American Axle at Deutsche Bank Conference: Strategic Moves in EV Market

On Wednesday, 11 June 2025, American Axle & Manufacturing (NYSE:AXL) presented its strategic vision at the Deutsche Bank Global Auto Industry Conference 2025. The company outlined its ambitious plans, including the acquisition of DALL-E (GKN) and a new contract with Scout Motors. While the tone was optimistic, challenges such as market volatility and tariff uncertainties were acknowledged.

Key Takeaways

• American Axle announced a significant contract with Scout Motors for electric truck components, set for production in 2027.
• The acquisition of DALL-E is projected to provide $300 million in synergies, enhancing the company’s market flexibility and financial health.
• The company maintains its financial guidance amid ongoing market volatility, with a comprehensive update expected in August.

Financial Results

• American Axle reaffirmed its previous guidance from May 2nd, citing market volatility and tariff uncertainties as reasons for withholding further updates.
• The DALL-E acquisition is expected to generate synergies worth $300 million, representing about 5% of sales.
• These synergies are anticipated to aid in debt reduction and strengthen the company’s balance sheet.

Operational Updates

• The company secured a contract with Scout Motors to produce rear beam axles and front electric drive units (EDUs) for their Terra and Traveler electric trucks, aligning with its electrification strategy.
• Progress on the DALL-E acquisition is on track, with three out of ten regulatory approvals secured and a year-end closing targeted.
• Plans for a dual listing aim to maximize shareholder value across the Atlantic.

Future Outlook

• American Axle emphasizes the importance of consumer choice, particularly in range extender EVs (EREVs), which offer a solution to range anxiety.
• The company expects further consolidation in the automotive supplier industry due to market turbulence and rising technology costs.
• Expansion in Europe through the DALL-E acquisition is viewed as a strategic move, enhancing the company’s presence in a historically underrepresented market.

Q&A Highlights

• EREVs are seen as a viable solution for passenger cars, while trucks may require a mechanical link from the engine to the wheels.
• The market’s "hype cycle" around electrification is stabilizing, with companies becoming more selective in pursuing opportunities.
• General Motors’ decision to move some production to the US is perceived positively, indicating continued belief in internal combustion engines and hybrids.
• GKN Automotive’s joint venture in China with POSCO is crucial, given China’s rapid electrification and market size.

In conclusion, American Axle’s presentation at the Deutsche Bank Global Auto Industry Conference 2025 highlighted its strategic initiatives in the evolving automotive market. For further details, readers are encouraged to refer to the full transcript below.

Full transcript - Deutsche Bank Global Auto Industry Conference 2025:

Unidentified speaker: All right. Welcome back. Next up, we have American Axle. I’m joined by Matt Geralondo, VP of Strategy and David Lim, Head of IR. Quick background on American Axle.

It’s a global tier one supplier of driveline and also metal forming products for primarily the light vehicle market, but also commercial vehicles. Of particular note, the company is currently in the process of acquiring a big acquisition of Bel Air in The UK, which we’ll certainly talk about. But to kick off, it’s been a very volatile start to the year, to say the least. Tariff policy is however getting seemingly stable now. What’s your visibility, I guess, around production schedules?

So before we even begin there, we just have some opening stuff that we wanted to share

David Lim, Head of IR, American Axle: with and I should have informed you before so my apologies. Matt will do me on to this.

Unidentified speaker: Yeah, sure, go ahead.

Matt Geralondo, VP of Strategy, American Axle: So we wanted to start by acknowledging we put out a

David Lim, Head of IR, American Axle: press release this morning and

Matt Geralondo, VP of Strategy, American Axle: I think 08:00. We secured a contract with Scout Motors in North America, and we will be producing the rear beam axles of the electric beam drive axle for the rear of that truck and then the front EDU for that truck when it goes to production in 2027. We’re very excited about it. It’s a big win for us, something that we’ve been working on in business acquisition for quite some time. Truck and the SUV themselves, the Terra and the Traveler are interesting in that they are pure battery electric, but also with an option for a range extender EV, which has been a really hot topic.

It’s probably something we’re gonna be talking about today. The range extender EV allows you to, in essence, drive the car as a gasoline powered car if you want. So vehicle’s got a plug, it’s got a place to put the gasoline, you can choose which of the two you want. A very compelling looking vehicle and we’re very excited to be able to announce that at work. And we also I guess we’re here to talk about the combination, but think that’ll come naturally out of the Q and A.

Yeah.

Unidentified speaker: No. Congratulations. That was actually in my list of questions since you since you brought up can maybe talk about that. Start off with that since that’s the freshest freshest win so far. How do you think about, I guess, this not so much the the product necessary itself, but the idea that you mentioned that has both powertrain options.

Do do you think that EREV can be a big hit in in

Matt Geralondo, VP of Strategy, American Axle: The US? This is, my favorite topic, so I’m gonna have to be here. Awesome. I wanna start by saying if there’s anything that we learned in the last years in North America, it’s that consumer choice and the consumer will is super important. We were just talking before we started about the concept of a plug in hybrid, so a vehicle that you could plug into the wall or you could put gas in.

I bought one in my house. David has one too, and we both are strong believers in the concept. You’ll hear people talking about these range extender EVs and then the plug in hybrids. I will tell you like when I talk to my extended family, people that I know from my private life, they don’t know the difference, they don’t care about the difference. It’s a question of does it have a plug, does it have the gas or does it have both.

I believe strongly that if you think about the psychology of buyers and why do some buyers not feel comfortable going to a pure electric lifestyle today. I think that those extended range EVs are really nice solution for those people, Kind of like a tow into the electric lifestyle, the plug in hybrid that we’ve got, it drives almost purely electric many months out of the year, but at the same time if we want to take that long trip or if it’s a cold day, or if we’re worried because the wife and the kids are going somewhere and it’s far away, you’ve got that backup system. Think that’s compelling. In a lot of the like technology symposium type events that I go to, that’s what you hear people talk about is the range extender, the range extender. And I think it’s for those reasons.

It’s a very elegant solution to give you electrification, but at the same time address like the psychological concern.

Unidentified speaker: So assuming that I’m gonna take your word for it because I believe in it too. When can we start seeing more of these?

Matt Geralondo, VP of Strategy, American Axle: Yes, so in The US it’s obviously based on who’s gonna launch what and when. You gotta remember it it wasn’t so long ago, maybe two years ago or three years ago, all that you heard OEMs talking about were battery electric vehicles. This is really across the spectrum. There were always some exceptions, but people really been focusing hard on that. It feels like a time of pivot, right?

It feels like a time of recognition that we’re going to need to have more options. The nature of the car industry is it takes a little time for that to work out. You’ve got to redevelop, redeploy and to a great extent, change the vehicles that are being manufactured. So I think you’ll see them coming some of them sooner, know, there are lot of OEMs have on the market today. But we also see a lot more discussions about future hybrid architectures that could come not just to the smaller vehicles in the market, but also to some of the bigger, like, trucks and SUVs that we tend to drive here and there.

Unidentified speaker: ERVs actually already it’s actually, you know, very popular in China. Mhmm. We have Alright. Thousands being sold from Huawei, Li Auto, etcetera. What what what’s gonna what’s gonna be the biggest difference or what are the biggest difference do you think will be with the CRVs we’ve seen there versus the ones that you’re aware of?

Matt Geralondo, VP of Strategy, American Axle: Just wanna mention like that Li Auto One was one of the applications we were on in China to be super compelling. Same concept, right? It drives an electric vehicle until you need backup and then the engine would fire. Think that that will work well in The US market for certain vehicle types.

David Lim, Head of IR, American Axle: Are he coming today or are he just smaller cars,

Matt Geralondo, VP of Strategy, American Axle: you know, passenger cars, not the kind of cars that necessarily we tow or do work with. We have a lot of discussions, with Detroit customers who are in that big truck in the space. We spend a lot of time kind of mapping out what’s the best hybrid solution or architecture in for a car the size of the produce. Right? Okay.

Now what is it for a much larger SUV? And then finally, what is it for a truck which might do work and doing work means like pulling something heavy on the highway? What we found is the architecture is different depending on which of those things you want to do. And just so fundamentally the question is, if the mission is I want to be able to carry four people for 50 or 60 miles, that extended range EV model is really good and that’s why it’s been so successful in China. If the mission is, I wanna be able to pull a boat or a trailer or drive a work truck and I need to be able to drive at 80 or 100 or 150 miles fully loaded, then the architecture could be something else.

So I think the big driver is gonna be how big

David Lim, Head of IR, American Axle: is the vehicle and how is

Matt Geralondo, VP of Strategy, American Axle: that vehicle really gonna get used in life. There will be different architectures depending on the answer to that question.

Unidentified speaker: And when you say different architectures that mean you just have a bigger engine or is more complicated?

Matt Geralondo, VP of Strategy, American Axle: So this is gonna get into that like discussion about where do the parts go under the hood? I would say broadly, the range extender EV is really a battery electric car. It’s kinda like a backup generator on board where the only connection from that generator to the wheels is through wires. There’s this situation where the more load that the engine has to pull, the more like work is being done by the combustion engine, the greater the benefit to have a mechanical link from that engine to the wheels. So what that means is the way the powertrain is designed could be very, very different.

Some of those applications might really have power chains that look a lot like the way combustion trucks look today, kind of products that we make today and maybe a little bit of light electrification elsewhere. And then other ones would go all the way to the point where you say there’s no mechanical link between the engine and the wheels, like Scout is doing in their concept. Maybe this is the point where I have to say, what we’re certain about is this D Maxle architecture, which is the core of our business today. We’re certain that it applies regardless of which those cases the OEMs will choose. And that’s why we’re so happy about that Scout award to be able to show how that system works.

Unidentified speaker: I I don’t I don’t know if you can answer this, but is there more coming?

Matt Geralondo, VP of Strategy, American Axle: Definitely more coming. We’re working on a lot of things in a lot of places around the world. And maybe as you mentioned a minute ago, a little bit different technology coming out in different regions, so there’ll be more to talk about in the future.

Unidentified speaker: Alright. Let’s switch gears to one eighty to DALL A. I understand that you’re very involved, intimately involved in this. Just just for people not so familiar with what’s going on, can you provide some context about your your interest in Dalla or GTN as people know as GTN and and remind us the Yeah. Absolutely.

Okay.

Matt Geralondo, VP of Strategy, American Axle: So Dallaigh or Dallaighs, we had a big argument about this. Yes. Supposed to say the yes. Dallaighs is a village in Wales, And it’s also the name of a company of public listed company in The UK, which has two businesses under it. And both of those businesses are called GKN.

GKN is a company that we a lot of us know about. They’ve been around actually since the 1700s I’ve heard. They made cannonballs during the Napoleonic War. So DALL E has two business units. One of them is strong in powdered metal and the powder to

David Lim, Head of IR, American Axle: make the powdered metal parts

Matt Geralondo, VP of Strategy, American Axle: and then the parts themselves. And then they have a part that’s today is called GKN Automotive, historically was called GKN Driveline. They are the leaders by far in the space of side shafts. Side shafts are one of those parts that you never see but the really important, it’s the thing that connects from the transmission to the wheels in the car to make the wheels spin. And part of the attractiveness of those side shafts is I don’t like the tire.

It doesn’t matter if it’s a battery car, a hybrid car, hydrogen car, it doesn’t matter. You need that shaft to connect to whatever it is that’s propelling the car to the wheels. And that’s kind of what led to our interest with them. So we have this thesis that given the environment that we’re all in right now, there’s uncertainty, there’s turbulence, can feel your tariff question coming. You have to ask yourself in this uncertain environment, especially given what’s been going on with the electrification mix in the last years.

How do you set your company up for staying power and for success as we go through this transition? If the transition is coming, electrification will increase, but how fast is really important to a company like ours. We kind of laid out, what you wanna have? What do you wanna do? And what we put especially at the center of our strategy as we said, we need scale.

Scale means we wanna be bigger in terms of revenue. We wanna be bigger in terms of our buying power. We wanna have a flexible footprint so that we can flex for things like what are going on today. And we wanna have like a diversity both in the products and then in like the geography. And so products means we wanna be agnostic to what the market needs.

We said, we wanna be prepared to sell to combustion customers, we wanna be prepared to sell to bev customers, and we wanna be flexible to switch and the Sideshap solves that for us. But we also wanted to have a lesser dependence on any one customer, any one region or any one technology. And that’s the thing you get. If you look at our investor deck, you’ll see there’s a lot of increased diversification that have to be stressed in that communication. So the other part of it is, in terms of overlap, the overlap is not so great.

We’re really a truck company, we make truck axles, especially for North American products. GKN Auto, much a global company, side shafts going in all kinds of cars around the world. Like if you would go that funny Renault that you might rent when you’re in Europe in the summer or even a vehicle that you might drive in Japan when you’re on a business trip, those all have these two hand side shafts and so it’s a very, very nice story. But the overlap is limited and that’s especially helpful for us in terms of the regulatory approval that we’re going for. But at the same time, because we’re both in the automotive space, it opens up the ability for significant synergies in the operations.

We’ve laid out a plan that leads us to $300,000,000 of synergies that we can attain after we achieve the full run rate. And that amount of cash, it’s a significant amount of extra EBITDA will help us to pay down our debt quickly, strengthen our balance sheet such that we can be prepared to, I don’t wanna call it a storm, let’s just say to weather the events that we’re going through and be prepared on the other side for whatever are the next steps in this industry.

Unidentified speaker: I want to follow-up on the on the synergy aspect. There’s two angles. One, per 100,000,000 does sound like a lot, but I think based on some of the comments that the company has made at least it’s a bit conservative. Is there a reason why there could be actually much more?

Matt Geralondo, VP of Strategy, American Axle: This is a hotly debated topic. I want to start by saying we were very very consequential in our planning process, our targeting of what the synergies would be. Like anything, you look at it top down, you look at it bottom up. When we targeted 300,000,000, which is a number it’s about 5% of sales. It’s really like smack in the center of what companies like this announce when they do combinations like this.

So I would say it’s not an aggressive number. And then, you know, without bringing you through the gory detail of our of our plan, I would say, because DALL is a UK company, the takeover has to adhere to the The United Kingdom takeover code, which has really specific rules about what you can announce and how that is embedded and verified by an independent firm. We ran through such a process in January. As part of that process, we had to build like a big list of here are all the individual ideas that you could put into place and here’s how much money that could save. And then with the help of an external financial like auditing firm, they essentially sensitized it down based on things like what’s your track record?

How much of the data have you actually seen? To what extent could this idea in this country or this region be read across the globe? And they really like reduced the number that we submitted down to the 300. So from our perspective, we went through a rigorous process. We saw a lot of data, certainly not everything because we are in a way competitors.

We can’t get into all the data. You can’t necessarily see what is the SG and A, what are the individual people make or what precisely are you paying for contracts. But you can in aggregated way get a feel for the data in a way that you can build these plans. So we are confident and we’re excited to get more insight into that as we move forward between now.

Unidentified speaker: And just one thing to clarify, so Dallet was actually doing its own restructuring regardless of the acquisition. Has that been playing out? And is this increment would that be incremental to $300,000,000 a part

Matt Geralondo, VP of Strategy, American Axle: So in terms of how does it apply, the rules and the panel are clear. You have your standalone plan and everything that you report as synergies must be those synergies only realized because of the combination. The answer is yes. And your point leads to one of the things that was very interesting about us. The present Dallet leadership team have been, I think very forward thinking in the restructuring of their business.

They’ve been open if you look at their investor material, they’ve been open about where they do business, what their cost structure is, where they do business, where they would like to be and they’ve been investing in the business to make it a, let’s say to reduce the cost structure and I expect that we’re going to benefit that post close benefit from that, excuse me. Yep.

Unidentified speaker: More generally on just this idea you mentioned earlier about getting bigger, we sort of think about it as consolidation versus specialization. Is the idea then that this will you will kind of initiate some some level of consolidation among I mean, basically having too many powers in place in it.

Matt Geralondo, VP of Strategy, American Axle: So I can’t answer for the other companies in our space. What I can say broadly and everybody would agree, we’re all in this kind of environment together. And some of the forces that I talked about before the uncertainty of the mix, the tariff threat that’s coming in, we haven’t talked about it today, but it seems like it’s getting more and more expensive whenever we develop new programs or new products these days. The technology has increased and therefore the cost has also increased. Combining enterprises is very helpful in that environment to help with either with the buying power of the sharing of the costs.

So it makes sense for us. I can imagine it making sense for others, but at the same time,

David Lim, Head of IR, American Axle: I’m not certain. David? Yeah, no, I think that’s a great point. I would back that up 100%. I think there’s a number of times when our management team said that it just makes sense for consolidation to happen within the industry.

You’ve seen it with the OEMs And given the turbulence that we’ve seen in the market in the last five years, given chip shortages, tariffs, COVID, that makes a lot of sense also from the supplier parts.

Unidentified speaker: Back to Dali specifically, it does have a pretty sizable US footprint. Can you go over that and how you can potentially take advantage of it?

David Lim, Head of IR, American Axle: So look, I think they have a sizable footprint and as more and more OEMs may consider onshoring to The US in The assumption that maybe next year in ’26 once we get the deal done, it’s going to close in ’25. But at that time it opens definite opportunities where we could leverage that footprint and there could be more installed capacity. So to your point right now, we are getting additional inquiries on the metal forming side for additional business. There’s a lot of OEMs that are saying, we could source more from The US again on the metal forming services.

Unidentified speaker: So it’s a big deal. And I think one natural question is leverage. Are we comfortable with the leverage coming out of the transaction? Look. I think

David Lim, Head of IR, American Axle: the way that we would couch it is, I mean, when we did the when we’re doing the deal I mean we had some very very strict parameters laid out by our Board of Directors and one of which was is you know we got to be very very sensitive to our net leverage. So we want to get you know as net leverage neutral as possible upon the close, but what we see is because of the combination and the synergies and the combined EBITDA, we feel a lot and feel comfortable in getting to that two and a half times, hopefully relatively quick. And then at that time, look, open up the playbook for some shareholder friendly activity. But I don’t want to say that we’re not going to stop delevering. We’re gonna that’s still the primary focus of our management team is to continue to delever it, and then at two and a half times while we do it delever, then we open up the coffers for maybe other options.

Unidentified speaker: Technically, timing timing wise, I think you’re targeting year end.

Matt Geralondo, VP of Strategy, American Axle: We’ll That’s doable. Yeah. That’s what so what we’ve announced is year end, and we’re confident that we’re gonna be able to get there. You know, we’ve announced when our shareholder vote’s gonna be. We’re in the midst of these regulatory approvals.

We’ve got 10 total, think we’ve said that we’ve got three of them approved so far, and just a lot of kind of like bureaucratic process work that we are pushing through. But we’re confident we’ll be able to get there at the end of the year.

Unidentified speaker: And then I saw that you’re doing dual listing as well, Nguyen?

David Lim, Head of IR, American Axle: Yeah, mean look, the dual listing, look, very receptive to the shareholders, we listened to what they had to say and we decided that was the right thing to do for both shareholders on both sides of the pond to really convert on the value creation of the combination. So that’s what led us to that decision.

Unidentified speaker: I wanted to switch gears, it’s not the tariffs. Tariffs, not yet. Back to my question, I guess production schedules in North America, how are they looking

David Lim, Head of IR, American Axle: especially on Look I would say production schedules in general a little bit volatile but nothing like crazy. So look I mean we still have several weeks to go, we’ve got to keep a good eye on you know what’s happening but you know there’s a little bit of volatility. Yeah that’s the way I’d probably couch it.

Unidentified speaker: Okay and then I now proceed to the tariff question. Has it been happening, recovering at the same pace that you would have expected?

Matt Geralondo, VP of Strategy, American Axle: Yeah let me just, okay so the tariff situation, I’m gonna start with like it’s really early days. The discussions have been progressing. I’ve heard this question a few times today and I want to start with, it’s not as simple, if you run a business it’s not as simple as just saying know to your customer, here’s your bill, let’s talk. What we’re trying to start with is where is their tariff exposure and why? I should have said, the nature of our products is that they’re big and they’re heavy and we therefore tend to build them very close to where our customers consume them.

And we also tend to buy the parts, those big heavy parts we use also relatively nearby. So the exposure for us is relatively low, I think compared to some of our peers. The discussion with the OEM now, what you start with is not please pay. What you start with is, here’s why there is an exposure and here’s what we can do to mitigate that. And in some cases, as simple as just resource the part.

And maybe resourcing a part to a higher cost country where there would be a cost to do so, but at least there’s an analysis as a study you can make to say, here’s an option or here is another option. That is where we are starting. As these things go, there are kind of some common themes that suppliers like us have and there are some discussions about what might make sense to onshore or near shore from the portfolio today. Having said that, we’ve said publicly as have some of our peers, our intention is whatever residual exposure there is, we intend to recover it. And that has been our position.

Let’s say discussions are constructive and professional at this point in time. It’s still early days.

Unidentified speaker: Understood. And related to that, GM had a big announcement yesterday about bringing some full size truck, full size SUV production to US. Any preliminary thoughts around that?

Matt Geralondo, VP of Strategy, American Axle: I wanna start with that factory is like four miles from my house And the bulldozers have not stopped running for three years. So I sensed something would come. There’s a little bit packed in there. Certainly, it’s interesting and it’s important that they’re announcing expanded footprint for trucks in The US. And thing is they’re going to bring the production of their sport utility vehicles also in Scout Factory.

If you followed you closely, you would know that the one plant where they build the full size sport utilities which are very, successful vehicles today is in Texas. So this would bring some additional capacity online. We serve both of those vehicles today. We and we of course serve GM from a kind of a combined footprint. We have a facility in Michigan where we kind of ship to the North plants.

And we have a facility in Mexico where we kind of ship to the Southern plants. There’s a little bit of cross and it’s in there. We think it’s good news for them. We think it’s good news for us. We have the ability to supply to all of those servers they mentioned from the footprint that we’ve got.

And I guess the last point that I’m going to say is we’re all eagerly awaiting the next information from the administration that’s going to relate to what about powertrain products that would cross borders, how will they be treated? Today our products are USMCA and we’re in a kind of a way you see approach to what’s gonna come out there. Not

Unidentified speaker: to dwell too much on GM, before yesterday they also made a big engine I think announced. Tonawanda,

Matt Geralondo, VP of Strategy, American Axle: that’s right. Yes, any

Unidentified speaker: impact there?

Matt Geralondo, VP of Strategy, American Axle: Certainly no impact there. Their announcement about Tonawanda was they’re changing the investment profile. There had been a certain technology slated for that business. And they said, still going be investment, but it’s going be in combustion V eight engines, which at General Motors broadly serves the truck and full size SUV portfolio. From our point, that would be a signal that they continue to believe in ICE, ICE and hybrid.

They continue to believe in the full size truck and utility franchise, and we’re positioned to benefit from that greatly. Expect that those engines are gonna go into some of those trucks we just talked about. Yep. Yep.

Unidentified speaker: Okay. Wanna take a side pause here to see if we have any questions from the audience. Alright. I continue. Back to this is more of a industry thing.

I guess, what do you think the competitive dynamics in public space look like going forward? Because, you know, we did a board before this, and we have a couple more tomorrow. It it seems the companies such as yourself, the setup is actually pretty favorable, I would say. The competition seems to be especially when once you start moving down the list, the competition gets thinner and weaker. Is that how you read it, or how do you read the kind of

Matt Geralondo, VP of Strategy, American Axle: competitive backdrop? You go I’ll go

David Lim, Head of IR, American Axle: Look. I think I think the competition is always stiff, and look I’m going to probably give you more of a general answer. Look, I think what we have to do is just have the right technology in place, the right cost structure in place and just continue to drive that in all aspects of our business. I think that’s probably the high level explanation. Maybe Matt will give you a little bit more details.

Please be controversial.

Matt Geralondo, VP of Strategy, American Axle: Like the last three or four years been crazy. It’s just been a crazy time and like I would say openly, we’ve all been through this real hype cycle of I’m speaking to North America now. We’ve been through this huge hype cycle of electrification where there has been a a assertiveness, I would say almost a panic to secure electric business. And a lot of that business has just not played out well, and we know it, right? And you can point at us and all of our peer groups and say, this is where we see you guys on that continuum, but we’re all on that same chart somewhere.

And I think outside of formal events like this, all talk about, how are we positioned? How do we do? How do we feel about the business that we’ve got? And like, what about these other guys? Two years ago when they took that, we were so upset and how do we feel about that?

I will tell you, I frame everything as we talk about the competitive set today through how are they positioned for electrification and to what extent has the business that they’ve won panned out in a good way? God, hope that’s not my phone. I think that, so now we’re down in this kind of trough of disillusionment in the hype cycle. A lot of us have these contracts, we’ve made these commitments, and we see what the business looks like. And we think, boy, maybe we should not have been so aggressive at that time.

Some of us might say that. I think this year, like what do I see when we compete for business with our known competitors that we’ve been working against since before I was born really. What do I see? And what I see is, I see a lot more rational behavior coming back in. It’s part of what I see.

And then I also see a lot more what we call selective about what are we gonna quote? Boss loves to explain to us. We do not have unlimited poker chips to bet. We have only so much money, so much capital, and we get a bet on winners. The question is who are those winners that we’re gonna put our capital into being certain they’re gonna move those cars and we’re gonna get return on our investment.

What I’ve seen of late is kind of a return to that kind of a thinking. And how are we therefore positioned? My view is always gonna be, we are positioned very, very well because we’ve been selective until now. We’ve been focused on the basics, excuse me, in particular remaining profitable in the business that we’ve got. But also, we’re we’re to a great extent manufacturing and technology company focused on that stuff.

And kinda after the this loop that we’ve all been through in the last three or four years, you know, things kinda come back to that, you know, we return to where we started, which is OEMs need reliable partners, and that’s what we

Unidentified speaker: Wanna move on to Europe really quick. Wanna ask quickly about Europe. I know historically, obviously, it’s it’s not been as important, but with this deal, obviously, now Europe becomes much more. Does are you worried at all about kind of the complexity of having much bigger European operation both from from a a margin perspective, also from a kind of segment of the agreement?

Matt Geralondo, VP of Strategy, American Axle: I I would not say that we’re worried. I would say that carefully thought through what is the European footprint of DALL E. We put out a chart in our IR deck that kind of looks at, what does our pie chart look like today? And then what will it be after we combine and to what extent will we be exposed to Europe? And this is kind of part of the analysis that we did pre announced.

And if you take a look at the combination profile versus the peer group, would say, well, still underrepresented or underexposed compared to some other. That was part of the thinking of of, you know, how deep you wanna be in that market because, you know, if we’re honest, there there’s a volume situation in the infrastructure. This part of it, and we’ve got obviously a little bit more insight than we’ve announced, but the part of it is that the management team of Galase has really been proactive about looking at what is their footprint, where are they doing business, where are their customers, what is their cost structure and what do they want to look like in five years. They’ve invested significantly in that and I think the combined enterprise is going to benefit from that. So we are not concerned about it.

We think it will be additive to the deal.

Unidentified speaker: And then just to close the loop on that, you got North America, you got Europe, Dollar’s also very big in China. Yes. You probably you I’m sure you know more more women than we do. What’s what was the I guess, was the thinking? Or what what do what do you think the prospects are?

Matt Geralondo, VP of Strategy, American Axle: I wanna start by explaining the the GKM automotive side has a 50% stake in a JV in China with POSCO. That joint venture is called SBS and it’s a very very successful business. I think I said early on that GKN is the biggest player by far in the side shaft market where they do business and the same holds true for China.

Unidentified speaker: This I guess is a

Matt Geralondo, VP of Strategy, American Axle: couple of like obvious points. obvious point, the Chinese market is huge and growing. And then another obvious point is the electrification business like ground zero for like penetration, or speed of technology change, and for cost structure, China. So the importance of that market cannot be understated. You might look at that market and say, whatever reads across to North America and Europe could to a great extent that technology might be coming from China in the future.

So it’s very, very attractive to us. It’s foundational to their business thesis today and it’s going to become foundational to the combination. So I think the last thing to say about that JV is the importance and what I’m thinking applies to the JV in China. An important, like, successful as a supplier in China in the future is being connected to the customers who are winning not just now, but are gonna continue to win in the next years. And from what you can see from their IR material, you can see they’re well positioned with those kind of growing customers as our as our stand alone captive businesses in China today.

I’m convinced it’s gonna work out well. There’s we’ve kind done that analysis of who are their customers, our customers, and then our customers, and we also see some opportunity in bringing those groups together.

Unidentified speaker: Fantastic. I’ll end with a probably a very mundane question maybe maybe for David. Guidance? Yeah, I knew it.

David Lim, Head of IR, American Axle: So look, you know, our guidance, you know, we gave guidance on May 2, look we’re gonna go through our typical exercise of evaluating and doing the analysis and you’ll just have to wait until we announce our earnings sometime in early August. I think your follow-up to that is what are we thinking about the half? It’s really too soon to tell. There’s a lot of volatility that’s going on. The tariffs can move things up or down, things change by the minute.

I mean, maybe not literally, but we’ve to keep a close eye on that. So no further comments on the actual guidance itself other than refer to May 2.

Unidentified speaker: It was a good guidance, I’m not worried about it.

Matt Geralondo, VP of Strategy, American Axle: All right,

Unidentified speaker: well thank you Matt and David, it’s been a pleasure, hope to have you again.

Matt Geralondo, VP of Strategy, American Axle: Thank you. Thank you. Appreciate it. Thanks.

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