Dana, Daewoo Sign Joint Venture Agreement to Produce Rear Axles and Driveshafts in Poland
Sep 18, 1998
FORT WAYNE, Ind., Sept. 18 /PRNewswire/ -- Dana Corporation (NYSE: DCN) today announced that it has signed a joint venture agreement with Daewoo-FSO Sp.zo.o, a unit of Daewoo Group Korea, to produce rear axles and driveshafts in Warsaw, Poland. Under terms of the agreement, Dana begins with 49 percent ownership in the joint venture company with an option to acquire majority ownership after five years. The partners expect their new investment in the project to total $20 million over the next four years. The company, to be named Spicer ZPZP, represents Daewoo-FSO's 19th such joint venture and its first with a non- Korean partner. Further terms of the agreement were not released. The agreement was signed by Bill Carroll, president of Dana's Automotive Components Group, and J.C. Suk, president of Daewoo-FSO. Carroll said the transaction provides Dana with an important foothold in Eastern Europe to manufacture axles and driveshafts. "We look forward to the prospect of combining our drivetrain technology and experience to produce these core components in Poland," he said. "We see this joint venture as a key component in Dana's strategic plan to grow our passenger car business in Europe," Carroll added. "And we are also excited at the opportunity this relationship presents for further global growth opportunities with Daewoo." Added President Suk, "We hope this occasion will be a good start toward expanding mutual cooperation between Dana and Daewoo." President Suk also said that the transaction "would represent a positive move within the Polish automotive industry." Dana is a global leader in the engineering and manufacture of automotive components and systems, including axles, driveshafts, and structural components, as well as modules and systems combining these and other products. Spicer ZPZP will supply components to two Daewoo manufacturing operations in Poland for the company's Polonez sedans and its planned F-100 van. One of the world's largest independent suppliers to vehicular, off- highway, and industrial manufacturers and their related aftermarkets, Dana Corporation produces components used on more than 95 percent of the world's 650 million motor vehicles. Founded in 1904 and based in Toledo, Ohio, the company operates 270 major facilities in 33 countries and employs more than 79,000 people. The company had pro forma sales of $11.9 billion in 1997. Dana's Internet address is http://www.dana.com.