Dana CEO: Auto supplier poised to thrive in EV era

MAUMEE, Ohio — How do you make sure a 118-year-old auto supplier survives and thrives in the electric vehicle era?

That's the question James Kamsickas is pondering as CEO of Dana Inc., the U.S. producer of axles, driveshafts, gaskets, electrodynamics and other vehicle components.

But it's a question he is confident Dana will answer in the years to come.

Already, the company has invested $500 million to produce complete e-propulsion systems in-house, with a goal of investing more than $1 billion by 2025. The company has more than 1,200 patents granted or pending related to electrification.

Dana expects to not only maintain its position during the shift to EVs, but to benefit from the change.

Kamsickas points to a strategy Dana adopted in 2016, shortly after he joined the company, that called for it to be "energy-source agnostic" — able to provide systems for automakers regardless of how the vehicles Dana supplies are powered.

"It basically says, we don't really care if it's an internal combustion engine or a full electric system. We're going to be ready," Kamsickas said.

He spoke with Staff Reporter John Irwin at the company's Ohio headquarters. Here are edited excerpts.

Q: As electrification speeds up its pace worldwide, how will Dana's product mix evolve?

A: System integration capabilities are where you create value for your customer. Just having bits and pieces — how does that get you any differentiation? It doesn't. That's why we built the company the way we did. It gets back to the idea of, wherever the pull-through market is, we'll be there.

The first [electric vehicle] market that came was the bus market. We were ready. The next market that came was largely underground mining. We were ready. The next market was last-mile delivery. We were ready.

As each one pulls through, we'll use synergies across our company and have the product based on the size of the motor and the capabilities of the inverter and our overall scaling of our systems capability.

We have 16 electrification technical centers. We've established that. We're creating value for customers. They'll pick their spots with us, and we'll pick our spots with them.

How will Dana's manufacturing footprint evolve during this change?

At the end of the day, manufacturing is still manufacturing. The core fundamentals of your operating system, your quality system, your material planning and logistics systems — those don't change, no matter the product you're making.

We're still going to build where we sell. Cost will still be king as it relates to our competitors. You're going to be in the same area code when you're doing full three-in-one axle systems and so forth. You don't have the luxury of shipping those things around the world.

What is the company's acquisitions strategy moving forward?

From an acquisitions perspective, we've pretty much filled out the full suite.

But you have to have people who have a unique skill set, who understand they need to be electrical engineers and have worked with electric vehicles in the past. That was really our overarching strategy — not to go out and get a full suite of low-voltage motors and inverters and high-voltage motors and all that stuff. It was really to get the people who have been putting those vehicles on the road.

It comes back to acquiring people first and foremost. Technology moves at such lightning speed anyway. If you're buying something for today's motor, charger or converter, you're going to die. It's really about the people.

Many are saying that the supplier challenges of the past two years have underscored the need for greater visibility into supply chains. How has Dana addressed this?

This schedule turbulence is unprecedented. It's no one's fault. It's just what it is. But it's been a challenge every day.

The silver lining is that a crisis is a terrible thing to waste. To be able to understand our integrated supply base, we all had to get exponentially better. I think everybody is in a better position than we were before, including Dana.

If you're going to have regions where it's going to be difficult to get product out, or there's a capacity issue because you're in competition with the computer industry, there will always be unknowns.

But we do a lot of things right that we don't give ourselves credit for. Especially the OEMs' strategic, planning and logistics people — they manage the value chain as well as any industry on the planet.