American Axle & Manufacturing Holdings Inc Q2 2021 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Aileen Elizabeth Smith - BofA Securities, Research Division - Analyst : This is Aileen Smith on for John. First question, as your automaker customers have clearly been benefiting on the margin side from very favorable price and a tight inventory environment, have they, in any way, been more cooperative with recovery mechanisms for, let's call it, the stop-and-go production environment that you and others have experienced with the semiconductor shortage? We've heard from some suppliers that automakers have been receptive to cost recoveries where those suppliers have had to buy -- spot buy semiconductors to avoid disruption. But just wondering if that's extended to automakers also helping out on cost overrun for logistics or manufacturing or other buckets for those suppliers that are just trying to meet their customers with very choppy schedules and releases.

Question: Aileen Elizabeth Smith - BofA Securities, Research Division - Analyst : Okay. That's helpful. And then second, I wanted to ask a question around the EBITDA margins. Obviously, we've seen a bit of a return to normal, but still incredibly strong margin performance from some pretty elevated quarters over the past year. But can you help us bridge how you land at what I think will probably be a 16 % or sub-16% margin in the second half of the year to get to your full year outlook versus where you stood in the second quarter? We've got the volume environment that will probably be sequentially better, but what offsetting factors are there for that? Is it commodity, mix or just cost lingering through the value chain?

Question: Aileen Elizabeth Smith - BofA Securities, Research Division - Analyst : Great. That's very helpful color. And one last question on the balance sheet, if I may. Clearly, you continue to make good progress in generating cash and delevering. Can you remind us what your time frame is to get to a sub 2x net leverage target? Is that something that could be theoretically achieved in the next 12 months? And then as you get to that target that you've talked about in the past, how much the capital allocation framework change in any way?