The turmoil at DaimlerChrysler AG has become a huge pothole for Dana Corp.'s high-profile Rolling Chassis project in Brazil.
Among the steps ordered by Chrysler group President Dieter Zetsche on Monday, Jan. 29, was the idling of the Dodge Dakota assembly plant in Campo Largo, Brazil.
Opened with much fanfare in June 1999, the Campo Largo plant was a showcase for vehicle assembly using large, preassembled modules, and Dana's Rolling Chassis was the star.
The Rolling Chassis combined 200 components from 66 suppliers, including the truck frame, axles, driveshaft, suspension and fuel system. Dana produced the module at a 76,000-square-foot facility near the Dakota plant, employing 52 hourly and salaried workers, and supplied the plant on a just-in-time basis.
But just as the plant opened, Brazil experienced an economic depression that hit auto sales hard. Last year the Campo Largo plant built only about 5,600 Dakota pickups.
The Campo Largo plant will be idled, indefinitely, in the fourth quarter of this year.
Although the announcement is a setback for Dana, the supplier is 'not abandoning the Rolling Chassis,' spokesman Gary Corrigan said.
Dana has talked with other automakers interested in adopting parts of the Rolling Chassis concept, Corrigan said. Dana also is touting a parallel concept, the Rolling Space Frame.
When DaimlerChrysler stops production in Campo Largo, Dana will be forced to follow suit, Corrigan said. However, it is not ready to announce any layoffs.
Dana would not reveal its investment in the Rolling Chassis project. However, DaimlerChrysler business collectively accounted for 14 percent of the Toledo, Ohio-based supplier's 1999 revenues.
Other automakers, including Volkswagen AG, also have plants close to Campo Largo, although Dana would not confirm or deny if any contracts are pending with these makers for the Rolling Chassis or any other products.
DaimlerChrysler said it will evaluate the Campo Largo plant's fate, however the automaker has not given Dana a time frame as to when a final decision will be made, Corrigan said.
Uncertainty for Dana
Dana is among many suppliers with plants whose future is undecided.
Siemens Automotive has three plants with volume that is almost 50 percent dedicated to DaimlerChrysler business: a fuel delivery system plant in Newport News, Va., and air induction plants in Windsor and Tilbury, Ontario.
'We have rather significant exposure to almost all their plants; they are our second-largest customer in the world,' spokesman David Ladd said. 'At this point, it's kind of early for us to gauge what impact, if any, it's going to have in a negative sense.'
Adjusting to cutbacks is nothing new for Troy, Mich., supplier ArvinMeritor Inc., which has had to weather recent plant idlings from General Motors and Ford Motor Co. Spokesman Sam Locricchio said it is still too soon to determine how DaimlerChrysler's announcement will affect ArvinMeritor's production schedules.
Staff Reporter Amy Wilson contributed to this story