American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) Q1 2023 Earnings Call Transcript

Christopher May : Yes, certainly. And Tom, this is Chris. From a volume perspective, I think in my prepared comments, we articulated from a range perspective, especially on the full size truck programs that we support, how we see the full year playing out from a pricing perspective. In addition, from a volume, our backlog is also, it’s a big backlog year for us. It is more weighted from a revenue perspective outside of the first quarter as we’re launching some of these programs inside of the first quarter. So that’s another key component to think about. From a pricing perspective, yes, we did have $40 million stepping into the year on a year-over-year bridge. That is still our expectation and generally we see those sort of come online the first half of the year, not all discrete within sight of the first quarter. So you’ll have a little bit of that sort of step in through as the year progresses.

Tom O’Brien: Okay, thanks. And then my follow up, Magna this morning issued raised their production guidance, global auto production guidance slightly. We’re starting to see kind of folks getting a little more constructive on that certainly maybe coming from price cut coming from automakers or views on pricing coming down on a retail perspective for the OEMs. Just curious how you are viewing auto production just in general. Do you feel that same kind of view of things getting more constructive or is this still challenging and still kind of clouds at the end of the year, supply chain, all those types of issues. Thanks.

David Dauch: Yes, I’ll take that. This is David Dauch. Well, first of all, in the first quarter we clearly were impacted negatively in regards to unexpected downtime from our customers because of supply chain issues or semiconductor related matters. So there’s still some uncertainty and disruption and volatility in the marketplace. We see that continuing, although improving quarter-over-quarter as we go forward here. Obviously, the macroenvironment is challenged still. Interest rates are rising, so we’ll see how that impacts consumer sentiment and demand in the future here. The wage inflation is still sticky. We’re dealing with that. We’re also dealing with economic issues that you’re all aware of, both raw material and components wise.

Energy is softening a little bit in regards to Europe from the highs that it was at before, but still above where we typically had operated at. Labor availability continues to be an issue and companies are going to have to run their businesses differently going forward than how we did pre-pandemic. That’s just a fact a reality. I think freight issues, the increases have subsided, but still higher than where they were before. So things that need to be dealt with and addressed there. But we do see the second half of the year getting better. We’ve guided the street at 14.5 to 15.1 million units here in North America. We’re hopeful that we’re at the higher end of that, but we’re also prepared to operate to the lower end if we need to, based on the marketplace and the customer demand.

But to wrap it all up, I mean, there’s still uncertainty and disruption and volatility in the marketplace. Again, we’re going to stay focused on the things that we can control. But we’re hopeful that the success of quarters starts to show improvement.

Tom O’Brien: Okay. And if I could just sneak one in. Does your guidance incorporate impacts, any potential impacts from UAW with the GM?

David Dauch: Absolutely not. We all need to be prepared in regards to potential work stoppage, but we can’t build that into our forecasting right now. If there is an incident or issue that takes place, then obviously the whole marketplace is going to be impacted. We all do so accordingly.