PLYMOUTH TOWNSHIP, Mich. (Nov. 1, 2002)—Federal-Mogul Corp. may be reorganizing under Chapter 11 bankruptcy protection but that doesn't mean the company isn't continuing to invest in its global operations.
The top executives of the Southfield, Mich.-based global supplier of automotive components and systems—including Wagner Brakes, Moog Chassis Parts and National Oil Seals—made that point clear in remarks at the opening of a new Friction Products Technical Center in Plymouth Township devoted to automotive brake pads and linings.
The company's management remains unchanged since the Oct. 1, 2001, bankruptcy filing, Federal-Mogul Chairman and CEO Frank Macher said at the Oct. 17 grand opening. “We continue to invest in our operations and advanced technology. We continue to win new business and make money.”
Federal-Mogul filed for Chapter 11 bankruptcy protection as a result of crushing liabilities from asbestos lawsuits, most of which the company inherited from its 1998 acquisition of piston maker T&N L.L.C.
“Our voluntary filings will eventually separate the asbestos liabilities from our operations, allowing us to be a stronger, more competitive enterprise,” Mr. Macher said. Federal-Mogul posted earnings of $16 million in the second quarter, ended June 30, vs. a loss of $17.5 million in the year-ago period. Sales in the quarter improved 1.2 percent to $1.44 billion.
While the company strives to emerge from its financial troubles, it also continues to invest in new products, processes and technologies, said Chip McClure, president and chief operating officer. This includes the friction operations, where Federal-Mogul ranks No. 2 in the U.S. behind Dana Corp.'s Brake Parts Inc. in aftermarket brake products sales.
The new $5 million tech center is part of a $50 million investment the company has made in friction technology this year. “We are driving to making technology our sustainable competitive advantage at Federal-Mogul, and this new technical center is a prime example of that commitment,” Mr. Macher said.
Federal-Mogul is positioning its new tech center as its North American research, development and testing facility for analyzing and preventing brake noise, vibration and harshness—historically the leading sources of vehicle comebacks, the company said.
Housed in a 35,000-sq.-ft. building in Plymouth Township, the tech center is equipped with sophisticated analytical and test equipment including several brake inertia dynamometers housed in noise- and environmental-control chambers. The dynamometers simulate vehicle braking under various conditions to measure brake pad performance, wear and noise.
The center also features a laser vibrometer, which is used in conjunction with the dynamometers to isolate and measure non-observable vibrations that could lead to noise issues.
Initially, the center will employ 25 engineers, technicians, test drivers and managers who will develop and test brake products for passenger and truck applications. A separate tech center in Smithville, Tenn., focuses on new brake friction materials and the production of prototype parts.
During the grand opening event, Federal-Mogul executives touted the success of the Wagner ThermoQuiet one-piece brake pads that deliver longer pad life and quiet performance. Since the debut of this product in July 2001, Federal-Mogul's replacement friction sales have grown 32 percent and the company's share of the North American replacement brake pad market has increased 3.5 percent, said Jay Burkhart, vice president of marketing.