DETROIT -- Diversified auto parts supplier Federal-Mogul Corp., which does more than 60 percent of its business in Europe, is looking to acquire companies developing emerging technologies for electric vehicles, its boss said.
CEO Jose Maria Alapont told Crain's Detroit Business that Federal-Mogul is in talks to acquire at least two such companies. If completed, the deals would bring new technologies to Federal-Mogul's existing portfolio of engine and safety components.
Alapont declined to name the targets or indicate how close the deals were to fruition, but he said new technologies needed for electric and hybrid electric vehicles are going to be among those pursued by Federal-Mogul, which is 75 percent owned by billionaire investor Carl Icahn.
“There is real competition in today's technologies for current vehicles, but for vehicle electrification, we need to take into consideration that all the technologies that are specifically unique to the electrification of the vehicle ... those technologies are brand new,” Alapont said.
Federal-Mogul's global scale and it's roughly $1.6 billion in liquidity would help accelerate development of emerging technologies added to the company's portfolio, and introduce them to global markets.
“The volumes today are very small (for electric vehicles,)” Alapont said. “That means whoever gets into those technologies, you need to globalize it.”
Alapont, 59, signed a deal extending his contract with Federal-Mogul until 2013 earlier this month. He'll make $1.5 million in annual salary with a maximum annual cash bonus of $1.5 million, plus other benefits and equity incentives.
But it wasn't until recently a given that Alapont would remain at Federal-Mogul's helm, as he has been since 2005.
“Frankly, this year I'm becoming 60 and I gave some consideration to retiring,” he said.
After steering Federal-Mogul out of U.S. Chapter 11 bankruptcy in December 2007, Alapont has presided over a massive cost-cutting initiative that began in the fourth quarter of 2008 to eliminate 8,600 positions at the company.
Meanwhile, revenue fell from $6.8 billion in 2008 to $5.3 billion in 2009 as the auto industry was crippled by the recession.
The cost cuts helped the company shrink its losses from a $468 million net loss in 2008 to a $45 million net loss for the full 2009, with net income of $43 million in the fourth quarter.
Alapont says the opportunity to lead the company in an automotive market that is on the mend made him want to stay.
“That has changed my mind, and I have finally decided to stay for a longer period,” he said.
Federal-Mogul ranks No. 41 on the Automotive News Europe list of the top 100 global suppliers, with sales to automakers of $4.23 billion in 2008. Europe accounted for 62 percent of the total.