Good morning. My name is Elisa, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the American Axle & Manufacturing Fourth Quarter 2020 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. As a reminder, today's call is being recorded. I would now like to turn the conference over to Mr. Jason Parsons, Head of Investor Relations. Please go ahead, Mr. Parsons.

Thank you, and good morning, I would like to welcome everyone who is joining us on AAM's fourth quarter earnings call. Earlier this morning, we released our fourth quarter of 2020 earnings announcement. You can access this announcement on the Investor Relations page of our website, www.aam.com, and through the PR newswire services. You can also find supplemental slides for this conference call on the Investor page of our website as well. To listen to a replay of this call, you can dial 1-877-344-7529, replay access code 10150289. This replay will be available beginning at 1:00 PM today through 11:59 PM Eastern Time February 19. Before we begin, I would like to remind everyone that the matters discussed in this call may contain comments and forward-looking statements subject to risks and uncertainties, which cannot be predicted or quantified and which may cause future activities and results of operations to differ materially from those discussed. For additional information, we ask that you to refer to our filings with the Securities and Exchange Commission. Also, during this call, we may refer to certain non-GAAP financial measures. Information regarding these non-GAAP measures, as well as a reconciliation of these non-GAAP measures to GAAP financial information is available on our website. With that let me turn things over to AAM's Chairman and CEO, David Dauch.

Thank you, David and good morning to everyone. Thank you for joining us today to discuss AAM's financial results for the fourth quarter and full year of 2020. Joining me on the call today are Mike Simonte, AAM's President; and Chris May, AAM's Vice President and Chief Financial Officer. To begin my comments today I'll review the highlight of our fourth quarter and full-year 2020 financial performance. Next, I'll cover some highlights from 2020 including some updates about the technology and innovation front. Then lastly, I'll review our 2021 financial outlook and our three-year new business backlog before turning things over to Chris. After Chris cover the details of our financial results, we will open up the call for any questions that you may have. AAM delivered solid operating financial results and cash flow performance in the fourth quarter and full year of 2020 as global production continue to recover resulted is strong EBITDA conversion. AAMs fourth quarter 2020 sales were $1.44 billion compared to $1.43 billion in the fourth quarter of 2019. Recall last year we were impacted by the GM work stoppage and we sold our US Casting business.

Thank you, David and good morning, everyone. I will cover the financial details of our fourth quarter and full-year 2020 results with you today. I will also refer to the earnings slide deck as part of my prepared comments. So let's go ahead and get started with sales. In the fourth quarter of 2020 AAM sales were $1.44 billion compared to $1.43 million in the fourth quarter of 2019. Slide 11 shows a walk down of fourth quarter 2019 sales to fourth quarter 2020 sales. First we cut down our fourth quarter 2019 sales by $190 million to reflect the sale of the US Casting business unit that was completed in December of 2019. Next, we end back the impact of the GM work stoppage from the fourth quarter of last year. That will account for the unfavorable impact of COVID-19 on our fourth quarter of 2020 sales, which we estimate to be approximately $40 million. At this point, our estimated sales impact from COVID is only for our India and Brazil locations, which have not recovered to pre-COVID levels for us. On a year-over-year basis, we were also impacted by GM's exit of its Thailand operations by approximately $10 million and the transition from a rear beam axle to a new lightweight and highly efficient independent rear drive axle for GM's new full size SUV impacted sales by about $35 million in the quarter. We'll have one more quarter of the year-over-year impact transition in the first quarter of 2021. Other volume and mix was positive by $38 million mainly driven by strong white truck mix in North America. Pricing came in $19 million on a year-over-year impact and metal market pass through and foreign currency for an increase in sales of about $7 million year-over-year. For full year of 2020 AAM sales were $4.71 million as compared to $6.53 million in the full year of 2019. The impacts of COVID-19 and the sale of the US Castings business was the primary driver of this year-over-year decrease. Now let's move on to profitability. Gross profit was $236.5 or 16.4% of sales in the fourth quarter of 2020 compared to $183.4 million or 12.8% of sales in the fourth quarter of 2019. Adjusted EBITDA was $261.5 million in the fourth quarter of 2020 or 18.2% of sales. This compares to $193.5 in the fourth quarter of 2019 or 13.5% of sales. As David mentioned this was AAM's best fourth quarter adjusted EBITDA margin in our company's history.

Thank you, Chris and David, we have reserved some time to take questions, I would ask that you please limit your questions to no more than two. So at this time, please feel free to proceed with any questions you may have, Elisa?

Your first question today comes from Rod Lache with Wolfe Research. Please go ahead.

Good morning, everybody.

Good morning, Rod.

Good morning, Rod.

I was hoping you could maybe just touch on EVs and backlog maybe just starting out with the background on Inovance in China. What is their market position, even prior to the relationship with you? Are those four contracts that you referenced in the backlog that you quoted? And maybe if you can talk about net backlog? I think that in the past, you've provided a gross backlog number and I believe that that's what you provided here today. What is the net number, net of attrition?

Yes, Rod, this is David, just working backwards on your questions. From a net standpoint, we typically we will run-off about $100 million a year, so you can do the math across the three-year period of time. With respect to the Inovance organization, a strong and leading producer of power electronics and motors in the China market, they're number two in the overall market in regards to supply our product in that market, strong and technical competency and manufacturing competency, very compatible to our technology. We're working very hard to develop obviously scalable and integrated technology, where we integrate the inverter, the motor and the gearbox all into one unit that's more power dense, smaller packaging space, greater performance and greater efficiency of that product while still offering our customers value propositions. That partnership started realizing such with four program awards in China, one that we were awarded last year, three that we’re awarded here in January of this year. And we're working on other opportunities in China, while at the same time we’re working in other opportunities both in Europe as well as in North America, as more and more opportunities are starting to present themselves with respect to the customer long range product plans and opportunities.

With those wins in your backlog, those four wins?

Yes, sorry I apologize. Yes, they were, Rod.

Definitely, and they obviously increasing volume.

Okay. And secondly obviously performance looks pretty strong in Q4, and that looks pretty fine in 2021. But it's pretty apparent investors are thinking about the disruption that the industry is facing. And I'm sure you spend a lot of time thinking about that, too. Right now, the consequence is low valuations for everybody that is in traditional driveline space. And I'm wondering if you could maybe talk a little bit about how you're thinking about strategic alternatives and options for American Axle whether you're looking at more acquisitions at this point, divestitures in the conventional driveline business, what is the sort of consequence of the environment that you're seeing right now?

Yes, Rod. This is David. In regards to the strategic side of things, when you look at our portfolio, we've pared down a lot of our portfolio, and we don't have a lot of material things to divest at this time. Nothing to announce at this time. But twice a year, we evaluate our portfolio and then make strategic decisions about that. But again, we don't see anything meaningful, that's going to have a major impact with respect to the debt pay down. I mean our debt pay down is going to really come through the strength of our operations and the performance that we're seeing from a cash flow generation which is only getting stronger, especially with the restructuring efforts that we put into place and have been able to now demonstrate third quarter, fourth quarter. And you can see the strength of our guidance in 2021 as well. Clearly, we made a big move in regards to expanding our relationship with Inovance from a technology standpoint, innovation standpoint, heavily focused on electric drive, there was people feel critical that maybe we were falling behind, we weren't falling behind, we're already in production on a number of programs. We've now landed incremental programs, and we've shored up where our gap was. And we were very open about it. In regards to power electronics and motors, we’re also working on a number of other next generation technologies for electric drive, with Inovance and independent of Inovance, with respect to satisfying the marketplace as we go forward across different vehicle segments and tailored for each of the respective markets that we're going to support. When it comes to the bigger strategic side of things, and the environment that's out there right now. And clearly, there's a lot of uncertainty in the…

Okay, great. Thank you.

Thanks, Rod.

Thanks, Rod.

The next question is from John Murphy with Bank of America. Please go ahead.

Good morning, guys.

Good morning, John.

Just a follow-up on Rod’s question on Inovance, just curious, I mean it sounds like it's burgeoning and starting out of China, but is it going global or you’re going to be going global with this partnership? And as you're going global and bidding on business, you yourselves are potentially in this partnership as well. Are you running into sort of the usual suspects in powertrain and truck management in and sort of your axle business? I’m just trying to really understand if you're running into new players, or it’s the same folks with new technology, and really trying to understand your right to play on a standalone basis and with Inovance in those discussions?

Yes, John, this is David. Historically, our biggest competitors in the truck side, they really been, Dana, and some of the in-house manufacturing operations. On the passenger car crossover vehicle side as far as ICE related products. The biggest competitor with that we really saw out there was GKN, but Dana and Magna and some of the others are out there as well. Clearly, with the electrification market, there's a whole host of new entrants or new players, you got your traditional driveline guys that go beyond the ones that I mentioned to you, but you also have the motor and inverter guys that want to spend time in that space as well. You've seen some of the partnerships that are being formed, the recent LG Magna partnership and the BorgWarner, Delphi acquisition, the ICE and Denso relationship that came together. But we feel that our partnership with Inovance will allow us to compete with any of those going forward. We've got the technology and are working on other advanced technology as I'm sure they’re as well. We're a proven supplier in the marketplace and we feel that we can bring a value proposition to our customers. The biggest thing we need to do is clearly understand their needs, the timing of those needs based on their long range product plans. And make sure that we're ready with proven technology and bookshelf technology to support those regardless of the vehicle segment whether it's pick-up, crossover passenger car and regardless of the region North America, Europe or Asia. We're positioning the organization to support that, we've shifted a lot of resources and reallocated resources internally towards advanced propulsion technologies, heavily weighted towards electrification. But we're not forgetting about our core business, we're protecting that core business by securing next generation replacement program that will support our cash flow generation for years to come. So that's a very huge positive for us. But we feel very good about the advancement with Inovance, we feel very good about our investment in and our discussion with them. And hopefully, there'll be some growth in those relationships as we go forward. But as I said, and we're very excited about what the future holds. Our whole position has been to be agnostic to the market, let the market dictate what type of propulsion system they want between IC engine, hybrid or electrification. But we clearly recognize that the market is pivoting towards electrification. And we'll make sure that we're properly prepared to win our fair share of the business.

And David, maybe just a follow-up to that. Can you remind us your content for vehicle potential on an ICE versus EV and maybe trucks and car to EV platform?

Yes, I mean pickup truck, full-size truck is around $1,600 a content per vehicle, crossover vehicles range between $900 to $1,200. Some of the passenger cars are $500 and below, let's say depend on components or independent systems. When you get into the electrification, as we've said you before, what we're doing on the Jaguar I-PACE is around $2,500 a content, but that involves both a front view and a rear view. Clearly as you move across the different product portfolios, I mean there's an opportunity to grow that in regards to some of the pickup applications. But there's also a possibility to reduce that to size it appropriately for individual vehicles, I think a big thing that will impact the price, but in a favorable way will be these three and one integrated solutions, which will allow us to offer a lower price content vehicle, but give more performance to the vehicle, but still command profits to support the overall business.

Great, thank you very much.

Your next question is from James Picariello of KeyBanc Capital Markets. Please go ahead.

Hey, good morning guys.

Good morning, James.

My apologies if I missed this, but the four new programs in China are all of those, the EV programs. Are all those tied to your agreement with Inovance?

Our technology agreement is a separate matter, we’re in that through our relationship with Inovance and our performance with Inovance. But ultimately, we're looking to have a stronger and bigger relationship with Inovance going forward. And this is just one part of it as far as the sourcing that we earn from them. At the same time, the confidence that they have in us, and we have in them in regards to the technology to put a technology agreement together. And we think there's better and brighter things ahead of us with that relationship going forward on a global basis.

Okay, got it. What's the latest timeframe on your Hybrid award with the premium European OEM that's been in the backlog?

Well, that program is going to be launching late this year, and we’ll roll into the next couple of years. And there's multiple variants that will be coming off of that. So we're very excited about that program. And we're very excited about announcing who that customer is because we've been talking about it for a period of time. But the technology that's going to go into this vehicle will be something that you haven't seen, as far as the type of performance of vehicles that it will be supporting.

Got it. And then just two quick modeling questions. The $15 million in increased R&D within the EBITDA walk, does that just reflect the third quarter commercial settlement that benefited the quarter and then for the $205 million interest expense, does that account for any debt prepayment through the year?

So your first question, this is Chris. Good morning. Yes, your first question as it relates to the R&D, a portion relates to the one-time clip from the third quarter where we had that reimbursement in the third quarter of 2020. But also a slight increase in spending net overall as it relates to R&D, right because it's we're directing some of our efforts towards some product expansion from that standpoint. The $205 million of interest just would begin to reflect debt pay down through the course of the year. Obviously, we would be subject to timing of when any debt payment was done. But yes, it should reflect that as well.

Okay, thanks.

The next question is from Ryan Brinkman of JPMorgan. Please go ahead.

Hi, thanks for taking my question. Are you able to quantify any more of your investment in that either in terms of $1 amount or percent ownership stake. I think I heard you say it was a small investment. But I'm mindful that sometimes with these pre-revenue companies, an initial small investment can turn into a larger one. And then I'd be interested to in, what drove you to make the initial investment? And maybe more broadly, my understanding is Re has assigned one of these so called skateboard type platforms. And just curious what you think the implications are to American Axle from skateboard type platforms, or the integration of traditional vehicle components into the arch of the wheel?

Yes, Ryan, hi good morning. This is Mike Simonte speaking. I would start by saying a couple things. David was clear about the fact that we're looking at multiple different strategies to access the new energy vehicle markets going forward. Electrification is the number one focus for our company. And we’re looking at ways to bring our electrification technology to the skateboard technology that you just refer to. But we're looking for multiple different ways to bring that technology to market. We were first introduced to this company, a couple, three years ago, we saw the potential that they had, we made a relatively small investment. So when we talk about smaller, talking about cost basis, Ryan and we've been in contact over the years looking for ways for us to advance the relationship beyond a passive VC type investment. We saw opportunity in that from the start. And we're optimistic, I mean nothing has been done quite yet. But we're optimistic that we can advance this relationship, assist this in a very creative, ambitious and good group of people that are behind this company to realize their longer-term vision to our industrialization experience. So we see some opportunities there. And we're going to chase it pretty hard.

Very interesting. Thank you. And then just lastly, relative to capital allocation, I heard you say that you're highly focused on debt de-leverage, does that mean that you intend to deploy the full $300 million to $400 million of 21 FCF toward debt pay down? Or with the rising EBITDA helping also does that maybe leave room for electrification related M&A, and wanted to check in on what you think the market looks like for electrification related M&A, currently, I don't know if the valuations are maybe overheated or whatnot, just given the rise in the market and for EV related stocks, or if you think there might still be any attractive opportunities out there?

Yes, Ryan, this is Chris. I'll start with your first question as it relates to our free cash flow guidance $300 million to $400 million, obviously, we'll generate that through the course of the year, that also fund a little bit of some restructuring payments, because that's a gross number. Also, as you've seen us in the past, we've had made small investments into our joint ventures where we expanded those in China and otherwise, I would expect some small capital allocation into that space as well. But then as we mentioned and our primary objective is continuing to reduce our leverage on this company.

Ryan, this is David. On the strategic front, I mean clearly the valuations of some of these power electronic companies is far exceeds what we were willing to pay at this point in time and need to pay based on where our balance sheet is. So our priority is clearly to service the balance sheet. But we also don't feel like we're being limited in regards to opportunities to support our customers, with the partnerships that we have in place. And as Mike alluded to you, we're also looking at other creative ways to leverage our technology in core markets as well as new markets.

Okay, very helpful. Thank you.

Your next question is from Dan Levy of Credit Suisse. Please go ahead.

Hey, good morning. Thank you. Hey, just first start with the backlog. And I apologize if this has been addressed already. Your backlog was effectively flat for ‘21 and ‘22 versus the prior-year. Can you just maybe walk us through the puts and takes on those years is simply that incremental business wins are being offset by weaker end markets versus what you assumed last year?

Yes, I think you had a couple puts and takes, if you think about through the course of 2020, right some of our customers deferred some of that backlog that was in ‘20 into ‘21 moved out, you had some attrition kind of recalibrate as well, some volume adjustments in the overall market, but our principal programs and a little bit of retiming on some of their program launches. And you've heard us talk about this in the past in some ways from months to maybe several months through the course of ‘21 and ‘22 based on a lot of activity really COVID related in terms of how they retimed some of their programs. But net-net, the key programs that were in our backlog previously continue to be in our backlog for the next two years and they're ready to launch, and ready to go. So we’re able to maintain a good hold on that and also keep our attrition level at the low-end of our previous ranges too. So from a net backlog, we remain pretty strong from that perspective.

Great. And then and just on the backlog as well, the e-drive piece, it's up slightly. What some could argue it should be up more, is that simply again, just a function of timing of programs like up $15 million, but not more?

Yes, so I think of some of the announcements that we've had over the past many months and past quarters and some of the relationships with Inovance that we discussed. So they continue to sort of step-in volume increases through the course of that three-year period as these vehicles launch, right a lot of these e-drive units are launching for example this year, they continue to step-in in ’21,’22 and even more in ‘23. So that's why we kind of curve-up through that period.

Okay, great. Second question is one that's maybe a bit more existential, we saw GM, obviously your largest customer a few weeks ago, put I guess, more of a line in the sand, outlining a target to be fully electric by 2035. This is really the first time that they've highlighted this timing for a full transition. And I realize there's a lot that can happen between now and 2035. And I know they use the word Aspire in the release binding. But I guess my question to you is, as you think through all the things that you need to do to transition to a full EV world be it on the product side or the manufacturing side. Is 15 years a reasonable period of time for you to make that full transition, that is first question.

No, Dan this is David. And you’ve asked me to predict the future a little bit. But at the same time, let me just say this, first and foremost, I applaud GM’s efforts to be carbon neutral by 2040 and eliminate the tailpipe emissions by the 2035 calendar period time. That's just good steward in this in regards to doing what's right for our environment, and the other things. At the same time, they've got leading edge technology, when it comes to electrification, they want to capitalize on that in the marketplace. So we're well aware of their transition and the announcement that that was not a surprise to us. You mentioned, it's an aspirational goal for them. But at the same time, they wouldn't put it out there if they didn't have a plan in order to deliver on that. But ultimately, the market will be the boss and determine the acceptance rate of electrification. Whole thing, as I said earlier was to be agnostic to the market, whether it's providing IC engines and hybrids, like we're probably doing today, or provide a larger number of electrified units in the future, we're going to be prepared either way. At the same time, we're going to partner with the various OEMs. But in this case, you brought GM. I mean, they're our largest customer, a strategic partner of ours, we’ve got a proven track record with them. We've been suppliers to them in the last three, four years in a row. And so we're going to get on that journey with them to support carbon neutral position, and also this whole tailpipe emission issue. Our big issue is to make sure that we develop these three in one integrated solutions with our partner Inovance and some of the other activities…

Great, thank you.

Thanks, Dan.

The next question comes from Brian Johnson with Barclays. Please go ahead.

Thank you for taking myself. So it's continuing on the question of the prior questioner, the GM slated at least per board said within their 20 to have all electric GMC in roughly 22, 23 as well as electric version of the Silverado Sierra. I know you don't like comment on specific programs, but could you maybe think through the content opportunities in a dedicated pickup truck, what they might be doing the Cybertruck, the Rivian, and so forth versus a conversion or a kind of e-powertrain version of an existing platform?

Yes, I just want to make sure I’m clear on your question, Brian, you want to try to understand that the content per vehicle and some of the impact with respect to content per vehicle based on what GM is doing? Is that how I understand your question?

Yes, you can answer it specifically for GM where would you see the addressable axle content going on a pickup truck versus a pickup truck that's been fitted with electric powertrains, but off of a legacy platform like the F-150 or perhaps what could go on with the Silverado?

Yes, clearly GM has made announcements already that they have their Ultium battery portfolio, they also have their Ultium electric drive unit portfolio, that's going to be supporting the Hummer program and some of these initial pickup truck programs that you mentioned to us. Obviously, those volumes are replated, all the trucks that they're producing today, they'll be incremental to the volumes that they're putting out there, they got to determine the receptivity of the marketplace with respect to those products. There is content for us, but more in the component sub assembly state. So thinking less than $250 of content in that area. But if we get into the full integrated EDU type systems, then it can be much greater than that, and even north to the $1,600 of content that we provide today. So, as we've said, we've already got some benchmarks out there in regards to what we're doing with Jaguar on IPs, which is more of a two in one solution today with an added inverter. We've got, what we're doing for the next European OEM. So we have a pretty good understanding what the market prices are for these products. Clearly, the advancements in technology and the ability to develop these three in one integrated, scalable solutions are going to dictate what the price point is going to be in the future for these products. And we're highly confident that we're going to be able to compete for that going forward. As I mentioned to you, our content look on a full-size truck today for IC and Hybrid is about $1,600 a content. And going forward, we think it can be that or maybe even greater, as we go forward here. But there's a lot of dialog that needs to take place with the customer base to really understand their requirements before we can identify what that content per vehicle is, but we feel very good about what it can mean to us on pickups. At the same time, we think that we can also capitalize on that and the other vehicle segments think crossovers and passenger cars.

And follow-on question as you think through the plant footprint you got from Metaldyne, and the product set that’s primarily based on facilities in the past, targeted engine and transmission components. Certainly those plants I think are well utilized and did a great job kind of cleaning-up the operational issues that came a couple years of age. But as you think very long-term, is there a way to repurpose that capital equipment towards components that go into electric vehicles, whether it's rough cutting, rough forming, gearing that you send to the OEM, we might be in-sourcing e-gearing, or could you just make body parts and whatnot. I think Mr. Musk is out there trying to cast a car like he would cast a matchbox toy. So just maybe some thoughts on that infrastructure and even if it doesn't wind-up serving e-motor, e-drive three and one units directly, what the feature of that would be in this kind of hypothetical future?

Yes, Brian you got a lot of questions, in this question, but the simple answer is yes. And what I mean by that is that we have positioned ourselves to go to the market from electrification standpoint, from a component standpoint, a sub assembly. So think differentials, also from a gearbox standpoint and also from a fully integrated EDU standpoint, all of those component plants that are manufacturing product today that are IC engine and Hybrid related type things. So think components and gears and shafts and differentials can clearly be converted over to run electric type product. As I mentioned earlier, some of the full integrated driveline solutions, those plants can also be converted over, but there's a little bit more work that will need to be done in regards to some of the assembly systems, most of the component activities can be converted over, I won't say that most of the work that we have that IC engine related than Hybrid related today, which think eight, nine and 10 speed transmission, think downsized engines, which leverage balance shafts and dampeners. Those products are going to continue for a long period of time, think a decade as we get on this journey in regards to electrification. And so but as the market starts to accept electrification at a greater scale than it is today, then clearly we’ll start converting those facilities over to provide electric product versus IC engine and Hybrid. But again, I keep driving and stress in home, that we want to be agnostic to the market. And we have strong operational excellence capability and technology capability from product engineering standpoint. And we'll make sure that we have products of relevance that are ready for the market. We just need the market to tell us when they're ready to adopt.

Okay, thank you.

Yes.

Thank you, gentlemen. Your last question comes from Joseph Spak with RBC. Please go ahead.

Thank you, everyone. Maybe just a point of clarification. You mentioned on Slide 5, some of the electric pickup and commercial vehicle component business launching, is that within the scope of the backlog? Is that new? And I guess, are you considering within that e-drive component, or e-drive business or not because it's sort of more components on electric programs, but not actual e-drive business?

Yes, these are not electric drive units, they’re components supporting electric drive unit manufacturing.

Yes, Joe, this is Chris. And this is included in our backlog or even think about some of the commentary, we talked about previously, where we're winning component work on commercial vehicles and pickup trucks, for e-drive BEV units of those type of platforms and segments that would fall into those categories.

But just to be clear like, if we were to I know, you're breaking up the backlog into e-drive and sort of the other traditional segments, but if we were to sort of look at it through a different lens, which is just content on electric vehicles, it would be above that 15%, because this business is spread across that 40% light truck and SUV.

No, no it would be in the e-drive, it support those vehicles. Right, so these support fully electric vehicles.

Okay, okay. Thank you and then just maybe one more on the trip shortage, because it does seem like, some of the automakers are getting a little bit creative, maybe in how they'll build vehicles, right. They're talking about building a good portion of the vehicle, but maybe without some of the components that are constrained on trips. So I'm wondering if you think that impacts the cadence of your business, because if you're able to sort of still supply like, do you still end-up shipping, and then they can sort of finish the vehicle later. And so you might actually somewhat diverged from what we see in terms of finished vehicle assembly, at least in the first half of the year?

Joe, this is David. First of all, it's an unfortunate situation that the industry is faced with in regards to semiconductor shortage, but the industry has overcome a lot of other challenges and they'll overcome this one as well. Clearly, it's going to really impact the market in the first half of the year here, but they hope to have it resolved by the second half of the year. Obviously, the OEMs are trying to protect their large profit pools in regards to their trucks and SUVs that benefits American Axle and our continuity of supply there. We’re being impacted by some of the crossover vehicles and passenger car applications, and even some truck applications. But at the same time, some of the OEMs plan to make up those units and have the ability to make up those units as long as those products are available, meaning that the chips are available in the future, which they expect to be. At the same time as you referenced, the OEMs are very creative, and they'll find a way to build product where they can, even if it's short apart for a period of time, and then they'll come back once the chips are available, build those sub-assemblies and integrate those into the final assembly, and then ultimately ship those vehicles out once they're validated from a quality standpoint. So overall, I mean we haven't been disrupted too badly. But yes, we have been impacted, was going to be something we're going to have to continue to monitor. It's part of the uncertainty that we were referring to earlier. But right now, our schedules look very strong for most of our products going forward here.

Just a follow-up, it's more an indirect impact thus far than a direct like have you had any trouble getting supply where you need it?

We have a couple tight spots, but we're working with our customers with respect to that as they're allocating chip production and making decisions on which plants to run or not run. But at this time, we're not being directly impacted by this more indirect.

Okay, thank you.

Thank you, Joe. We thank all of you who have participated on this call and appreciate your interest in AAM. We certainly look forward to talking with you in the future. Thank you.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.