DETROIT -- General Motors' plan to invest $1 billion into U.S. factories and add thousands of jobs comes at the expense of one Detroit supplier.
American Axle & Manufacturing Holdings Inc. is losing part of its business to supply GM's next-generation full-size pickup trucks and SUVs, as GM said it is moving some axle production in-house. The move will create 450 new jobs for GM.
Chris Son, spokesman for American Axle, said the supplier will be reduced to 65 percent of the axle supply for the program, down from 100 percent today.
"We've known the direction of the program for about a year and a half," Son said. "We've been aggressive in securing new business to backfill the existing capacity that would be idled (by GM's insourcing)."
Son said the Detroit-based supplier is "cautiously optimistic" that no lines at its Three Rivers, Mich., plant will be idled as a result of GM's production shift, which will begin in 2018 through 2020. He declined to say specifically whether any jobs will be affected because of the decision.
American Axle will open its $30 million Advanced Technology Development Center in Detroit later this year. In November, the supplier agreed to acquire Metaldyne Performance Group Inc. in a $3.3 billion deal that will further reduce Axle's reliance on GM, its largest customer.
The deal is expected to close in the first half of 2017.
The combined company is projected to generate annual revenue of nearly $7 billion.
It will operate with four business units: driveline, which will manufacture axles and driveshafts and account for $3.7 billion in revenue; metal forming, manufacturing gears, axle shafts, suspension components with revenue of $1.6 billion; powertrain, manufacturing differential assemblies, valve bodies, etc., with sales of $1.1 billion; and castings, which will make axle carriers and steering knuckles with sales of $900 million.
The integration of MPG will reduce GM's percentage of the combined company's revenue to 41 percent of sales with plans to reduce that further to 32 percent by 2020, the company said.
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