American Axle and Manufacturing Holdings Inc. said that its quarterly net income dropped as costs increased, according to its statement last Friday. The company had written down the closure of Michigan and New York plants. American Axle's net profit in the second quarter decreased to $4.7 million from the $49.2 million posted last year.
These results are a reflection of $36.5 million in restructuring costs from the closure of its Detroit and Cheektowaga plants, as well as a $28.1 million charge related to a union pension benefits claim. The revenue increased by 8% to $739.8 million from the prior year’s $686.2 million. However, gross margins declined to 11.6% of sales from 19.0% the previous year.
Its operating income plunged to $30.3 million from $71.7 million the past year. American Axle said that its results were influenced by the sluggish demand in North America for four-wheel-drive pickups and SUVs. The company said its new-business backlog rose to $1.2 billion for new models that will be presented over the next couple of years in North America, Brazil and Thailand. American Axle is a major supplier of axles and other driveline components. General Motors Co is its main customer, accounting for almost 75% of its sales.