Federal-Mogul Holdings LLC Business Report FY ended Dec. 2018
Financial Overview
-In the fiscal year ending December 31, 2017, the Company had sales of approximately USD 7.8 billion.
-Based on unaudited pro forma sales measures, the Company’s sales in the fiscal years ending December 31, 2018 and 2017 were USD 7,982 million and 7,879 million, respectively.
Restructuring
Chronology of Tenneco's acquisition of the Company
-Tenneco announced that it has signed a definitive agreement to acquire the Company from Icahn Enterprises for a total consideration of USD 5.4 billion to be funded through cash, Tenneco equity and assumption of debt. Tenneco also announced its intention to separate the combined businesses into two independent, publicly traded companies through a tax-free spin-off to shareholders that will establish an aftermarket and ride performance company and a powertrain technology company. The acquisition is expected to close in the second half of 2018, subject to regulatory and shareholder approvals and other customary closing conditions, with the separation occurring in the second half of 2019. (From a press release on April 10, 2018)
-At its special meeting of stockholders held in September 12, 2018, Tenneco stockholders approved all of the proposals necessary to complete the acquisition of the Company. All three proposals received the support of over 90% of the shares voted, including the proposal to issue stock for the acquisition of Federal Mogul. During the meeting, Tenneco announced that it had received the regulatory approvals required to close, and that it expects the acquisition to close on October 1, 2018. (From a press release on September 12, 2018)
-Tenneco announced that it has completed its acquisition of the Company. The closing precedes the planned separation of the combined businesses into two independent, publicly traded companies that will establish an Aftermarket and Ride Performance company and a Powertrain Technology company. The spin-off is expected to be complete in late 2019. (From a press release on October 1, 2018)
Joint Ventures
-The Company announced that it would form a spark plug joint venture with South Korean supplier Yura Tech Co., Ltd., located in Sejong, South Korea. The Company will own a 51% stake in the new joint venture, which will provide ignition products to leading Korean global OEMs. (From a press release on September 14, 2018)
-On March 26, 2018, Dongfeng Motor Parts And Components Group Co., Ltd. and the Company signed an agreement on the establishment of a new joint venture. The two companies will collectively invest CNY 400 million to build a plant in Dongfeng Motor Parts And Components Group's industrial park in Zhangwan, Shiyan. The joint manufacturer will design, manufacture and sell pistons for ICEs. The joint venture is expected to generate sales of CNY 380 million in 2022, exporting some of its products to North America. The joint venture will design and produce high-performance pistons for customers in China including the Dongfeng Group. The joint venture will also improve heat-efficiency of conventional engines, contribute to the reduction of carbon emissions, and comply with several environmental protection laws. (From a press release on March 27, 2018)
Recent Developments
-The Company launched it new electrification strategy for medium- and heavy-duty vehicles at the 2018 IAA Commercial Vehicles in Hanover, Germany. The strategy focuses on a cost-efficient, scalable, modular approach that can be adapted and customized to specific customer needs across various vehicle segments and applications. The Company aims to emphasize technologies including electrification to enhance ICEs and motor-generators. (From a press release on September 14, 2018)
Contracts
-The Company announced its engine technologies are in all 13 winners of the 2018 International Engine of the Year. The Company supplies components for the engines, including pistons, piston, rings, cylinder liners, valve seats and guides, valvetrain, engine bearings, seals, gaskets and system protection components. (From a press release on June 13, 2018)
-The Company announced that it had won its first commercial customer contract for its new product group Controlled Power Technologies, worth approximately USD 100 million. The long-term contract covers the development and production of advanced starter-generator systems for an OEM. (From a press release on March 28, 2018)
-The Company announced its engine technologies are in all ten of Ward's 10 Best Engines for 2018 model year vehicles. The Company supplies components for the engines, including pistons, piston rings, cylinder liners, valve seats and guides, engine valves, engine bearings, spark plugs, seals, gaskets, heat shields, and system protection components. The award-winning engines are as follows:
- BMW M240i: 150-kW electric drive system
- Chrysler Pacifica Hybrid: 3.6-liter Pentastar DOHC V6
- Ford F-150: 2.7-liter twin turbo DOHC V6
- Ford Mustang GT: 5.0-liter DOHC V8
- Honda Clarity: 130-kW fuel cell/electric drive system
- Honda Civic Type R: 2.0-liter VTEC turbocharged DOHC I4
- Infiniti Q50: 3.0-liter turbocharged DOHC V6
- Jaguar XF: 2.0-liter turbocharged DOHC I4
- Kia Stinger: 3.3-liter turbocharged DOHC V6
- Toyota Camry Hybrid: 2.5-liter Atkinson DOHC I4
(From a press release on January 17, 2018)
Awards
-The Company received a Smart Brand Pillar Award from Ford during the 20th annual Ford World Excellence Awards. (From a press release on May 23, 2018)
R&D Facilities
-The Company has approximately 12 technical centers for its Powertrain division and 13 technical support centers for its Motorparts division.
Product Development
IROX 2 polymeric coating for heavy-duty commercial vehicle applications
-At the 2018 IAA Commercial Vehicles in Hanover, Germany, the Company launched the IROX 2 high-performance polymeric coating for heavy-duty applications, after debuting in the previous year for light vehicle engine bearings. The IROX 2 coating provides improved seizure and fatigue performance, especially in steel crankshafts, while reducing friction, improving efficiency and wear resistance. IROX 2 is intended to be used for crankshafts with extra smooth finish running with thinner oils. (From a press release on September 6, 2018)
CrushShield 2448 textile sleeving
-The Company launched a next-generation textile sleeving for crash protection and impact resistance called CrushShield 2448. The sleeve utilizes a new heat shrinkable design which absorbs and disperses energy during a crash to protect vehicle components such as air conditioning lines, fuel lines, hoses and high-voltage cables. The sleeve also provides abrasion resistance. (From a press release on July 12, 2018)
Piston ring for commercial vehicle diesel engines
-The Company announced that it has developed a new piston ring for use in commercial vehicle diesel engines that enhances gas sealing capability by stabilizing ring dynamic motion and homogenizing oil film. The running surface profile of the new eLine rings for use in the second groove has been designed to distribute oil more evenly around the cylinder bores and to modify the running face area for reduced gas pressure force. This results in enhanced engine efficiency, increased robustness and lower emissions. Bench tests with eLine in different diesel engines have shown a significant reduction in blow-by of up to 20%, which converts directly into either an increase in mean effective pressure or a decrease in fuel consumption. (From a press release on May 29, 2018)