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Posted: 3/3/2006 9:59:24 AM EDT
Hits keep coming for the US auto industry

news.yahoo.com/s/nm/20060303/bs_nm/autos_dana_dc

CHICAGO (Reuters) - Auto and truck parts maker Dana Corp. (NYSE:DCN - news) said on Friday that its U.S. operations have filed for bankruptcy protection, succumbing to declining production at large U.S. customers and high materials costs.

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Dana, the first large U.S. auto parts maker to file for Chapter 11 protection from creditors in 2006, cited general industry financial deterioration and its inability to renew or expand credit facilities in a timely matter.

The filing covers Dana and 40 U.S. subsidiaries. It excludes Dana's European, South American, Asia-Pacific, Canadian and Mexican subsidiaries, which are operating as normal, Dana said.

Dana has run into numerous rough spots in the past year beyond raw materials costs and declining market share at key North American customers Ford Motor Co. (NYSE:F - news) and General Motors Corp. (NYSE:GM - news)

The bankruptcy adds to a long list of U.S. auto parts makers that have turned to the courts to aid reorganizations in the past two years, including Delphi Corp. (Other OTC:DPHIQ - news), Collins & Aikman Corp. (Other OTC:CKCRQ - news) and Tower Automotive Inc. (Other OTC:TWRAQ - news)

The filing did not surprise industry analysts. Dana, which was in talks with lenders on financing alternatives, on Wednesday announced it had failed to make $21 million of bond interest payments.

David Cole, chairman of the Center for Automotive Research, said a restructuring likely would take at least one year and possibly several, though it shouldn't have a great deal of impact on automakers.

"The whole purpose is to enable the company to restructure to a point where they are once again profitable," Cole said.

Dana shares were down 26 cents, or 25.5 percent, to $0.67 on the New York Stock Exchange in early afternoon trading.

OCTOBER RESTRUCTURING PLAN TO CONTINUE

The company last October announced plans to cut jobs, plants and noncore business and shift some production to lower-cost areas to focus its operations, something that will continue under the Chapter 11 reorganization, it said.

The company was forced to restate financial statements back several years due to accounting problems, which also delayed the filing of quarterly results, and led to a formal U.S. Securities and Exchange Commission investigation.

Dana posted losses totaling $1.23 billion through the first nine months of 2005, and had postponed a decision on whether to issue a first quarter 2006 dividend until it completes its fourth-quarter and full-year 2005 financial reports.

Dana, a producer of frames, axles and driveshafts, was founded in 1904 as the Spicer Universal Joint Manufacturing Co. It had revenue of $9.1 billion in 2004, its last full year of reported results, and about 46,000 employees worldwide.

Roughly three-quarters of its 2004 sales were derived from automotive systems sales and the rest from truck products.

Dana reported total assets of $7.9 billion and liabilities of $4.7 billion, on a consolidated basis, as of September 30.

Jones Day is Dana's legal adviser, Miller Buckfire is its financial adviser and AlixPartners is its restructuring adviser.

Toledo, Ohio-based Dana said it has secured $1.45 billion of debtor-in-possession financing from Citigroup, Bank of America, and JP Morgan Chase Bank for the restructuring, pending approval of the New York bankruptcy court.

Dana said the DIP facility replaces a previous $400 million revolving credit facility and $275 million receivables securitization facility.

(Additional reporting by Jui Chakravorty in Detroit)

Link Posted: 3/3/2006 10:05:27 AM EDT
Yep.

You'd think the Auto industry would learn
to be efficient, and, produce a superior
product.

But, then...Why should they?

Nothing in it for them, after all.
Link Posted: 3/3/2006 10:11:44 AM EDT
Wunnerfull...part of Danas' Eaton Axle Division is here in my town. More unemployment...whoopeee
Link Posted: 3/3/2006 10:16:51 AM EDT
That is most unfortunate. The car companies are blaming the unions & high health care, but I think the corp leaders should also bear some of the blame. The corp leaders response to competition was to cede market share, after awhile there will be no more market share to cede because you're going out of buiness.

As of now the only money money division for GM is their finance arm GMAC, and many finance people are advocating that the GM split of GMAC to realize greater shareholder value, of couse GM the car companie will go bankrupt.
Link Posted: 3/3/2006 10:21:15 AM EDT

Originally Posted By warlord:
That is most unfortunate. The car companies are blaming the unions & high health care, but I think the corp leaders should also bear some of the blame. The corp leaders response to competition was to cede market share, after awhile there will be no more market share to cede because you're going out of buiness.

As of now the only money money division for GM is their finance arm GMAC, and many finance people are advocating that the GM split of GMAC to realize greater shareholder value, of couse GM the car companie will go bankrupt.




Takes two to tango. Retired 20 year union guy here.
They steal at the top, they steal at the bottom. Damn shame
Link Posted: 3/3/2006 10:21:33 AM EDT
NO !!! Blame the Japanese automakers !!!
How dare they make quality cars that people actually want !!
Link Posted: 3/3/2006 10:23:39 AM EDT
oops
the dana plant here in town employs a lot of folks
Link Posted: 3/3/2006 10:26:36 AM EDT
[Last Edit: 3/3/2006 10:28:17 AM EDT by warlord]

Originally Posted By MTUSA:

Originally Posted By warlord:
That is most unfortunate. The car companies are blaming the unions & high health care, but I think the corp leaders should also bear some of the blame. The corp leaders response to competition was to cede market share, after awhile there will be no more market share to cede because you're going out of buiness.

As of now the only money money division for GM is their finance arm GMAC, and many finance people are advocating that the GM split of GMAC to realize greater shareholder value, of couse GM the car companie will go bankrupt.




Takes two to tango. Retired 20 year union guy here.
They steal at the top, they steal at the bottom. Damn shame


Yep, John DeLorean before he died was really concerned about his former employer's distress. I think the problem is that many of the corp leaders are actually finance people(aka bean coutners) and not engineers, John DeLorean was an engineer, and he had the vision where he wanted to the company to go. The current crop of corp leaders wants to make money, but there goal should be to make cars that someone wants.

Unfortunately the suppliers don't have much control over GM, Ford etc.
Link Posted: 3/3/2006 10:30:26 AM EDT
so no more Dana 44 axles? who is gonna be the top dog next?
Link Posted: 3/3/2006 10:32:51 AM EDT

Originally Posted By Stormtrooper:
so no more Dana 44 axles? who is gonna be the top dog next?


I think there will still be available, but it will probably be made in the PRC.

The Big 3 have squeezed their suppliers so much, that they can no longer continue operating as they did before.
Link Posted: 3/3/2006 10:37:00 AM EDT
67 cents a share? Guess I'll by a hundred of so just for the heck of it. It'll go back up when an overseas company buys them.
Link Posted: 3/3/2006 11:12:22 AM EDT
China to U.S.: all your manufactuing are belong to us.
Link Posted: 3/3/2006 12:58:59 PM EDT
Until we start hitting imports with tariffs this will be the norm . It is my [ admittedly limited ] understanding that most of our trading 'partners' charge high tariffs on US made goods, why shouldn't we be doing the same on theirs ?

rj
Link Posted: 3/3/2006 1:02:35 PM EDT
When everybody from the top down is stealing as much as they can from a company, that company is doomed.

Americans are way too greedy.
Link Posted: 3/3/2006 1:06:36 PM EDT
Link Posted: 3/3/2006 1:12:44 PM EDT

Originally Posted By The_Beer_Slayer:
how much of a bonus will ford/chevy/chrysler CEO's be getting this year?


That's exactly what I'm getting at.
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