10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2004

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from     to

Commission file number 1-14303

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

(Exact Name of Registrant as Specified in Its Charter)

DELAWARE	38-3161171
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

ONE DAUCH DRIVE, DETROIT, MICHIGAN	48211-1198
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code  313-758-2000

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
COMMON STOCK, PAR VALUE $0.01 PER SHARE	NEW YORK STOCK EXCHANGE
PREFERRED SHARE PURCHASE RIGHTS, PAR VALUE $0.01 PER SHARE	NEW YORK STOCK EXCHANGE

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).  Yes x   No o

The closing price of the Common Stock on June 30, 2004 as reported on the New York Stock Exchange was $36.36 per share and the aggregate market value of the registrant’s Common Stock held by non-affiliates was approximately $1,614.1 million.

As of February 21, 2005, the number of shares of the registrant’s Common Stock, $0.01 par value, outstanding was 49,877,188 shares.

Documents Incorporated By Reference

Portions of the registrant's Annual Report to Stockholders for the year ended December 31, 2004 and Proxy Statement for use in connection with its Annual Meeting of Stockholders to be held on April 28, 2005, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after December 31, 2004, are incorporated by reference in Part I (Items 1, 3 and 4), Part II (Items 5, 6, 7, 7A, 8 and 9A), Part III (Items 10, 11, 12, 13 and 14) and Part IV (Item 15) of this Report.

Internet Website Access to Reports 

The website for American Axle & Manufacturing Holdings, Inc. is www.aam.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to section 13(a) or 15(d) of the Exchange Act are available free of charge through our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission. The Securities and Exchange Commission also maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

TABLE OF CONTENTS - ANNUAL REPORT ON FORM 10-K

Year Ended December 31, 2004

			Page Number
Cautionary Statements			1
Part I	Item 1	Business	2
	Item 2	Properties	6
	Item 3	Legal Proceedings	7
	Item 4	Submission of Matters to a Vote of Security Holders	7
		Supplemental Item – Executive Officers and Directors of the Registrant	7
Part II	Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	11
	Item 6	Selected Financial Data	12
	Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operation	12
	Item 7A	Quantitative and Qualitative Disclosures About Market Risk	12
	Item 8	Financial Statements and Supplementary Data	12
	Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	12
	Item 9A	Controls and Procedures	12
	Item 9B	Other Information	12
Part III	Item 10	Directors and Executive Officers of the Registrant	13
	Item 11	Executive Compensation	13
	Item 12	Security Ownership of Certain Beneficial Owners and Management	13
	Item 13	Certain Relationships and Related Transactions	13
	Item 14	Principal Accounting Fees and Services	13
Part IV	Item 15	Exhibits and Financial Statement Schedules	14
Signatures			20
Schedule II		Valuation and Qualifying Accounts	21
Report of Independent Registered Public Accounting Firm			22
Exhibit 12		Computation of Ratio of Earnings to Fixed Charges	23
Exhibit 21		Subsidiaries of our Company	24
Exhibit 23		Consent of Independent Registered Public Accounting Firm	25
Exhibit 31.1		Certification of Richard E. Dauch, Co-Founder, Chairman of the Board & Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act	26
Exhibit 31.2		Certification of Thomas L. Martin, Vice President – Finance & Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act	27
Exhibit 32		Certifications of Richard E. Dauch, Co-Founder, Chairman of the Board & Chief Executive Officer and Thomas L. Martin, Vice President – Finance & Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	28
Amended and Restated American Axle & Manufacturing, Inc. Incentive Compensation Plan for Executive Officers
Computation of Ratio of Earnings to Fixed Charges
Annual Report to Stockholders
Subsidiaries of the Company
Consent of Deloitte & Touche LLP
Certification of Richard E. Dauch, C.E.O.
Certification of Thomas L. Martin, C.F.O.
Section 906 Certifications of C.E.O. & C.F.O

Cautionary Statements

Certain statements in this Annual Report on Form 10-K are forward-looking in nature and relate to trends and events that may affect our future financial position and operating results. Such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The terms “will,” “expect,” “anticipate,” “intend,” “project” and similar words or expressions are intended to identify forward-looking statements. These statements speak only as of the date of this Annual Report. The statements are based on our current expectations, are inherently uncertain, are subject to risks and should be viewed with caution. Actual results and experience may differ materially from the forward-looking statements as a result of many factors, including, but not limited to:

·   reduced demand for our customers’ products (particularly light trucks and sport utility vehicles produced by General Motors Corporation and DaimlerChrysler Corporation);

·   reduced purchases of our products by General Motors Corporation, DaimlerChrysler Corporation or other customers;

·   supply shortages or price fluctuations in raw materials, utilities or other operating supplies;

·   our ability to maintain satisfactory labor relations and avoid work stoppages;

·   our customers’ ability to maintain satisfactory labor relations and avoid work stoppages;

·   our ability to attract and retain key associates;

·   our ability and our customers’ ability to successfully launch new product programs;

·   our ability to respond to changes in technology or increased competition;

·   adverse changes in laws, government regulations or market conditions affecting our products or our customers’ products (including the Corporate Average Fuel Economy regulations);

·   adverse changes in the economic conditions or political stability of our principal markets (particularly North America, Europe, South America and Asia);

·   liabilities arising from legal proceedings to which we are or may become a party or claims against us or our products;

·   risks of noncompliance with environmental regulations or risks of environmental issues that could result in unforeseen costs at our facilities;

·   availability of financing for working capital, capital expenditures, research and development or other general corporate purposes;

·   other unanticipated events and conditions that hinder our ability to compete.

It is not possible to foresee or identify all such factors and we make no commitment to update any forward-looking statement or to disclose any facts, events or circumstances after the date hereof that may affect the accuracy of any forward-looking statement.

1

Part I

Item 1. Business

(a)  General Development of Business

General

As used in this report, except as otherwise indicated in information incorporated by reference, references to “our Company,” "we," "our," "us" or “AAM” mean American Axle & Manufacturing Holdings, Inc. (Holdings) and its subsidiaries and predecessors, collectively.

We are a premier Tier I supplier to the automotive industry and a worldwide leader in the manufacture, engineering, design and validation of driveline systems and related powertrain components and chassis modules for light trucks, sport utility vehicles (SUVs), passenger cars and crossover vehicles. Driveline systems include components that transfer power from the transmission and deliver it to the drive wheels. Our driveline and related powertrain products include axles, chassis modules, driveshafts, chassis and steering components, driving heads, crankshafts, transmission parts and metal formed products.

In March 1994, we were formed by a private investor group led by Richard E. Dauch, our Co-Founder, Chairman of the Board & Chief Executive Officer, that purchased the Final Drive and Forge Business Unit of the Saginaw Division of General Motors Corporation (GM). In connection with this acquisition and under subsequent additional binding agreements we have entered into with GM, we are the principal supplier of driveline components to GM for its rear-wheel drive (RWD) light trucks and SUVs manufactured in North America, supplying substantially all of GM’s rear axle and front four-wheel drive/all-wheel drive (4WD/AWD) axle requirements for these vehicle platforms in 2004.

In October 1997, Blackstone Capital Partners II Merchant Banking Fund L.P. and certain of its affiliates (Blackstone) acquired a majority ownership position of our Company in a leveraged recapitalization. From 1999 through 2003, Blackstone executed an orderly exit strategy of its ownership position culminating in December 2003 when Blackstone completed a secondary offering of approximately 6.5 million shares to outside investors. As a result, Blackstone no longer has an ownership interest in our Company.

Initial Public Offering (IPO)

Holdings is the survivor of a migratory merger with American Axle & Manufacturing of Michigan, Inc. (AAMM) and has no significant assets other than its 100% ownership of American Axle & Manufacturing, Inc. (AAM, Inc.) and its subsidiaries. Pursuant to this merger, which was effected in January 1999 in connection with our IPO, each share of AAMM's common stock was converted into 3,945 shares of Holdings' common stock. Holdings has no subsidiaries other than AAM, Inc. In February 1999, Holdings completed an IPO and issued 7.0 million shares of its common stock.

Acquisitions

In 1999, we acquired two domestic automotive forging companies, Colfor Manufacturing Inc. (Colfor) and MSP Industries Corporation (MSP), and a majority interest in a joint venture in Brazil which machines forging and driveline components for automotive original equipment manufacturers (OEMs) for an aggregate cash purchase consideration of approximately $239 million.

In 1998, we acquired Albion Automotive (Holdings) Limited (referred to as Albion) for a cash purchase price of approximately $42 million plus $30 million of assumed debt and capital lease obligations. Albion supplies front steerable and rear axles, driving heads, crankshafts, chassis components and transmission parts used primarily in medium and heavy-duty trucks and buses for customers located in the United Kingdom and elsewhere in Europe.

2

(b)  Financial Information About Segments

Incorporated by reference from Exhibit 13 to this Form 10-K, Annual Report to Stockholders (Annual Report), section entitled “Financials - Notes to Consolidated Financial Statements, Note 13 - Segment and Geographic Information.”

(c)Narrative Description of Business

Company Overview

We are the principal supplier of driveline components to GM for its RWD light trucks and SUVs manufactured in North America, supplying substantially all of GM’s rear axle and front 4WD/AWD axle requirements for these vehicle platforms. Sales to GM were approximately 80% of our total net sales in 2004, 82% in 2003 and 86% in 2002.

As a result of our Component Supply Agreement (CSA) and Lifetime Program Contracts with GM (LPCs), we are the sole-source supplier to GM for certain axles and other driveline products for the life of each GM vehicle program covered by a LPC. Substantially all of our sales to GM are made pursuant to the LPCs. The LPCs have terms equal to the lives of the relevant vehicle programs or their respective derivatives, which typically run 6 to 12 years, and require us to remain competitive with respect to technology, design and quality. We will compete for future GM business upon the expiration of the LPCs or the CSA.

We are also the principal supplier of driveline system products for the Chrysler Group’s heavy-duty Dodge Ram full-size pickup trucks (Dodge Ram program) and its derivatives. As part of this program, we have commenced supply of a fully integrated computer-controlled chassis system for the 2005 Dodge Ram Power Wagon in the fourth quarter of 2004. Sales to DaimlerChrysler Corporation (DaimlerChrysler) were 11% of our total net sales in 2004, 9% in 2003 and 4% in 2002.

We continue to diversify our customer base. In addition to GM and DaimlerChrysler, we supply driveline systems and other related components to PACCAR Inc., Volvo Group, Ford Motor Company, and other OEMs and Tier I supplier companies such as Delphi Corporation, New Venture Gear, Inc. and The Timken Company. Our sales to customers other than GM increased 8% to $728.0 million in 2004 as compared to $674.0 million in 2003 and $498.5 million in 2002. In 2005, we will launch rear drive modules (RDMs) and independent front drive axles (IFDAs) for South Korean automaker Ssangyong Motor Corporation.

We compete in an $8 billion served market in North America that consists of drive axles and driveshafts for light trucks and SUVs. Our definition of our served market excludes passenger cars and front-wheel drive minivans.

The following chart sets forth the percentage of total revenues attributable to our products for the periods indicated:

	Year ended December 31,
	2004			2003			2002
Axles and driveshafts		84.9	%		86.0	%		84.3	%
Chassis components, forged products and other		15.1			14.0			15.7
Total		100.0	%		100.0	%		100.0	%

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Industry Trends and Competition

Incorporated by reference from Exhibit 13 to this Form 10-K, Annual Report, section entitled “Financials - Management’s Discussion and Analysis - Industry Trends and Competition.”

Productive Materials

We believe that we have adequate sources of supply of productive materials and components for our manufacturing needs. Most raw materials (such as steel) and semi-processed or finished items (such as castings) are available within the geographical regions of our operating facilities from numerous qualified sources in quantities sufficient for our needs.

For further information regarding productive materials, see Exhibit 13 to this Form 10-K, Annual Report, section entitled “Financials - Management’s Discussion and Analysis - Industry Trends and Competition.”

Research and Development (R&D)

Since March 1, 1994, we have spent approximately $445 million in R&D focusing on new product and process development. We plan to continue to invest in the development of new product, process and systems technologies to improve productive efficiency and flexibility in our operations and continue to deliver innovative new products, chassis modules and integrated driveline systems to our customers.

In 2004, R&D spending in product, process and systems increased 13% to $68.6 million as compared to $60.7 million in 2003 and $54.0 million in 2002. The focus of this increasing investment is to develop innovative driveline and powertrain system solutions for passenger cars, light trucks and SUVs in the global marketplace. New products under development in this area include power transfer units, transfer cases, driveline and transmission differentials, multi-piece driveshafts, RDMs and IFDAs. We also continue to focus on electronic integration in our existing products. The most recent examples of these initiatives are the electronic SmartBar^TM stabilizer based roll-control system, TracRite^® GTL electronic differentials and TracRite^® EL electronic locking differentials all featured in the 2005 Dodge Ram Power Wagon. In addition, we continue to support the development of hybrid vehicle systems. Our efforts in these areas have resulted in the development of prototypes and various configurations of these driveline systems for several OEMs throughout the world.

Backlog

We typically enter into agreements with our customers to provide certain axles and driveline products for the life of our customers’ vehicle programs. Our backlog includes formally awarded programs and incremental content and volume including customer requested engineering changes. Our backlog may be impacted by various assumptions such as production volume estimates, changes in program launch timing and fluctuation in foreign currency exchange rates.

Our backlog was approximately $1 billion at December 31, 2004 as compared to approximately $560 million at December 31, 2003. As of December 31, 2004, our sales backlog includes approximately $100 million for orders to be executed in 2005.

Patents and Trademarks

We maintain and have pending various U.S. and foreign patents and trademarks and other rights to intellectual property relating to our business, which we believe are appropriate to protect our interest in existing products, new inventions, manufacturing processes and product developments. We do not believe that any single patent or trademark is material to our business nor would expiration or invalidity of any patent or trademark have a material adverse effect on our business or our ability to compete.

4

Cyclicality and Seasonality

Incorporated by reference from Exhibit 13 to this Form 10-K, Annual Report, section entitled “Financials - Management’s Discussion and Analysis - Cyclicality and Seasonality.”

Environmental Matters

Incorporated by reference from Exhibit 13 to this Form 10-K, Annual Report, section entitled "Financials - Management's Discussion and Analysis - Litigation and Environmental Matters."

Associates

We believe that one of our most important assets is our workforce. Since 1994, we have focused on making significant improvements in our labor relations through improving working conditions, incentive programs and town hall meetings with our hourly and salaried associates. We have also implemented a program of continuous training whereby associates develop their skill sets using the latest manufacturing technology to produce products of precision quality. Our workforce has committed to assist us in achieving both quality and productivity gains over the life of our contracts. We believe our relationships with our associates are positive.

As of December 31, 2004, we employed approximately 10,900 associates, approximately 8,400 of which are employed in the United States. Approximately 6,900 associates are represented by the United Automobile, Aerospace and Agricultural Implement Workers of America (UAW). Approximately 6,200 associates represented by the UAW are subject to a collective bargaining agreement that expires February 25, 2008; approximately 700 associates at MSP and Colfor are also represented by the UAW under collective bargaining agreements that expire April 18, 2005 and June 3, 2005, respectively. Approximately 200 associates are represented by the International Association of Machinists (IAM) under a collective bargaining agreement, which runs through May 4, 2008. In addition, approximately 500 associates at Albion, approximately 1,400 associates at our Silao, Mexico facility (Guanajuato Gear & Axle and Guanajuato Forge) and approximately 300 associates at our Brazilian majority-owned subsidiary are represented by labor unions that are subject to collective bargaining agreements. The collective bargaining agreements at Albion, certain of which may be terminated upon six-months notice, expire in 2006 and the agreements in Mexico and Brazil expire annually.

Credit and Working Capital Practices

Incorporated by reference from Exhibit 13 to this Form 10-K, Annual Report, section entitled “Financials - Management’s Discussion and Analysis - Liquidity and Capital Resources.”

(d)  Financial Information About Geographic Areas

International operations are subject to certain additional risks inherent in conducting business outside the United States, such as changes in currency exchange rates, price and currency exchange controls, import restrictions, nationalization, expropriation and other governmental action.

For further financial information regarding foreign and domestic sales and export sales, see Exhibit 13 to this Form 10-K, Annual Report, section entitled “Financials - Notes to Consolidated Financial Statements, Note 13 - Segment and Geographic Information.”

5

Item 2. Properties

The following is a summary of our principal facilities:

	Approx.	Type
Name	Sq. Feet	of Interest	Function
Detroit Gear & Axle  Detroit, MI	1,795,000	Owned	Rear and front axles
Buffalo Gear, Axle & Linkage  Buffalo, NY	1,199,000	Owned	Rear axles and steering linkages
Three Rivers Driveline  Three Rivers, MI	850,000	Owned	Rear axles and driveshafts, front auxiliary driveshafts and universal joints
Guanajuato Gear & Axle  Guanajuato, Mexico	839,000	Owned	Rear axles and driveshafts and front axles and auxiliary driveshafts
Guanajuato Forge  Guanajuato, Mexico	111,000	Owned	Forged products
Scotstoun Plant  Glasgow, Scotland	453,000	Leased	Front and rear axles for medium and heavy-duty trucks and buses
Spurrier Plant  Lancashire, England	303,000	Leased	Crankshafts and fabricated parts
AAM do Brasil  Araucária, Brazil	264,000	Owned	Machining of forged and cast products
Detroit Forge  Detroit, MI	710,000	Owned	Forged products
Tonawanda Forge  Tonawanda, NY	470,000	Owned	Forged products
Cheektowaga Plant  Cheektowaga, NY	116,000	Owned	Machining of forged products
Colfor – Malvern  Malvern, OH	234,000	Owned	Forged products
Colfor – Salem  Salem, OH	189,000	Owned	Forged products
Colfor – Minerva  Minerva, OH	125,000	Owned	Machining of forged products
MSP – Oxford  Oxford, MI	125,000	Leased	Forged products
MSP – Centerline  Centerline, MI	14,000	Leased	Forged products
Technical Center  Rochester Hills, MI	104,000	Owned	R&D, design engineering, metallurgy, testing and validation
Detroit South Campus  Detroit, MI	43,000	Owned	Quality Engineering Technical Center, Process Development Center and Safety Training Center
Corporate Headquarters  Detroit, MI	219,000	Owned	Executive and administrative offices

6

Item 3. Legal Proceedings

Incorporated by reference from Exhibit 13 to this Form 10-K, Annual Report, section entitled “Financials - Management’s Discussion and Analysis - Litigation and Environmental Matters.”

Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of stockholders during the fourth quarter of fiscal year 2004.

Supplemental Item - Executive Officers and Directors of the Registrant

We possess a management team with proven leadership and extensive automotive industry experience. Our executive officers and directors are:

Name	Age	Position
Richard E. Dauch(3)	62	Co-Founder, Chairman of the Board & Chief Executive Officer
Joel D. Robinson	61	Vice Chairman
David C. Dauch	40	Executive Vice President - Commercial & Strategic Development
Yogendra N. Rahangdale	57	Executive Vice President - Operations & Planning
Richard F. Dauch	44	President - Metal Formed Products Division
John J. Bellanti	50	Vice President - Engineering & Chief Technology Officer
Marion A. Cumo, Sr.	62	Vice President - Driveline Division
Thomas O. Delanoy	53	Vice President - Materials Management & Logistics
John E. Jerge	43	Vice President - Human Resources
Patrick S. Lancaster	57	Vice President,  Chief Administrative Officer & Secretary
Thomas L. Martin	61	Vice President - Finance & Chief Financial Officer
Allan R. Monich	51	Vice President - Program Management & Launch
Steven J. Proctor	48	Vice President - Sales & Marketing
Alberto L. Satine	48	Vice President - Procurement
Alan L. Shaffer	54	Vice President - Strategic & Business Development
Abdallah F. Shanti	44	Vice President - Information Technology, Electronic Product Integration & Chief Information Officer
Michael K. Simonte	41	Vice President & Treasurer
John S. Sofia	45	Vice President - Quality Assurance & Customer Satisfaction
Elizabeth A. Chappell(2)	47	Director
Forest J. Farmer(1)	64	Director
Richard C. Lappin(1)	60	Director
B.G. Mathis(2)	72	Director
Larry W. McCurdy(3)	69	Director
Larry K. Switzer(3)(a)	61	Director
Thomas K. Walker(1)	64	Director
Dr. Henry T. Yang(2)	64	Director

⁽¹⁾Class I Director

⁽²⁾Class II Director

⁽³⁾Class III Director

^(a)Appointed to the Board in February, 2005

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Richard E. Dauch, age 62,is Co-Founder, Chairman of the Board & Chief Executive Officer of AAM, and is also Chairman of the Executive Committee of the Board of Directors. He has been Chief Executive Officer and a member of the Board of Directors since the Company began operations in March 1994. In October 1997, he was named Chairman of the Board of Directors. He was also President of AAM from March 1994 through December 2000. Prior to March 1994, he spent 12 years at Chrysler Corporation. He left Chrysler Corporation in 1991 as Executive Vice President of Worldwide Manufacturing. Mr. Dauch also served as Group Vice President of Volkswagen of America, where he established the manufacturing facilities and organization for the successful launch of the first major automotive transplant in the United States. Mr. Dauch has more than 40 years of experience in the automotive industry. Mr. Dauch has been named the 1996 Worldwide Automotive Industry Leader of the Year by the Automotive Hall of Fame, the 1997 Manufacturer of the Year by the Michigan Manufacturer’s Association, and the 1999 Michiganian of the Year by The Detroit News. In 2003, he received the Harvard Business School of Michigan Business Statesman Award, the Ernst & Young Entrepreneur of the Year Award, and the Northwood University Outstanding Business Leader Award. Mr. Dauch also served as Chairman of the National Association of Manufacturers (N.A.M.). He has lectured extensively on the subject of manufacturing and authored the book, Passion for Manufacturing, which is distributed in colleges and universities globally and in several languages.

Joel D. Robinson, age 61,was appointed Vice Chairman in October 2004. Prior to that, Mr. Robinson served as President & Chief Operating Officer (since January 2001); Executive Vice President - Operations & Chief Operating Officer (since August 1998) and Vice President, Manufacturing (since May 1997). Mr. Robinson joined our Company in March 1994 and has held various other positions including Executive Director of the GMT-800 program and Executive Director, Manufacturing Services. Mr. Robinson began his career in the automotive industry at Ford Motor Company in 1963, where he held a series of technical and manufacturing management positions. Mr. Robinson also worked for American Motors Corporation, serving as Director of Vehicle Assembly, and later, at Chrysler Corporation, where he was responsible for all car body programs. Mr. Robinson has over 40 years of experience in the global automotive industry.

David C. Dauch, age 40, has been Executive Vice President - Commercial & Strategic Development since January 2005. Prior to that, he served as Senior Vice President, Commercial (since May 2004); Senior Vice President, Sales, Marketing & Driveline Division (since September 2003); Vice President, Manufacturing - Driveline Division (since January 2001); Vice President, Sales and Marketing (since 1998) and Director of Sales, GM Full-Size Truck Programs (since May 1996). Mr. Dauch joined our Company in July 1995 as Manager, Sales Administration. Prior to joining our Company, Mr. Dauch held various positions at Collins & Aikman Products Company, including Sales Manager. Mr. Dauch is a member of the Board of Directors of Collins & Aikman. David C. Dauch is a son of Richard E. Dauch.

Yogendra (Yogen) N. Rahangdale, age 57, has been Executive Vice President - Operations & Planning since May 2004. Prior to that, he served as Executive Vice President & Chief Technology Officer (since September 2003); Group Vice President & Chief Technology Officer (since January 2001); Vice President, Manufacturing and Procurement Services (since March 2000); Vice President, Manufacturing Services (since April 1999); Executive Director, Manufacturing Services (since March 1998) and Director, Corporate Manufacturing Planning (since joining our Company in August 1995). Prior to joining our Company, Mr. Rahangdale spent 12 years with Chrysler Corporation in a variety of positions including Manager, Paint & Energy Management.

Richard F. Dauch, age 44, has been President - Metal Formed Products Division since January 2005. Prior to that, he served as Vice President, Metal Formed Products Division (since May 2004); Vice President, Investor Relations (since September 2003); Vice President, Financial Planning (since September 2002); Vice President, Sales and Marketing (since January 2002); Vice President, Sales (since January 2001); Vice President, Manufacturing - Driveline Division (since July 1999); Vice President, Manufacturing (since August 1998); Director, Strategic and Capacity Planning (since February 1998) and Plant Manager, Detroit Gear & Axle Plant (since May 1996). Mr. Dauch joined our Company in May 1995 as Corporate Manager, Labor Relations, and served in that position until May 1996. Prior to joining our Company, Mr. Dauch served as a Senior Business Manager and Business Unit Manager with United Technologies Corporation from July 1992. Prior to his automotive career, Mr. Dauch served in the U.S. Army for eleven years, with assignments including Platoon Leader and Company Commander. Richard F. Dauch is a son of Richard E. Dauch.

8

John J. Bellanti, age 50, has been Vice President - Engineering & Chief Technology Officer since May 2004. Prior to that, he served as Vice President, Engineering & Product Development (since September 2003); Executive Director, Manufacturing Services (since March 2000); Director, Manufacturing Engineering (since June 1998); Director Advanced Programs (since May 1996) and Plant Manager, Detroit Forge Plant (since joining our Company in March 1994). Prior to joining our Company, Mr. Bellanti, worked 22 years at General Motors in various manufacturing and engineering positions, most recently serving as Production Manager. Mr. Bellanti was on the Board of Directors for the North American Forging Industry Association from 1999 through 2003, serving as President of that Association in 2002.

Marion A. Cumo, Sr., age 62, has been Vice President - Driveline Division since May 2004. Prior to that, he served as Vice President, Program Management & Launch (since September 2002); Vice President, Materials Management and Logistics (since May 1996) and Vice President, Quality Assurance and Customer Satisfaction (since joining our Company in March 1994). Prior to joining our Company, Mr. Cumo spent 11 years working as a manufacturing executive at Chrysler Corporation. His most recent title at Chrysler was General Plants Manager of Assembly Operations. After leaving Chrysler, Mr. Cumo became president of Tri-County Chrysler Products in Peebles/West Union, Ohio, and also worked as an automotive manufacturing consultant. Mr. Cumo began his career at General Motors and has over 38 years experience in the global automotive industry including positions with General Motors, Volkswagen of America and Chrysler.

Thomas O. Delanoy, age 53, has been Vice President - Materials Management & Logistics since October 2004. Prior to that, he served as Executive Director Production Control and Materials Management (since September 2002); Director, Materials Management (since March 2000); Director of Business Integration (since December 1998); Plant Manager, Detroit Forge (since August 1994) and Production Manager (since joining our Company in March 1994). Prior to joining our Company, Mr. Delanoy served at General Motors, Volkswagen of America, and Chrysler Corporation in a variety of production and operations positions.

John E. Jerge, age 43, has been Vice President - Human Resources since September 2004. Prior to that, he served as Executive Director, Labor Relations (since April 2004); Director, Labor Relations (since January 2003); Plant Manager, Detroit Gear & Axle Plant (since March 2000); Plant Manager, Buffalo Gear Axle & Linkage (since November 1997) and Manufacturing Manager, Buffalo Gear Axle & Linkage (since joining our Company in March 1994). Prior to joining our Company, Mr. Jerge began his automotive career at Chrysler Corporation in 1984 where he progressed through a variety of manufacturing management positions.

Patrick S. Lancaster, age 57, has been Vice President, Chief Administrative Officer & Secretary since September 2003. Prior to that, he served as Group Vice President, Chief Administrative Officer & Secretary (since January 2001); Vice President and Secretary (since March 2000); Vice President, General Counsel and Secretary (since November 1997) and General Counsel and Secretary (since June 1994). Mr. Lancaster is a member of the State Bar of Michigan.

Thomas L. Martin, age 61, has been Vice President - Finance & Chief Financial Officer since joining our Company in June 2004. Prior to that, he served on AAM’s Board of Directors and was a member of the Board’s Audit Committee (since February 2004). Prior to joining our Company, Mr. Martin served in various financial positions at DaimlerChrysler including Chief Financial Officer and Board member, Chrysler de Mexico; Chief Financial Officer, Chrysler International - Europe; Controller, Chrysler de Mexico and Director, Core Process Implementation. In addition, he served as Controller, Service & Parts Division and Financial Manager for Manufacturing, Engineering, Program Management, Design, Procurement & Supply, Chrysler Financial and Corporate Staffs. Mr. Martin has over 36 years of experience in the global automotive industry.

Allan R. Monich, age 51, has been Vice President - Program Management & Launch since May 2004. Prior to that, he served as Vice President, Manufacturing Forging Division (since October 2001); Vice President, Human Resources (since 1998); Vice President, Personnel (since November 1997) and Plant Manager for the Buffalo Gear & Axle Plant in Buffalo, NY since the formation of our Company in March 1994. Prior to joining our Company in March 1994, he worked for General Motors for 22 years in the areas of manufacturing, quality assurance, sales and engineering, including four years as a Plant Manager.

9

Steven J. Proctor, age 48, has been Vice President - Sales & Marketing since June 2004. Prior to that, he served as Executive Director, Driveline Sales & Marketing (since September 2003); President and Chief Operating Officer of AAM do Brasil (since September 1999); Director, GMT-360, I-10/GMT-355 (since December 1998); Director, Worldwide Programs (since February 1998); Director, Strategic Planning (since July 1996) and Director, General Programs (since joining our Company in March 1994). Prior to joining our Company, Mr. Proctor worked for General Motors for 20 years in the areas of product and industrial engineering, production, material management and sales.

Alberto L. Satine, age 48, has been Vice President - Procurement since January 2005. Prior to that, he served as Executive Director, Global Procurement Direct Materials (since January 2004); General Manager, Latin and South American Driveline Sales and Operations (since August 2003) and General Manager of International Operations (since joining our Company in May 2001). Prior to joining our Company, Mr. Satine held several management positions at Dana Corporation, including the position of President of Dana’s Andean Operations in South America from 1997 to 2000 and General Manager of the Spicer Transmission Division in Toledo, Ohio from 1994 to 1997.

Alan L. Shaffer, age 54, has been Vice President - Strategic & Business Development since September 2003. Prior to that, he served as Senior Vice President, Sales, Marketing & Strategic Planning (since September 2002) and Vice President, Manufacturing Services since joining our Company in October 2000. Prior to joining our Company, Mr. Shaffer was Executive Vice President of Eventory, Inc. in Bedford, Massachusetts since February 2000 and served as Group Vice President, Metalworking Technologies at Milacron, Inc. since 1986.

Abdallah F. Shanti, age 44, has been Vice President - Information Technology, Electronic Product Integration & Chief Information Officer since January 2005. Prior to that, he served as Vice President, Procurement, Information Technology & Chief Information Officer (since September 2002) and Executive Director, Information Technology & Chief Information Officer (since joining our Company in December 1999). Prior to joining our Company, Mr. Shanti served as Vice President, Global Information Technology at LucasVarity PLC. Mr. Shanti began his career with GM/Electronic Data Systems Corporation in 1984 where he served in a variety of information technology leadership roles providing services for automotive and manufacturing corporations. He has over 20 years of experience in the global automotive industry including positions with General Motors, where he most recently served as General Director, Systems Engineering; LucasVarity PLC; Perot Systems Corporation and GM/Electronic Data Systems Corporation.

Michael K. Simonte, age 41, has been Vice President & Treasurer since May 2004. Prior to that, he served as Treasurer (since September 2002) and Director, Corporate Finance (since joining our Company in December 1998). Prior to joining our Company, Mr. Simonte served as Senior Manager at the Detroit office of Ernst & Young LLP. Mr. Simonte is a certified public accountant.

John S. Sofia, age 45, has been Vice President - Quality Assurance & Customer Satisfaction since October 2004. Prior to that, he served as Director, Advanced Quality Planning (since August 2002); Plant Manager, Detroit Forge (since April 2001); Director, Product Engineering (since June 2000); Manager of the Current Production & Process Engineering Group (since September 1997) and Engineering Manager, (since joining our Company in May 1994). Prior to joining our Company, Mr. Sofia served at Chrysler Corporation in a variety of manufacturing and engineering positions.

The business experience of our Board of Directors is incorporated by reference from the information in the sections entitled “Nominees for Directors” and “Returning Members of the Board of Directors” in our Proxy Statement.

10

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock, par value $0.01 per share, is listed for trading on the New York Stock Exchange under the symbol “AXL.”

Holders and High and Low Sales Prices

Incorporated by reference from Exhibit 13 to this Form 10-K, Annual Report, section entitled “Financials - Notes to Consolidated Financial Statements, Note 14 - Unaudited Quarterly Financial and Market Data.”

Dividends

In April 2004, AAM’s Board of Directors declared our first quarterly cash dividend as a public company of $0.15 per share. As of December 31, 2004, we have paid $23.0 million to stockholders of record under the quarterly cash dividend program. On an annualized basis, the dividend payout is $0.60 per share.

Securities Authorized for Issuance Under Equity Compensation Plans

The information regarding our equity compensation plans is incorporated by reference from the information in the section entitled “Report of the Compensation Committee on Executive Compensation” in our Proxy Statement.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

In February 2004, our Board of Directors approved a stock repurchase program under which we were able to repurchase up to 2.5 million shares of our common stock in the open market or in privately negotiated transactions from time to time over the next two years. In July 2004, the remaining 325,900 shares of our common stock were repurchased under the stock repurchase program in open market transactions pursuant to Rule 10b-18.

In August 2004, our Board of Directors approved an additional 3.0 million shares for repurchase under the stock repurchase program, bringing the aggregate program total to 5.5 million shares.

The following table provides information about our equity security repurchases during the year ended December 31, 2004 that are registered pursuant to Section 12 of the Exchange Act:

Issuer Purchases of Equity Securities

	(a)	(b)	(c)	(d)
Period	Total Number of Shares (or Units) Purchased	Average Price Paid per Share (or Unit)	Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
February, 2004	1,591,900	$39.59	1,591,900	908,100
May, 2004	582,200	$35.41	582,200	325,900
July, 2004	325,900	$34.07	325,900	-
August, 2004	799,487	$33.34	799,487	2,200,513
September, 2004	313,040	$30.48	313,040	1,887,473
October, 2004	1,398,000	$28.67	1,398,000	489,473
December, 2004	-	-	-	489,473

11

Item 6. Selected Financial Data

Incorporated by reference from Exhibit 13 to this Form 10-K, Annual Report, section entitled “Five Year Financial Summary.”

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation

Incorporated by reference from Exhibit 13 to this Form 10-K, Annual Report, section entitled “Financials - Management’s Discussion and Analysis.”

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Incorporated by reference from Exhibit 13 to this Form 10-K, Annual Report, section entitled “Financials - Management’s Discussion and Analysis - Market Risk.”

Item 8. Financial Statements and Supplementary Data

Incorporated by reference from Exhibit 13 to this Form 10-K, Annual Report, sections entitled “Financials - Consolidated Financial Statements” and “Financials - Notes to Consolidated Financial Statements.”

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

Item 9A. Controls and Procedures

Under the direction of our Chief Executive Officer and Chief Financial Officer, we evaluated our disclosure controls and procedures and internal control over financial reporting and concluded that (1) our disclosure controls and procedures were effective as of December 31, 2004, and (2) no change in internal control over financial reporting occurred during the quarter ended December 31, 2004 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting and the Report of Independent Registered Public Accounting Firm are incorporated by reference from Item 8 of this Form 10-K “Financial Statements and Supplementary Data.”

Item 9B. Other Information

None

12

Part III

Item 10. Directors and Executive Officers of the Registrant

The information required by Item 10 regarding directors is incorporated by reference from the information in the sections entitled “Nominees for Directors,” “Returning Members of the Board of Directors” and “Security Ownership of AAM Directors and Officers and Certain Beneficial Owners” in the Proxy Statement for the Annual Meeting of Stockholders to be held on April 28, 2005 (Proxy Statement), which is being filed on March 22, 2005.

The information required by Item 10 regarding executive officers appears as a Supplemental Item in Part I and incorporated by reference from the information in the section entitled “Security Ownership of AAM Directors and Officers and Certain Beneficial Owners” in our Proxy Statement.

We have adopted a code of ethics that applies to our Chief Executive Officer, Chief Administrative Officer and Chief Financial Officer and the senior financial executives who report directly to our Chief Financial Officer. This code of ethics has been posted to our website at www.aam.com and is available free of charge through our website. Our Board of Directors has also adopted the AAM Corporate Governance Guidelines and the AAM Code of Business Conduct. The AAM Corporate Governance Guidelines and the AAM Code of Business Conduct have been posted to our website and are available in print free of charge to any AAM stockholder who requests it.

Item 11. Executive Compensation

The information required by Item 11 is incorporated by reference from the information in the sections entitled “Report of the Compensation Committee on Executive Compensation” and “Executive Compensation, Retirement Program and Employment and Continuity Agreements” in our Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management

Equity Compensation Plan Information

	(a)	(b)	(c)
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted -average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders	7,283,963	$21.82	5,492,613
Equity compensation plans not approved by security holders	-	-	-
Total	7,283,963	$21.82	5,492,613

The information in the section entitled “Security Ownership of AAM Directors and Officers and Certain Beneficial Owners” is incorporated by reference from our Proxy Statement.

Item 13. Certain Relationships and Related Transactions

The information required by Item 13 regarding certain relationships and related transactions is incorporated by reference from the information in the section entitled “Certain Relationships and Related-Party Transactions” in our Proxy Statement.

Item 14. Principal Accounting Fees and Services

The information required by Item 14 is incorporated by reference from the information in the section entitled “Report of the Audit Committee” in our Proxy Statement.

13

Part IV

Item 15. Exhibits and Financial Statement Schedules

  The following documents are filed as a part of this report:

1.   All Financial Statements

Management’s Report on Internal Control Over Financial Reporting

Reports of Independent Registered Public Accounting Firm

Consolidated Statements of Income

Consolidated Balance Sheets

Consolidated Statements of Cash Flows

Consolidated Statements of Stockholders’ Equity

Notes to Consolidated Financial Statements

The above financial statements are filed as Exhibit 13 to this Form 10-K.

2.   Financial Statement Schedules

Schedule II - Valuation and Qualifying Accounts and the report of Deloitte & Touche LLP, Independent Registered Public Accounting Firm, on our consolidated financial statement schedule (Schedule II) for the years ended December 31, 2004, 2003 and 2002 are filed as part of this Form 10-K.

All other schedules have been omitted because they are not applicable or not required.

3.   Exhibits

The following exhibits were previously filed unless otherwise indicated:

Number	Description of Exhibit
3.01	Amended and Restated Certificate of Incorporation
		(Incorporated by reference to Exhibit 3.01 filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
3.02	Bylaws
		(Incorporated by reference to Exhibit 3.01 filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
4.01	Specimen Stock Certificate
		(Incorporated by reference to Exhibit 4.01 filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
4.02	5.25% Senior Notes due 2014, Indenture, dated as of February 11, 2004, among AAM, Inc., as issuer, the Company, as guarantor, and BNY Midwest Trust Company, as trustee
4.03	Senior Convertible Notes due 2024, Indenture, dated as of February 11, 2004, among the Company, as issuer, AAM, Inc., as guarantor, and BNY Midwest Trust Company, as trustee

14

Number	Description of Exhibit
10.01	Asset Purchase Agreement, dated February 18, 1994, between AAM, Inc. and GM, and all amendments thereto
		(Incorporated by reference to Exhibit 10.01 filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
++10.02	Component Supply Agreement, dated February 28, 1994, between AAM, Inc. and GM
		(Incorporated by reference to Exhibit 10.02 filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
10.03	Amendment No. 1 to Component Supply Agreement, dated February 28, 1994, between AAM, Inc. and GM
		(Incorporated by reference to Exhibit 10.02(a) filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
++10.04	Amendment No. 2 to Component Supply Agreement, dated February 7, 1996, between AAM, Inc. and GM
		(Incorporated by reference to Exhibit 10.02(b) filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
++10.05	Amended and Restated Memorandum of Understanding (MOU), dated September 2, 1997, between AAM, Inc. and GM
		(Incorporated by reference to Exhibit 10.02(f) filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
10.06	MOU Extension Agreement, dated September 22, 1997, between AAM, Inc. and GM
		(Incorporated by reference to Exhibit 10.02(g) filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
++10.07	Agreement dated February 17, 1997, between AAM, Inc. and GM
		(Incorporated by reference to Exhibit 10.05 filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))

++10.08	Letter dated December 13, 1996, by AAM, Inc.
		(Incorporated by reference to Exhibit 10.05(a) filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
10.09	1997 American Axle & Manufacturing of Michigan, Inc. Replacement Plan
		(Incorporated by reference to Exhibit 10.07 filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
10.10	The Amended and Restated American Axle & Manufacturing of Michigan, Inc. Management Stock Option Plan
		(Incorporated by reference to Exhibit 10.08 filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
10.11	Nonqualified Stock Option Agreement, dated October 30, 1997, between AAM, Inc. and Richard E. Dauch
		(Incorporated by reference to Exhibit 10.09 filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))

15

Number	Description of Exhibit
10.12	Indemnification Agreement, dated February 28, 1994, between AAM, Inc. and GM
		(Incorporated by reference to Exhibit 10.10 filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
‡10.13	Employment Agreement, dated November 6, 1997, by and between the Company and Richard E. Dauch
		(Incorporated by reference to Exhibit 10.11 filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
10.14	Letter Agreement, dated August 18, 1997, between AAM Acquisition, Inc. and Richard E. Dauch
		(Incorporated by reference to Exhibit 10.11(a) filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
10.15	Recapitalization Agreement, dated as of September 19, 1997, among AAM, Inc., the Company, Jupiter Capital Corporation, Richard E. Dauch, Morton E. Harris and AAM Acquisition, Inc.
		(Incorporated by reference to Exhibit 10.12 filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))

10.16	Disposition Agreement, dated as of December 10, 1998, between American Axle & Manufacturing of Michigan, Inc. and Richard E. Dauch
		(Incorporated by reference to Exhibit 10.13(a) filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
10.17	1999 Stock Incentive Plan
		(Incorporated by reference to Exhibit 10.20 filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
++10.18	Lifetime Program Contract for GMT-325 Products, between GM and AAM, Inc.
		(Incorporated by reference to Exhibit 10.22(a) filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
++10.19	Lifetime Program Contract for GMT-330 Products, between GM and AAM, Inc.
		(Incorporated by reference to Exhibit 10.22(b) filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
++10.20	Lifetime Program Contract for New M-SUV Products, between GM and AAM, Inc.
		(Incorporated by reference to Exhibit 10.22(c) filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
++10.21	Lifetime Program Contract for GMT-400 Products, between GM and AAM, Inc.
		(Incorporated by reference to Exhibit 10.22(d) filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))
++10.22	Lifetime Program Contract for GMT-800 Products, between GM and AAM, Inc.
		(Incorporated by reference to Exhibit 10.22(e) filed with American Axle & Manufacturing Holdings, Inc. Registration Statement on Form S-1 (Registration No. 333-53491))

16

Number	Description of Exhibit
10.23	Letter Agreement, dated as of December 15, 1998, as amended January 11, 2000, between B.G. Mathis and the Company
		(Incorporated by reference to Exhibit 10.01 filed with American Axle & Manufacturing Holdings, Inc. Form 10-Q for the quarterly period ended March 31, 2000)

++10.24	Agreement dated as of February 24, 2000, by and between AAM, Inc. and GM
		(Incorporated by reference to Exhibit 10.03 filed with American Axle & Manufacturing Holdings, Inc. Form 10-Q for the quarterly period ended March 31, 2000)
++10.25	Settlement Agreement dated as of July 28, 2000 by and between AAM, Inc. and GM
		(Incorporated by reference to Exhibit 10.01 filed with American Axle & Manufacturing Holdings, Inc. Form 10-Q for the quarterly period ended September 30, 2000)
‡10.26	Amendment dated December 20, 2000 to Employment Agreement dated as of November 6, 1997 by and between the Company and Richard E. Dauch
		(Incorporated by reference to Exhibit 10.07 filed with American Axle & Manufacturing Holdings, Inc. Form 10-K for the year ended December 31, 2000)
‡10.27	Stock Purchase Agreement dated December 20, 2000 by and between the Company and Richard E. Dauch
		(Incorporated by reference to Exhibit 10.08 filed with American Axle & Manufacturing Holdings, Inc. Form 10-K for the year ended December 30, 2000)
‡10.28	Supplemental Compensation Agreement dated December 20, 2000 by and between the Company and Richard E. Dauch
		(Incorporated by reference to Exhibit 10.09 filed with American Axle & Manufacturing Holdings, Inc. Form 10-K for the year ended December 30, 2000)
10.29	Lifetime Program Contract between General Motors Corporation North American Operations (Buyer) and AAM, Inc. (Seller)
		(Incorporated by reference to Exhibit 10.01 filed with American Axle & Manufacturing Holdings, Inc. Form 10-Q for the quarterly period ended June 30, 2001)
10.30	Agreement dated as of June 14, 2001 by and between GM and AAM, Inc.
		(Incorporated by reference to Exhibit 10.02 filed with American Axle & Manufacturing Holdings, Inc. Form 10-Q for the quarterly period ended June 30, 2001)
10.31	Restatement of the American Axle & Manufacturing, Inc. Personal Savings Plan for Hourly-Rate Associates dated September 27, 2001
		(Incorporated by reference to Exhibit 10.01 to our Registration Statement on Form S-8 (Registration Statement No. 333-70466))
10.32	Restatement of the American Axle & Manufacturing, Inc. Salaried Savings Plan dated September 27, 2001
		(Incorporated by reference to Exhibit 10.02 to our Registration Statement on Form S-8 (Registration Statement No. 333-70466))

10.33	Amendment No. 1 to the 1999 American Axle & Manufacturing of Michigan, Inc. Stock Incentive Plan
		(Incorporated by reference to Exhibit 10.03 filed with American Axle & Manufacturing Holdings, Inc. Form 10-Q for the quarterly period ended September 30, 2001)

17

Number	Description of Exhibit
10.34	Amendment No. 2 to the 1999 American Axle & Manufacturing, Inc. Stock Incentive Plan
		(Incorporated by reference to Exhibit 10.04 filed with American Axle & Manufacturing Holdings, Inc. Form 10-Q for the quarterly period ended September 30, 2001)
++10.35	Agreement dated as December 21, 2001 by and between GM and AAM, Inc.
		(Incorporated by reference to Exhibit 10.47 filed with American Axle & Manufacturing Holdings, Inc. Form 10-K for the year ended December 30, 2001)
‡10.36	Second Amendment, dated as of December 10, 2001, to the Employment Agreement, dated as of November 6, 1997, by and between the Company, a Delaware corporation and Richard E. Dauch
		(Incorporated by reference to Exhibit 10.49 filed with American Axle & Manufacturing Holdings, Inc. Form 10-K for the year ended December 30, 2001)
10.37	Lifetime Program Contract for GMT-900 Products, between GM and AAM, Inc.
		(Incorporated by reference to Exhibit 10.51 filed with American Axle & Manufacturing Holdings, Inc. Form 10-Q for the quarterly period ended June 30, 2003)
10.38	Continuity Agreement dated as of September 29, 2003 between the Company and Richard E. Dauch
		(Incorporated by reference to Exhibit 10.52 filed with American Axle & Manufacturing Holdings, Inc. Form 10-Q for the quarterly period ended September 30, 2003)
10.39	Continuity Agreements dated as of September 29, 2003 between the Company and certain officers
		(Incorporated by reference to Exhibit 10.53 filed with American Axle & Manufacturing Holdings, Inc. Form 10-Q for the quarterly period ended September 30, 2003)
10.40	Senior Unsecured Revolving Credit Facility, dated as of January 9, 2004 (Credit Agreement), among the Company, AAM, Inc., the lenders named therein and JPMorgan Chase Bank, as Administrative Agent
		(Incorporated by reference to Exhibit 10.40 filed with American Axle & Manufacturing Holdings, Inc. Form 10-K for the year ended December 30, 2003)

10.41	Guarantee Agreement, dated as of January 9, 2004, among the Company, AAM, Inc., the Subsidiary Guarantors and JPMorgan Chase Bank, as Administrative Agent
		(Incorporated by reference to Exhibit 10.41 filed with American Axle & Manufacturing Holdings, Inc. Form 10-K for the year ended December 31, 2003)
++10.42	Sourcing Letter Agreement dated as of February 26, 2004 by and between GM and AAM, Inc.
		(Incorporated by reference to Exhibit 10.42 filed with American Axle & Manufacturing Holdings, Inc. Form 10-Q for the quarterly period ended March 31, 2004)
++10.43	Letter Agreement dated April 22, 2004 by and between DaimlerChrysler Corporation and AAM, Inc.
		(Incorporated by reference to Exhibit 10.43 filed with American Axle & Manufacturing Holdings, Inc. Form 10-Q for the quarterly period ended June 30, 2004)
10.44	Forms of Stock Option Agreement under 1999 Stock Incentive Plan
		(Incorporated by reference to Exhibit 10.44 filed with American Axle & Manufacturing Holdings, Inc. Form 10-Q for the quarterly period ended September 30, 2004)

18

Number	Description of Exhibit
10.45	Forms of Restricted Stock Agreement under 1999 Stock Incentive Plan
		(Incorporated by reference to Exhibit 10.45 filed with American Axle & Manufacturing Holdings, Inc. Form 10-Q for the quarterly period ended September 30, 2004)
*10.46	Amended and Restated American Axle & Manufacturing, Inc. Incentive Compensation Plan for Executive Officers **
*12	Computation of Ratio of Earnings to Fixed Charges
*13	Annual Report to Stockholders for the year ended December 31, 2004, sections entitled “Financials – Management’s Discussion and Analysis,” “Financials – Consolidated Financial Statements,” “Financials – Notes to Consolidated Financial Statements” and “Five Year Financial Summary” **
*21	Subsidiaries of the Company
*23	Consent of Deloitte & Touche LLP
*31.1	Certification of Richard E. Dauch, Co-Founder, Chairman of the Board & Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act
*31.2	Certification of Thomas L. Martin, Vice President – Finance & Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act

*32	Certifications of Richard E. Dauch, Co-Founder, Chairman of the Board & Chief Executive Officer and Thomas L. Martin, Vice President – Finance & Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	(All other exhibits are not applicable.)

++Confidentiality Requests Approved by the SEC

‡Reflects Management or Compensatory Contract

*Filed herewith

** Shown only in the original filed with the Securities and Exchange Commission

19

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

(Registrant)

Date:	March 1, 2005
By:	/s/ Thomas L. Martin
Name:	Thomas L. Martin
Title:	Vice President - Finance
	& Chief Financial Officer
	(Chief Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated.

Signature	Title	Date
/s/ Richard E. Dauch	Co-Founder, Chairman of the Board &	March 1, 2005
Richard E. Dauch	Chief Executive Officer
/s/ Thomas L. Martin	Vice President - Finance &	March 1, 2005
Thomas L. Martin	Chief Financial Officer
/s/ Elizabeth A. Chappell	Director	March 1, 2005
Elizabeth A. Chappell
/s/ Forest J. Farmer	Director	March 1, 2005
Forest J. Farmer
/s/ Richard C. Lappin	Director	March 1, 2005
Richard C. Lappin
/s/ B.G. Mathis	Director	March 1, 2005
B.G. Mathis
/s/ Larry W. McCurdy	Director	March 1, 2005
Larry W. McCurdy
/s/ Larry K. Switzer	Director	March 1, 2005
Larry K. Switzer
/s/ Thomas K. Walker	Director	March 1, 2005
Thomas K. Walker
/s/ Dr. Henry T. Yang	Director	March 1, 2005
Dr. Henry T. Yang

20

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

			Additions -
	Balance at		Charged to		Deductions -			Balance
	Beginning of		Costs and		See Notes			At End of
	Period		Expenses		Below			Period
	(In millions)
Year Ended December 31, 2002:
Allowance for doubtful accounts	$	12.7		5.2		12.5	(1)	$	5.4
Valuation allowance for deferred taxes		31.0		23.4		12.8	(2)		41.6
Inventory valuation allowance		24.5		6.6		8.9	(3)		22.2
LIFO reserve		9.3		1.3		-			10.6
Year Ended December 31, 2003:
Allowance for doubtful accounts		5.4		4.1		6.7	(1)		2.8
Valuation allowance for deferred taxes		41.6		9.2		15.9	(2)		34.9
Inventory valuation allowance		22.2		6.5		13.9	(3)		14.8
LIFO reserve		10.6		-		0.2			10.4
Year Ended December 31, 2004:
Allowance for doubtful accounts		2.8		0.4		0.7	(1)		2.5
Valuation allowance for deferred taxes		34.9		2.8		5.2	(2)		32.5
Inventory valuation allowance		14.8		6.7		8.9	(3)		12.6
LIFO reserve		10.4		3.9		-			14.3
(1) Uncollectible accounts charged off net of recoveries.
(2) Adjustments associated with our assessment of the uncertainty of realizing the full benefit of deferred tax assets (principally related to acquired foreign NOLs and capital allowance carryforwards).
(3) Inventory adjustments for physical quantity discrepancies and write-offs of excess and obsolete inventories.
For further information regarding our valuation allowances, see Exhibit 13 to this Form 10-K , Annual Report, section entitled "Financials - Management's Discussion and Analysis."

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

American Axle & Manufacturing Holdings, Inc.:

We have audited the consolidated financial statements of American Axle & Manufacturing Holdings, Inc. and its subsidiaries (the Company) as of December 31, 2004 and 2003, and for each of the three years in the period ended December 31, 2004, management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004, and the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004, and have issued our reports thereon dated February 1, 2005; such consolidated financial statements and reports are included in your 2004 Annual Report to Stockholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedule of the Company, listed in Item 15.  This consolidated financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits.  In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ DELOITTE & TOUCHE LLP

Detroit, Michigan

February 1, 2005

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EX-10.46

EXHIBIT 10.46

AMENDED AND RESTATED

AMERICAN AXLE & MANUFACTURING, INC.

INCENTIVE COMPENSATION PLAN FOR EXECUTIVE OFFICERS

ARTICLE 1

DEFINITIONS

When used in the Plan, the following words and phrases shall have the following meanings unless the context clearly indicates another meaning:

1.1 Administrator means the Management Benefits Committee acting through the Corporate Human Resources Department, as set forth in Article 5.

1.2 Affiliated Employer means any of the following that, with the consent of the Compensation Committee, adopt the Plan as provided in Sec. 6.1:

(i)   any of the other corporations which are members of a controlled group of corporations (as defined in Code Section 414(b)) which includes the Company;

(ii)   any trade or business (whether or not incorporated) which is under common control (as defined in Code Section 414(c)) with the Company;

(iii)   any organization (whether or not incorporated) which is a member of an affiliated service group (as defined in Section 414(m)) which includes the Company;

(iv)   any other entity required to be aggregated with the Company pursuant to Regulations under Code Section 414(o).

1.3 Average Invested Capital means the simple average of Invested Capital as of January 1 and Invested Capital as of December 31 of the Plan Year in question.

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1.4 Base Salary means a Participant’s monthly gross regular rate of pay from the Company as of December 1 of a Plan Year or on the date of a Participant’s death, Disability, Retirement or employment by an Affiliated Employer who has not adopted the Plan, if earlier, before any required reductions or withholdings or reductions under any salary reduction agreement between a Participant and the Company. Base Salary shall not include overtime, bonuses, compensation paid in kind, special allowances or reimbursements to cover expenses paid or incurred on behalf of the Company or in the course of employment with the Company, the Company’s contribution to this Plan or to any pension or profit sharing plan to which the Company makes contributions, or the Company’s contribution to any employee welfare plan or arrangement.

1.5 Beneficiary means the Participant’s legal spouse, if married, otherwise the beneficiary or beneficiaries designated by a Participant as such in connection with the group term life insurance program maintained by the Company for Eligible Employees as in effect at the time of the Participant’s death. If no beneficiary is so designated, a Participant’s beneficiary shall be his or her estate.

1.6 Board of Directors means the Board of Directors of the American Axle & Manufacturing Holdings, Inc.

1.7 Bonus Award means a bonus award under this Plan determined in accordance with Article 3.

1.8 Bonus Factors means Return on Invested Capital (ROIC), Cash Flow as a Percentage of Budgeted Cash Flow and Net Income as a Percentage of Sales (NIPS) each as defined herein.

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1.9 Budgeted Cash Flow means the anticipated Cash Flow as set forth in the Company’s budget for the Plan Year in question, as approved by the Board of Directors.

1.10 Cash Flow means the cash provided by and used in the Company’s operating activities for the Plan Year in question less the Company’s capital expenditures for the Plan Year in question, all as determined by the Company in accordance with generally accepted accounting principles (GAAP) and as reported in the Company's audited consolidated financial statements for the Plan Year.

1.11 Cash Flow as a Percentage of Budgeted Cash Flow means one of the Bonus Factors which, for a particular Plan Year, is computed as the Company’s Cash Flow for that year divided by the Company’s Budgeted Cash Flow for that year.

1.12  CEO means the Chief Executive Officer of Holdings.

1.13  CFO means the Chief Financial Officer of Holdings.

1.14 Company means American Axle & Manufacturing, Inc., a Delaware corporation.

1.15 Compensation Committee means the Compensation Committee of the Board of Directors.

1.16 Covered Earnings means a Participant’s Base Salary multiplied by his or her Months of Participation during a Plan Year.

1.17 Disability means disability as defined in the short term disability plan maintained by the Company for Eligible Employees as in effect on the date of disability.

1.18 Eligible Employee means an Executive Officer designated as an Eligible Employee by the CEO.

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1.19 Executive Officer means “officer” of the Company or Holdings as defined in Section 16 of the Securities Exchange Act of 1934 and the rules thereunder, as determined by the CEO.

1.20 GAAP means generally accepted accounting principles in the United States.

1.21 Holdings means American Axle & Manufacturing Holdings, Inc., the publicly held parent corporation of the Company.

1.22 Invested Capital means the sum of the Company's long-term debt, less cash and cash equivalents, plus stockholders' equity, all as determined in accordance with GAAP.

1.23 Management Benefits Committee means the Management Benefits Committee authorized by the Compensation Committee to administer the Plan.

1.24 Month of Participation means each full or partial month during which an employee of the Company or an Affiliated Employer is an Eligible Employee. An Eligible Employee who, during the Plan Year, dies, Retires, incurs a Disability, or is employed by an Affiliated Employer who has not adopted the Plan and who remains an employee of such Affiliated Employer through the Payment Date, will be credited with his or her Months of Participation through the month of death, Retirement, Disability or transfer but not thereafter.

1.25 Net Income means the net income of Holdings as determined in accordance with GAAP and as reported in the audited consolidated financial statements of Holdings.

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1.26 NIPS means net income as a percentage (%) of sales. NIPS is computed as the net income for the Plan Year in question divided by the net sales for the Plan Year in question, all as determined by Holdings in accordance with GAAP and as reported in Holdings’ audited consolidated financial statements for the Plan Year.

1.27 Participant means an individual who is eligible to receive a Bonus Award in a Plan Year in accordance with Article 2.

1.28 Payment Date means the date or dates on which Bonus Awards under the Plan are paid to Participants as determined in accordance with Section 4.1 hereof.

1.29 Peer Group Companies means the companies identified by Holdings and reported in its annual proxy statement as members of a competitor peer group for purposes of comparison of cumulative total stockholder return.

1.30 Plan means this Amended and Restated American Axle & Manufacturing, Inc. Incentive Compensation Plan for Executive Officers.

1.31 Plan Year means the 12-month period beginning on January 1 and ending on December 31 of each year.

1.32 Retire or Retirement means termination of employment while entitled to an early, normal, or late retirement benefit under the Salaried Pension Plan.

1.33 ROIC means return on invested capital and is computed as the sum of Holdings’ net income and after-tax net interest expense for the Plan Year in question, which sum is divided by Average Invested Capital for the Plan Year in question, all as determined in accordance with GAAP and as set forth in Holdings’ audited consolidated financial statements for the Plan Year.

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1.34 Salaried Pension Plan means the American Axle & Manufacturing, Inc. Retirement Program for Salaried Employees, the American Axle & Manufacturing, Inc. and Affiliated Corporation Salaried Cash Bonus Pension Plan, or other retirement plans sponsored by the Company or Affiliated Employers.

1.35 Target Performance Levels means performance levels determined as follows:

a.   in the case of the Bonus Factors:

1.   for ROIC and NIPS, Target Performance Levels are financial performance targets reviewed and approved annually each Plan Year by the Compensation Committee that are intended to establish performance targets to exceed the performance of two thirds of the Peer Group Companies based on the most recent trailing 3 year data available for the Peer Group Companies, and are specifically identified as Target Performance Levels as established and approved in writing by the Compensation Committee for the Plan Year; and

2.   for Cash Flow as a Percentage of Budgeted Cash Flow, the Target Performance Level means achievement of 100% of Budgeted Cash Flow for the Company in the Plan Year in question, and is specifically identified as the Target Performance Level as established and approved by the Compensation Committee for the Plan Year.

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The Target Performance Levels are reviewed and approved annually by the Compensation Committee. 

1.36 Weighted Percentage means the percentage allocation (relative weighting) assigned to each of the Bonus Factors referred to in Article 3 for each Plan Year, as approved by the Compensation Committee in consultation with the CEO and CFO.

ARTICLE 2

PARTICIPATION

2.1 Participation. An individual who becomes an Eligible Employee before October 1 of a Plan Year shall be a Participant for such Plan Year. An individual who becomes an Eligible Employee on or after October 1 of a Plan Year shall not be a Participant for such Plan Year, but shall become a Participant for the next succeeding Plan Year on January 1 of such next succeeding Plan Year in the event and to the extent such individual remains an Eligible Employee continuously into such succeeding Plan Year.

2.2  Eligibility. Each Participant:

a.   who remains an Eligible Employee through the last day of a Plan Year and continuously throughout the next succeeding Plan Year up to and including the Payment Date; or

b.   whose participation in the Plan terminated during the Plan Year due to the Participant’s:

i.   death; or

ii.   Disability; or

iii.   Retirement; or

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iv.   employment by an Affiliated Employer who has not adopted the Plan, provided the Participant remains employed by such Affiliated Employer through the Payment Date or the Participant’s employment by the Affiliated Employer terminates due to the Participant’s death, Disability, or Retirement or subsequent employment by another Affiliated Employer.

shall be entitled to receive a Bonus Award, except as otherwise provided herein.

ARTICLE 3

CALCULATION OF BONUS AWARDS

3.1 Bonus Award Formula. The Bonus Award of an Executive Officer for a particular Plan Year shall be determined pursuant to this Article 3 and shall be equal to the sum of the amounts calculated under sub-sections (a) - - (c) below:

(a) ROIC. The ROIC component of the bonus award formula for Executive Officers shall be computed as follows, referring to the Target Performance Levels approved by the Compensation Committee for the Plan Year:

1. The bonus award percentage for Executive Officers which corresponds to the ROIC for the Plan Year;

2. multiplied by the Weighted Percentage assigned to the ROIC Bonus Factor for Executive Officers;

3. multiplied by the Covered Earnings of the Executive Officer for the Plan Year; PLUS

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(b) Cash Flow. The Cash Flow as a Percentage of Budgeted Cash Flow component of the bonus award formula for Executive Officers shall be computed as follows, referring to the Target Performance Levels approved by the Compensation Committee for the Plan Year:

1. the bonus award percentage for Executive Officers which corresponds to the Cash Flow for the Plan Year;

2. multiplied by the Weighted Percentage assigned to the Cash Flow as a Percentage of Budgeted Cash Flow Bonus Factor for Executive Officers;

3. multiplied by the Covered Earnings of the Executive Officer for the Plan Year; PLUS

(c) NIPS. The NIPS component of the bonus award formula for Executive Officers shall be computed as follows, referring to the Target Performance Levels approved by the Compensation Committee for the Plan Year:

1. the bonus award percentage for Executive Officers which corresponds to Net Income As a % of Sales (NIPS) for the Plan Year;

2. multiplied by the Weighted Percentage assigned to NIPS for Executive Officers;

3. multiplied by the Covered Earnings of the Executive Officer for the Plan Year.

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3.2 Weighted Percentages. Each Plan Year the Compensation Committee, in consultation with the CEO and CFO, shall assign a Weighted Percentage to each of the Bonus Factors. For purposes of determining Bonus Awards for Executive Officers, the Weighted Percentages for each of the Bonus Factors must total 100%. A list setting forth all Weighted Percentages for each of the Bonus Factors shall be established for each Plan Year based on the recommendation of the CEO and CFO and approval of the Compensation Committee.

3.3 Individual Performance Adjustments. Anything in this Plan to the contrary notwithstanding, the amount of a Participant’s Bonus Award for a given Plan Year shall be subject to review and adjustment by the CEO who shall have the discretion to increase, decrease, or eliminate entirely (“Individual Performance Adjustments”) any Bonus Award determined pursuant to this Article 3; provided, however, that the amount of an Executive Officer’s Bonus Award must be approved by the Compensation Committee and the sum of all Bonus Awards for all Participants in a Plan Year may not exceed the maximum annual amount allocated for Bonus Award payments as such amount is determined each Plan Year by the Compensation Committee.

3.4 Effect of Plan on Other Company Policies.

(a) Company Programs. Unless otherwise expressly approved by the Compensation Committee, a Participant shall have his or her Bonus Award under this Plan for any Plan Year, if any, reduced by any performance based compensation paid or payable to him or her by the Company for such Plan Year pursuant to any other Company program, policy or agreement. Notwithstanding

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the foregoing, a Participant’s Bonus Award shall not be reduced by any deferred compensation payments or obligations applicable to such Participant for such Plan Year.

(b) Employment Agreements. Anything contained in this Plan to the contrary notwithstanding, in the event a Participant has entered into an employment agreement with the Company which provides for the payment of a bonus which is determined, in whole or in part, based upon the financial performance of the Company for any Plan Year, then in such event such Participant shall be entitled to receive the bonus calculated for such Plan Year in accordance with the applicable employment agreement in lieu of any Bonus Award.

3.5 Requirement of Profitability. Anything contained in this Plan to the contrary notwithstanding, no Bonus Award shall be payable pursuant to this Plan to any Participant for any Plan Year in which Holdings’ audited consolidated financial statements contained in its Annual Report on Form 10-K filed with the SEC for such Plan Year (or approved for filing with the SEC by the Board of Directors if such filing has not yet occurred) do not report positive Net Income for the Plan Year in question after reflecting all costs and expenses associated with the Plan for such Plan Year.

ARTICLE 4

PAYMENT OF BONUS AWARD

4.1 Time and Manner of Payment. Payment of a Participant’s Bonus Award for a Plan Year shall be made not later than March 15 of the subsequent year. Provided, however, that if the employment of a Participant by the Company shall

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terminate during a Plan Year, or prior to March 15 of the subsequent year, for a reason other than his or her death, Disability, Retirement or employment by an Affiliated Employer (so long as such Participant remains employed by the Affiliated Employer on the Payment Date or terminated employment with the Affiliated Employer due to such Participant’s death, disability, or Retirement as determined pursuant to the Affiliated Employer’s applicable disability or Retirement plan) prior to receiving payment of such Bonus Award, the Participant shall forfeit all rights to a Bonus Award in such Plan Year and no Bonus Award shall be paid to such Participant for such Plan Year. Notwithstanding any provision of the Plan to the contrary, the Company shall withhold from any Bonus Award all federal, state and local taxes as shall be required pursuant to any law or governmental regulation or ruling, any amounts owed by the Participant to the Company to the extent permitted by law, and any amounts otherwise required to be withheld or deducted under applicable law or by agreement of the Company and the Participant.

ARTICLE 5

ADMINISTRATION, AMENDMENT AND TERMINATION

5.1 Authority of Administrator. The Management Benefits Committee shall monitor the performance of the Plan to ensure that it is administered by the Human Resources Department in accordance with its terms and applicable laws and regulations. Except as otherwise expressly stated, the Compensation Committee, or such other committee, including the Management Benefits Committee, to which it delegates such authority, shall have the full power, discretion and authority to construe, interpret and administer the Plan, including authority to correct any defect or reconcile any inconsistency or ambiguity. All decisions, acts or interpretations of the

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Compensation Committee shall be final, conclusive and binding upon all persons. No member of the Compensation Committee, the Management Benefits Committee or any other committee to which Plan administrative authority has been delegated, shall be personally liable by reason of any action taken by him or her in good faith or on his or her behalf as Administrator, nor for any mistake in judgment made in good faith and the Company and Holdings shall indemnify and hold harmless each member of the Compensation Committee, the Management Benefits Committee, the CEO, the CFO, and each other officer, employee or director of the Company to whom any duty or power relating to the Plan, or its administration or interpretation, may be delegated, against any cost or expense (including legal fees) or liability (including any sum paid in settlement of a claim with the approval of the Board of Directors) arising out of any act or omission to act in connection with the Plan unless arising out of such person’s own fraud or bad faith.

 5.2  Amendment and Termination. The Compensation Committee may at its discretion amend this Plan in any respect at any time and for any reason and may terminate the Plan, in whole or in part, at any time and neither notice of amendment nor of termination is necessary for any amendment or termination to be effective. Any amendment or termination of the Plan may be made effective retroactively to the first day of the Plan Year or, in the case of an amendment or termination of the Plan adopted on or before March 15, the first day of the preceding Plan Year. No Participant or Beneficiary shall be deemed to have a vested or contractual right to a Bonus Award until such Bonus Award is actually paid to the Participant or Beneficiary by the Company. The payment of Bonus Awards pursuant to this Plan is completely

13

discretionary on the part of the Company. The existence of this Plan shall create no rights on behalf of Participants or Beneficiaries or obligations on behalf of the Company or any Affiliated Employer.

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ARTICLE 6

AFFILIATED EMPLOYERS

6.1 Adoption of Plan by Affiliated Employers. Any Affiliated Employer may, with the recommendation of the Management Benefits Committee and the approval of the Compensation Committee, adopt this Plan on behalf of such of its Executive Officers. The Affiliated Employer shall pay all Bonus Awards made to Executive Officers which are payable because of their employment with the Affiliated Employer.

ARTICLE 7

MISCELLANEOUS

7.1 Compliance with Financing Agreements. This Plan may be subject to the terms and conditions of any agreements entered into between the Company and any third party lender to whom the Company is now indebted, or may at any time during the term of this Plan become indebted, and the Bonus Awards for any Plan Year may be reduced by such amounts as may be necessary to ensure that the Company is not in default under any such agreements.

7.2 No Right, Title or Interest in or to the Company’s Assets. Neither Participants nor Beneficiaries shall have any right, title or interest whatsoever in or to any investments which the Company may make to aid it in meeting its obligations under this Plan. Nothing contained in the Plan and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind or a fiduciary relationship between Holdings or the Company and any Participant, Beneficiary or any other person.

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All payments to be made under this Plan shall be paid from the general assets of the Company. 

7.3 No Alienation of Bonus Awards. Except as otherwise may be required by law, no amount payable at any time under this Plan shall be subject in any manner to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge or encumbrance of any kind, nor in any manner be subject to the debts or liabilities of any person, and any attempt to so alienate or subject any such amount, whether presently or thereafter payable, shall be void.

7.4 No Contract of Employment. Neither the actions of the Company in establishing this Plan, nor any provisions of this Plan or any action taken by Holdings, any Affiliated Employer, the Compensation Committee, the Administrator or the CEO pursuant to its provisions, shall be construed as giving to any Eligible Employee or any employee the right to be employed by the Company or affect the right of the Company to dismiss any employee.

7.5 Governing Law. This Plan shall be governed by and construed in accordance with the laws of the State of Michigan without giving effect to the conflict of laws provisions thereof.

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EX-12

EXHIBIT 12 - COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
	Year Ended December 31,
	2004			2003			2002			2001			2000
	(Unaudited)
	(In millions, except for ratios)
Fixed Charges:
Interest expense, including amortization of debt issuance costs	$	25.8		$	47.5		$	51.0		$	60.2		$	65.7
Estimated interest portion of rents		11.7			12.2			15.8			16.6			15.0
Capitalized interest		5.8			6.0			8.2			13.2			11.9
Total fixed charges as defined		43.3			65.7			75.0			90.0			92.6
Earnings:
Income from continuing operations before income tax expense		235.8			303.2			273.8			180.9			203.4
Total fixed charges as defined		43.3			65.7			75.0			90.0			92.6
Fixed charges not deducted in the determination of income from continuing operations before income tax expense		(5.8	)		(6.0	)		(8.2	)		(13.2	)		(11.9	)
Total earnings as defined	$	273.3		$	362.9		$	340.6		$	257.7		$	284.1
Ratio of earnings to fixed charges		6.31			5.52			4.54			2.86			3.07

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EX-13

Exhibit 13

AAMFINANCIALS

Management’s Discussion and Analysis

OVERVIEW

American Axle & Manufacturing Holdings, Inc. (Holdings) and its subsidiaries (collectively, we, our, us or AAM) is a premier Tier I supplier to the automotive industry and a worldwide leader in the manufacture, engineering, design and validation of driveline systems and related powertrain components and chassis modules for light trucks, sport utility vehicles (SUVs), passenger cars and crossover vehicles. Driveline systems include components that transfer power from the transmission and deliver it to the drive wheels. Our driveline and related powertrain products include axles, chassis modules, driveshafts, chassis and steering components, driving heads, crankshafts, transmission parts and metal formed products.

We are the principal supplier of driveline components to General Motors Corporation (GM) for its rear-wheel drive (RWD) light trucks and SUVs manufactured in North America, supplying substantially all of GM’s rear axle and front four-wheel drive/ all-wheel drive (4WD/AWD) axle requirements for these vehicle platforms. Sales to GM were approximately 80% of our total net sales in 2004, 82% in 2003 and 86% in 2002.

As a result of our Component Supply Agreement (CSA) and Lifetime Program Contracts with GM (LPCs), we are the sole-source supplier to GM for certain axles and other driveline products for the life of each GM vehicle program covered by a LPC. Substantially all of our sales to GM are made pursuant to the LPCs. The LPCs have terms equal to the lives of the relevant vehicle programs or their respective derivatives, which typically run 6 to 12 years, and require us to remain competitive with respect to technology, design and quality. We will compete for future GM business upon the expiration of the LPCs or the CSA.

We are also the principal supplier of driveline system products for the Chrysler Group’s heavy-duty Dodge Ram full-size pickup trucks (Dodge Ram program) and its derivatives. As part of this program, we have commenced supply of a fully integrated computer-controlled chassis system for the 2005 Dodge Ram Power Wagon in the fourth quarter of 2004. Sales to DaimlerChrysler Corporation (DaimlerChrysler) were 11% of our total net sales in 2004, 9% in 2003 and 4% in 2002.

We continue to diversify our customer base. In addition to GM and DaimlerChrysler, we supply driveline systems and other related

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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

components to PACCAR Inc., Volvo Group, Ford Motor Company, and other original equipment manufacturers (OEMs) and Tier I supplier companies such as Delphi Corporation, New Venture Gear, Inc. and The Timken Company. Our sales to customers other than GM increased 8% to $728.0 million in 2004 as compared to $674.0 million in 2003 and $498.5 million in 2002. In 2005, we will launch rear drive modules (RDMs) and independent front drive axles (IFDAs) for South Korean automaker Ssangyong Motor Corporation.

INDUSTRY TRENDS AND COMPETITION

There are a number of key trends affecting the highly competitive automotive industry. The industry is global with an increased emphasis on new consumer markets, geographically diverse production facilities and supplier consolidation. Pricing pressures are significant, while domestic manufacturing costs, including labor and certain raw materials, are escalating. As a result, OEMs and suppliers are developing strategies to reduce costs such as producing in low cost locations and sourcing on a global basis. Product development and advanced technology are critical to attracting and retaining business. The driveline systems segment of the industry in which we compete reflects these trends, and we expect them to continue.

GLOBAL AUTOMOTIVE PRODUCTION  Global automotive production is increasing in Eastern Europe, Asia (particularly China, South Korea and India) and South America. The rate of growth of automotive production in these regions is expected to be much greater than the more traditional automotive production centers such as North America, Western Europe and Japan. Our first Asian program will begin in 2005 as we launch production of RDMs and IFDAs for South Korean automaker Ssangyong Motor Corporation. We have also opened offices in India, China and South Korea to support these growing markets. We expect our activity in these markets to increase significantly over the next several years.

PRICE PRESSURE  Year-over-year price reductions are a common practice in the automotive industry. We sell most of our products under long-term contracts with prices scheduled at the time the contracts are established. Some of our contracts require us to reduce our prices in subsequent years and most of our contracts allow us to adjust prices for engineering changes. We do not believe that the price reductions we have committed to our customers will have a material adverse impact on our future operating results, because we intend to continue offsetting such price reductions through purchased material cost reductions and other productivity improvements.

STEEL AND OTHER METALLIC MATERIAL PRICING  Recent worldwide market conditions have resulted in significant increases in steel and other metallic material prices. We are focused on mitigating the impact of this trend through commercial agreements with our customers, strategic sourcing arrangements with suppliers and technology advancements that will allow us to use less metallic materials in the manufacture of our products.

The majority of our sales contracts with our largest customer provide price adjustment provisions for metal market price fluctuations. Because we do not have such provisions with all of our customers for all of the parts that we sell, we are experiencing higher net costs for raw materials. These escalating prices have come in the form of metal market adjustments, base price increases and surcharges. We also have contracts with our steel suppliers that ensure continuity of supply. Additionally, our validation and testing capabilities enable us to strategically utilize steel sources on a global basis, and we now have qualified steel sources in Brazil, Italy, Mexico and South Korea.

SUPPLY BASE CONSOLIDATION  The OEMs have reduced their supply base, preferring stronger relationships with a fewer number of suppliers capable of designing, engineering, testing, validating and manufacturing systems and modules for their increasingly global operations. The trend is to move away from regional suppliers and toward suppliers that can serve global markets in a cost efficient manner. The financial strength of suppliers is also an important factor in sourcing decisions as the OEMs work to protect their continuity of supply. We believe our engineering capabilities and financial resources position us well in this environment.

Supply base consolidation is not limited to Tier I suppliers. The competitive pressures of the automotive industry have forced the consolidation of our supply base as well. We have expanded our global purchasing activities in order to procure materials cost-effectively while ensuring continuity of high quality supply.

SHIFT OF WARRANTY RESPONSIBILITIES  The OEMs are also shifting warranty responsibilities to their supply base. In our ten-year history, we have experienced negligible warranty charges from our customers due to our contractual relationships and ongoing improvements in the areas of quality, reliability and durability with respect to the products that we sell. Although we do not expect that our warranty obligations will have a material adverse impact on our future operating results, we will continue to closely monitor potential future warranty costs.

4WD/AWD  There is a continuing trend toward higher 4WD/AWD penetration in the market place. We benefit from increased 4WD/AWD penetration because we are able to sell two axles on a 4WD/AWD vehicle versus one on a traditional light truck or SUV, which also increases our content-per-vehicle.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

  RESULTS OF OPERATIONS   NET SALES  Net sales were $3,599.6 million in 2004 as compared to $3,682.7 million in 2003 and $3,480.2 million in 2002. The decrease in 2004 net sales of 2% relative to 2003 compares to a decrease in North American (N.A.) light vehicle production of less than 1 % and a decrease of nearly 5% in GM light truck production. The increase in 2003 net sales of 6% relative to 2002 was achieved despite a decrease of 3% in N.A. light vehicle production and compares to a 3% increase in GM light truck production.   Sales in 2004 and 2003 as compared to 2002 benefited from the launch in the second half of 2003 of the GMC Canyon and Chevrolet Colorado and increased production of GM’s full-size pickup and SUV programs. Sales in 2004 also reflect the impact of price adjustments under metal market price fluctuation provisions in our contracts with our customers. These increases were more than offset by the impact of our customers’ lower production volumes in 2004. The increase in net sales for 2003 was partially offset by decreased production of the Chevrolet Astro and GMC Safari van program.  

Our sales activity in 2003 and 2002 reflect the impact of our successful launch in the second half of 2002 of new driveline system products supporting the Dodge Ram program, the launch in the third quarter of 2002 of GM’s HUMMER H2 and the 2002 introduction of the longer wheel-base Chevrolet Trailblazer EXT and GMC Envoy XL. Our sales in these two years also reflect a reduction in sales to Visteon Corporation and the discontinuance of the GMT-600 full-size van program and the Pontiac Firebird/Chevrolet Camaro program.

Our content-per-vehicle (as measured by the dollar value of our products supporting GM’s N.A. light truck platforms and the Dodge Ram program) was $1,173 in 2004 and 2003, up from $1,140 in 2002. This increase was primarily a result of our 2002 launch of new driveline system products supporting the Dodge Ram program and the 2002 launch of the HUMMER H2 partially offset by a product mix shift from GM’s full-size to mid-size pickup trucks and SUVs. Although our products supporting mid-size SUVs carry a higher-than-average 4WD/AWD penetration rate, these products generate a lower-than-average content-per-vehicle. Our 4WD/AWD penetration rate has also increased in these periods to 62.6% in 2004 as compared to 61.8% in 2003 and 58.5% in 2002. 4WD/AWD penetration is equal to the total number of front axles we produce divided by the total number of rear axles we produce for the vehicle programs on which we sell product.

  GROSS PROFIT  Gross profit was $474.5 million in 2004 as compared to $540.3 million in 2003 and $491 .7 million in 2002. Gross margin was 13.2% in 2004 as compared to 14.7% in 2003 and 14.1 % in 2002. Ongoing productivity improvements continued to positively impact our gross profit and gross margin in these periods. However in 2004, these gains were more than offset by the impact of lower production volumes and approximately $30.0 million of increased costs for steel and other metallic material prices.   In February 2004, our national collective bargaining agreement with the UAW expired. As a result of not reaching an agreement before the expiration of the contract, we experienced a temporary work stoppage of less than two days at six of our North American manufacturing facilities. In 2004, our operating results include costs and expenses of approximately $5.2 million related to overtime and other costs to recover lost production as a result of the work stoppage.

 

Lump-sum ratification payments totaling $37.5 million (including applicable payroll taxes) were made in the first half of 2004 in accordance with new collective bargaining agreements with unions that represent our hourly associates at six of our locations in the U.S. These lump-sum payments relate to future service of our hourly associates. In 2004, we expensed $13.7 million of these payments, which represented amounts earned in 2004 including $7.5 million paid in lieu of base wage increases. The remaining $23.8 million relates to amounts both parties agreed would be earned during the terms of the agreements and will be amortized over the remaining lives of the agreements.

In the first half of 2004, we recognized a pre-tax charge of $12.7 million (most of which was recovered through associated labor cost savings in the second half of 2004) related to lump-sum voluntary separation payments accepted by nearly 250 hourly associates terminating their employment with AAM . In December 2004, we recognized an additional pre-tax charge of $10.0 million related to a similar voluntary separation program accepted by 186 hourly associates terminating their employment with AAM (associated labor cost savings will be recovered in 2005).

In 2003, productivity gains were partially offset by a $9.3 million charge for an early retirement program for our hourly associates and a $2.2 million third quarter charge to adjust our salary workforce. Increased gross profit and gross margin in 2003 as compared to 2002 was also a result of incremental profit on increased net sales of over $200.0 million.

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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

In July 2002, a fire occurred at our forge operations in Detroit, Michigan. The impact on our operations related to the fire is explained in the section entitled “Other Income (Expense)” appearing in this Management’s Discussion and Analysis (MD&A).

  SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (SG&A)  SG&A (including research and development (R&D)) was $189.7 million in 2004 as compared to $194.0 million in 2003 and $180.5 million in 2002. SG&A as a percentage of net sales was 5.3% in 2004 and 2003 and 5.2% in 2002. SG&A in 2004 includes higher R&D spending offset by lower profit sharing expense due to lower earnings and changes to our incentive compensation plans implemented in 2004. The increase in SG&A spending in 2003 as compared to 2002 was primarily a result of higher R&D spending and increased insurance and benefit costs.

  R&D  In 2004, R&D spending in product, process and systems increased 13% to $68.6 million as compared to $60.7 million in 2003 and $54.0 million in 2002. The focus of this increasing investment is to develop innovative driveline and powertrain system solutions for passenger cars, light trucks and SUVs in the global marketplace. New products under development in this area include power transfer units, transfer cases, driveline and transmission differentials, multi-piece driveshafts, RDMs and IFDAs. We also continue to focus on electronic integration in our existing products. The most recent examples of these initiatives are the electronic SmartBar™ stabilizer based roll-control system, TracRite^® GTL electronic differentials and TracRite^® EL electronic locking differentials all featured in the 2005 Dodge Ram Power Wagon. In addition, we continue to support the development of hybrid vehicle systems. Our efforts in these areas have resulted in the development of prototypes and various configurations of these driveline systems for several OEMs throughout the world.

OPERATING INCOME  Operating income was $284.8 million in 2004 as compared to $346.3 million in 2003 and $311.2 million in 2002. Operating margin was 7.9% in 2004, 9.4% in 2003 and 8.9% in 2002. The decreases in operating income and operating margin in 2004 and the increases in operating income and operating margin in 2003 were due to the factors discussed in Gross Profit and SG&A.

  NET INTEREST EXPENSE  Net interest expense was $25.5 million in 2004, $46.8 million in 2003 and $50.6 million in 2002. Interest expense decreased in 2004 due to lower average outstanding borrowings and the favorable impact of our debt refinancing activities in the first quarter of 2004. In 2003 as compared to 2002, we benefited from lower average interest rates and reduced our borrowings primarily as a result of our increased operating cash flow.

OTHER INCOME (EXPENSE)  Following are the components of Other Income (Expense) for 2004, 2003 and 2002:

Debt refinancing and redemption costs  Debt refinancing and redemption costs expensed in the first quarter of 2004 are summarized as follows (dollars in millions):

Call premium on 9.75%Notes	$	14.6
Write-off of unamortized discount and debt issuance costs
9.75% Notes		5.7
1997 Bank Credit Facilities		3.2
Debt refinancing and redemption costs	$	23.5

The details of the debt refinancing and redemption costs are more fully explained in the section entitled “Liquidity and Capital Resources - Capitalization and Debt Availability.”

Gain on insurance settlement  In July 2002, a fire occurred at our forge operations in Detroit, Michigan. There were no resulting injuries and the fire did not affect our ability to meet customer demand. Our insurance policies provided coverage for the property destroyed and incremental costs incurred to maintain continuity of supply.

·   Damage for Property Destroyed - A portion of the building and several machines were damaged. At year-end 2002, a substantial portion of our insurance claim was settled and we recognized a gain in the fourth quarter of $10.4 million in other income. This gain consisted of $11.0 million of expected proceeds from the insurance company related to our overall property damage claim offset by $0.1 million net book value of the damaged building and equipment, and a $0.5 million insurance deductible related to property damage expensed in the third quarter. Additionally, we recognized $1.9 million ($0.9 million in cost of goods sold and $1.0 million in SG&A) of incremental profit sharing expense in 2002 as a result of this gain. The net pre-tax gain at year-end 2002 was $8.5 million and the net after-tax gain amounted to $5.5 million.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

·   Incremental Costs - While the fire did not affect our ability to meet customer demand, additional costs of $4.9 million were incurred in 2002 to maintain continuity of supply to our customers. These costs were offset by insurance recoveries received in 2002 and had no impact on our results of operations. However, our gross profit was impacted by a $0.5 million insurance deductible related to incremental costs in the third quarter of 2002.

At year-end 2003, this claim was settled in full, and all cash had been collected related to this claim.

Other, net  We recognized $3.7 million in 2003 and $2.8 million in 2002 related principally to the net effect of foreign exchange gains.

INCOME TAX EXPENSE  Income tax expense was $76.3 million in 2004, $106.1 million in 2003 and $97.7 million in 2002. Our effective income tax rate was 32.4% in 2004, 35.0% in 2003 and 35.7% in 2002. The decrease in our effective income tax rate in 2004 was primarily due to tax effects related to the recognition of R&D tax credits, the Medicare Part D subsidy and lower foreign rates. The decrease in our effective income tax rate in 2003 as compared to 2002 was primarily due to the realization of state tax credits partially offset by a reduction in federal tax credits.

NET INCOME AND EARNINGS PER SHAPE (EPS)  Net income was $159.5 million in 2004 as compared to $197.1 million in 2003 and $176.1 million in 2002. Diluted earnings were $2.98 per share in 2004 as compared to $3.70 per share in 2003 and $3.38 per share in 2002.

In 2004, net income and EPS includes the impact of a one-time first quarter charge related to debt refinancing and redemption costs of $15.9 million, net of tax ($23.5 million before tax), and a December charge of $6.8 million, net of tax ($10.0 million before tax), related to lump-sum voluntary separation payments accepted by 186 hourly associates. Net income was positively impacted in 2002 by a $5.5 million gain, net of tax and other related costs ($8.5 million before tax), due to an insurance settlement related to a fire that occurred at our forge operations in Detroit, Michigan. The details related to the fire are explained in the section entitled “Other Income (Expense).”

EARNINGS BEFORE INTEREST EXPENSE, INCOME TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)  EBITDA was $432.7 million in 2004 as compared to $513.8 million in 2003 and $470.6 million in 2002. The decrease in EBITDA in 2004 and the increase in EBITDA in 2003 were primarily due to the factors discussed in Gross Profit and SG&A.

In 2004, EBITDA includes the impact of a one-time first quarter charge of $23.5 million related to debt refinancing and redemption costs and a December charge of $10.0 million related to lump-sum voluntary separation payments accepted by 186 hourly associates. In 2002, EBITDA was positively impacted by an $8.5 million insurance settlement related to a fire that occurred at our forge operations in Detroit, Michigan. The details related to the fire are explained in the section entitled “Other Income (Expense).” For an explanation and reconciliation of EBITDA, refer to the section entitled “Supplemental Financial Data.”

LIQUIDITY AND CAPITAL RESOURCES

Our primary liquidity needs are to fund capital expenditures, debt service obligations, working capital investments and our quarterly cash dividend program. We believe that operating cash flow and borrowings under our Revolving Credit Facility will be sufficient to meet these needs in the foreseeable future.

  OPERATING ACTIVITIES  Net cash provided by operating activities was $453.2 million in 2004 as compared to $496.9 million in 2003 and $384.2 million in 2002. Significant factors impacting our 2004 operating cash flow as compared to 2003 were:

·   Lower net income;

·   Lump-sum ratification payments totaling $37.5 million made in accordance with new collective bargaining agreements with unions that represent our hourly associates at six of our locations in the U.S.; and

·   Collection of state tax credit refunds of $10.7 million in 2003 that were not available in 2004.

Deferred taxes  Deferred income taxes were $46.3 million in 2004, $20.4 million in 2003 and $58.7 million in 2002. The tax benefit associated with the exercise of stock options, accelerated depreciation and other tax planning strategies had a positive impact on our operating cash flow in these years offset primarily by the timing of the tax deducibility of our postretirement benefit obligations. Another factor that positively impacted our operating cash flow was the utilization of federal tax credits in 2004 and 2003.

Our deferred tax asset valuation allowances were $32.5 million at year-end 2004, $34.9 million at year-end 2003 and $41.6 million at year-end 2002. The majority of our allowances relate to foreign net operating losses and capital allowance carryforwards. Although these carryforwards do not expire, we considered prior operating results and future plans, as well as the utilization period of other temporary differences, in determining the amount of our valuation allowances.

Pension and postretirement benefit obligations  We contributed $35.7 million to our pension trust in 2004 as compared to $42.1 million in 2003 and $47.1 million in 2002. This funding

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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

compares to our annual pension expense of $39.1 million in 2004, $41.2 million in 2003 and $25.6 million in 2002. We expect our pension funding in 2005 to be in the range of $30.0 million to $40.0 million.

Our cash outlay for other postretirement benefit obligations was $2.7 million in 2004, $3.9 million in 2003 and $0.4 million in 2002. This compares to our annual postretirement benefit expense of $69.5 million in 2004, $55.7 million in 2003 and $36.9 million in 2002. We expect our funding of other postretirement benefit obligations in 2005 to be less than $5.0 million.

Accounts receivable  Accounts receivable at year-end 2004 were $334.9 million as compared to $339.2 million at year-end 2003 and $335.7 million at year-end 2002. Accounts receivable were impacted by reduced sales in the fourth quarter of 2004 as compared to the fourth quarter of 2003 partially offset by increased billings for metal market price adjustments.

Our accounts receivable allowances were $2.5 million at year-end 2004, $2.8 million at year-end 2003 and $5.4 million at year-end 2002. These allowances have been reduced by over 50% in these periods as a result of the improvement in the aging of balances due from our customers.

Inventories  At year-end 2004, inventories were $196.8 million as compared to $171.8 million at year-end 2003 and $174.6 million at year-end 2002. Raw materials increased in 2004 due to higher costs of steel and other metallic materials in addition to steel purchases made ahead of scheduled release dates to ensure continuity of supply. At year-end 2004, material in-transit, primarily at our Mexican operations, was higher as compared to year-end 2003 due to increased transit time of purchases from new foreign suppliers and changes in the mode of transportation with existing suppliers. Spare parts inventories increased in these periods as we continued to support preventive maintenance strategies to protect against costly disruptions in operations due to machine downtime.

Our inventory valuation allowances were $12.6 million at year-end 2004, $14.8 million at year-end 2003 and $22.2 million at year-end 2002. These inventory valuation allowances have been reduced in these periods primarily due to the usage and disposal of excess and obsolete indirect inventory.

Accounts payable and accrued expenses  The change in our accounts payable and accrued expenses was a source of cash of $18.9 million in 2004 as compared to $2.6 million in 2003 and $41.3 million in 2002. Accrued compensation and benefits were lower at year-end 2004 as compared to year-end 2003 primarily due to lower profit sharing accruals, which were more than offset by increased accounts payable due to higher inventory purchases and capital expenditures in the fourth quarter.

The most significant factor contributing to our increased funding of our accounts payable and accrued expenses in 2003 as compared to 2002 was a higher profit sharing payout due to our increased profitability in 2002. Other factors affecting the net cash impact associated with our accounts payable and accrued expenses in 2003 were lower direct inventory purchases and reduced supplier holdbacks on construction in process.

  INVESTING ACTIVITIES  Capital expenditures were $240.2 million in 2004, $229.1 million in 2003 and $207.7 million in 2002. In addition to ongoing productivity improvements, our largest capital projects in 2004 included our initial investments for process development equipment for the GMT-900 program (GM’s next generation full-size truck and SUV platform currently projected to launch in the first quarter of 2006) and expenditures to support the model year 2005 launch of the HUMMER H3 and Dodge Ram Power Wagon. Additionally, we had capital expenditures to support the fourth quarter 2004 launch of a new axle available for the Chevrolet SSR, Chevrolet Silverado, GMC Sierra, Chevrolet Tahoe, GMC Yukon, GMC Yukon Denali, Cadillac Escalade, Chevrolet TrailBlazer and GMC Envoy to handle higher torque and horsepower powertrains.

We expect our capital spending in 2005 to be in the range of $315.0 million to $320.0 million supporting the 2006 and 2007 model year launch of the GMT-900 program and other major customer programs. Other major capital projects expected in 2005 include expenditures for the 2005 launch of RDMs and IFDAs to support our lifetime production contract for new business with South Korean automaker Ssangyong Motor Corporation and the expansion and increased capacity of our Guanajuato Gear & Axle manufacturing facility. We are also adding equipment and capacity to make an electronic vehicle stability and enhancement system standard in the axles for GM’s full-size and mid-size SUVs. Additionally, we expect to have expenditures in 2005 for new business to provide precision machined transmission components for a major OEM in North America and Europe.

In 2003 and 2002, our investing activities also included optional purchase buyouts of leased manufacturing equipment of $3.0 million and $45.2 million, respectively. The manufacturing equipment purchased in these transactions was originally financed under sale-leaseback agreements in 1996 and 1997.

6

MANAGEMENT’S DISCUSSION AND ANALYSIS

We have invested our capital with the objective of improving quality, productivity and operating profitability. Our after-tax return on invested capital (ROIC) was 12.7% in 2004, 16.1% in 2003 and 14.7% in 2002. In 2004, our ROIC reflects the impact of lower production volumes, increased costs of steel and other metallic material prices, the December voluntary separation charge and the effect of debt refinancing activities in the first quarter.

The improvement in our ROIC in 2003 as compared to 2002 was primarily due to our increased operating profitability and improved net income. In 2002, ROIC was positively impacted by a $5.5 million gain, net of tax and other related costs, due to an insurance settlement related to a fire that occurred at our forge operations in Detroit, Michigan. The details related to the fire are explained in the section entitled “Other Income (Expense).” For an explanation and reconciliation of ROIC, refer to the section entitled “Supplemental Financial Data.”

NET OPERATING CASH FLOW AND FREE CASH FLOW  Net operating cash flow was $213.0 million in 2004 as compared to $267.8 million in 2003 and $176.5 million in 2002. Free cash flow was $190.0 million in 2004 as compared to $267.8 million in 2003 and $176.5 million in 2002. For an explanation and reconciliation of net operating cash flow and free cash flow, refer to the section entitled “Supplemental Financial Data.”

FINANCING ACTIVITIES  Net cash used in financing activities was $211.3 million in 2004 as compared to $262.6 million in 2003 and $133.2 million in 2002. Total debt outstanding was $448.0 million at year-end 2004, $449.7 million at year-end 2003 and $734.1 million at year-end 2002. Total debt outstanding decreased by $284.4 million at year-end 2003 as compared to year-end 2002 primarily due to improved operating cash flow performance.

  CAPITALIZATION AND DEBT AVAILABILITY  Our total capitalization was $1.4 billion at year-end 2004 and 2003. Our positive operating cash flow in the periods presented enabled us to reduce our net debt to capital ratio from 50.7% at year-end 2002 to 31.2% at year-end 2004. For an explanation and reconciliation of net debt to capital, refer to the section entitled “Supplemental Financial Data.”   In January 2004, we entered into a new senior unsecured revolving credit facility (Revolving Credit Facility) that provides up to $600.0 million of revolving bank financing commitments through January 2009. The Revolving Credit Facility bears interest at rates based on LIBOR or an alternate base rate, plus an applicable margin. Together with $109.0 million of uncommitted bank lines of credit, the Revolving Credit Facility is now our primary source of day-to-day liquidity.

The Revolving Credit Facility is used for general corporate purposes, which included the refinancing of the previously existing senior secured bank credit facilities (1997 Bank Credit Facilities). We had been amortizing fees and expenses associated with the 1997 Bank Credit Facilities over the life of the agreement. In January 2004, the unamortized balance of such fees and expenses of $3.2 million was expensed when we terminated our bank financing commitments under the 1997 Bank Credit Facilities.

At December 31, 2004, $580.5 million was available under the Revolving Credit Facility, which reflected a reduction of $19.5 million for standby letters of credit issued against the facility. We also utilize foreign credit facilities and uncommitted lines of credit to finance working capital needs. At December 31, 2004, $44.1 million was outstanding and $123.8 million was available under such agreements.

In February 2004, we issued $250.0 million of 5.25% Senior Notes due February 2014 (5.25% Notes) and $150.0 million of 2.00% Senior Convertible Notes due 2024 (2.00% Convertible Notes) in concurrent private offerings pursuant to Rule 144A of the Securities Act of 1933. We received net proceeds from these offerings of approximately $394.0 million, after deducting discounts and commissions of the initial purchasers and other expenses. We used a portion of the net proceeds to repurchase $63.0 million, or 1.59 million shares, of our common stock in privately negotiated transactions. The remainder of the net proceeds was used to redeem all $300.0 million of the outstanding 9.75% Senior Subordinated Notes due March 2009 (9.75% Notes) at a cost of $314.6 million on March 1, 2004, and for other general corporate purposes. In the first quarter of 2004, the $14.6 million call premium and an additional $5.7 million of unamortized discounts and debt issuance costs were expensed as a result of this redemption.

The weighted-average interest rate of our total debt outstanding was 4.8%, 5.9% and 5.8% during 2004, 2003 and 2002, respectively.

Credit ratings  In the fourth quarter of 2003, our credit ratings were upgraded to investment grade credit status (S&P’s corporate credit rating of BBB and Moody’s senior implied rating of Baa3). At year-end 2004, the rating agencies’ stable outlook on both of these ratings remained unchanged.

Dividend program  In April 2004, AAM’s Board of Directors declared our first quarterly cash dividend as a public company of $0.15 per share. As of December 31, 2004, we have paid $23.0 million to stockholders of record under the quarterly cash dividend program. On an annualized basis, the dividend payout is $0.60 per share.

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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

Stock repurchase program  During 2004, AAM’s Board of Directors approved a stock repurchase program under which we may repurchase up to 5.5 million shares of common stock in the open market or in privately negotiated transactions from time to time through the first quarter of 2006. Including the common stock we acquired in connection with our debt refinancing activities in the first quarter of 2004, we have repurchased 5.0 million shares of our common stock for $171.0 million under this stock repurchase program.

Off-balance sheet arrangements  Our off-balance sheet financing relates principally to operating leases for certain facilities and manufacturing machinery and equipment. These operating leases are fully disclosed in Note 2 to our consolidated financial statements. Pursuant to these operating leases, most of which were initiated prior to year-end 1999, we have the opportunity to purchase the underlying machinery and equipment at specified buy-out dates. We exercised our purchase options for $3.0 million of such lease buy-outs in 2003 and $45.2 million in 2002. Remaining lease renewal or repurchase options are approximately $106.0 million in 2006. We have no off-balance sheet arrangements with non-consolidated entities.

Contractual obligations  The following table summarizes payments due on our contractual obligations as of December 31, 2004:

	Payments due by period
	Total		< 1 yr		1-3 yrs		3-5 yrs		> 5 yrs
	(Dollars in millions)
Long-term debt	$	443.8	$	28.3	$	15.8	$	—	$	399.7
Capital lease obligations		4.2		1.4		0.6		0.8		1.4
Operating leases(1)		187.6		31.7		59.7		57.4		38.8
Purchase obligations(2)		155.6		140.0		15.6		—		—
Other long-term liabilities(3)		342.9		15.4		38.9		56.2		232.4
Total contractual obligations	$	1,134.1	$	216.8	$	130.6	$	114.4	$	672.3

(1)	Operating leases include all lease payments through the end of the contractual lease terms and excludes any purchase options on such leased equipment.
(2)	Purchase obligations represent our obligated purchase commitments for capital expenditures.
(3)	Other long-term liabilities represent our pension and other postretirement obligations that were actuarially determined through 2014.

MARKET RISK

Our business and financial results are affected by fluctuations in world financial markets, including interest rates and currency exchange rates. Our hedging policy has been developed to manage these risks to an acceptable level based on management’s judgment of the appropriate trade-off between risk, opportunity and cost. We do not hold financial instruments for trading or speculative purposes.

CURRENCY EXCHANGE RISK  Because most of our business is denominated in U.S. dollars, we do not currently have significant exposures relating to currency exchange risk. From time to time, we use foreign currency forward contracts to reduce the effects of fluctuations in exchange rates, primarily relating to the Euro, Mexican Peso, Pound Sterling, Brazilian Real and Canadian Dollar. At December 31, 2004, we had currency forward contracts with a notional amount of $21.0 million outstanding. A 10% change in any of these currencies would not have had a material impact on our consolidated financial statements in 2004.

Future business operations and opportunities, including the expansion of our business outside North America, may further increase the risk that cash flows resulting from these activities may be adversely affected by changes in currency exchange rates. If and when appropriate, we intend to manage these risks by utilizing local currency funding of these expansions and various types of foreign exchange contracts.

INTEREST RATE RISK  We are exposed to variable interest rates on certain credit facilities. The pre-tax earnings and cash flow impact of a one-percentage-point increase in interest rates (approximately 18.7% of our weighted-average interest rate at December 31, 2004) on our long-term debt outstanding at year-end 2004 would be approximately $0.4 million.

CYCLICALITY AND SEASONALITY

Our operations are cyclical because they are directly related to worldwide automotive production, which is itself cyclical and dependent on general economic conditions and other factors. Our business is also moderately seasonal as our major OEM customers historically have a two-week shutdown of operations in July and an approximate one-week shutdown in December. In addition, our OEM customers have historically incurred lower production rates in the third quarter as model changes enter production. Accordingly, our third quarter and fourth quarter results may reflect these trends.

LITIGATION AND ENVIRONMENTAL MATTERS

We are involved in various legal proceedings incidental to our business. Although the outcome of these matters cannot be predicted with certainty, we do not believe that any of these matters, individually or in the aggregate, will have a material adverse effect on our financial condition, results of operations or cash flows.

We are subject to various federal, state, local and foreign environmental and occupational safety and health laws, regulations and ordinances, including those regulating air emissions, water discharge, waste management and environmental cleanup. We will continue to closely monitor our environmental conditions to ensure that we are in compliance with all laws, regulations and ordinances.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

GM has agreed to indemnify and hold us harmless against certain environmental conditions existing prior to our purchase of the assets from GM on March 1, 1994. GM’s indemnification obligations terminated on March 1, 2004 with respect to any new claims that we may have against GM. We have made, and will continue to make, capital and other expenditures (including recurring administrative costs) to comply with environmental requirements. Such expenditures were not significant during 2004, and we do not expect such expenditures to be significant in 2005.

EFFECT OF NEW ACCOUNTING STANDARDS

EITF 04-08  In October 2004, the Emerging Issues Task Force (EITF) reached a consensus opinion on EITF 04-08, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share.” The consensus opinion provides that contingently convertible debt instruments, commonly referred to as “Co-Cos,” are to be included in diluted earnings per share computations (if dilutive) regardless of whether the market price trigger (or other contingent feature) has been met. EITF 04-08 is effective for reporting periods ending after December 15, 2004 with retroactive application. The adoption of EITF 04-08 did not have any impact on our diluted earnings per share calculation for the year ended December 31, 2004 because we gave notice in October 2004 of our irrevocable election to pay cash for the accreted principal amount upon conversion of the 2.00% Convertible Notes, and the impact to earnings per share is currently anti-dilutive due to the market price being less than the conversion price trigger of $54.66, as adjusted.

FASB STATEMENT NO. 151  In November 2004, the FASB issued Statement No. 151, “Inventory Costs.” FASB Statement No. 151 amends and clarifies Accounting Research Bulletin No. 43, Chapter 4. The amendments made by Statement No. 151 will improve financial reporting by clarifying that abnormal amounts of idle facility expense, freight, handling costs and wasted materials should be recognized as current-period charges and requiring the allocation of fixed production overhead costs to inventory based on the normal capacity of the production facilities. FASB Statement No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005 and, therefore, did not have any impact on our results of operations or financial position at December 31, 2004. We do not expect the adoption of this Statement to have a significant impact in 2005.

FASB STATEMENT NO. 123 (REVISED 2004)  In December 2004, the FASB issued Statement No. 123(R), “Share-Based Payment.” FASB Statement No. 123(R) replaces FASB Statement No. 123, “Accounting for Stock-Based Compensation” and supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees.”The revised statement requires that the compensation cost relating to share-based payment transactions be recognized in financial statements and measured on the fair value of the equity or liability instruments issued. FASB Statement No. 123(R) is effective for the first interim or annual reporting period that begins after June 15, 2005. We did not early adopt FASB Statement No. 123(R) and, therefore, there was no impact on our results of operations or financial position at December 31, 2004. While we are currently in the process of finalizing our analysis of the impact and alternative methods of adoption of this Statement, we estimate the impact, along with other equity compensation, will result in after-tax expense of approximately $10 million in 2005.

CRITICAL ACCOUNTING POLICIES

In order to prepare consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP), we are required to make estimates and assumptions that affect the reported amounts and disclosures in our consolidated financial statements. These estimates are subject to an inherent degree of uncertainty and actual results could differ from our estimates.

Other items in our consolidated financial statements require estimation. In our judgment, they are not as critical as those disclosed herein. We have discussed and reviewed our critical accounting policies disclosure with the Audit Committee of our Board of Directors.

PENSION AND OTHER POSTRETIREMENT BENEFITS  In calculating our liabilities and expenses related to pension and other postretirement benefits, key assumptions include the discount rate, expected long-term rate of return on plan assets and rates of increase in compensation and health care costs.

The discount rates used in the valuation of our U.S. pension and other postretirement benefit obligations were based on a hypothetical portfolio of long-term, high quality corporate bonds matched against our expected payment stream. In 2004, the discount rates determined on that basis were 6.20% for the valuation of our pension and 6.35% for the valuation of our other postretirement benefit obligations. The expected long-term rate of return on our U.S. plan assets was 9.0% in 2004. We developed this rate of return assumption based on a review of long-term historical returns for the asset classes represented within our portfolio. The asset allocation for our plans was developed in consideration of the demographics of the plan participants and expected payment stream of the liability. Our investment policy allocates 65-70% of the plans’ assets to equity securities, with the remainder invested in fixed income securities and cash. The rates of increase in compensation and health care costs are based on current market conditions, inflationary expectations and historical information.

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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

All of our assumptions were developed in consultation with our actuarial service providers. While we believe that we have selected reasonable assumptions for the valuation of our pension and other postretirement benefits obligations at year-end 2004, actual trends could result in materially different valuations.

The effect of a 0.5% decrease in both the discount rate and expected return on assets is shown below as of September 30, 2004, our valuation date.

			Expected
	Discount		Return on
	Rate		Assets
	(Dollars in millions)
Decline in funded status	$	47.9		N/A
Reduction in equity	$	50.7		N/A
Increase in 2004 expense	$	6.5	$	1.5

No changes in benefit levels and no changes in the amortization of gains or losses have been assumed.

A 10% annual increase in the per-capita cost of covered health care benefits was assumed for 2005. The rate was assumed to decrease gradually to 5% for 2010 and remain at that level thereafter. A one-percentage-point increase in the assumed health care cost trend rate would have increased total service and interest cost in 2004 and the postretirement obligation at December 31, 2004 by $16.0 million and $91.3 million, respectively.

ACCOUNTS RECEIVABLE ALLOWANCES  The scope of our relationships with certain customers, such as GM and DaimlerChrysler, is inherently complex and, from time to time, we identify differences in our valuation of receivables due from these customers. Differences in the quantity of parts processed as received by customers and the quantity of parts shipped by AAM is one major type of such difference. Price differences can arise when we and our customer agree on a price change but the customer’s pricing database does not reflect the commercial agreement. In these instances, revenue is fixed and determinable, but payment could fall outside our normal payment terms as we work through the process of resolving these differences.

All of our transactions with our customers occur within the parameters of a purchase order which makes the price fixed and determinable. Because of the inherently complex nature of our supply relationships with our customers, from time to time we encounter situations that were not contemplated in the purchase order. As a result, we sometimes enter into non-routine agreements outside the original scope of the purchase order. These agreements may be temporary, are fixed and determinable, and often have payment terms that are different than our normal terms. We recognize the revenue or cost recovery from such arrangements in accordance with the commercial agreement.

We track the aging of uncollected billings and adjust our accounts receivable allowances on a quarterly basis as necessary based on our evaluation of the probability of collection. We recognize revenue or cost recoveries in accordance with our understanding of a commercial agreement.

While we believe that we have made an appropriate valuation of our accounts receivable due from GM , DaimlerChrysler and other customers for accounting purposes, unforeseen changes in our ability to enforce commercial agreements or collect aged receivables may result in actual collections that differ materially from current estimates.

VALUATION OF INDIRECT INVENTORIES  As part of our strategy to control our investment in working capital and manage the risk of excess and obsolete inventory, we generally do not maintain large balances of productive raw materials, work-in-process or finished goods inventories. Instead, we utilize lean manufacturing techniques and coordinate our daily production activities to meet our daily customer delivery requirements. The ability to address plant maintenance issues on a real-time basis is a critical element of our ability to pursue such an operational strategy. Our machinery and equipment may run for long periods of time without disruption and suddenly fail to operate as intended. In addition, certain repair parts required to address such maintenance requirements may be difficult or cost prohibitive to source on a real-time basis.

To facilitate our continuous preventive maintenance strategies and to protect against costly disruptions in operations due to machine downtime, we carry a significant investment in inherently slow-moving machine repair parts and other maintenance materials and supplies. At December 31, 2004, such indirect inventories comprised approximately 33% of our total gross inventories. For inventory valuation purposes, we evaluate our usage of such slow-moving inventory on a quarterly basis by part number and adjust our inventory valuation allowances as necessary to recognize as an asset only those quantities that we can reasonably estimate will be used. We have used the same approach in 2004 and 2003 to evaluate the adequacy of our indirect inventory valuation allowances.

While we believe that we have made an appropriate valuation of such inventories for accounting purposes, unforeseen changes in inventory usage requirements, manufacturing processes, maintenance and repair techniques or inventory control may result in actual usage of such inventories that differ materially from current estimates.

ESTIMATED USEFUL LIVES FOR DEPRECIATION  At December 31, 2004, approximately 79% of our capitalized investment in property, plant and equipment, or $2.0 billion, was related to productive machinery and equipment used in support of our

10

MANAGEMENT’S DISCUSSION AND ANALYSIS

manufacturing operations. The selection of appropriate useful life estimates for such machinery and equipment is a critical element of our ability to properly match the cost of such assets with the operating profits and cash flow generated by their use. We currently depreciate productive machinery and equipment on the straight-line method using composite useful life estimates up to 15 years.

While we believe that the useful life estimates currently being used for depreciation purposes reasonably approximate the period of time we will use such assets in our operations, unforeseen changes in product design and technology standards or cost, quality and delivery requirements may result in actual useful lives that differ materially from the current estimates.

VALUATION OF DEFERRED TAX ASSETS  Because we operate in many different geographic locations, including several foreign, state and local tax jurisdictions, the evaluation of our ability to use all recognized deferred tax assets is inherently complex. In assessing our ability to realize such deferred tax assets, we review the scheduled reversal of deferred tax liabilities, the projections of taxable income in future periods and the effectiveness of various tax planning strategies in making our assessment. Our consideration of these matters requires significant management judgment.

While we believe that we have made appropriate valuations of our deferred tax assets, unforeseen changes in tax legislation, regulatory activities, audit results, operating results, financing strategies, organization structure and other related matters may result in material changes in our deferred tax asset valuation allowances.

FORWARD-LOOKING INFORMATION

Certain statements in this MD&A and elsewhere in this Annual Report are forward-looking in nature and relate to trends and events that may affect our future financial position and operating results. Such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The terms “will,” “expect,” “anticipate,” “intend,” “project” and similar words or expressions are intended to identify forward-looking statements. These statements speak only as of the date of this Annual Report. The statements are based on our current expectations, are inherently uncertain, are subject to risks and should be viewed with caution. Actual results and experience may differ materially from the forward-looking statements as a result of many factors, including, but not limited to:

• reduced demand for our customers’ products (particularly light trucks and SUVs produced by GM and DaimlerChrysler);

• reduced purchases of our products by GM , DaimlerChrysler or other customers;

• supply shortages or price fluctuations in raw materials, utilities or other operating supplies;

• our ability to maintain satisfactory labor relations and avoid work stoppages;

• our customers’ ability to maintain satisfactory labor relations and avoid work stoppages;

• our ability to attract and retain key associates;

• our ability and our customers’ ability to successfully launch new product programs;

• our ability to respond to changes in technology or increased competition;

• adverse changes in laws, government regulations or market conditions affecting our products or our customers’ products (including the Corporate Average Fuel Economy regulations);

• adverse changes in the economic conditions or political stability of our principal markets (particularly North America, Europe, South America and Asia);

• liabilities arising from legal proceedings to which we are or may become a party or claims against us or our products;

• risks of noncompliance with environmental regulations or risks of environmental issues that could result in unforeseen costs at our facilities;

• availability of financing for working capital, capital expenditures, R&D or other general corporate purposes;

• other unanticipated events and conditions that hinder our ability to compete.

It is not possible to foresee or identify all such factors and we make no commitment to update any forward-looking statement or to disclose any facts, events or circumstances after the date hereof that may affect the accuracy of any forward-looking statement.

11

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

SUPPLEMENTAL FINANCIAL DATA

The following supplemental financial data presented for the years ended December 31, 2004, 2003 and 2002 are reconciliations of non-GAAP financial measures, which are intended to facilitate analysis of our business and operating performance. This information is not and should not be viewed as a substitute for financial measures determined under GAAP Other companies may calculate these non-GAAP financial measures differently.

Earnings Before Interest Expense, Income Taxes, Depreciation and Amortization (EBITDA)

	2004		2003		2002
	(Dollars in millions)
Net income	$	159.5	$	197.1	$	176.1
Interest expense		25.8		47.5		51.0
Income taxes		76.3		106.1		97.7
Depreciation and amortization		171.1		163.1		145.8
EBITDA	$	432.7	$	513.8	$	470.6

We believe EBITDA is a meaningful measure of performance as it is commonly utilized by management and investors to analyze operating performance and entity valuation. Our management, the investment community and the banking institutions routinely use EBITDA, together with other measures, to measure our operating performance relative to other Tier I automotive suppliers. EBITDA should not be construed as income from operations, net income or cash flow from operating activities as determined under GAAP.

Net Operating Cash Flow and Free Cash Flow

	2004		2003		2002
	(Dollars in millions)
Net cash flow provided by operating activities	$	453.2	$	496.9	$	384.2
Less: Purchases of property, plant and equipment		240.2		229.1		207.7
Net operating cash flow		213.0		267.8		176.5
Less: Dividends paid		23.0		—		—
Free cash flow	$	190.0	$	267.8	$	176.5

We believe net operating cash flow and free cash flow are meaningful measures as they are commonly utilized by management and investors to assess our ability to generate cash flow from business operations to repay debt and return capital to our stockholders. Net operating cash flow is also a key metric used in our calculation of incentive compensation.

After-Tax Return on Invested Capital (ROIC)

	2004			2003			2002
	(Dollars in millions)
Net income	$	159.5		$	197.1		$	176.1
Add: After-tax net interest expense(1)		17.2			30.4			32.5
After-tax return		176.7			227.5			208.6
Net debt(2)		433.6			437.3			724.7
Add: Stockholders’ equity		955.5			954.7			703.6
Invested capital
End of year		1,389.1			1 ,392.0			1 ,428.3
Beginning of year		1,392.0			1,428.3			1,400.6
Average invested capital(3)		1,390.6			1,410.2			1 ,414.5
ROIC (4)		12.7	%		16.1	%		14.7	%

(1)	After-tax net interest expense is equal to tax effecting net interest expense by the applicable effective income tax rate as disclosed in Note 7 to the consolidated financial statements.
(2)	Net debt is equal to total debt less cash and cash equivalents as reconciled in the net debt to capital table appearing on this page.
(3)	Average invested capital is equal to the average of beginning and ending invested capital.
(4)	ROIC is equal to after-tax return divided by average invested capital.

We believe ROIC is a meaningful overall measure of business performance because it reflects our earnings performance relative to our investment level. ROIC is also a key metric used in our calculation of incentive compensation.

Net Debt to Capital

	2004			2003			2002
	(Dollars in millions)
Total debt	$	448.0		$	449.7		$	734.1
Less: Cash and cash equivalents		14.4			12.4			9.4
Net debt		433.6			437.3			724.7
Add: Stockholders’ equity		955.5			954.7			703.6
Invested capital		1,389.1			1,392.0			1,428.3
Net debt to capital(1)		31.2	%		31.4	%		50.7	%

⁽¹⁾ Net debt to capital is equal to net debt divided by invested capital.

We believe net debt to capital is a meaningful measure of financial condition as it is commonly utilized by management, investors and creditors to assess relative capital structure risk.

12

MANAGEMENT’S DISCUSSION AND ANALYSIS

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

We are responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system was designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published financial statements.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2004. In making this assessment, we used the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment, we believe that as of December 31, 2004, our internal control over financial reporting is effective based on those criteria.

Our independent auditors have issued an audit report on our assessment of our internal control over financial reporting. This report appears on page 29.

/s/ Richard E. Dauch	/s/ Thomas L. Martin
Richard E. Dauch	Thomas L. Martin
Co-Founder, Chairman of the Board &	Vice President - Finance &
Chief Executive Officer	Chief Financial Officer
February 1, 2005	(also in the capacity of Chief Accounting Officer)
	February 1, 2005

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of American Axle & Manufacturing Holdings, Inc.:

We have audited the accompanying consolidated balance sheets of American Axle & Manufacturing Holdings, Inc. and its subsidiaries (the Company) as of December 31, 2004 and 2003, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2004. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company at December 31, 2004 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 1, 2005 expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ Deloitte & Touche LLP

Deloitte & Touche LLP

Detroit, Michigan

February 1, 2005

13

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of American Axle & Manufacturing Holdings, Inc.:

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that American Axle & Manufacturing Holdings, Inc. and its subsidiaries (the Company) maintained effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of December 31, 2004, is fairly stated, in all material respects, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, the Company maintained in all material respects, effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2004 of the Company and our report dated February 1, 2005 expressed an unqualified opinion on those financial statements.

/s/ Deloitte & Touche LLP

Deloitte & Touche LLP

Detroit, Michigan

February 1, 2005

14

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

Consolidated Statements of Income

Year Ended December 31,

(In millions, except per share data)

	2004			2003			2002
Net sales	$	3,599.6		$	3,682.7		$	3,480.2
Cost of goods sold		3,125.1			3,142.4			2,988.5
Gross profit		474.5			540.3			491.7
Selling, general and administrative expenses		189.7			194.0			180.5
Operating income		284.8			346.3			311.2
Net interest expense		(25.5	)		(46.8	)		(50.6	)
Other income (expense)
Debt refinancing and redemption costs		(23.5	)		—			—
Gain on insurance settlement		—			—			10.4
Other, net		—			3.7			2.8
Income before income taxes		235.8			303.2			273.8
Income taxes		76.3			106.1			97.7
Net income	$	159.5		$	197.1		$	176.1
Basic earnings per share	$	3.09		$	3.84		$	3.62
Diluted earnings per share	$	2.98		$	3.70		$	3.38

See accompanying notes to consolidated financial statements.

15

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

Consolidated Balance Sheets

December 31,

(In millions, except per share data)

	2004			2003
Assets
Current assets
Cash and cash equivalents	$	14.4		$	12.4
Accounts receivable, net of allowances of $2.5 million in 2004 and $2.8 million in 2003		334.9			339.2
Inventories, net		196.8			171.8
Prepaid expenses and other		39.1			24.0
Deferred income taxes		7.4			16.3
Total current assets		592.6			563.7
Property, plant and equipment, net		1,713.0			1,629.5
Deferred income taxes		6.8			6.9
Goodwill		147.8			147.8
Other assets and deferred charges		78.6			50.8
Total assets	$	2,538.8		$	2,398.7
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	349.3		$	333.6
Trade payable program liability		49.3			2.1
Accrued compensation and benefits		128.4			164.8
Other accrued expenses		58.6			53.7
Total current liabilities		585.6			554.2
Long-term debt		448.0			449.7
Deferred income taxes		114.5			73.0
Postretirement benefits and other long-term liabilities		435.2			367.1
Total liabilities		1,583.3			1,444.0
Stockholders’ Equity
Series A junior participating preferred stock, par value $0.01 per share; 0.1 million shares authorized; no shares outstanding in 2004 or 2003		—			—
Preferred stock, par value $0.01 per share; 10.0 million shares authorized; no shares outstanding in 2004 or 2003		—			—
Common stock, par value $0.01 per share; 150.0 million shares authorized; 54.8 million and 53.7 million shares issued in 2004 and 2003, respectively		0.5			0.5
Series common stock, par value $0.01 per share; 40.0 million shares authorized; no shares outstanding in 2004 or 2003		—			—
Paid-in capital		357.6			336.2
Retained earnings		817.9			681.4
Treasury stock at cost, 5.1 million and 0.1 million shares in 2004 and 2003, respectively		(171.7	)		(0.7	)
Accumulated other comprehensive loss, net of tax
Minimum pension liability adjustments		(47.1	)		(56.1	)
Foreign currency translation adjustments		(2.2	)		(6.1	)
Unrecognized gain (loss) on derivatives		0.5			(0.5	)
Total stockholders’ equity		955.5			954.7
Total liabilities and stockholders’ equity	$	2,538.8		$	2,398.7

See accompanying notes to consolidated financial statements.

16

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

Consolidated Statements of Cash Flows

Year Ended December 31,

(In millions)

	2004			2003			2002
Operating activities
Net income	$	159.5		$	197.1		$	176.1
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		171.1			163.1			145.8
Deferred income taxes		46.3			20.4			58.7
Pensions and other postretirement benefits, net of contributions		72.1			51.9			14.2
Loss on retirement of equipment		9.2			3.5			9.4
Debt refinancing and redemption costs		23.5			—			—
Gain on insurance settlement		—			—			(10.4	)
Changes in operating assets and liabilities
Accounts receivable		7.2			(2.1	)		(53.1	)
Inventories		(23.7	)		4.1			(15.9	)
Accounts payable and accrued expenses		18.9			2.6			41.3
Other assets and liabilities		(30.9	)		56.3			18.1
Net cash provided by operating activities		453.2			496.9			384.2
Investing activities
Purchases of property, plant and equipment		(240.2	)		(229.1	)		(207.7	)
Purchase buyouts of leased equipment		—			(3.0	)		(45.2	)
Net cash used in investing activities		(240.2	)		(232.1	)		(252.9	)
Financing activities
Net borrowings (repayments) under revolving credit facilities		(81.9	)		87.5			(139.6	)
Proceeds from issuance of long-term debt		399.7			—			2.2
Redemption of 9.75% Notes		(314.6	)		—			—
Payments of long-term debt and capital lease obligations		(24.4	)		(375.2	)		(8.2	)
Debt issuance costs		(9.7	)		—			—
Employee stock option exercises		13.6			25.1			12.4
Dividends paid		(23.0	)		—			—
Purchase of treasury stock		(171.0	)		—			—
Net cash used in financing activities		(211.3	)		(262.6	)		(133.2	)
Effect of exchange rate changes on cash		0.3			0.8			(1.0	)
Net increase (decrease) in cash and cash equivalents		2.0			3.0			(2.9	)
Cash and cash equivalents at beginning of year		12.4			9.4			12.3
Cash and cash equivalents at end of year	$	14.4		$	12.4		$	9.4
Supplemental cash flow information
Interest paid	$	33.6		$	50.1		$	57.0
Income taxes paid, net of refunds	$	32.2		$	34.2		$	22.3

See accompanying notes to consolidated financial statements.

17

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

Consolidated Statements of Stockholders’ Equity

(In millions)

														Accumulated
	Common Stock													Other
	Shares			Par		Paid-in		Retained			Treasury			Comprehensive			Comprehensive
	Outstanding			Value		Capital		Earnings			Stock			Loss			Income
Balance at January 1 , 2002		47.1		$	0.5	$	242.2	$	308.2		$	(0.7	)	$	(15.5	)
Net income									176.1								$	176.1
Unrecognized gain on derivatives, net															0.2			0.2
Foreign currency translation, net															(2.9	)		(2.9	)
Minimum pension liability adjustment, net															(41.3	)		(41.3	)
Comprehensive income																	$	132.1
Exercise of stock options, including tax benefit		2.6					36.8
Balance at December 31 , 2002		49.7			0.5		279.0		484.3			(0.7	)		(59.5	)
Net income									197.1								$	197.1
Unrecognized gain on derivatives, net															1.0			1.0
Foreign currency translation, net															0.7			0.7
Minimum pension liability adjustment, net															(4.9	)		(4.9	)
Comprehensive income																	$	193.9
Exercise of stock options, including tax benefit		3.9					57.2
Balance at December 31 , 2003		53.6			0.5		336.2		681.4			(0.7	)		(62.7	)
Net income									159.5								$	159.5
Unrecognized gain on derivatives, net															1.0			1.0
Foreign currency translation, net															3.9			3.9
Minimum pension liability adjustment, net															9.0			9.0
Comprehensive income																	$	173.4
Exercise of stock options, including tax benefit		1.1					21.4
Dividends paid									(23.0	)
Purchase of treasury stock		(5.0	)									(171.0	)
Balance at December 31 , 2004		49.7		$	0.5	$	357.6	$	817.9		$	(171.7	)	$	(48.8	)

See accompanying notes to consolidated financial statements.

18

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION  American Axle & Manufacturing Holdings, Inc. (Holdings) and its subsidiaries (collectively, we, our, us or AAM) is a premier Tier I supplier to the automotive industry and a worldwide leader in the manufacture, engineering, design and validation of driveline systems and related powertrain components and chassis modules for light trucks, sport utility vehicles (SUVs), passenger cars and crossover vehicles. Driveline systems include components that transfer power from the transmission and deliver it to the drive wheels. Our driveline and related powertrain products include axles, chassis modules, driveshafts, chassis and steering components, driving heads, crankshafts, transmission parts and metal formed products. In addition to locations in the United States (U.S.) (Michigan, New York and Ohio), we also have offices or facilities in Brazil, China, England, Germany, India, Japan, Mexico, Scotland and South Korea.

PRINCIPLES OF CONSOLIDATION  We include the accounts of Holdings and its subsidiaries in our consolidated financial statements. We eliminate the effects of all intercompany transactions, balances and profits in our consolidation.

REVENUE RECOGNITION  We recognize revenue when products are shipped to our customers and title transfers under standard commercial terms. If we are uncertain as to whether we will be successful collecting a balance we determine in accordance with our understanding of a commercial agreement, we do not recognize the revenue or cost recovery until such time as the uncertainty is removed.

RESEARCH AND DEVELOPMENT (R&D) COSTS  We expense R&D as incurred. R&D spending was $68.6 million, $60.7 million and $54.0 million in 2004, 2003 and 2002, respectively.

CASH AND CASH EQUIVALENTS  Cash and cash equivalents include all of our cash balances and highly liquid investments with a maturity of 90 days or less at the time of purchase.

ACCOUNTS RECEIVABLE  The majority of our accounts receivable are due from original equipment manufacturers in the automotive industry. Credit is extended based on the evaluation of our customers’ financial condition and is reviewed on an ongoing basis. Trade accounts receivable are generally due on average within 45 days from the date of shipment and are past due when payment is not received within the stated terms. Amounts due from customers are stated net of allowances for doubtful accounts. We determine our allowances by considering factors such as, length of time accounts are past due, our previous loss history, the customer’s ability to pay its obligation to us, and the condition of the general economy and the industry as a whole. We write-off accounts receivable when they become uncollectible.

CUSTOMER TOOLING  Reimbursable costs incurred for customer tooling are classified as accounts receivable. In the event we estimate that the cost of such customer tooling is not deemed collectible, a loss is recognized at such time.

INVENTORIES  We state our inventories at the lower of cost or market. The cost of our U.S. inventories is determined principally using the last-in, first-out method (LIFO). The cost of our foreign and indirect inventories is determined principally using the first-in, first-out method (FIFO). We classify indirect inventories, which include perishable tooling, repair parts and other materials consumed in the manufacturing process but not incorporated into our finished products, as raw materials. When we determine that our gross inventories exceed usage requirements, or if inventories become obsolete or otherwise not saleable, we record a provision for such loss as a component of our inventory accounts. This policy predominantly affects our accounting for indirect inventories. At December 31, 2004 and 2003, inventories consist of the following:

	2004			2003
	(Dollars in millions)
Raw materials and work-in-progress	$	196.1		$	161.4
Finished goods		27.6			35.6
Gross inventories		223.7			197.0
LIFO reserve		(14.3	)		(10.4	)
Other inventory valuation reserves		(12.6	)		(14.8	)
Inventories, net	$	196.8		$	171.8

PROPERTY, PLANT AND EQUIPMENT  Property, plant and equipment consists of the following:

	Estimated
	Useful Lives		2004			2003
	(Years)		(Dollars in millions)
Land		—	$	23.5		$	22.8
Land improvements		10-15		18.7			13.7
Buildings and building improvements		15-40		350.9			324.6
Machinery and equipment		3-15		2,045.8			1,884.3
Construction in progress		—		143.6			110.9
				2,582.5			2,356.3
Accumulated depreciation and amortization				(869.5	)		(726.8	)
Property, plant and equipment, net			$	1,713.0		$	1,629.5

We state property, plant and equipment including tooling at cost. Construction in progress includes costs incurred for the construction of buildings and building improvements, and machinery and equipment in

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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

process. All expenditures for repair and maintenance costs that do not extend the useful life of the related asset are expensed in the period incurred.

We record depreciation and tooling amortization on the straight-line method over the estimated useful lives of depreciable assets. Depreciation and tooling amortization amounted to $156.6 million, $159.8 million and $142.1 million in 2004, 2003 and 2002, respectively.

IMPAIRMENT OF LONG-LIVED ASSETS  We evaluate the carrying value of long-lived assets and long-lived assets to be disposed for potential impairment on an ongoing basis in accordance with FASB Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”  We consider projected future undiscounted cash flows, trends and other circumstances in making such estimates and evaluations. If an impairment is deemed to exist, the carrying amount of the asset is adjusted based on its fair value.

GOODWILL  We record goodwill when the purchase price of acquired businesses exceeds the value of their identifiable net tangible and intangible assets acquired. With the adoption of FASB Statement No. 142, “Goodwill and Other Intangible Assets” on January 1, 2002, we no longer amortize goodwill. Instead, we periodically evaluate goodwill for impairment. To meet our ongoing annual obligation, we completed impairment tests as of December 31, 2004 and 2003 and concluded that there was no impairment of our goodwill. Accumulated goodwill amortization was $11.7 million at December 31, 2004 and 2003. Goodwill is our only significant intangible asset.

Goodwill was reduced $2.4 million in 2003 due to the utilization of a portion of our foreign net operating loss carryforwards for which deferred tax asset valuation allowances were established in our initial purchase accounting for the 1998 acquisition of Albion Automotive (Holdings) Limited.

TRADE PAYABLE PROGRAM LIABILITY  In 2003, we established an accelerated supplier payment program through which our suppliers can elect for a designated finance company to advance payment on their invoices due from us. We gain no advantage on the timing of such payments or the amounts due to be paid. The only difference between these obligations and other trade payables is that we are obligated to pay the finance company on the due date for such payment established in the terms and conditions of the purchase order. Our agreement with the finance company calls for us to share in the discount fees charged to the suppliers by the finance company for any advance payments made through this program. The fees collected in association with this program were negligible for 2004, and no such fees were received in 2003.

STOCK-BASED COMPENSATION  As permitted by FASB Statement No. 123, “Accounting for Stock-Based Compensation,” we account for our employee stock options in accordance with APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. Although it is our practice to grant options with no intrinsic value, we measure compensation cost as the excess, if any, of the market price of our common stock at the date of grant over the amount our associates must pay to acquire the stock.

Had we determined compensation cost based upon the fair value of the options at the grant date consistent with the alternative fair value method set forth in FASB Statement No. 123, our net income and EPS would have been adjusted to the pro forma amounts indicated as follows:

	2004			2003			2002
	(Dollars in millions, except per share data)
Net income, as reported	$	159.5		$	197.1		$	176.1
Deduct: Total employee stock option expense determined under the fair value method, net of tax		(16.4	)		(13.1	)		(10.5	)
Pro forma net income	$	143.1		$	184.0		$	165.6
Basic EPS, as reported	$	3.09		$	3.84		$	3.62
Basic EPS, pro forma	$	2.77		$	3.59		$	3.41
Diluted EPS, as reported	$	2.98		$	3.70		$	3.38
Diluted EPS, pro forma	$	2.69		$	3.50		$	3.21

We estimated the fair value of our employee stock options on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

	2004			2003			2002
Expected volatility		44.04	%		47.55	%		53.79	%
Risk-free interest rate		3.70	%		3.50	%		4.60	%
Dividend yield		None			None			None
Expected life of options		7 years			7 years			7 years
Weighted-average grant-date fair value	$	19.83		$	12.69		$	14.51

In December 2004, the FASB issued Statement No. 123(R), “Share-Based Payment.” FASB Statement No. 123(R) replaces FASB Statement No. 123, “Accounting for Stock-Based Compensation” and supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees.” The revised statement requires that the compensation cost relating to share-based payment transactions be recognized in financial statements and measured on the fair value of the equity or liability instruments issued. FASB Statement

20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

No. 123(R) is effective for the first interim or annual reporting period that begins after June 15, 2005. We did not early adopt FASB Statement 123(R) and, therefore, there was no impact on our results of operations or financial position at December 31, 2004. While we are currently in the process of finalizing our analysis of the impact and alternative methods of adoption of this Statement, we estimate the impact, along with other equity compensation, will result in after-tax expense of approximately $10 million in 2005.

DERIVATIVES  We account for derivatives under FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended and interpreted. FASB Statement No. 133 requires us to recognize all derivatives on the balance sheet at fair value. If a derivative qualifies under FASB Statement No.133 as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative are either offset against the change in fair value of the hedged assets, liabilities or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value and changes in the fair value of derivatives that do not qualify as hedges are immediately recognized in earnings.

In May 2003, the FASB issued Statement No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” FASB Statement No. 149 amends and clarifies accounting for derivative instruments and hedging activities under FASB Statement No. 133. FASB Statement No. 149 is effective for contracts entered into or modified and for hedging relationships designated after June 30, 2003 with this guidance applied prospectively. The adoption of this Statement did not have a significant impact on our results of operations or financial position at December 31, 2004 or 2003.

CURRENCY TRANSLATION  We translate the assets and liabilities of our foreign subsidiaries to U.S. dollars at end-of-period exchange rates. We translate the income statement elements of our foreign subsidiaries to U.S. dollars at average-period exchange rates. We report the effect of translation for our foreign subsidiaries that use the local currency as their functional currency as a separate component of stockholders’ equity. Gains and losses resulting from the remeasurement of assets and liabilities of our foreign subsidiary that uses the U.S. dollar as its functional currency are reported in current period income. We also report any gains and losses arising from transactions denominated in a currency other than our functional currency in current period income.

USE OF ESTIMATES  In order to prepare consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP), we are required to make estimates and assumptions that affect the reported amounts and disclosures in our consolidated financial statements. Actual results could differ from those estimates.

RECLASSIFICATIONS  We have reclassified certain 2003 amounts to conform to the presentation of our 2004 consolidated financial statements.

EFFECT OF NEW ACCOUNTING STANDARDSEITF 04-08  In October 2004, the Emerging Issues Task Force (EITF) reached a consensus opinion on EITF 04-08, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share.” The consensus opinion provides that contingently convertible debt instruments, commonly referred to as “Co-Cos,” are to be included in diluted earnings per share computations (if dilutive) regardless of whether the market price trigger (or other contingent feature) has been met. EITF 04-08 is effective for reporting periods ending after December 15, 2004, with retroactive application. The adoption of EITF 04-08 did not have any impact on our diluted earnings per share calculation for the year ended December 31, 2004 because we gave notice in October 2004 of our irrevocable election to pay cash for the accreted principal amount upon conversion of the 2.00% Convertible Notes, and the impact to earnings per share is currently anti-dilutive due to the market price being less than the conversion price trigger of $54.66, as adjusted.

FASB Statement No. 151  In November 2004, the FASB issued Statement No. 151, “Inventory Costs.” FASB Statement No. 151 amends and clarifies Accounting Research Bulletin No. 43, Chapter 4. The amendments made by Statement No. 151 will improve financial reporting by clarifying that abnormal amounts of idle facility expense, freight, handling costs and wasted materials should be recognized as current-period charges and requiring the allocation of fixed production overhead costs to inventory based on the normal capacity of the production facilities. FASB Statement No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005 and, therefore, did not have any impact on our results of operations or financial position at December 31, 2004. We do not expect the adoption of this Statement to have a significant impact in 2005.

2. LONG-TERM DEBT AND LEASE OBLIGATIONS

Long-term debt consists of the following:

	2004		2003
	(Dollars in millions)
Revolving credit facilities	$	—	$	60.0
9.75% Notes, net of discount		—		298.8
5.25% Notes, net of discount		249.7		—
2.00% Convertible Notes		150.0		—
Capital lease obligations		4.2		6.3
Uncommitted lines of credit		—		48.5
Foreign credit facilities and other		44.1		36.1
Long-term debt	$	448.0	$	449.7

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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

DEBT REFINANCING AND REDEMPTION COSTS  In January 2004, we entered into a new senior unsecured revolving credit facility (Revolving Credit Facility) that provides up to $600.0 million of revolving bank financing commitments through January 2009. The Revolving Credit Facility is used for general corporate purposes, which included the refinancing of the previously existing senior secured bank credit facilities (1997 Bank Credit Facilities). We had been amortizing fees and expenses associated with the 1997 Bank Credit Facilities over the life of the agreement. In January 2004, the unamortized balance of such fees and expenses of $3.2 million was expensed when we terminated our bank financing commitments under the 1997 Bank Credit Facilities.

In February 2004, we issued $250.0 million of 5.25% Senior Notes due February 2014 (5.25% Notes) and $150.0 million of 2.00% Senior Convertible Notes due 2024 (2.00% Convertible Notes) in concurrent private offerings pursuant to Rule 144A of the Securities Act of 1933. We received net proceeds from these offerings of approximately $394.0 million, after deducting discounts and commissions of the initial purchasers and other expenses. We used a portion of the net proceeds to repurchase $63.0 million, or 1.59 million shares, of our common stock in privately negotiated transactions. The remainder of the net proceeds was used to redeem all $300.0 million of the outstanding 9.75% Senior Subordinated Notes due March 2009 (9.75% Notes) at a cost of $314.6 million on March 1, 2004, and for other general corporate purposes. In the first quarter of 2004, the $14.6 million call premium and an additional $5.7 million of unamortized discounts and debt issuance costs were expensed as a result of this redemption.

Debt refinancing and redemption costs expensed in the first quarter of 2004 are summarized as follows (dollars in millions):

Call premium on 9.75%Notes	$	14.6
Write-off of unamortized discount and debt issuance costs
9.75% Notes		5.7
1997 Bank Credit Facilities		3.2
Debt refinancing and redemption costs	$	23.5

REVOLVING CREDIT FACILITY  Our Revolving Credit Facility of $600.0 million is due January 2009 and bears interest at rates based on LIBOR or an alternate base rate, plus an applicable margin. At December 31, 2004, $580.5 million was available under the Revolving Credit Facility, which reflected a reduction of $19.5 million for standby letters of credit issued against the facility.

The Revolving Credit Facility provides back-up liquidity for our foreign credit facilities and uncommitted lines of credit. We intend to use the availability of long-term financing under the Revolving Credit Facility to refinance any current maturities related to such debt agreements that are not otherwise refinanced on a long-term basis in their respective markets. Accordingly, we have classified such amounts as long-term debt.

5.25% NOTES  The 5.25% Notes are senior unsecured obligations of American Axle & Manufacturing, Inc. (AAM, Inc.) and are fully and unconditionally guaranteed by Holdings. Holdings has no significant assets other than its 100% ownership of AAM, Inc. and no subsidiaries other than AAM, Inc.

2.00% CONVERTIBLE NOTES  The 2.00% Convertible Notes are senior unsecured obligations of Holdings and are fully and unconditionally guaranteed by AAM , Inc. At the option of the holder, under certain conditions, these notes are convertible through 2024. The conversion rate is subject to adjustment for certain events, including the payment of dividends, change of control and other events specified in the indenture. In October 2004, we gave notice of our irrevocable election to pay cash for the accreted principal portion of the securities upon conversion.

LEASES  We lease certain facilities, machinery and equipment under capital leases expiring at various dates. Approximately $22.2 million and $20.8 million of such gross asset cost is included in property, plant and equipment at December 31, 2004 and 2003, respectively. The weighted-average interest rate on these capital lease obligations at December 31, 2004 was 5.1%.

We also lease certain facilities, machinery and equipment under operating leases expiring at various dates. All of the leases contain renewal and/ or purchase options. Future minimum payments under noncancelable operating leases are as follows: $31.7 million in 2005; $30.6 million in 2006; $29.1 million in 2007; $29.0 million in 2008; $28.4 million in 2009 and $38.8 million thereafter. Our total expense relating to operating leases was $30.6 million, $33.3 million and $44.3 million in 2004, 2003 and 2002, respectively.

UNCOMMITTED LINES OF CREDIT  In 2004, we secured the use of an additional $60.0 million of uncommitted bank lines of credit, which increased our total availability to $109.0 million. At December 31, 2003, $48.5 million was outstanding under such uncommitted bank credit lines.

FOREIGN CREDIT FACILITIES  We utilize local currency credit facilities to finance the operations of certain foreign subsidiaries. These credit facilities, guaranteed by Holdings and/or AAM, Inc., expire at various dates through March 2006. At December 31, 2004, $44.1 million was outstanding under these facilities and $14.8 million was available. At December 31, 2003, $36.0 million was outstanding and availability under such credit facilities was $3.2 million.

22

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DEBT COVENANTS  The Revolving Credit Facility contains operating covenants which, among other things, require us to comply with a leverage ratio and maintain a minimum level of net worth. The Revolving Credit Facility also limits our ability to incur certain types of liens and amounts of indebtedness or merge into another company.

DEBT MATURITIES  Aggregate maturities of long-term debt are as follows (dollars in millions):

2005	$	29.7
2006		16.1
2007		0.3
2008		0.4
2009		0.4
Thereafter		401.1
Total	$	448.0

NET INTEREST EXPENSE  The following table summarizes supplemental information regarding the components of net interest expense as reported in our consolidated statements of income:

	2004			2003			2002
	(Dollars in millions)
Gross interest expense	$	31.6		$	53.5		$	59.2
Capitalized interest		(5.8	)		(6.0	)		(8.2	)
Interest income		(0.3	)		(0.7	)		(0.4	)
Net interest expense	$	25.5		$	46.8		$	50.6

3. DERIVATIVES AND RISK MANAGEMENT

DERIVATIVE FINANCIAL INSTRUMENTS  In the normal course of business, we are exposed to market risk associated with changes in foreign currency exchange rates and interest rates. To manage a portion of these inherent risks, we purchase certain types of derivative financial instruments, from time to time, based on management’s judgment of the trade-off between risk, opportunity and cost. We do not hold or issue derivative financial instruments for trading or speculative purposes.

CURRENCY FORWARD CONTRACTS  Because most of our business is denominated in U.S. dollars, we do not currently have significant exposures relating to currency exchange risk. From time to time, we use foreign currency forward contracts to reduce the effects of fluctuations in exchange rates, primarily relating to the Euro, Mexican Peso, Pound Sterling, Brazilian Real and Canadian Dollar. We had currency forward contracts with a notional amount of $21.0 million and $14.6 million outstanding at December 31, 2004 and 2003, respectively.

INTEREST RATE SWAPS  We are exposed to variable interest rates on certain credit facilities. At December 31, 2004, we did not hedge any of our interest rate risk through interest rate swaps. At December 31, 2003, we hedged a portion of our interest rate risk by entering into interest rate swaps with a notional amount of approximately $26.4 million. These interest rate swaps, which were first established in 1999, converted variable financing based on 3-month LIBOR rates into fixed U.S. dollar rates varying from 6.88% to 6.96% and expired during 2004. Generally, we designate interest rate swaps as effective cash flow hedges of the related debt and reflect the net cost of such agreements as an adjustment to interest expense over the lives of the debt agreements. The ineffective portion of any such hedges is included in current earnings. The impact of hedge ineffectiveness was not significant during the years ended December 31, 2004 and 2003.

FAIR VALUE OF FINANCIAL INSTRUMENTS  The carrying value of our cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximates their fair values due to the short-term maturities of these assets and liabilities. The carrying value of our borrowings under the Revolving Credit Facility, the uncommitted lines of credit and foreign credit facilities approximates their fair value due to the frequent resetting of the interest rates. We have estimated the fair value of the 5.25% Notes and the 2.00% Convertible Notes, using available market information, to be approximately $240.0 million and $131.6 million, respectively at December 31, 2004. We have estimated the fair value of the 9.75% Notes to be approximately $318.0 million at December 31, 2003.

CONCENTRATIONS OF CREDIT RISK  In the normal course of business, we provide credit to customers in the automotive industry. We periodically evaluate the credit worthiness of our customers and we maintain reserves for potential credit losses, which, when realized, have been within the range of our allowances for doubtful accounts. When appropriate, we also diversify the concentration of invested cash among different financial institutions and we monitor the selection of counter parties to other financial instruments to avoid unnecessary concentrations of credit risk.

Sales to General Motors Corporation (GM) were approximately 80%, 82% and 86% of our total net sales in 2004, 2003 and 2002, respectively. Accounts receivable due from GM were $237.2 million at year-end 2004 and $245.7 million at year-end 2003. Sales to DaimlerChrysler Corporation were approximately 11% of our total net sales in 2004 and less than 10% in both 2003 and 2002. Accounts receivable due from DaimlerChrysler Corporation were $51.7 million at year-end 2004. No other single customer accounted for more than 10% of our consolidated net sales in any year presented.

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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

4. IMPACT OF INSURANCE SETTLEMENT

In July 2002, a fire occurred at our forge operations in Detroit, Michigan. There were no resulting injuries and the fire did not affect our ability to meet customer demand. Our insurance policies provided coverage for the property destroyed and incremental costs incurred to maintain continuity of supply.

·   Damage for Property Destroyed - A portion of the building and several machines were damaged. At year-end 2002, a substantial portion of our insurance claim was settled and we recognized a gain in the fourth quarter of $10.4 million in other income. This gain consisted of $11.0 million of expected proceeds from the insurance company related to our overall property damage claim offset by $0.1 million net book value of the damaged building and equipment, and a $0.5 million insurance deductible related to property damage expensed in the third quarter. Additionally, we recognized $1.9 million ($0.9 million in cost of goods sold and $1.0 million in SG&A) of incremental profit sharing expense in 2002 as a result of this gain. The net pre-tax gain at year-end 2002 was $8.5 million and the net after-tax gain amounted to $5.5 million.

·   Incremental Costs - While the fire did not affect our ability to meet customer demand, additional costs of $4.9 million were incurred in 2002 to maintain continuity of supply to our customers. These costs were offset by insurance recoveries received in 2002 and had no impact on our results of operations. However, our gross profit was impacted by a $0.5 million insurance deductible related to incremental costs in the third quarter of 2002.

At year-end 2003, this claim was settled in full, and all cash had been collected related to this claim.

5. EMPLOYEE BENEFIT PLANS

PENSION AND OTHER POSTRETIREMENT BENEFITS  We sponsor various qualified and non-qualified defined benefit pension plans for our eligible associates. We maintain hourly and salaried benefit plans that provide postretirement medical, dental, vision and life benefits to our eligible retirees and their dependents in the U.S. We also provide benefits under collective bargaining agreements to a majority of our hourly associates.

Actuarial valuations of our benefit plans were made as of September 30, 2004 and 2003. The principal weighted-average assumptions used in the valuation of our U.S. and foreign plans appear in the following table. The U.S. discount rate was based on an actuarial review of a hypothetical portfolio of long-term, high quality corporate bonds matched against our expected payment stream. The foreign discount rate was based on a review of long-term bonds, including published indices in the applicable market. The assumptions for the expected return on plan assets were based on a review of long-term historical returns for the asset classes represented within our portfolio.  The rates of increase in compensation and health care costs were based on current market conditions, inflationary expectations and historical information.

	Pension Benefits																		Other Postretirement Benefits
	2004						2003						2002						2004			2003			2002
	U.S.			Foreign			U.S.			Foreign			U.S.			Foreign
Discount rate		6.20	%		5.75	%		6.25	%		5.50	%		6.75	%		5.50	%		6.35	%		6.25	%		6.75	%
Expected return on plan assets		9.00	%		8.00	%		9.00	%		8.00	%		9.00	%		8.00	%		N/A			N/A			N/A
Rate of compensation increase		4.25	%		3.50	%		4.25	%		3.50	%		4.25	%		3.50	%		4.25	%		4.25	%		4.25	%

The weighted-average asset allocations at December 31, 2004 and 2003 by asset category appear in the following table. The asset allocation for our plans was developed in consideration of the demographics of the plan participants and expected payment stream of the liability.

	U.S.							Foreign
	Plan Assets at December 31,						Target	Plan Assets at December 31,						Target
	2004			2003			Allocation	2004			2003			Allocation
Equity securities		66.0	%		66.3	%	65.0% - 70.0%		70.5	%		69.0	%	65.0% - 70.0%
Fixed income securities		32.8	%		31.4	%	30.0% - 35.0%		28.0	%		29.0	%	30.0% - 35.0%
Cash		1.2	%		2.3	%	0.0% - 5.0%		1.5	%		2.0	%	0.0% - 5.0%
Total		100.0	%		100.0	%			100.0	%		100.0	%

24

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The accumulated benefit obligation for all defined benefit pension plans was $461.0 million and $393.2 million at September 30, 2004 and 2003, respectively. The following table summarizes the changes in benefit obligations and plan assets and reconciles the funded status of the benefit plans to the net benefit plan asset (liability):

	Pension Benefits						Other Postretirement Benefits
	2004			2003			2004			2003
	(Dollars in millions)						(Dollars in millions)
Change in benefit obligation
Benefit obligation at beginning of year	$	416.5		$	335.7		$	397.5		$	274.4
Service cost		32.6			28.1			39.0			32.6
Interest cost		27.9			23.6			25.6			20.7
Plan amendments		21.2			—			(9.3	)		(2.2	)
Actuarial (gain) loss		(5.6	)		26.7			(31.7	)		73.6
Participant contributions		1.7			1.6			—			—
Special termination benefits		—			9.3			—			—
Benefit payments		(14.5	)		(16.0	)		(2.5	)		(1.6	)
Currency fluctuations		6.5			7.5			—			—
Net change		69.8			80.8			21.1			123.1
Benefit obligation at end of year		486.3			416.5			418.6			397.5
Change in plan assets
Fair value of plan assets at beginning of year		283.5			210.3			—			—
Actual return on plan assets		35.6			39.0			—			—
Employer contributions		40.2			44.6			2.5			1.6
Participant contributions		1.7			1.6			—			—
Benefit payments		(14.5	)		(16.0	)		(2.5	)		(1.6	)
Currency fluctuations		4.1			4.0			—			—
Net change		67.1			73.2			—			—
Fair value of plan assets at end of year		350.6			283.5			—			—
Funded status — U.S. plans at September 30		(106.1	)		(96.3	)		(418.6	)		(397.5	)
Funded status — foreign plan at September 30		(29.6	)		(36.7	)		—			—
Unrecognized actuarial loss		108.3			123.9			99.4			138.2
Unrecognized prior service cost		34.2			15.4			(10.9	)		(2.1	)
Fourth quarter contribution		4.0			8.5			0.6			0.4
Net asset (liability) at December 31	$	10.8		$	14.8		$	(329.5	)	$	(261.0	)

Amounts recognized in our balance sheets are as follows:

	Pension Benefits						Other Postretirement Benefits
	2004			2003			2004			2003
	(Dollars in millions)						(Dollars in millions)
Prepaid benefit cost	$	11.4		$	16.2		$	—		$	—
Accrued benefit liability		(109.5	)		(106.0	)		(329.5	)		(261.0	)
Intangible asset		31.9			14.3			—			—
Minimum pension liability adjustment		77.0			90.3			—			—
Net asset (liability) at December 31	$	10.8		$	14.8		$	(329.5	)	$	(261 .0	)

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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

The components of net periodic benefit cost are as follows:

	Pension Benefits									Other Postretirement Benefits
	2004			2003			2002			2004			2003		2002
	(Dollars in millions)									(Dollars in millions)
Service cost	$	32.6		$	28.1		$	24.0		$	39.0		$	32.6	$	22.5
Interest cost		27.9			23.6			19.7			25.6			20.7		14.4
Expected asset return		(26.6	)		(23.6	)		(20.8	)		N/A			N/A		N/A
Amortized loss		4.1			1.9			0.1			5.4			2.4		—
Amortized prior service cost		2.5			1.7			1.6			(0.5	)		—		—
Special termination benefits		—			9.3			—			—			—		—
Other		(1.4	)		0.2			1.0			—			—		—
Net periodic benefit cost	$	39.1		$	41.2		$	25.6		$	69.5		$	55.7	$	36.9

For measurement purposes, a 10% annual increase in the per-capita cost of covered health care benefits was assumed for 2005. The rate was assumed to decrease gradually to 5% for 2010 and remain at that level thereafter. Health care cost trend rates have a significant effect on the amounts reported for health care plans. A one-percentage-point increase in the assumed health care cost trend rate would have increased total service and interest cost in 2004 and the postretirement obligation at December 31, 2004 by $16.0 million and $91.3 million, respectively. A one-percentage-point decrease in the assumed health care cost trend rate would have decreased total service and interest cost in 2004 and the postretirement obligation at December 31, 2004 by $12.0 million and $69.6 million, respectively.

The expected future pension and other postretirement benefits to be paid for each of the next five years and in the aggregate for the succeeding five years thereafter are as follows: $15.4 million in 2005; $17.8 million in 2006; $21.1 million in 2007; $25.5 million in 2008; $30.7 million in 2009 and $232.4 million thereafter. These amounts were estimated using the same assumptions to measure our 2004 year-end pension and other postretirement benefit obligation and include an estimate of future employee service.

MEDICARE PRESCRIPTION DRUG, IMPROVEMENT AND MODERNIZATION ACT OF 2003  In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 was signed into law. This Act introduces a prescription drug benefit under Medicare (Medicare Part D) as well as a federal subsidy to sponsors of postretirement health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. The effect of the subsidy reduced our other postretirement benefit obligation by $28.1 million, which has been treated as an actuarial gain and will be amortized over the future service lives of active employees. Our net periodic postretirement benefit cost was reduced by $4.7 million in 2004 to recognize the effects of the subsidy.

CONTRIBUTIONS  We expect our pension funding in 2005 to be in the range of $30.0 million to $40.0 million and our cash outlay for other postretirement benefit obligations to be less than $5.0 million in 2005.

ACCELERATED ATTRITION PROGRAM  In accordance with FASB Statement No. 88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits,” we recorded a $9.3 million charge in 2003 for hourly associates who were eligible to participate in an early retirement program. Each hourly associate who elected to participate received a one-time lump-sum payment.

SEVERANCE OBLIGATIONS AND OTHER POSTEMPLOYMENT BENEFITS  Pursuant to FASB Statement No. 112, “Employers’ Accounting for Postemployment Benefits,” we recorded a $3.4 million charge during the third quarter of 2003 to adjust our salary workforce.

VOLUNTARY SAVINGS PLANS  Most of our U.S. associates are eligible to participate in voluntary savings plans. Our maximum match under these plans is 50% of salaried associates’ contributions, up to 6% of their eligible salary. Matching contributions amounted to $2.3 million in 2004, 2003 and 2002. Under these plans, our common stock became an investment option for our participants during 2002.

DEFERRED COMPENSATION PLAN  Certain U.S. associates are eligible to participate in a non-qualified deferred compensation plan. Payments of $0.6 million and $0.1 million have been made in 2004 and 2003, respectively to eligible associates that have elected distributions. At December 31, 2004 and 2003, our deferred compensation liability was $12.5 million and $9.7 million, respectively. We recognized $2.0 million, $1.3 million and $0.6 million of expense related to this deferred compensation plan in 2004, 2003 and 2002, respectively.

26

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In January 2005, our deferred compensation plan was amended to comply with the American Jobs Creation Act of 2004 passed in October 2004. The amendments were primarily administrative in nature, affecting deferral elections and the timing of distributions and will not significantly impact the benefits paid under the plan.

6. STOCK OPTIONS

At December 31, 2004, we have stock options outstanding under three stock compensation plans approved by our stockholders. Under two of these plans, a total of 19.1 million options have been authorized for issuance to our directors, officers and certain other associates in the form of options, stock appreciation rights or other awards that are based on the value of our common stock. We have granted a total of 13.6 million options under these stock compensation plans through December 31, 2004, which become vested based upon duration of employment. The vesting of some of these options awarded pursuant to one of the plans was accelerated due to the satisfaction of certain annual or cumulative performance criteria. At December 31, 2004, 6.5 million of these options have been exercised.

At December 31, 2004, there are also 0.2 million options held by several of our officers that were granted in 1997 as a replacement for an incentive compensation plan established in 1994. These options were immediately vested and are exercisable at a weighted-average exercise price of approximately $0.12 per share. A total of 1.7 million options granted under this plan have been exercised prior to December 31, 2004.

The following table summarizes activity relating to our stock options:

				Weighted-Average
	Number of			Exercise Price
	Shares			Per Share
	(In millions, except per share data)
Outstanding at January 1, 2002		9.9		$	6.54
Options granted		1.8			24.25
Options exercised		(2.7	)		4.61
Options lapsed or canceled		(0.1	)		12.57
Outstanding at December 31, 2002		8.9		$	10.61
Options granted		2.0			23.74
Options exercised		(3.9	)		6.55
Options lapsed or canceled		—			20.56
Outstanding at December 31, 2003		7.0		$	16.43
Options granted		1.7			38.35
Options exercised		(1.1	)		12.17
Options lapsed or canceled		(0.3	)		28.07
Outstanding at December 31, 2004		7.3		$	21.82

Options outstanding at December 31, 2004 have a weighted-average remaining contractual life of approximately 7 years. The following is a summary of the range of exercise prices for stock options that are outstanding and exercisable at December 31, 2004:

			Weighted-Average		Number of		Weighted-Average
	Outstanding		Exercise Price		Stock Options		Exercise Price
	Stock Options		Per Share		Exercisable		Per Share
	(In millions, except per share data)				(In millions, except per share data)
Range of exercise prices
$0.01 - $0.25		0.2	$	0.11		0.2	$	0.11
$4.26		0.8		4.26		0.8		4.26
$8.85		0.8		8.85		0.8		8.85
$9.25 - $13.13		0.1		12.19		0.1		12.19
$15.00 - $24.13		2.4		21.09		1.2		18.72
$24.15 - $40.83		3.0		31.87		0.9		24.63
		7.3	$	21.82		4.0	$	14.30

27

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

7. INCOME TAXES

Income before income taxes for U.S. and non-U.S. operations was as follows:

	2004		2003		2002
	(Dollars in millions)
U.S income	$	187.0	$	285.4	$	263.1
Non-U.S. income		48.8		17.8		10.7
Total income before income taxes	$	235.8	$	303.2	$	273.8

The following is a summary of the components of our provisions for income taxes:

	2004		2003			2002
	(Dollars in millions)
Current
Federal	$	18.3	$	76.2		$	31.4
Other state and local		4.0		6.8			4.9
Foreign		7.7		2.7			2.7
Total current		30.0		85.7			39.0
Deferred
Federal		36.8		20.0			45.5
Other state and local		0.5		(2.9	)		4.1
Foreign		9.0		3.3			9.1
Total deferred		46.3		20.4			58.7
Total income taxes	$	76.3	$	106.1		$	97.7

The following is a reconciliation of our provision for income taxes to the expected amounts using statutory rates:

	2004			2003			2002
Federal statutory		35.0	%		35.0	%		35.0	%
Foreign income taxes		(0.5	)		(0.1	)		3.0
State and local		1.2			0.8			2.0
Federal tax credits		(1.7	)		(1.0	)		(2.0	)
Other		(1.6	)		0.3			(2.3	)
Effective income tax rate		32.4	%		35.0	%		35.7	%

The following is a summary of the significant components of our deferred tax assets and liabilities:

	2004			2003
	(Dollars in millions)
Current deferred tax assets
Employee benefits	$	10.9		$	11.4
Inventory and other		—			5.3
Total current deferred tax assets		10.9			16.7
Current deferred tax liabilities
Inventory and other		(3.5	)		(0.4	)
Current deferred tax asset, net	$	7.4		$	16.3
		2004			2003
	(Dollars in millions)
Noncurrent deferred tax assets
Employee benefits	$	127.5		$	115.4
NOL carryforwards		19.7			18.4
Tax credit carryforwards		1.7			2.9
Capital allowance carryforwards		15.0			17.4
Prepaid taxes		12.1			17.4
Goodwill		0.4			0.4
Other		1.3			4.1
Valuation allowances		(32.5	)		(34.9	)
Noncurrent deferred tax assets, net		145.2			141.1
Noncurrent deferred tax liabilities
Fixed assets and other		(252.9	)		(207.2	)
Noncurrent deferred tax liability, net	$	(107.7	)	$	(66.1	)

Noncurrent deferred tax assets and liabilities recognized in our balance sheets are as follows:

	2004			2003
	(Dollars in millions)
U.S. Federal deferred tax liability, net	$	(114.5	)	$	(73.0	)
Other foreign deferred tax asset, net		6.8			6.9
Noncurrent deferred tax liability, net	$	(107.7	)	$	(66.1	)

28

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The deferred income tax assets and liabilities summarized on the preceding page reflect the impact of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the basis of such assets and liabilities as measured by tax laws. At year-end 2004 and 2003, our net noncurrent foreign deferred tax asset was primarily attributable to timing differences related to our minimum pension liability for our foreign operations. Also at year-end 2004 and 2003, our net noncurrent U.S. Federal deferred tax liability was principally attributable to the impact of accelerated tax depreciation. The impact of this accelerated tax depreciation was offset in both 2004 and 2003 primarily by timing differences related to postretirement benefits and alternative minimum tax credit carryforwards that do not expire.

Our deferred tax asset valuation allowances at December 31, 2004 and 2003 were tax benefits principally related to foreign net operating losses and capital allowance carryforwards. Although these carryforwards do not expire, we considered prior operating results and future plans, as well as the utilization period of other temporary differences, in determining the amount of our valuation allowances. In 2004 and 2003, we utilized a portion of such foreign tax benefits.

Payments for federal, state, local and foreign income taxes were $33.3 million, $44.9 million and $31.5 million in 2004, 2003 and 2002, respectively.

8. EARNINGS PER SHARE (EPS)

The following table sets forth the computation of our basic and diluted EPS:

	2004		2003		2002
	(In millions, except per share data)
Numerator
Net income	$	159.5	$	197.1	$	176.1
Denominators
Basic shares outstanding - Weighted - average shares outstanding		51.6		51.3		48.6
Effect of dilutive securities Dilutive stock options		1.9		2.0		3.5
Diluted shares outstanding - Adjusted weighted-average shares after assumed conversions		53.5		53.3		52.1
Basic EPS	$	3.09	$	3.84	$	3.62
Diluted EPS	$	2.98	$	3.70	$	3.38

Certain exercisable stock options were excluded in the computations of diluted EPS because the exercise price of these options was greater than the average annual market prices. The number of stock options outstanding, which was not included in the calculation of diluted EPS, was 1.6 million at year-end 2004 and less than 0.1 million at year-end 2003 and 2002. The ranges of exercise prices related to the excluded exercisable stock options were $34.88 — $40.83 at year-end 2004, $34.15 — $34.88 at year-end 2003 and $27.00 — $34.88 at year-end 2002.

9. COMMITMENTS AND CONTINGENCIES

Obligated purchase commitments for capital expenditures were approximately $155.6 million at December 31, 2004 and $117.4 million at December 31, 2003.

We are involved in various legal proceedings incidental to our business. Although the outcome of these matters cannot be predicted with certainty, we do not believe that any of these matters, individually or in the aggregate, will have a material adverse effect on our financial condition, results of operations or cash flows.

We are subject to various federal, state, local and foreign environmental and occupational safety and health laws, regulations and ordinances, including those regulating air emissions, water discharge, waste management and environmental cleanup. We will continue to closely monitor our environmental conditions to ensure that we are in compliance with all laws, regulations and ordinances. GM has agreed to indemnify and hold us harmless against certain environmental conditions existing prior to our purchase of the assets from GM on March 1, 1994. GM’s indemnification obligations terminated on March 1, 2004 with respect to any new claims that we may have against GM. We have made, and will continue to make, capital and other expenditures (including recurring administrative costs) to comply with environmental requirements. Such expenditures were not significant during 2004, and we do not expect such expenditures to be significant in 2005.

10. STOCKHOLDER RIGHTS PLAN

In September 2003, our Board of Directors adopted a Stockholder Rights Plan (the Rights Plan) and declared a dividend of one preferred share purchase right for each outstanding share of common stock for stockholders of record on September 25, 2003. The Rights Plan provides a reasonable means of safeguarding the interests of all stockholders against unsolicited takeover attempts at a price not reflective of its fair value. The Rights Plan is designed to give the Board of Directors sufficient time to evaluate and

29

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

respond to an unsolicited takeover attempt and to encourage anyone or group considering such action to negotiate first with the Board of Directors.

11. RELATED PARTY TRANSACTIONS

In 1997, Blackstone Capital Partners II Merchant Banking Fund L.P. and certain of its affiliates (Blackstone) acquired a majority ownership interest in our company through a leveraged recapitalization transaction. In connection with this transaction, we entered into an agreement, which was amended in 2001, pursuant to which Blackstone provided certain advisory and consulting services to us. In December 2003, Blackstone completed their orderly exit strategy with a secondary offering of approximately 6.5 million shares to outside investors at which time this agreement terminated. We incurred costs of $2.6 million and $2.0 million for services provided by Blackstone in 2003 and 2002, respectively. The following table summarizes Blackstone’s ownership and shares offered to outside investors in 2003 and 2002:

	Blackstone’s Ownership
			Shares		Approximate
	Shares		Beneficially Owned		% Owned
	Offered		After Offerings		After Offerings
	(In millions)
March 2002		8.0		14.0		27	%
October 2003		7.5		6.5		12	%
December 2003		6.5		0.0		0	%

AAM did not sell any shares and did not receive any of the proceeds from the sale of shares by Blackstone.

In March 2002, in addition to Blackstone’s sale of our common stock, Richard E. Dauch, AAM’s Co-Founder, Chairman of the Board & Chief Executive Officer, sold 1.5 million shares of our common stock in a public offering. Prior to the March 2002 offering, Mr. Dauch’s beneficial ownership of our common stock was approximately 17%. After such offering, Mr. Dauch beneficially owned approximately 14% of our common stock.

Consistent with our Registration Statement disclosures related to these offerings, we have assumed the exercise of deep-in-the-money options to purchase common shares that were granted prior to our initial public offering and that were exercisable at the time of the offerings in the determination of the beneficial ownership percentages for Blackstone and Mr. Dauch. Approximately 2.0 million and 4.1 million shares of common stock related to such options were assumed to be outstanding in the beneficial ownership calculations for October 2003 and March 2002, respectively.

12. LABOR RELATIONS

In February 2004, our national collective bargaining agreement with the UAW expired. As a result of not reaching an agreement before the expiration of the contract, we experienced a temporary work stoppage of less than two days at six of our North American manufacturing facilities. In 2004, our operating results include costs and expenses of approximately $5.2 million related to overtime and other costs to recover lost production as a result of the work stoppage.

Lump-sum ratification payments totaling $37.5 million (including applicable payroll taxes) were made in the first half of 2004 in accordance with new collective bargaining agreements with unions that represent our hourly associates at six of our locations in the U.S. These lump-sum payments relate to future service of our hourly associates. In 2004, we expensed $13.7 million of these payments, which represented amounts earned in 2004 including $7.5 million paid in lieu of base wage increases. The remaining $23.8 million relates to amounts both parties agreed would be earned during the terms of the agreements and will be amortized over the remaining lives of the agreements.

In the first half of 2004, we recognized a pre-tax charge of $12.7 million (most of which was recovered through associated labor cost savings in the second half of 2004) related to lump-sum voluntary separation payments accepted by nearly 250 hourly associates terminating their employment with AAM. In December 2004, we recognized an additional pre-tax charge of $10.0 million related to a similar voluntary separation program accepted by 186 hourly associates terminating their employment with AAM (associated labor cost savings will be recovered in 2005).

30

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. SEGMENT AND GEOGRAPHIC INFORMATION

We operate in one reportable segment: the manufacture, engineering, design and validation of driveline systems and related powertrain components and chassis modules for light trucks, SUVs, passenger cars and crossover vehicles. Financial information relating to our operations by geographic area is presented in the following table. Net sales are attributed to countries based upon location of customer. Long-lived assets exclude deferred income taxes.

	2004		2003		2002
	(Dollars in millions)
Net sales
United States	$	2,472.5	$	2,600.0	$	2,524.9
Canada		328.1		325.2		402.7
Mexico and South America		667.6		642.2		432.1
Europe and other		131.4		115.3		120.5
Total net sales	$	3,599.6	$	3,682.7	$	3,480.2
Long-lived assets
United States	$	1,499.3	$	1,411.6	$	1,378.4
Other		440.1		416.5		380.3
Total long-lived assets	$	1,939.4	$	1,828.1	$	1,758.7

14. UNAUDITED QUARTERLY FINANCIAL AND MARKET DATA

	March 31		June 30		September 30		December 31		Full Year
	(Dollars in millions, except per share data)
2004
Net sales	$	952.8	$	929.6	$	841.6	$	875.6	$	3,599.6
Gross profit		136.4		133.4		107.9		96.8		474.5
Net income		36.5		55.3		36.4		31.3		159.5
Basic EPS	$	0.69	$	1.06	$	0.71	$	0.63	$	3.09
Diluted EPS(1)	$	0.66	$	1.02	$	0.68	$	0.61	$	2.98
Market price (2)
High	$	41.98	$	39.86	$	35.66	$	30.84	$	41.98
Low	$	34.10	$	33.30	$	27.84	$	26.87	$	26.87
2003
Net sales	$	975.3	$	913.6	$	867.7	$	926.1	$	3,682.7
Gross profit		144.7		137.8		119.4		138.4		540.3
Net income		54.0		51.0		38.7		53.4		197.1
Basic EPS	$	1.08	$	1.01	$	0.74	$	1.01	$	3.84
Diluted EPS(1)	$	1.02	$	0.97	$	0.71	$	0.96	$	3.70
Market price (2)
High	$	25.79	$	25.65	$	33.17	$	40.53	$	40.53
Low	$	19.50	$	21.24	$	24.05	$	30.47	$	19.50
(1)  Full year diluted EPS will not necessarily agree to the sum of the four quarters because each quarter is a separate calculation.
(2)  Prices are the quarterly high and low closing sales prices for our common stock as reported by the New York Stock Exchange (NYSE). We had approximately 469 stockholders of record as of February 10, 2005.
We submitted a CEO certification to the NYSE on May 5, 2004 pursuant to Section 303A of the NYSE Corporate Governance Listing Standards.

31

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

FIVE YEAR FINANCIAL SUMMARY
Year Ended December 31,
(In millions, except per share data)
	2004			2003			2002			2001			2000
Statement of income data
Net sales	$	3,599.6		$	3,682.7		$	3,480.2		$	3,107.2		$	3,069.5
Gross profit		474.5			540.3			491.7			409.7			426.2
Selling, general and administrative expenses		189.7			194.0			180.5			164.4			162.6
Operating income		284.8			346.3			311.2			241.3			259.4
Net interest expense		(25.5	)		(46.8	)		(50.6	)		(59.4	)		(58.8	)
Net income		159.5	(a)		197.1			176.1	(b)		114.9			129.2
Diluted earnings per share	$	2.98		$	3.70		$	3.38		$	2.36		$	2.60
Diluted shares outstanding		53.5			53.3			52.1			48.7			49.7
Balance sheet data
Cash and cash equivalents	$	14.4		$	12.4		$	9.4		$	12.3		$	35.2
Total assets		2,538.8			2,398.7			2,335.7			2,160.9			1,902.5
Total long-term debt		448.0			449.7			734.1			878.2			817.1
Stockholders' equity		955.5			954.7			703.6			534.7			372.0
Dividends declared per share	$	0.45		$	-		$	-		$	-		$	-
Statement of cash flows data
Cash provided by operating activities	$	453.2		$	496.9		$	384.2		$	232.8		$	252.2
Cash used in investing activities		(240.2	)		(232.1	)		(252.9	)		(375.5	)		(381.0	)
Cash (used in) provided by financing activities		(211.3	)		(262.6	)		(133.2	)		120.2			24.1
Other data
EBITDA(c)	$	432.7		$	513.8		$	470.6		$	367.8		$	377.0
Depreciation and amortization		171.1			163.1			145.8			126.6			107.9
Capital expenditures		240.2			229.1			207.7			375.5			381.0
Buyouts of sale-leasebacks		-			3.0			45.2			-			-
(a) Excluding a one-time charge of $15.9 million, net of tax related to debt refinancing and redemption costs in the first quarter of 2004, net income would have been $175.4 million.
(b) Excluding a $5.5 million gain, net of tax and other related costs, due to an insurance settlement related to a fire that occurred at our forge operations in Detroit, Michigan, net income would have been $170.6 million. See Note 4 to the consolidated financial statements for further discussion.
(c) We believe that earnings before interest expense, income taxes, depreciation and amortization (EBITDA) is a meaningful measure of performance as it is commonly utilized by management and investors to analyze operating performance and entity valuation. Our management, the investment community and the banking institutions routinely use EBITDA, together with other measures, to measure our operating performance relative to other Tier I automotive suppliers. EBITDA should not be construed as income from operations, net income or cash flow from operating activities as determined under accounting principles generally accepted in the United States of America. Other companies may calculate EBITDA differently.
		2004			2003			2002			2001			2000
Net income	$	159.5		$	197.1		$	176.1		$	114.9		$	129.2
Interest expense		25.8			47.5			51.0			60.3			65.7
Income taxes		76.3			106.1			97.7			66.0			74.2
Depreciation and amortization		171.1			163.1			145.8			126.6			107.9
EBITDA	$	432.7		$	513.8		$	470.6		$	367.8		$	377.0

32

EX-21

EXHIBIT 21 – SUBSIDIARIES OF OUR COMPANY
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
					Organized	% Owned by
					Under	Immediate
Subsidiary					Laws of	Parent(1)
American Axle & Manufacturing Holdings, Inc.					Delaware
	American Axle & Manufacturing, Inc.				Delaware	100%
		AAM Receivables Corp.			Delaware	100%
		Colfor Manufacturing Inc.			Delaware	100%
		MSP Industries Corporation			Michigan	100%
			MSP Team, LLC		Michigan	99%	(2)
		American Axle & Manufacturing de Mexico Holdings S. de R.L. de C.V.			Mexico	99.99%	(2)
			Guanajuato Gear & Axle de Mexico S. de R.L. de C.V.		Mexico	99.99%	(2)
			American Axle & Manufacturing de Mexico S.A. de C.V.		Mexico	99.99%	(2)
		AAM International Holdings, Inc.			Delaware	100%
			Albion Automotive (Holdings) Limited		Scotland	100%
				Albion Automotive Limited	Scotland	100%
				Farington Components Limited	England	100%
			AAM Comércio e Participações Ltda.		Brazil	99.99%	(2)
				AAM do Brasil Ltda.	Brazil	99.2%
			AAM Services India Private Limited		India	99%	(2)
			American Axle & Manufacturing Korea, Inc.		Korea	100%
			AAM Europe GmbH		Germany	100%
(1)	All subsidiaries set forth herein are reported in our financial statements through consolidations; there are no subsidiaries omitted from this list.
(2)	Remaining shares owned by the Company or its subsidiaries.

24

EX-23

EXHIBIT 23 - CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

American Axle & Manufacturing Holdings, Inc.:

We consent to the incorporation by reference in Registration Statements Nos. 333-41976 and 333-70466 on Form S-8 and Registration Statement 333-115317 on Form S-3 of our reports dated February 1, 2005 relating to the financial statements and financial statement schedule of American Axle & Manufacturing Holdings, Inc. (the Company), and management’s report on the effectiveness of internal control over financial reporting appearing in and incorporated by reference in the Annual Report on Form 10-K of the Company for the year ended December 31, 2004.

/s/ DELOITTE & TOUCHE LLP

Detroit, Michigan

March 1, 2005

25

EX-31.1

EXHIBIT 31.1 - CERTIFICATION PURSUANT TO RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT

I, Richard E. Dauch, Co-Founder, Chairman of the Board & Chief Executive Officer, certify that:

1.   I have reviewed this Annual Report on Form 10-K of American Axle & Manufacturing Holdings, Inc. for the year-ended December 31, 2004;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 1, 2005

By: /s/ Richard E. Dauch

Richard E. Dauch

Co-Founder, Chairman of the Board & Chief Executive Officer

(Principal Executive Officer)

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EX-31.2

EXHIBIT 31.2 - CERTIFICATION PURSUANT TO RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT

I, Thomas L. Martin, Vice President - Finance & Chief Financial Officer, certify that:

1.   I have reviewed this Annual Report on Form 10-K of American Axle & Manufacturing Holdings, Inc. for the year-ended December 31, 2004;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 1, 2005

By: /s/ Thomas L. Martin

Thomas L. Martin

Vice President - Finance & Chief Financial Officer

(Principal Financial Officer)

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EX-32

EXHIBIT 32 - CERTIFICATIONS PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of American Axle & Manufacturing Holdings, Inc. (Issuer) on Form 10-K for the period ending December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (Report), I, Richard E. Dauch, Co-Founder, Chairman of the Board & Chief Executive Officer of the Issuer, and I, Thomas L. Martin, Vice President - Finance & Chief Financial Officer of the Issuer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

        (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

        (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

By:  /s/ Richard E. Dauch	By:  /s/ Thomas L. Martin
Richard E. Dauch Co-Founder, Chairman of the Board & Chief Executive Officer March 1, 2005	Thomas L. Martin Vice President - Finance & Chief Financial Officer March 1, 2005

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