World Headquarters Opening

AxleTech International celebrates the opening of a state-of-the-art, 210,000 sq.-ft. facility in Troy, MI.

September 22, 2010

On September 17^th, OEM Off-Highway had the honor of celebrating a monumental achievement for AxleTech International, a General Dynamics company and global manufacturer and supplier of axles, axle components, brakes and aftermarket parts for commercial trucks, military and off-highway vehicles. The company opened its new state-of-the-art world headquarters in Troy, MI, an expanded new home and “testimony to our success and incredible growth in the face of the ‘great recession’,” said Mary Petrovich, general manager, AxleTech Intl. The new location is near the company’s old headquarters in south Troy, MI, showing the company’s dedication to Michigan and its community’s growth and development.

More than 300 employees, suppliers and government officials attended the grand opening ceremony,including U.S. Rep. Gary Peters (D-Mich.), Michigan State Senator John Pappageorge and Oakland, MI, County Executive L. Brooks Patterson.

“AxleTech is adding skilled workers, helping Michigan to lead in advanced manufacturing, and providing moreproof that fighting for the auto industry and its workers while it restructured was the right thing to do forMichigan jobs,” said Rep. Peters. “We need to do everything in our power to fight for companies like AxleTechthat are investing in America and creating jobs in America."

“This new facility will allow AxleTech to be more responsive, more efficient, and more effective in serving the needs of our customers,” she continued. “This means that we can better serve the country’s war fighters, construction workers, longshoremen, agricultural workers, and many other laborers.”

The facility is a massive 210,000 square feet, housing AxleTech’s new in-house engineering and technical center. “Our customers will benefit from rapid prototyping, testing, development and trouble shooting,” said Petrovich. The building also houses the global distribution center to send out service parts and spares to keep customer vehicles and machines operating. Additionally, the Troy location features brake system assembly and AxleTech’s Truck Trailer Transit operations, servicing municipalities around the U.S.

The headquarters expanded Troy-location employment by 140% to 190 people, and well complements AxleTech’s Oshkosh, WI, manufacturing facility, as well as its global operations in St. Etienne, France (manufacturing, product development and aftermarket) and Osasco, Brazil (manufacturing and aftermarket).

An impressive line-up of heavy-duty mobile equipment equipped with AxleTech components helped to demonstrate the breadth of industries touched by the company and its technology. AxleTech’s over 200 customers include industry heavy-weights such as Navistar Defense, Oshkosh Corp., Grove, Terex, Freightliner, AGCO and BAE Systems, showcasing its presence in industries from military to construction to agriculture and on-highway trucking.

AxleTech Intl., a General Dynamics company

www.axletech.com

Mary Petrovich, General Manager

1. What proactive measures did you (and are you continuing to) employ to drive revenue during the recession?

We have hired incremental OE and Aftermarket business development leaders and sales account managers to cultivate relationships and identify upcoming opportunities ahead of the recovery

We are also exploiting the relationships gained from our two acquisitions of the past 3 years (manufacturers of gears and brakes) to leverage those market and customer relationships to identify opportunities to cross sell our other drivetrain products and systems

2. What steps are you taking to prepare for the eventual economic upswing and increased demand? Or, if you have already seen a significant boom in volume, what steps did you take to meet this demand?

We have in sourced our aftermarket customer service and distribution operations by hiring over 40 professionals in the past 12 months- we believe that this will allow us to be well poised to meet an expected upswing in customer demand with strong operational excellence, co-located teamwork, and internal attention to detail.

We have expanded our new global headquarters by 50% from the planned 140,000 square feet to 210,000 square feet--- to allow us to take advantage of our speed to market for various prototype, remanufacturing, and aftermarket opportunity

3. We heard that many companies focused on things like research and development and testing during the recession. What did you do with the slow down?

We continued to invest in and develop our core expertise in engineering and technical support for customers… it is what differentiates us in the market so we have continued that focus and investment by selectively hiring key engineering talent i.e. gear engineers

We have added almost 10,000 square feet of engineering lab, teardown, and prototyping capability on-site at our new global headquarters to improve our ability to serve customers

4. When do you see your industry’s full recovery, and what trends or instances have suggested and supported your prediction?

I believe that any recovery will be slow and drawn out, not dramatic and “overnight”.

That said, we do expect the commercial markets to pick up about 10% in 2011….with slow growth thereafter.

We also expect that there will be continued spending to repair and retrofit key battle-worn military vehicles in Iraq and Afghanistan—therefore, we are focusing our strategies to grow in those areas of the Military market as a result.

Our new global headquarters and operational expansion in Troy give us significantly greater capability to serve those markets more aggressively right now.