By Jenny Ratzel
On the heels of a survey that revealed the weakness of Buena Vista's economy, the city is taking another hit. Dana Corporation, a publicly-traded auto parts supplier, is planning on closing its two Virginia plants, including a Buena Vista center that employs 275 people.
In an announcement last Friday, Dana CEO and Chairman Michael J. Burns called the cutbacks “painful” and “vital” to refocusing the company. Employees could start losing their jobs as early as the end of this year, and layoffs will remain a possibility until 2007.
Dana is the largest manufacturer, taxpayer and employer in Buena Vista, according to Finance Director Tim Dudley. All in all, Buena Vista will lose about $190,000 in taxes from Dana.
Dave Kleppinger, executive director of the Rockbridge Partnership, said that he was expecting the cutbacks.
The cutbacks stem from Dana’s new plans to focus solely on its light- and heavy-vehicle drivetrain products and sealing and thermal products, according to a press release. Financial problems have been plaguing the entire auto-parts industry as energy and steel prices have soared in the past months.
The Buena Vista plant’s axle facility will be shifted to an existing facility in Dry Ridge, Ky. Furthermore, Dana will cut salaries by five percent over the next year. The cuts will save more than $15 million in 2006.
Dana also plans on reducing its benefits programs for employees who remain. It will cut the Employees’ Stock Purchase Plan, reduce its share of U.S. medical benefit plans, “suspend matching contributions to its U.S. and Canadian long-term savings programs,” and further reduce benefits costs, according to a press release.
In order to refocus, Dana plans on dropping its engine hard parts, fluid products, and pump products. These businesses employ about 9,800 people worldwide but represent only one-ninth of Dana’s $9 billion total sales for 2004.
It’s unclear whether Dana will relocate Buena Vista workers to their other plants. The Bristol, Va. plant will consolidate its productions and move them to Mexico. Bristol employs about 270 people.
Produced by Washington and Lee journalism students.
Lead supervisor: Prof. Claudette Artwick
Reporting supervisor: Prof. Doug Cumming
Editing supervisor: Prof. Pamela Luecke
Technical supervisor: Michael Todd