American Axle & Manufacturing Holdings Inc.'s (AXL)
fourth-quarter net loss widened, as sales tumbled amid worldwide
production cuts by auto makers stung by sinking demand.
The larger loss is the latest sign of trouble for the
auto-supplier industry, which is struggling as auto makers from
Chrysler LLC to Japan's Toyota Motor Corp. (TM) continue adjusting
production to ensure they don't overload already-strained dealer
lots with too much inventory.
"The U.S. automotive industry has been pushed to the verge of
collapse due to numerous adverse market, economic and competitive
forces," said Chairman and Chief Executive Richard E. Dauch. "As a
result, 2008 proved to be a brutally difficult and demanding year
for the entire domestic automotive industry."
Dauch aims to return American Axle to profitability this year
through a combination of job and production cuts, reductions in
capital spending and expansion in global markets, despite the bleak
outlook for the industry. The company also is shifting to rely more
on passenger cars and less on large pickup trucks and sport-utility
vehicles, which have fallen out of favor as gas prices soared and
then sank.
The major supplier of General Motors Corp. (GM) and Chrysler
truck axles said its net loss widened to $112.1 million, or $2.17 a
share, from $26.8 million, 52 cents a share, a year earlier.
Results for the latest period included a charge related to
deferred U.S. and U.K. tax assets.
Net sales fell 33% to $503 million amid a 41% drop in
light-truck production volume at American Axle-supported product
programs at GM and Chrysler. The company projected the sales
decline earlier this month.
Analysts surveyed by Thomson Reuters were expecting a loss of 60
cents a share on revenue of $525 million.
Gross margin was 5.7%.
American Axle generates around three-quarters of its revenue
from GM. Non-GM sales were 22% of total sales in the quarter. Two
weeks ago, GM, the biggest U.S. auto maker, reported that
fourth-quarter global sales skidded 26%.
The results come amid a bleak U.S. sales outlook for auto makers
in 2009. American Axle predicts light vehicle sales of 10 million
to 12 million this year and in 2010, a level even more anemic than
2008's 13.2 million sales, which saw its worst year since 1992.
As American Axle shrinks in the U.S., the company is aiming to
increase its operations around the world. Dauch said two weeks ago
the company has contracted for $1.4 billion in new business from
2009 to 2013. Of that, 85% of the work will be sourced from
American Axle factories outside the U.S.
Earlier this month, Visteon Corp. (VC) and ArvinMeritor Inc.
(ARM) became the first two major suppliers to announce deeper cost
cutting actions for 2009. Visteon shifted 2,050 salaried workers to
a four-day work week and cut their pay 25%. ArvinMeritor scrapped
plans to spin off its car parts business last week and said that it
was reducing pay for about 100 senior executives, including Chief
Executive Chip McClure, by 10%. The remaining white-collar workers,
primarily in the U.S., will have their pay cut 5%.
Shares closed at $1.21 on Thursday and didn't trade premarket.
The stock has lost 94% of its value since May.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com
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