BorgWaner plans to sell its spark-plug unit to Federal-Mogul Corporation, including the plants in Chazelles, France and Neuhaus, Germany.
The company aims at focusing on other products which were also bought in 2005 together with German auto-parts maker Beru. The plants in France and Germany manufacture Beru-branded spark plugs which are sold to European original equipment manufacturers. In 2011 the Beru spark plug business generated sales of about $80 million.
By selling the business BorgWaner hopes it will hit a pretax loss of $50 million to $60 million related to restructuring activities and sales. On the other hand Federal-Mogul hopes the transaction will boost its annual spark-plug production to over 350 million annually.
“The increased manufacturing capacity in Europe will place us closer to our customers and positions Federal-Mogul well for further market share growth,” said Rainer Jueckstock, chief executive of Federal-Mogul’s OE Division.
BorgWarner declared it plans to focus on the expansion of glow plugs, diesel cold start systems, and other gasoline-ignition technologies, while Federal-Mogul plans to create a separate and independent aftermarket unit, which will sell auto parts through retailers.