AHOSTILE bid by a Michigan firm to take over Dana Corp., one of Toledo's few remaining Fortune 500 companies, is reminiscent of the 1980s era of cowboy capitalism. This region lost five of its major companies and another firm had to be drastically reorganized to stave off oblivion.
Change is part of life in a dog-eat-dog business world. Over two painful decades of decline, Toledo has painfully learned to live with it and adjust its economic sights. Typically, in these piratical raids on companies, the target of an acquisition is dismembered, its units sold off or folded into other operations, lives are disrupted, and communities face massive economic headaches.
For a while the merger mania was in check, because the results of these economic shotgun marriages proved in many cases to be less than successful. The last Michigan company that barged into town purchased Seaway Food Town and ran a deeply rooted local firm into the ground in short order. Spartan left town, licking its wounds, unlike Wickes Corp., which, after its 1986 takeover bid for Owens Corning was aborted, walked away with a $9.4 million profit on the OC shares it had accumulated.
On the face of it, the ArvinMeritor bid for Dana is not a marriage made in business heaven. Dana is No. 182 on the Fortune 500 list, and the Michigan firm is No. 266. The key issue could be corporate debt. The company would have $5.9 billion in combined debt as well as an estimated $3.3 billion in underfunded pension and other retirement liabilities. That's a heavy anchor to be dragging in uncertain economic times.
Mayor Jack Ford is correct in his comment about the takeover bid: “It's our prestige as a city that's also on the line.” Unfortunately, in the macro-economic sense there is little the city can do if another wave of predatory mergers is under way. It can expect scant sympathy from the big-business-oriented Republican administration in Washington.
To be realistic, there is no indication that people from other parts of the country are lining up to come to live and work here. Much more could be done to provide the amenities that do attract favorable attention. The Blade has been criticized as being too negative, even though most thoughtful observers would agree with our contention that the region needs a strong infusion of high-tech and knowledge-based industry to diversify its largely heavy-manufacturing base.
After all we've been through, the priority remains to make the city, and particularly the downtown, a more attractive place to live and work. There must be more attractions for young professionals who would like to remain in the region as well as those who might be recruited to come here in the future.
For that reason, we have long advocated a downtown health club and pool facility as both a symbol of urban renaissance and a practical amenity. Likewise, the riverfront, both west and east, must continue to be made more attractive. One should be able to hike or bike along pathways designed for such activities. Why not a downtown Metropark on the riverfront for these activities; it is not really that impossible a dream.
To some extent, this community has had a “it was good enough for father” outlook, and that must change. Given the way big business operates these days, though, the world won't wait on Toledo. This region will have to meet the challenge head on.
Retention of Dana as a major player in the Toledo economy is crucial. We are all proud of Dana's heritage and should not be content to passively watch it go down the tube.
Nothing about the ArvinMeritor takeover bid will benefit worldwide stockholders, employees, or the Toledo area. We urge Dana's management to carry the fight to the enemy and to make a counter offer to take over the competitor.
Washington and Columbus must get into the act, too. The right questions asked by agencies, senators, and congressmen would derail this whole greedy plan.
The street runs both ways. Dana is by far the stronger of the two companies. We will welcome the “best and brightest” of ArvinMeritor when they are required to move to Toledo. It's a better place to do business than Troy, Mich., ever could be.