Dana Continues Strategic Focus on Core Businesses With Sale of Transmission Business to Affiliate
16 July 1997
Dana Continues Strategic Focus on Core Businesses With Sale of Transmission Business to Affiliate
TOLEDO, Ohio, July 16 -- In another move to further focus on
its core business units, Dana Corporation announced today that it
has reached an agreement to sell its transmission business to a unit of its
Mexican affiliate, Spicer, S.A. de C.V.
Transmisiones TSP, S.A. de C.V., a wholly-owned subsidiary of Spicer,
S.A., will purchase the business. Terms of the sale were not released. The
transaction is subject to customary regulatory approval.
"This move is another element of our strategy of focusing on the company's
core business units in order to meet or exceed corporate financial objectives
by 1/1/99," said Dana Chairman Southwood J. Morcott. "At the same time this
move should further position Spicer, S.A. with a very solid growth
opportunity."
Dana holds a 49-percent share of Spicer, S.A., an affiliate since 1964
that consists of 15 facilities and more than 5,000 people. Spicer, S.A.
operates vehicular component manufacturing and distribution facilities for the
global market. The move will make Spicer, S.A. a leading, independent
transmission manufacturer, with a full range of transmissions, from automotive
to heavy truck.
Through Transmisiones TSP, Spicer, S.A. has been manufacturing medium and
heavy-duty transmissions for nearly 25 years and has supplied Dana with full
transmission assemblies for more than 10 years. In 1994 Spicer, S.A. acquired
Tremec (Transmisiones y Equipos Mecanicos, S.A. de C.V.), a manufacturer of
light-duty transmissions, and in 1996 it purchased Borg Warner's North
American manual transmission business. The move announced today will help to
position Spicer, S.A. as a full-line transmission manufacturer, with annual
transmission sales expected to exceed $400 million.
Units of Spicer, S.A. have been awarded the prestigious Premio Nacional de
Calidad award -- the equivalent to the Malcolm Baldrige National Quality Award
in Mexico -- as well as other important quality awards, such as Quality
Supplier of the Year by General Motors Corp.; World Class Supplier by Cummins
Engine Co., Inc.; Pentastar by Chrysler Corp.; and Q1 by Ford Motor Co.
Spicer, S.A. also is QS 9000 and ISO 9000 certified and has been recognized by
the Mexican government for its commitment to the environment.
Joseph M. Magliochetti, Dana president, said, "I am pleased that we will
be able to accomplish this important strategic move for Dana in this way. We
are confident that Spicer transmission customers will benefit from the
expanded product offering of a reliable and experienced source of quality
products."
Added Morcott, "This action will continue to position Dana for a
successful future by strengthening our core businesses, while continuing to
provide Spicer transmission customers the best in service, value, and
innovation."
Dana employs approximately 400 people in its transmission facilities in
Jonesboro, Ark.; Knoxville, Tenn.; and Toledo, Ohio. 1996 transmission sales
totaled $104.3 million.
Dana plans to convert the Jonesboro facility into a manufacturing
operation for light axle components, according to Bill Hoffmann, vice
president and general manager of Dana's Spicer Axle Division. He said he
anticipates the change to result in additional jobs at that plant after
relocation of the transmission assets.
The Knoxville and Toledo-area transmission facilities will keep operating
during the transition period, which is estimated to last a year. Dana is
reviewing alternative uses of the Knoxville facility for other products.
Morcott said, "The conversion of Jonesboro to an axle facility should
provide new growth opportunities for the people currently in the transmission
division. I am proud that Dana's track record is one of long-term job growth
in the U.S."
Over the past several months, Dana has announced the sale of a number of
non-core business units, including its global vehicular clutch business; its
leaf spring manufacturing operation in Berwick, Pa.; its heavy truck
structural component operation in Reading, Pa.; its European warehouse
distribution operations; and its hydraulic cylinder operations in North
America and Europe. Additionally, Dana has initiated a significant
rationalization plan at its Perfect Circle Europe operations in France.
At the same time, Dana has taken moves to strengthen its core businesses
by agreeing to purchase Eaton Corporation's global axle and brake operations
and by purchasing Clark-Hurth Components, a worldwide manufacturer of off-
highway vehicular equipment, from Ingersoll-Rand Co.; the piston ring and
cylinder liner operations from SPX Corporation; Flexon, Inc., a manufacturer
of a full line of fuel filters; Thermoplast+Apparatebau GmbH, a German
injection molding company; and Industrias Orlando Stevaux Ltda., a Brazilian
manufacturer of gaskets and oil seals. Dana also has announced plans for a
joint venture with Przedsiebiorstwu FILTRON, of Gostyn, Poland, to manufacture
filtration products in Central Europe.
Spicer, S.A. also is owned in part by Unik, a wholly-owned subsidiary of
Desc, S.A. de C.V. Based in Mexico City, Desc is one of the largest
industrial groups in Mexico and through its subsidiaries is engaged in auto
parts, chemicals, agribusiness, consumer products, and real estate. The
company holds a leading position in Mexico in each business, with consolidated
sales totaling $1.5 billion in 1996.
Dana Corporation is a global leader in the engineering, manufacture, and
distribution of products and systems for the vehicular, industrial, and off-
highway markets. Its core businesses are axles, driveshafts, structural
components (frames), sealing products, filtration products, engine products,
industrial products, and leasing services. Its leasing operation was a
recipient of the 1996 Malcolm Baldrige National Quality Award. Founded in
1904 and based in Toledo, Ohio, Dana operates facilities in 30 countries with
more than 48,000 people. Its 1996 sales were $7.7 billion. The Internet
address for Dana's web site is http://www.dana.com.
SOURCE Dana Corporation