Richard E. Dauch. Co-Founder, Chairman & CEO American Axle & Manufacturing

Transcription

1 Richard E. Dauch Co-Founder, Chairman & CEO American Axle & Manufacturing

2 Life in the Fast Lane

3 Global Car and Truck Production: Region 2005 (M) 2012 (M) Net Change (M) % Change Japan/Korea % Western Europe % North America % South America % Middle East/Africa % Central / Eastern Europe % Greater China % Southern Asia % Total Source: CSM Worldwide

4 The Auto Industry is Disproportionately Growing Outside of North America

5 Automotive Transplants Legend: Original Equipment Manufacturers Suppliers

6 Detroit Economic Club May 10, 2004

7 Automotive Industry Supply Base Continued price pressure Rapid volume reductions High legacy costs Excess capacity Under-utilized workforces Restricted operational flexibility Closing / selling domestic plants Attrition programs

8 North American Auto Suppliers Idling operations Liquidating Restructuring Selling of assets 85% of the Auto Suppliers in the 1995 Phone Book No Longer Exist

9 Worldwide Automotive Supplier Consolidation 30,000 Economic Climate will Accelerate Supply Base Consolidation or Elimination 10,000 4,

10 A RECESSION is when you tighten your belt; A DEPRESSION is when you have no belt to tighten; And, when you have no pants to hold up, it is a PANIC!

11 Sweeping Resizing of Detroit s s Automakers and Supply Base

12 Structural Change of the American Automotive Marketplace

13 Structural Change Resizing to create new business models Redefining of labor relationships Rationalizing and deploying of installed capacity Streamlining of brand portfolios, dealer networks and distribution networks

14 Finding the Right Balance Mindset: Doing Things Twice as Good, Twice as Fast, With Half the Resources

15 Welcome to Global Competition!

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17 The Keys to Survival and Growth Meeting the demands of: Intense global competition Customer demands for world pricing Dealing with rapidly escalating production costs

18 It is Essential that U.S. OEMs and Key Suppliers Flourish

19 Manufacturing is How We Pay Our Way In the World

20 Life in the Fast Lane

21 Technology Product, Process & Systems

22 CAFE Corporate Average Fuel Economy

23 Electric All-Wheel Drive (EAWD) Chevrolet Cobalt

24 Electronics Integration Electronic Stabilizer System Jeep Wrangler Rubicon Dodge Power Wagon

25 Global Leveraging Global Assets

26 Leveraging Global Assets Design Engineering & Product Development Resources Sales IT Systems Procurement Manufacturing Operations Global Capability & Capacity Common Parts & Manufacturing Processes Global Business Plan

27 Global Technical Capabilities World Headquarters Engineering Staff Australia Office Engineering Staff India Office Design Services & Technical Analysis Japan Office Engineering Staff Global Manufacturing Sites Engineering Staff European Office Engineering Center & Engineering Staff USA - Technical Center Test & Validation Engineering NVH Engineering Materials Engineering Advanced Engineering Electronics & Software Engineering Accreditations: ISO 9001 Certified TS Materials Lab: A2LA South American Office Engineering Center & Engineering Staff Korea Office Engineering Center & Engineering Staff China Office Engineering Center & Engineering Staff

28 Global Engineering Benefits 1. Better proximity to customers and new markets 2. Ability to engineer around the clock, 24 hours a day 3. Allows us to get our products from concept to market faster

29 Materials & Procurement Total Landed Cost Approach

30 Total Landed Cost Approach + Supplier Development Freight Costs Modes of Transportation Energy Inventory Customs Warehousing Carrying Costs Piece Price Selecting the Right Supplier

31 Emerging Automotive Markets Satellite Image Courtesy Google Maps

32 Emerging Automotive Markets China

33 Emerging Automotive Markets China India

34 Emerging Automotive Markets Globalization is Here to Stay!

35 Competitive Cost Structures

36 2007 and 2008 Union Negotiations

37 AAM s Colfor Manufacturing Minerva, Ohio

38 Flexibility

39 Flexibility Workforces Human Resources Operations Machinery, Equipment & Tooling Make / Buy Decisions Sourcing Business Financial Performance Business Thinking & Mentality

40 Restructuring Demands Change Re-engineering Alliances Quality Efforts Downsizing Buy-outs Real Transformation Takes Time Right-sizing Acquisitions Mergers Attrition Programs Re-strategizing Negotiations

41 Successful Suppliers Workforce / Team harmony Bullet-proof quality Technological advancement Product innovation Product expansion Customer diversity Global footprint Steady profitable growth Rejection of get-big-quick acquisitions Outstanding warranty performance On-time delivery Packaging Reliability Durability Continuous improvement

42 Change!

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44 AAM Original Five Facilities Detroit Gear & Axle Detroit Forge Three Rivers Buffalo Gear, Axle & Linkage Tonawanda Forge

45 AAM Global Presence Korea Business Office Seoul, South Korea Albion Automotive England / Scotland Technical Center Rochester Hills, MI MSP Industries Colfor Manufacturing World H.Q. Detroit Gear & Axle Buffalo Gear, Axle & Linkage Three Rivers Tonawanda Forge Cheektowaga Machining Guanajuato Gear & Axle Guanajuato Forge Silao, Mexico Olawa Manufacturing Facility Olawa, Poland Changshu Manufacturing Facility Changshu, China European HQ & Engineering Center Bad Homburg, Germany AAM do Brasil, Araucária, Brazil South American Business Office, Sáo Paulo, Brazil India Business Office Puné, India Japan Business Office Tokyo, Japan China Business Office Shanghai, China

46 Manufacturing: A Noble Profession!

47 I have never seen so much change in a relatively short period of time. And the chances are good that the change will be even greater in the future. Keith Crain October 2006

48 Life in the Fast Lane

49 J a n u a r y ,