Dana Corporation announced today that it has been informed by Mack Trucks, part of the Volvo group, that the truck maker does not plan to extend its current agreements for supply of chassis assemblies and groomed axles for Mack’s on-highway and vocational trucks.

The current chassis assembly agreement with Dana expires at the end of 2003, and the axle agreements expire in May 2004.

“We are disappointed by this change of direction by Mack,” said the president of Dana’s Heavy Vehicle Technologies and Systems Group Nick Cole.
“For more than 15 years, Dana has provided the highest calibre of service to Mack — as we will continue to do in the future.”

Cole said that Dana generated revenue of approximately $US293 million in 2001 from the sale of the chassis assemblies and groomed axles to Mack. Approximately $120 million of these sales consisted of Dana-manufactured components, and the balance was purchased parts, assembly, and other related fees.

He said that Dana continues to secure new business that is expected to exceed this loss and is aggressively pursuing further opportunities for its facilities in Lancaster, Pennsylvania and Lugoff, South Carolina.

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“Mack Trucks appreciates the products and services that Dana has provided for more than 15 years. This is a difficult decision due to tough market conditions and restructuring needs, and is not a reflection on the people of Dana, who have delivered quality chassis systems,” said Mack vice president of purchasing Carlos Hungria.

The Dana-Mack contract relationships date back to the mid-1980s, when Dana began supplying fully assembled chassis to Mack’s Macungie, Pennsylvania., and Winnsboro, South Carolina, plants.

By effectively reducing Mack’s supply base from 500 separate component suppliers to just one, Dana was able to reduce the truckmaker’s administrative workload with regard to logistics, purchasing, and quality control.

Mack Trucks and its parent company, Renault V.I., were acquired by AB Volvo in December 2000.

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