Dana blames UAW strike for $39 million Q4 loss

Longtime drivetrain parts supplier Dana Inc. said it lost $39 million in the fourth quarter in large part because of the UAW strike, which the company said disproportionately impacted its factories.

Sales on the quarter fell 2.4 percent from a year earlier to $2.5 billion. Still, the company's fourth-quarter loss represented an improvement from its earnings report a year ago, when the company lost $179 million primarily because of the "recording of noncash tax valuation allowances," Dana said in a news release Tuesday.

Dana CEO James Kamsickas said the supplier makes parts for the Jeep Wrangler and Gladiator, as well as Ford's Bronco, Ranger and Super Duty, production of which stopped for various lengths of time during the strike. Those parts programs are some of the company's largest, meaning the strike had a "disproportionate" impact on Dana's business, he said.

"As challenging as the shutdowns were, the restart was an even more daunting task, ensuring that labor, components supply, logistics and so forth were in place and coordinated for a successful operational restart," Kamsickas said during a call with investors. "It was very difficult to execute, but the entire Dana team pulled together resulting in a near-flawless shutdown and restart across the company."

On the year, Dana reported net income of $38 million, an improvement from the $242 million it lost in 2022. Full-year sales rose 3.9 percent from 2022 to $10.56 billion, a gain that was spurred by improved market demand and inflation cost recoveries Dana secured from customers, helping to offset the impact of the UAW strike.

Dana said it expects 2024 sales to rise to between $10.65 billion and $11.15 billion, with adjusted earnings before interest, taxes, depreciation and amortization of between $875 million and $975 million. That compared with adjusted EBITDA of $845 million in 2023.

The company expects profits to rise in 2024 thanks to more stable production from customers along with expected new business.

Dana said it has a three-year business backlog of $950 million, a $50 million increase from its previous three-year backlog. About 74 percent of that business is slated for vehicles with electric propulsion systems, according to Dana.

Kamsickas said the past several years have been challenging as the supplier has navigated the impacts of the COVID-19 pandemic, inflationary pressures, parts shortages, the transition to electric vehicles and the UAW strike. He said the company has used those events to "significantly strengthen the company" and make it better positioned for success in the future.

"We believe you're starting to see it come through in the numbers," he said.

Sales from Dana's light-vehicle drive systems unit, the supplier's largest by annual sales, fell 10 percent in the fourth quarter to $923 million in large part because of the UAW strike. Commercial vehicle sales were roughly flat at about $509 million.

Shares in Dana slipped 7.8 percent to $12.46 when the market closed Tuesday.

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.