Dana Incorporated has announced the appointment of R Bruce McDonald, a member of the Dana Board of Directors, as Chairman and Chief Executive Officer, effective immediately.
McDonald’s appointment follows the retirement of James Kamsickas as Chief Executive Officer and his departure from the Board.
Kamsickas will remain as an advisor to the company through March 2025 to support the transition. The Board has retained a leading executive search firm to identify Dana’s next permanent CEO.
“Jim is an exceptional leader with more than 18 years as a CEO in the industry. He led Dana through one of the industry’s most challenging periods while successfully building a high-performance culture, enabling a world-class manufacturing company and assembling a portfolio of leading products and technologies,” Keith Wandell, Dana’s Lead Independent Director, said in a statement.
“The Board and Jim agreed that now is the right time to transition the leadership of Dana, and we thank Jim for his many contributions over his nine years leading the Company and wish him all the best.”
Kamsickas said he was proud of the work the Dana team has done over the past decade to grow revenues and successfully enhance the technology to serve all mobility markets.
“It has been an honour to lead this talented global team during that time and I am confident the company is well positioned for the future,” he said.
While there was confidence in the long-term opportunity in the mobility industry, Wandell said it was undergoing a significant transformation, including protracted cost pressures and demand uncertainty.
“To address these challenges and deliver more value to customers and shareholders, Dana is taking action to streamline the business, unlock the value of its Off-Highway business and further reduce costs,” he said.
“Bruce is an experienced public company CEO in our industry with significant M&A expertise, and we are confident that he is the right person to oversee this transformation while the Board conducts a search for a permanent successor.”
Dana today also announced it has engaged financial advisors Goldman Sachs & Co LLC and Morgan Stanley & Co LLC to sell its Off-Highway business, which the Board believes will unlock substantial value for shareholders.
The Off-Highway business provides drive and motion systems for heavy-duty vehicles in markets such as agriculture, materials handling, mining, construction and forestry.
A sale will position Dana with a streamlined go-to-market approach focused on serving its light and commercial vehicle customers, with traditional and electrified products that are largely shared across the remaining portfolio.
Proceeds from a potential sale will enable Dana to strengthen its balance sheet through substantially reduced leverage, and to return capital to shareholders.
While the company and its advisors believe there is strong interest in the Off-Highway business, there can be no assurance that the sale process for Off-Highway will result in a transaction.
There is no timeframe for the conclusion of the process, and Dana does not intend to comment further regarding this matter unless and until further disclosure is determined to be appropriate.
As Dana continues to improve its profitability in a challenging operating environment, the company announced further actions to support sustained long-term profitability and enhanced cash flow generation.
This includes substantial reductions in selling, general and administrative costs across all the company’s businesses and engineering expenses to match current industry dynamics, including the ongoing delay in the adoption of electric vehicles.
The company expects to deliver annualised savings of approximately $200 million by 2026.
Furthermore, the company plans to reduce capital spending to reflect the revised market demand for electric vehicles.
“Dana is committed to a strategy that accelerates value creation and has taken action to flex its cost structure and generate efficiencies by leveraging its core strengths through current market conditions,” said Bruce McDonald, Chief Executive Officer.
“It is clear that further actions are needed, and I am confident that the new incremental cost reductions, paired with the benefits of a potential Off-Highway sale, will enhance shareholder value.
“Following the Off-Highway business sale, we believe Dana will have an adjusted EBITDA margin and free cash flow margin in excess of current levels.”
Dana, according to McDonald, is differentiated by leading technology innovation and a track record of continuous improvement.
“My conviction in our businesses, the team and the opportunities to capitalise on the EV transition over the long-term remain strong. I look forward to stepping into my new role as CEO at such an important time for Dana and will work diligently alongside the Board and management team to deliver on these actions and drive value for Dana shareholders.”
Prior to his appointment as Chairman of the Board, Mr. McDonald served on Dana’s Audit Committee and as chair of the Nominating and Corporate Governance Committee.
He has been a member of the Dana Board of Directors since 2014.
