American Axle lands key extension of GM business
American Axle lands key extension of GM business
GM light-truck contract equals half of company revenue
Automotive News | January 17, 2008 - 10:36 am EST
DETROIT — American Axle & Manufacturing Holdings Inc. said today that it will be the driveline supplier for the next generation of full-sized General Motors light trucks. The contract award represents more than half of the supplier’s annual global sales of $3.19 billion.
GM has yet to finish key parts of the new truck program — code-named GMT10XX — but the new program is expected to be substantially the same as the existing one, according to an American Axle statement.
"We are extremely pleased that General Motors has recognized AAM’s exceptional capabilities in the design, engineering, testing, validation and manufacturing of premier driveline systems and selected us for this critical program," CEO Richard E. Dauch said in the statement.
American Axle’s stock rose more than 2 percent on the news this morning on Wall Street, trading at $17.78 a share at 10:22 a.m. EST.
A company spokeswoman declined to discuss the component mix of the contract.
A GM spokeswoman said the automaker does not comment on future product awards.
American Axle also announced that its backlog of new and incremental business launching from 2008 through 2012 has been increased from $1.2 billion last July to $1.3 billion today in future annual sales.
American Axle, a former unit of GM, has supplied GM trucks and cars with axles, prop shafts and other parts since its inception in 1994.
Separately, American Axle said today that 558 UAW employees at its idled plant in Buffalo, N.Y., have agreed to take buyouts and other voluntary separation deals.
American Axle idled the plant in December and offered the program to about 650 union-represented workers starting in September. The company expects the program to cost about $56 million, down from an $85 million estimate it gave in August.
The supplier has been restructuring in North America to reduce capacity on some vehicles, such as mid-sized light trucks, where consumer demand has fallen. Its contract with the UAW expires near the end of February.
American Axle also said it expects 2008 full-year volume to be down 8 to 9 percent from 2007 on the major light-truck programs it supports in North America for GM and Chrysler LLC. It expects first-half volume to be down about 15 percent from a year earlier.
The company expects its content per vehicle to increase by about 1 to 2 percent in 2008 on those programs. It reported content per vehicle of $1,292 in 2007, a 5 percent increase over 2006.
American Axle, of Detroit, ranks No. 50 on the Automotive News list of the top100 global suppliers with worldwide original equipment automotive parts sales of $3.19 billion in fiscal 2006.
