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Auto Suppliers See Better Times Ahead

February 6, 2010
2 min to read


Continued positive earnings and outlooks from major suppliers reflect a growing sense the worst is behind the auto industry, analysts said Friday, according to a report by The Detroit News.

American Axle & Manufacturing Holdings Inc. reported fourth-quarter earnings of $48.6 million compared with a $112.1 million loss a year ago. Net loss for the year was $253.1 million, far less than 2008's net loss of $1.2 billion.

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The Detroit supplier expects 2010 revenue to increase as much as 40 percent to $1.9 billion to $2.1 billion.

American Axle is anticipating growth from GM's large trucks this year, which includes new heavy-duty pickups due this spring. The supplier has a $1 billion backlog of business to 2014 and many are new orders for such brands as Volkswagen, Audi, Nissan, Tata and Mack truck.

Fixed operating costs have been reduced more than 50 percent over the last two years, Chairman Richard Dauch told The Detroit News.

Restructuring also helped Lear Corp., which spent $740 million doing that since mid-2005; spent time in bankruptcy last year; and ended 2009 with $1.6 billion in cash and less than $1 billion in debt.

The Southfield supplier reported fourth-quarter earnings of $116 million on $2.7 billion in sales, up from $2.6 billion. Lear expects global net sales this year of up to $10.7 billion and core operating earnings of $250 million to $350 million, said Chairman Bob Rossiter. The supplier has a $1.4 billion order backlog through 2012, Rossiter said.

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