Dana Inc. has appointed Bruce McDonald as interim CEO following Jim Kamsickas’ immediate retirement. The company aims to cut $200 million in costs and sell its off-highway division, which accounted for almost $3.2 billion in sales last year. The leadership change comes amid a significant decrease in vehicle demand, prompting strategic cost-cutting measures.
Dana Inc. has announced the immediate retirement of its CEO, Jim Kamsickas, who has led the company since 2015. His role will be provisionally filled by Bruce McDonald, the board chairman, while the search for a permanent successor progresses. Concurrently, Dana plans to implement cost reductions totaling $200 million annually and will divest its off-highway division, which reported nearly $3.2 billion in sales last year.
Kamsickas will remain with Dana in an advisory capacity until March but will receive his full salary and benefits before transitioning to his severance package. McDonald brings experience as a prior leader of Adient plc and has been a director at Dana since 2014. According to Keith Wandell, the lead independent director, “The board and Jim agreed that now is the right time to transition the leadership of Dana.”
This leadership shift occurs shortly after Kamsickas reported declining demand in the automotive sector, exacerbated by inflation and inventory challenges. He expressed confidence in Dana’s resilience, noting improved margins despite market fluctuations and commitment to hybrid and electric vehicle development. Future plans include cost cuts throughout the organization to adapt to reduced vehicle adoption rates.
Dana is also actively seeking to sell its off-highway business, which specializes in drive systems for heavy-duty industries such as construction and agriculture. The off-highway division generated $334 million in EBITDA from $2.15 billion in sales within the first nine months of this fiscal year. Prospective buyers will be approached with assistance from Goldman Sachs and Morgan Stanley.
Following these announcements regarding leadership changes and cost-saving measures, Dana’s stock saw an uptick of 8%, trading around $9.60. However, the stock is still lower by approximately 30% in the previous six months, reducing the company’s market capitalization to roughly $1.4 billion.
Dana Inc. is an established manufacturer specializing in driveline, sealing, and thermal management technologies for various vehicles. As the company navigates the challenges of declining demand for internal combustion engines and electric vehicles, strategic leadership changes and cost-cutting initiatives have become imperative to sustain financial health. The off-highway division, a significant contributor to sales, faces pressures from declining markets, particularly in Europe, leading to the decision to divest.
In summary, Dana Inc. is undergoing significant leadership changes with the retirement of CEO Jim Kamsickas and the appointment of Bruce McDonald as interim leader. The company is focused on reducing operational costs by $200 million and plans to divest its off-highway division amid market challenges. Despite a slight rebound in stock prices, notable declines over the past months reflect ongoing difficulties in the automotive sector.
Original Source: www.industryweek.com
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