Dana: competing with technology and synergy

Automotive Design & Production, June, 2004 by Gary S. Vasilash

Mike Burns is standing in a 190,000-[ft.sup.2] building that is so new that it still has the architectural analog to the "new car smell." The facility is in a developing area in Maumee, OH, which is just southwest of Toledo, where Dana Corporation, the $7.9-billion automotive supplier, is headquartered. Burns has been Dana CEO and president for about six weeks when the Dana Automotive Systems Technology Center officially opens on April 16. He still has that new executive smell.

Prior to joining Dana, Burns was on the other side of the supplier/OEM equation: He had been the president of General Motors Europe. Which meant that he dealt with Opel, Vauxhall, Saab, GM Daewoo Europe, GM North American vehicles in Europe, and the GM-Fiat relationship. The supplier side of things isn't completely foreign to Burns, as he's held a variety of positions within the then-captive Delco and Delphi organizations. But now at Dana it is a pure supplier play, dealing with three major business units--Automotive Systems (18,820 people; 68 major facilities), Engine and Fluid Management (15,834 people; 78 major facilities), Heavy Vehicle Technologies and Systems (5,545 people; 20 major facilities)--and a list of customers so extensive that he remarks, "We supply virtually every OEM in the world--outside a few small Chinese and Indian manufacturers." Drive shafts and axles. Frames, suspension and steering products. Heat exchangers valves, and coolers. Piston rings and gaskets. Burns's job at Dana is certainly different than when he was dealing with Astras and Tigras, Vectras and Merivas. But in some ways, the challenges are similar, as he faces demands like integrating companies and profitably growing the business. Especially profitably growing the business.

The Automotive Systems Technology Center is staffed with some 500 people, 300 of whom are directly involved in engineering. This development center is equipped with a variety of systems, from axle and driveshaft dynos to environmental test chambers, from scanning electron microscopy to finite element analysis. Asked how he would have perceived the center from the perspective of his previous position, Burns answers, "This would be impressive from the standpoint that the capability and the systems are in place. A lot of times when you go to a supplier you see a kind of fracture--they do things in a lot of places." But in the case of this tech center, there are no fault lines; everything is of a single piece. This approach is in effect echoed by the way that Dana has recently done a reorganization. A few weeks after he joined Dana it was announced that the Engine and Fluid Management Group and the Automotive Systems Group would be combined to a single organization under the leadership of Mike Laisure. By bringing together these groups, Burns explains, they are able to focus resources on meeting customer needs in a way that goes beyond what would ordinarily occur with the separation of businesses, even though there is a single corporate parent. Continuing on this theme, Burns notes, "Dana has had a history of acquiring businesses. One of the things we need to do is better integrate those businesses to work together. Some of the newer companies that have been purchased have some great ideas, and we want to get those back into the rest of the businesses. Likewise, some of the traditional businesses have wonderful practices that those new companies can leverage."

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A focus at Dana is to leverage intellectual resources and know-how. Although many of the products that are produced by Dana might be perceived as being commodities, Burns insists that there are discernable differences that need to be taken into account, whether it is the quality of the gears that are used in a driveline or the lighter assembly that can be made with magnetic pulse welding.*

Dana presently has facilities in 30 countries. As vehicle manufacturers open operations in new locations--be they in eastern Europe or China--a question arises as to whether suppliers need to follow. Burns thinks so. "If you're building your product in western Europe and supply a PSA plant in Slovakia, you're probably not going to be competitive." He believes that Dana has a "proven ability to move fast" when it comes to meeting OEM requirements: "You have to be very diversified. You need good manufacturing facilities in low-cost places. They don't have to be elaborate, but they have to get the job done."

As a supplier, Dana is under continual cost pressures. Burns is consequently focused on increasing revenue. He sees the company's broad customer base and extensive product offerings as advantages in this regard. "The idea is to get our content per vehicle up." He points out the annual global production of light vehicles and medium- and heavy-duty trucks is approximately 60 million. "We need to get more content on each one of those vehicles. It's bang with one customer. It's a lot of different things with our entire customer base."