Federal-Mogul
Federal-Mogul Corporation is a major automotive parts supplier in the United States.
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Early History
The predecessor company was founded in 1899 as the Muzzy-Lyon Company. At that time, founders J. Howard Muzzy and Edward F. Lyon sold mill supplies and rubber goods. The company's first location was on Woodward Avenue in Detroit, Michigan.
The same year, the partners set up an early subsidiary company, the Mogul Metal Company, to manufacture new bearing alloys. At that time, it was common practice to sell one type of bearing metal for all types of uses. Muzzy and Lyon adopted the theory that bearing metals for high or low speed, heavy or light load jobs, all required different qualities and structures. As a result, they blended two babbit metals, which were sold under the brand names of Duro and Mogul. Duro was made according to a purchased formula but the Mogul formula was developed by founders Muzzy and Lyon.
In the early 1900s, bearings were made by pouring molten babbit metals directly onto the motor block and shaping the metal to fit. To replace a bearing, a mechanic had to gouge out the old one and pour in new metal. Muzzy and Lyon believed metals could be die-cast directly into replaceable bearings of the required size and shape, so the partners bought an old printer's type casting machine and began experimenting. Their die casting machine became so successful that they stopped selling mill supplies and began selling automotive bearings and metal projects. The Buick 10 was one of the first cars to use parts produced by Mogul Metal. In 1910 Buick had placed an order for 10,000 connecting rod bearings for this automobile.
Mergers and Expansion
The Mogul Metal Company became Federal-Mogul Corporation on May 1, 1924, when the company merged with Federal-Bearing and Bushing, a manufacturer of engine bearings and bushings. Then on July 29, 1955, Federal-Mogul merged with the Bower Roller Bearing Company, a producer of straight and tapered roller bearings, to form Federal-Mogul-Bower Bearings, Inc.
Federal-Mogul-Bower Bearings, Inc. acquired The National Motor Bearing Co. (National Seal Division) on July 27, 1956. At the time of the merger, National was one of the country's largest manufacturers of oil seals and a variety of other specialized parts ranging from grommets and gaskets to fiberglass ducts and railroad journal boxes.
The company's name was changed back to Federal-Mogul Corporation on April 27, 1965. Just over a year later, on July 28, 1966, Federal-Mogul's World Headquarters officially relocated from its location in downtown Detroit to Southfield, Michigan.
Between 1979 and 1983, Federal-Mogul rolled out its FOCUS program, or Field Operations Customer Service, to strengthen its service to replacement parts customers, also known as aftermarket customers. The system managed Federal-Mogul's replacement parts inventories, shipping and billing. In 1982, Federal-Mogul took an industry-leading step by establishing a customer service hotline for jobbers, mechanics and engine rebuilders to receive up-to-date information on the company's aftermarket products. Prior to this, like most automotive suppliers, they focused primarily on original equipment manufacturers.
Throughout the 1980s, Federal-Mogul made acquisitions and entered into joint ventures to strengthen its manufacturing position, both for original equipment and aftermarket customers. Federal-Mogul acquired the Mather Company, a manufacturer of high-performance sealing products and a leader in PTFE technology in July 1985. The following year, the company acquired Carter Automotive Company, Inc., a manufacturer and distributor of automotive fuel pumps. On August 24, 1989 Federal-Mogul completed a joint venture agreement with G. Bruss GmbH and Co. KG, a German manufacturer of seals and specialty molded products.
Federal-Mogul continued to strengthen its operations through additional acquisitions in the 1990s. In October 1990, Federal-Mogul completed the acquisition of Glyco AG, a German manufacturer of automotive and diesel engine bearings. In September 1995, Federal-Mogul acquired Seal Technology Systems (STS), one of Europe's leading designers and manufacturers of a specialized range of seals and gaskets for the automotive sector.
Change in Direction
In the early 1990s, Federal-Mogul decided to build on its international presence and aftermarket distribution network. The company began to open Federal-Mogul auto parts retail stores. Federal-Mogul opened auto parts stores in Chile, Panama and Venezuela in 1993 and soon expanded to Australia, South Africa and Puerto Rico. By the end of 1995 Federal-Mogul had 128 retail stores.
In 1996 Federal-Mogul's Board of Directors began to review the retail strategy and its impact on the company's aftermarket customers. In September, the Board announced the departure of the chairman and chief executive officer.
In November 1996, a new chairman and CEO was named and in the following year, the company underwent a major restructuring to return itself to its manufacturing roots. By the end of 1997, most of the auto parts stores were sold and the company refocused its efforts and energy on manufacturing mastery. The company also reaffirmed its commitment to original equipment and aftermarket customers.
Recent Activity
In 1998, Federal-Mogul announced 13 acquisitions, growing in a 12-month time frame from $2 billion to over $6 billion in sales. The company was following a three-point growth strategy as it evaluated acquisitions: create systems and modules for original equipment customers; expand its global presence to support the growth of the major auto manufacturers in emerging markets; and expand its aftermarket product offerings in those markets.
The largest acquisiton was that of T&N plc, a $3 billion automotive parts supplier headquartered in England. Through the T&N acquisition, Federal-Mogul expanded its global presence in key products such as pistons, piston rings and gaskets, and moved into new product areas with friction material.
Significant to Federal-Mogul's expanded presence in the aftermarket were the 1998 acquisitions of Fel-Pro, the premier gasket manufacturer for the North American aftermarket, and the automotive businesses of Cooper Industries, operated as Cooper Automotive and Moog Automotive. Through the Cooper acquisition, Federal-Mogul strengthened its brand portfolio with Moog® chassis parts, Champion® spark plugs, and Wagner® brakes and lighting.
Federal-Mogul strengthened its global product offering with four significant acquisitions in Europe. In March 1998, Federal-Mogul expanded its engine bearing operations with the acquisition of Bimet S.A., a Polish manufacturer of engine bearings and bushings. In December 1998, Federal-Mogul acquired Glöckler Dichtsysteme Günter Hemmrich GmbH, a world class German manufacturer of sealing products. On June 1, 1999, Federal-Mogul completed the acquisition of the piston division of Alcan Deutschland GmbH in Germany, a subsidiary of Alcan Aluminum Limited in Canada bringing Federal-Mogul the Nural brand of piston products. In March 2000, Federal-Mogul announced its agreement to acquire WSK Gorzyce S.A., a leading Polish manufacturer of pistons and other automotive components.
In January 2001, a new leadership team joined Federal-Mogul and was faced with the task of developing a solution for the company's asbestos liabilities. Federal-Mogul itself had only limited involvement with asbestos. But the company had been overwhelmed by asbestos litigation because of the historical involvement with asbestos of the companies acquired by Federal-Mogul over the years.
On October 1, 2001, Federal-Mogul announced that to separate its asbestos liabilities from its true operating potential, the company and its United States subsidiaries have voluntarily filed for financial restructuring under Chapter 11 of the U.S. Bankruptcy Code. In addition, Federal-Mogul subsidiaries in the United Kingdom have filed jointly for Chapter 11 and Administration under the U.K. Insolvency Act of 1986. During these restructuring proceedings, Federal-Mogul continues business operations without interruption, and with the full support of its major customers and suppliers.
Today, Federal-Mogul is a global supplier of automotive components and sub-systems serving the world's original equipment manufacturers and the aftermarket. The company utilizes its engineering and materials expertise, proprietary technology, manufacturing skill, distribution flexibility and marketing power to deliver products, brands and services of value to its customers. Federal-Mogul is focused on the globalization of its teams, products and processes to bring greater opportunities for its customers and employees, and value to its constituents.
Headquartered in Southfield, Michigan, Federal-Mogul today employs 45,000 people in 24 countries.