Dana Inc. directors plan to sell the company’s off-highway division, which last year rang up sales of nearly $3.2 billion, about 30% of the company's total.
The board of Ohio-based Dana announced the move Nov. 25 alongside the retirement, effective immediately, of CEO Jim Kamsickas as well as plans to slash tens of millions of annual costs by the end of 2026.
The off-highway group at Dana makes drive and motion systems for heavy-duty vehicles in used in agriculture, construction, mining and other industries. It generated EBITDA of $334 million on sales of $2.15 billion in the first nine months of this year. Those numbers were 7% and 11%, respectively, from 2023.
Two-thirds of the group’s sales are in Europe, where business is down more than 15% year to date due primarily to soft construction and agriculture markets. North American revenues—at $277 million, they are up slightly year to date from 2023 levels—account for 13% of sales while the Asia-Pacific region accounts for 21% and South America 1%, respectively.
Globally, the division’s top customers are Deere & Co. (9% of sales), Oshkosh Corp. (7%) and Agco Corp. and CNH Industrial NV (6% each). The Dana board has hired Goldman Sachs & Co. and Morgan Stanley & Co. to market the unit, which employed 11,800 people and ran 19 plants at the end of last year.
A CEO Change and More Cost Cuts
Taking the place of Kamsickas until the board finds a more permanent successor is Bruce McDonald, one of the parts manufacturer’s directors. McDonald, who is Dana’s chairman and who has been a director since 2014, is a past leader of Adient plc, an automotive seat maker that was part of Johnson Controls until 2016.
Kamsickas had led Ohio-based Dana since the summer of 2015. He is staying with the company in an advisory role until the end of March and will be paid his full salary and benefits before becoming eligible for his severance package.
“The board and Jim agreed that now is the right time to transition the leadership of Dana, and we thank Jim for his many contributions over his nine years leading the company and wish him all the best,” Keith Wandell, Dana’s lead independent director, said in an announcement.
Kamsickas’ exit comes less than four weeks after he told investors and analysts that Dana’s third quarter had been marked by “further weakening demand for ICE, hybrid and electric vehicles across most mobility markets” because of “ongoing inflationary pressure, global uncertainty and higher vehicle inventory levels.” Despite that, he added, Dana has consistently grown its margins even as it invested heavily in new hybrid and electric technologies.
Providing an early look at 2025, Kamsickas said Dana’s leaders planned to continue to cut costs. As part of the news that he has stepped down, Dana’s directors said the company will make “substantial reductions in selling, general and administrative costs across all the company’s businesses” while adjusting engineering spending reflect the auto sector’s slowdown, specifically when it comes to the adoption of electric vehicles. The goal is to save $200 million annually by 2026, which is roughly 2% of the company’s total costs.
