NEW YORK -- Dana Corp., a struggling auto and truck parts maker, on Tuesday said it plans to dissolve a joint venture with Mexico's DESC SA de CV and take full ownership of five factories.
In dissolving Spicer SA de CV, Dana will take over axle and driveshaft factories, as well as forging and foundry operations in which it has an indirect 49 percent stake. DESC will take over transmission and aftermarket gasket operations in which it has a 51 percent stake.
Mike Burns, Dana's chief executive, in a statement said the transactions will help Dana become more efficient, and strengthen its "core" axle and driveshaft businesses.
Toledo, Ohio-based Dana last month said it plans to sell its engine hard parts, fluid products and pump products units, and focus on light and heavy vehicle drivetrain products, structures, sealing and thermal products. The units being sold employ 9,800 people, or 21 percent of Dana's total, and had about $1.3 billion of sales in 2004, or 14 percent.
Dana and other parts suppliers, such as Delphi Corp., have struggled amid pricing pressure from automakers, rising raw materials costs and lowered production at Ford Motor Co. and General Motors. Delphi filed for bankruptcy protection on Oct. 8.
Under the transactions announced on Tuesday, Dana will take over five manufacturing facilities in Mexico with annual sales of $290 million. DESC will take over three operations in Mexico and one, Transmission Technologies Corp., that operates in Knoxville, Tennessee.
The transactions are expected to be completed in the first quarter of 2006, pending the signing of a definitive agreement, approval by Dana's board of directors and regulatory approvals.