Tenneco Inc. Business Report FY ended Dec. 2013

Business Highlights

Financial Overview

(in million USD)
  FY ended Dec. 31, 2013 FY ended Dec. 31, 2012 Rate of change (%) Factors
Net Sales 7,964 7,363 8.2 1)
Net Income 222 304 (27.0) -
Salesa by Sengment
Clean Air 5,444 4,926 10.5 -
Ride Performance 2,520 2,437 3.4 -


1) Net Sales
-The Company's net sales increased 8.2% in 2013 to USD 7,964 million. Excluding the impact of currency and substrate sales, revenue grew by USD 481 million, primarily due to the increase of global light vehicle sales, the launch of new light vehicle platforms, and the growth of commercial truck, off-highway and aftermarket businesses.


Closure of Gijon plant, transfer of operations of Sint-Truiden plant
-The Company announced its intention to close its ride performance plant in Gijon, Spain and downsize its ride performance plant in Sint-Truiden, Belgium as it continues to address ongoing weak economic conditions in Europe. Both plants manufacture shock absorbers for vehicle manufacturers and the replacement market. The Company currently employs 230 people at the Gijon plant and will begin transferring current customer business to other ride performance operations. The closure is expected to be completed in the first quarter of 2014. The Sint-Truiden plant would transfer higher labor assemblies to other ride performance operations while focusing the plant on more highly automated, advanced component production and final assembly. The Company estimates that 480 jobs will be eliminated in Western Europe. (From a press release on September 5, 2013)


-The Company announced that it supplies ride performance and clean air technologies on the 2013 Chevrolet Malibu and Malibu Eco. The Company supplies both hot- and cold-end emission control systems for the 2.4L Ecotec four-cylinder engine, 2.5L Ecotec four-cylinder engine and the new Ecotec 2.0L turbocharged engine. The Company also supplies front strut modules, rear shock absorbers and exhaust isolators. A list of locations of where the Malibu's components are produced is given below:
  • Hot-end exhaust system: Smithville, Tennessee and Seward, Nebraska
  • Converter: Litchfield, Michigan
  • Cold-end exhaust system: Cambridge, Ontario, Canada and Seward, Nebraska
  • Ride control components: Hartwell, Georgia and Kettering, Ohio
  • Exhaust isolators: Suzhou, China
(From a press release on April 10, 2013)

-The Company announced it is supplying key clean air technologies, including electrical valves, for the 2014 Chevrolet Corvette Stingray. Notably, the Corvette's standard exhaust system is the first vehicle to utilize the Company's electrical valve technology for sound tuning. The electric valves are designed to work in concert with the vehicle's Active Fuel Management (AFM) system, a fuel-saving four-cylinder mode. In addition to the valves highlighted in the AFM system, the exhaust system features an option which includes two additional electrical valves in the tailpipes. (From a press release on April 3, 2013)


-In 2014, the Company expects that its total OE revenue will increase between 7 and 11%. Revenue from the light vehicle market is expected to grow at a rate higher than globally forecasted growth rate of 5%, while revenue from the commercial truck and off-highway market is expected in increase by about 20 to 30%.


-The Company announced that its facilities in Gliwice, Poland and Ligonier, Indiana, USA. have been selected as winners of the 2012 Ford Motor Company World Excellence Awards. The Company's Gliwice Ride Performance plant won a Gold Award in the category of shock absorbers, while its Clean Air plant in Ligonier was acknowledged with a Recognition of Achievement Award for warranty improvement. (From a press release on May 29, 2013)


R&D Expenditure

(in million USD)
  FY ended Dec. 31, 2013 FY ended Dec. 31, 2012 FY ended Dec. 31, 2011
Total 144 126 133

-In 2013, USD 19 million was spent on research and development of unproven products and processes, USD 101 million was spent on applications of existing products and technologies to vehicle platforms, and the remainder was spent on improvements to existing products and processes.

R&D Facilities

-The Company's Clean Air segment operates four engineering and technical facilities while its Ride Performance segment has seven engineering and technical facilities. In addition, both segments share three technical centers.

Product Development

Electronic exhaust sound system
-The Company debuted its Tenneco Software Based Signature Sound System at the 2013 Frankfurt IAA Motor Show. The system has an audio controller, an amplifier module and a plug-in loudspeaker. While the loudspeaker produces audio near the vehicle tailpipe, it does not require a connection to the exhaust system, which maximizes vibration decoupling and thermal isolation. Sounds can be programmed for specific vehicle models and are generated from the audio controller based on the vehicle's speed, RPM and other information. (From a press release on September 11, 2013)

Thermoelectric Generator
-The Company, as part of a consortium which includes Gentherm and two global vehicle manufacturers, displayed a prototype of a Thermoelectric Generator (TEG) at the 2013 Frankfurt IAA Motor Show. The TEG is a heat exchanger that uses cylindrical-shaped cartridges. These cartridges are exposed to the heat from exhaust gases on one side, and engine coolant on the other. Thermoelectric material inside the cartridges create a flow of electrical current due to the temperature difference on each end of the cartridge, which is then transferred to the vehicle. (From a press release on September 11, 2013)

Clean air technologies
-At the 2013 Frankfurt IAA Motor Show, the Company unveiled its latest clean air emissions technologies and products.
  • Hydrocarbon Manifold Dosing: A hydrocarbon dosing vaporizer and injector directly integrated into the engine manifold, which allows the diesel fuel to evaporate faster thus improving engine efficiency.
  • Compact Mixing Zone: Technology which allows for efficient conversion of injected urea into ammonia without the formation of deposits.
  • Electrical Valves for Low Pressure EGR: Valves controlled by an electric actuator which continuously adjusts the position of the exhaust flap for optimal back pressure. Combined with a low-pressure EGR system, the valve can reduce Nitrogen Oxide emissions by up to 50%.
  • Electrical Valves for Cylinder Deactivation and Acoustic Tuning: Valve which provides precise sound design and noise control in tailpipe applications or adaptive exhaust control in vehicles with cylinder deactivation features. (From a press release on September 11, 2013)

Investment Activities

Capital Expenditure

(in million USD)
  FY ended Dec. 31, 2013 FY ended Dec. 31, 2012 FY ended Dec. 31, 2011
Clean Air Division 182 172 128
Ride Performance Division 72 91 90
Total 254 263 218


-The Company expects to spend between USD 275 million and 300 million in capital expenditures for 2014.

Investment Outside USA

-The Company announced the opening of a new manufacturing facility in Chakan near Pune, India. The Chakan facility is the Company's sixth manufacturing location in India. The 13,000-square-meter facility is located close to key customers in the Pune region including Volkswagen, General Motors, Tata Motors and Mahindra & Mahindra. It will produce emission control products and systems and supply ride performance products on a just in time (JIT) basis. The Chakan facility is equipped with the latest converter canning technology, robotic welding and assembly and highly automated muffler manufacturing lines. The facility also has a modular assembly line for ride performance products which it supplies to Pune-based OEMs. It also supplies clean air products to commercial vehicle customers SML Isuzu and Ag Tractors. The Company currently employs over 350 people at the new plant, which has the capacity to produce more than 2,500 exhaust systems daily. (From a press release on October 17, 2013)