Roughly one-third of Dana Corp.’s $10 billion in sales comes from torque and traction products, such as axles and driveshafts. The segments are strategically crucial to Dana, yet surprisingly, there has been little integration between the two.

But the supplier now is combining the two operations into one global unit, with a new $24 million headquarters to be built southwest of Toledo, OH, on 30 acres (12 ha) in Monclova Township. The new Torque and Traction Technologies Group headquarters will stand several miles from Dana’s world headquarters in Toledo.

Dana axle

Bill Carroll, president of Dana's Automotive Systems Group, tells Ward’s the consolidation is driven by the growing popularity of modules and systems.

“We will continue to sell components, but we will bring these operations together so we can better understand NVH (noise, vibration and harshness) and ride and handling,” Carroll says. “We were organized as a supplier of components at one time, and now we are combining these operations to leverage technology. The sum of the parts will be much greater than the whole.”

Carroll says the time is ripe for this consolidation as auto makers migrate toward more complex independent rear suspensions for SUVs to make them ride more car-like. Dana, for instance, is supplying the front and rear axles for the BMW X5, which is produced in Spartanburg, SC, and the upcoming BMW X3 SUV, which will be produced in Graz, Austria.

Dana also produces the front and rear axles and driveshaft for the Holden Monaro, which is produced in Australia. General Motors Corp., which owns Holden Ltd., is shipping the Monaro to the U.S. next year as a modern interpretation of the Pontiac GTO muscle car.

(see related story: GM Makes GTO Revival Official)

As part of the Torque and Traction consolidation, 300 employees will be invited to relocate from Fort Wayne, IN, Dana’s current home for axle technology. The employees work primarily in engineering and sales and marketing. The 2-stage move brings 150 employees to a temporary facility near Toledo this year, with the remainder making the move in 2003 when the facility is completed.

Carroll concedes that some employees may choose not to leave Fort Wayne. “We have come up with a world-class moving package to help in the sale and purchase of a home and for moving of families,” he says. “We’re going through the process with each employee.”

Dana’s driveshaft operations currently are based in Holland, OH, a suburb of Toledo. It serves as the North American design center for main drives for driveshafts. Some 200 employees there will relocate their offices to the new headquarters.

Dana lost $300 million in 2001, much of it due to restructuring. The torque and traction business, however, is a moneymaker for Dana, Carroll says.

Groundbreaking for the new divisional headquarters is set for this summer, with construction concluding by the end of 2003. Carroll says the Toledo area was selected because of its proximity to the University of Toledo and the University of Michigan in Ann Arbor, both of which are solid resources for engineering talent.

The new facility will feature an advanced prototype and manufacturing/assembly area, 3-dimensional computer modeling and testing capabilities and real-time video and network resources providing direct hookup to manufacturing facilities and customers.

Incentives from governmental entities in northwest Ohio are generous, including job grants of $20,000 per year for 10 years; school tax abatements; and $7 million in bond money through the Northwest Ohio Bond Fund. Lucas County will construct new roads and install water and sewer lines by June 2003.

The state of Ohio is offering job tax credits of 70% for 10 years, worth an estimated $5 million, as well as a 7.5% tax credit for manufacturing machinery and equipment. A $1 million state grant is covering Dana’s share of all roadway costs.