Q: What's good about Dana's stock price? A: A share of Dana stock makes a dandy gift for under $5.
A: A share of Dana stock makes a dandy gift for under $5.
Now that Dana stock is trading in the $4 to $4.50 range, Chip McClure must be thankful that Dana's problems aren't his.
Larry Yost would have had it otherwise.
Yost, who preceded McClure as CEO of ArvinMeritor, coveted Dana Corp. Yost envisioned a giant supplier with $15 billion in sales, so he launched a hostile takeover attempt in mid-2003.
But Dana CEO Joe Magliochetti resisted. And a couple of months after Joe Mag's untimely death that September, Yost threw in the towel.
The ante got to $18 a share.
It was just about two years ago that Mike Burns left General Motors to become Dana's CEO. At first, everything looked pretty good.
Dana sold its aftermarket business for nearly $1 billion. It wasn't quite as much as the board had hoped, but it's half again as much as Dana's market capitalization.
In early 2004, the stock price tiptoed past $20 a share. It even briefly touched $23, which was a long way from the $50 a share it had fetched a decade earlier.
But times change.
By midyear, the $20 level slipped away. Since then, the price has trended downward.
The auto sector in general has been hit pretty hard because of the declining market share and profits of the two biggest players, GM and Ford Motor Co., plus the bankruptcy of several suppliers, including Delphi Corp.
And don't forget the spike in energy costs.
But Dana had other issues last year, such as slashing its quarterly dividend from 12 cents to a penny, having its debt rating downgraded by Fitch, and the humiliating need to restate its earnings for a couple of years because of errors.
Last week, the Toledo-based supplier reported a third-quarter loss of $1.27 billion and the stock price took another tumble.
Management is trying to overcome the adversities by cutting costs, realigning Dana's ventures and trying to shore up the heavy-truck business.
Wall Street isn't sold on a quick recovery.
But with Dana's total market cap at about $660 million, you wonder if somebody else might be.
You may e-mail Edward Lapham at [email protected]