Dana Corporation Announces Outsourcing of Grey Iron Castings

Muskegon, Michigan, Foundry to Close

TOLEDO, Ohio, Dec. 22 -- Dana Corporation today announced it has signed a long-term agreement with Federal- Mogul Corporation to supply Dana with grey iron castings from its western Michigan facility. Grey iron castings are used in the manufacture of piston rings.

Consequently, Dana will close its Muskegon, Mich., foundry operations. Production is expected to end in the third quarter of 2005, eliminating approximately 240 jobs. This action will result in an after-tax charge of approximately $12 million, of which $11 million will be recorded in the fourth quarter of 2004.

"This decision was necessary due to the excess capacity for grey iron piston ring castings," said Mike Laisure, president of Dana's Automotive Systems Group. "Our foundry is severely underutilized and no longer a viable operation. This action will strengthen our overall competitiveness.

"Affected Dana employees will receive outplacement training and separation benefits. We will do everything possible to support our people in their search for new employment," he added.

Dana Corporation is a global leader in the design, engineering, and manufacture of value-added products and systems for automotive, commercial, and off-highway vehicles. Delivering on a century of innovation, the company employs approximately 45,000 people worldwide dedicated to advancing the science of mobility. Founded in 1904 and based in Toledo, Ohio, Dana operates technology, manufacturing, and customer-service facilities in 30 countries. Sales from continuing operations totaled $7.9 billion in 2003.