German bearings supplier FAG Kugelfischer Georg Schaefer AG signed a memorandum of understanding with Japanese bearing supplier NTN to jointly develop and market a new generation of roller bearing systems.
A joint-venture production company will make wheel hub bearings in the USA. FAG and NTN plan joint production of ball and tapered roller bearings in Portugal and Hungary.
They also plan a common sales and marketing organization for industrial bearings in Canada. It will be extended to other countries subject to regulatory approval.
The fragmented bearings market has been under tremendous price pressure for several years. FAG Chairman and CEO Uwe Loos says the alliance will 'improve profitability for both companies.'
The partners plan to set up a common supplier base for raw materials, components, tools and services. They will also create a joint marketplace for e-commerce applications.
However, the companies plan no equity cross-shareholdings.
NTN Corporation, based in Osaka, Japan, has annual bearing and constant velocity joint sales of 327 billion yen (E3.1 billion).
FAG, based in Schweinfurt, Germany, had bearing and technical component sales estimated at E2.2 billion in 2000.