DETROIT -- American Axle & Manufacturing Holdings Inc. is joining Ford Motor Co. and General Motors in cutting its supplier ranks.
The axle maker expects to reduce its global supply base by about 30 to 40 percent by 2008, said spokeswoman Renee Rogers. She declined to reveal the exact number of suppliers.
American Axle, of Detroit, wants fewer, more capable suppliers able to serve the company as it expands globally, Rogers said.
CEO Richard E. Dauch disclosed the company's supplier reduction plan during a conference call this month announcing fourth-quarter earnings.
American Axle is building a plant in Changshu, China, and is looking to build a factory in central or eastern Europe, Dauch said.
As part of that expansion, American Axle wants far-reaching suppliers that can produce components and materials for every corner of the globe, Rogers said.
In validating suppliers, American Axle looks at technology, cost and financial stability, among several other criteria, she said.
Suppliers such as American Axle are following in the path of the car-
makers. Ford is cutting its supplier base from about 2,500 to 800 over the next several years. GM cut 500 suppliers in 2005 and now has 3,200 worldwide.
American Axle, which was created through the spinoff of GM's axle business in 1994, struggled in 2005 to stay ahead of production cuts by its domestic customers.
Company earnings swooned last year. American Axle posted net income in 2005 of $56 million on sales of $3.39 billion compared with net income of $159.5 million in 2004 on sales of $3.60 billion. Net income in the fourth quarter ended Dec. 31 was $4.5 million compared with net income of $31.3 million in the same period a year ago.
You may e-mail Dave Barkholz at [email protected]