American Axle & Manufacturing Holdings, Inc. Business Report FY2010

Business Highlights

Financial Overview

(in million dollars)
  FY2010 FY2009 Rate of change (%) Factors
Sales 2,283.0 1,521.6 50.0


Gross profit(loss) 401.7 (31.1) - -

-Sales in 2010, as compared to 2009, reflect an increase of approximately 42% in production volumes for the North American light truck and SUV programs the Company currently supports for GM and Chrysler.  These increases reflect the impact of the stabilization of general economic conditions, the improving market conditions in the automotive industry and the adverse impact of the extended production shutdowns in 2009, which was estimated at $304.3 million.  The increase in sales also reflects the favorable impact of recent new product launches, many of which support passenger car and crossover vehicle platforms.

-The Content-per-vehicle (as measured by the dollar value of our products supporting GM's North American light truck platforms and the Dodge Ram program) increased to $1,441 in 2010 as compared to $1,403 in 2009 and $1,391 in 2008. The increase in 2010 as compared to 2009 is primarily due to higher metal market pass through partially offset by a change in the billing process for consigned components for the Dodge Ram program and the adverse mix in the first half of 2010 associated with the launch of the next generation heavy-duty truck for GM in June 2010.

-The 4WD/AWD penetration rate was 64.2% in 2010 as compared to 64.1% in 2009 and 64.8% in 2008.


-The Company received a first order for the EcoTrac(TM) AWD system from a major automaker. This system allows the vehicle to utilize its primary drive system, the front wheels, when AWD is not required. Then, the vehicles can automatically transition to AWD when the vehicle senses that AWD may be necessary. AAM''s EcoTrac(TM) AWD system will be featured on passenger car and crossover vehicle program beginning in 2012. (From a press release on November 16, 2010)

-The Company begun supplying rear axles for Volkswagen AG's 2010 Amarok pickup truck. The Amarok incorporates AAM's TracRite(R) Electronic Locking Differential (ELD). The axles will be manufactured at AAM's Araucaria Manufacturing Facility in Brazil and shipped to Volkswagen AG's Pacheco plant in Argentine. (From a press release on March 30, 2010)

Joint Ventures

-The Company announced the formation of a joint venture with Saab which is owned by Spyker Cars of the Netherlands. The new company, e-AAM Driveline Systems AB (e-AAM), will develop and market electric all-wheel-drive (e-AWD) and hybrid driveline systems for passenger cars and crossover vehicles. The corporate headquarters of e-AAM will be in Trollhattan, Sweden where Saab is based. The joint venture, which will be majority controlled by AAM, will commence operations on October 1, 2010. e-AAM systems will be featured in Saab vehicles beginning in 2012. In addition, e-AAM will be offering its products to other OEMs. (From a press release on September 24, 2010)


R&D Expenditure

(in million dollars)
  FY2010 FY2009 FY2008
Overall 82.5 67.0 85.0

-The Product development includes power transfer units, transfer cases, driveline and transmission differentials, multi-piece driveshafts, constant velocity joints, torque transfer devices, chassis modules and front and rear drive axles. The Company continue to focus on electronic integration in our existing and future products to advance their performance. The Company also continue to support the development of hybrid and electric vehicle systems. Special focus is also placed on the development of products and systems that provide our customers with efficiency fuel economy and emissions reduction advancements.

Investment Activities

Capital Expenditure

(in million dollars)
  FY2010 FY2009 FY2008
Overall 108.3 141.5 140.2

-In 2010, the capital spending primarily supported our significant global program launches in 2010 and 2011 within our new business backlog.

Investment Plan

-The Company expects the capital spending in 2011 to be in the range of $140 million - $150 million (approximately 6% of sales), which includes support for our significant global program launches in 2011 and 2012 within our new business backlog.

Investment in USA

-The Company announced that it has established a new manufacturing plant in Lancaster, Pennsylvania, USA. The facility, launched in January 2010, supplies axles for the Class 8 truck market. (From a press release on March 25, 2010)