Dana, Dongfeng proceed with axle merger

SHANGHAI, China — Dana Corp. and Chinese truck maker Dongfeng Motor Co. have amended their 50-50 joint venture Dongfeng Dana Axle.

Certain terms of the original agreement with Dongfeng signed on March 10, 2005, were renegotiated after Dana filed for reorganization under Chapter 11 in the U.S. in March 2006.

Under the amendments and other agreements signed by both companies, -Dana Mauritius will make an initial payment of about US$5 million) to Dongfeng for a 4-percent equity interest in the joint venture. Dana will purchase the remaining 46-percent equity interest after April 1, 2008.

Dongfeng Dana Axle, which will be headquartered in Xiangfan, China, will employ approximately 8,000 employees in three production facilities in Xiangfan and Shiyan, as well as a research and development center that will be established. It will be the the largest commercial vehicle axle supplier in Asia.

Dana will also licence certain commercial vehicle axle technology to Dongfeng Dana Axle for the term of the joint venture.

“We are very pleased to reach this milestone with Dongfeng,” said Nick Stanage, president of Dana’s Heavy Vehicle Products group. “For Dana’s Commercial Vehicle Systems business, this joint venture also provides a great opportunity to balance and complement our extensive operations in North America.”