TOLEDO, Ohio - Like other troubled U.S. auto suppliers, Dana Corp. plans to fix its ailing North American business by moving more operations out of the country.
CEO Mike Burns is touting that strategy as a crucial part of his effort to restructure the 100-year-old supplier of drivelines, chassis and truck components.
On March 3, Dana filed for Chapter 11 bankruptcy reorganization of its U.S. businesses.
Key elements of the restructuring were approved in U.S. Bankruptcy Court in New York on Wednesday, March 29 - including $1.45 billion in reorganization financing.
Dana depends heavily on the traditional U.S. automakers. Forty-three percent of its revenue comes from Ford Motor Co., General Motors and the Chrysler group.
The supplier also does considerable business with transplant automakers and heavy-truck manufacturers.
The company's plan to shift more operations to low-cost countries is part of a trend among large and troubled U.S. auto suppliers.
Visteon Corp. and Delphi Corp. are doing the same. For years GM has encouraged suppliers to make such moves.
Burns has plenty of experience outside the United States, having run General Motors Europe for six years before joining Dana in 2004.
He says 70 percent of Dana's new business is outside North America.
"Today, we're like in the high 60s (percent) in North American content, and you know it would feel pretty good as kind of an interim goal to have about half of your business outside North America," he said in a March 23 interview with Automotive News. "You have to have a footprint that allows you to be competitive."
Earlier that week, Burns and his top executives met with Dana's financiers to sell the plan, which calls for decreasing the company's dependence on Big 3 customers and moving more work to low-cost countries.
Dana is ramping up operations in Mexico. It recently bought out a joint-venture partner to take control of five axle, driveshaft, forging and foundry operations and gain more capacity.
Dana also wants to "utilize growing low-cost capability in China, India, eastern Europe and South America," according to a presentation given to the company's bankers.
Before its slide into Chapter 11, Dana last fall announced several restructuring moves.
For example, it sold off its fluids and pumps business and consolidated five U.S. plants into two. It also said it would move a driveshaft operation in Bristol, Va., and a steering shaft operation in Lima, Ohio, to Mexico.
Organized labor exposure
About 38 percent of Dana's U.S. work force of 19,000 is represented by the UAW and other unions, Burns said. According to the UAW, Dana operates 16 plants employing about 4,500 UAW workers.
Altogether, Dana has about 142 plants and other operations in North America and 254 globally - and about 44,000 employees worldwide. It listed 17 operations in Asia in 2004.