Dana Corp. ended its third quarter in the red, and is bracing for tougher times to come.

The company posted a net loss of $8 million before non-recurring items on sales of $2.4 billion. This compares to a $61 million profit in third quarter 2000 on sales of $2.9 billion. After non-recurring items, Dana had a $13 million profit versus a $29 million profit a year ago.
“While global economic conditions had already shown signs of weakening, given the events following Sept. 11, we now face the prospect of a further significant decline in our markets,” said Chairman and CEO Joe Magliochetti. “These extraordinary circumstances necessitate extraordinary actions to secure the long-term competitive position of the company.”
The company said it will accelerate previously announced restructuring plans, including a 15% reduction of its global workforce. It will initiate a series of plant closures and consolidations in addition to continued exploration of “strategic opportunities” involving its Engine Management, Engine Products, Industrial Fluid and Quinton-Hazell European aftermarket component manufacturing operations. It will accelerate the outsourcing of non-core manufacturing and processing as part of a program to reduce assets and costs. And it will sell its profitable Dana Commercial Credit Corp., which offers finance/lease services to a broad range of industries.
Given the expected duration of the downturn, “we now believe that DCC’s very successful business will be better served as part of a different corporate structure,” said Magliochetti. “As the same time, this will allow Dana to increase its focus on its foundation business.”
Dana’s Commercial Vehicle Systems Group had a net loss of $3 million on sales of $259 million for the quarter. For the same period last year, the group had an $8 million profit on sales of $346 million. Dana’s Automotive Systems Group had a $9 million profit on sales of $831 billion versus $33 million on $1.06 billion a year ago. The Automotive Aftermarket Group posted a $6 million net loss on $639 million compared to a $1 million loss on $681 million a year ago. The Engine Systems Group lost $10 million on $273 million compared to a net profit of $7 million on $321 million. The Fluid Systems Group had a $4 milll net profit on $237 million versus $6 million on $266 million last year. The Off-Highway Systems Group lost $1 million on sales of $141 million versus a $3 million profit on $178 million last year.
“While we entered the third quarter believing we were at or near the bottom of the current cycle, recent events have significantly changed our markets - and our world - making it increasingly difficult to predict even near-term conditions with precision,” said Magliochetti. “In general, we believe the balance of 2001 will be extremely soft. Looking further ahead, indications are that 2002 production of both light vehicles and commercial vehicles may be significantly lower than 2001 levels.”