TOLEDO, Oh. — Dana Corporation has filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code.
Today’s Chapter 11 filing does not include Dana’s Canadian (or other worldwide) subsidiaries. In order to fund its continuing operations while it restructures, the component manufacturer secured $1.45 billion debtor-in-possession financing from several banks.
Those funds will be used to meet the company’s normal working capital requirements, including employee wages and supplier payments. As a result, Dana officials insisted it will be business as usual for the time being.
“We want to assure everyone – our customers, suppliers, our people and our communities — that Dana is open for business as usual,” said Dana chairman and CEO, Michael J. Burns. “And, to this end, our customers can continue to rely on Dana for quality products – delivered on time and to best-in-class specification. This is an extremely difficult, but necessary and responsible decision that will provide us with the time and opportunity to strengthen our performance and achieve a sustained turnaround at Dana.”
Dana has been struggling to deal with declining revenues resulting from a decreasing market share and declining production from its largest domestic customers. Meanwhile, the skyrocketing costs of raw materials and energy have also taken their toll.
“The Chapter 11 process provides the company an opportunity to fix our business comprehensively – financially and operationally,” said Burns. “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.”
Burns said Dana will sell off several of its non-core businesses and close several facilities while shifting production of some components to lower-cost locations.
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