Sunday, November 9, 2008

Dana to cut jobs, close plants

NEW YORK — Dana Holding Corp. said Thursday it will close up to
10 plants and cut 2,000 more employees than originally planned as the auto parts maker's net loss widened in the third quarter.

The Toledo, Ohio, company said its loss available to common stockholders widened to $279 million, or $2.79 per share, from $69 million, or 46 cents per share, in the year-earlier period. Sales for the quarter ended Sept. 30 fell 9 percent to $1.93 billion from $2.13 billion.

Dana said the plant closures will take place in 2009 and 2010, while the 5,000 job cuts will be complete by the end of this year. Previously, Dana said it intended to cut only 3,000 jobs this year.

The company has two facilities in Middle Tennessee: a driveshaft manufacturing operation in Gordonsville with 250 employees, and a warehouse-distribution center in Crossville with 153 workers, according to local chamber of commerce records.

In West Tennessee, Dana operates a driveshaft plant in Humboldt, with 460 employees; a factory manufacturing automotive sealing and hose products in Paris, with 900 workers; and a facility in McKenzie that makes molded rubber automotive parts, with 176 employees.

At the Crossville location, shipping manager Tim Pugh said Thursday that employees had been told about the company's impending cutbacks, but that no details were given yet about which locations might be affected. "We're worried, but the plant manager assures us we're very productive and it may not affect us," Pugh said. "We were told that there may be some layoffs, but probably no outright closure." The Crossville location has been operating for 18 years and is "a very good place to work," Pugh said, adding that he hopes the employees there can keep their jobs.

"These are difficult actions," Executive Chairman John Devine said in a conference call with analysts. "We don't like doing them, but the industry situation right now forces us to move as quickly as we can in this environment."

Shares tumble

Dana said it remained in compliance with its financial covenants through Sept. 30. However, it said it won't be able to comply with its covenants through the end of the year, and expects to complete an amendment to its credit facility with its lenders within the next few weeks. Dana, which emerged from bankruptcy protection in January after nearly two years of restructuring, said it had $1 billion in cash and global liquidity of $1.3 billion.

Dana also cut its sales guidance for the year, to $8.2 billion. The company had previously expected $8.6 billion to $8.8 billion in sales for the year. It also targeted lower sales in 2009 of between $7.2 billion and $7.3 billion. Devine told analysts he expects the company to continue to suffer from weaker volumes next year.

Shares of Dana tumbled 22 cents, or 11.6 percent, to $1.67 in morning trading. The stock is down 86 percent from a post-bankruptcy high of $13.30 set in February.

Dana identified only one of the 10 facilities it plans to close: its drive shaft plant in Magog, Quebec, which employs 115 people.

Real Estate Outlook: Home Sales Rise
Whirlpool will cut jobs, close Jackson plant
Condo Trends: Nationally, Prices Hold 1Q Despite Housing Downturn