Automakers Count on Freudenberg Parts From Inside Out

DETROIT – Disassemble an average car and you’ll find as many as 320 parts made by Freudenberg or its Freudenberg NOK joint venture.

Some will come from deep inside, such as crankshaft seals. Carpeting and headliners are plain to see. Other components fall somewhere in the middle, such as lubricants for the needles on analog gauges.

So, as auto sales continue on their upward trajectory, the 165-year-old German conglomerate’s automotive business is producing more parts, and profits, than ever.

Car components accounted for 24% of Freudenberg’s record global sales of $8.8 billion in 2013. That compares with 35% in 2012. But, as Freudenberg North America President Leesa Smith points out, the growth in auto-parts sales is skewed somewhat by bookkeeping changes that no longer include revenues from 50-50 JVs and by even more rapid growth in non-automotive businesses, including medical devices and oil and gas-industry equipment.

Smith oversees Freudenberg North America’s 12 business groups, which employed more than 8,000 people at 86 locations in 2013, from the company’s regional corporate center in
Plymouth, MI, that opened in October.

Similar centers in China, Brazil and India are modeled on the Plymouth facility, which was chosen for its proximity to major clients and existing Freudenberg businesses in the area. They include the adjacent regional headquarters of the firm’s largest business in North America, the Freudenberg-NOK Sealing Technologies joint venture with Japanese sealing manufacturer NOK.

The recent spate of auto recalls has underscored the importance of every car component, right down to the flawed ignition cylinders now being replaced in millions of General Motors vehicles. Freudenberg products have steered clear of the crisis.

But, spokeswoman Indira Sadikovic says in an e-mailed statement: “That is not to say that Freudenberg companies are not constantly reviewing their quality policies and practices, working on constant improvements and making sure that all employees receive adequate training on quality policies and customer-specific requirements.”

Freudenberg, founded in 1849 as a leather-goods maker and privately held by more than 300 family members who each control no more than a 2% stake, is moving ahead with development of new automotive products and improvements to existing ones, including:

Freudenberg’s automotive portfolio enjoyed global success in 2013: Sales of Freudenberg Sealing Technologies products increased in both Europe and North America; NOK Freudenberg Group China grew at about twice the overall industry rate in that country; and the TrelleborgVibracoustic JV saw increased demand for vibration-control components for new platforms and orders for luxury-car components, particularly in Asia.

Smith says the firm’s broad range of products and services has created some unlikely synergies, such as industrial sealants derived in part from chemicals used in candy coatings. No word yet on whether there’s an automotive application for the pull-strip that unwraps golf-ball-sized Babybel cheeses.