TOLEDO, OHIO — Dana Corp. has set a goal to conduct at least half its business outside the United States by the year 2000.
The Toledo-based automotive parts supplier, which is increasing its plastics molding work steadily, records about 36 percent of its sales from overseas markets, said Michael Plumley, industrial group vice president. However, the company plans to open new plants or acquire existing facilities in its drive to reach its overseas goals, Plumley said.
``It's important for us to be a major player in every region of the world,'' Plumley said in an interview at Dana's headquarters. ``As the global market evolves, we'll be well-positioned if we continue to make a major investment now. That strategy should pay off in greater returns worldwide down the road.''
Dana's strategy folds neatly into the supplier's goal of expanding annual sales to $10 billion by the year 2000. The company, which expects to reach the $8.2 billion sales mark in 1997, has reshaped its operations this year by shedding noncore or underperforming business units and acquiring a basketful of new companies, many with extensive manufacturing plants overseas, Plumley said.
A key growth area for Dana is China, where General Motors Corp., Volkswagen AG and other carmakers assemble vehicles. GM relies heavily on its supply base to produce Buick Regal vehicles in China, said Stephen Schnell III, former managing director of General Motors Overseas Corp. in Shanghai, China, and a manager at GM's Warren, Mich., technical center.
``It would be terribly expensive for us to produce parts in China on our own or to import parts,'' Schnell said. ``We don't force our suppliers to come to China, but we like to build relationships with those [companies] that can provide real-time parts delivery to our plants.''
Both Schnell and Plumley will discuss the China market Oct. 23 at the Automotive Global Growth Opportunities and Strategies conference in Dearborn, Mich. The conference is sponsored by the SMC Automotive Alliance of Troy, Mich., the Detroit section of the Society of Plastics Engineers and the Michigan Jobs Commission.
GM made the decision in the mid-1980s to go to China and establish its position for long-term growth, Schnell said. Today, the automaker produces about 100,000 Regals a year for that market. Yet, while GM is entrenched there, other Big Three automakers — and many large suppliers — have taken a wait-and-see approach while China slowly shifts to a more market-driven economy.
Dana does not expect its China operations to reap large profits today.
``It's more of a long-term strategy for us,'' Plumley said. ``We know we won't convert the country tomorrow from bicycles to cars. It might take 20-30 years for China to move to a free-market system, but we can still be successful working with carmakers there currently.''
Dana has three plants in China and a sales office in Beijing. The plants, located in Shenyang, Shenzhen and Tianjin, make driveshafts, filtration products and metal processed parts.
A fourth plant, at a location to be determined, will produce axles when it opens next year, said spokesman Gary Corrigan.
Dana's sales in the Asian market have grown about 20 percent a year during the past three to four years, Plumley said.
Opening plants in China and other Pacific Rim countries could help insulate the publicly held supplier against the threat of an automotive sales dip in the United States, he said.
``Economies in different countries operate under different business cycles, so we wouldn't be as vulnerable to fluctuations in [U.S] vehicle demand,'' he said.
The company, which employs 3,500 at 10 plants in Asia, has accelerated its growth with a spate of acquisitions. In 1997 alone, the company has completed the purchase of the piston ring and cylinder liner units of Muskegon, Mich.-based SPX Corp.; the Clark-Hurth axle and transmission unit of Woodcliff Lake, N.J.-based Ingersoll-Rand Co.; and axle operations from Cleveland's Eaton Corp.
Dana also bought injection molder Mohawk Plastics Inc. in Marine City, Mich., in 1996. Mohawk makes gaskets, trim and other under-the-hood auto parts.