Components manufacturer Dana Corporation, which filed for US bankruptcy protection in March, reportedly plans to close eight US plants and downsize three others in North America.

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Citing a filing with the US Securities and Exchange Commission, the Associated Press (AP) reported that Dana also said it would eliminate health benefits for retirees and attempt to alter labour contracts at its unionised plants.


“Our existing labour costs, especially in the US, impair our financial position and are a significant impediment to a successful reorganisation,” the company was reported to have said in the filing.


It will announce within the next month which of its 66 plants will close, Dana chief executive Michael Burns said in a letter sent to employees cited by the news agency on Thursday. Eight other plants have either shut down or targeted for closing in the last year.


The company has not decided which plants will close or how many employees will be affected, spokesman Chuck Hartlage told AP.

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Dana has said in its bankruptcy filing that rising energy costs were driving up production costs and hurting demand for its customers’ products, according to the report.


Closing the plants, eliminating health benefits and reducing other labour costs should save between $405m and $540m each year, Burns reportedly said.


According to the Associated Press, Dana said it lost $US356m for the quarter ended 30 September compared with $1.2bn a year ago when the company recorded tax and restructuring charges. Sales fell slightly to $2bn from $2.1bn. For the year to date, the company has lost $510m, down from a loss of $1.2bn a year ago. Sales fell to $6.5bn from $6.6bn.