Dauch Corporation

What they do

Dauch designs and manufactures driveline components—axles, driveshafts, and related systems—for light trucks, SUVs, and crossovers, serving automakers with products for ICE, hybrid, and electric vehicles. Its Metal Forming segment supplies forged and machined components. Operations span 24 countries and more than 175 locations. Major customers include GM, Ford, and Stellantis, with GM representing about 44% of 2025 sales.

Revenue drivers

• General Motors (GM) — Primary supplier of rear axles and 4WD/AWD axles for GM's full-size RWD trucks and SUVs; GM accounted for 44% of 2025 net sales, but declined to 30% in the first half of 2026 due to Dowlais contribution.
• Ford Motor Company — Supplies driveline systems for Bronco Sport, Maverick, Escape, and Lincoln Nautilus; accounted for 15% of 2025 net sales and 11% for the first half of 2026.
• Stellantis N.V. — Supplies driveline products for heavy-duty Ram pickup trucks; accounted for 13% of 2025 net sales, unchanged at 13% for the first half of 2026.
• Dowlais acquisition (GKN Automotive and GKN Powder Metallurgy) — Acquired Feb 3, 2026 for ~$1.7 billion, adding global driveline and powder metallurgy operations, significantly increasing revenue base.

Recent performance

For Q2 2026, revenue was $2.96 billion, up from $1.54 billion in Q2 2025, due to the Dowlais acquisition. Net income attributable to Dauch was $1.0 million, or $0.00 diluted EPS, compared to $39.3 million ($0.32) in Q2 2025. Adjusted EBITDA was $389.6 million (13.2% of sales), and adjusted EPS was $0.32. Operating cash flow for the quarter was $107.5 million. Full-year 2025 revenue was $5.84 billion with a net loss of $19.7 million.

Strategy

Management aims to diversify customer, product, and geographic mix while maintaining core ICE volumes, and to grow hybrid and electric vehicle business. The Dowlais acquisition is central to strategy, expected to generate synergies of $60-75 million in 2026 (over $100 million run rate by end of year one). They are also pursuing tariff mitigation and customer recoveries, and divesting non-core assets such as the sale of the India commercial vehicle axle business to Bharat Forge for ~$65 million.

Risks

• Customer concentration — GM, Ford, and Stellantis together comprised over 70% of 2025 net sales; loss of any major program or customer could materially impact results.
• Tariff and trade policy uncertainty — U.S. tariffs on automotive parts have caused earnings impacts of ~$10 million in 2025 and ~$30 million in H1 2026, with uncertain recoveries and potential 2026 USMCA review.
• Supply chain disruptions — Reliance on limited suppliers for critical components and geopolitical supply chain disruptions could cause production volatility and increased costs.
• Electric vehicle cancellation — A large customer terminated e-Beam axle orders in April 2024; although a $28 million settlement was reached in January 2026, ongoing EV demand uncertainty persists.

Outlook

For full-year 2026, Dauch targets sales of $10.6-10.8 billion and Adjusted EBITDA of $1.36-1.425 billion. Adjusted free cash flow is targeted at $260-325 million. Management expects continued tariff impacts of $10-20 million for 2026 after mitigation and recoveries. The outlook includes a partial year of Dowlais contribution, with production assumptions of 15.1M units in North America, 16.9M in Europe, 31.6M in China, and 91.1M globally.