Dana sees 'significant' Q3 impact from UAW strike

MAUMEE, Ohio—Auto parts supplier Dana Inc. said Oct. 27 its operations in North America were "significantly impacted" by the ongoing United Auto Workers' strikes against the Detroit 3 auto makers, while outlining the expected financial hit from them.

It supplies key parts for vehicles such as the Ford Super Duty, Bronco and Ranger, as well as the Jeep Wrangler and Gladiator.

The company said the strike has impacted less than 10 percent of its plants so far, but sales were $65 million lower in the third quarter because of it. It anticipates a sales hit from the strike of about $185 million in October.

"The UAW strike is significantly impacting a number of our operations in North America while our heavy-vehicle business and operations in the rest of the world are largely unaffected," Timothy Kraus, Dana's chief financial officer, said Oct. 27 as the company reported third-quarter results.

Dana said it swung to $19 million in net income during the quarter compared with an $88 million loss during the same quarter last year, which was hit by a one-time $191 million impairment charge.

Revenue during the quarter grew 5 percent to $2.7 billion.

Dana also made these projections about the strike's impact on its finances:

• Adjusted earnings before interest, taxes and other costs would be $850 million with strike through Oct. 31; $760 million with strike through Dec. 31.
• Operating cash flow of about $490 million with a strike through Oct. 31; $375 million with strike through Dec. 31.
• Free cash flow use of $20 million with strike through Oct. 31; $135 million use with strike through Dec. 31.

Dana's low-end guidance assumes a strike continuing at all three Detroit auto makers through Dec. 31. The UAW and Ford reached a tentative agreement on Oct. 25. GM and Ford have pulled their full-year forecasts this week to account for impacts from the UAW strikes.

Earlier this week, consultancy firm Anderson Economic Group estimated the economic losses related to supplier wages and earnings of about $2.78 billion through the fifth week of the strike.

Dana said it was continuing to monitor the health of Tier 2, 3 and 4 suppliers, many of whom have been hit particularly hard by the strike after being under financial pressure for years.

Through Sept. 30, about 45 percent of Dana's sales in its light-vehicle drive systems business have been to Ford, with another 21 percent to Stellantis. The Detroit 3 also made up about a third of all sales in its power technologies unit in that time.

Dana said its third-quarter revenue was boosted by higher new-vehicle demand, as well as cost-recovery actions it took and the conversion of its sales backlog. It also gained from a "beneficial mix" in its sales and more consistent vehicle assembly schedules when compared the third quarter of 2022, though it was hurt by inflationary pressures and the strike.

Dana reported a 3.5-percent rise in its light-vehicle business from a year earlier to $1.08 billion on the quarter. Revenue from its power technologies unit jumped 7.6 percent to $311 million.

Dana, based near Toledo, Ohio, ranks No. 29 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to auto makers of $10.16 billion in 2022.

John Irwin and Philip Nussel of Automotive News, along with Reuters, contributed to this report.