Financial Overview

(in million USD)

	FY2008	FY2007	Rate of change (%)	Factors
Consolidated
Sales	624.2	717.6	(13.0)	-
Sales by business units
Suspension North America	292	433	(32.5)	1)
Suspension Brazil	203	163	24.5	2)
Brake business	129	122	5.7	3)

1)
Suspension North America
-The Company launched four leaf and two coil spring programs for four customer platforms totaling US$67.7 million dollars in sales. And the Company was awarded leaf and coil spring contracts or letters of intent for six customer platforms totaling US$43.8 million in new business on an annualized basis.

-The Company's design and development team was selected by Ford Motor as the "Global Lead Development Supplier" to design and develop the rear suspension for a vehicle to be built in the Europe, NAFTA and China markets.

2)
Suspension Brazil
-In 2008, Rassini-NHK Autopecas, Ltda. (RNA), had a record year in terms of volume and revenues due to the economic growth in Brazil, mainly driven by a robust internal demand and a strong currency during most of the year.

-In 2008, RNA produced and sold 1.7 million leaf spring assemblies and three million coil springs which together represented US$203 million in revenues and an EBITDA of 11.9% to sales. Also, during this year, RNA kept its 65% market share in the OEM leaf spring market and 20% in the case of coil springs.

-RNA was nominated as a coil spring supplier for two new platforms starting in 2010. This new businesses represents an increase of 3% in market share. In the leaf spring market, the Company initiated exports to the European OE trailer market.

-The Company received a first order for cold bent "U" bolts, key element in the suspension system, and these continue to be well accepted by the truck manufacturers.

-The Company faced significant increases in the cost of steel, utilities as well as labor. All of this pushed RNA to negotiate the prices with its customers. The effect of these negotiations and other cost control measures, contributed to an 11.9% EBITDA and a 6.1% net profit.

3)
Brake business
-Rassini Brakes increased its sales by 6% in 2008 compared to the previous year, totaling US$129 million at year-end. The growth was mostly the result of the launch of new platforms with Ford and General Motors, which partially compensated the market contraction seen in the second half of 2008.

-The increases in the price of steel scrap and ferro alloys continued during the first half of the year, significantly affecting the Company's costs.

-The launch of 5 new platforms with an annualized volume of 1,145,000 brake rotors, partially offset the serious market contraction.

-The Company machined 5 million discs and rotors, 3.8% lower than 2007, mainly due to the market contraction during the second half of the year. Coupled with this, the strike at American Axle & Manufacturing during the Spring of 2008, had a negative effect of 250,000 brake discs not supplied to GM.


Restructuring
In order to address a number of challenging industry-wide issues including reduced production volumes, excess capacity, changes in product mix and higher energy costs, since April 2008 the Company began implementing a number of immediate restructuring and cost reduction initiatives. These actions included, among others:
-Workforce reductions of more than 1,080 associates, including salaried and hourly, equivalent to 37% of the total work force.
-Extended shutdowns and reduced work weeks at all plants.
-Reduction of the matching contribution for the U.S.401 K
-Again the Company continued with previous year窶冱 policy of no salary adjustments for the employees.
-Implementation of more than 350 kaizen (improvement) initiatives.
-More than 25 "team projects窶 also focused to continuous improvement.

R&D Structure
-Working closely with its Product Development laboratories in Mexico and Brazil , the Plymouth Office provides directional leadership for new technologies and technical initiatives.


Product Developments
-The Company launched its suspension system for light vehicles based on its new Quadratech(R) technology. Quadratech, through its suspension system which is 20% lighter than the existing systems, achieves a better performance in fuel consumption. And for its first commercial application, an alliance was made with Firestone Industrial Products, LLC. (From a press release on Aug. 4, 2008)

-The Company introduced the R4Tech; at the SEMA show in November 2008. This new suspension system which was a joint effort between the Company and a leading air spring company, won Popular Mechanics Editors Choice Award for 2008. This new suspension will be available on 32 different light trucks in 2009 as an aftermarket option.

-In 2008, the Company's brake business registered two patents, the first one, a new metal matrix composite and the second one related with a technology that provides significant weight reduction while improving the performance of the brakes system.

-In the last quarter of 2008 the Company developed new gray iron products for the agricultural sector and began supplying during December.

Domestic Investment
-Rassini-NHK Autopecas Ltda, Brazil continued with the 2008-2009 investment plans. By the third quarter of 2009, the Company will have at its Sao Paulo facility a highly productive line capable of producing high stress coil springs. Also during the second half of 2009 a new leaf spring production line will be up and running at the Rio de Janeiro facility. With this new line the Company expects new business opportunities while meeting tighter tolerances required by the truck manufacturers.