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American Axle modifies production

Keywords: Tags  American Axle & Manufacturing, General Motors, Chrysler, axles, transmissions, pickup trucks, sports utility vehicles, David Dauch Chuck Stevens

CHICAGO — American Axle & Manufacturing Holdings Inc., a heavy consumer of special bar quality (SBQ) products, is altering its production mix and cadence in response to hiccups with major new vehicle launches by General Motors Co. and Chrysler Group LLC.

"To keep up with the red-hot sales pace and address unanticipated powertrain mix shifts, daily production schedules have been running significantly higher. This strain on active capacity is expected to be short term as additional installed capacity will come online ... in the first quarter of 2014," American Axle chairman, president and chief executive officer David C. Dauch said during the Detroit-based manufacturer’s Nov. 1 earnings call.

Detroit-based GM had "some short-term issues with American Axle around specific components," Chuck Stevens, chief financial officer of General Motors North America, said during a recent earnings call. "It had a small impact on full-sized pickup truck and (sports utility vehicle) production in October, but we expect to make that up in the fourth quarter. (It will) have no impact on the full-size SUV launch."

Among its 28 global product and facility launches this year, American Axle is managing the supply of axles and components to GM’s next-generation pickups and SUVs, Dauch said.

American Axle is working with GM to make appropriate capacity adjustments, in terms of volume and mix, to support future production scheduling requirements.

If GM produces more trucks with V8 engines and fewer V6 models, it would mean the automaker needs more large axles—9.5-inch vs. 8.6-inch diameters, an equities analyst suggested.

"This is a great problem to have. The truck is red hot (and) we have to deal with some adjustments ... with regard to product sizes. (Eventually) this will be a win-win for both General Motors and (American Axle)," Dauch replied.

Auburn Hills, Mich.-based Chrysler was supposed to start shipping the 2014 Jeep Cherokee this summer, but dealers didn’t start getting deliveries until October, chairman and chief executive officer Sergio Marchionne said during an earnings call last week.

American Axle’s EcoTrac Disconnecting All-Wheel-Drive system is featured on the 2014 Jeep Cherokee, but Dauch said Chrysler’s problems with that transmission had less to do with the part and more to do with related software.

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