Crain News Service
DETROIT - Federal-Mogul Corp. has taken a big step toward its goal of providing everything needed to seal an automotive engine.
The supplier has landed a contract for work on a new DaimlerChrysler AG engine to be used in undisclosed North American vehicles for the 2003 model year, said Mike Fisher, Federal-Mogul's vice president of sales for North America.
At full volume, the agreement is valued at $30 million annually, he said. The length of the contract will depend on how successful the engine is in the market, Fisher said.
The DaimlerChrysler deal brings together the capabilities Federal-Mogul gained through recent acquisitions that increased its Sealing Systems Group's yearly sales to $1.3 billion. The automotive supplier posts total sales of about $7 billion.
Its strategy 'has been to put together a total sealing system capability, and we've been able to achieve that,' Fisher said.
Federal-Mogul, of Southfield, Mich., is in the initial design stage for the project's estimated 25 components. They include gasket joints and dynamic seals and an undetermined number of sealing modules. Work on the contract will be done at oil seal and gasket manufacturing sites in the United States and Mexico, Fisher said.
Federal-Mogul's competitors already are fulfilling total sealing contracts or are very close to gaining the capability. Dana Corp. of Toledo, Ohio, supplies an engine sealing system to engine manufacturer Navistar International Corp. and also to DaimlerChrysler and BMW AG.
Plymouth, Mich.-based Freudenberg-NOK Group Co.'s German parent, Freudenberg & Co., in December acquired a significant interest in French gasket maker Meillor SA. That will provide the production needed to offer a sealing system as well.