Dana CEO Jim Kamsickas assured analysts two weeks ago that, while the COVID-19 pandemic was hurting his company along with the rest of the auto industry, Dana is in a strong financial position to weather the crisis, and has benefited from management lessons about employee safety it learned while coping with the pandemic in China and Italy.
The company completely or nearly completely closed more than 100 of its manufacturing plants worldwide, although some of its customers in the aftermarket and agricultural sector required continued production.
The Maumee, Ohio, producer of axles, driveshafts and transmissions, reported net income of $38 million for the first quarter, a $50 million decline from the same period last year, due to the coronavirus disruption. The company took steps to maximize its access to cash, drawing down $300 million from its revolving credit and boosting its liquidity position to $1.8 billion.
At the same time, it instituted cost reductions, including temporary layoffs of direct and indirect hourly associates, across-the-board pay reductions for salaried employees, reduced workweeks throughout the organization, the suspension of its common stock dividend and a trimming of its current capital spending plans.
But Dana is not minimizing the pandemic’s impact. Kamsickas estimated that April sales would be 75 percent lower than in April 2019 as customers curtail production around the world. While customer orders are likely to strengthen in May and June, second-quarter sales could be 50 percent lower than second-quarter 2019’s.
In the midst of the crisis, Dana announced the promotion of company veteran Ryan Laskey to lead the commercial vehicle drive and motion systems business. Laskey succeeded Mark Wallace, who accepted a CEO position outside the company. Last month, Laskey announced a new collaboration with Silicon Valley-based software supplier Motiv Power Systems to fit Dana’s Spicer e-axle into Ford Motor Co.’s F-550 chassis for electrified commercial fleet applications.