Rainer Jueckstock, co-CEO of Federal-Mogul Corp., sees exactly where automakers are spending their r&d money as they develop the next generation of fuel-efficient powertrains.
The company has recovered from its 2002 bankruptcy and is prospering in part by transforming commodity parts such as bearings, pistons and rings into low-friction, long-lasting components.
Jueckstock, 53, spoke with Staff Reporter Richard Truett.
Q: What's Federal-Mogul's outlook on diesel engines for North America?
A: I believe that diesel engines, especially for pickup trucks, are a great application. I believe they will come [in light-duty] pickups, but slower than we had hoped a few years ago. We had large programs for diesel pickup trucks and SUVs in 2007-08. We invested quite nicely in Mexico and here in the U.S., but the demand didn't happen. Now we see virtually everyone, not only the Germans, are coming with diesel engines for large pickup trucks, SUVs and even for passenger cars.
Where is engine development going, and what products must Federal-Mogul have in its portfolio in the next 20 years?
We define what we need from the technology road map of our customers.
We see significantly higher specific loads, engine downsizing and very different combustion strategies going forward, such as HCCI -- homogeneous charge compression ignition -- with extremely high exhaust gas recirculation, with extremely lean burn.
Our components need to deal with these. We see the base technologies between gasoline and diesel coming together, moving more into the performance of a diesel with the size of the gasoline engine. All our components are getting smaller and lighter.
Federal-Mogul has been developing an advanced plasma spark plug that could help improve fuel economy. We don't often view Federal-Mogul as a technology leader. Is this an image you wish to create?
Your picture is somewhat not what we see. Think of pistons, piston rings and bearings. These are patented technologies. You could not have the diesel boom in Europe without us. You could not have start-stop without our coated bearings.
If you think about the pressure and the temperature and the mechanical stress on some of our components, several are enablers of diesel technology or turbocharged gasoline engines.
What's another example of a standard engine part that Federal-Mogul has developed that has patented technology?
We have, for example, heavy-duty pistons and rings with a 1 million mile requirement.
Electrified vehicles, hybrids, battery electrics and even fuel cell vehicles are all coming to market. Will Federal-Mogul be a supplier to those kinds of alternative powertrains?
We've got a product that protects high voltage wires and cables that is very difficult to sever in a crash. It is being used in electric vehicles today. But to go into batteries or into electric motors, we currently don't have the intention. We want to spend our r&d money and our effort and resources to make combustion engines more reliable to meet the most stringent emissions regulations.
Are the strong sales of cars in the United States the result of old cars wearing out, and just a temporary situation, or are we in a long-term sustainable recovery?
It will be easier to answer this question looking backwards from 2015. I do see a mixed picture. On one hand there is some catch-up. For the next few years, 15.5 million to 16 million could be the normal average.
Can Federal-Mogul prosper in the United States based on that volume?
Oh yeah, absolutely. It's good business in most of our product lines in passenger cars, SUVs and pickup trucks. And we are well positioned here, but that is not our only business. We would still like to see heavy-duty and industrial use coming back in the U.S.
How is Federal-Mogul dealing with the economic mess in Europe? Have there been plant closings and staff reductions?
After the 2008-09 crisis, we changed the business model in most of our European plants towards having by far a more temporary work force. And we are currently harvesting the benefits of this change. We do have the ability to adjust the work force in most of our European plants by taking out the temporary work force or not extending temporary contracts. We do have a few cases where we have had to layoff part of the permanent work force, but this is more in cases when there is a structural change, where we think we have to go into lower cost countries.
How did the recession affect Federal-Mogul in the United States? Did the company find new ways to become more efficient?
In our product lines, we have the philosophy to produce where the customers are in tandem with low-cost plants. We do invest in Mexico and the United States. One of the changes we brought in 2012 was to have more focus on asset productivity than we had in the past. If we have to invest, we do it in the current floor space, because every new roof brings additional fixed costs.
Federal-Mogul's stock has increased nearly 100 percent this year.
The current stock price is better than it was a few quarters ago. To a certain extent, a sign of the overall industry. And also to a certain extent the position of the company. I think we are by far better off today then we were in 2012.