Dana posts Q3 loss, accelerates restructuring plan

Dana Corp. on Wednesday posted a net loss of $8 million, excluding nonrecurring items, on $2.4 billion in sales over the third quarter 2001.

Sales for the quarter were off $500 million, or 17 percent, compared with third quarter 2000. The Toledo, Ohio, auto supplier's $8 million loss this quarter compares with a $61 million net income over the same period a year ago. Including nonrecurring items, the company recorded a net profit of $13 million.

The company cited the down market for its third-quarter performance and acknowledged the possibility of bleaker times ahead. The company, said Chairman and CEO Joe Magliochetti, is gearing up to "face the prospect of a further significant decline in our markets." As a result Dana has:

  • Slashed its fourth-quarter dividend to 1 cent per share, a reduction from the previous quarterly rate of 31 cents per share. By cutting the dividend, Dana's annualized effect is a $178 million improvement in cash flow.

  • Accelerated the restructuring of its operations. This includes adding 15 percent more job cuts to a planned global work force reduction. Dana has eliminated nearly 10,000 jobs in the past 18 months.

    The company anticipates taking an after-tax charge of between $400 million and $450 million for the restructuring, mostly in fourth quarter 2001.

  • Announced a series of plant closures and consolidations that will include its engine management, engine products, industrial fluid, and Quinton-Hazell operations. Dana also will accelerate the outsourcing of noncore manufacturing and processes as part of its program to reduce assets and costs.

  • Said it will pursue the sale of its Dana Commercial Credit Corp. leasing operation.

    Dana is No. 5 on the Automotive News ranking of the top 150 original-equipment suppliers to North America with $7.1 billion in 2000 parts sales to North America.

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