Dana's U.K. Operations Reach Agreement to Address Historic Balance Sheet Liabilities

RUGBY, Warwickshire, Great Britain, Feb. 28, 2007 /PRNewswire-FirstCall/ -- Dana Corporation's affiliate companies in the United Kingdom have today concluded an agreement with their pension scheme creditors to settle a substantial portion of their historic balance sheet liabilities in exchange for a one-time cash settlement and a transfer of a portion of equity in the business. This action will enable the companies to preserve jobs in the U.K. and to complete the U.K. portion of Dana's planned global divestitures.

(Logo: http://www.newscom.com/cgi-bin/prnh/19990903/DANA )

"We have found a solution that ensures that our plants can continue to operate normally, our business can obtain long-term secured financing, we preserve as many jobs as possible, our suppliers continue to be paid, and our customers continue to receive products on time and without disruption," said Ralf Goettel, president of Dana Europe.

The restructuring of the Dana U.K. companies has been achieved by transferring liabilities of the companies to a newly funded special-purpose company separate from the operating company group. This structure was designed to protect the employees, customers and suppliers of the business and to facilitate a consensual solution. With this action, the Dana U.K. companies will remain on sound financial footing and will proceed with business as usual on that basis.

Goettel said the issues faced by the U.K. business are not the result of the Dana Chapter 11 filing in the United States. Rather, he said, the nature of the U.K. obligations and U.K. law, combined with Dana's planned divestiture of several non-core businesses, have forced the company to address this issue regardless of any activity in any other region of the world.

"I want to emphasize that none of Dana's operations in any other region of the world will be affected by this initiative, including our operations in other locations in Europe," he added. "This is an issue specific to the U.K. only, and under the agreed solution, the liabilities being addressed cannot be transferred to any other Dana group company in any other region. All of our plants in every region, including the U.K., are open and producing products for our customers as specified and delivering materials on time, and will continue to do so. This will not change as a result of the current actions in the U.K."

Dana has worked with the trustees of the pension schemes, the Pensions Regulator and the Pension Protection Fund to reach this solution and the Pensions Regulator has now issued a clearance statement.

The solution will enable the U.K. axle and driveshaft businesses that are retained to:

   - Continue normal plant operations with no disruption to customers;
   - Secure financing with the opportunity to move forward without the
     crippling burden of legacy pension schemes, thereby improving
     competitiveness and future employment prospects;
   - Provide for trade suppliers and employees to be paid on normal terms;
   - Provide for the preservation of the highest possible level of accrued
     pension benefits for current and past employees; and
   - Maintain the largest possible level of employment opportunities.

Furthermore, Dana will be able to complete the planned divestitures in the U.K., providing those businesses with a solid foundation for the future.

"This solution creates a sound basis for our retained business to grow, and for our divested businesses to prosper under new ownership," Goettel added.

About Dana Corporation

Dana is a leading supplier of drivetrain, chassis, structural, and engine technologies. Dana people design and manufacture products for every major vehicle and engine producer in the world. Based in Toledo, Ohio, with operations throughout the world, Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company's continuing operations reported sales of $8.6 billion in 2005. Dana' Internet address is http://www.dana.com/.

Dana and certain of its U.S. subsidiaries are operating under Chapter 11 of the U.S. Bankruptcy Code as debtors in possession. Information about the bankruptcy proceedings can be found at http://www.dana.com/reorganization. While Dana continues its reorganization under Chapter 11, investments in its securities are highly speculative. Although shares of Dana common stock continue to trade on the OTC Bulletin Board (OTCBB) under the symbol "DCNAQ," the trading prices of the shares may have little or no relationship to the actual recovery, if any, by the holders under any eventual court-approved reorganization plan. The opportunity for any recovery by holders of Dana common stock under such reorganization plan is uncertain and shares of Dana common stock may be cancelled without any compensation pursuant to such plan.

Forward-Looking Statements

Statements in this release regarding the impact of the Dana U.K. restructuring on the Dana's continuing operations in the U.K. and regarding Dana's planned divestitures of other U.K. operations constitute "forward- looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements represent Dana's expectations based on its current information and assumptions. Forward-looking statements are inherently subject to risks and uncertainties. Actual results could differ from those that are anticipated. Dana does not undertake to update any forward-looking statements in this release.

Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/19990903/DANA
AP Archive: http://photoarchive.ap.org/
PRN Photo Desk, photodesk@prnewswire.com

SOURCE: Dana Corporation

CONTACT: Paul Burman of Dana Corporation, +44-1788-538601, or
paul.burman@dana.com

Web site: http://www.dana.com/

Company News On-Call: http://www.prnewswire.com/comp/226839.html