DETROIT -- Dana Corp. said it expects to exit from bankruptcy in January 2008 as a bankruptcy court on Wednesday confirmed the company's plan of reorganization.
Dana, which filed for Chapter 11 reorganization in New York on March 3, 2006, said it expects to emerge from bankruptcy after the closing of its $2 billion exit financing facility.
"This is a significant milestone for Dana and all of its constituents," Dana Chairman and CEO Mike Burns said in a statement. "The approved plan provides a solid foundation for the new Dana."
During the last 21 months, Dana said it won court approval for more than $440 million in annual cost savings and revenue increases. Key to the plan were major cost savings from the company's labor contracts, which included the auto industry's first agreement for a Voluntary Employee Beneficiary Association, or VEBA, to cover retiree health care. It also includes two-tier wage plans, which pay less to new hourly hires than existing union workers.
"From the outset of this process, we said that fundamental -- not incremental -- change was critical to Dana's future success," Burns said. "I am pleased to say that we have achieved this goal due in large part to the enormous efforts of our resilient employees around the world and the talented team of advisers who have helped bring us to this point."
Dana makes a variety of axles, driveshafts and other drivetrain parts. The 103-year-old company ranks No. 20 on the Automotive News list of the top 100 global suppliers, with original-equipment automotive parts sales of $8.50 billion in 2006.
The company, based in Toledo, Ohio, has named a new board -- with several well known auto industry executives -- to take control once it emerges from bankruptcy protection. It has not yet named a chairman of the board, although Burns will remain as CEO.
Reuters contributed to this report