Dana CEO's death unlikely to stop bid

Sept. 24, 2003
The death of Dana Corp. Chairman and CEO Joseph Magliochetti late Monday apparently will not derail the $2.2-billion hostile takeover bid by ArvinMeritor
The death of Dana Corp. Chairman and CEO Joseph Magliochetti late Monday apparently will not derail the $2.2-billion hostile takeover bid by ArvinMeritor Inc. ArvinMeritor Chairman and CEO Larry Yost expressed sadness after Magliochetti died of complications from pancreatitis. "I'm still in shock. I knew Joe fairly well. I considered him a business associate and a friend. Our prayers are with his family at this point in time," Yost told Bloomberg. Yost refused to say whether the death will affect his company's takeover bid for Toledo-based Dana, but he reiterated that his company will consider raising its bid and extending the offer deadline. Dana, the world's largest maker of axles for light trucks, appointed William Carroll, a 32-year company veteran, as acting president and Glen Hiner as acting chairman. Carroll, 59, president of Dana's biggest unit, had been acting chief operating officer since Magliochetti was hospitalized two weeks ago, the company said. Hiner, 69, is an independent director and former chairman and CEO of insulation maker Owens Corning, also based in Toledo. Magliochetti led Dana's fight against ArvinMeritor's takeover. In rejecting the offer from the rival axle maker, he said antitrust concerns and divestitures that would result from a combination would make the deal pointless. Dana's board has urged stockholders to reject the $15-a-share offer. ArvinMeritor disclosed it July 8 and extended it until Oct. 2. The companies have sued each other over the offer. "As soon as the Dana board is ready to sit down and talk with us, we'll find some more value and perhaps could raise the price," Yost told Bloomberg following a speech Tuesday morning in Dearborn. Dana probably will continue to rebuff ArvinMeritor, said David Cole, chairman of the Center for Automotive Research in Ann Arbor. "One of the reasons they've resisted the takeover is that they believe they're poised to make a strong return to profitability," Cole said. Dana became a takeover target after net losses of $182 million last year and $298 million in 2001, and a 33-percent drop in its share price from the end of 2001 until July 8, the day ArvinMeritor made its offer public. Dana shares have since risen 32 percent. The company had revenue last year of $9.69 billion. Magliochetti, 61, led Dana through a restructuring that closed more than 30 plants in two years. He had been hospitalized for the past two weeks for pancreatitis after a gallstone was removed. He is survived by his wife, Kathy, three children and one grandchild. Magliochetti had been Dana's chairman since 2000 and CEO since 1999. He started as a management trainee in 1966 at a Chicago company that Dana absorbed the following year. "The auto industry has lost one of its true champions -- a charismatic and innovative leader who cared about his people and this business," said Chip McClure, CEO of Southfield-based supplier Federal-Mogul Corp. "Our thoughts and prayers go out to Joe's family and to all Dana employees."