Dauch: We will take business away

With $1.2 billion in new business booked through 2004, American Axle & Mfg. Inc. is bullish — and downright cocky — about its future.

“We will take business away from others,” AAM Chairman Richard Dauch says recently in announcing plans for a new headquarters in Detroit. “We will do it the old-fashion way — honest, straight and no-nonsense.”

AAM scored a coup by winning axle business for the all-new Dodge Ram pickup, launching June 2002. AAM beat out incumbent Dana Corp. and has 100% lifetime exclusivity for axles on the +- and 1-ton versions of the truck.

Mr. Dauch bought six antiquated manufacturing plants from General Motors Corp. in 1994 to form AAM. At that time GM was AAM's only customer, with a tiny sliver of sales with Ford Motor Co. Today, AAM has more than 75 customers, and 86% of its sales are to GM. By 2004, that figure should fall to 76%.

Due to the popularity of GM's all-new midsize sport/utility vehicles (Chevrolet TrailBlazer, GMC Envoy and Oldsmobile Bravada), the automaker is asking that AAM run plants seven days a week to meet demand. “I haven't run an assembly plant on seven days since the 1960s and 1970s in Flint, MI,” says Mr. Dauch.

AAM's new seven-story headquarters building will be located in a “Renaissance Zone,” at Interstate 75 and Holbrook Ave. in the city of Detroit. AAM was offered an incentive package worth $18.5 million to build in Detroit versus other locations. All county, state and city taxes (except debt millage) are waived for 12 years.

Other significant new contracts for AAM include the driveline system for Ford's fullsize rear-drive vans (production starting in 2003 +) and a GM axle contract from 2006 to 2014.