American Axle says it's also on the brink

[BeatleBoot]

Source: The Detroit Free Press

American Axle & Manufacturing Inc. said in a regulatory filing Friday that it might violate the terms of its loan agreements as the future of its primary customers remains in question.

General Motors Corp. and Chrysler LLC are American Axle's largest customers, accounting for 88% of American Axle's sales in 2008.

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"As a result of the current automotive industry environment and the uncertainty relating to the ability of GM and Chrysler to continue operating as going concerns ... it is uncertain whether we will be in compliance with the financial covenants ... throughout 2009," the company said in its annual filing.

"Should AAM fail to be in compliance with these covenants, and we are unable to obtain a waiver or amend these covenants, we may be unable to continue as a going concern."



Read more: http://www.freep.com/article/20090314/BUSINESS01/903140304

[LiberalFighter]

1. Excuse me. Didn't GM announce they were doing better than expected and not needing additional loan?

[blue_onyx]

3. "Doing better than expected"

means they are losing less money, not necessary selling more vehicles. It doesn't help American Axle if the budget cuts GM made are kicking in.

[madmom]

2. So the dominoes start to fall.