Five minutes with Frank Macher, Chairman and CEO, Federal Mogul - The Supply Side - interview - Brief Article

Automotive Industries, May, 2002

If the strain of guiding a company out of bankruptcy proceedings is a difficult thing to hide, Federal Mogul's Frank Macher makes it look easy. Macher's focus is on products, service and the opportunities that lie beyond the quagmire of asbestos litigation.

Automotive Industries' Executive Editor Gerry Kobe spoke with Macher about what lies ahead.

Q. Can you see the light at the end of the tunnel with regard to your asbestos claims?

A. I'm optimistic. The judge has picked us to accelerate our progress through the bankruptcy courts and we are receiving a great deal of cooperation from all our creditors. I'm hopeful we can do a fast track and emerge from this in a lot less than the 3 to 5 years that most people talk about.

Q. Have your customers stuck with you through this?

A. I'm amazed at how well they've been supporting us. In fact, since we filed Chapter 11 we've won some $300 million in new business and that is growing all the time. Our suppliers supported us through the transition, our people and plants supported us and we didn't miss a delivery. Frankly in most cases now it's business as usual.

Q. Do you see opportunities in segments where you are strong?

A. One is diesels. Diesels have about 40% of the business in Europe in the light vehicle market and we are the dominant player with our pistons and rings and bushings and bearings. I also believe diesels will continue to grow to at least 50% market share over the next five years.

Another opportunity I am really excited about is our ThermoQuiet friction products. It integrates the shim into the brake pad material and provides for greater stability and elimination of NVH. We can actually sell this product as better than OE.

Q. Is your aftermarket business healthy?

Our brands in the aftermarket are what we really rely on and I think we have the strongest brands of any company. Champion, Anco, FelPro, Moog, Wagner, Goetze -- we have brands second to none. We've seen aftermarket orders increase and market share improvement.

Q. What about expansion overseas?

A. We recognize a significant amount of our OE customer base is shifting as the domestic OEs are unfortunately losing some market share. We just announced the development of a tech center in Yokohama, Japan where we will support the Japanese OEs. And we'll use our JVs in India, China, Korea, Japan and Thailand to develop low cost components for the Japanese market and customers in Europe and the U.S.

Q. What is your message to customers?

A. Thank you for sticking with us. you've showed loyalty to us and we have the same loyalty to you -- you won't be disappointed. We'll deliver the best in technology, provide competitive advantage and we will provide value.