'Dana has faced a continued decline in revenues resulting from the decreasing market share and production levels of its largest domestic customers, along with sharp increases in commodity and energy prices that have outpaced the cost savings Dana has been able to achieve,' the company said in a statement.
'The general financial condition of the industry, together with Dana's inability to renew or expand its credit facilities in a timely manner, has significantly constrained Dana's liquidity.'
Dana, which sells brakes, axles and other parts to most major automakers, has faced increasing pressure from customers to offer products at lower prices. Ford Motor and General Motors together accounted for 36% of its roughly $9.1 billion (£5.2bn) of sales in 2004. Dana derives about three-quarters of its revenue from car parts and one-quarter from truck parts.
The company, with 46,000 workers worldwide, said in January it lost nearly $1.3 billion (£750m) in the third quarter of last year while realigning its business.