Federal-Mogul emerges leaner from bankruptcy

One year on, strong financials and a lean strategy are key to the company’s multi-brand identity

A year ago, Federal-Mogul emerged from bankruptcy after spending over six years under protection. The aggressive acquisitions carried out by the company as part of its “get big or get out” strategy in the latter half of 1990s helped in scaling-up its business. But it was the buyout of Turner & Newall, a former supplier of asbestos materials, put Federal-Mogul’s position in jeopardy. The business carried hefty liability resulting from several asbestos related claims. In order to exit these litigations, the company and its subsidiaries in the US voluntarily filed for protection under Chapter 11 in October 2001. The company’s subsidiary in the UK also sought protection in relation to the asbestos claims under the UK Insolvency Act.