Dana Corp. was riding high four years ago before an industry downturn, a massive, companywide restructuring that slashed 26,000 jobs, a Michigan rival's hostile takeover attempt, and the sudden death of its chief executive.
Now, with its 100th birthday coming on Thursday, the Fortune 500 firm - Toledo's largest - powers on.
"My view is it really made Dana a stronger company," said Glen Hiner, chairman of Dana's board and retired head of Toledo's Owens Corning. "I think the second century is going to be even better than the first."
Automakers and other customers are interested in helping ensure Dana remains an independent supplier, as long as it does not interfere with their own profitability, said Mike Burns, Dana's newly hired chief executive and president.
"There's a lot of energy around wanting Dana to survive," he said, adding that cost cutting remains a major focus of the company.
Dana makes parts for sport-utility vehicles, pickups, cars, and even heavy-duty commercial trucks that generally only mechanics see: axles, driveshafts, brakes, piston rings, filters, and heat exchangers, among others. It also makes parts for farm tractors, construction machinery, and other off-highway equipment.
Its future, and its centennial celebration, were in doubt last year when ArvinMeritor, Inc., made an unsolicited takeover bid to Dana shareholders. The offer was likely driven by Dana's depressed stock price, which had faltered from more than $50 a share in 1999 to about $7 a share, both because of a slumping stock market and the benefits of its restructuring measures had not emerged.
Amid the takeover effort, which the Dana board repeatedly rejected and shareholders largely shunned, then-Chairman and CEO Joe Magliochetti died.
But about the time ArvinMeritor finally gave up, Dana opened a new technology center in suburban Toledo, a symbol of innovation and of confidence in its future - and a project that brought hundreds of high-paying jobs to the local economy. Dana has long put stock in technology, as evidenced by its trademarked centennial slogan: "One Hundred Years. Millions of Ideas."
This year, the company expects to finish its restructuring and shutter the remaining four of 39 factories slated for closure or consolidation. The firm also plans to sell the bulk of its replacement-parts business.
Those moves are expected to shed 15,000 jobs, slicing the worldwide count to 44,000, or about half the employees with which Dana started this century. Selling the replacement-parts business will strip a quarter of Dana's sales, or $2.2 billion of Dana's $10.1 billion sales last year, down from a record high of nearly $13.2 billion in 1999.
Analyst Joseph Phillippi said Dana is continuing to make progress with its restructuring. But, he said, it isn't yet clear what direction will be taken by Mr. Burns, the new Dana leader who spent 34 years at General Motors Corp.
Automakers, Mr. Phillippi said, will continue to put pricing pressures on suppliers, an inevitability Dana acknowledges. Dana has some advantages, though, because automakers want the technology the company has developed, said the president of AutoTrends Consulting in Short Hills, N.J.
To help meet automakers' intense price-cut demands, Dana has farmed out some business it used to handle. For example, a Mexican partner, Spicer SA, is making $140 million worth of axle components that the northwest Ohio firm used to produce.
David Siino, an analyst with Gabelli & Co. Inc. of Rye, N.Y., said dumping the struggling replacement-part business will help Dana in the long run.
"It's the right move to move on," he said. The unit includes operations from the former Echlin, Inc., a $3.9 billion acquisition in 1998 that executives said would make Dana less dependent on supplying parts to manufacturers. Analysts had questioned the purchase and now applaud the planned sale.
"For a variety of reasons, it just didn't work out," Mr. Siino said.
A key piece of Dana's growth could come in its hometown. Neither the company nor DaimlerChrysler AG will confirm negotiations, but the parts supplier is reportedly in the running for operating a factory to deliver a completed chassis to the Toledo Jeep Assembly Plant as part of an upcoming $2.1 billion expansion.
Chrysler accounted for 10 percent of Dana's business last year, down from 14 percent the year before, and the local company likely wants to reverse that loss.
Ford Motor Co., meanwhile, is Dana's largest customer, accounting for 27 percent of its business last year. Dana's relationship with Ford can be traced to 1921, and worldwide the supplier is now one of the automaker's 10 largest, making parts or components for every vehicle line it builds, a Ford spokesman said.
Dana's Mr. Burns said he wants to increase sales with all automakers, including GM. The world's largest automaker accounted for less than 10 percent of Dana's sales last year.
"Clearly, I'd like more business with General Motors," said the former GM executive, who began his new job March 1.
Dana, whose world headquarters are on Dorr Street, will be better able to concentrate on supplying automakers if it sheds the unit selling replacement parts for repair shops and auto stores, Mr. Hiner said.
"We believe the sharper our focus, the better our future," he said.
What Dana will do with the proceeds from such a sale is undecided, but it could include buying other companies that make products in line with existing offerings, Mr. Burns said.
It makes sense for Dana to concentrate resources on companies that build vehicles, both in North America and promising markets such as China, said Mr. Phillippi, the analyst.
Dana's commercial truck business, the first to encounter problems four years ago, is showing signs of a rebound. Heavy-truck orders in the first two months of this year indicate a "very strong year," which is good for Dana and somewhat of a bellwether of the economy, Dana officials and analysts said.
Such improving prospects, and a corresponding improvement in the firm's stock price, are keys to thwarting future hostile takeover attempts, Mr. Burns said.
Its stock closed Friday at $18.61 a share on the New York Stock Exchange.
"That's the biggest defense against something like that," he said.
Contact Julie M. McKinnon at: email@example.com or 419-724-6087.
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