Dana Corp. has signed a letter of understanding to sell certain production assets of Dana's Heavy Vehicle Technologies and Systems Group to Sypris Solutions Inc., and has entered a long-term supply agreement with Sypris for the related axle components.
Sources say the outsourcing has been in the works since before rival aftermarket manufacturer ArvinMeritor Inc. extended a $2.2 billion offer in July to purchase all assets of Dana.
The proposed asset sale to Sypris includes Dana's manufacturing facility in Morganton, NC, and production assets from facilities in Toluca, Mexico; Glasgow, KY; and Humboldt, TN. Approximately 600 employees in Morganton and Toluca would be transferred to Sypris as part of the transaction.
The transaction is subject to the execution of definitive agreements, approval by Dana's board of directors, applicable regulatory approvals, and other customary closing conditions.
A story posted on Friday, Sept. 5, incorrectly indicated Dana was selling its truck axle business, rather than outsourcing some components related to it.