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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 13,
1995
Commission File Number: 1-1511
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FEDERAL-MOGUL CORPORATION
(Exact name of registrant as specified in its charter)
Michigan 38-0533580
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
26555 Northwestern Highway, Southfield, Michigan 48034
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (810) 354-7700
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INFORMATION TO BE INCLUDED IN REPORT
ITEM 5. OTHER EVENTS.
On December 13, 1995, Federal-Mogul Corporation (the
"Company") issued a press release announcing a special
after-tax charge totaling of approximately $52 million in the
fourth quarter in connection with announced actions to enhance
shareholder value, including the sale of certain non-strategic
assets and measures to reduce expenses and improve productivity.
Offsetting a portion of the charge is an after-tax gain of
approximately $10 million from the sale of the Company's interest
in Westwind Air Bearings Ltd. The combined impact of these actions
is approximately $42 million or $.99 per share.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
28.1 Press Release, dated December 13, 1995, issued by the
Company (filed herewith as EX-99 and incorporated herein
by reference).
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned, thereto
duly authorized.
FEDERAL-MOGUL CORPORATION
(Michael J. Viola)
By:-----------------------------------
Michael J. Viola
Vice President, Controller
and Treasurer
Dated as of December 21, 1995
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EXHIBIT INDEX
S-K Item 601 No. Document
28.1 Press Release, dated December 13, 1995 of
Federal-Mogul Corporation (filed herewith as
EX-99 and incorporated herein by reference).
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Bonnie J. Price 810/354-8847
FOR IMMEDIATE RELEASE
Federal-Mogul to sell non-strategic assets and take productivity
actions - fourth quarter earnings to include an after-tax special
charge of approximately $42 million.
SOUTHFIELD, MICHIGAN, December 13, 1995 . . . Federal-Mogul
Corporation (NYSE-FMO) reported today that it is taking a number of
actions to enhance shareholder value including the sale of certain
non-strategic assets and measures to reduce expenses and improve
productivity. As a result,the company will take a special
after-tax charge of approximately $52 million in the fourth quarter
of 1995. Offsetting a portion of the charge is an after-tax gain
of approximately $10 million from the sale of Westwind Air
Bearings Ltd. announced earlier today. The combined impact of
these actions is approximately $42 million or $.99 per share.
Specifically, the company said the $42 million special charge
is comprised of:
1. The sale of non-strategic assets and early adoption of FASB
121 for an approximate total of $32 million. Eighty percent of the
$32 million is categorized as assets held for sale including the
company's:
- U.S. ball bearing manufacturing division. However, the
company will continue to supply ball bearings to its global
aftermarket customers through a reliable sourcing agreement.
- BHW heavy wall bearing division in Braunschweig, Germany
which manufactures products for large industrial and marine
equipment.
- Other non-strategic assets.
The remaining twenty percent of the $32 million is the
write-down of certain other assets as a result of the early
adoption of FASB 121.
The company anticipates that no further charges for FASB 121
will be necessary in 1996.
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2. A restructuring charge for an approximate total of $16
million.
This category is composed primarily of:
- Closing the company's St. Louis research location, other
facility
consolidations, and lease terminations.
- Employee separation costs.
3. Items relating to reengineering and productivity
improvements for an approximate total of $4 million. The company
still anticipates an estimated $60 to $70 million cumulative
discounted cash flow impact over five years and an estimated $50 to
$75 million EBIT increase by year five for its reengineering
initiatives.
4. Gain on the sale of Westwind Air Bearings Ltd. of
approximately $10 million.
Chairman and Chief Executive Officer Dennis J. Gormley
explained, "The combination of these actions will result in a
one-time net positive cash impact of approximately $50 million
which will be used to pay down debt. These actions will also
result in annual savings of approximately
$.25 per share. The company believes the asset sales will occur in
1996, however it will not receive the full annual benefit of the
E.P.S. savings until 1997."
"These actions will also allow Federal-Mogul to better focus
its management and capital resources to pursue its strategy to grow
its replacement business as well as focusing on increasing content
per vehicle on key product lines such as sealing products and
engine bearings to the O.E. manufacturers. Recent acquisitions
highlighting this strategy include TRW replacement business, Sealed
Power replacement business, Varex Ltd. in South Africa, Bertolotti
S.r.l. in Italy, Centropiezas in Puerto Rico, STS Ltd. in
Wales, and Shanghai F-M Bearing Co., Ltd. in China. Divestitures
emphasizing this strategy include Precision Forged Products
Division and Westwind Air Bearings Ltd.," he said.
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Headquartered in Southfield, Michigan, Federal-Mogul is a
global distributor and manufacturer of a broad range of
non-discretionary parts primarily for automobiles, light trucks,
heavy trucks, and farm and construction vehicles. The company
serves both the aftermarket and original equipment market providing
quality products -- as they are needed -- to customers around the
world. Federal-Mogul operates 29 plants, more than 80
distribution centers, 124 international auto parts stores and four
major research centers worldwide.
