All right. Good afternoon, everybody. Thank you so much for joining us for this session with American Axle as part of Deutsche Bank's Global Automotive Conference. My name is Emmanuel Rosner, and I'm the lead U.S. autos analyst here at Deutsche Bank. American Axle is a leading supplier of driveline, metal forming, powertrain, and casting technologies for automotive, commercial, and industrial markets. American Axle has also been ramping up its electric powertrain business with several initial production contracts as well as a few, you know, global partnerships. And so we're extremely excited to be joined today by Chris May, who's the EVP and CFO of American Axle, as well as David Lim, who is the head of investor relations, to discuss how things are going. I think the format will be maybe to kick it off, a few introduction remarks from you, Chris, and then we'll dive right into some of my questions. Yeah. That sounds great, Emmanuel. First of all, thank you for hosting us here. We always enjoy coming to this conference each and every year. Deutsche Bank puts on a fantastic venue here, and it's a great way to have some dialogue and interchange on what's going on inside the industry and some dialogue with some of our key investors and potential new investors, as well. Before I begin any of our comments, of course, I would encourage everyone to go take a look at our website, www.aam.com, for our forward-looking information disclosures. Really, I'll keep my introductory comments very brief because I think some of the key points will probably come out during Q&A. But certainly, 2024 started with our earnings release a few weeks back, about a month or so back. We started the year, I think, on a very positive note. We reaffirmed our guidance for the year. We continue to push on our initiatives for operational efficiency, commercial recoveries with our customers, as well as we're seeing some level of stability in terms of our production inside of this year, calendar year 2024, versus clearly what we experienced last year in 2023 and also, to some degree, in 2022. So maybe with that, as we push through on the operational piece of the year, we also continue to be very focused, forward-looking in terms of trying to pursue new business, but also continue to secure the next generation of our key products that we enjoy today. And I think in some of the recent activities that we have seen inside the industry, I think those continue to become even more valuable on some of these key platforms that will run for a very long period of time. But from a technology standpoint, we're ready to, of course, meet the needs of our customers today, meet the needs of our customers tomorrow, whether it be hybridization or electrification, and pursue a nice bright future for American Axle. So with that, maybe I'll just kind of pause, turn it over to you and the audience, whoever may have some Q&A. Sounds good. Thank you. Let me just speak a little bit about the environment and industry conditions. Can you provide an update on the industry conditions you're seeing, and how's American Axle doing so far this year? Yeah. No, great question. I think this is a very key element for our operational performance as a company, obviously, as well for the industry. No surprise, we talked a lot last year about some of the challenges we faced, from a volatility perspective in the industry, a lot of changes in customer schedules, not only just changes, but in, in particular, last-minute type of changes. And those can be very disruptive to our operations, cause for less than optimal efficiency at our factories, and then ultimately drive through our P&L. I think the good news here, we talked a little bit about this on our first quarter earnings call, is we've seen a fair amount of stability, at least in production schedules in the first quarter, that has continued, mostly, mostly into the second quarter. There was some pre-announced, downtime that some of our largest customers had here in the second quarter. We have experienced some of that downtime. But I think the positive trend here was the it was pre-announced, it's sort of more customary where in the past, if you experienced some downtime, you had some heads-up and some notice that you can accommodate and deal with that versus just at the last minute. So I think picture-wise, stability seems to be in good shape from an industry perspective. You know, hopefully that will continue through the rest of the year. And we're off to a decent start as a company, both on our first quarter performance as well as we reiterated our full gu full-year guide at that time as well. How are you tracking with some of your important U.S. launches this year? Yeah. From a launch perspective, it's more of a tale of second half for us as a company. We have some critical launches on the electrification space. Most of those are in Asia or India in the second half, and we're tracking very well for those. In terms of our sizable launches here in the U.S., we have 2, both in the second half. One is really the next generation of the full-size Ram platform that we supply. We supply the 2500, 3500, 4500, and 5500 series for Ram. And that'll be a big transition here for us in the second half of the year as they move into their next model. That is our second largest platform as a company. Also, in addition, as you know, General Motors is launching their new compact SUV, the Equinox, the Terrain, the XT4, in the Buick Envision. We are the primary all-wheel-drive supplier for that. That's our third largest platform as a company. And that transition will also happen here in the second half. So, but again, all of these are starting to line up to, from a timing perspective, just as we had planned. But again, we have to face the big ones here in the second half of the year. What are you seeing in terms of the industry pushing out some of these EV launches and Rams? Is this impacting your business, and is it affecting your capital allocation priority? Yeah. Great, great, great question. I know that's probably the, I think, the largest, element on most people's minds for the industry in total. This is, it's a very dynamic time as it relates to, EV in the space in terms of not only programs that are launching now, but also in terms of how our customers and, and consumers are thinking about the near, mid, and longer term as it relates to these vehicle applications. So we have seen, in particular, probably over the last now 4-6 months, clearly our customers sort of, reassessing in terms of their vehicle launches, the cadence for which, the timing they will come on, the ramp curves, and the ultimate volumes. So that has impacted us how? Meaning not necessarily current year impact, but more in terms of as we think about the future, the quotation activity has certainly reflected some of these dynamics and uncertainties, in terms of our customers seeking quotations in the markets for platforms that will happen in the future as they, I believe, our view anyway, as they assess where they think these will ultimately land in the timing and stuff. So, you've probably heard us use the term air pocket in terms of some of the quotation activity, and we certainly have experienced it here in the last six months. Let's focus on some of the, you know, shorter-term dynamics in your business. You had a fairly strong beat in the first quarter. You chose to maintain guidance for the year. What are you assuming for the rest of the year sequentially, you know, to get there? Yeah. So we reaffirmed guidance on our earnings call, as you mentioned, back in May. We had a nice start to the year. And of course, that start to the year, in our view, gave us added confidence to deliver our financial performance inside of that guidance range. Of course, it's still yet early in the year. We have, obviously, as I mentioned, a little bit about the volatility has been stable or less volatility, which is good. That is our continued operating assumption for the balance of the year. And we do also have some of these large, second-half launches that we talked about in terms of the Ram as well as the General Motors Delta platform. But some of the key underpinnings, as we think about our guidance, we had North America production around 15.8 million. I know right now the current, third-party indications are a little bit higher than that, but very close to our thought process there. The midpoint of our guidance reflects approximately 1.4 million full-size General Motors trucks on their T1 platform. That's a key underpinning to our business, sizable chunk of our revenue. From a timing and cadence perspective, you know, generally we track is our business is about 70%-75% North America timing with the North America production assumptions, in conjunction with some of those back-half launches, that we will also experience, which generally brings a little bit of volatility to those specific platforms from a volume perspective as they come up and down, meaning run-off the old platforms, bring on the new platforms. But those are probably the main macros wrapped around our guidance at this point in time. Now, one of the impacts you had mentioned at the time was some pull forward of the full-size truck platform in Q1 as well as some downtime expected in Q2. When I'm tracking what's going on with IHS, it looks like Q2 volume might actually be better even than Q1. So, any update on essentially how production, downtime and production of this, you know, has played out? Yeah. Certainly, at the time when we had our first quarter earnings release back in May, you know, our view with the first quarter, production related to that full-size truck was very strong. We had some indication that they were trying to pull some of that production into the quarter, which, of course, supported us to have a very strong start to the year. They did announce some of the downtime in the second quarter. You know, we had continued to see that downtime play out. It's basically contained to one production facility at this point in time. But in general, the volumes have been pretty decent. We're still tracking towards that midpoint of our guidance. Can you dimension the impact from, non-materials related inflation from freight, labor, utilities that you expect this year? How much of this do you expect to be able to recover and how are negotiations with automakers addressed? Sure. It's also a very key question to our operations. You know, certainly, you know, the onset of inflation came on very strong back in 2022 for a variety of reasons, some geopolitical as it relates to utilities and otherwise. But also, we've had a consistent inflation pressure as it relates to labor over the last couple of years, and then more broadly, inflation as that's permeated through the supply base as well as our indirect inventory, suppliers, etc. So our goal for this year is to mitigate inflation through either commercial recoveries and/or our own productivity. And I think by and large, our guide into the year assumes a small amount of residual inflation, but generally, accomplishing that goal that I just shared with you. We do have some work to do yet on some of our customer recoveries. We do have a lot of it done, but we have some yet we need to close out here for 2024. I would tell from a timing perspective, you know, if you think about 2022, we settled with most of our customers around mid-year. Last year in 2023, it was much more weighted towards the tail end of the year, which we ultimately received final negotiations with our customers. I would tell you for 2024, we're tracking very similar closer to 2022 where we seem to have most of this behind us, hopefully by the middle of the year. But we do have some work to do on that perspective. But we are experiencing inflation. Labor inflation in particular is very sticky. Some of the other elements of inflation we've seen moderate a little bit, but still experiencing it. Of course, our supply base is experiencing the same level of inflation. And if they're experiencing inflation, they're looking for price increases from us, which we have to manage through, which is a form of inflation for us as well. I was gonna ask you with respect to labor. Can you characterize for us the current environment now? You mentioned, you know, efforts to increase automation where feasible. You mentioned the focus on plant loading throughout the year. What can you tell us about the progress on these efforts in mitigating labor constraints so far? Sure. Obviously, you know, we talked a lot about labor in 2023. That was some of the challenges that we faced, as a company, caused us for some of our operational disruptions and some of our performance challenges that we had last year in 2023. That manifested itself predominantly in the United States. It was really driven in large part by labor shortages. We had to kind of work our way through some of these labor shortages. In some cases, we had to offer compensation increases to attract and retain, more associates as we were facing turnover. We had to advance some of our training programs. But we also had to reload some of our facilities from some—maybe call it—some of our facilities that were challenged more from a labor perspective, reload some of that product, as you mentioned, to some of our other facilities that could have either labor or physical capacity to build some of that product. These things I just shared with you take time to do. I think in the third quarter of last year, we laid out a pretty nice plan transparent to all our investors on our website in terms of how we would sort of work through many of these challenges from a labor perspective in particular. I would tell you we are tracking towards stabilizing our workforce. You know, we had in line now a good wage structure, a good retention program. Some of those people that we brought in last year, now you're starting to hit them at full run rate, meaning they've been trained, they're not producing excessive scrap, they're not going through the ups and downs of the new associates. And now you're starting to realize some of those efficiencies. We've properly now reloaded all our facilities. We're starting to see the benefits of that, start to stabilize in our operations. And as you can imagine, this, this issue is circular, right? So if your, your operations are unstable, your labor becomes unstable, you create excessive costs, and that keeps going in a circle until you can sort of stop that. And, I think the actions we have taken now over the last six months have really started to hit put in place, and we're starting to realize the benefits of these actions. You saw that in our performance in the first quarter, and I would expect that to continue to be favorable for us as we go forward. Wanted to ask you about contribution margin. What, what contribution margin should we expect from the business, this year and going forward relative to your historical average? And is there an impact from a higher mix of electrification? Think about it. Sure. From a contribution margin perspective or variable profit, as some people would articulate it, if it's our existing product, our existing book of business on a volume basis, we have great operating leverage as a company. We will realize incremental margins on existing business for higher revenues of 25%-30% in the short term. Of course, if it's a new book of business that's coming in at a fully loaded cost, obviously it's lower than that. But on our current product set, I would expect our contribution margin to be in the 25%-30% range. You see that very clearly on our year-over-year walks that we provide, every quarter. And I would expect that range to continue into the near term. I see no reason why that would change. And then obviously you're focused on execution, you know, one year at a time, and you have 2024 targets out there. If I look ahead to 2025, what are some of the puts and takes to consider from American Axle in terms of growth and margin trajectory? Sure. And we're giving no guidance for 2025 at this point. I want to be, be clear on that point. But some of the things that we think about as we're stepping into 2025, you know, of course, first and foremost, production drives our business. So you have to take your view on the production in the marketplace. That would be the first recipe I would think about. The second is we expect, and kind of ties a little bit in with your, your question on labor, continued productivity improvements inside of our own operations, especially on a year-over-year basis. Some of the other elements that we're beginning to invest in more heavily, of course, is automation that will drive some of our productivity, just some of the core productivity inside of the labor elements that we mentioned, as well as the throughput through our factories. That'll be critical for our success. You know, we do have continued launch of new business coming in next year as part of our backlog. That will be critical for our success and top-line revenue and profit conversion. So at the macro, I would call those are sort of the main drivers driving our operations today. Some of the things, of course, on our mind as we think about going forward that would, you know, be a, you know, those are the puts, the takes away would, of course, be continuing to monitor volatility inside the marketplace. We have a large exposure to the Mexican peso, and that has strengthened considerably over the last 12 months. So over the last several weeks, it's weakened a little bit with some of their geopolitical environments. We're gonna continue to watch that very closely. And then, of course, holistically, macro inflation. Wanted to shift a little bit to the electrification part of the story. So, as we discussed, EV slowdown has been a big industry shift in recent quarters. How are you handling this changing dynamic? And obviously, you have large market share on some of the combustion engine trucks. So does this EV slowdown provide you better cash generation opportunity? Yeah. So I'll answer that in reverse. The answer is clearly yes to your last point. You know, if internal combustion engine hybrid applications that we support here today have much longer life than maybe people realized 6 months ago, absolutely, that's very beneficial for our business. We have high operating leverage on these platforms, strong cash flow conversion on these platforms. And as I mentioned, one of our goals in my opening remarks is to continue to secure the next generation of the programs we're on today. Many of our largest platforms, we have secured those, which will take that book of business well beyond 2030. So a book of business that has a long life to it that's highly profitable and strong cash flow conversion is very good for American Axle. But as it relates to some of the other EV applications, we'll continue to support those as well. We've seen, as I mentioned, dynamics and slowdown of some of the quotation activity. But our product set for to support the pivot to electrification is in place. We've been winning awards in this space, and we're launching product in this space today around the globe. And in our view, been quite successful at it, and we'll continue to do so. Can you remind us the size of your EV business currently, and your existing backlog and any future goals? So in terms of size for our business on our 2023 revenues, it was in the low single-digit%. Our backlog, as we disclosed, it's about half of our backlog that we announced back earlier in the course of the year. And our goal is to continue to sort of pace with our core product set and our customers' platforms that we support in terms of their transition to electrification. We announced a served market goal of greater than 10% by 2030. And of course, that's defined by our served market, and that continues to pivot around in terms of what the absolute will be in terms of forward-looking projections. But we see no reason why at this point in time we cannot continue to achieve our goals for our 2030 timeframe. Can you just go over some of your major recent, or upcoming EV launches and what content you have on them? So we have, you know, most recently, in this year, we started this launch a year or two ago. This is, of course, on the Mercedes-AMG product. I think we talked about it at this conference maybe two years ago. That was fed into a variety of derivatives. We continue to support that. It has expanded here again yet in 2024. We have won several awards for beam axles in the Asia and India marketplace with several different customers. Those are launching in the back half of this year and some into 2025. So those are pacing quite nicely. And we've also won how we call component awards where we supply into directly, generally into OEMs, a variety of different OEMs in Europe and North America as well as Asia from a component perspective that ultimately end up in BEV platforms. Those are generally tracking on track as well. As the electrification portion of your new business backlog continues to grow, can you speak to the difference in margin profile of these wins versus the other things? I know we get asked this question quite a bit. We do not provide margin profile differences between all the different segments of the business that we supply here today. Our goal has been, and will continue to be, holistically as a company as a top-tier margin performer. And each business case, each award that we pursue from an electrification standpoint needs to meet the financial hurdles that we have as a company. And if we continue to perform at that level from a quotation and hurdle perspective, we'll be able to deliver that goal of continuing to be a top-tier margin performers company. As you develop the electrification global footprint, where do you see the biggest opportunity for American Axle for expansion? Well, I think it comes in twofold for us. One, I think clearly geographical. We're three, almost three quarters of our business today is in North America. But we've seen EV business growth in Europe. We've seen EV business growth in Asia, in particular, China. So that would begin to sort of build an area that we have lower exposure to. But I think maybe one of the underappreciated elements of our business is also expansion of segment. If you think about our company today, we are the majority of our business falls into the full-size truck, full-size SUV, or crossover vehicle platforms. When we move into the electrification space, our drive units, whether we're on front-wheel drive, rear-wheel drive, or all-wheel drive applications from a EV platform can now supply front-wheel drive vehicles, rear-wheel drive vehicles, luxury car platforms, skateboard platforms, and of course, conventional or typical CUV and full-size truck applications. Some of these segments today, we really don't have a lot of exposure to, but they use the same drive units. And if you think about some of the wins we've announced in our past with electrification, whether it be the Jaguar I-PACE or the Mercedes product, these are vehicles our traditional lines of business would not participate in. We're seeing some segment expansion into these areas. I would expect that to continue in the future as well. It's just a couple of capital allocation questions. Can you walk us through your overall M&A strategy going forward? And will you continue to target EV-specific acquisitions? Or at this point, does it have to be largely powertrain agnostic? Well, clearly, you know, having powertrain-agnostic applications is one of our goals as a company is to be at the macro level powertrain agnostic. And what does that mean? That means we can supply ICE, we can supply hybrid, we can supply EV. But in terms of M&A, maybe we should start to take a step back and talk about our capital allocation first. So obviously, we've been using our strong cash flow generating power of our company to continue to reduce the outstanding leverage of our company, meaning taking gross debt down. We have paid over $1.4 billion of our debt down since 2017. I would expect that to continue. We'll continue to fund the organic growth and R&D investments necessary to continue to support our programs and new business opportunities in front of us as a company. And then we would pursue M&A activity where it makes sense. And of course, the last bucket I would put in the shareholder activity, whether it be buybacks or dividends. And right now, we do not have open authorizations for either one of those. Our focus has been on funding the organic growth of the company as well as paying down our debt. But as it specifically relates to M&A that you asked about, if you look at what we have done over the last couple of years, in addition to paying down debt using that internally generated cash flow, we have made some, I would call, tactical acquisitions. For example, most recently, Tekfor out of Europe. It was about a $400 million dollar revenue book of business that had a lot of agnostic product into it. Also brought some BEV technologies that we didn't have from a forging perspective, but also played right in our hand of a consolidation and synergy play. It really hit, in my mind, on the trifecta of some of the three areas we're looking for for an M&A acquisition. Those type of things would be certainly things we would consider about that we can do inside the envelope of our current cash flow generation. And then how should we think about the use of free cash flow longer term? You, you've directed a lot of it towards debt reduction, you know, in recent years. Should that continue to get to that low 2 turns of leverage, or is there a different thinking currently? Yeah. I mean, our goal from a leverage perspective, and this is a net debt leverage, and I'll call it near to midterm to achieve a 2x ratio or a little over 3 today. We've continued to pay down growth debt. We'll continue to do so with our free cash flow generation. Once we start to bring that leverage down towards that objective, what it really does, you know, couple that with our strong cash flow generation is to really then open up optionality inside of that capital allocation playbook. I think it'd be a little premature to talk about the various options at this point in time because we have some work to do to get to those stated targets. But we're on a mission to do so. And I think our operational performance and our cash flow generation will support that. Great. Those are all my questions. Let's see if there's any in the room. Any questions for American Axle? It looks like you were abundantly clear. You always are. So, Well, thank you. Thank you so much for coming inside today. All right. Thank you.