Third-quarter earnings of American Axle & Manufacturing Holdings Inc. fell by 36%, mostly due to costs linked to plant closures. It recorded a net income of $24.8 million in the third quarter, compared to $38.8 million the previous year. In the latest period, the company incurred $11.9 million in charges over the planned closure of two U.S. manufacturing facilities.
The company had previously said that it will shut down plants in Michigan and New York after it failed to enter competitive labor contracts with the UAW. The special charges in this quarter included a $1.6 million asset impairment posted by its e-AAM joint venture associated with a long-term supply contract with Saab Automobile AB.
In the latest period, its revenue rose by 5% to $647.6 million. American Axle, which manufactures driveline systems, chassis systems and forged components for trucks, buses and cars, has experienced a rebound after having faced a string of financial losses that were resolved in 2009.
The demand in the U.S. for light vehicles grew 10% through September. General Motors Co., a major customer and former parent, has recorded a 16% increase in sales this year for its light vehicles in the U.S.
American Axle has also been diversifying and has gone into businesses outside of the light truck market. The company said that about two-thirds of its new business backlog that will launch from 2012 through 2014 is for passenger car, crossover vehicle and commercial vehicle programs.
In a statement, CEO Richard E. Dauch said that after maintaining a strong profit performance in the last two years, it is now able to accelerate the investment in advanced product, process and systems technology required to expand and diversify its customer base, product portfolio and served markets. [source: BusinessWeek]