Tenneco Automotive Inc. (ticker: TEN, exchange: New York Stock Exchange) News Release -
June 7, 2000
TENNECO AUTOMOTIVE SIGNS MEMORANDA OF UNDERSTANDING WITH FUTABA INDUSTRIAL CO. LTD AND TOKICO LTD
LAKE FOREST, Ill.--(BUSINESS WIRE)--June 7, 2000--Tenneco Automotive announced today that it has signed Memoranda of Understanding with two Japan-based auto-parts suppliers, Futaba Industrial Co. Ltd. and Tokico Ltd. Today's announcement signals the first step in establishing separate strategic alliances with each company.
"We are pleased at the possibility of joining forces with two industry leaders - Futaba in emissions control and Tokico in ride-control engineering and technology," said Mark Frissora, chairman and CEO of Tenneco Automotive. "Industry consolidation among auto makers and the growing use of global platforms require suppliers to provide worldwide engineering and manufacturing support. These alliances would enhance what we bring to our customers and position us to better meet the needs of the global market," said Frissora.
Tenneco Automotive and Futaba intend to form an alliance to design, manufacture and market emission control components and systems; and stamped systems, components, and assemblies. The alliance would also include establishing a joint venture to manufacture exhaust and stamped products at Tenneco's existing facility in Burnley, England.
The alliance with Futaba would leverage the geographical and technical strengths of each partner, combining Futaba's strong engineering and manufacturing presence in Japan and Tenneco Automotive's global manufacturing capabilities. The alliance would serve Japan-based original equipment manufacturers worldwide. The joint venture at Burnley would primarily support the European market.
The Memorandum of Understanding between Tenneco Automotive and Tokico calls for the companies to pursue establishing a strategic alliance to design, engineer, and manufacture shock absorbers and suspension struts for global platforms, i.e. vehicles that are engineered and/or produced on more than one continent.
Tenneco Automotive and Tokico have complementary engineering and manufacturing capabilities. Tokico is a supplier to the leading original equipment manufacturers in Japan and has two production facilities in that country. Tokico's strength in Japan complements Tenneco Automotive's strong presence in North America and Europe, as well as its engineering and manufacturing capabilities in Latin America and in Pacific Rim countries other than Japan.
"We continue to grow our business globally through strategic acquisitions and partnerships. Developing alliances with Futaba and Tokico fits in our strategy of aligning with partners to fill product, geographic or technological niches," said Mark Frissora.
The formation of these strategic alliances is subject to, among other things, the negotiation and execution of definitive agreements putting them into place and any required regulatory approvals. However, the companies are hopeful that the alliances will be established by the end of the year.
Tenneco Automotive is a $3.3 billion manufacturing company headquartered in Lake Forest, Ill., with 24,000 employees worldwide. Tenneco Automotive is one of the world's largest producers and marketers of ride control and exhaust systems and products, which are sold under the Monroe(R) and Walker(R) global brand names. Among its products are Sensa-Trac(R) and Reflex(R) shocks and struts, Rancho(R) shock absorbers, Walker(R) Quiet-Flow(TM) mufflers and DynoMax(TM) performance exhaust products, and Monroe(R) Clevite(TM) vibration control components.
CONTACT: Tenneco Automotive, Media relations
Jane Ostrander, 847/482-5607
Tenneco Automotive, Investor relations
Leslie Cleveland Hague, 847/482-5042