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When Richard M. Szary went before Federal-Mogul Corp. directors in 1991, he promised to tune up a key division of the automotive-parts giant and turn it into an industry leader.
With a $15 million cash infusion from the board, Szary--a former vice president with the Southfield-based multinational--succeeded wildly. At a time when Federal-Mogul was posting lackluster results, Szary pushed his group to a fourfold gain in revenue in less than five years.
As a result, Federal-Mogul's Precision Forged Products division in Romulus is adding workers and escalating production at its newly expanded plant now that it has won a major contract from General Motors Corp. that could run until 2000 Ford Motor Co. and Chrysler Corp. reportedly are in discussions with Federal Mogul as well.
Yet with sales reaching $60 million at the Romulus division this year, Federal-Mogul is preparing to unload its fast-growing and innovative division, said employees and industry observers. The reason: The division cannot meet the dual-market strategy Federal-Mogul needs to become more profitable and less vulnerable to market cycles.
By concentrating its assets in the automotive aftermarket business, Federal-Mogul can also avoid serious pricing problems when the Big Three automakers and distributors demand lower parts prices.
That Federal-Mogul, a manufacturer and distributor of automotive, farm and manufacturing components with sales last year of $1.6 billion, may...