Vehicle driveline supplier Dana Inc. plowed through a fourth quarter disrupted by the United Auto Workers strike to finish 2023 with record annual sales, dramatically improved earnings, and a record three-year backlog of business totaling $950 million.
Maumee-based Dana also successfully executed more than 100 product launches across its three major segments of business: light vehicles, commercial trucks, and off-road equipment, said CEO Jim Kamsickas during a fourth-quarter earnings call Tuesday.
Several new electric-vehicle parts launches were among the number, also a record for the company in a single year.
"With record sales reaching $10.6 billion for 2023, Dana continues its strong trajectory built on our balanced approach of supplying both conventional and clean-energy solutions to nearly every vehicle manufacturer around the globe,” Mr. Kamsickas said.
Dana has a series of technical centers on its headquarters campus in Maumee, which is today largely dedicated to developing products and systems for EVs. The company is 119 years old and one of the oldest makers of axles and driveline systems in the United States.
It was one of the nation’s hardest hit auto suppliers by the UAW strike that shut down two high-volume auto assembly plants for its axles – Jeep’s Toledo Assembly Complex, where the Wrangler SUV and Gladiator pickup are made, and Ford’s Michigan Assembly plant, where the Bronco SUV is made.
Those were two of the first three assembly plants struck by the UAW on Sept. 15 during a rolling strike that alternately hit the Detroit Three over a 40-plus day duration. Dana has a major axle plant in Toledo that supplies the Jeep complex and another plant in Napoleon that ships axles up to the Ford plant in Wayne, Mich.
The UAW strike into November cost Dana about $132 million in sales during the fourth quarter. And it was largely responsible for overall sales in the quarter falling to $2.5 billion from $2.6 billion in the year-earlier quarter, said CFO Tim Kraus during the earnings call.
It also caused a $7 million decline in earnings before interest, taxes, depreciation, and amortization in Dana’s traditional parts business for gasoline and diesel-powered vehicles. Profits in that line are still strong and paying for the company’s rapid expansion into EV parts.
Mr. Kamsickas said in the earnings presentation that Dana largely offset the impact of the strike with operating efficiencies. And solid execution of its 100-plus product launches in 2023 has set the company on a course for future growth during the next three years, he said.
The company projects it will top sales of $11 billion in 2025 after reaching $10.6 billion in 2023. That’s up $399 million from the $10.2 billion posted last year.
Moreover, earnings are on the rise, despite the slight wobble caused by the strike.
Dana’s EBITDA rose to $845 million in 2023 from $700 million in 2022, led by an $100 million increase in traditional products and an $8 million gain in its EV segment. Dana is projecting that number to rise another $80 million next year to about $925 million, the company’s presentation showed.
Dana is winning new business with existing customers and new ones, and for its traditional products and those supporting electrification.
For example, Mr. Kamsickas pointed to a new contract to supply electric vertical motor drives units for Hyster-Yale Warehousing Equipment and the addition of an SUV for which Dana will be supplying a full-EV drive system for a fleet of EVs being launched by an as-yet identified carmaker.
Those products are part of a three-year backlog of business of $950 million, $50 million more than a year ago.
EV drive system sales rose by $182 million in 2023, the presentation showed.
First Published February 20, 2024, 9:52 p.m.
