Dana to cut more jobs, close plants as loss widens

The Toledo, Ohio, company said its loss available to common stockholders widened to $279 million, or $2.79 per share, from $69 million, or 46 cents per share, in the year-earlier period. Sales for the quarter ended Sept. 30 fell 9 percent to $1.93 billion from $2.13 billion.

Dana said the plant closures will take place in 2009 and 2010, while the 5,000 job cuts will be complete by the end of this year. Previously, Dana said it intended to cut only 3,000 jobs this year.

"These are difficult actions," Executive Chairman John Devine said in conference call with analysts. "We don't like doing them, but the industry situation right now forces us to move as quickly as we can in this environment."

Dana said it remained in compliance with its financial covenants through Sept. 30. However, it said it won't be able to comply with its covenants through the end of the year, and expects to complete an amendment to its credit facility with its lenders within the next few weeks.

Dana, which emerged from bankruptcy protection in January after nearly two years of restructuring, said it had $1 billion in cash and global liquidity of $1.3 billion.

Dana also cut its sales guidance for the year, to $8.2 billion. The company had previously expected $8.6 billion to $8.8 billion in sales for the year.

It also targeted lower sales in 2009 of between $7.2 billion and $7.3 billion. Devine told analysts he expects the company to continue to suffer from weaker volumes next year.

Shares of Dana tumbled 19 cents, or 10.1 percent, to $1.70 in Thursday trading. The stock is down 86 percent from a post-bankruptcy high of $13.30 set in February.

The 2,000 additional job cuts this year represent about 6 percent of the company's 32,000 employees.