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Coretalk: MAHLE Group to Acquire Dana Corp’s Engine Hard Parts Business Units

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The agreement includes the acquisition of all worldwide units of Dana’s engine hard parts business by MAHLE, including the Clevite aftermarket organization. In connection with the transaction, the parties will enter into ancillary agreements including an agreement granting MAHLE exclusive distribution rights to Dana’s retained Victor Reinz branded products in the independent aftermarket in the U.S. and Canada.

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Dana’s engine hard parts business consists of 39 locations in 10 countries with approximately 5,000 employees. The business had sales of approximately $670 million in 2005. The engine hard parts business makes piston rings, engine bearings, cylinder liners and camshafts sold under the Perfect Circle, Clevite and Glacier Vandervell brands.

“The acquisition of Dana’s engine hard parts business would complement our worldwide market position particularly in the areas of piston rings and engine bearings, as well as in the aftermarket for engine parts,” Dr. Heinz Junker, CEO of MAHLE Group Management Board, said.

“As Dana Corporation has not considered the engine hard parts business as one of its core business segments for some time, it will be a major task to integrate the Dana locations into the existing MAHLE production network by appropriate restructuring measures, in order to facilitate all necessary synergy effects for the future,” he continued.

Since Dana Corp. is currently in Chapter 11, closing of the transaction is subject to the approval of the Bankruptcy Court. As a standard part of the bankruptcy process, Dana will allow other parties to make competitive bids for the engine hard parts business and there may be an auction at which Dana, MAHLE and any such other bidders will participate. Closing of the transaction is also subject to government regulatory approvals and customary closing conditions. It is anticipated the conditions to closing, including Bankruptcy Court approval, will be satisfied in time to close the transaction in the 1st Quarter 2007.

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‘Car Care Guide’ Goes Platinum As Distribution Nears 1 Million Copies

Nearly one million copies of the Car Care Council’s new Car Care Guide have been distributed to motorists, repair shops, retailers, groups, distributors and manufacturers since its introduction earlier this year.

The guide has generated widespread publicity in the consumer media. It has been featured on the CBS Early Show and WBBM-TV (CBS) in Chicago; in several daily newspapers including the Washington Post, the Detroit Free Press, the Dallas Morning News and the Tampa Tribune; on many business and financial Web sites, including ABCNews.com, CNN Money, Forbes, BusinessWeek and YahooNews, and on consumer automotive Web sites, such as Car & Driver, Popular Mechanics, Auto Spectator and Auto Channel.

“Clearly, interest in the guide from the media has exceeded our expectations, but the industry response has also been tremendous,” said Rich White, executive director, Car Care Council. “Program groups, retailers, distributors and repair shops throughout North America are ordering the guide to give to their DIY and DIFM consumers. We are planning a full-court press to urge all channels of the industry to order guides to give away during National Car Care Month in April.”

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The guide includes information for consumers about the pros and cons of several possible repair options when a car or truck suffers significant damage. Thanks to advances in technology and manufacturing, cars and trucks last longer, allowing consumers to have more options than ever. The guide explains the benefits of repowering the current vehicle with a remanufactured or rebuilt engine.

During the creation of the Car Care Guide, feedback from focus groups of repair shop owners, counterpersons, service advisors and technicians indicated that they would find the guide helpful when discussing recommended maintenance and repair to their customers. Focus groups of consumers said they saw great value in the guide as a reference from a credible third party source, to turn to when considering service and repair.

The guide is free to motorists and fits easily in a glove box. It has common preventative maintenance procedures and explains major vehicle systems and parts. It includes a list of questions to ask when maintenance is being done on a car and a checklist to remind motorists what vehicle systems need to be maintained and when service should be performed.

Bulk quantities and customization are available. Information about quantity discounts and ordering is on the council’s website at www.carcare.org.

Becky Babcox Named CCC Women’s Board ‘Woman of the Year’


The Car Care Council Women’s Board has named Becky Babcox the third annual “Aftermarket Woman of the Year.”

Babcox was chosen by the Women’s Board executive committee based on her longevity in the aftermarket, her career accomplishments, her leadership capabilities and dedication to the automotive aftermarket industry.

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“We are all very proud of Becky and applaud her many years of dedicated service to the automotive aftermarket,” said Katie Noga, Women’s Board president. “We are honored to have her represent all women within the industry.”

Babcox recently retired as publisher of Engine Builder. During her career at Babcox Publications, she also served as corporate secretary for the company.

Babcox is a graduate of Emory University and received her MBA from The Ohio State University. She is the eldest of five children and the granddaughter of Edward S. Babcox, who founded Babcox Publications in 1919. Babcox is very involved in many charities and organizations, including Goodwill, Old Trail School and Planned Parenthood.

While a member of the Car Care Council Women’s Board, Babcox served as vice president of the board and as the scholarship committee chair.

For more information about the Car Care Council Women’s Board, visit women.carcare.org.

HD Dialogue ’07 Adds
New Expert Presenters to Already Stellar Line-up

The 2007 HD Dialogue, organized by the Heavy Duty Manufacturers Association (HDMA), will feature a stellar line-up of analysts and industry experts forecasting the future of the heavy duty industry on Monday, Jan. 22, at The Mirage in Las Vegas. The event will give insight into the global marketplace, future economic and market trends, industry predictions and technology.

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A variety of panel discussions will be offered as well, covering a variety of industry topics.

HD Dialogue is an annual, one-day event for industry executives. The Heavy Duty Aftermarket Week (HDAW) will follow this event, and is expected to bring together 2,500 aftermarket distributor and supplier executives. Register for both at www.hdma.org.

Peterbilt Trims Production, Cuts Workforce

Paccar Inc.’s Peterbilt unit is cutting production at its Nashville, TN, truck assembly plant, and will lay off some 670 employees after the first of the new year.
Paccar also said it would lay off an unspecified number of workers at its assembly plant in Washington state.

Paccar said the moves are being made in anticipation of significantly lower orders for new trucks in 2007. New EPA engine regulations, which kick in as of Jan. 1, created a heavy pre-buy and used truck purchase market this year. As a result, sales of new Class 8 tractors are expected to drop sharply at least through the first half of 2007.

APRA’s Heavy Duty Divisions to be Very Active at HDAW 2007

On January 22, 2007 the First Annual Heavy Duty Remanufacturing Group Summit will take place. The focus of the program will be on “The Future Truck.” This will be a panel discussion featuring Bruce Purkey of Purkey’s Fleet Electric, Al Lesesky, President of Vehicle Enhancement Systems, and John Sullivan, Vice President of Maintenance & Purchasing for Performance Transportation Services. John is also Chairman of the Future Truck Committee at the Technology & Maintenance Council of ATA.

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This all-important session will deal with a great deal of issues that will be challenging the HD remanufacturer in the years ahead regardless of the product line(s) that they remanufacture. These changes may lead to even more opportunities for remanufacturers. Where will these opportunities be and what will you need to do to prepare your company and your employees for these changes?

In addition to the Future Truck Panel we will hear from Joe Kripli of Flight Systems Electronics Group and a very active member of APRA’s Electronics & Mechatronics Division talking about “What the HD Remans Need to Know about Electronics & Mechatronics.” The afternoon session will end with Scott Johnson of ProfitBoost sharing some software ideas that will help you and your customers determine if the unit can be serviced or is it ready for an exchange unit to be installed. Helping your customer to make the right choice can add many dollars to your bottom line.

The HDRG Summit will be preceded in the morning by two other APRA Clinic meetings that will both start at 8:30 am and go until 11:30 am. The first will be the Heavy Duty Transmission Division featuring the following topics:

  • “Diagnostic Tools/Equipment Designed for Electronic HD Transmissions,” Tom Kotenko of Nexiq

  • “Keeping Your Tranny Cool,” Dale Hermand & Pat Hurley of Thermal Dynamics International

  • “Electro-Magnetic Driveline Braking Opportunities for HD Remans,” Harry Valckx of Telma Retarders

These sessions will help the HD transmission remanufacturer look at some new opportunities for service to their customers.

The Heavy Duty Brake Division will also meet on the morning of January 22nd from 8:30 am to 11:30 am. The program is still being solidified but will include presentations from some of the major manufacturers, a product update from some of the major suppliers, and a roundtable discussion among the participants.

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APRA feels very strong about their commitment to support the Heavy Duty Aftermarket Week events and to schedule many of their heavy duty meetings at the same time to fully leverage everyone’s time, participation and expense. For a complete program of APRA’s Heavy Duty meetings and a faxable registration form, please go online to http://www.apra.org/Meetings/2007/HD_Program_07.asp.

Cummins Unveils Exhaust Aftertreatment Facility Equipped to Meet 2007 Emissions Regulations

Cummins Emission Solutions (CES) recently announced that its North American exhaust aftertreatment manufacturing facility has begun producing the diesel particulate filters that will play a key role in enabling engine manufacturers to meet the 2007 U.S. EPA emissions standards.

The Mineral Point facility, which employs nearly 350 people, recently played host to members of the engine, transportation and equipment industry press as Cummins Emission Solutions and corporate executives discussed the plant’s readiness as well as the Company’s preparations to meet the new EPA standards. Those standards will reduce particulate matter emissions in on-highway diesel-powered vehicles by 90 percent, while also resulting in a significant reduction in nitrogen oxides (NOx) emissions.

“Cummins Emission Solutions has the right technology to allow our engine and vehicle customers to meet these challenges reliably and cost effectively, and that technology is ready for the market,” said Mike Cross, Cummins Vice President and General Manager of Cummins Emission Solutions. “Catalytic exhaust systems may be considered something of a new technology for medium- and heavy-duty diesel engines, but they certainly are not new for this facility or Cummins Emission Solutions.”

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Cummins Emission Solutions was formed in 2002 in response to a recognized need to provide advanced aftertreatment technologies to meet emissions regulations around the world. CES provides OEM and retrofit aftertreatment systems for Cummins and a number of other engine manufacturers. The business reported sales in excess of $100 million in 2005 and is projecting more than $500 million in annual revenue by 2009, as the worldwide demand for advanced aftertreatment grows.

The Mineral Point manufacturing plant began in 1947 as Nelson Muffler, a four-employee operation that worked out of a small space in a former county garage. Today’s facility – now approximately 72,000 sq.ft. – was constructed in 1974 and expanded in 2006 to enable the production of Diesel Particulate Filter (DPF) systems.

The DPF uses a diesel oxidation catalyst (DOC) and a diesel particulate filter to trap diesel particulate matter (PM) in the exhaust system, reducing PM emissions by 90 percent while also reducing hydrocarbons and carbon monoxide. The DOC optimizes the regeneration capability of the particulate filter, a critical aspect for maintaining fuel economy comparable to today’s engines.

The plant has manufactured more than 1.5 million medium- and heavy-duty diesel oxidation catalysts and well over 10,000 medium and heavy duty diesel particulate filters in its history.

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CES has been preparing for the EPA 2007 emissions changes for five years, and its products have accumulated nearly 17 million test miles across multiple platforms and applications.

“Cummins Emission Solutions is an example of the Company’s strategy to build complementary businesses that allow us to provide all the core systems and technologies needed to not only meet the more stringent emissions requirements, but also to meet and exceed customer expectations,” Cross said. “We have made a tremendous investment in understanding and developing aftertreatment solutions, and we provide a full suite of products and services unmatched in our industry.”

“The work being done by Cummins Emission Solutions will not only benefit current EPA 2007 and Euro IV/V customers, but we see tremendous growth opportunities around the world as emissions requirements continue to become more demanding.”

Dana to Close 8 plants, Try to Reopen Labor Pacts

Auto-parts maker Dana Corp. said in a recent Associated Press report that it plans to close eight U.S. plants and downsize three others in North America.

Dana, which filed for bankruptcy protection in March, also said in the report that in a filing with the U.S. Securities and Exchange Commission it would eliminate health benefits for retirees and attempt to alter labor contracts at its unionized plants.

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“Our existing labor costs, especially in the U.S., impair our financial position and are a significant impediment to a successful reorganization,” the company said in the filing.

It will announce within the next month which plants will close, Dana Chief Executive Michael Burns said in a letter sent to employees.

Dana, which sells brakes, axles and other parts to most major automakers, has said in its bankruptcy filing that rising energy costs were driving up production costs and hurting demand for its customers’ products.

Closing the plants, eliminating health benefits and reducing other labor costs should save $405 million to $540 million each year, Burns said.

The company also plans to renegotiate contracts with its customers and cut administrative costs.

“These changes are neither easy nor pleasant,” Burns said. “The reality is that we simply cannot continue to provide a solid base of jobs in our communities and a strong presence in our industry with incremental, patchwork solutions.”

The company already has started to shift operations at two of its plants and close four U.S. sealing and thermal plants and one in Canada.

“We expect to continue to move manufacturing capacity from the U.S. to lower cost countries, such as Mexico,” the company’s filing said.

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A large slice of Dana’s business comes from Ford Motor Co., General Motors Corp. and DaimlerChrysler AG.

Parts makers over the last two years have been squeezed by automakers forcing the suppliers to sell them parts at lower prices.

“This will make it more challenging for us to achieve our restructuring goal of improving product profitability by obtaining price modifications,” Dana said in the AP report.

The nation’s largest parts maker, Delphi Corp., filed for bankruptcy protection in 2005.
Dana said it lost $356 million for the quarter ended Sept. 30 compared with $1.2 billion a year ago when the company recorded tax and restructuring charges. Sales fell slightly to $2 billion from $2.1 billion.

For the year to date, the company has lost $510 million, down from a loss of $1.2 billion a year ago.

Sales fell to $6.5 billion from $6.6 billion.

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