Dana Inc., a developer of various drive and motion technologies, has announced plans to sell its off-highway business which serves the agriculture, construction, and mining equipment markets as well as several other heavy-duty mobile machinery sectors.
The sale is part of cost-reduction efforts the company is undertaking. It views the potential sale of this business unit as a beneficial step toward strengthening its balance sheet.
If sold, it would be the second such sale this year aimed at improving the company's operational efficiencies as earlier in 2024 Dana announced the sale of its European hydraulics business.
High interest rates and inventory levels have dampened demand for mobile equipment in 2024. Farm incomes in particular are down due to lower crop prices, leading to reduced demand for new agricultural machinery — one of the largest customer markets for the fluid power industry. As such, component manufacturers like Dana are feeling the effects of this down market.
Read our interviews with leaders from the fluid power industry for their insights on market conditions in 2024 and areas of opportunity in 2025.
Besides the financial benefits it foresees, Dana said selling the off-highway business would streamline its market approach as well by enabling it to better focus on serving light and commercial vehicle customers. There is more commonality between the traditional and electrified drivetrain products used within these vehicle sectors, benefiting development and manufacturing costs.
Although electrification and other technology trends generally make their way into mobile off-highway equipment from the on-road sector, the heavy machinery market has more unique duty cycles and application needs. This often requires more investment in research and development to ensure optimized drivetrain solutions to meet varied machine needs.
The company believes there is strong interest in its off-highway business, but also made a point to note there is no guarantee that it will in fact be sold. Dana does not have a timeframe for concluding the potential sale and will announce further details only when appropriate.
In addition to selling the off-highway business, Dana is reducing costs associated with various business and engineering expenses as well to match current market conditions which it said include the slower uptake of electric vehicles in the sectors it serves.
The company is undergoing various changes to better position itself in an evolving marketplace, including the appointment of a new Chairman and Chief Executive Officer. It has appointed R. Burce McDonald, a member of the Dana Board of Directors, to the position effective immediately upon the retirement of James Kamsickas who has served as Chief Executive Officer for the last 9 years.
