Dana Commercial Credit Corp. financed the $1 million lighting retrofit at the Statue of Liberty and Ellis Island four years ago.
It has financed dozens of hotels in four countries for France's Accor SA, one of the world's largest hoteliers.
And the Dana Corp. subsidiary, headquartered on the Toledo parent company's Dorr Street campus, manages thousands of leases for one-hour photo-processing equipment in stores nationwide.
Started with a $2 million equity investment in 1980, the subsidiary has grown to have assets valued at $2.5 billion. Dana Credit has profitably been involved in various real estate ventures and in leasing of goods including factory forklifts, office computers, and even power plants.
But now the unit of the city's largest corporation is on the sales block. Dana, one of the nation's largest automotive parts suppliers with more than $12 billion in sales, is trimming costs and restructuring, and with that, shedding the financial services and leasing operation.
The unit has about 75 jobs at its Toledo headquarters, a five-year-old Monticello-inspired building, and most of the rest of its 185 employees are in Maumee offices.
A buyer isn't likely to move Dana Credit from Toledo, especially because the operations depend on its employees, many of whom aren't likely to move, said Ed Shultz, the 35-year Dana man who started the subsidiary.
“We've seen a lot of interest, and we're sort of homing in on some people who might be very interested in us,” said Mr. Shultz, the subsidiary's chairman and chief executive. He supports the sale.
Analysts have long encouraged Dana to sell the unit, despite its stable earnings. The only leasing company to win the prestigious Malcolm Baldrige National Quality Award, Dana Credit had $35 million in profits last year from $324 million in revenues.
But the parent company's low credit rating since the economy softened has hampered Dana Credit's ability to get needed capital, making the sale more pressing.
“It has restricted our ability to continue to do business,” Mr. Shultz said. “We don't know how long the current downturn in Dana is going to last, but we think that the franchise is extremely valuable.”
Through the first nine months of this year, the subsidiary has had a profit of $17 million, down 39 percent from the same period last year. The profit dropped 29 percent to $5 million in the third quarter from the same period last year.
How much the unit will bring and who buys it are uncertain. General Electric Capital Corp. of Stamford, Conn., would be a likely candidate, some industry observers said.
Dana Credit could be sold in pieces, although Mr. Shultz said he is hopeful the company and its interrelated business lines will stay intact. Some assets may be sold before the end of March, but the entire operation's sale is not likely to occur until at least next summer, he said.
The company won't be subject to a fire sale, said Brett Hoselton, an analyst with McDonald Investments in Cleveland. Dana has ample financial resources, so it doesn't have to sell the subsidiary to stay in business, he said.
And, unlike other auto suppliers in the midst of restructuring, Dana doesn't have the added burden of finding a firm interested in and capable of buying the operation, mainly because the subsidiary isn't involved in the troubled auto industry, he said.
Dana, a Fortune 500 firm, wants cash from the sale to help decrease its debt, but officials need to make sure they get enough for the prized asset, said Efraim Levy, an equity analyst with S&P Equity Group in New York. “If they can't get the price they want, then they better back away from the deal,” he said.
Originally named Potomac Leasing, Dana Credit focused on leasing and buying non-core assets needed by Dana. Nine years later, the renamed subsidiary reached the $1 billion asset mark by adding the leasing of office equipment, satellite transponders, and other goods and the financing of projects such as a coal-fired power plant to its expanding portfolio.
Still, the subsidiary has kept close ties to Dana. It developed a program around the auto supplier's factory in Dry Ridge, Ky., a $22 million project for which Dana Credit found the site, negotiated incentives, managed construction, and leased the facility.
But most of the unit's clients are a far cry from Dana.
For example, the unit was the equity investor and used cross-border financing techniques for a $50 million frozen foods distribution center in North Warwickshire, England, and it provided development equity for a $22.5 million shopping center in Simi Valley, Calif.
Through the years, Dana Credit has expanded globally, formed partnerships, and made acquisitions.
Three years ago, it sold its technology-leasing group, which provided microcomputers mostly to small and mid-sized European and U.S. businesses, for an after-tax gain of about $80 million.
First Published December 15, 2001, 3:44 p.m.