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Toledo: Dana Corp. bankruptcy, restructuring and layoffs

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From the 1/25/07 Blade:

 

 

Judge OKs revised expenses for Dana

FROM BLADE STAFF AND WIRE REPORTS

 

Dana Corp.'s bankruptcy lawyers and consultants received court approval yesterday for three months of expenses after they trimmed the initial $1.4 million bill by 9 percent.

 

Judge Burton Lifland of U.S. Bankruptcy Court in Manhattan, who previously criticized their July-through-August billings, approved revised expenses after the Toledo auto supplier's professionals pledged to take steps to keep expenses down.

 

 

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From the 2/2/07 Blade:

 

 

Dana files documents on benefits cuts

 

Toledo’s Dana Corp. filed its legal arguments for eliminating retiree health-care benefits and rejecting union contracts this week, but the documents and their details are under seal in the U.S. Bankruptcy Court in Manhattan.

 

A hearing is scheduled to start March 12 on the subject and is expected to last several days. Objections are due by Feb. 22.

 

 

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From the 2/10/07 Blade:

 

 

Dana workers want to stop sale over loss of benefits

 

Unions representing Dana Corp. workers want a bankruptcy judge to put the brakes on the sale of its engine hard-parts business because the buyer won’t honor retiree benefits.

 

Dana, which filed for bankruptcy protection in New York 11 months ago, said in December it would sell the business to German supplier Mahle GmbH for $157 million. The sale is expected to be final by the end of March.

 

 

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From the 2/15/07 Blade:

 

 

Dana Corp. again asks to void contracts

 

Even as stockholders of Dana Corp. have lost their representation in the firm's bankruptcy case, the Toledo auto-parts maker has remade its case to end its union contracts and terminate its retiree health care benefits.

 

Both issues occurred in the past few days.

 

 

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From the 2/25/07 Blade:

 

 

ONE YEAR INTO BANKRUPTCY

Uncertainty still shadows Dana Corp. workers, retirees

By JULIE M. McKINNON

BLADE BUSINESS WRITER

 

Dana Corp. workers in Lima, Ohio, who have long feared that their plant will close, face wage reductions of up to $6 an hour, or about a third of their pay.

 

Bill Large could lose health-care and life insurance benefits April 1, along with roughly 27,000 other Dana retirees in the United States. He started work at a Toledo factory and stayed with the company for more than 40 years.

 

Contact Julie M. McKinnon at: [email protected] or 419-724-6087.

 

 

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From the 2/28/07 Blade:

 

 

Dana retirees ask court to halt benefits cuts

 

Retirees said in court filings this week that their former employer, Dana Corp. of Toledo, made enforceable promises to them and cannot be allowed to walk away from them.

 

Dana, which has been in bankruptcy for a year, has said its turnaround cannot take place without “meaningful and permanent” cost savings from its labor unions and retirees.

 

 

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From the 3/1/07 Blade:

 

 

Dana clears way for sale of British operations

 

Dana Corp. cleared the way yesterday for the sale of some British operations by transferring pension liabilities to a newly formed company.

 

The move is required under British law to protect the benefits of retirees, Dana said in a statement. Dana said the action isn’t related to its 2006 bankruptcy filing.

 

 

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From the 3/10/07 Blade:

 

 

Dana completes sale of engine hard parts firm

 

Toledo’s Dana Corp. completed the sale of its German-based engine hard parts business for $97 million and expects to take a $30 million to $35 million charge related to the transaction this quarter, the bankrupt auto supplier announced yesterday.

 

 

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From the 3/13/07 Blade:

 

 

Dana cuts benefits for 9,700 retirees

Health care to end July 1; trial begins

By GARY T. PAKULSKI

BLADE BUSINESS WRITER

 

Traditional health benefits will end July 1 for 9,700 nonunion retirees at Dana Corp. in the United States, but the Toledo firm’s top two unions are continuing a fight to preserve benefits for their retired members.

 

Also, current salaried employees at Dana’s headquarters and elsewhere likely won’t be able to look forward to health insurance when they retire.

 

Contact Gary Pakulski at: [email protected] or 419-724-6082.

 

 

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From the 3/21/07 Blade:

 

 

REGULATORY FILING

Red ink at Dana narrows to $739M

Bankrupt firm posts reduction in sales

By JON CHAVEZ

BLADE BUSINESS WRITER

 

An ailing automotive industry nationwide steered Toledo's largest corporation into a $739 million loss last year on declining sales.

 

Dana Corp., which makes axles and other parts mostly for pickup trucks and sport-utility vehicles, said in regulatory filing yesterday that its results loss in 2006 was an improvement over 2005, when it lost $1.6 billion.

 

Contact Jon Chavez at: [email protected] or 419-724-6128.

 

 

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From the 3/25/07 Blade:

 

 

Brinksmanship on benefits; Dana Corp., unions due in court this week

By JULIE M. McKINNON

BLADE BUSINESS WRITER

 

PARTS SHORTAGES resulting in intermittent shutdowns at Dana Corp.'s Henderson, Ky., axle factory are evidence to workers there that the Toledo firm's foreign plants are more important.

 

Dana, as part of its bid to right itself financially, has been consolidating operations and moving some work to Mexico, and managers in Henderson have said the south-of-the border operations get priority for parts shipments.

 

Contact Julie M. McKinnon at: [email protected] or 419-724-6087.

 

 

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From the 3/27/07 Blade:

 

 

Dana Corporation pleads with judge to let it scrap union contracts

Dana to hire replacement workers if strike is called

By JULIE M. McKINNON

BLADE BUSINESS WRITER

 

NEW YORK — As Toledo’s largest firm tries to snare another $200 million from its car-making customers, a Dana Corp. executive yesterday asked a judge for labor and benefit concessions from its unions.

 

The firm, in a continuation of a trial in its ongoing U.S. Bankruptcy Court, said it would hire replacement workers if union members at its plant strike as threatened if wages and benefits are cut without their approval.

 

Contact Julie M. McKinnon at:[email protected] 419-724-6087.

 

 

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From the 3/28/07 Blade:

 

 

DANA BANKRUPTCY

Company outlines plans for health fund

Proposal would affect union workers, retirees

By JULIE M. McKINNON

BLADE BUSINESS WRITER

 

NEW YORK - Toledo's Dana Corp. wants to eliminate traditional health-care coverage for union retirees but set up a fund to cover about 30 percent of their costs.

 

And the bankrupt auto-parts supplier hopes to save $7.5 million a year by shifting union workers at its Lima, Ohio, factory and three other plants into an insurance plan with a higher deductible.

 

Contact Julie M. McKinnon at: [email protected] or 419-724-6087.

 

 

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Both from the 3/29/07 Blade:

 

 

Unions counter Dana's case for cutting wages

By JULIE M. McKINNON

BLADE BUSINESS WRITER

 

NEW YORK - Government statistics could determine what union factory workers for Dana Corp. are paid.

 

In a U.S. Bankruptcy Court hearing yesterday in New York City, attorneys for the major unions representing workers suggested a different set of wages compiled by the government than did the experts at the Toledo firm, which would mean pay cuts are not needed.

 

Contact Julie M. McKinnon at: [email protected] or 419-724-6087.

 

 

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Dana sells Archbold plant; 2 in area still on block

 

Bankrupt Dana Corp. has agreed to sell an operation in Archbold in a $70 million deal involving eight factories worldwide, but the firm has yet to find a buyer for two other northwest Ohio plants on the sales block.

 

Orhan Holding AS, a Turkish industrial concern, has agreed to buy the hose and tubing plants, which the Toledo auto-parts supplier does not consider integral to its operations.

 

- Gary T. Pakulski

 

 

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From the 3/30/07 Blade:

 

 

Judge hears fourth day of testimony in Dana Corp. case

 

Toledo's Dana Corp. and its two main unions yesterday finished the fourth day of expert testimony on whether the bankrupt auto supplier can throw out union contracts, eliminate retiree health care, and institute other changes.

 

But because bankruptcy laws are not written to protect workers, the United Auto Workers and United Steelworkers will need to bargain a settlement to protect workers and retirees, said Jim Robinson, the Steelworkers' director for Illinois and Indiana. He led union negotiations with Dana.

 

 

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From the 4/4/07 Blade:

 

 

Judge urges Dana, unions to keep talking

FROM BLADE STAFF AND WIRE REPORTS

 

NEW YORK - A bankruptcy judge urged Dana Corp. and its two major unions yesterday to continue to try to negotiate an agreement on pay and benefit reductions, which the Toledo firm said it needs to successfully emerge from bankruptcy.

 

The automotive parts supplier, which filed for Chapter 11 bankruptcy a year ago, said it needs authority to cancel its labor contracts for about 5,200 employees represented by the United Auto Workers and United Steelworkers. The firm said it wants to trim hourly wages by about a third, to about $15.

 

 

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From the 4/5/07 Blade:

 

 

Shareholders' stake in Dana at nearly nil

By JULIE M. McKINNON

BLADE BUSINESS WRITER

 

Dana Corp.'s stock traded at about $3.50 a share last summer, but Arnold McLellan held onto his stake even though the Toledo auto supplier was in bankruptcy protection.

 

The Westland, Mich., resident who has held Dana stock since 1989 figured it was a good sign that large shareholders, including hedge fund Appaloosa Management LP, were buying or retaining shares. Even when Dana's stock was around $2 a share Mr. McLellan didn't sell his or his children's holdings.

 

Contact Julie M. McKinnon at: [email protected] or 419-724-6087.

 

 

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From the AP, 4/11/07:

 

 

Judge OKs bidding for sale of bulk of Dana hose, tubing business

ASSOCIATED PRESS

 

NEW YORK — A bankruptcy judge on Wednesday approved bidding procedures for auto parts maker Dana Corp.’s sale of the majority of its hose and tubing business. A Turkish company beat out more than 100 others with its bid of $70 million.

 

U.S. Bankruptcy Judge Burton Lifland could give final approval to the sale June 6 if no higher bid emerges. Dana has sought to sell noncore assets as part of its restructuring.

 

 

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From the 4/12/07 Blade:

 

 

Supplier to Dana could seek hefty claims

 

Dana Corp. could be on the hook for hundreds of millions of dollars if it decides to part company with its largest supplier over the cost of component parts.

 

The Toledo automotive parts supplier wants to end its contract with Sypris Technologies Inc. or find a cheaper supplier of various castings and forgings it buys from the company for $194 million a year. Dana said in court papers this week that Sypris thinks it is owed damages of hundreds of millions of dollars, but the local firm said the amount would be much smaller.

 

 

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From the 4/17/07 Blade:

 

 

Dana's top legal exec replaced by a deputy

By GARY T. PAKULSKI

BLADE BUSINESS WRITER

 

Dana Corp. quietly replaced its top lawyer last week just days after a professional publication reported that he lacked proper legal licensing.

 

Michael DeBacker, general counsel for the Toledo Fortune 500 company since 2000, didn't respond to a request for comment.

 

Contact Gary Pakulski at: [email protected] or 419-724-6082.

 

 

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From the 4/24/07 Blade:

 

 

Dana's '07 bankruptcy bills could be $180M, trustee warns

 

Lawyers, consultants, and other experts involved in Dana Corp.'s bankruptcy could rack up bills totaling as much as $180 million by year's end, according to the U.S. trustee overseeing the case.

 

The trustee, Diana Adams, warned the U.S. Bankruptcy Court judge in New York City that such bills were likely at the "current burn rate" in the case.

 

 

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From the 4/26/07 Blade:

 

 

Dana bankruptcy-case fees to continue at current payout rate, judge rules

 

Consultants, lawyers, and other professionals involved in Dana Corp.'s bankruptcy will continue to receive about 80 percent of their professional fees on a timely basis under a ruling yesterday at a court hearing in New York City.

 

The U.S. trustee overseeing the case, Diana Adams, had warned U.S. Bankruptcy Court Judge Burton Lifland that professional fees for services were likely to total up to $180 million by year's end at the current rate, seriously hampering the Toledo auto parts giant's ability to operate.

 

 

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From the 5/1/07 Blade:

 

 

Judge asked to delay Dana contract decision

 

A U.S. Bankruptcy Court judge in Manhattan was asked yesterday to delay his decision on Dana Corp.’s request to nullify contracts with its labor unions.

 

Attorneys for the unions and the Toledo auto parts maker jointly submitted a letter asking Judge Burton Lifland to delay his decision for a month while the two sides negotiate.

 

 

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From Dow Jones, 5/6/07:

 

 

Dana Corp. seeks court approval to continue product-liability case

By MARC HOPKINS

Dow Jones Newswires

 

WASHINGTON - Dana Corp. wants to suspend Chapter 11 protections against litigation so it can appeal a $43.9 million judgment won by Microtherm Inc.

 

The Toledo, Ohio-based auto-parts maker believes the move would benefit its bankruptcy restructuring efforts because it could erase a $70.8 million claim filed in the Chapter 11 case, Dana said Thursday in papers filed with the U.S. Bankruptcy Court in Manhattan.

 

 

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From the 5/9/07 Blade:

 

 

Continuation of Dana lawsuit in Texas sought

By GARY T. PAKULSKI

BLADE BUSINESS WRITER

 

Just weeks before filing for Chapter 11 bankruptcy, Dana Corp. went to court to try to overturn a $44 million jury award that arose from claims it provided faulty temperature sensors to a manufacturer of water heaters.

 

But the bankruptcy filing on March 4, 2006, halted all litigation involving the company - even that from which it might benefit.

 

Contact Gary Pakulski at: [email protected] or 419-724-6082.

 

 

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From the 5/12/07 Blade:

 

 

Dana Corp. reports it lost $92 million in 1st quarter

 

Bankrupt Dana Corp. said this week in a regulatory filing that it lost $92 million in the first quarter of 2007, and that sales slipped 2 percent to $2.15 billion.

 

The loss was lower than at the same time in 2006 when the firm lost $126 million, according to the quarterly financial report filed Thursday with the U.S. Securities & Exchange Commission.

 

 

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  • 2 weeks later...

From the 5/24/07 Blade:

 

 

Dana receives OK to appeal verdict

 

Dana Corp. received bankruptcy court approval yesterday to challenge a $44 million jury verdict it lost in Texas.

 

Judge Burton Lifland, of U.S. Bankruptcy Court in New York, gave the Toledo auto-parts producer permission to appeal the 2004 Texas case involving Microtherm Inc. That company accused Dana of supplying faulty temperature sensors.

 

 

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  • 2 weeks later...

From the 6/1/07 Blade:

 

 

Second delay sought on Dana contract ruling

 

A U.S. Bankruptcy judge in Manhattan was asked yesterday to again delay his decision on Dana Corp.’s request to nullify contracts with its labor unions.

 

Attorneys for the Toledo auto parts producer, the United Auto Workers, and the United Steelworkers jointly submitted a letter asking Judge Burton Lifl and to postpone his decision for two more weeks, until June 15. The delay was the second sought by the parties.

 

 

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From the 6/7/07 Blade:

 

 

Sale of 3 area Dana plants OK'd

 

Dana Corp. will shed three northwest Ohio plants with a total of 500 employees as part of the auto parts maker's attempts to return to profitability.

 

Judge Burton Lifland, of U.S. Bankruptcy Court in New York, yesterday approved the sale of the operations in Archbold and in the Wyandot County communities of Upper Sandusky and Wharton.

 

 

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From the 6/8/07 Blade:

 

 

Dana seeks permission to drop supplier accord

 

Toledo automotive-parts maker Dana Corp. said yesterday a bankruptcy court should let it out of “uneconomic, noncompetitive” contracts with a supplier whose performance has been “consistently abysmal.”

 

Dana said it should be allowed to enter into cheaper, more-favorable contracts with

other suppliers even though it still has seven years left on a deal with Sypris Technologies Inc., a unit of Sypris Solutions Inc., of Louisville.

 

Dana contends that Sypris is trying to force it “to assume an indisputably uneconomic, noncompetitive set of contracts.”

 

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From the 6/9/07 Blade:

 

 

Dana settles dispute with Citation Corp.

 

WASHINGTON — Dana Corp. has resolved a series of long-standing disputes with Citation Corp. in a deal it said defuses the risk that one of its biggest suppliers might halt the shipment of parts used in Ford Motor Co. and Nissan Motor Co. automobiles.

 

In papers filed with the U.S. Bankruptcy Court in Manhattan this week, the Toledo auto parts supplier said the deal sharply lowers the price it has paid for Citation parts used to make such automobile components as axle assemblies.

 

It also obligates Citation to pay Dana about $790,000 to settle quarrels involving past overpayments.

 

From the 6/16/07 Blade:

 

 

Dana, unions report progress in discussions

 

Dana Corp. and its unions yesterday reported “significant progress” in negotiations on a company proposal to modify labor contracts and curtail or drop retiree health benefits for former hourly workers.

 

The Toledo auto parts manufacturer, United Auto Workers, and United Steelworkers, in a joint letter, asked Judge Burton Lifland of U.S. Bankruptcy Court in New York for another two weeks to reach a voluntary settlement in a company proposal to cut $180 million in expenses annually through wage cuts, benefit changes, and elimination of the retiree benefits.

 

The company says it needs lower costs to successfully emerge from Chapter 11 bankruptcy. The two sides asked the judge to delay deciding until July 2. Dana has reached a deal to curtail health benefits for 7,500 salaried retirees.

 

The letter yesterday said company and union negotiators are engaged in “around-the-clock discussions” that have been “very productive.” The company proposals would affect thousands of hourly retirees and 5,200 of 19,000 current U.S. employees at plants in Fort Wayne, Ind., Elizabethtown, Ky., Auburn Hills, Mich., and Marion, Ind.

 

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From the 6/21/07 Blade:

 

 

Settlement likely on trust fund for retirees

$700M payment by company cited

By GARY T. PAKULSKI

BLADE BUSINESS WRITER

 

Dana Corp. is close to a settlement that would eliminate its $1.5 billion obligation for retiree health care but would avert a catastrophic benefit cutoff for union retirees.

 

The bankrupt Toledo auto-parts producer and its two largest unions are near a settlement under which the company would commit to $700 million in total payments to a trust fund that would subsidize the cost of health coverage for current and future retirees, union representatives said.

 

Contact Gary Pakulski at: [email protected] or 419-724-6082.

 

 

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  • 2 weeks later...

From the 6/30/07 Blade:

 

 

Appaloosa asks Dana to modify ‘poison pill’

 

Appaloosa Management LP asked Dana Corp.’s board to drop or ease a takeover defense that makes it difficult for the bankrupt auto-parts supplier’s shareholders to work together on an alternative reorganization plan.

 

Appaloosa, whose stake of almost 15 percent makes it Dana’s largest holder, requested the move in a letter to directors of the Toledo firm, according to a U.S. regulatory filing. Dana has denied Appaloosa’s request for details about the progress of the company’s restructuring plan.

 

The investment firm is trying to get around Dana’s “poison pill” defense, which includes a requirement for a unanimous shareholder vote to call a special investor meeting or authorize joint action among holders. Appaloosa said the provision could stay in place as long as Dana lets shareholders cooperate.

 

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From the 7/3/07 Blade:

 

 

Dana, unions seek delay in ruling on contracts

 

NEW YORK — Toledo auto-parts maker Dana Corp. and two labor unions asked the judge overseeing the company’s bankruptcy yesterday to delay ruling until Friday on whether Dana can reject its contracts with unionized workers.

 

The company and the United Auto Workers and the United Steelworkers said in a joint letter to U.S. Bankruptcy Judge Burton Lifland that they agreed to seek a postponement of yesterday’s deadline for a ruling on voiding the contracts. The company and the unions last extended the deadline to negotiate a deal from June 15. The original deadline, already extended twice, was April 30.

 

The unions have threatened to strike if Dana, which filed for bankruptcy in March, 2006, terminates collective-bargaining agreements.

 

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Both from the 7/6/07 Blade:

 

Dana, unions reach deal to change worker pay, retiree health care

BLADE STAFF

 

Dana Corp., Toledo’s bankrupt auto supplier, said today it has reached an agreement with its major labor unions to save $100 million a year in retiree health care costs by establishing a $700 million trust fund to cover such expenses.  Further, the firm said it will receive $500 million from Centerbridge Capital Partners LP and help to line up investors for another $250 million to cover some costs after the local company emerges from bankruptcy.

 

The agreement extends the labor contracts with the United Auto Workers and United Steelworkers unions for four years, providing the membership ratifies the terms, the company said. The terms include a two-tier wage structure and changes in disability benefits, the company said.

 

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Dana completes sale of European hose unit

 

A deal for Dana Corp. to sell its European vehicle hose and tubing business has been completed. Turkey’s Orhan Holding AS bought the operation for $67 million.

 

Purchase of the unit’s North American operations, including a factory in Archbold with 230 employees, won’t be completed until later. Also yet to be completed is sale of facilities in Rochester Hills, Mich.; Paris, Tenn.; and San Luis Potosi, Mexico.

 

Dana, a Toledo firm in Chapter 11 bankruptcy, is selling some operations and trying to cut labor expenses. It expects a $34 million third-quarter gain from the sale.

 

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From the 7/7/07 Blade:

 

Dana, 2 unions cut deal to save $100M annually

By JON CHAVEZ

BLADE BUSINESS WRITER

 

Clearing a big hurdle toward exiting bankruptcy, Toledo's Dana Corp. yesterday announced an agreement with its two largest unions that will save it more than $100 million a year.  The agreement will set up independent trust funds to provide health care coverage to its unionized retirees nationwide.

 

The deal calls for Dana to contribute $780 million to the trust funds and ends the company's obligation for retiree health care. But how much those benefits for retirees will change is uncertain.  About 16,400 retirees are covered.  The agreement, subject to membership ratification and U.S. Bankruptcy Court approval, extends for four years labor contracts, to June, 2011, with the United Auto Workers and United Steelworkers.

 

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From Bloomberg, 7/7/07:

 

UAW-Dana health plan could become model

BLOOMBERG NEWS SERVICE

 

The United Auto Workers' agreement with bankrupt auto-parts maker Dana Corp. on an independent retiree health-care fund may be another sign that the union will accept a similar deal with General Motors Corp. or Ford Motor Co.

 

The UAW and United Steelworkers unions will administer the new fund to help Dana exit court protection.  The Steelworkers in December agreed to a similar fund at Goodyear Tire & Rubber Co., a plan that GM and Ford executives have said they're studying.

 

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From the 7/11/07 Lima News:

 

Dana may move work to Lima

Bart Mills | [email protected] - 07.11.2007

 

LIMA — The loss of jobs at a Kentucky plant could mean more work for Lima.  Dana Corp. announced Monday it will shift some production away from its plant in Louisville, Ky., and move it to its Lima plant.

 

Dana officials did not say how much work would be moved or how many jobs it might affect. Public Relations Director Chuck Hartledge told the Louisville Courier Journal the company will consolidate production of heavy duty drive shafts to Lima “no later than the fourth quarter of 2008.”

 

Officials at Dana’s corporate office in Toledo and local officials were not available for comment Tuesday.

 

MORE: http://www.limaohio.com/story.php?IDnum=40473

 

From the 7/12/07 Blade:

 

 

Big shareholder objects to Dana stock plan

 

Appaloosa Management LP, the largest shareholder of Toledo’s Dana Corp., has filed what it called a preliminary objection to Dana’s request for approval of an agreement allowing investors to purchase $750 million in convertible preferred stock.  The money would be used to fund a trust taking over Dana’s retiree health benefits.

 

Appaloosa contends that the negotiations with Centerbridge Capital Partners LP, which would put $500 million into the purchase, were “the product of a defective process” that “resulted in the undervaluation” of Dana.  A bankruptcy court hearing is scheduled July 25 on the investment agreement and on the newly negotiated contract with the United Auto Workers and the United Steelworkers.

 

MORE: http://www.toledoblade.com/apps/pbcs.dll/article?AID=/20070712/BUSINESS03/70712003/-1/RSS04

 

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