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Liquidity Management

Helping Dana Accelerate Change

Implementing a true global intraday liquidity platform with expanded toolset to manage global cross-currency exposures.


The Company

Dana is a global leader in drivetrain power-conveyance and energy-management solutions that are engineered to improve efficiency, performance and sustainability of conventional, hybrid and electric-powered vehicles. Founded in 1904 and headquartered in Ohio, U.S., Dana reported sales of $8.6 billion in 2019 with 36,000 associates in 34 countries at 150 facilities, including 26 technology centers. Dana operates four major business units: Light Vehicle Drive Systems, Commercial Vehicle Drive and Motion Systems, Off-Highway Drive and Motion Systems and Power Technologies. Customers include nearly all major global automakers.
 

The Challenge

In 2019, Dana was managing local liquidity efficiently by running a single entity multi-currency notional pooling structure in Europe. However, while the structure was functioning smoothly in Europe, Dana was not able to fully unlock the value of their global liquidity due to a fragmented banking landscape and legacy platforms. The consolidation of balances from certain regions was executed manually, with limited visibility during operating business hours. This increased working capital costs due to localized liquidity buffers and idle cash, leading the firm’s treasury to actively seek one global liquidity structure ensuring full control and visibility.
 

The Solution

Working closely with Dana’s treasury, J.P. Morgan designed a multi-entity, multi-currency liquidity structure that could connect, extract and centralize liquidity globally, ultimately connecting Dana's APAC and Americas pools with Europe. Leveraging their experience in EMEA, Dana worked with the J.P. Morgan team in increasing the scope of the existing pool, transforming it from a single entity to a multi-entity pool and expanding regions, countries and currencies to ensure maximum coverage.


Centralization Realized: 
Global Liquidity Flows

In close cooperation with JPMorgan’s liquidity experts, we were able to implement a truly global solution, concentrating liquidity from all our regions into one central hub.

Michaël Lenaerts; Sr. Manager of Finance – Europe, Dana Incorporated

With the aim of reducing business costs and achieving same day liquidity value for the majority of their balances, Dana will be able to capture more than 75% of their business flows in a single pool. This solution was designed and implemented in a completely virtual environment due to COVID-related disruptions – leveraging J.P. Morgan’s latest technology capabilities. The handling of significant documentation requirements digitally marks the first notional pool at J.P. Morgan going live entirely leveraging e-signatures. The pooling documentation execution took only a matter of a few days from issue to signing and was fully executed using J.P. Morgan’s DocuSign solution, expediting implementation.

Our ability to connect different regions and provide Dana same day value for their global liquidity while simultaneously centralizing funding was a differentiator.

Vivek Chikballapur, Executive Director, J.P. Morgan Wholesale Payments

A Multi-Phase Journey

The execution of the multi-entity, multi-currency notional pooling structure was just the first step of Dana’s treasury transformation. J.P. Morgan continues to work with Dana as their pool structure evolves. To further support Dana’s need to monitor liquidity in real time, the combined team leveraged API’s – and built the network in days.  Dana benefitted from on-demand information about their account balances and activities, as well as on their users' statuses and entitlements.

The use of preconfigured templates also meant that the client had real-time visibility on MS Excel without having to log into any portal. With this simple integration, Dana leveraged secure connection to monitor live balances and transactional reconciliation.
 

Leveraging APIs: On-demand Information Made Possible Within Days

The Results

Utilizing J.P. Morgan’s capabilities and platforms, Dana's treasury team was able to enhance governance, manage intercompany funding, centralize cash and improve visibility – all in an automated manner enabling the team to strategically aid corporate decisions.

The bank is incredibly pleased to be able to partner with Dana on this project - unleashing the breadth of J.P. Morgan’s payment and –liquidity platform and delivering tomorrow’s world of instant reporting in a rounded and truly global solution.

Frieder Haberecht, Executive Director, J.P. Morgan EMEA Corporate Banking

Leveraging J.P. Morgan’s liquidity platform and concentrating global liquidity in EMEA, Dana is in a position to manage excess cash giving better opportunities for interest enhancements, currency risk management and funding optimization. Dana’s team have done an incredible job in envisioning and bringing to fruition a liquidity structure that will serve their organization well in the years to come. When the structure is fully implemented, Dana stands to consolidate the majority of its global liquidity, securing savings in capital costs.


J.P. Morgan Global Liquidity Management

We are a full-service provider of cash management solutions specifically developed to meet the challenges treasury professionals face today. J.P. Morgan Liquidity Management has the global capabilities, industry expertise and transformative technology to support you at every stage of your cash management journey.  Whether you are seeking to control, gain visibility into, or optimize your working capital, we are here to help you meet your liquidity objectives.

We are committed to making it as easy as possible for clients to do business with us by providing streamlined documentation, fast-track implementations and online service tools as well as continuing to invest in the seamless global operating model that differentiates us in the market.

Disclaimer:

This material was prepared exclusively for the benefit and internal use of the JPMorgan client to whom it is directly addressed (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating a possible transaction(s) and does not carry any right of disclosure to any other party.  In preparing this material, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Company or which was otherwise reviewed by us.  This material is for discussion purposes only and is incomplete without reference to the other briefings provided by JPMorgan.  Neither this material nor any of its contents may be disclosed or used for any other purpose without the prior written consent of JPMorgan.
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Investments or strategies discussed herein may not be suitable for all investors. Neither JPMorgan nor any of its directors, officers, employees or agents shall incur in any responsibility or liability whatsoever to the Company or any other party with respect to the contents of any matters referred herein, or discussed as a result of, this material. This material is not intended to provide, and should not be relied on for, accounting, legal or tax advice or investment recommendations.  Please consult your own tax, legal, accounting or investment advisor concerning such matters.
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