Dana Acquiring Mexican Manufacturing Operations

Nov. 23, 2005
Breaking up joint venture, acquiring foundry, forging facilities

Dana Corp. has agreed with its joint-venture partner DESC S.A. de C.V. to dissolve their partnership, Spicer S.A. de C.V., after which will take full ownership of the operations.

Spicer S.A. manufactures and assembles axles and driveshafts at five manufacturing operations that also perform some metalcasting and forging: Autometales, S.A. de C.V.; and Ejes Tractivos, S.A. de C.V. in Mexico City, and Cardanes, S.A. de C.V.; Engranes Conicos, S.A. de C.V.; and Forjas Spicer, S.A. de C.V. in Queretaro, produce light vehicle axle and driveshafts, and a variety of related components. Dana now holds 49% of these but will become full owner.

DESC will assume full ownership of the joint-venture’s transmission and aftermarket gasket operations, in which it currently holds a 51-percent interest.

The transactions are expected to be completed in the first quarter of 2006. They are subject to negotiation and execution of a definitive agreement, approval by Dana's board of directors, and customary regulatory approvals.

According to Dana chairman and CEO Mike Burns, "These transactions will provide Dana with a strategic opportunity to strengthen our core axle and driveshaft businesses with vertically integrated and technologically advanced operations in a key geographic location." Burns added that Dana will benefit from low-cost manufacturing efficiencies and growth opportunities in Mexico.