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May 29, 2008

US: American Axle details new business backlog

American Axle & Manufacturing Holdings, which has recently endured an almost three-month strike at several of its US facilities, in turn crippling some of GM's truck and SUV production, has announced a backlog of new and incremental business from 2009 through 2013 worth about $1.4bn in future annual sales.

American Axle & Manufacturing Holdings, which has recently endured an almost three-month strike at several of its US facilities, in turn crippling some of GM’s truck and SUV production, has announced a backlog of new and incremental business from 2009 through 2013 worth about $1.4bn in future annual sales.

AAM said it expects to launch about two-thirds of the new business in 2009, 2010 and 2011 and the rest in 2012 and 2013.

“[Our] new business backlog reflects the company’s continued success in expanding its product portfolio, customer base, served markets and global manufacturing footprint,” the supplier said in a statement.

Almost half of the new business relates to rear-wheel- and all-wheel-drive applications for passenger cars and crossover vehicles and, AAM said, “benefits from the company’s continued focus on electronics product integration. This is particularly evident in the expansion of… drivetrain product offerings, such as transmission differentials and transfer cases”.

Significantly, and perhaps unsurprisingly, given the recent strike at some US facilities was over a proposed wage rate cut to make AAM more competitive, about 85% of the new business has been sourced to non-US facilities.

“This will accelerate the expansion of AAM’s high quality, cost-competitive and operationally flexible global manufacturing footprint in Brazil, China, India, Mexico, Poland and Thailand,” the statement added.

AAM, which was formed from former GM parts-making units and remains a key supplier to the automaker, said it had continued efforts to diversify its customer base.

Recent new business wins include rear axles and driveshafts for a 2010 model-year light vehicle program at Nissan Motor. These parts will be manufactured at AAM’s Guanajuato, Mexico, manufacturing facility for the North American market.

Other orders include rear dual-wheel axles for a 2011 model-year light commercial vehicle from Renault – these components will be made at Changshu, China, and used in vehicles sold in the emerging markets of Brazil, Russia, India, and China itself.

VW group premium brand Audi has awarded AAM new and incremental transmission differential business for manufacture at AAM’s Olawa, Poland, facility.

Brilliance China Automotive Holdings has ordered independent rear drive assemblies (IRDA) for a 2010 model-year crossover utility vehicle. The parts will also be made at Changshu and the vehicles sold in China.

For Chery Automobile, AAM will supply driveshafts for a 2009 model year crossover which also will feature the supplier’s rear-drive modules. Again, these components will be made in Changshu and the vehicles sold in China.

“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,” said outgoing AAM chairman and CEO, Richard Dauch, who becomes president and CEO of fastener specialist Acument Global Technologies on 2 June.

“AAM’s success in growing its new business backlog demonstrates that our long-term strategic goals of expanding and diversifying [our] product portfolio, customer base, served markets and global manufacturing footprint are on track and in balance with the needs of our customers.”

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