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Federal-Mogul's CEO Discusses Q1 2012 Results - Earnings Call Transcript

In the future I am going to run the OE segment of Federal-Mogul and I am going to ensure profitable growth with efficient use of capital and resources and the prime part for me to push for this growth will be to drive a focused approach around our core product lines we have in Federal-Mogul on a global basis. We want to enhance our competitiveness and customer orientation especially for this core product lines in every single market.

Federal-Mogul is a (inaudible) company that's excellent technology grants interpretation and we are responsible to persist into the future to create value for our shareholders customers and employees. One of the key task I got from the board of directors of Federal-Mogul is to prepare the company for a segmentation into OE and aftermarket segments. My team is focused on preparing this in the best way and the fastest possible and we see opportunities to find an optimal model for the two units which have very different customers, business models and processes. The customers and the market requirements of these two segments are very different. Think about those unique working capital requirements we have to serve our aftermarket operations compared with the capital investment requirements to expand and install capacity for our OE business around suburb. We believe that this segmentation will enable us to customize and optimize the decision processes should foresee two different segments.

Important for us is to do this segmentation in a way that we establish optimal relationship between the two segments OE and aftermarket going forward. These two segments will make business together in the long run and we have to ensure that this business runs in a way to create value for our shareholders, customers and employees.

I see segmentation could be done in different ways and we are currently putting together models to understand the pros and cons of each of this alternatives. It could go from an integrated aftermarket unit with limited manufacturing capabilities up to a fully integrated aftermarket unit with manufacturing capabilities for most of the product lines they are selling. We will put together these models and the decision for which model to go will be made jointly after the new aftermarket CEO is appointed with him and the board of directors so that we have to come an understanding how to go forward. We believe the new aftermarket CEO will show up in the next few weeks before end of quarter two, selection process is an advanced status.

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