American Axle Closing Detroit Plant - Analyst Blog
01 Luglio 2011 - 5:39PM
Zacks
American Axle and Manufacturing
Inc. (AXL) plans to close its manufacturing
facility in Detroit as communication with the United Auto Workers
(UAW) union broke down. The parties had disagreement over the
reduction of compensation for the workers from $45 an hour to $30
an hour. The shutdown will affect 300 hourly and salaried workers
at the plant.
American Axle went through tough times during the global
economic recession as it is one of the companies that is exposed to
platforms which have seen maximum production cuts.
The company derives a substantial portion of its revenue from
products supporting rear-wheel-drive (RWD) light truck and sports
utility vehicle (SUV) platforms in North America. However, sales
and output levels of light trucks and SUVs are being affected by
many factors during the period.
Moreover, the auto parts maker has a high exposure to
General Motors Company (GM) and Chrysler, which
has been restructuring under the Chapter 11 bankruptcy. Sales to GM
and Chrysler were 75% and 9% of its total net sales, respectively
in 2010, 78% and 8% in 2009 and 74% and 10% in 2008.
The Zacks #3 Rank (Hold) company posted a profit of $37.7
million or 50 cents per share in the first quarter of 2011 that
more than doubled from $16.3 million or 22 cents per share in the
year-ago quarter. With this, the company has beaten the Zacks
Consensus Estimate by 12 cents per share. The increase in profit
was attributable to improved capacity utilization and sustained
reductions in fixed cost structure.
Revenues in the quarter grew 24% to $645.6 million, up from the
Zacks Consensus Estimate of $591 million. The company expects its
sales to grow in excess of $3 billion by 2013 through product
launches. It also aims to improve its business diversification in
terms of product mix, customer base and served markets.
AMER AXLE & MFG (AXL): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis Report
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