Federal-Mogul begins operating with 2 business units

DETROIT -- Supplier Federal-Mogul Corp. said it has begun operating with two business units -- one for powertrain parts to automakers and the other for aftermarket parts.

Each unit has a CEO who reports to the suburban Detroit company's board. Rainer Jueckstock, formerly CEO of Federal-Mogul, is now the supplier's co-CEO and CEO of the powertrain unit. Michael Broderick, formerly president of CarQuest Corp.'s U.S. operations until joining Federal-Mogul in June, is now Federal-Mogul's co-CEO and CEO of the aftermarket unit.

Federal-Mogul, which disclosed its plans for two business units in March, said the change will better serve both customer bases.

"The new organizational model allows for a strong product line focus benefitting both original equipment and aftermarket customers and will enable the global Federal-Mogul teams to be responsive to customers' needs for superior products and to promote greater identification with Federal-Mogul premium brands," Broderick said in a statement on Tuesday.

In 2011, Federal-Mogul's powertrain sales totaled $4.2 billion. The powertrain operation has 79 plants with 32,500 employees.

The company's aftermarket sales last year totaled $3.1 billion. The aftermarket operation has 31 plants with 12,500 employees. The aftermarket is seen as a growth industry, now that the average U.S. light vehicle on the road is 10.8 years old -- up from 9.7 years in 2006.

"We have made significant progress in the last five months in preparing the company's major product lines to operate in structure with two independent segments," Jueckstock said in the statement.

Jueckstock succeeded former Federal-Mogul CEO Jose Maria Alapont, who retired March 31. Alapont joined the company in 2005 and led it out of bankruptcy in December 2007. The company is majority controlled by longtime New York investor Carl Icahn.

From 2005 to 2011, the company closed 34 plants in Europe and North America while opening 18 plants in fast-growth regions.

Now, about 30 percent of the company's production capacity is in low-cost markets such as China, India, Turkey, Russia and South America -- up from 10 percent in 2005.

Volkswagen, Daimler and General Motors are the company's biggest customers, but no automaker generates more than 5 percent of sales.

Federal-Mogul makes a variety of parts for automakers, including piston rings, valve seats, bearings and friction products.

The company has invested in new technology, and has won nine Automotive News PACE awards for technology innovations over the years. It ranked No. 46 on the Automotive News list of the top 100 global suppliers with $4.6 billion in sales to automakers in 2011.

Automotive News staff contributed to this report.