Dauch Corporation (DCH) Earnings Call Transcript
August 12, 2026
Earnings Call Speaker Segments
Great. Thanks, everyone, for listening. My name is Rajat Gupta, member of the automotive equity research team at JPMorgan. Very pleased to have with us the team from Dauch Corporation, David Dauch, Chairman and CEO; and Chris May, Executive Vice President and CFO.
So maybe like just to quickly start, 6 months from the close, Dauch is a different company from American Axle. Most investors have followed for years, roughly twice the size, far less North America, far less General Motors weighted. For someone who's still like catching up on the story, could you give us a sense of what Dauch is today, what you most want them to understand about the earnings power of the combined business today and a few years out?
First of all, good morning, everyone. It's an honor and a pleasure for us to be here today and talk about the transformation taking place within the Dauch Corporation. We're certainly excited about the combination of the previous legacy AAM and the legacy Dowlais coming together to form the Dauch Corporation. The big thing for those that don't know -- didn't know the history is the legacy AAM or Dauch Corporation was approximately $6 billion in sales. With the acquisition of Dowlais, this year, we've guided the Street close to $11 billion, but for the full year, we'll be in that $11 billion to $12 billion range. So we've essentially doubled the size of the company. At the same time, we wanted to make sure that we had a product portfolio that was agnostic to the market, whether it be ICE-related, hybrid related or EV related going forward. That's been achieved with respect to this. In addition to that, we want to introduce diversification into our business from a geographical standpoint. We were heavily concentrated in North America at 75% with legacy AAM. We're now approximately 60% with the combined business. General Motors was about 40%, 45% of our business. Today, they're approximately 25% to 30% of our business. So you can see the power of the diversification on the geographic, the customer and the product portfolio standpoint. In addition to that, there's tremendous synergistic opportunity of bringing these 2 great companies together. We're in the process of realizing that. We've already realized $70 million on a run rate basis for this year against the goal of $100 million for this year. At the same time, we now have a more robust business model as a combined business that is going to bode well for us from a margin accretion and cash generation standpoint going forward as well.
Understood. Thanks for that overview. Just going back to the quarter, very strong guidance was raised. Big contribution from Dowlais than most like had in the numbers, at least ahead of our expectations. Could you recap some of the main drivers of the performance and shed some light maybe also on the onetime costs that might have run through the quarter, higher energy costs, the work stoppage at Three Rivers. Just help us like understand what drove the strength.
Yes. This is Chris. I'll take that as it relates to the quarter. Very pleased with our performance in the quarter. A couple of elements as we thought about the quarter. Sales came in stronger than our expectations, really on the back of several platforms. General Motors light-duty truck was very strong inside the quarter. We had some strong sales and revenue on the legacy Dowlais product that supported BMW and a few other customers also very strong. So pleased from a top line perspective. From a performance perspective, I think what you saw happen inside that quarter is several fold. First and foremost, from a synergy perspective, we put $15 million on the P&L flow-through inside the quarter, so tracking towards the run rates that David just mentioned. So very pleased with that performance. You can see how that adds to the margin profile of the company. But both legacy businesses also performed quite strongly. Legacy American Axle and especially in its metal forming side of the business, continue to have improvements quarter after quarter. And then legacy Dowlais business that has been invested in over the past several years from a restructuring standpoint continue to have performance inside the quarter as well. So you put those together, it ends up with a pretty strong quarter overall for the company. In terms of some maybe puts and takes inside the quarter, we started to feel a little bit of, I would call it, some energy-type inflation that we're experiencing on the macro, but not significant, but a little bit. That will obviously continue in the back half we also had, I would call, a one-timer associated with our Three Rivers facility UAW work stoppage, which cost us about $8 million inside the quarter, and we spiked that over on our year-over-year box. But big picture synergies and performance at both of the underlying businesses inside the quarter.
Yes. That makes sense. Just let's talk to the GM truck transition. The next-generation full-size truck, very important launch for you, customer downtime beginning in September. Could you help us think about the shape of the third and fourth quarters, just given the fourth quarter looks softer on production across GM, Stellantis and just across the industry more broadly. Could you talk about where you see room for content or margin uplift as the new architecture matures and whether early platform share capture is something we should start to see in your numbers?
Yes. Maybe I'll talk a little bit about maybe the cadence of the back half. We articulated on our earnings call last Friday. Inside of the third quarter, you have some, I would say, normal seasonality, in particular in Europe, which is generally a little weaker in August. But also, as you mentioned, as it related to the full-size truck with General Motors, will start to be impacted as we supply into their Mexico facility and sold out. That's one of our largest customer endpoints for that vehicle, and they're going to start to go down in early September for about a month. So that will impact our production and of course, corresponding sales and profits associated with that. And then in the fourth quarter, you'll have typical seasonality generally wrapped around the holidays near the tail end of the year. So those would be the seasonal cadence items that I would call out as it relates to first half versus second half.
Got it. And I know you'll give us a lot more color at the Analyst Day on '27, but any early puts and takes on organic growth or growth over market we should think about for '27. Obviously, historically, GM was kind of like a proxy for us to model that. But given now a broader regional and a broader customer base, maybe a few things you would suggest that we keep in mind when you look at '27.
Yes. It's clearly -- we've not provided any '27 guidance, to be clear. But as you think about some of those puts and takes, obviously, macro volumes in our 2 primary regions of North America and Europe, obviously, we'll track very close to that. But you are coming into now General Motors launching these new trucks. Our experience has been -- that's generally very well received inside the marketplace. So we're very excited about that launch and the benefits that will yield in the next couple of years to come. We'll continue to advance our synergy objectives from a profitability standpoint. Obviously, we would look to continue to advance our productivity initiatives at the core level of the company to offset any inflation that we experience. Those are probably some -- from a P&L standpoint, some of the higher-level puts and takes for '27, but still a little early to be into '27.
Got it. Fair enough. I mean you gave us like the $2 billion like quoting pipeline number, but we'll double-click on that in a second. But just related to that, you also pointed to reshoring inquiries picking up meaningfully as customers look at their North America footprint. Can you give us a sense of like how real that pipeline is looking like, whether it's showing up in actual awards yet and whether it helps absorb capacity that frees up as you consolidate some plants?
Yes, I'll take that one. We've got an increasing pipeline of onshoring opportunities, and yes, we have converted some of those already into booked business. So that's positive for us. Obviously, we're leveraging our installed capacity from a forging opportunity and from a powder metal opportunity are the initial wins that we're seeing at this point in time. But clearly, the Trump administration is driving a lot of onshoring into the U.S. as well that we think that we can capitalize as part of this $2 billion that we're quoting on right now also. But overall, we feel good about where we're at. Clearly, some of these opportunities require customer validation or our own internal validation before they can be put into production, but we'll start realizing some of those benefits as early as '27, but most of them will be out a little bit further.
Got it. And then you gave us a little more insight around the $2 billion, the quoting activity and the mix having swung sharply towards ICE and hybrid. Can you shed some light on like where the demand is coming from? And obviously, some of the onshoring stuff, but any more details there? And then how the win rate on the Dowlais side compares to what you've seen historically?
Yes. I'll just start with the last question. The Dowlais win rates are similar to what the historical AAM win rate was, which was around 30%. When you look at the quoting opportunity, the $2 billion, a year, 18 months ago, there's probably 85% electrification, 15%, 20% in regards to ICE and hybrid, it's the opposite today. So a lot of emphasis on the ICE and hybrid, especially in platform replacements on the ICE and hybrid. We've secured a lot of replacement business already. But at the same time, now there's next-generation products that are out there that we're actively quoting on. The makeup of what we're quoting on is pretty well distributed across the comprehensive portfolio that we have now from truck applications, all-wheel drive applications, the sideshaft, halfshaft, propshaft applications, and then their respective metal forming businesses. And it's broken down very similar to the geographic footprint that we really have today, about 60-plus percent in North America, 25% in Europe, the balance in Asia and South America.
Got it. And maybe just on sideshaft, obviously brings a leading global share position that travels across powertrains with more content per vehicle on just the battery electric platform than on combustion. Can you talk to us about how defensible that share is? And just whether the broader consolidation of supplier base towards the strongest players is helping you there in the sense of whether you see yourself more as a consolidator from here or just as a beneficiary of the flight to quality?
Yes. I'll talk more than just on the sideshaft side of things. I mean one of the reasons we did this deal of bringing 2 great companies together was the power and the performance they had in their business, the power and performance we had in our legacy AAM business. When you look at it, we're now a top 10 North American supplier, top 25 global supplier, but we're #1 in all the major markets that we serve. So you look at -- you bring up the sideshaft side of things. Legacy Dowlais has the largest market share, a little over 40% on the sideshaft side of the business. They bring depth, they bring breadth, they bring a global scale and reach. They bring tremendous innovation. That's all now part of us. No different than what legacy AAM was bringing on the axle side. So we'll continue to leverage that going forward. Right now, the OEMs are predominantly looking for suppliers that have that size and the scale that can weather the uncertainty and the storms that are going on in the marketplace. That doesn't take away that they're still looking for cost. But our big thing is to make sure that we're offering a value proposition. And legacy Dowlais has been able to protect their market share, just like legacy AAM has been able to protect their market share, our market share on the axle side. Now it's a combined business, and we'll continue to work on that. Now certainly, there's new entrants with the Chinese supply base as the Chinese are on the offense trying to grow their share globally around the world. We'll keep a watchful eye on that, but we'll also leverage the Chinese joint venture that Dowlais had, which is called SDS, very successful joint venture that gives us another competitive source and base not only for the China market, but even for the global market.
Understood. I just wanted to pause there for a second to see if any questions from the audience. None yet. So we'll move on just to the acquisition and just the integration and synergies. You obviously upsized -- you've been tracking ahead of plan. You're roughly at $70 million run rate after 5 months, which is ahead of the target. Could you shed some light on which buckets that number is coming from today? And which ones are the longer-dated pieces? And separately, where do cross-sell revenue synergies sit in that picture given they were never built into the original target?
Yes. So we're getting contributions from all those 3 main buckets that we had identified. Originally, we talked about SG&A as one bucket, purchasing as another bucket and then the operations is the third bucket, 30%, 50%, 20% was the distribution of the $300 million. The majority of what we're realizing right now is on the SG&A and the E side as far as the engineering efficiencies that are -- that's going very well. You would expect that as far as the elimination of corporate -- duplicative corporate costs just overall SG&A optimization and then obviously, the engineering efficiencies. But we are getting contributions on the purchasing side as well, especially on the indirect side and from a material and supply chain management side. The in-sourcing will take a little bit longer just because of the validation that I mentioned to you and some of the plant product footprint work that we need to work on. And then the direct procurement and the operations will take the longest to realize. We'll start realizing more of that in the '27 and '28 calendar year periods of time. But we are realizing some today.
Got it. And vertical integration looks like one of the more interesting piece, you touched upon that slightly. Given you're one of the largest steel forges in the world, while Dowlais historically bought forging powder outside, could you walk us through like how much of that is capturable? What the customer approval process looks like as you move that work in-house and whether it's more about existing -- filling existing capacity or just requires incremental investment as well?
Yes. So legacy AAM was the largest steel forger in the -- automotive forger in the world. We did that by acquiring MPG back in the 2017 calendar year period of time. We really put #1 and #2 together in North America. Subsequent to that, in 2022, we bought Tekfor, which was the #3 supplier in Europe, and Metaldyne was the #2 or MPG was the #2 supplier. We really put #2 and #3 together in Europe. So again, we have a sizable capacity on the forging side of the business. Dowlais has a forging capacity to support in-house side shaft forge requirements. So they were still buying 75% to 80% of their forgings on the outside. So we'll look to in-source a lot of that work going forward. The flip side on the powder metal side, we -- legacy AAM was already buying powder from legacy GKN Powder Metallurgy group. We have the opportunity to buy more from them on that, which is fantastic. Those are things that we can control ourselves internally. And on top of that, we've got the opportunity from a reshoring standpoint, as we mentioned earlier, and just leverage the buying power that we have from both the steel and from a powder standpoint and take advantage of the size and scale, which is part of the reason why we did the acquisition.
And maybe just sticking to like the margin side of things, just on the same theme, where are you with respect to automation and the opportunity in the plants? Can you give us like some sort of like a time line and how that benefits accrues to the P&L over time?
Yes. We've got a sizable piece of automation already put into our operations from a legacy AAM standpoint. Now there's still plenty of room to enhance our capabilities there. Dowlais also has a very strong capability when it comes to automation and robotics and a tremendous skill set within their operations. So we're in the process right now of forming a corporate group that will manage all of our automation and robotics activities within the company. We're identifying projects by plant, by business unit, by region. There will obviously be business cases associated with that. They tend to be very favorable, especially as labor costs are going up in the Western countries, especially, they'll pay for themselves overnight. The other issue to take into consideration is labor is becoming very scarce on a global basis. At the same time, the skill sets associated with that labor are lower than what they've been in the past. So therefore, it behooves us all to really take the time to invest in the technology and the automation, which has gone through tremendous advancements in the last decade that I think we can all benefit from. And we're really pushing that hard just as another means of driving productivity and throughput and consistent performance in the operations.
Yes. So things like efficiency that David just mentioned, impacts of wage inflation, things like that are exactly what will help support margins going forward through automation as part of your question.
And then just following on the labor point, the new agreement locks in a step-up that takes wages from $22 to $30 an hour. Can you shed some light on how much of that you expect to absorb versus recovery from customers? You talked about automation and some of the offsets. Maybe help us like bridge how you address some of the headwinds there?
I mean clearly, our responsibility to manage our cost structure. And yes, we have an increase resulting from our Three Rivers labor negotiations. And what we'll do is we'll work to optimize the amount of people, as I said, the overhead walks in on 2 feet. So we'll work to optimize that through automation, robotics where we can. We'll look at plant and product loading opportunities as far as where we can load things in different locations that are maybe a little bit more cost competitive going forward. But we'll continue to drive efficiency and productivity within the existing plants. And clearly, as we look at our cost structure and we quote on business, we factor that cost structure into the equation with our customers.
Got it. Just checking if anyone in the audience -- any questions? None yet. On China, I think that seems like one of the more underappreciated pieces of the deal. And you took your outlook up, which is pretty rare from across the whole ecosystem to take up the outlook in the region. Can you give us a sense of how that business is positioned as domestic brands take share? How do you think about the durability of the profitability, just given the pricing environment in that region?
Yes. One of the things that we are most impressed with, with the acquisition, it was really that joint venture. It's a joint venture goes back well over 30 years. It's a very profitable joint venture within China. It started off as supporting more of the Western OEMs, but it's really migrated its way. We're probably about 60% of its customer base today are the local Chinese OEMs. But those local Chinese OEMs are also now building plants or shipping product abroad. So we're supporting both the domestic market within China, but also trying to support and identify those customers that are growing on a global basis. And we've been fortunate to do that with SAIC and BYD and Great Wall and some of the other -- Geely and some of the other key names that you hear about all the time. We also have our own legacy AAM WFOE that's within China, where our skill sets will complement -- the businesses complement one another. So we do think there's expansion of the product portfolio that we can bring to the table. There's some cross-selling opportunities that we haven't even realized those benefits yet. From an operational standpoint, what I'll say is that I was very favorably impressed with what I saw over there. I wasn't sure what I was going to see in a state-owned enterprise initially. But this was very sophisticated machines, adoption of AI technology, full design development testing capabilities existed within the joint venture. which bodes well for our cost structure, not only within China, but leveraging that as supporting our global enterprise as well. Chris, I don't know if you want to speak on the financial side or...
Yes. I think, as you mentioned, very underappreciated and part of our story. And you can see it's contributing very positively to our EBITDA performance company. We took our guide up slightly as it relates to that region based on their performance. They do have some upcoming launches here in the back half of the year that will favorably benefit that as well. So I think we're in a really good spot as it relates to China.
And a big part of like the theme over the last few months, quarters has been this whole Chinese exports into Europe. And many of those domestic customers are now exporting heavily and ultimately likely to localize in Europe, Southeast Asia, Latin America. Could you walk us through whether your content travels with them? And whether serving these Chinese OEMs outside China could eventually matter as much of the business inside the country today?
Yes. I mean once you ship the product out our door to the customer, it's hard to track it all the time as to where it's going. But there's no doubt there's some of our products that's on Chinese vehicles that are being exported globally around the world, whether it's to Southeast Asia, to Europe or to Latin and South America, where the Chinese are going at this point in time. But at the same time, our job is just to make sure we're winning business with the Chinese OEMs, just like we're winning business with the Japanese OEMs and the Detroit Three for that matter. But we all got to be cognizant that the market in China was growing gangbusters. They were -- the Chinese OEMs are just trying to satisfy that initial demand inside of China. Now with the policy changes, it's actually taken a dip for the first time in over a decade. But at the same time, as I mentioned earlier, they now surpassed China as the largest exporter last year in Europe and Southeast Asia and Latin South America, like I mentioned, are the target areas that they're going. And we just need to make sure that we can participate with them as they gain market share going forward. Flip side is they're taking that market share from somebody because the overall market isn't necessarily growing there. So we just got to make sure that we're protecting the business that we enjoy today or replacing it with the Chinese OEMs as they're gaining market share going forward.
Got it. Just one more check in. Maybe just going back to some of the revenue synergy opportunities. You've talked about Dowlais relationship with Toyota, VW. Where are you in the customer outreach and just like technical days with these new customers? When can we expect to see some awards starting to get announced right from the cross-sell?
Yes. Our initial focus with the customers was just, one, educating them in regards to combination businesses. At the same time, we wanted to identify where there were open issues, commercial issues, relationship issues, whatever they might be. We're still in the process of doing that, which is going very well because we want to close out any issues that were there. At the same time, we're in the process of explaining to them the comprehensiveness of our portfolio. We will be going on the road later this year and a lot next year in regards to holding or hosting technology days at the various customers so they can see the vastness of our portfolio, the comprehensiveness of the portfolio that should lead to further cross-selling opportunities, depending on which product line we're talking about metal forming like powder metal or forging, those opportunities will be shorter as far as opportunity in the earlier years is what I really mean, where the driveline products will take 3 to 5 years based on the lead times associated with those types of products.
Got it. Got it. Makes sense. Maybe I think we should -- capital allocation and leverage is obviously a big topic for both equity and like debt investors. Could you walk us through the time line to your 2.5x threshold? How much of that comes -- it looks like majority of that is going to come from the synergies and earnings growth, but also there's a component of like just the onetime expenses starting to go away. Looking past the point where the acquisition is fully digested, just help us understand the path there and then how we should think about capital allocation?
I'll take that from a leverage perspective. We closed out the second quarter 2.6x. Obviously, very pleased to how we closed the second quarter, but quite frankly, very pleased to how we started the year upon closing the transaction a little better than I think we thought we would be at that point in time. And I think the reason you mentioned 2.5x, that's a critical marker for us. That's where we committed from a capital allocation perspective. In the near term, we'll focus primarily on debt paydown, which we've done in the second quarter. We have we done some additional in the third quarter. But once we cross that 2.5x threshold, we'll open up that capital allocation playbook to some more, I'll call, shareholder-friendly activity. So that's a critical milestone for us. Longer term, medium to longer term, we would love to have our leverage less than 2x. So we'll continue to prioritize debt paydown even after the 2.5x point as well. But in terms of how do we get from here to sort of those goals, clearly, synergy performance, which will drive earnings growth will be an important part of that equation. But as you referenced a little bit in your question, continued strong cash flow performance and some of the, I'll call, onetimer cash items like acquisition costs to close, those will be behind us. Our restructuring costs will continue to -- we'll have some synergy implementation costs, obviously, heavy this year and next year. But holistically, cash flow will continue to strengthen over the next couple of years. So put those together, I think we're in a pretty good spot trying to hit those markers that we want to get to.
How should we think about restructuring in general? I mean I think we see this often like where restructuring is kind of like a perpetual like cost across many suppliers. I mean, is there sufficient line of sight just given all the dynamics around like onshoring and reshoring and then Chinese OEMs going to Europe, which might require some restructuring in Europe. I mean how visible is just the restructuring?
Yes. Let me just talk and then you can add to it, Chris, is Dowlais was doing a lot of restructuring before we acquired the business, started in the U.S. in regards to consolidating a lot of operations to Mexico. Most of that is done and behind us, and we're realizing the benefit of that at this point in time. There's still some launch opportunities that we're trying to improve to optimize that transition to Mexico. In Europe, they had a 3-year journey that they were on in '23, '24, '25. We're wrapping up some of the final parts of that right now. So that's why you're starting to see those costs are coming down. We, legacy AAM, had some restructuring that we were doing in Europe. I do think there'll be continued restructuring in Europe for the whole industry, especially with the Chinese offensive that's going into there right now where they're gaining market share. There's too much capacity today in regards to OEM. There's probably too much capacity from a supplier standpoint. We think that we're in a very good position at this time. But if we need to do further, we'll obviously do what we need to do. Most likely -- most importantly, what we want to do is get our capacity utilization and quite honestly, facility, machinery and people utilization to the desired levels that we historically run our business by. But I just think that you're going to also see further consolidation taking place in both the OEM ranks and the supplier ranks, and that will drive consolidation that way, but also drive some restructuring too. And we'll look for other restructuring to do it smartly where there's a business case and justification behind it that will only benefit from an efficiency and productivity and synergy standpoint.
Makes sense. You have a question from Jim.
2.5, 3 years from now, consolidation, you're a big part of it, right, with the M&A. And I'm thinking about that dynamic of where we're going to be in terms of where you want to be and then the competitive dynamics. You just -- as a follow-up to the question you just answered, you're rationalizing your utilization rate up. And so how does the competitive landscape look in 2, 3 years from your standpoint against that backdrop of Europe? And I'm curious of your opinion, are we going to see more new plants like Hungary for BYD? Or do you think there's just going to be a shifting of existing capacity to new players, like what we're seeing with Ford, Geely in Spain. How do you kind of see that landscape that have a very big impact on you because I assume you're going to be getting after that business that's going into Europe from the Chinese. Kind of 2 questions in there.
Yes. No, I'll start with the latter part of it. I definitely think it's going to be a combination where the Chinese are going to have some of their own greenfield approaches and Hungary is a big market for them to go to at this point in time. But they're also going to leverage some of the existing open capacity that exists within the Western OEMs today, just so they can do business in those countries and open up their market further and avoid some of the political things that may come in the future. Right now, the European governments haven't put a lot of restriction on the Chinese. So therefore, they can kind of dictate what they want to do and go where they want to go. I do think there will be some sort of legislation or policy put in place over time. It's just a matter of does it get put in place fast enough so that the existing OEMs don't lose a lot of market share because of the cost competitiveness of the Chinese. And is it stringent enough where they require a certain amount of domestic made within that region or within those individual countries themselves. That's still to play out. We'll have to adjust to that, just like any other supplier would have to adjust to that. The best way for us to do is make sure we've got a competitive footprint, let's say, in Europe or any of the regions that we serve. At the same time, leverage our global enterprise so that we can quote out of different areas to serve that region. In this case, we're talking Europe, whether it's out of China, whether it's out of India or whether it's out of Eastern Europe is what we would do. But the name of the game is utilization, right? If you don't have the utilization, you don't have volume covering those fixed costs, you're going to bleed. And that's what's happening with some of the OEMs there and some of the supply base. And that's why you're seeing the massive restructuring that's going on in Europe right now, where tens of thousands of jobs are being impacted. Hopefully, that addressed your question.
I just want to know -- I'm a bit curious about the transition to Mexico. I don't know if you could talk a bit more. And also how exposed do you think it's going to be with the USMCA possible changes?
Yes. Mexico has been a big source of revenue performance for our legacy AAM business. And obviously, Dowlais doubled down with their consolidation from a lot of their U.S. operations down to Mexico. So we have a big presence in Mexico and a very well-installed infrastructure that's there. You just don't pick up assembly plants and pick up component plants that are capital intensive overnight. But we do think that we're very well positioned there. Right now, we don't have clarity to where USMCA is going to go. They've telegraphed where they are in regards to the discussions. They telegraphed where they're going in regards to U.S. content that they would like to see higher content requirements. The good news is over 90-plus percent of our parts are USMCA compliant today. It's just a matter of what changes in the future. So we're trying to proactively work on those things right now, anticipating that they're only going to be more demanding. Almost all of the steel that we use in Mexico is consumed. And then it's just how does it impact the OEM and their vehicles versus how does it impact the component supplier. So clearly, there's going to be an impact. It's a matter of how we can mitigate that and how we offset it, either within Mexico or with our U.S. footprint as well. And we already had a U.S. footprint from a legacy AAM standpoint. We picked up additional facilities from Dowlais. We'll work to optimize that. But part of what we're doing is waiting to see where USMCA goes before we make some final decisions on that plant and product loading.
Yes. Maybe just on the portfolio and like just adjacencies. Obviously, a lot of suppliers have found ways to leverage the technology in adjacent end markets. Curious like is there a real opportunity for you, where those capabilities travel more naturally, whether there's a live process or like a post-integration ambition in other markets?
Yes. I mean it's our job to look for growth, right? And right now, we're not seeing a lot of growth from a vehicle unit standpoint on a global basis. So we got to consolidate the industry and the core business that we're in, in order to realize some of that growth. And that's not only just us, it's true for all the auto suppliers that are out there. Technology makes a big difference in regards to what you're able to do that way. But clearly, we want to look at adjacent markets that make sense that leverage our core competencies and our capabilities. But our priority right now is the integration of Dowlais and the GKN subsidiaries, make sure that we're very effective there. But at the same time, look at what we can do, as you said, leverage that installed capacity base. I mean, think about it, forgings can go into a lot of industries. Powder metal goes into a lot of industries. About 20% of our customer base today is outside of the automotive space on the powder side. There's more opportunity on the driveline side, especially when you're looking at the industrial markets, the commercial markets or the powersport type markets. So we'll look at that, but some of that takes capital to enter into, too, whether it's a greenfield approach or a strategic approach of some nature. But we'll look at aerospace, defense, some of the other critical industries that would merit and utilize some of the core competencies and capabilities we have.
Understood. Maybe one final question. Any early preview or peek into the analyst event, what we can expect to hear?
Well, I mean, we've shared our story early in regards to what we were trying to do with the acquisition, the combination. Again, it's 2 great companies that came together. I think it's one of the better deals that have taken place. It's like a hand-in-glove fit. Our job is really focused, especially the first 2 to 3 years on this integration. The integration is off to a wonderful start. At the same time, the Street is looking for shareholder appreciation. They're looking for growth. That growth is going to have to come by either consolidation, which means strategic activities or conquest -- organic conquest wins or it's got to come through those adjacent markets. So we're looking at all those, spend a lot of time on that at this point in time, and then we'll discuss that on November 17 when we have our meeting. In addition to that, we'll telegraph and guide a more futuristic or look towards what our earnings and our size of revenue and all that we really want to be as a company on a go-forward basis. I mean everyone knows right now, we're in that $11 billion to $12 billion range on a consolidated basis. At the same time, we're evaluating our portfolio, what's core, what's noncore, can we accelerate our current plan, get that debt paid down, clean up the balance sheet, open up the shareholder from the activities that Chris mentioned earlier, while also trying to say how do we grow going forward. A lot of things to cover, but exciting time for our organization. A lot of work to do, but nothing that's overwhelming and stuff that scares us at all. It just -- this is right in our wheelhouse about execution, right in our wheelhouse in regards to performance. We've demonstrated that we want to be a consolidator, and we'll continue to look and capitalize on that where it's appropriate.
Makes sense. It's a great way to end. So thanks, everyone, for listening.
Great. Thanks. Thank you.
Really appreciate it.
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