Dana Holding Corporation Business Report FY ended Dec. 2013

Business Highlights

Financial Overview

(in million USD)
  FY ended Dec. 31, 2013 FY ended Dec. 31, 2012 Rate of
change (%)
Net Sales  6,769 7,224 (6.3) 1)
Adjusted EBITDA 745 781 (4.6) -
Sales by region
North America 2,958 3,371 (12.3) 2)
Europe 1,994 2,021 (1.3)
South America 983 925 6.3
Asia Pacific 834 907 (8.0)

-Sales for 2013 declined 6.3% from 2012. Lower market volumes, particularly in North America medium/heavy truck market and global off-highway markets, contributed about USD 141 million to lower year-over-year sales. Scheduled roll-offs of certain North America light vehicle market programs also reduced sales by USD 186 million. Currency effects and divestitures also contributed to the lower sales.

<North America>
-Sales for 2013 declined 12.3% from 2012. Scheduled roll-offs of certain light vehicle programs accounted for USD 186 million of the decrease. The remaining sales reduction was due primarily to a decline in medium/heavy production levels of around 5% and lower off-highway market sales, partly due to the transfer of certain production to Asia Pacific operations.

-Excluding currency effects, sales in Europe in 2013 were 3% lower than in 2012. The reduction was primarily driven by lower off-highway market production levels. Partially offsetting lower volumes were increased sales from new Light Vehicle programs coming on line in 2013.

<South America>
-Sales in 2013 increased 6.3% from 2012. Adjusted for currency effects, sales were up about 24%. Growth in medium/heavy truck production of about 28% and an increase in light vehicle production of about 4% were the principal drivers of the organic increase in sales.

<Asia Pacific>
-Sales in 2013 were 8% lower than in 2012. Adverse currency effects resulted principally from a weakening of the Indian rupee and Japanese yen, partially offset by a stronger Chinese yuan. Declining economic conditions in India and Thailand contributed to this region's reduced sales, partially offset by stronger market volume in China.

Major Contracts

-The Company announced that it is expanding its business relationship with Mahindra & Mahindra Ltd. by supplying it with Spicer axles with AdvanTEK gears for the company's new platform of sport-utility vehicles and small trucks. With production expected to begin mid-2015, the axles will be manufactured in Chakan, India, by Spicer India Ltd., a majority-owned joint-venture with Anand Automotive Systems. The Chakan facility is a supplier of axles, drivetrain products, and genuine service parts, providing complete system solutions to OEMs and the aftermarket in India. Last year, the Company introduced Spicer rear axles with AdvanTEK gear sets for "Xylo". (From a press release on October 22, 2013)

-The Company announced that the Spicer Diamond Series driveshaft will be featured on Navistar's "International LoneStar" truck on display at the Mid-America Trucking Show (MATS). Navistar promotes Spicer driveshafts as the standard and exclusive offering in the company's North American commercial-vehicle data book. In addition to Spicer driveshafts, Navistar offers customers a complete lineup of Spicer medium- and heavy-duty steer and drive axles, tire-management solutions, and wheel-end offerings. (From a press release on March 21, 2013)

-Other Major Contracts (From a press release on January 24, 2013)
Maker / Model Products
2013 Chrysler "Ram 1500" Spicer rear driveshaft, Cam covers, Exhaust gaskets and Active warm up units

GM "Cadillac ATS"

Cylinder-head gaskets, Exhaust gaskets, Cam cover gaskets, Valve stem seals, Thermal-acoustical protective shielding (TAPS) and Engine oil coolers
Audi 3.0L TFSI Supercharged DOHC V-6 Cylinder-head gaskets and Secondary gaskets
BMW 2.0L N20 Turbocharged DOHC I-4 Secondary gaskets

GM 2.0L Turbocharged I-4

Cylinder-head gaskets, Engine oil coolers and Valve stem seals
Chrysler 3.6L DOHC Pentastar V-6 Exhaust gaskets and Thermal-acoustical protective shielding (TAPS)
Ford 2.0L EcoBoost DOHC I-4 Cylinder-head gaskets, Exhaust manifold gaskets and Down stream exhaust gaskets
Honda 3.5L SOHC V-6 Cam covers
2013 Ford "Fusion" Cylinder-head gaskets, Exhaust system gaskets, Thermal-acoustical protective shielding (TAPS), Transmission oil coolers, Thermal bypass valves and Combo coolers

Start of Production

-The Company announced it will launch serial production of metallic bipolar plates, a critical component for enhancing the performance of fuel-cell powered engines. The Company's ultra-thin metallic bipolar plates incorporate the Company's integrated sealing technology, which provides high power density and superior durability. By utilizing a range of advanced processes specifically developed for metallic bipolar plates, the Company is able to streamline production to cost-effectively manufacture a high volume of plates at its facility in Neu-Ulm, Germany. (From a press release on April 8, 2013)

Recent Development Outside USA

-Spicer India, a joint venture company of Dana holding corporation and the Anand Group, has inaugurated its new facility, in Lucknow, India, its sixth plant. The new facility will supply propeller shafts to Tata Motors Lucknow and Jamshedpur. Spicer India currently supplies drive shafts for buses and trucks, produced by Tata Motors Lucknow and Jamshedpur, from its facility at Satara. (From a press release on November 15, 2013)

-The Company announced that it has signed an agreement with Victor Reinz India (VRI), the Company's joint venture with India-based Jayant Group, to manufacture the Company's heat exchanger technologies for the local market. The agreement leverages the Company's existing technical knowledge and manufacturing capabilities with VRI's customer relationships and physical infrastructure to expand the Company's reach and product offerings in India, which will now include engine oil coolers, fuel coolers, transmission oil coolers, and power steering oil coolers. VRI has been producing multi-layer steel cylinder-head gaskets, secondary gaskets, and thermal-acoustical protective shielding for automotive customers in India since 2009. (From a press release on May 23, 2013)


-The Company has received the Best Supplier Award from Mahindra & Mahindra Ltd. The Company's joint-venture facility in Chakan, India, Spicer India Limited, supplies a range of Spicer axles and driveshafts to Mahindra & Mahindra vehicles, including the Mahindra "Quanto", the company's first compact sport-utility vehicle. (From a press release on July 18, 2013)

-The Company has been honored by General Motors as a 2012 Supplier of the Year in recognition of its operations that support GM's production in Ecuador. GM Ecuador also named the Company as the best supplier of direct material in the chassis category. From its operation in Colombia, the Company supplies GM Ecuador with complete rear dressed axle modules and front and rear driveshafts for multiple platforms. This year, the Company will open a new manufacturing operation in Ecuador. The facility will produce driveline sets for one of General Motors' new global programs. (From a press release on May 15, 2013)

Outlook for FY ending Dec. 31, 2014

-Sales amount USD 6,800 - 6,900 million (0.5% - 1.9% increased from 2013) and Adjusted EBITDA USD 760 - 770 million (2.0% - 3.4% increase from 2013) are expected.


R&D Expenditure

(in million USD)
  FY ended Dec. 31, 2013 FY ended Dec. 31, 2012 FY ended Dec. 31, 2011
Overall 165 161 155
% of Sales 2.4 2.2 2.1

R&D Facilities

-The Company holds 8 technical centers. (5 in North America and 3 in Asia Pacific)
-Additional research and development activities: 7 locations

-The Company announced that it has finalized plans to open its 16th global technology center in Cedar Park, Texas, USA. Scheduled to begin operations in the spring of 2014, the center is designed to accommodate more than 80 engineers and support staff as part of an effort to fully leverage the Company's investment in its strategic relationship with Fallbrook Technologies, which is headquartered nearby. In September of 2012, the Company secured an exclusive license from Fallbrook to engineer and produce continuously variable planetary (CVP) technology for use in light-vehicle and certain off-highway transmissions in the end markets that the Company serves. The Company plans to market the technology under the VariGlide brand name. (From a press release on December 16, 2013)

-The Company announced the opening of the Company's new 12,000 square-meter (129,000 square-foot) technical center in Wuxi, Jiangsu Provence, China. The Dana China Technical Center will provide advanced product and applications engineering for original-equipment manufacturers in the light-vehicle, commercial-vehicle, and off-highway markets in China and throughout the Asia-Pacific region. The Dana China Technical Center is devoted to the research, design, development, and testing of drivetrain, sealing, and thermal-management products. The new center includes a 5,800 square-meter (62,000 square-foot) test lab and provides 3,200 square meters (34,000 square feet) of manufacturing space to supplement the 17,000 square meters (183,000 square feet) dedicated to manufacturing at the adjacent Dana Wuxi Technologies Company, Ltd., facility. (From a press release on March 12, 2013)

R&D Activities

-The Company announced that it has received two grants totaling USD 3 million from Natural Resources Canada (NRCan) to develop technology to improve thermal management systems for battery systems in electric, plug-in hybrid-electric, and hybrid-electric vehicles. Both projects are part of NRCan's ecoENERGY Innovation Initiative (ecoEII) and are expected to last approximately three years. The first project aims to advance the development of aluminum heat exchangers, which are used to thermally manage electric-vehicle battery systems. The second project aims to improve battery system performance in low temperatures. For this project, the Company will collaborate with Datec Coatings, of Mississauga, Ontario. The work for these projects will be completed at the Company's technology center in Oakville, Ontario. (From a press release on May 13, 2013)

Product Development

Lightweight tandem axle
-The Company introduced the Spicer EconoTrek tandem axle, a new durable, lightweight 6x2 configuration for heavy-duty line haul tractors. It improves fuel economy by up to 3% through decreases in mechanical drivetrain energy loss and reduces weight by up to 400 pounds when compared with a traditional 40,000-pound tandem axle arrangement. Available this summer, the Spicer EconoTrek tandem axle expertly combines the Company's newly upgraded Spicer S170 and S190 single-reduction single drive axles with the new, lightweight Spicer S20-045B tag axle. (From a press release on March 21, 2013)

Investment Activities

Capital Expenditure

(in million USD)
  FY ended Dec. 31, 2013 FY ended Dec. 31, 2012 FY ended Dec. 31, 2011
Light Vehicle 82 47 71
Commercial Vehicle 40 30 49
Off-Highway 33 22 21
Power Technologies 33 24 34
Eliminations and other 21 41 21
Total 209 164 196

Investments Outside USA

-The Company announced that it will construct a new gear manufacturing operation in Rayong, Thailand, to support growing customer demand for Spicer axles in the region. The new Company's facility, scheduled to open in 2014, will have the capacity to deliver 600,000 gear sets to the region. Approximately 125 new jobs will be created to support the expansion. The Company currently employees 650 people at three facilities in the country. (From a press release on September 4, 2013)