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As an executive with BorgWarner, Roger Wood once looked to fellow auto parts supplier Dana Holding Corp. as a benchmark of success.
“Dana was the company that everybody aspired to be. I remember that, and that's one of the reasons I'm here,” Mr. Wood, now the chief executive officer of Dana, said Monday. “I remember those days when we used to look at Dana and say, ‘We want to be just like that.’”
But the last decade wasn't kind to Dana. The company weathered a takeover bid, suffered through a bankruptcy filing, and dealt with a tumultuous string of leadership changes. Mr. Wood was lured away from BorgWarner to take over Dana’s reins in early 2011.
Though there's still a way to go to get Dana where it was in the early 1990s as the pinnacle of the industry, Mr. Wood told the Toledo Rotary Club that the Maumee firm is on its way back.
Dana sells a variety of components to manufacturers of light vehicles, commercial trucks, and construction equipment the world over. In 2013, the company's parts are found in the North American car and truck of the year, as well as six of the 10 best engines recognized by Wards. Known best for its driveline parts, such as axles and driveshafts, Dana also markets sealing and thermal-management technologies.
The company reported sales of $7.2 billion last year, but weakness in several areas of the market weighed on Dana this year. The company's third quarter results, reported last week, were not as good as expected. Following that, Dana slashed its 2013 sales expectation to $6.7 billion.
“While our company did great in terms of performance on the level of sales we had, the sales weren't where we anticipated they would be,” Mr. Wood said in an interview after his presentation.
The company had expected some growth in the commercial truck market, but sales have been essentially flat this year. Weakened demand in mining and construction has also hurt the company. Solid sales of passenger cars and trucks in North America have helped provide some stability for the company.
Ford Motor Co. remains Dana's largest customer, representing 19 percent of Dana's sales. Chrysler Group LLC is second at 9 percent.
“While our guys are doing a great job at managing the business within the volatility, it would be nice if the volatility would start to swing up a little bit, like the light vehicle [segment] has,” Mr. Wood said.
Mr. Wood said Dana expects the mining industries to remain down for the time being. He's cautiously hopeful that production of commercial trucks may pick up next year.
“We think that it could, and our customers think that it will begin to pick up next year. I think it has everything to do with where the economy in general goes. As you know, there's still some confusion and concern with what's happening in Washington, and I think the people that buy the large fleets are a little nervous to actually execute their orders given the concerns they're seeing happening,” he said.
Shares of Dana's stock were sent tumbling last week following the announcement of its third quarter results. The day the results were out, Dana's stock price fell nearly 15 percent.
Though Dana missed analysts' expectations in the third quarter, Mr. Wood the company was still praised for doing what it did in a less-than-ideal environment. Mr. Wood said investors with whom he has spoken have indicated their concerns are over what 2014 may look like in light of weakness at the end of 2013.
“From our perspective, there will be a time when this thing comes up,” he said. “ It's just not when we thought it was originally going to be at the end of 2013. It could be the beginning of 2014. Could be the end of 2014. But it was the inability for me to declare when that might be that made people nervous.”
Dana hasn't yet given any guidance for 2014, but Mr. Wood said many investors have presumed that based on the third quarter results and fourth quarter expectations that the year could be flat.
“People will start buying trucks at a higher rate. I just don't know when. But I'm sure it will happen,” he said. “Mining will come back. It will. I just don't know when. It's that lack of ability to predict when that made people a little nervous that 2014 could be a relatively flat year.”
In spite of the losses last week, shares of Dana's stock are up 21 percent this year through Monday.
Contact Tyrel Linkhorn at email@example.com or 419-724-6134.