Dana Holding Corporation
) plans to close down its operations in the Milwaukee plant by
early 2013. The company has informed the Wisconsin state officials
about shifting the plant located in 11500 W. Brown Deer Road to the
company's facility in Danville, Kentucky.
Dana Holding is consolidating the engine-gasket manufacturing
business in order to achieve long- term growth and greater success.
The closure of the plant will render nearly 150 workers jobless;
however, a handful of the company's employees will be offered the
choice of relocating to another facility of the company. At
present, the company employs 25,500 people and serves about 26
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According to the union members, the plant in Danville employs about
195 people with wage scale lower than that in the Milwaukee plant.
The wages at the plant range from $16.5 to $32.0 per hour. It is
thus clear that the plant closure is mainly driven by the company's
cost cutting strategy.
Milwaukee is the largest city in Wisconsin. Recently,
General Motors Company
) and Chrysler have withdrawn their operations from the city
followed by supply constraints as suppliers Delphi Corp, in Oak
) in Janesville have both withdrawn from the market. These factors
are also responsible for the closure of Milwaukee plant.
In the first quarter of 2012, Dana witnessed a 30% increase in
earnings to 44 cents per share from 34 cents a year ago. The
results surpassed the Zacks Consensus Estimate by 3 cents. The
higher profit was attributable to higher sales, material cost
recovery, and cost reductions strategy of the company. In absolute
terms, the company reported a profit of $94 million compared to a
loss of $73 million recorded in the first quarter of 2011.
Total revenue in the quarter escalated 9.4% year over year to $1.97
million. The growth was driven by higher vehicle production, which
offset the effects of foreign currency.
Maumee, Ohio based Dana is one of the world's leading suppliers of
driveline, sealing, and thermal technologies, which improves the
efficiency and performance of passenger, commercial and highway
vehicles. The major competitors of the company include
Magna International Inc.
). Currently, it retains a Zacks #3 Rank, which translates into a
short-term (1 to 3 months) Hold rating.