Federal-Mogul Holdings Corporation Business Report FY ended Dec. 2014

Business Highlights

Financial Overview

(in million USD)
  FY ended Dec. 31, 2014 FY ended Dec. 31, 2013 Rate of
change (%)
Sales 7,317 6,786 7.8 1)
EBITDA 624 591 5.6 -
Sales by segments
-Powertrain 4,430 4,173 6.2 2)
-Motorparts 3,192 2,935 8.8 3)

1) Overall
-FY ended Dec. 2014, sales increased by 7.8% year-on-year. Excluding the impact of unfavorable foreign currency of USD 51 million, sales increased by 9% year-on-year on a constant dollar basis.

2) Powertrain
-FY ended Dec. 2014, sales increased by 6.2% year-on-year. This increase is driven by higher sales volumes and market share gains across all regions. In Europe, sales increased by 6%, in North America 9%, and in ROW 12% year-on-year.

3) Vehicle Components Solutions
-FY ended Dec. 2014, sales  increased by 8.8% year-on-year driven by the Affinia chassis and the Honeywell brake component business acquisitions. In Europe, sales decreased by 3% largely driven by Eastern European sales decline. Sales in ROW increased by 4% driven by stronger aftermarket demand in the China and India.


-On April 15, 2014, Federal-Mogul Corporation completed a holding company reorganization as Federal-Mogul Holdings Corporation.

-The Company announced its plan to separate its Powertrain and Motorparts divisions into two independent, publicly-traded companies. The planned separation will be implemented through a tax-free distribution of Federal-Mogul's Motorparts division to shareholders of Federal-Mogul Holdings Corporation. Federal-Mogul Motorparts sells and distributes a broad portfolio of products through more than 20 brands in the global vehicle aftermarket, while also serving original equipment manufacturers with braking, chassis and wiper products. The Company's objective is to complete the spin-off of Federal-Mogul Motorparts prior to end of 2015.


-In February 2015, the Company announced that it has closed on material portions of the previously announced acquisition of TRW's engine valve business, with a purchase price of approximately USD 385 million. The acquired business, headquartered in Barsinghausen, Germany, employs nearly 4,000 people globally. The closing did not include the sale of TRW's joint ventures involved in the business with the exception of a joint venture in Venezuela. The TRW engine valve business - a leading developer and supplier of engine valves for passenger car engines, heavy-duty engines and large-bore engines for industrial and marine applications with annual global sales of USD 610 million

-In July 2014, the Company announced that its Motorparts Division has completed the previously announced acquisition of certain business assets of the Honeywell Friction Materials business, with a purchase price of approximately USD 155 million. The Honeywell Friction Materials manufactures disc brake pads and braking system components for car makers and the aftermarket covering passenger car, light truck, commercial vehicle, railway, and other industrial applications. The Honeywell Friction Materials business is headquartered in Glinde, Germany, with significant operations in Romania and China. The acquired business operates only in Europe, China and Brazil and not in the United States. The transaction does not include the Bendix name or line of products or any assets, liabilities or business in the United States.

-In May 2014, the Company completed the purchase of the Affinia chassis business, with a purchase price of approximately USD 149 million. This business serves leading U.S. aftermarket customers with private label chassis product lines and will allow the Company to broaden its product offering, provide operational synergies.

Joint Ventures

-On June 23, 2014, Huangxin Federal-Mogul Powder Metallurgy Co., Ltd., a joint venture between the Company and Anqing Huanxin Group Co., Ltd., held a groundbreaking ceremony for a new plant in Anqing. Investment in this construction project is expected to reach USD 50 million. The plant will produce valve seat inserts and valve guides, starting in 2015. Annual sales are expected to reach USD 80 million by 2018. (From a press release on June 24, 2014)


-The Company announced it supplies products for nine of Ward's 10 Best Engines for 2015 model year vehicles. 2015 award-winning engines featuring Federal-Mogul Powertrain technologies include:
・BMW 127-kW Electric Motor (BMW "i3" Electric Vehicle)
・BMW 1.5L Turbocharged DOHC I-3 ("Mini Cooper")
・FCA 6.2L Supercharged OHV Hemi V-8 ("Dodge Challenger SRT Hellcat")
・FCA 3.0L Ecodiesel DOHC V-6 ("Ram 1500")
・Ford 1.0L Ecoboost DOHC DI I-3 (Ford "Fiesta")
・GM 6.2L LT1 OHV DI V-8 ("Chevrolet Corvette Stingray")
・Subaru 2.0L Turbocharged DOHC DI H-4 Boxer (Subaru "WRX")
・VW 1.8L TSI Turbocharged DOHC I-4 (Volkswagen "Golf")
・Volvo 2.0L Turbocharged T5 DOHC DI I-4 (Volvo "S60")  
The Company provides a wide range of components for Ward's award-winning engines, including  pistons, rings, liners, valve seats and guides, bearings, bushings, sealing, gaskets and systems protection products.
(From a press release on January 14, 2015)


R&D Expenditure

(in million USD)
  FY ended Dec. 31, 2014 FY ended Dec. 31, 2013 FY ended Dec. 31, 2012
Overall 192 173 173
% of Sales 2.6 2.5 2.7

Number of R&D Facilities

(As of December 31, 2014)
  North America Europe, Middle-East, Africa Rest of World
Technical centers 8 5 1

R&D Facilities

-Plymouth, Michigan; Skokie, Illinois; Ann Arbor, Michigan; Exton, Pennsylvania; St. Louis, Missouri; and Waupun, Wisconsin

<Outside USA>
-Brazil: Araras
-Germany: Burscheid, Nuremberg, Wiesbaden, Bad Camberg
-Belgium: Aubange
-UK: Chapel-en-le Frith, Chapel
-France: Noyon Codex
-China: Shanghai

Product Developments

Piston Ring
-Federal-Mogul Powertrain has significantly reduced the friction of heavy-duty diesel piston rings by a combination of technologies, materials and designs. The Company's approach to achieving friction reduction in these areas includes innovative technology, process and material solutions, including the company's DuroGlide piston ring coating; its LKZ piston ring and a vertical casting process combined with the use of a highly-refined GOE70 cast steel material. (From a press release on September 23, 2014)

Clutch Piston
-Federal-Mogul Powertrain has developed its new high-modulus clutch piston, called Unipiston, which allows transmission designers more flexibility, including increased clutch apply pressures, higher rotational clutch speeds, and larger diameter clutches. High-modulus injection-molded Unipistons are now in series production. (From a press release on September 18, 2014)

Steel-Elastmer Head Gasket
Federal-Mogul Holdings Corporation's Powertrain Division is supporting the commercial vehicle industry's drive towards greener, more efficient engines with sealing technologies that enable reliable operation at cylinder pressures up to 250 bar and exhaust temperatures up to 1000℃. The Company's hybrid Steel-Elastomer head gaskets combine multi-layer steel (MLS) technology and elastomeric fluid sealing in a single product that provides optimum sealing of both combustion gases and engine fluids. The Company's High Temperature Alloys (HTA) and High Temperature Coatings (HTC) seal exhaust joints reliably at temperatures beyond the capability of conventional stainless steel and graphite materials. (From a press release on August 21, 2014)

Investment Activities

Capital Expenditures

(in million USD)
  FY ended Dec. 31, 2014 FY ended Dec. 31, 2013 FY ended Dec. 31, 2012
Powertrain 268 276 278
Motorparts 130 86 86
Corporate 20 13 16
Discontinued operations - 5 7
Total 418 380 387

Investments Outside USA

In November 2014, Federal-Mogul Powertrain announced that it has relocated two engine bearing plants in Shanghai (Federal-Mogul Shanghai Bearing Co., Ltd. and Federal-Mogul Shanghai Compound Material Co., Ltd.) into one larger facility to meet the growing demands for its powertrain solutions in China. Located in the Zhoupu Zhihui Industrial Park in Shanghai, the new plant is a Federal-Mogul majority-owned joint venture with Shanghai Automotive Industry Co. (Group) (SAIC) subsidiary Huayu Automotive Systems Co. Ltd. The Company expects the 215,000 square-foot plant, which produces bearings, bushings and thrust washers to car makers, will double its current capacity of engine bearings for domestic Chinese customers in the next five years. The Company is launching its IROX bearing technology in the new facility to localize production and supply for the domestic China market.

-In October 2014, Federal-Mogul Powertrain has opened a new Systems Protection manufacturing facility in Changshu, Jiangsu Province, China to support domestic customers in automotive, high-speed rail and aviation sectors. The new 7,000-square meter plant will provide additional production capacity for the Company's complete systems protection portfolio, including its Thermflex exhaust insulating sleeve. Thermflex protective sleeves, made with a special natural fiber, can effectively retain heat in exhaust pipes for emissions to be sufficiently decomposed. In addition to passenger car applications, Thermflex is also used for domestic public transit vehicles, mainly for reducing particulate matter (PM) and carbon monoxide. (From a press release on October 23, 2014)

-On April 17, 2014, the Company began a capacity expansion project at its piston factory in Qingdao, China. When the project is completed, the plant space will be expanded by 30%. Starting in the second half of 2014, the company will supply its advanced Elastoval pistons to three global automakers to support their engine platforms produced in China. The expanded facility also will manufacture the Elastoval II aluminum pistons for mid- and high-end passenger cars. The Company's Elastoval technology combines high-strength piston architecture with a low friction, durable piston skirt coating to deliver a lightweight design. (From news releases issued by multiple sources on May 4, 2014)

-In October 2014, Federal-Mogul Powertrain announced that it has opened a new piston ring manufacturing facility in Puebla, Mexico. The new facility will manufacture steel and cast iron piston rings for automotive manufacturers in North and South America. The facility will initially employ 120 people, with more growth planned in the next few years. The new Puebla piston ring facility brings the total number of Federal-Mogul Powertrain manufacturing sites operating in Mexico to seven. (From a press release on October 9, 2014)

-In April 2014, the Company announced that it recently completed an expansion to its Sejong City, Korea manufacturing plant to meet the growing need for lead-free engine bearings in the Asian market. The Company's lead-free bearings were developed at the company's Global Bearing Technology Center in Wiesbaden, Germany. The company produces the bearings in multiple facilities around the world. (From a press release on April 30, 2014)