As Ford Authority reported a little over one month ago, Ford supplier Dana Inc – one of the most well-known entities in the automotive supplier world, having been in business for 120 years now – has been talking to advisers as it contemplates selling its off-highway unit amid softening demand, which builds and sells drive and motion systems for heavy-duty vehicles in sectors including agriculture, forestry, construction, and mining. Now, Dana has announced that it will indeed look to sell that off-highway division while it works to reduce costs.
Dana has officially engaged financial advisors Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC to sell its off-highway business, a move that it believes will help it streamline the company’s approach to focus more on light and commercial vehicle customers. The proceeds from that sale will also enable Dana to strengthen its balance sheet through substantially reduced leverage, and to return capital to shareholders. However, while Dana notes that it believes there will be “significant interest” in its off-highway business, there are no guarantees that it will successfully complete a sale, nor is there any preset timeline for that to happen.
In 2023, Dana’s off-highway division accounted for 30 percent of its overall business with $3.2 billion in revenue, along with an EBIT (earnings before interest, taxes, depreciation, and amortization) of $465 million. Dana has faced its fair share of financial challenges amid numerous difficulties since then, which have resulted in a 24 percent decline in share value, along with $2.9 billion in debt accumulated in 2024 thus far. To help right the ship, the company plans to make “substantial reductions” in its selling, general, and administrative costs across all divisions, with an expected annualized savings of approximately $200 million by 2026.
At the moment, Dana counts Ford as its biggest customer, as The Blue Oval accounts for 20 percent of its overall business, and it currently supplies a variety of driveline parts for a large number of Blue Oval models – including the Ford Maverick, Ford Bronco, Ford Escape, Lincoln Nautilus, and Lincoln Corsair.
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