American Axle & Manufacturing (AAM) has reported net income of US$59m for the full year 2005, in line with forecasts announced last month. This is down from $159.5m a year earlier, and is attributed to lower sales to its major customer, GM. Net sales fell $3,599.6m in 2004 to $3,387.3m in 2005.
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GM accounted for 78% of AAM’s turnover, in 2005. AAM is trying to reduce its dependence on GM and this figure was reduced from 80% a year earlier.
“In a year of challenge and change for the domestic automotive supply industry, AAM continued to generate profits and invest in exciting new and strategic business growth initiatives,” said AAM Co- Founder, Chairman of the Board & CEO, Richard E. Dauch.
“In 2005, we made significant progress on AAM’s long-term strategic goals of expanding our product portfolio, served markets, customer base and global manufacturing footprint. We are especially pleased with the growth in our backlog of orders for our newest driveline technology supporting all-wheel-drive applications for passenger cars and crossover vehicles. We are also looking forward to the 2006 calendar year launch of our new regional manufacturing facility in Changshu, China.”
Gross margin for the full year 2005 was 9.0% as compared to 13.2% in 2004. Operating income was $105.1 million, or 3.1% of sales in 2005 as compared to $284.8, or 7.9% of sales in 2004.
AAM said its lower gross margin and operating income performance in 2005 reflects the impact of lower OEM production volumes; higher energy, steel and other metallic material prices; and the increased cost of providing healthcare, pension and supplemental unemployment benefits to hourly associates.
In January 2006, AAM announced that its backlog of new and incremental business launching from 2006 through 2012 is estimated at approximately $1.4 billion in future annual sales. In addition to GM and the Chrysler Group, AAM’s expanded customer base now includes Nissan, Audi, Ssangyong, Hino, Jatco, Koyo and Harley-Davidson.
