Drivetrain and automotive specialist Dana has implemented a plan that includes selling its off-highway business and cutting $200 million in annual expenses by 2026, the company said in a Nov. 25 press release.
The move coincides with the retirement of CEO James Kamsickas and the appointment of board member Bruce McDonald to chairman and interim CEO. Kamsickas will continue in an advisory role through March 2025, the company said.
Dana said McDonald will lead the company and has retained an executive search firm to help it find a permanent CEO. He will remain on the board once a new CEO is named, the company said.
Selling its off-highway business allows Dana to focus on its light-duty and commercial segments, which manufacture “traditional and electrified products that are largely shared across the remaining portfolio,” according to the release.
Dana said its company wide cost-reduction strategy includes slashing capital spending to “reflect the revised market demand for electric vehicles,” the company said.
The potential sale of its off-highway business “will enable Dana to strengthen its balance sheet through substantially reduced leverage, and to return capital to shareholders,” the company said. Dana offered no timeline to sell its off-highway business.
Because auto suppliers work with high fixed costs, the industry is less flexible to respond to a volatile auto market, according to consultant firm Bain & Co. In a September report the firm emphasized how the automobile supply industry in particular is “vulnerable to volume fluctuations.”
Keith Wandell, lead independent director of Dana’s board of directors, pointed to what he called a “significant transformation” in the automobile industry, which includes “protracted cost pressures and demand uncertainty,” he said in a statement.
Wandell said Dana is addressing its challenges by “taking action to streamline the business, unlock the value of its off-highway business and further reduce costs.”
