Dana Holdings Swings To 1Q Loss, Cuts 5,000 More Jobs

   DOW JONES NEWSWIRES 
 

Dana Holding Corp. (DAN) swung to a first-quarter loss on a prior-year gain related to its exit from bankruptcy as the company cut 5,000 more jobs during the quarter.

The auto-parts maker also said it was offering to buy back up to 10% of the existing $1.26 billion under its term loan facility. The company said the repurchase likely would be finished later this month.

The company had already cut 5,000 jobs last year and had said it would close up to 10 more plants than expected this year and next.

U.S. auto-parts manufacturers are suffering as auto makers struggle with plunging sales. The drop in business, combined with a credit crunch that has choked off access to rescue financing, could prove disastrous to an industry already hit by bankruptcies.

Dana's shares were up 3.5% at $2.05 in recent premarket action.

"Our first-quarter results were hit hard by the continued global recession," Chairman and Chief Executive John Devine said. He added the company was making progress on its cost cuts and improving margins.

The company posted a loss of $157 million, compared with year-earlier income of $659 million. The prior year's results included $754 million in bankruptcy gain. On a per-share basis, the latest quarter's loss was $1.64.

Revenue decreased 47% to $1.22 billion.

Despite its exit from Chapter 11 last year, Dana has faced trouble in the past several months. Standard & Poor's Ratings Services said last week that it would consider another cut to Dana's ratings, among other auto-parts makers, if General Motors Corp. (GM) were to file for bankruptcy. Dana's credit ratings were downgraded deeper into junk territory late last year by S&P and Moody's Investors Services.

-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089; [e-mail]