BorgWarner Inc. Business Report FY2010

Business Highlights

Financial Overview

(in million dollars)
  FY2010 FY2009 Rate of


Net Sales 5,652.8 3,961.8 42.7 -

Engine Segment

Net Sales 4,060.8 2,883.2 40.8 1)
EBIT 537.9 219.8 144.7 -

Drivetrain Segment

Net Sales 1,611.4 1,093.5 47.4 2)
EBIT 137.0 (13.5) - -

Engine Segment
-The sales increase was primarily driven by strong global growth in all major product groups as well as the second quarter 2010 acquisition of Dytech ENSA SL.

Drivetrain Segment
-The sales increase was primarily driven by strong growth of transmission components and torque management devices in Europe, Asia and the U.S.


-The Company has been selected by Chrysler to supply its engine and drivetrain components for four-wheel drive Dodge Ram pickups. The Company will supply Electric shift Part-Time transfer cases for the Ram 1500 and Ram 2500/3500. Torque-On-Demand(R) (TOD(R)) transfer cases will be an option for the 1500. In addition to transfer cases, the Ram vehicles also feature friction plates, one-way clutch assemblies and transmission solenoid control modules from BorgWarner Drivetrain Systems. Other its product for the Ram pickup includes BorgWarner Morse TEC engine timing systems for 3.7-liter V6 and 4.7-liter V8 engines, BorgWarner Thermal Systems cooling fan assemblies for Ram pickups equipped with 5.7-liter Hemi V8 gasoline engines, and BorgWarner Turbo & Emissions Systems exhaust gas recirculation (EGR) valves for the Dual-mode Hybrid Ram. (From a press release on January 11, 2010)

-The Company provides turbochargers to Ford for its four-cylinder EcoBoost engines scheduled to make its debut early in 2010. The turbochargers will be on direct-injected 1.6-liter and 2.0-liter gasoline engines. The Company will also supply turbochargers for rear-wheel drive trucks featuring Ford's 3.5-liter V6 EcoBoost engines. (From a press release on January 12, 2010)

-BorgWarner Drivetrain Systems' eGearDrive transmission and BorgWarner BERU Systems' high-power electric cabin heater, currently being piloted in the MINIE, will be showcased at the 2010 Electric Drive Transportation Association (EDTA) Conference and Exposition. (From a press release on January 25, 2010)

-The Company supplies a variety of engine technologies - such as turbochargers, timing systems, emission control devices, glow plugs and control modules, and pressure sensor glow plugs (PSGs) - for Ward's "10 Best Engines 2010." The engines that feature its products are: 2.0L TFSI turbocharged DOHC I-4 (Audi A4); 3.0L DOHC I-6 Turbodiesel (BMW 335d); 2.5L DOHC I-4 Hybrid (Ford Fusion Hybrid); 2.4L Ecotec DOHC I-4 (Chevrolet Equinox) and 2.0L SOHC I-4 Turbodiesel (Volkswagen Jetta SportWagen TDI) (From a press release on January 28, 2010)

-The Company supplies its 31-03 eGearDrive(TM) single-speed transmission for the 2011 Ford Transit Connect Electric, all-electric version of Transit Connect commercial van. For this vehicle, Azure Dynamics Corporation, a US-based supplier of electric powertrains for commercial vehicles, will provide its electric propulsion system incorporating the Company's eGearDrive transmission. (From a press release on March 11, 2010)

-The Company supplies twin scroll turbochargers for the BMW 535i Gran Turismo featuring a 3.0-liter six-cylinder inline direct injection gasoline engine launched in October 2009 in Europe. (From a press release on March 25, 2010)

-BorgWarner Morse TEC supplies its Cam Torque Actuated (CTA(TM)) variable cam timing (VCT) technology and timing drive system for the 2011 Ford Mustang GT's new 5.0-liter V8 engine. (From a press release on March 31, 2010)

-BorgWarner BERU Systems supplies platinum spark plug for the eight-cylinder gasoline engine on the new Audi A8. (From a press release on April 1, 2010)

-The Company supplies its variable turbine geometry (VTG) turbochargers, pressure sensor glow plugs and control modules as well as DualTronic(R) control and dual-clutch modules for the Audi A3 TDI. (From a press release on April 13, 2010)

-The Company will supply its variable turbine geometry (VTG) turbochargers for the new 2.0-liter four-cylinder diesel engine featured in the Hyundai ix35 and Kia Sportage. Series production of the Hyundai ix35 for the domestic market began in Korea in late 2009, and the diesel engine has been offered in Europe since the spring of 2010. The Kia Sportage premiered at the 2010 Geneva Motor Show and will be available across Europe later in 2010. (From a press release on April 15, 2010)

-The Company supplies high pressure transmission solenoids for the R-tronic automated manual transmission on the Audi R8. (From a press release on April 22, 2010)

-The Company supplies transmission components, including friction plates and sprag one-way clutch assemblies, for the six-speed automatic transmission on the Chevrolet Camaro. (From a press release on April 22, 2010)

-The Company supplies multiple components to Volkswagen. For the Polo diesel models, it produces variable turbine geometry (VTG) turbochargers, three-way valves, glow plugs and control modules. For gasoline versions, timing systems and high pressure transmission solenoids are provided for the automated manual transmission. In addition, the Company delivers VTG turbochargers and three-way valves for the 1.6-liter diesel Polo BlueMotion as well as glow plugs and control modules for the Golf, Passat and Polo BlueMotion models. (From a press release on April 22, 2010)

-BorgWarner BERU Systems supplies platinum spark plug for the 1.4-liter petrol engine on the new Citroen C3. (From a press release on May 7, 2010)

-The Company supplies its regulated two-stage (R2S(R)) and variable turbine geometry (VTG) turbocharging technologies to BMW for its new 3.0-liter straight six-cylinder diesel engine 740d. This technologies help improve fuel economy up to 4 percent compared with its predecessor. (From a press release on June 24, 2010)

-The Company will supply its regulated two-stage turbocharging (R2S(R)) technology to MAN. MAN will use this turbocharging system for its common-rail, four-cylinder and six-cylinder diesel engines with displacements of 4.6 and 6.9 liters. These engines are used to power medium-duty trucks and buses in the Latin American market. The turbochargers will be produced at the facility in Campinas, Brazil, with the start of deliveries scheduled in 2012. (From a press release on July 7, 2010)

-The Company supplies its water-cooled K03 turbochargers for Shanghai GM's (SGM's) 1.6-liter four-cylinder gasoline engine on the Buick Excelle XT, a model launched in the Chinese market in January 2010. SGM will also install the engine with the Company's turbocharger in the Chevrolet Cruze. The Company began manufacturing turbochargers in Ningbo, Zhejiang Province, in 2010. (From a press release on July 22, 2010)

-The Company will supply engine timing systems for Fiat Powertrain Technologies' two-cylinder TWIN-AIR engines. Debuting in the Fiat 500 in the fall of 2010, the engine is expected to be available in several other small car models. (From a press release on July 26, 2010)

-The Company supplies components for the 2011 Jeep Grand Cherokee. BorgWarner Morse TEC delivers its engine timing system with silent chains for the 3.6-liter Pentastar V6 engine on this Chrysler model. In addition, the vehicle's five-speed automatic transmission features friction plates and sprag one-way clutches supplied by BorgWarner Drivetrain Systems. (From a press release on August 31, 2010)

-BorgWarner BERU Systems will supply two high-temperature sensors for the 2010 0.8-liter diesel-powered smart fortwo coupe, launching later this year in 45 countries. In the smart fortwo one sensor measures high temperatures ahead of the turbocharger (also produced by the Company) while a second is positioned downstream in the exhaust gas after-treatment system. BorgWarner expects its high-temperature sensors to become standard equipment for several German automakers and commercial vehicle makers. (From a press release on September 10, 2010)

-BorgWarner BERU Systems supplies double platinum spark plugs for BMW's new 1.6-liter gas-powered Mini Cooper S. (From a press release on September 27, 2010)

-The Company supplies its R2S(R) two-stage turbochargers for the newly developed 2.0-liter four-cylinder common-rail diesel engine featured in Volkswagen's 180 HP (132kW) Transport T5 and 163 HP (120kW) Amarok pickup. Both versions of the engine comply with Euro 5 emission standards and deliver a maximum torque of 400 Nm at an engine speed of 1500 rpm. In addition, this engine technology achieves an efficient fuel consumption of 31 mpg. (From a press release on November 18, 2010)

-BorgWarner BERU Systems supplies platinum spark plugs for the current 1.4-liter gasoline engines in the Peugeot 207 Peugeot 308, Citroen DS3, and Citroen Picasso. The Company's new platinum spark plug technology improves cold starts and helps the 70 kW (98 hp) engine meet Euro 5 emission standards. (From a press release on November 25, 2010)


-The Company has acquired a Spanish company Dytech ENSA SL. With locations in Spain, Portugal and India, Dytech produces exhaust gas recirculation (EGR) coolers, EGR tubes, and integrated EGR modules including valves. Its annual sales for 2009 were approximately 180 million USD. It supplies customers such as Renault/Nissan, VW/Audi, Ford, Fiat, Navistar, GM, Daimler, PSA, Suzuki, Mahindra & Mahindra, TATA, Ashok Leyland, MAN, and IVECO. (From a press release on April 9, 2010)

-BorgWarner BERU Systems has gained full control of BERU Eichenauer GmbH by acquiring the shares of its former joint venture partner, Eichenauer Heizelemente GmbH & Co. KG in Germany. The acquired business is based in Kandel, Germany and engages in the development and manufacturing of electric cabin heaters. (From a press release on May 3, 2010)


-The Company announced 2.3 billion USD of expected new powertrain business for 2011 through 2013, a 28 percent increase over its previous three-year. Of the total new business, 77 percent is anticipated from engine-related products such as turbochargers, ignition systems, emissions products, engine timing systems, variable cam timing modules and thermal systems. The other 23 percent is expected from drivetrain-related products including DualTronic(R) transmission technology and its traditional automatic transmission and all-wheel drive technologies. (From a press release on November 9, 2010)


R&D Expenditure

(in million dollars)
  FY2010 FY2009 FY2008
Total 185.0 155.2 205.7
% of sales 3.3% 3.9% 3.9%

-Each of the Company's operating segments has its own research and development ("R&D") organization.
-The Company has approximately 700 employees, including engineers, mechanics and technicians, engaged in R&D activities at facilities worldwide.

R&D Facilities

-The Company opened the BorgWarner China Technical Center in Shanghai, China. By 2012, the facility will be the largest in the Company's network of global technical centers and is expected to employ about 400 people. The new center will engage in the research and development of products including turbochargers, DualTronic(R) modules, exhaust gas recirculation (EGR) valves, air pumps, timing chains, fans and fan drives, water pumps, ignition systems, transmission solenoids and controls, friction plates, and four-wheel drive systems. (From a press release on March 26, 2010)

Product Development

-The Company's two-stage R2S(R) turbochargers and Hybrid Tube exhaust gas recirculation (EGR) coolers help reduce emissions and improve fuel economy for on-highway commercial diesel trucks and buses. Launched with a major North American commercial truck maker earlier this year, the combination of technologies enables truck makers to meet 2010 EPA emissions regulations. (From a press release on December 8, 2010)

Investment Activities

Capital Expenditure

(in million dollars)
  FY2010 FY2009 FY2008
Total 276.6 172.0 369.7
% of sales 4.9% 4.3% 7.0%

Investment Outside USA

-BorgWarner Thermal Systems has opened a manufacturing facility near Chennai, India. The new site produces viscous fans and fan drives for customers including Tata Motors, Tata Cummins, Ashok Leyland, Mahindra & Mahindra, and others. (From a press release on March 30, 2010)