Article published November 04, 2008
Dana CEO to leave post, was on job for 6 months
Change at top job is 3rd in 9 months
By GARY T. PAKULSKI
BLADE BUSINESS WRITER
The chief executive officer of struggling Dana Holding Corp. is resigning after six months in the job.
Gary Convis will be replaced Jan. 1 by John Devine, executive chairman. Officials of the Toledo auto parts producer announced the changes yesterday.
Mr. Convis will remain at the Fortune 500 company as vice chairman and focus on developing customer relations and manufacturing quality, officials said in a written statement. Dana, an auto parts manufacturer that emerged from Chapter 11 bankruptcy protection on Feb. 1, is Toledo's largest corporation with $8.7 billion in annual sales.
The decision marks the third change in CEOs for Dana in the last nine month.
Mr. Convis, who is 65 and a former executive for Toyota Motor Corp., informed the company that he would leave Dana's top job shortly after the board of directors named him to become vice chairman, according to a company filing with the U.S. Securities & Exchange Commission. Board members took the action Friday.
The move to make Mr. Convis vice chairman was somewhat unusual in that company CEOs more typically serve as chairman, starting either upon appointment or after a brief period.But company spokesman Chuck Hartlage said that played no role in Mr. Convis' decision to resign. Neither Mr. Devine nor Mr. Convis was available for comment, the spokesman said.
"Dana's board has been pleased with Gary's performance," Mr. Hartlage added. "Evidence lies in the fact that his contract was extended."
Both Mr. Convis and Mr. Devine agreed to stay at least until the end of 2009.
As vice chairman, Mr. Convis' base salary will be cut to $1 million from his current $1.2 million. He is eligible for a bonus of up to $1 million and stock options, and he also will receive a payment of $750,000 for agreeing to stay through next year, SEC filings show.
As chairman and CEO, Mr. Devine will receive a base salary of $1.35 million, a bonus of up to $2 million, stock options, and $1.5 million for agreeing to stay through 2009.
Executives portrayed the moves as a sharpening of leadership roles.
"We are pleased to ensure that Dana will continue to benefit from the experience and continuity that John and Gary provide, particularly against the backdrop of unprecedented industry turbulence," Steve Girsky, lead director, said in written comments.
Dana, which specializes in axles and other underbody parts, has been hit hard by the troubles at its biggest customers: Detroit's Big Three automakers. As part of cost-saving measures, the Toledo firm, which employs 35,000 people worldwide, said it would trim its work force by 3,000 positions this year.
Company shares traded for less than $2 each on the New York Stock Exchange last week. They reached a year-long high of $12.75 shortly after the shares were issued Feb. 1 when Dana exited bankruptcy after two years.
Yesterday, Dana's shares closed at $2.09 each, up 19 cents.
Dana has struggled since leaving Chapter 11. Sales rose slightly to $2.3 billion in the second quarter. But the firm recorded a loss of $140 million following a loss of $133 million in the second quarter of 2007. Results for the third quarter are scheduled to be announced Thursday.
The promotion of Mr. Devine, 63, will mark the second time he has served as CEO at the Dorr Street firm. He became interim CEO when Mike Burns resigned in February as the firm exited bankruptcy. His appointment this time is permanent, officials said. Before joining Dana, he was finance chief at General Motors Corp. from 2001 to 2006.
Mr. Convis, 65, was appointed to president and CEO in April. The selection followed his retirement last year as executive vice president of Toyota's North America operations.
Contact Gary Pakulski at:
gpakulski@theblade.com
or 419-724-6082.
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