From staring into the abyss to the biggest project of its existence…the 21st century has already been an exciting time for Dana Traction Technologies, Ruari McCallion learned from Jeff Hayden
There has been a company operating from Dana Traction Technologies’ site in Witton, Birmingham, for just over 80 years and the connection between Dana and the facility goes back the same amount of time.
“This factory was built in 1926 to manufacture propeller shafts under license from Dana Corporation in the USA,” said Jeff Hayden, vice president of Dana and general manager. “That business ended after the second world war and the facility went through the hands of a number of owners, the last being GKN, before Dana purchased the entire business in 1995.” The history and connection was close to coming to a juddering and ignominious end just a few years later.
“In 2002, we were on the brink of closure,” he explained. “One of the things that made our situation so precarious was that we’d unfortunately lost pretty much our whole business portfolio back in the late 1990s and early 2000s. If you aren’t working today on a project for three years down the road, you’re going to struggle.” Part of the problem was the strategy at that time, which was to focus on one programme at a time, which is understandable but carries the risk of putting all the eggs in one basket. That risk came home, hard. “Before I came here, the group was working on a very large project, which looked very promising but it was cancelled, less than eight months before start of production. The current book of business was all winding down and 2002 did not look at all encouraging.”
Dana’s speciality is axles and traction technologies for heavy-duty applications. Just about every big American SUV and large truck – the pick-up trucks so beloved of movie stars, rappers and Californian governors – is equipped with Dana axles. It also makes the front and rear axle for LTI’s black taxicabs; the front corner and rear axle for LDV’s Maxis van; the rear axle for Ford’s Transit; the limited slip differential for the Porsche Carrera GT and the 911-derived GT2 and GT3; and, from its plant in Austria – for which Hayden is also responsible – the rear axle for the Nissan Navara and rear axle for the Fiat
Panda 4×4. They’re all applications that require coping with shed loads of power and/or torque, under heavy load. Most of these projects post-date the 2002 crisis – in fact, 85 per cent of its business has been won in the past five years. The turnaround was led by the company’s involvement with Land Rover’s T5 project – the Discovery 2 and Range Rover Sport models for which they make the front and rear axle as well as the rear axle for the Range Rover vehicle.
“The investment for the T5 – $27.5 million – was the largest ever made in this factory,” Hayden said. “Typically, in Europe, we don’t do the mega-volumes they do in the USA. For us, 45,000 to 50,000 units a year is a typical product line. The T5 programme generally runs at between 250,000 and 280,000.” The housing manufacture line has 16 CNC machines in it alone and is run by six people per shift – in stark
comparison to older lines, which require around 28 to produce 80,000 units a year. The AdvanTEK axle is a complex piece of kit, with the option of an electronically-locking rear differential. It represents a higher level of complexity than Dana had previously dealt with and the technology that won the contract was the root of the company’s survival and subsequent growth.
“The key for us was sitting down and developing a proper strategic plan for the future,” he said. “Fundamental to our strategy was greater focus on our customers and on technology. They had both eroded away and we had to turn that round.” Technological advantage was the foundation. Hayden pointed out that regular turnover of products was important to profitability, as long-term product lines will certainly be subject to price-down pressures and, in extremis, become commoditised.
Introducing advanced technology would give competitive edge. “We – in collaboration with our colleagues in America – were instrumental in developing a new range of axle assemblies called AdvanTEK. The whole point of it is to engineer into the axle a greater ability to precisely locate the interior components and to keep them there, which is as important as putting them in the right place at outset,” said Hayden. “Land Rover was the first customer to receive the technology. Our success with the T5 programme was that we were fortunate to be able to bring some additional technology and being able to say to our customers: this is more advanced than anything anyone else is doing. It helped draw them into us and to
drastically expand our relationship with them.”
The AdvanTEK technology is now being offered to other companies, including a project Hayden and his team were working on when we spoke. AdvanTEK axles are going into a premium vehicle, the actual identity of which is currently a commercial secret – he wouldn’t even name the company. But the pilot, with mules and early prototypes, has gone very well and the factory floor is being prepared for full production.
But technology on its own isn’t the key to the success Dana has enjoyed over the past few years, during which time it has boosted turnover from $103 million in 2003 to around $260 million in 2007. “A number of things combined to enable our turnaround and subsequent success,” said Hayden. “You must have a defined strategic plan delivered with strong leadership which includes how to engage the entire workforce, especially the manufacturing/engineering segment. Technology allows your sales force to talk about something other than cost. We’ve put great emphasis on step change improvement, on upskilling our workforce and introducing tools like 5S and kaizen blitz. Our people understand the world has moved on; continuous improvement is now part of our culture. When I first arrived and we began holding monthly meetings, I was barraged about our business portfolio we would have going forward. Today our greatest issue is how to properly manage our fantastic growth.
“Our workforce has embraced these new opportunities, undertaken extensive training and greatly improved their skills. All of us knew we were on the slippery slope five years ago; it’s to the Traction Technologies team’s credit that we have achieved such success in such a short time.”