BorgWarner names CEO, CFO of fuel systems, aftermarket spinoff

Parts supplier BorgWarner Inc. on Tuesday named two longtime executives to serve as CEO and CFO of the proposed spinoff of its fuel parts and aftermarket business, which will be known as Phinia Inc.

Brady Ericson, the president of BorgWarner's fuel systems and aftermarket business since March 2022, was named as CEO of the newly named spinoff. Ericson began his career with the supplier in 2000 and has held various officer roles since 2011, managing three business units and serving as BorgWarner's chief strategy officer.

Chris Gropp, the vice president of finance for the field systems and aftermarket business since October 2020, was named as CFO of Phinia. Gropp has been with BorgWarner since 2001, serving as head of finance for three of the metro Detroit supplier's business units in that time.

"They each possess a breadth of knowledge and experience that will be required to guide Phinia as an independent company and pursue its continued success," BorgWarner CEO Frédéric Lissalde said in a statement.

The spinoff, announced in December, will allow BorgWarner to focus on its growing electric vehicle business as the electrification of the auto industry picks up steam. The supplier invested $150 million into electrification R&D last year and expects to break even on that business by late this year or early 2024, CFO Kevin Nowlan said on a Feb. 9 call with investors.

The spinoff, expected to be completed in late 2023, will allow for the company's traditional combustion business to be a "product leader in fuel systems, starters, alternators and aftermarket distribution," BorgWarner said in a news release. In December, the company said that it would also be free to "pursue growth opportunities" in alternative fuels such as hydrogen.

Naming the spinoff Phinia is "an exciting next step that personifies and gives an identity to what we had referred to as 'NewCo', " Lissalde said.

Ericson, Phinia's soon-to-be CEO, served in a variety of operations, manufacturing, engineering and sales roles with BorgWarner, including at locations in Europe and Asia. Before joining BorgWarner, he worked at companies including Ford Motor Co., supplier Remy International and Honeywell.

Ericson earned a bachelor of science degree in mechanical engineering from Kettering University and a master of business administration from Duke University.

"I am honored and humbled to be selected to launch and lead Phinia," he said in a statement. "We will draw upon BorgWarner's rich 130-year history — maintaining the strong culture of product leadership, integrity and operational excellence."

Gropp, meanwhile, has served in a variety of roles, such as plant controller, commercial controller, finance director and vice president of finance for BorgWarner businesses. She was previously an auditor for KPMG. Gropp holds a bachelor of science degree in accounting from the University of Alabama.

"I'm excited for the opportunity to lead Phinia, as part of Brady's leadership team, and seek to continue the positive momentum and financial discipline, with the objective of setting us up for success as an independent entity," she said in a statement.

Last week, BorgWarner reported gross profit of $833 million on $4.1 billion in revenue in the fourth quarter, up 11 percent from a year earlier. On the year, gross profit rose 7 percent to $3.1 billion on $15.8 billion in sales.

Full-year sales revenue from BorgWarner's fuel systems and aftermarket businesses rose 4.3 percent from a year earlier to $3.6 billion.

BorgWarner ranks No. 15 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to automakers of $14 billion in 2021.