On May 22, Federal-Mogul announced that its vehicle components division has been renamed Federal-Mogul Motorparts as the next step in the company’s strategy to drive the global growth of its premium products and leading brands.
A leading provider of premium brands – such as MOOG, Fel-Pro, Champion, Ferodo, Wagner and ANCO – to the global aftermarket,
Q: Why did Federal-Mogul decide to change the name of its Vehicle Components division?
We segmented our business into two distinct organizations in mid-2012 so that each could better focus on the needs of its respective customers. We refer to our OE engine business as Federal-Mogul Powertrain. Renaming our Vehicle Components division Federal-Mogul Motorparts is intended to create a distinct identity within and outside Federal-Mogul and emphasize our more than 100-year history of producing the highest quality products in the automotive aftermarket.
A change in a company’s name in itself is obviously not meaningful. What is important, in my opinion, is that we are embracing our past and at the same time moving forward to emphasize in new ways the importance of high-quality premium products in the aftermarket.
Q: How does the Federal-Mogul Motorparts name better support the division’s growth strategies, both in North America and around the world?
We are building our future on the strong heritage of Federal-Mogul. For more than a century, we have been focused on providing the highest quality components across all product categories and regions we serve. Vehicle manufacturers recognize this, as our friction products are found on seven of the top 10 vehicle models in Europe and the best-selling vehicle in North America.
Within the aftermarket, we will always be best known by our brands, including Champion, MOOG, Fel-Pro, FP Diesel, ANCO, Sealed Power, Ferodo and Wagner. We believe vehicle safety and product performance matter most to consumers. Our internal motto is “Where product quality is concerned, good is not good enough.”
Unfortunately, over the past several years, the aftermarket in North America has seen a significant increase in lower quality, non-branded products. It is easy for consumers and even service technicians to be confused as to the quality of the products in the market. We intend to more clearly communicate the safety, performance and durability characteristics of our products so that our customers better understand what’s in the box.
I believe Federal-Mogul Motorparts captures and communicates our distinct identity within Federal-Mogul and will serve as a platform for future growth within our product categories.
Q: Does the new name represent the next step in the eventual separation of the company into two standalone businesses?
No. The principal purpose of the separation of Federal-Mogul’s business into Federal-Mogul Powertrain and what is now Federal-Mogul Motorparts was to allow each operating division to focus on its unique end markets. This remains the case today. The common link is Federal-Mogul’s heritage of providing high- quality products and services to the vehicle and industrial marketplace for more than a century.
Q: How do the two divisions compare in terms of size, revenue, number of employees, and engineering and manufacturing footprint?
We have a diversified business that manufactures, sells and distributes a broad portfolio of replacement products to over 11,000 customers globally through more than 20 of the world’s most recognized brands. We also are a leading manufacturer of original equipment and OE service products in the braking, chassis and wiper product categories.
The Federal-Mogul Motorparts division accounted for approximately $3.1 billion of Federal-Mogul’s $6.8 billion in revenue in 2013. With our recently announced acquisitions and internal initiatives, we expect that number to grow significantly.
Our division has roughly 12,800 employees, 57 percent of whom work in North America. We are truly a global engineering, manufacturing, sales and distribution enterprise, operating eight advanced technology centers, 33 manufacturing sites and 19 distribution centers.
Our aftermarket portfolio comprises more than 550,000 SKUs covering the vast majority of passenger and commercial vehicle applications worldwide. Additionally, we are the world’s largest manufacturer of brake pads and related friction products for the global aftermarket and the original equipment and OES channels.
Q: Now that the segmentation and identity have been formalized, are there any key growth initiatives that will be undertaken by Federal-Mogul Motorparts? What will be your strategic priorities going forward?
Our principal focus is on supporting our leading premium brands. We have made significant progress but we have a great deal of work to do in reaching the levels of market leadership and customer value I believe are achievable.
Our strategic priorities in North America include investing in our technical field force and building a state-of-the-art on-line presence. I believe both initiatives are critical to reconnecting with our end customers and clearly communicating the performance characteristics of our products. Most of our products are safety-related, so it is critical for service technicians and consumers to understand how these products contribute to vehicle safety.
In addition, we are expanding our distribution network to ensure better access to large markets and shorter lead times for all customers. We are also continuing to invest in an improved cost structure by optimizing our manufacturing and engineering footprints and better leveraging our global supply base. Finally, we want to grow our product offering globally, but particularly in Asia.
Q: Federal-Mogul recently finalized the acquisition of the Affinia chassis business. Do you plan additional acquisitions, and if so, are there any specific types of opportunities that are most appealing to you?
Our objective is to be a category leader in each of our core product lines in terms of quality, innovation and coverage. A broader product portfolio also allows us to leverage our assets and capabilities to better serve our customers. The integrated Federal-Mogul and Affinia chassis business is much better positioned to meet the needs of end users in the light, medium and heavy-duty markets. Our pending acquisition of the Honeywell friction business further demonstrates our readiness to invest in strategic opportunities to better serve existing and new customers around the world.
Q: What immediate changes will Federal-Mogul Motorparts customers see as a result of the new identity?
The new Federal-Mogul Motorparts name and logo will be rolled out globally effective immediately, and will result in new marketing campaigns for our product brands. Our focus will be on our products and communicating the quality advantages these products offer.
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