Growing Development and Future Plan of Federal-Mogul China

An Interview with Mr. Cornelius Fricke, Vice President Asia Pacific, Federal-Mogul Corporation.

Gasgoo.com: Congratulations for winning “TOP 100 Most Competitive Auto Parts Suppliers Award 2010.

Mr. Fricke: Thank you very much.

Gasgoo.com: Would you please briefly introduce Federal-Mogul’s businesses in China as a global leading supplier for powertrain and safety technologies?

Mr. Fricke: Federal-Mogul has in China manufacturing bases and a technical center to serve our customers. We have overall 11 manufacturing bases here for pistons production, rings, bearings, sealing, gaskets, friction material, systems protection and so on, together with our 18 technical centers in the world and more than 100 manufacturing plants all over the world. We’re capable together with them to serve our customers here in China in a best possible way what is expected. Our growth in this year has grown by 78%, much faster than the Chinese market production growth of 33% during the same period. And this gives us the confidence we’re successful in this market and we’ll stay successful in this market.

Gasgoo.com: What are the main functions of Federal-Mogul’s technical center in China? And what do you plan to add the function into it in the next three or five years?

Mr. Fricke: The Federal-Mogul’s technical center here in Shanghai has the ability to develop and perform all of our customers’ products or what is necessary to serve the market. Together with our worldwide network of 18 technical centers in the world, we’re capable to deliver the highest and best performance of the customers can get from Federal-Mogul all over the world same here in China.

Gasgoo.com: How do you define this technical center in Federal-Mogul’s global R&D system?

Mr. Fricke: We have the strategy to bring the most current and advanced technology here to China. We did this with the technical center. We have equipment here what is absolutely state-of-art. We’ve employed high-qualified local Chinese engineers, which surely needs some additional training. But we’re looking for gathering market to achieve more market shares with this technical center by serving the customer in a fast way as we did in the past. And the target is to have mainly local Chinese staff here who can deal with our customers.

Gasgoo.com: Would you please introduce some new technology and product that Federal-Mogul has introduced in China or plans to launch in China that will help the car manufacturers to produce safer, more energy efficient and more environmentally friendly cars?

Mr. Fricke: Actually the Chinese automotive market is very similar to the automobile market in the rest of the world. What we are introducing here is the highest technologies in China what we already introduced in Europe, North America and other high-developed countries. It would be definitely all the services for the customers concerning reducing fuel consumption to reduce weight, to reduce emissions and so on. Everything what is for the necessary to fulfill the requirements what’s already standard in North America or Europe. And this will also happen here in China. And we will serve our customers to achieve that.

Gasgoo.com: Can you give us some examples?

Mr. Fricke: Well, in the piston area we have Durabowl and EcoTough as examples. These two piston technologies are focused on the light vehicle engine market and they support customer requirements to enhance durability in an increasingly punishing combustion chamber environment and at the same time reduce overall friction. The new Magnum Monosteel piston is designed for heavy duty truck engines, and it will reduce friction and to reduce the mass, thereby increasing fuel economy and reducing emissions, off course. We have further new technologies in the sealing market, piston ring market, fiction market and all other areas of our product portfolio.

Gasgoo.com: With regards to cost-reducing and price-fixing to meet the Chinese customers’ demand, what are the initiatives that Federal-Mogul has taken?

Mr. Fricke: Federal-Mogul has high technology products that deliver value to the customers as they seek to improve fuel economy and reduce emissions. We do not product simple commodity products that fall under extreme cost pressure. We have a lean global organization and maintain a competitive cost structure that enables us to win market shares in China. As I mentioned we have increased our sales in China by more than double to overall production growth rate.

Gasgoo.com: Can you tell us something about Federal-Mogul’s localization in China, especially in the area of competence development? And what’s your future plan?

Mr. Fricke: We are making excellent progress in our localization plans. We have established local engineering, manufacturing and support competencies with extensive use of Chinese employees. Our local workforce with a few expatriates who are focused on developing Chinese nationals are the target to replace them in a few years. We are proud of our local workforce and believe it is very effective in offering local support to customers based in China. We would like to accelerate our materials and purchasing from Chinese sources. This is the area where the biggest gap exists and we are working to develop additional Chinese sources for materials and other products.