No. of Recommendations: 2
Earlier I outlined my impression of the bankruptcy process with regards to Delphi here
http://boards.fool.com/Message.asp?mid=23640832

I believe we'll get some first hand viewing of it, and consequent shareholder rape, with Dana. They've restated their earnings December 30th and found they were off by 44 million total for all periods. Not too much for a 9 billion dollar revenue company. Sales were up from 2.1 billion to 2.4 billion for the year though. Shares at the beginning of Jan. were about $8. http://dana.mediaroom.com/index.php/press_releases/2034

On January 17th it said it lost nearly 1.3 Billion in "restructuring costs" This mostly was a $918 million valuation allowance charge taken because "Dana believes it is no longer more likely than not that the company will be able to utilize these tax assets." although they point out that "This action does not affect the company's ability to use these tax assets later"

Pretty much the rest of the losses came from "An impairment charge to reduce the book value of certain assets of these businesses of $275 million after tax was recorded in the third quarter."
http://dana.mediaroom.com/index.php/press_releases/2038

Shares dropped to about $4 after these accounting actions. Note that they have nothing to do with material, energy, labor, or healthcare costs, cash flow, Sales, or market share.

Dana announced today they will hire Miller Buckfire & Co. a New York restructuring firm and shares dropped by half to $1.51.

Step 1 and 2 are nearly done. They just need to name their multi million dollar posterboy and have him trot out some "Millerisms"

I predict they will blame high labor and "legacy" costs as the culprits, along with market share, energy, and higher material costs as opposed to the paperwork culprits of "valuation and impairment charges" that they used to devalue the company.

They'll have trouble with number 3 as the PBGC is nearing insolvency itself and won't want to accept the obligation unless Dana can pay for it entirely at their reduced 60% benefit rate.

Step 4 is, of course, a lock, as is the outsourcing of more manufacturing jobs (they can get jobs as burger manufacturers).

Step 5 is guaranteed as well!!

Save this post and see how accurate this ends up. I'm hoping I'm completely wrong about everything but...


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