BorgWarner Resizing

BorgWarner Automotive Inc. is replacing production lost forever in North America with future technology aimed mainly at emerging markets.

November 1, 2006

2 Min Read
WardsAuto logo in a gray background | WardsAuto

BorgWarner Automotive Inc. is replacing production lost forever in North America with future technology aimed mainly at emerging markets.

“The drastic schedule cuts we've seen from the Detroit Three, the size of the cuts and how rapidly they came about drove us to consider plans to resize our operations in North America,” CEO Tim Manganello says. “We think these cuts are probably more permanent than past cuts.”

Production cuts of 25% by Ford Motor Co. and General Motors Corp. hit BorgWarner in its breadbasket, as GM, Ford and Chrysler Group account for about 22% of BorgWarner's sales. The company says earnings will fall at least $10 million this year to $230 million.

Although BorgWarner is trimming 13% of its North American workforce and has reduced its sales and profit outlook for this year, it expects continued growth, thanks to new technologies.

A new dual-clutch transmission for engines displacing 0.6L-1.0L is attracting attention in Asia, Manganello says, and BorgWarner will spread the diesel engine technology of its subsidiary Beru AG from Europe to India and China, where it expects diesel penetration to increase quickly.

“We are working on a new architecture on dual-clutch transmissions for low-cost countries with low-cost cars,” he says. “They want an automatic, but they can't afford the price point of a standard European or North American or even an Asian automatic.”

BorgWarner's sales of high-end dual-clutch modules for larger engines will grow in Europe, from 1,400 a day now to 1,700 daily in the next two years, the company says.

Volkswagen AG and Audi AG were the early adopters, but now “there are other European OEMs with contracts,” Manganello says. “And we have active programs in China, Korea, Japan, and it looks like at least one of the Detroit Three has some significant interest. They are working out the details of their product plans.”

With a dual-clutch transmission, cars can be operated in either manual or automatic mode.

Read more about:

2006

You May Also Like