Dana files for Ch. 11 protection in US - Europe unaffected

Toledo, Ohio - Dana Corp. and 40 of its US subsidiaries on Friday filed voluntary petitions for Chapter 11 bankruptcy protection so it can address financial and operational challenges.

Dana's European, South American, Asia-Pacific, Canadian and Mexican subsidiaries are not included in the filing and are operating as normal.

The Toledo-based automotive components supplier has secured a $1450 million debtor-in-possession financing facility from Citigroup, Bank of America NA and JP Morgan Chase Bank NA to fund its continuing operations during the restructuring.

Dana said it has faced a continued decline in revenues from the decreasing market share and production levels of its largest domestic customers, and increases in commodity and energy prices have outpaced the cost savings Dana has been able to achieve.

Michael Burns, Dana chairman and CEO, said the Chapter 11 filing "provides the company an opportunity to fix our business comprehensively - financially and operationally à We want to assure everyone - our customers, suppliers, our people and our communities - that Dana is open for business as usual."

Dana will proceed with its previously announced divestiture and restructuring plans, which include the sale of several non-core businesses - including its fluid products business - and the closure of several facilities.

In its filing, Dana listed total assets of about $7900 million and total liabilities of $4700 million. It posted sales of more than $9000 million in 2004, and ranked as the No. 23 rubber product manufacturer in the US with estimated rubber-related sales of $390 million.

Shares of the company's stock fell rapidly in the days leading up to the filing. On Thursday, the firm's stock dropped 44 percent to $1.04 amid heavy trading on the New York Stock Exchange.

From Rubber & Plastics News (A Crain publication)

Press release from Dana