Plant’s closing is costly to the city

By Charles Sercombe

Not only did about 2,000 union workers lose their jobs at American Axle & Manufacturing two years ago, Hamtramck also lost out.

The city lost out, that is, in tax revenue from some of those employees and now from the equipment used to manufacture vehicle parts there.

Hamtramck City Manager Bill Cooper gave the grim news recently to the City Council that $57,000 will have to be refunded to the company for personal property taxes from 2009.

The city will also lose $137,000 this year in personal property taxes because the plant is closed down.

Cooper said it could have been far worse had the matter gone forward to the state Tax Tribunal.

“We would have lost a lot more if they had appealed,” Cooper said.

Once considered a savior of an ailing GM plant, American Axle has turned out to be a nightmare for its employees and Hamtramck. Two years ago UAW workers went on a three-month strike over the company’s insistence of a 50 percent salary and benefit cut.

The workers eventually relented and agreed to the demand. Shortly after returning to work, American Axle abruptly announced it was closing down the plant and transferring the work to a plant in Mexico.

The loss in tax revenue comes at a time when Hamtramck is facing a $3 million budget deficit that could lead to bankruptcy by this January, Cooper said.

The city has already laid off several employees. Cooper said he looking at several options to save money. One way is a proposal to city retirees to modify their benefit package. If retirees accept the deal, the city could save $200,000 a year, Cooper said.