DETROIT -- Now that David Dauch has succeeded his father as CEO of American Axle & Manufacturing, he must reduce his dependence on General Motors, the customer that saved his company from bankruptcy three years ago.
Dauch says he has a plan to do just that. American Axle, which derived 73 percent of its revenue last year from GM, has begun to win a considerable number of non-GM contracts.
The company is expanding into Asia, and it has rolled out new driveline products for crossovers and cars.
“We’ve really diversified quite a bit,” said Dauch, who became CEO on Sept. 1. “We’ve got plans to increase non-GM sales to 50 percent of our business by 2015.”
That’s a big change for GM’s former in-house producer of truck axles and drive shafts, which was reborn as American Axle in 1994 after investors purchased the assets.
At first, American Axle thrived as sales of pickups and SUVs soared. But consumers began to downsize to crossovers, and then the Great Recession struck in 2008.
When truck sales collapsed in 2009, American Axle nearly went under after GM canceled a batch of purchase orders.
American Axle avoided bankruptcy after GM compensated it with $110 million in cash plus access to a $100 million line of credit and 10-day payment terms. In return, GM received 1.7 million shares of American Axle’s common stock in 2010.
Revenues and profits began to rebound, and Dick Dauch, 70, American Axle CEO at the time, subsequently forged a plan to reduce his company's reliance on GM.