Automotive Suppliers Feel the Pinch

Drivetrain parts supplier American Axle & Manufacturing Holdings Inc. recently reported a larger than expected quarterly loss due to falling production volumes by major automakers. Shares of the huge parts supplier fell 22 percent in a single day. The net loss came to $112.1 million for the fourth quarter alone, compared with a year-earlier loss of $26.8 million, the company said. Sales of American Axle parts fell 33 percent to $503.0 million.

American Axle has been aggressively laying off and terminating employees over the course of 2008, contributing to a downward economic spiral as consumers pull back on spending due to job loss which then creates more cut-backs in production and more job loss. “There are too many material uncertainties surrounding the economy and our industry,” Chief Financial officer Mike Simonte told analysts and reporters on a conference call.”We don’t know what is going to happen, we are not going to speculate on the outcomes, what we can say is we understand the risks we face,” Simonte said.