CHICAGO: The struggling US auto sector claimed another victim yesterday as parts maker Dana Corp filed for bankruptcy protection.
The Toledo, Ohio-based maker of axles, transmissions and other auto components said it and 40 of its US subsidiaries have voluntary petitions for reorganization under Chapter 11 of the US Bankruptcy Code.
“Dana has faced a continued decline in revenues resulting from the decreasing market share and production levels of its largest domestic customers, along with sharp increases in commodity and energy prices that have outpaced the cost savings Dana has been able to achieve,” the company said in a statement.
“The general financial condition of the industry, together with Dana’s inability to renew or expand its credit facilities in a timely manner, has significantly constrained Dana’s liquidity.”
The company said it had obtained $1.45bn in special debtor financing from Citigroup, Bank of America and JP Morgan Chase Bank to continue operations during the reorganization.
Dana’s European, South American, Asia-Pacific, Canadian and Mexican subsidiaries are not included in the bankruptcy filing.
The company reported total assets of $7.9bn and liabilities of 4.7bn as of September 30.
“The Chapter 11 process provides the company an opportunity to fix our business comprehensively -- financially and operationally,” chairman and chief executive Michael Burns said.
“This will be fundamental change, not just incremental improvement. The Chapter 11 process allows us to continue normal business operations, while we restructure our debt and other obligations and enhance performance.”
He added, “We want to assure everyone — our customers, suppliers, our people and our communities — that Dana is open for business as usual.”
Shares of Dana lost nearly half their value Thursday after the auto parts maker said it missed $21mn in interest payments on two of its senior secured notes.
Dana, which has 46,000 employees in 28 countries, posted a loss of nearly $1.3bn dollars in the third quarter, the latest it filed, blaming higher materials costs and troubles for the entire industry.
It joined Delphi, the former GM parts unit that filed for bankruptcy last year, adding to the woes of GM, which still has financial obligations to the onetime subsidiary. — AFP |
