Dana at J.P. Morgan Auto Conference: Strategic Shift and Shareholder Focus

On Tuesday, 12 August 2025, Dana Inc. (NYSE:DAN) took center stage at the J.P. Morgan Auto Conference 2025, outlining its strategic transformation following the sale of its off-highway business. The company, led by CEO Bruce MacDonald, highlighted both opportunities and challenges in its path forward. A significant cost-cutting initiative and a $600 million share repurchase plan underscore Dana’s commitment to improving shareholder value, despite potential hurdles in the commercial vehicle market and electrification investments.

Key Takeaways

• Dana plans to complete a $600 million share repurchase by year-end, representing about 25% of its market cap.
• The off-highway business sale is expected to close in Q4, yielding $2.4 billion in net proceeds.
• The company targets a 10% to 10.5% margin and a 4% free cash flow yield for 2024.
• A $300 million cost-saving initiative is underway, focusing on reduced electrification investments and structural simplification.
• Dana is shifting to a North American-centric strategy, with a strategic facility in Mexico offering a competitive edge.

Financial Results

• Off-Highway Sale: Anticipated to close in Q4, generating $2.4 billion in net proceeds.
• Debt Reduction: Post-sale, Dana aims for a net debt to EBITDA ratio of 0.7x.
• Share Repurchase: A $600 million buyback is planned, equating to roughly 25% of Dana’s market capitalization.
• 2024 Margin and Cash Flow: The company forecasts a margin of 10% to 10.5% and a free cash flow yield of 4%.
• Cost Savings: A $300 million target, with $225 million expected to be realized this year.

Operational Updates

• Cost Cutting Program: Focused on reducing electrification investments, structural simplification, and corporate overhead reductions.
• Manufacturing Efficiency: Plans to save $100 million through automation and activity-based costing.
• Strategic Realignment: Streamlining operations in Europe, Asia, and South America to focus on North America.

Future Outlook

• 2024 Projections: Aiming for stable margins and cash flow, with no anticipated improvement in end markets.
• Global Positioning: Evaluating strategies for its commercial vehicle business in Europe and China.
• Automation and Restructuring: Pursuing further cost reductions through manufacturing automation and restructuring.

Q&A Highlights

• North American Focus: Prioritizing alignment with large SUV and truck production.
• Competitive Edge: Leveraging its new facility in Mexico for cost advantages in the commercial vehicle driveline market.
• Market Dynamics: Acknowledging the impact of the Cummins-Meritor acquisition and exploring opportunities to gain market share.

In conclusion, Dana’s strategic initiatives, highlighted at the J.P. Morgan Auto Conference, reflect a focus on operational efficiency and shareholder value. For a detailed understanding, readers are encouraged to refer to the full transcript.

Full transcript - J.P. Morgan Auto Conference 2025:

Ryan Brinkman, U. S. Automotive Equity Research Analyst, JPMorgan: So we’re going get going with the next presentation. Once again, I’m Ryan Brinkman, The U. S. Automotive Equity Research Analyst at JPMorgan. Very excited to get started with Dana, including their new CEO, Bruce MacDonald and Craig Barber, Vice President, Investor Relations.

Bruce and Craig, thanks so much for coming to the conference.

Bruce MacDonald, CEO, Dana: Thank you.

Ryan Brinkman, U. S. Automotive Equity Research Analyst, JPMorgan: Okay. Look, since you became CEO in November, it seems there have been two major things happening at the same time: number one, the off highway sale and number two, a massive materially margin enhancing cost cutting program. There are a few drivers of the cost cutting, including less spending to support growth areas and old fashioned execution. But maybe to start, I’d love to get your sense on the degree to which the two major things may be linked, that the simpler corporate structure in conjunction with off highway sale allows you to become leaner and more efficient with less overhead. Where are you finding the overhead savings?

And how much of it has been catalyzed by the decision to sell off highway?

Bruce MacDonald, CEO, Dana: Okay. So there’s a lot to unpack in that one. But I guess I’ll maybe start with the decision to sell off highway was really triggered by the fact that we are trading at an automotive, I’ll say maybe even automotive light type multiple even though we had an accretive off highway business. So it just wasn’t being reflected in our stock price. And so when you ran the sort of sum of the parts analysis of Dana on what we could sell the off highway business for, it it it was materially accretive, like, 50%.

And so so when I when my appointment was announced last November, you know, we we we came out. We said, hey. We’re selling this business. We’d we’d already made that decision, but we came out of the closet, I’ll say. Said we’re gonna do it, and and we got a fairly significant run up in our stock price because people kinda got it.

Like, we’re trading at 4 and a half or five times, and this is a seven or eight type multiple business. Times are pretty big number. Right? So so we accreted higher as the uncertainty around that transaction diminished. The then the cost reduction side, Ryan, was really around kinda backed into the number a little bit in the sense that we said, hey.

If if we do sell the off highway business and capture that value, unless we can maintain our margins and and improve our cash generation, it’s it’s gonna be kind of a one and done event, and we’re just gonna be in a situation where we’re significantly deleverage. We we have a capital return, and then we kinda have nowhere to go. So when we ran all the numbers, we said, hey. We need to pull out 300 at least 2 to $3,200,000,000 at which we later up to 300,000,000. And, you know, I was kind of fortunate in that, you know, being on the board previously.

You know, I did some access to their our cost structure. And, you know, when I went in there, you know, the board sort of said to me, well, you know, how how comfortable are you that you can cut the 300,000,000? And I said, I’m I’m highly confident. And and the and the savings really came in three areas. First, you you made a characterization about cutting some growth investments.

I I wouldn’t characterize it like that. I would say we were overinvesting in light of the risk in EV. And so the you know, Dana, for for the last few years, and, you know and I’m part of this because I was on the board and approved the strategy, is there’s a huge opportunity for the company. We pushed all our chips and and and went for it. You know, if you want to go back, say, twenty four, thirty months ago, we would have been here saying, hey.

We’ve got a huge content per vehicle growth story, $45,000,000,000 of growth opportunity if the market would have, moved in the direction that we all thought at the time. And this, by the way, is not a Dana unique issue, obviously. Where when I came in is, look, we were still investing a lot of our free cash flow, like, of it, and a lot of our engineering resource in pursuing electrification businesses that were inherently higher risk, and the market wasn’t was was basically voted with their feet. We don’t like it. You’re taking all of our money, investing it investing it in long tail high risk projects.

So I had to sort of reverse that, coming in. So so about, roughly speaking, a third of the 300,000,000 we cut is is investments that we’re making in electrification. And not to say we aren’t making any. It’s just right now we’ve got the customers co investing in it or upfronting the engineering, whereas before we are taking it all a 100%. The other two thirds has really been just radically simplifying our structure.

We’re going to be much more North American centric. So there’s a lot of corporate expenses that we had in Europe, Asia, and South America that we’ve eliminated or pushed into our businesses. We deleted our power technology segment and combined that with larger light vehicle. We had aftermarket split in two different businesses. We put all that together and had a corporate piece.

And then if you just look at the corporate overhead that we had as a company, it it was probably sized for a for a business that was gonna grow to $1,213,000,000,000 and not a business that’s gonna be 6 or sort of $78,000,000,000. And so a pretty radical reduction in, I’ll say, the manager and above level in the company. So it’s been, you know, the quick wins, I’ll say. There there’s more opportunity, but but the $300,000,000 was stuff that we could kind of recognize quickly and focusing on what I would say is about $1,000,000,000 of our $7,000,000,000 cost base.

Ryan Brinkman, U. S. Automotive Equity Research Analyst, JPMorgan: Thanks so much. And to follow-up on that comment, you’re not one and done. I think that’s a great analogy. You’re not one and done because you still have the restructuring program to go. But what about the degree to which the transaction itself can continue to provide benefits?

Mean, stock is up 98% since November 25, 91 points better than the S and P, up 7%. And the average auto parts suppliers underperformed that by quite a bit. But what about the share repurchase? Because if you’re not one and done, you’ve got the restructuring savings, the the share repurchase enabled by the transaction can really amplify that. Maybe just scope out the magnitude there.

And then also the benefit to valuation for new data from delevering the balance sheet. What what could that help?

Bruce MacDonald, CEO, Dana: Yeah. Yeah. So so again, a a longer answer than a question, I guess, up here on this one. But I guess a few things. So first of all, the the the way we’ve positioned new Dana here and Dana’s post off highway.

And and by the way, just just the transaction, we expect to close probably at the November, but in the fourth quarter for sure. For those of you maybe not familiar with it, it’s $2,400,000,000 of net proceeds, of which we will take a big chunk of that and reduce our debt so that our net debt post the transaction is about point seven times EBITDA. And then we we’ve announced that we will return $600,000,000 or approximately 25% of our of our market cap in in by way of buybacks this before the end of this year. We’ve done two we did just a little bit over 250,000,000 last quarter. We’ve guided to another 100, a 150 this quarter, and we’ll do the balance of that 600 over the the course of the fourth quarter.

For next year, we’re gonna be we’ve guided, and we’ve talked consistently about being 10 to 10 and a half percent margins for next year and 4% free cash flow. You know, we walked through on our on our earnings call kinda how do we get to next year because some of the commentary has been around. It seems, I’ll say, aspirational, I think, is a quote somebody said. I view it as a tap in putt. If you just think about this year, we’re guiding to be around 7.5.

You annualize our cost savings. In other words, the $300,000,000 the $310,000,000 about $225,000,000 of that flows through this year. So another 75,000,080 million dollars next year, that’s one point. So it takes you from seven point five to eight point five dollars If you look at stranded costs that we have, we think we can take out conservatively two thirds. That’s another forty, fifty basis points, and that gets us to the nines.

And then a combination of some new business that we have coming on stream from our backlog, which is about 300,000,000. And I’ll say a very conservative view in terms of what we’ve been able to do from an operational improvement perspective. It gets us into the 10.5% type range comfortably. On the cash flow side, you know, we’ve done a little bit more work on this one since our call. Because there’s some question about, like, you know, we we gave sort of a total cash guide for the year inclusive of both continuing and discontinued ops.

So if you sort of take our $2.75 at the midpoint and you think about what how much of it is is off highway and how much of it is Dana on a go forward basis, about 125,000,000 is is is off highway, and and the way I’m calculating that is taking their EBITDA, their change in working capital, their taxes, and then also attaching the interest savings that we will get next year to that business. That leaves them with cash flow about $1.25. The rest of the company, which then reflects, like, the ongoing interest expense and the cash taxes, which are lower for the ongoing part of Dana. Our free cash flow for this year is 150,000,000 or about 2% of sales. So how do we get to the 400 We got 200, 300 points of margin expansion.

That falls right to the bottom line. We’ve talked about lower onetime cost next year because we’ve had to do some restructuring around the off highway sale. And then we will have slightly higher CapEx next year as as we capacitize for increased volume on the Super Duty and the next generation Super Duty launch, which is in late twenty twenty eight.

Ryan Brinkman, U. S. Automotive Equity Research Analyst, JPMorgan: Great. Thank you. And the benefits of the off highway sale are obvious, but just wanted to check-in though on the potential for any dis synergies and if there may be ways to mitigate those. Starting on the cost side, I’m not sure there were a ton, but maybe in purchasing. Can you just confirm, are the cost cutting targets you’ve given inclusive of any headwinds?

And then on the revenue side, I’m guessing what synergies there are between the various segments is more between light and commercial vehicle draglines or the Class four through seven kind of meets together. But just checking if there’s anything to consider there too or or just how you’re thinking about dis synergies generally.

Bruce MacDonald, CEO, Dana: Yeah. I I would I would say the dis synergies are are very manageable. I I I would say the only area is purchasing side of things. And and from so far what we’ve seen, I I don’t see it being overly problematic. On the on the revenue side, I I would say the only area where there’s some benefit in in in us being confined was maybe on the motor motor inverter part of our business, the light the low voltage side.

The low voltage sale of our of our of our, motors and inverters did not go with Allison’s sale. That’s something that they’re interested in. But because we haven’t bought that business back from Hydro Quebec yet, we we couldn’t include it in the transaction. So as things stand right now, we still have that. So I I I would say it’s it’s not really gonna affect us in any material way.

Ryan Brinkman, U. S. Automotive Equity Research Analyst, JPMorgan: Great. Thank you. And, of course, well, there’s a a valuation benefit to delevering the new Dana balance sheet in terms of the multiple. Just curious if there could also be potential commercial benefits too. In the past, management has talked about wanting to drive toward one times net leverage, given that it could be helpful in securing business in the electrification space where you might be competing against non levered technology companies, or it might be helpful in winning business with certain foreign automakers.

I hear the Japanese referenced as preferring suppliers for lower leverage. Just given you’re likely to be well below one point zero times here very soon, I think 0.6, something like that, How are you thinking about the potential for any commercial benefits?

Bruce MacDonald, CEO, Dana: I I’d say a couple of different ways. I mean, we wanna be we wanna be at one times through the cycle. That’s kind of the number that we’ve that we’ve talked about. You know, as as it relates to new business, I I would say, you know, two things about Dana that we hear a lot. One is our leverage target.

And obviously, you know, we’re in a product that people have to source many years in advance that’s highly engineered, so switching costs are difficult. So so the extent we have a safer balance sheet definitely makes us we’re not going in there with one iron arm tied behind our back. Also, you know, they don’t they don’t like having, agitators in there. So the fact that we were able to buy out, Carl Icahn from his position and hence, you know, sort of reposition ourselves as a normal type supplier, That’ll be helpful. I I I don’t expect a year from now we’re gonna say, hey.

We’re growing away quicker than we could have before because of our balance sheet. I I think it helps at the at the edge. You know, we do have I I would say, we do have more opportunities to reinvest in our business to both grow it, but more importantly, our margins because we’d we’d starved our business of some things that we otherwise shouldn’t have because we were chasing growth. And I’ll just I can give you kind of a few examples. If you look at our manufacturing footprint, we, you know, we need to do more restructuring, and that will lead to a significant significant benefit in our cost base.

If you look at if you went into our factories and went into an investment grade BorgWarner, Ad Unit, Lear, or something like that, you you would see a radically different level of automation. And I’m and I’m not talking about Tesla robots manufacturing things. I’m just talking about basic AMRs, AGVs, moving material around, basic robotic arms unloading and loading machines or unstacking pallets and things like that. We’ve got hardly any of that as a company, and there’s just, you know, I’d say, a $100,000,000 type opportunity just from low level automation. Same thing on on, if you just look at what we manufacture and take and take a look at our true manufacturing cost from an activity based costing point of view.

In other words, like, how much of our overhead is directly attributable to specific functions instead of just smearing it across based on sales. We’ve probably got over a $100,000,000 of things that we make that we lose money on. So I I still see even though I think you said breathtaking amount of costs that we’ve taken out of our business, I I still think the opportunity in front of us is even larger than what’s behind us here.

Ryan Brinkman, U. S. Automotive Equity Research Analyst, JPMorgan: Interesting. Thank you. And And just to follow-up on that point, we’ve all been very surprised, right? You started with $200,000,000 in November. You said The Street called it aspirational.

I think I used the word ambitious. Look, it was over 20% of total company EBITDA. It was over 40% of pro form a new data EBITDA at the time. And also, it’s a company that had really struggled to restore its margin to pre pandemic levels after most of the supply base already had. So bucket out again, where are you getting these savings in the relative heard one tap putt earlier, but some of these must be easier to achieve than others.

Some of them are more in the bag than others. How much sits down at the plant level? Seems like not a ton, actually. A little bit more

Bruce MacDonald, CEO, Dana: It’s largely it’s very little at the plant. There is some plant level SG and A, but minor amount. It it’s like like, let me just help you out here. So let’s just take let’s just call it the 300. Roughly speaking, a third of it is what we are spent, like I said, on electrification.

So if you think about our CV, commercial vehicle side of our business, it is it is a and and same thing with motor and averse. It is a you could sort of think about catalog type business. We spent a bunch of money over the last two years developing a suite of products that will then be application engineered slash tailored to a specific need at at a relatively minor cost. On on the so so that the investments behind us, we have the full suite of products. So even without me coming here, that would have dropped down this year anyway.

On the comer on the light vehicle side of the business, you know, we are chasing business, a lot of upfront investment both in capital and engineering on programs that, you know, with the benefit of hindsight, far too risky. And if you look at you know, I’ve I’ll I’ll say of the 20 or so electric vehicle programs that we have in flight right now, ranging from big to small, every single one of them is financially challenged, either a customer’s in financial distress or bankrupt. The volumes are a fraction of themselves. The program has been canceled. The job one date has been deferred, etcetera, etcetera, etcetera.

And so we’ve we’ve unpacked that, renegotiated the way we go in the market. Not to say we’re not investing in electrification because we are, but it it is upfront in terms of engineering. It is customers putting their money into the capital. It is having volume. I won’t say volume guarantees, but a volume pricing matrix so that we make sure we uncover our investment.

And we’ve been very successful. So so that’s, like, a 100 of the 300,000,000, just the quoting disciplines, not continuing to invest in new products for for the marketplace because we’re just not seeing a demand. The other two thirds are it it’s it’s really span and control. It’s you know, $2,530,000,000 is eliminating the power technology segment. Probably 25,000,000 or so is is combining our aftermarket operations between some at corporate, some in CV, and some in power technologies.

There’s probably $3,040,000,000 dollars of reduced corporate costs outside of North America. And then I would just say if you just looked at our general corporate overhead costs as a as a comparator to what I would say is normal, we are on the high end, and we’ve trimmed that back. And a lot of those cuts have been in the senior manager, director, vice president level.

Ryan Brinkman, U. S. Automotive Equity Research Analyst, JPMorgan: Very helpful. Turning to your North America driveline business. Given that light vehicle, really it’s largely North America light truck, not entirely. But what impact do you see on the specific programs or type of programs that you supply, like Ford Super Duty, some of the Jeeps and SUVs, from the relaxation of the federal greenhouse gas and corporate average fuel economy standards that Congress passed in July?

Bruce MacDonald, CEO, Dana: Yeah. So for our light vehicle business, the best way to think about it is it’s really five or six programs. It’s it’s it’s Ford Super Duty. It’s Wrangler. It’s Gladiator.

It’s Bronco. It’s Ranger, maybe Maverick to some extent. I mean, that’s the bulk of our of our business. It’s almost all of those are assembled in North America, high USMCA compliant from a tariff point of view. Some cases, they’re advantaged.

Our customers are advantaged versus their competitors, particularly, say, Super Duty from a tariff perspective. These are on you know, Super Duty being our biggest single platform, over 10% of our sales. You know, it’s a work vehicle. The the decision to go electric is is gonna be economic. So it’s it’s it’s gonna be, hey.

Is dollars and cents, is it worth it? Help help there there are some because of that’s the way the Super Duty truck is graded. You know, reducing the cafe requirements could be helpful in terms of some of our customers are still planning on electric variant to that vehicle, not just Ford, but GM and Stellantis as well. And so if there’s a relaxation, you know, these are gonna be programs that they electrify because they need credits, not not because the underlying economics are favorable. And so to the extent some of that stuff goes away, it it it’ll be helpful.

Ryan Brinkman, U. S. Automotive Equity Research Analyst, JPMorgan: Great. Thanks. Next, I wanted to ask electrification to follow some of the earlier comments about the $100,000,000 of savings. Obviously, there’s a headwind to your electrified driveline portfolio, but a tailwind from all of the savings. And with what we just talked about, the tailwind to those programs on the ICE side, when you net it all together, I feel like for most of the companies at the conference, there’s like a silver lining to the EV slowdown, which is, oh, we’d have to spend less, this and that.

But but for you, would you say it’s actually a large net tailwind?

Bruce MacDonald, CEO, Dana: Yeah. For sure. Just be just because of the the amount of cash flow and p and l that we’re invested in it and the payback being so far out. Now I’d say if you look at our electric vehicle business overall today, and this would include, like, things we have on the thermal, like the battery cooling plates and things like that. Like it’s still a several $100,000,000 business for us.

And I would say we’re at the point now where without there being this massive investment in the growth side, we can that business will start to turn accretive as opposed to being I mean, you’ve sort of seen in our earnings call for the last two or three years like electrification on our bridges was a negative kind of quarter after quarter after quarter. That business will turn positive for us. We still have good electrification growth in our backlog. It’s just not as much as the several billion that we thought it was before. It’s more like in the few hundreds of millions.

Ryan Brinkman, U. S. Automotive Equity Research Analyst, JPMorgan: Very helpful. Thank you. I wanted to ask on near term capital allocation, including the change recently between the time of the off highway sale announcement in June and the 2Q earnings call in August, you upped your targeted return of capital this year beyond the ordinary cash dividend from $550,000,000 to $600,000,000 And you also went from saying that the $550,000,000 could consist of some undetermined combination of buyback and special dividend to just entirely buyback. So firstly, could you talk about the decision to increase the payout? And then secondly, what drove the preference for buyback over dividend?

Bruce MacDonald, CEO, Dana: Yeah. So I’m glad you asked that. It’s it’s probably the most important question. So first of all, as as we generate more cash and up you know, we upped our guidance here in terms of cash flow and earnings. And, you know, as we continue to do well on our on generating cash, it it will go all towards returning capital to shareholders as well as on a on a go forward basis because we’ll be appropriately levered post the transaction.

And so all free cash flow in this in the intermediate term, the way we’ve seen it right now, we’ll go back to shareholders. You’re right. In terms of our original announcement sort of said TBD based and and really based on what’s the underlying financial, value of our stock, and do we see our stock as trading you know, how’s our stock trade versus its intrinsic value? And, you know, I guess the way I would look at that is, you know, we’ve guided towards how we get to our ten, ten and a half percent. So so when we calculate the intrinsic value of our stock, you know, we’re using our number.

If you look at where I think the consensus is for our margins next year based on the reports that I’ve seen so far, it’s more like in the lower nines. And based on that, including your note, you get to a stock price in the $24.26 range. Well, our math isn’t a higher number. So so right now, it’s very simple. We’re we’re buying two shares and getting one free

And hence, all the money is going to buy back.

Ryan Brinkman, U. S. Automotive Equity Research Analyst, JPMorgan: Very love the confidence. What are your thoughts on some of the recent onshoring announcements by automakers as a result of tariffs? For example, we’ve seen GM investing $4,000,000,000 to bring back a number of body and frame pickups in SUVs, crossovers, VEDS from Mexico to Michigan, Kansas, Tennessee. Nissan’s bringing more road crossovers from Japan to Tennessee. Honda’s moving the CR V from Canada to, I don’t know, Indiana or Ohio, I imagine.

It looks like a lot of your light vehicle driveline facilities are clustered around the Midwestern United States more so than in Canada or Mexico. Are you in a position to benefit from this onshoring trend? Have you maybe had any preliminary discussions with automakers about supporting their onshoring activities?

Bruce MacDonald, CEO, Dana: Yeah. I mean, not really. Because for again, when I sort of say where our exposure is, they’re almost all made here. Like, Maverick is an exception, but almost all of them are assembled in in North America. And so we don’t it it you know, it’s not like they’re bad.

It’s just they’re already well positioned, so there’s not an opportunity to reposition. Maybe with the one exception, I know you have this later on your questions on Super Duty volume uplift. And so, you know, that is something that that that is a gold program for Ford. They’re they’re uplifting their capacity by, I think, it’s just a shade over 20% by introducing into Oakville. And that kicks in next August and ramps up to a full run rate of just under 60,000 by October.

Ryan Brinkman, U. S. Automotive Equity Research Analyst, JPMorgan: Let’s move to talking about that now then. Tomorrow, have Naveen Kumar, the CFO of Ford Pro. And one of the questions I’ll be asking him is, are you really going to go forward this $3,000,000,000 investment for your most profitable product when right now you’d be paying a 25% tariff. And even if you didn’t, there’s still USMCA coming up in July year. And Treasury Secretary or Bessen, it was said, we’re going to renegotiate NAFTA.

We don’t want vehicles built in Canada when they can be built in US, etcetera. So I don’t know what’s happening there. And I haven’t heard you say it makes all the sense in the world. I’m sure you’re going to supply that product. Maybe you haven’t officially announced that.

But where would you supply that product from? And what would be the implication to you if it was built in Canada or The US?

Bruce MacDonald, CEO, Dana: Well, it is built in The US now, and they’re they’re adding capacity in Oakville. And I I can tell you it is a gold program, because, obviously, we had had the same question. And, you know, we do have to spend a fairly good chunk of capital this year and next year to help us. We’re not we’re not putting any footprint in Canada. Everything that we supply will come out of The US, so it’s it’s adding capacity to our existing footprint, in in pretty short order.

I would be shocked if they’re not going to do it given the lead times. I was actually in Oakville, last week. They are expanding the plant I mean, the plant is vacant right now. It’s idled because they were gonna put some electric stuff in there. But they are expanding the plant, adding rooftop.

I I I suspect they sell a half decent amount of of of Super Duties in Canada. I I don’t if it’s 60,000, but if you think about their market being a tenth size of ours roughly, and they they sell 300,000, I mean, it wouldn’t surprise me if they sold thirty, forty thousand of them in Canada. And so making them there’s probably, to some extent makes sense. And, you know, maybe what time is he on? Because I’d like to listen in, but there could be a UAW element to this too.

Ryan Brinkman, U. S. Automotive Equity Research Analyst, JPMorgan: Yeah. Thanks. You mentioned that The Street was at low 9s EBITDA margin for next year. You’re targeting 10% to 10.5%. Can you maybe help us what can you say to increase the confidence in modeling that?

You’re doing 7.4 to 8.1 this year for new data. So what’s the walk to 10 to 10.5? You gave the confidence in the cost saves. What else is required to kind of get there? What kind of end market backdrop, etcetera?

Bruce MacDonald, CEO, Dana: Well, no improvement in the end markets. This is 100% within our control. It assumes that the markets stay kind of where they’re at right now. So if they were to fundamentally improve, if we if we were to see off highway kick up in advance of of of, CAFE or not CAFE the air, the clean air standards in 2027. We’re starting to see a pre buy.

We’re we’re not expecting that, but those things would only help us. So the only the only thing that we have from a top line perspective is about $300,000,000 of our backlog that rolls in, some of which is the Super Duty. Probably about 20% of that would be the Super Duty volume for next year. So it’s it’s it’s all within our control, and it’s like I said, it’s a short putt.

Ryan Brinkman, U. S. Automotive Equity Research Analyst, JPMorgan: I just got one follow-up there. I’ll turn it over to the investors on the no improvement in end markets. I want to ask about what you’re seeing for commercial truck demand in North America and Europe. On the 2Q call, said, well, North America is a little bit softer. The headwind didn’t seem overly huge.

You said you actually managed to raise guidance. And you said there’s actually tailwinds to commercial truck in EU, South America. Now other suppliers this quarter sounded actually a lot more negative on commercial truck. There could be different five through seven versus eight split. I think you might have a little bit more South America than them.

What are seeing

Bruce MacDonald, CEO, Dana: out there? So for us, I mean, just to put it in perspective, so CV North America is about $1,000,000,000 business for us. And I think that’s the area people are focusing on. The rest of our CV business be Europe, and we have a big, like you said, big business in South America. And so South America is holding its own, a little bit of softness with some of the interest rate increases here.

Europe is actually doing better, bottomed out. So so I would say, if you think about our North American business, yeah, we we may have maybe 50,000,000 of, like, 10% risk here in the back half of the year. But, you know, in the scheme of our of the revenue guide, like, you know, that’s, like, one and a half percent of our total sales. It’s it’s manageable. And, obviously, in terms of our guidance, you know, we we we don’t plan on everything going right in there.

So I I I view our second half guide as absolutely middle of fair way. I I know there’s been a lot of questions about walking from first half to second half, but you’ll see a market increase in our margins in q three beyond like, in q two, we are 7.5%. We’ve guided to a sort of that number for the year. You’ll start to see the benefits of improved operational performance, the higher level of cost save. A lot of that’s going to be flowing through in Q3 and you’ll see a massive step up in margins year over year and versus Q from Q2 to Q3.

So it’s not really going to be a long term wait and see.

Ryan Brinkman, U. S. Automotive Equity Research Analyst, JPMorgan: Very helpful. Thanks. I’ve got more questions. Why don’t I pause and see if there’s any questions in the audience for Bruce? One up front, please.

Unidentified speaker: So a lot of the things we’re talking about today are decisions and debates that took place probably a year and a half to two years ago, if not longer. What are the things inside of your executive team conference room that you’re sort of debating and raising questions about now about the future of the business?

Bruce MacDonald, CEO, Dana: Yeah. I think, you know, a couple. We’re we’re I think we feel pretty good where where we are right now. You know, as as as it you know, the changes that I’ve talked about that we’ve made as a as a company have been you know, I’ve certainly had my full team, the executive team engaged. And to some extent, you know, I’ve pushed them maybe a little bit in some areas, but but not very many.

You know, we ask ourselves, like, we’re gonna be very I would say, we’re North American centric now, like, type percent. Really gotta look at what we can do to become more global. And that’s and that’s, I’d say, a little bit of a dilemma for us because if think on the light vehicle side, we don’t really have if you look at our product portfolio, it it doesn’t match up well for Asia or Europe. Like, there are no big volume Super Duty, SUV stuff out there, so it doesn’t really mesh well for us. On on the commercial vehicle side of things, you know, the European, they and the North American market operate kinda differently.

More in house manufacturing in CV in Europe. On on in China, we’re we’re a fairly small player. It’s probably gonna be much more of an electrification story there, where it’s not gonna be so much here in North America. We’re strong. So I I’d say the strategic questions are probably more on the CV side and how we position that business for the long term?

And or should we be in that in those markets? Or should we so we should be more concentrated?

Ryan Brinkman, U. S. Automotive Equity Research Analyst, JPMorgan: And just maybe lastly, if you could comment on the competitive environment within the commercial vehicle driveline market. I was curious what impact, if any, you’ve seen from the Cummins acquisition of rival Meritor.

Bruce MacDonald, CEO, Dana: Yeah. I mean, it for it’s a very it’s a bit of an oligopoly here in North America. If you look at the marketplace, you know, we’re in some customers that they’re not. They’re in customers that we’re not, and there’s other places where we compete sort of head to head. In in a lot of cases, our products are almost substitutional, and so, you know, we compete with them.

They’re they’re a good competitor. I I, you know, I would say there’s opportunities for us to gain share, mainly because we’ve taken some actions to re to I think we have an advantageous cost position now because we’ve opened a brand new commercial vehicle facility in Mexico. And I think we have a cost base coming out of a world class facility versus our peers, and that should position us well to gain some share over the long term.

Ryan Brinkman, U. S. Automotive Equity Research Analyst, JPMorgan: Great. Very helpful. We are over time, so please join me in thanking Thank Bruce and you.

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