Former president and chief executive officer, Dana Corporation
Born: 1942, in River Forest, Illinois.
Died: September 22, 2003.
Education: Hillsdale College, 1969; Harvard University, 1985.
Family: Married Kathleen (maiden name unknown); children: three.
Career: Victor Manufacturing, 1966–1967, management trainee; Dana Corporation, 1967–1975, management trainee in a number of sales, engineering, and manufacturing positions; Dana's Churubusco Distribution Center, 1975–1978, plant manager—service-parts group; Dana-Spicer Clutch Division, 1978–1979, general manager; 1979–1980, vice president and general manager; Dana Engineering (part of Dana Europe), 1980, director of drive-train components; Dana Europe, 1980–1985, president; Dana North American Operations, 1985–1990, group vice president; 1990–1992, president—automotive; 1992–1996, president; Dana Corporation, 1996–1997, president; 1997–1999, chief operating officer; 1999–2003, president and chief executive officer; 2000–2003, chairman of the board of directors.
Awards: Triangle Award and Automotive Hall of Fame Distinguished Service Citation, Motor & Equipment Manufacturers Association, 2002.
■ The automotive executive Joseph Magliochetti served the Dana Corporation for 37 years, from 1966 to 2003, and was ultimately named CEO and chairman. During his career with Dana, Magliochetti held a number of domestic and international positions. He gained a wealth of experience in the global economy, both with domestic and international projects. He also developed Dana's e-commerce initiatives and repositioned the company to focus on long-term technology.
Dana Corporation is one of the world's largest independent designers and manufacturers of components, modules, and complete systems that automobile, commercial, off-highway, and industrial vehicle manufacturers use to assemble new vehicles. It also supplies replacement parts for automobile companies in the aftermarket sector. Dana's core products include axles, brakes, and drive shafts, along with engine, filtration, fluid-system, sealing, and structural products. Customers include original equipment manufacturers, such as Ford, General Motors, Toyota, DaimlerChrysler, and BMW. Dana employs approximately 60,000 people worldwide and operates hundreds of technology, manufacturing, assembly, distribution, and customer-service facilities in more than 30 countries.
Magliochetti began his automotive career as a management trainee with Victor Manufacturing in Chicago, Illinois, in 1966. He had declined an employment offer with Dana before taking the job with Victor and rejected another job offer from Dana just before the company acquired Victor in 1967. After Dana management finally got Magliochetti on its team, he served in a variety of sales, engineering, and manufacturing positions at several Dana divisions. In 1975 he moved to the service-parts group as plant manager of the Churubusco Distribution Center. He was promoted to general manager of the Spicer Clutch Division (Toledo, Ohio) in 1978 and was named that division's vice president and general manager the following year.
In 1980 Magliochetti was named director of drive-train components for Dana Engineering (London, England), a part of Dana Europe. Later that year he was appointed president of Dana Europe with responsibility for all operations in Europe and the Middle East. In 1985 Magliochetti returned to the United States as group vice president of North American Operations. In 1990 he became president of the automotive division of North American Operations. He was promoted to president of North American Operations in 1992 and was appointed to the Dana Policy Committee.
Magliochetti was promoted to president of Dana Corporation in 1996 and was elected to the company's board of directors later that year. In 1997 he was appointed chairman of Dana's World Operating committee. In that same year he was elected COO and remained at that post until 1999. He was named CEO in February 1999, after Southwood "Woody" Morcott resigned from the position. Magliochetti became chairman of the board of directors in April 2000.
Owing to the economic slowdown that began in 2000, Dana Corporation was struggling as a direct result of diminishing automobile production and slow U.S. vehicle sales. Automobile manufacturers began to cut back production to reduce inventories, and heavy truck manufacturing companies were already in the process of contracting their businesses. All of Dana's customers began to pressure the company to cut costs.
Although Magliochetti had headed the company for only 18 months, he began a restructuring plan in 2000 that cut 10,000 jobs and closed 11 facilities. This strategy included implementing online warehouse distribution, selling some non-core facilities, and reducing capital-spending plans by $150 million, to less than $400 million. Looking to increase Dana's return on investment, Magliochetti moved its North American axle production out of existing plants and consolidated all such production into nine facilities run by its Spicer Driveshaft Division. Dana's 2000 profits dropped about 44 percent—on a sales decline of 6 percent—to $12.3 billion. Its share price sank from $30 to $15. By the end of 2001 Magliochetti continued to see his company struggle. However, he was unchanged in his defense of his company's fundamental strength. By the end of 2002 Magliochetti had closed a total of 39 plants, consolidated others, and cut 20 percent of its pre-2000 workforce of 70,000 employees. In the first six months of 2003 Magliochetti saw Dana turn around—earning $93 million, compared with a $177 million loss during the first half of 2002.
Despite the pressure from the declining stock market and the contracting manufacturing industry, Magliochetti directed the company's affairs with technology in mind. Knowing that technology would drive Dana's growth, Magliochetti spent $287 million on research and development in 2000 with the goal of developing proprietary (private) technologies and products that would give the company an edge over its formidable competitors, such as Delphi and Visteon—large suppliers spun off from the automobile makers General Motors and Ford, respectively. Rather than expand through acquisitions, Magliochetti felt that in order to protect Dana's long-term margins, the company had to grow with innovations.
One of the concepts that Magliochetti used to advance this technological growth was "megatronics"—the science of incorporating emerging technologies into traditional products. For instance, the cylinder-head gasket—a traditional low-technology product—was modified to include state-of-the-art sensors, which were able to monitor engine temperatures.
Magliochetti also made Dana a leader in manufacturing modular parts, which helped decrease the number of parts used to assemble an automobile from 10,000 to 6,000. For instance, one module might call for a comprehensive driveline complete with clutch, transmission, driveshaft, and axle. Magliochetti focused on offering module products either directly or through strategic partnerships. Dana continued to focus on joint ventures to prepare for increased modularity use.
Magliochetti saw great potential with long-term employees who had experienced the volatile cyclical market in which Dana operated. He stated that his top-level management team averaged 27 years of service. With such experience, Magliochetti's team looked forward to growing the company by offering new products and becoming a supplier to the new modular manufacturing sector.
During 2002 and into 2003 Magliochetti was leading the company in a tremendous battle to protect itself from a hostile takeover attempt by Larry D. Yost, CEO of rival ArvinMeritor. The company, based in Troy, Michigan, was a supplier of shocks, struts, suspensions, and exhaust systems and made a $15-per-share, $2.2 billion hostile takeover bid in July 2003. Magliochetti rejected the offer, saying that the antitrust concerns and divestitures that would result from a merger would make the deal pointless. Dana became a takeover target after suffering net losses of $182 million in 2002 and $298 million in 2001 and a 33 percent drop in its share price from the end of 2001 until July 8, 2003, the day ArvinMeritor made its offer. At Magliochetti's last public appearance at the University of Michigan, he described the takeover attempt as totally inadequate with regard to the best interests of Dana's shareholders.
Dana announced on September 23, 2003, that Magliochetti had passed away on the previous evening. After a two-week hospitalization for removal of his gallbladder, he died from complications of pancreatitis. Dana announced that Glen Hiner would serve as acting chairman of the board of directors. Hiner, one of Dana's longest-serving directors, said in a news release that Magliochetti "was a wonderful man, not only respected but also beloved by his friends and colleagues…. [who] served with great distinction for more than three decades and was an outstanding leader. He built a culture of integrity and a strong organizational structure" (Dana press release, September 23, 2003).
No one knew whether Magliochetti's death would make Dana a more vulnerable target for takeover. Scott Upham, an analyst with J. D. Power and Associates, said in the Detroit News , "His absence is going to bring a lot of things into question during the next couple of weeks. The company is 100 years old and has very solid management from the top down" (September 24, 2003). By November 2003 ArvinMeritor had abandoned its hostile takeover bid for Dana. As a result, Dana stock increased about 45 percent from the end of November 2003 to February 2004. For the first time in more than 50 years, the board of directors at Dana looked outside its own management members for a new CEO. Michael J. Burns, a lifelong General Motors executive, was named CEO, president, and a director of the board of directors in the early part of February 2004, taking the helm on March 1.
Magliochetti led many business and civic initiatives, both locally and nationally. He served on the board of directors of BellSouth (beginning in March 2000) and CIGNA Corporation and was a member of the U.S. Business Roundtable and its policy committee and a member and former chairman of the Motor and Equipment Manufacturers Association (MEMA) board of directors. He also was a member of the Automotive Original Equipment Manufacturers Association and the Automotive Service Industry Association. Magliochetti served on the board of the National Association of Manufacturers and was a member of the U.S.-Japan Business Council and the MEMA/JAMA (Japan Automotive Manufacturers Association) Liaison Committee to cultivate automotive trade relations with Japan. He also served on the U.S. Department of Commerce Auto Parts Advisory Committee and on the independent nominating committee to recommend directors for the New York Stock Exchange.
Locally, Magliochetti was actively involved in many community organizations, including the United Way of Greater Toledo, for which he served as the 2002 Toledo-area campaign chairman. He also was chairman of the Toledo Symphony board and a member of the board of directors of the Toledo Museum of Art and the Center of Science and Industry.
An avid sportsman, Magliochetti often invited industry analysts to join him on hunting and fishing trips. He was ranked number 197 among the country's best chief executive golfers in a survey by Golf Digest magazine. In 2002 Magliochetti was awarded the Automotive Hall of Fame Distinguished Service Citation in honor of his contributions to the motor vehicle industry as well as the MEMA Triangle Award, which recognized his leadership and advocacy on behalf of the automotive industry.
See also entry on Dana Corporation in International Directory of Company Histories .
"Dana Chairman & CEO Joe Magliochetti Passes Away; Board Names Acting Chairman, Acting President," Dana press release, September 23, 2003, http://www.dana.com/news/pressreleases/prpage.asp?page=1318 .
Garsten, Ed, "Dana Chief's Death May Upset Takeover Bid: Magliochetti Led Opposition to $2.2 Billion ArvinMeritor Offer," Detroit News , September 24, 2003.
—William Arthur Atkins