Dana Corporation (NYSE: DCN) today announced that it has signed a definitive agreement to purchase an interest in GETRAG Getriebe- und Zahnradfabrik Hermann Hagenmeyer GmbH & Cie, a manufacturer of transmissions, transaxles, axles, and other automotive components. Headquartered in Ludwigsburg, Germany, the company had sales of $750 million in 1999. Financial terms of the agreement were not disclosed.

"This relationship will support our global growth strategy for the passenger car market, and enhance our focus on advanced automotive technologies," said Dana Chairman and CEO Joe Magliochetti. "GETRAG has a highly skilled workforce and a solid reputation for precision engineering, quality, and innovation. We have great respect for this fine organization and we are excited about expanding Dana's relationship with GETRAG."

Under the terms of the agreement, Dana will acquire a 30-percent stake in GETRAG Cie, the parent company of the GETRAG group of companies, and a 49-percent stake in GETRAG's North American operations. Bill Carroll, president of Dana's Automotive Systems Group, will be named to the Advisory Board of GETRAG GmbH & Cie.

"This strategic partnership will strengthen Dana's automotive offerings globally, and particularly enhance our opportunities in the European passenger car market," Mr. Carroll said.

"Strategically, this transaction is very similar to our recent collaboration with GKN to produce advanced driveline technologies. GETRAG's transaxle and gear manufacturing technologies are highly complementary to our expertise and will enable us to further develop our under-the-vehicle technology, products, and systems," he added.

Tobias Hagenmeyer, GETRAG's chairman and CEO, said, "This agreement with Dana fits our strategy of continued growth and complements in a great way our recently announced joint venture with Ford. In both cases, GETRAG will benefit strategically by further developing ideas and innovations to better serve our customers on a global basis. We are very pleased to advance our relationship with another global leader in advanced automotive technology for the benefit of both companies."

GETRAG is a major supplier to the European automotive industry and has an excellent reputation for the quality of its products and technologies. The company employs some 5,000 people in 11 manufacturing facilities worldwide. Its major customers include Audi, BMW, DaimlerChrysler, Ford, GM/Opel, Jaguar, Porsche, and Volkswagen.

GETRAG and Ford-Werke AG recently signed a joint-venture agreement to develop and produce innovative manual transmissions in Europe. Under terms of the agreement, Getrag will purchase a 50-percent interest in the joint venture encompassing Ford's manual transmission manufacturing plants in Bordeaux, France; Cologne, Germany; and Halewood, U.K.; as well as its technical center in Merkenich, Germany. The agreement also includes a 10-year gearbox sourcing commitment from Ford.

Dana and GETRAG will establish a joint technology council to explore ways to further advance automotive applications for design and technology. The two companies will also create a joint marketing council to bring the resulting new products and innovations to market rapidly.

The transaction is subject to the approval of appropriate regulatory agencies.

This move is consistent with Dana's previously announced Five-Point Plan for continued growth and improved profitability, which is a tactical link to the company's overall strategic plan.

The plan includes the following five tactics:
  • Grow while focusing on returns and maintaining financial discipline;
  • Seek strategic, bolt-on acquisitions at reasonable valuations;
  • Divest non-strategic and non-performing operations;
  • Repurchase stock as the company generates cash; and
  • Complete integration efforts and realize synergy savings.

    Dana Corporation is one of the world's largest independent suppliers to vehicle manufacturers and their related aftermarkets. Founded in 1904 and based in Toledo, Ohio, the company operates some 320 major facilities in 32 countries and employs more than 82,000 people. The company reported sales of $13.2 billion in 1999. Dana's Internet address is www.dana.com.