Dana Corp. says it hopes to emerge from bankruptcy within 18 months. The Toledo, Ohio-based company filed for bankruptcy protection earlier this month because of rising energy costs that drove up production costs
and hurt demand for its customers' products.
A meeting with creditors was to determine who would sit on a creditors' committee to oversee how the company manages its bankruptcy.
"Dana's management indicated to its employees that the typical Chapter 11 bankruptcy takes at least 18 months for a company to reorganize and re-emerge. Some take longer. Dana hopes to be on the shorter end of that timetable, but cannot make a projection," company spokesman Fredric Spar told The Associated Press.
Speaking to a crowded room of creditors and their attorneys, Dana's chief executive, Michael Burns, assured creditors there have been no disruptions for customers related to Dana's bankruptcy. He told creditors diversification of Dana's customer base has become very important.
"Dana has been historically very much tied to the Big Three. That's changing now" with customers like Toyota Motor Corp. and Nissan Motor Co., Burns said.
Burns told creditors that a jump in steel prices, a drop in SUV sales and higher energy costs pushed the company into bankruptcy. He said that the downturn in the auto parts industry has made it tougher for the company to borrow money outside of bankruptcy.
"This is the right thing for the company to do," Burns said of Dana's petition for bankruptcy protection.