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U.S. auto parts supplier Dana Corp. files bankruptcy reorganization plan

U.S. auto parts supplier Dana Corp. files bankruptcy reorganization plan

Dana Corp., a major U.S. auto parts supplier, moved a step closer to exiting bankruptcy Friday by filing a reorganization plan that calls for up to $750 million (euro547.25 million) in new investments in the company, largely from Centerbridge Capital Partners LP, a private equity firm.
If the plan is approved by a judge and Dana's creditors, the company can emerge from bankruptcy with lower labor costs, renegotiated supply contracts and, in some cases, the ability to charge more for its parts. The higher prices would net $180 million (euro131 million) a year.
The Toledo, Ohio-based company employs 40,000 people.
The main pillars of Dana's plan include an investment from Centerbridge as well as agreements with labor unions representing 6,500 employees at 25 U.S. plants. In July, the United Auto Workers and United Steelworkers agreed to a two-tier wage structure and to eliminate Dana's obligation to provide non-pension retiree benefits.
Dana also announced a key deal this week to continue to supply parts to Chrysler LLC but at higher prices than they did before. The settlement still needs a judge's approval.
Centerbridge will invest between $250 million (euro182.5 million) and $500 million (euro365 million) in Dana, and other investors will provide up to another $250 million (euro182.5 million).
Hedge fund Appaloosa Management LP, run by former Goldman Sachs executive David Tepper, also wants to be the primary investor in Dana and has a Sept. 21 deadline to submit a competing bid. Appaloosa is also the lead investor in a plan to invest as much as $2.55 billion (euro1.86 billion) in Troy, Michigan-based Delphi Corp., another auto parts supplier that is trying to emerge from bankruptcy.
Dana sells brakes, axles and other parts to major automakers such as General Motors Corp. and Ford Motor Co., and its money-losing U.S. operations have prompted it to move manufacturing out of the country to cut costs. So far this year, Dana has lost $214 million (euro156.15 million) on sales of $5.09 billion (euro3.71 billion).
The company has been in bankruptcy since March 2006.


Updated : 2021-01-20 15:58 GMT+08:00