GKN and Dana have suspended their Drive Tek joint venture in the USA because customers weren't eager to buy complete driveline systems.
But GKN has formed another alliance that may help it pursue the driveline systems business. GKN purchased a 33.3 percent stake in Japanese supplier Tochigi Fuji for $39.2 million (E45 million) to add to its torque-management capabilities and bolster its Asian sales position.
Drive Tek shut down its Auburn Hills, Michigan, engineering office in March after GKN and Dana executives spent January and February dividing up what little business the venture had. The 20 employees at Drive Tek were recalled to their parent companies.
The joint venture formed in 1999 is now inactive. But the companies would reinvest in Drive Tek when the market is ready, said Jay Dewar, director of marketing for Dana's automotive systems group.
Drive Tek had won a minimal amount of business, but it wasn't enough to justify continued investment, he said. He wouldn't identify the Drive Tek programs, but said they included both North American and European business.
Automakers are reluctant to give up total responsibility for certain vehicle systems, including ride and handling technology, Dewar said.
Based on 2000 sales, Automotive News Europe ranks Dana of Toledo, Ohio, No. 9 among the top 100 global suppliers. GKN, based in Worcestershire, England, is ranked No. 20.
Dana and GKN will pursue individual buyers for their axle, driveshaft, half-shaft and torque management components.
GKN's deal with Tochigi Fuji includes 20.4 percent of outstanding Tochigi shares owned by Nissan. Nissan accounted for 18 percent of Tochigi's sales of about $260 million in 2001. GKN has an option to buy up to 50.4 percent of Tochigi by 2007.
Tochigi offers GKN complementary technology, a spokesman said. The companies will cooperate on future global driveline opportunities.