American Axle says insurance to cover losses from Ohio plant fire
September 24, 2020
While American Axle and Manufacturing is still assessing the damage from a Tuesday fire at its Colfor Manufacturing plant in Malvern, Ohio, its insurance policies are expected to cover any interruptions to the business.
Employees escaped the blaze unharmed, but it remains unclear how much damage could be done to the company’s business with customers such as General Motors.
Representatives for the supplier declined to discuss the topic. Calls seeking comment from Automotive News this week have not been returned.
“GM’s supply chain team is working closely with American Axle to develop contingency plans to mitigate any impact to parts supply and on our manufacturing operations,” GM said in an emailed statement on Wednesday.
American Axle, in a Thursday filing with the U.S. Securities and Exchange Commission, said it is “still assessing the impact of the damage as well as coordinating plans to work around this disruption and protect continuity of supply to our customers, including utilizing production capacity and resources at other (American Axle) facilities.”
Beyond reimbursing for business interruptions, the company’s insurance plan will also cover repair or replacement of the Colfor Manufacturing plant, it said in the filing.
The plant, which manufactured pinion forgings and axle tubes for internal consumption and outside customers, generated $100 million in revenue for American Axle in 2019 and employs 276. American Axle reported revenue of $6.53 billion in 2019, compared to $7.27 billion in 2018.
It isn’t clear which automakers beyond GM rely on the American Axle plant. GM accounted for 37 percent of American Axle’s business last year, according to an SEC filing.
American Axle & Manufacturing, of Detroit, ranks No. 41 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to automakers of $6.53 billion in 2019.