To what factors does F-M attribute its continued increase in profits?
(staffing changes, pricing, etc.)
Federal-Mogul realized strong operating results in the second quarter due to the positive impact of a 13 percent increase in net sales. In particular, we saw significant increases in Europe and BRIC (Brazil, Russia, India & China) markets. In addition to strong sales, we made great strides in overall productivity while also reducing our cost structure. We also were able to effectively mitigate energy and material price increases.
How does the company stay successful in such tough economic times?
Federal-Mogul has a well-diversified customer base, market presence and product portfolio. No customer accounts for more that 6 percent of our total revenue. This reduces the impact of softness in any specific market or with a single customer. Federal-Mogul supplies products and services to automotive and commercial vehicle makers, commercial and industrial customers, and the replacement parts market in every region of the world.
How does F-M's good news bode for the aftermarket at large, in your opinion?
The global aftermarket is a very exciting industry with tremendous opportunity, especially considering the rapid technological change in automobiles. We believe that having strong companies that offer the latest OE technology along with a complete range of premium brands and entry level products is an absolute requirement to support increasingly sophisticated customer needs in the aftermarket. Our corporate results should instill confidence in our brands, which means the end users of our products can have confidence in the solutions recommended to them by our channel partners.
Is brand identity becoming more or less important in light of today's challenging economy?
Federal-Mogul offers an impressive portfolio of leading brands, including Anco, Champion, Fel-Pro, MOOG, National and Wagner, providing premium features and performance. Leading brands are increasingly important to automotive service professionals, who often have just one chance to get the job done right for today's time-starved consumer. Brands also play a vital role in helping the aftermarket compete for the consumer's repair dollar. Vehicle owners, who already face rising fuel prices and other operating costs, expect accurate diagnosis, dependable, high quality repairs and timely completion. Premium brands carry the reputation for dependability, but they also have key quality and design advantages that help solve repair problems and speed the repair for the technician, while bringing additional value to the consumer.
How important is it for parts distributors and jobbers to offer a range of product technologies — entry-level, standard and premium?
Federal-Mogul recognizes that some consumers face economic hardship or do not plan to retain their car long enough to invest in premium products. Our role is to simplify the challenge for our channel partners by offering a comprehensive assortment of products in each category to support the need for entry level and premium branded parts.
How can a parts store increase its sales of premium products?
We offer extensive brand support to ensure that distributors, jobbers, service providers and do-it-yourselfers understand the unique value of premium products. Through point-of-sale materials, technical education, field sales support and national advertising, we help our customers communicate the advantages of Federal-Mogul brands.
What can AAPEX attendees expect to see and learn about at FM's exhibit in Las Vegas?
Trade shows remain an important part of our marketing activities. The aftermarket is a business of people and relationships. We will continue to evaluate and optimize our presence at AAPEX and other shows around the world to ensure we meet the information needs of current and prospective customers. Above all, we want to leverage these and other events to demonstrate how distributors, jobbers and service providers can build their businesses by relying on Federal-Mogul solutions. But, I won't get into any additional details about our show plans because we want to save our best news for Las Vegas!
