Contact: Media Relations: Investor Relations:
Kimberly A. Welch, +44 207 973 5900 Janet Halpin, 248 354 8847
Jim Fisher, 248 354 9809
Dieter Mueller, +49 611 201 9100
Federal-Mogul Corporation Files Voluntary Chapter 11 and Administration
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Petitions to Resolve Asbestos Claims
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. Business Will Continue to Operate Without Interruption
. No Job Losses or Facility Closures Directly Resulting from the
Filings
. Advanced Technology Effort Continues for Customers
. Supply Chain Remains Strong
Southfield, Michigan, October 1, 2001... Federal-Mogul Corporation (NYSE:
FMO) today announced that to separate its asbestos liabilities from its true
operating potential, the company and its United States subsidiaries have
voluntarily filed for financial restructuring under Chapter 11 of the U.S
Bankruptcy Code. In addition, Federal-Mogul subsidiaries in the United Kingdom
have filed jointly for Chapter 11 and Administration under the U.K. Insolvency
Act of 1986. No company subsidiaries outside of the United States and the United
Kingdom are included in these filings.
The filings, made today in the U.S. Bankruptcy Court in Wilmington,
Delaware, and the High Court of Justice, Chancery Division, London, England,
enable Federal-Mogul to develop a plan to resolve its asbestos liabilities.
During these restructuring proceedings, Federal-Mogul will continue business
operations without interruption, and with the full support of its major
customers and suppliers.
"Moving forward, Federal-Mogul will continue to serve its existing
customers, fulfill current contracts and secure new business," said
Federal-Mogul Chairman and Chief Executive Officer Frank Macher. "I have been in
close contact with many of our major customers and suppliers, who have indicated
that they will support Federal-Mogul during the restructuring process."
Federal-Mogul intends to work closely with asbestos claimants and other
creditors to develop a financial reorganization plan that will address asbestos
claims and establish a viable capital structure for the long-term growth and
profitability of the company's operations.
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In conjunction with the filings, Federal-Mogul has obtained commitments of
up to $675 million in a new loan through debtor-in-possession financing from a
group of banks led by J.P. Morgan Chase & Co. Following the U.S. Court's
approval, Federal-Mogul can use these funds to meet the future needs and
obligations associated with normal business operations. This includes payment
under normal terms to suppliers and vendors for all goods and services that are
provided after today's filing.
"After vigorously working for a legislative solution and operating nine
months with our new litigation approach for managing asbestos claims, we have
determined that the Chapter 11 and Administration processes are the only way we
can effectively structure payments for claimants without financially crippling
the operations of Federal-Mogul. This voluntary, but difficult, decision to file
enables us to continue our operations with the same high level of commitment to
our product quality and innovative technologies required to competitively serve
our customers," said Macher. "Federal-Mogul is a very good company with
dedicated, talented employees. We have a long history and a solid future
providing we take this undeniably difficult action."
No Federal-Mogul job losses or facility closures are expected as a direct
result of the filings. The company expects its employees worldwide will continue
to be paid in the normal manner and that their benefits will not be disrupted.
Federal-Mogul's qualified U.S. and U.K. pension plans for retirees are protected
by law.
Macher said the goals of Federal-Mogul's restructuring include:
. Continue business operations without interruption, including the full
support of its customers.
. Continue to compensate and reward our employees as valued corporate assets.
. Create an environment where our employees can focus on serving our
customers without distractions.
. Grow the business on a global basis.
. Invest capital and human resources in core businesses for our ongoing
competitive advantage.
. Develop advanced technologies to maintain performance leadership.
. Provide for asbestos claimants.
. Complete the restructuring proceedings in a reasonable time frame.
. Treat creditors and shareholders fairly.
"The operations of Federal-Mogul are fundamentally sound," Macher said. "We
have a clear leadership position in many of our major markets, and our products
are vital to the automotive industry. We have a loyal, global customer base,
strong technology in our core products, and the best brand names in the
industry. These business strengths combined with our employee talent forms a
solid foundation for long term success.
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"Today's action provides a means for effectively separating our company's
acquired asbestos liabilities from our true operating potential, thus paving the
way for Federal-Mogul to emerge from the reorganization process as a stronger,
more competitive enterprise," Macher added. "We remain committed in our efforts
to bring about a legislative solution for managing asbestos claims."
Federal-Mogul is one of more than 30 companies involved in asbestos-related
litigation to voluntarily file for Chapter 11 since 1982. Ten companies involved
in asbestos-related litigation have filed since January 1, 2000.
In the United Kingdom, the Administration Order is a court order placing
Federal-Mogul's U.K. businesses under the control of a court-appointed
administrator. The order is intended to preserve the company's business and
allow a reorganization of its assets while protecting it from actions by
creditors and asbestos claimants. While these filings are independent of the
U.S., every effort is being made to maintain a mutual goal of reorganization.
For more information on Federal-Mogul's financial restructuring, visit the
company's web site at http://www.federal-mogul.com. For questions or
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informational needs beyond what is available on the web site, the following call
centers have been established:
. Suppliers serving operations in the United States and Canada may call
1-888-333-6645 or 1-248-354-7860
. Suppliers serving operations outside of the United States and Canada may call
the following toll-free numbers: from the United Kingdom - 0800 389 6881; from
Germany - 0800 181 8324; from France - 0800 919 605; from Italy - 800 783 590;
from Spain - 900 938 958. Suppliers calling from any other country can dial
+44 161 490 2650.
. Customers, employees, investors, retirees and friends of Federal-Mogul may
call 1-888-711-3981 or 1-248-354-7884
Federal-Mogul Hosts Restructuring Conference Call
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Federal-Mogul will be hosting a conference call at 1:00 p.m. EDT today,
Monday, October 1, to discuss the company's financial restructuring. The
conference call will feature remarks by Frank Macher, chairman and chief
executive officer. Chip McClure, president and chief operating officer and Mike
Lynch, executive vice president and chief financial officer, will join Macher
during the question and answer period. To participate in the call, dial
1-719-457-2650 and give 515570 as the Federal-Mogul RSVP confirmation code when
requested. Please dial into the conference 15 minutes prior to 1:00 p.m.
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Federal-Mogul expects to report its financial results for the third quarter
of 2001 in a Form 10-Q scheduled to be filed with the Securities and Exchange
Commission no later than November 14, 2001.
Headquartered in Southfield, Michigan, Federal-Mogul is an automotive parts
manufacturer providing innovative solutions and systems to global customers in
the automotive, small engine, heavy-duty and industrial markets. The company was
founded in 1899.
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Certain statements contained or incorporated in this press release which
are not statements of historical fact constitute "Forward Looking Statements"
within the meaning of the Private Securities Litigation Reform Act of 1995, the
Act. Such statements are made in good faith by the Company pursuant to the Safe
Harbor Provisions of the Act.
Forward-looking statements include financial projections, estimates and
statements regarding plans, objectives and expectations of the Company and its
management as well as the Company's views regarding industry and economic
conditions and trends. Among the forward-looking statements that may be included
in this press release are statements regarding plans to implement restructuring
initiatives, plans to address issues related to financing of the company's
business operations, statements regarding industry conditions, and statements
regarding the scope and effect of asbestos liabilities.
These forward-looking statements involve known and unknown risks, which may
cause the Company's actual results to differ materially from any future results
expressed or implied by such forward-looking statements. Such risks,
uncertainties, and other factors include, without limitation, fluctuation and
demand for both original equipment and replacement components in the automotive,
heavy-duty vehicular and industrial market, the effect of certain global and
regional economic conditions, the ability of the Company to control operating
and other costs, legal proceedings and claims (including environmental and
asbestos matters) involving the Company, changes in the Company's relationships
with customers and suppliers, the effect of the bankruptcy filing by the Company
and its subsidiaries and the filing for administration by the Company's U.K.
subsidiaries, legislative risks and uncertainties, and other factors some of
which are beyond the Company's control.
Federal-Mogul assumes no obligation to update any forward looking
information contained in this press release.
Contact: Kimberly A. Welch +44 207 973 5900
Jim Fisher 248/354-9809
FOR IMMEDIATE RELEASE
Federal-Mogul Appoints Frank E. Macher Chairman and Chief Executive Officer,
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Accelerating Leadership Succession Plan
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Southfield, Michigan, October 1, 2001...The Board of Directors of
Federal-Mogul Corporation (NYSE: FMO) has elected Frank E. Macher as chairman
and chief executive officer, adding the responsibilities of chairman to his
previous role as chief executive officer, effective October 1, 2001. Macher, 60,
replaces Robert S. (Steve) Miller Jr., who had been serving as non-executive
chairman and who will remain on Federal-Mogul's board of directors.
The board's action accelerates a leadership succession plan at
Federal-Mogul that was announced at the time of Macher's appointment on January
11, 2001. The acceleration resulted from the recent appointment of Miller as
chairman and chief executive officer of Bethlehem Steel Corporation, effective
September 24, 2001.
Chip McClure remains as Federal-Mogul's president and chief operating
officer, a position he has held since January 11, 2001.
Macher has more than 35 years of automotive industry experience. He
served as president and chief executive officer of the former ITT Automotive, a
$6 billion global automotive supplier, from July 1997 to January 1999. Before
joining ITT, Macher served 30 years at Ford Motor Co. in a variety of
progressively responsible positions in management, manufacturing, engineering
and quality. His last position at Ford was vice president and general manager of
the Automotive Components Division, the predecessor to the current Visteon
Corporation. While at Ford, Macher served as general manager of the Plastic and
Trim Products Division, the Electronics Division and the Electrical and
Electronics Division. His other roles included vice president of northern
Pacific Operations, based in Tokyo, Japan, and general manufacturing manager and
plant manager at several Michigan facilities. He began his Ford career in 1966
as a manufacturing development engineer.
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Headquartered in Southfield, Michigan, Federal-Mogul is an automotive
parts manufacturer providing innovative solutions and systems to global
customers in the automotive, small engine, heavy-duty and industrial markets.
The company was founded in 1899. Visit the company's web site at
http://www.federal-mogul.com for more information.
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