It's time for 'Getmylittlefinger' to go.
American Axle posts backlog of $1.4 billionDETROIT -- American Axle & Manufacturing Holdings Inc. said today that it has a $1.4 billion backlog in new business beginning next year through 2013 -- almost all of which will be sourced outside the United States.
American Axle, which spun off from General Motors in 1994, last week settled on a new contract with the UAW for its U.S. operations. In a conference call with analysts this morning, CEO Richard E. Dauch said the contract will produce annual savings of $300 million or about a 50 percent cut in labor costs for unionized factory workers.
"American Axle was clear, consistent and direct about the need for a U.S. market competitive agreement that would help us achieve operational flexibility and efficiency," Dauch said.
The strike reduced American Axle's expected 2008 sales by about $370 million and cost the supplier about a 250,000 vehicle loss in production. The strike cost the company about $133 million in the first quarter alone.
Dauch said American Axle expects the new contract to cut its average UAW-represented hourly labor cost from near $73 to between $30 and $45. Its U.S. work force of about 3,650 will be reduced by about 2,000 over the next year.More business overseas
Despite those gains, American Axle said about 85 percent of its new business will be made in non-U.S. operations, increasing its business in Brazil, China, India, Mexico, Poland and Thailand.
That means more than 50 percent of the supplier's production will be done outside the United States, Dauch said. About 65 to 70 percent of that production will be shipped back to the United States. (SCREWED AGAIN)
About half of American Axle's new business will be for rear-wheel-drive and all-wheel-drive products for cars and crossovers. But the company said it is also looking to begin offering electronics products, including transmission differentials and transfer cases.
"Record-high fuel prices, rapidly shifting consumer preferences and fast growth in the emerging markets are quickly changing the product development requirements of the global automotive industry," Dauch said in a statement.
"American Axle's success in growing its new business backlog demonstrates that our long-term strategic goals of expanding and diversifying American Axle's product portfolio, customer base, served markets and global manufacturing footprint are on track and in balance with the needs of our customers."
GM's help 'critical'
GM, still American Axle's largest customer by far, kicked in about $215 million to help pay for buy-downs and settle the three-month strike. American Axle will receive the financial assistance in three cash payments between August and April 2009.
Dauch said GM's assistance was "critical" to ending the strike.
"We greatly appreciate the strategic partnership," he said. "GM has been a great customer to American Axle, and American Axle has been a great supplier to GM."
Much of American Axle's production for GM during the strike came from its Mexico plant, which produced more than 6,000 axles per day. Dauch said the company will review whether any of the production it shipped to Mexico to support production for GM during the strike will return to the United States.
About two-thirds of the company's $1.4 billion in new business will launch during 2009-2011.
Contract awards
American Axle said some of the recent awards in new business include:
• Nissan Motor Co., which selected American Axle to produce rear axles and driveshafts for a 2010 model year light-vehicle program. These components will be manufactured at the supplier's Mexico plant for North America.
• Renault S.A., which chose American Axle to make rear dual-wheel axles for a 2011 model year light commercial-vehicle program. These components will be made at the supplier's Changshu, China, plant for use in Brazil, Russia, India and China.
Shares of American Axle closed Wednesday at $17.94, down $1.09
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http://www.autonews.com/apps/pbcs.dll/article?AID=/20080528/ANA02/257179457/1128
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