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    Borgwarner Inc (BWA)

    CEO Change
    Board Change

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    BorgWarner Inc. is a global leader in providing clean and efficient technology solutions for combustion, hybrid, and electric vehicles. The company primarily manufactures and sells products to original equipment manufacturers (OEMs) of light vehicles, including passenger cars, SUVs, vans, and light trucks, as well as to OEMs of commercial vehicles and off-highway vehicles such as agricultural and construction machinery . BorgWarner's business is organized into three main segments: Air Management, Drivetrain & Battery Systems, and ePropulsion . In 2023, the company's foundational products, which include all products used in internal combustion engines and hybrid powertrains, accounted for a significant portion of its total revenue, while its eProducts segment, used in electric vehicles and hybrid powertrains, represented approximately 14% of the total revenue . The company's strategy, known as "Charging Forward," aims to grow its eProducts segment significantly by 2027 .

    1. Air Management - Improves fuel economy, reduces emissions, and enhances performance with products such as turbochargers, emissions systems, and thermal systems.
    2. Drivetrain & Battery Systems - Includes battery modules, control modules, and torque-management products.
    3. ePropulsion - Provides technologies for electric and hybrid vehicles, including power electronics and rotating electric machines.
    NamePositionStart DateShort Bio
    Frédéric B. LissaldePresident and Chief Executive Officer (retiring effective February 6, 2025)August 2018Frédéric B. Lissalde has served as the President and CEO of BorgWarner Inc. since August 2018. He joined the company in 1999 and has held various leadership roles. He has been a board member of Autoliv, Inc. since December 2020 .
    Kevin A. NowlanExecutive Vice President, Chief Financial Officer (until March 1, 2024)April 2019Kevin A. Nowlan has served as the Executive Vice President and CFO of BorgWarner Inc. since April 2019. He previously worked at Meritor, Inc. and GMAC .
    Craig D. AaronExecutive Vice President, Chief Financial OfficerMarch 1, 2024Craig D. Aaron has been with BorgWarner for nearly 18 years. He served as Vice President and Controller starting in 2022 and will become Executive Vice President and CFO on March 1, 2024 .
    Tonit M. CalawayExecutive Vice President, Chief Administrative Officer, General Counsel and SecretaryOctober 2020Tonit M. Calaway has been serving in her current roles since October 2020. She joined BorgWarner in 2016 and previously worked at Harley-Davidson, Inc. .
    Tania WingfieldExecutive Vice President, Chief Human Resources Officer2022Tania Wingfield assumed her current position in 2022. She has held various roles within BorgWarner since 2017 .
    Stefan DemmerleVice President and President and General Manager, PowerDrive SystemsSeptember 2012Stefan Demmerle has been serving in his current roles since September 2012. He previously worked at Continental .
    Joseph F. FadoolExecutive Vice President and Chief Operating Officer; President and CEO (effective February 6, 2025)July 2024Joseph F. Fadool has been with BorgWarner since 2010. He currently serves as Executive Vice President and COO and will become President and CEO effective February 6, 2025 .
    Paul A. FarrellExecutive Vice President and Chief Strategy Officer2020Paul A. Farrell has held his current position since 2020. He previously worked at Delphi Technologies PLC .
    Isabelle McKenzieVice President and President and General Manager, Morse Systems2023Isabelle McKenzie assumed her current role in 2023. She has held various positions within BorgWarner since 2014 .
    Volker WengVice President and President and General Manager, Drivetrain & Battery Systems2019Volker Weng has held his current position since 2019. He has been with BorgWarner in various roles since 2017 .
    Amy B. KulikowskiVice President and Chief Accounting OfficerMarch 1, 2024Amy B. Kulikowski serves as the Vice President and Chief Accounting Officer at BorgWarner Inc. She has been in this role since at least March 1, 2024 .
    1. In the battery and charging segment, you achieved a 36% sales increase and are near breakeven margins. With capacity now aligned to demand in North America and Europe, what specific strategies will you implement to drive margin improvement to mid to high teens over time?

    2. Your growth over market assumption for 2024 has been lowered from 350-450 basis points to 200-300 basis points, with approximately $200 million drop in growth, half from the eProduct portfolio. What are the primary challenges causing this reduction, and how do you plan to mitigate them to regain higher growth levels?

    3. You have initiated restructuring in the PDS segment with $20-30 million in cost reductions this year and a target of $100 million by 2026. Can you elaborate on the specific structural changes being made and how they will contribute to your goal of incrementing income in the mid-teens?

    4. Considering potential regulatory changes, especially with the upcoming U.S. elections affecting CO₂ requirements, how is BorgWarner preparing to adapt its product offerings and strategy to meet varying customer demands for combustion, hybrid, and electric powertrains?

    5. With $525 million of cash generation being returned to shareholders this year through buybacks and dividends, how do you plan to balance shareholder returns with necessary investments in capital expenditures and R&D to support your electrification and growth initiatives in the coming years?

    Program DetailsProgram 1Program 2
    Approval DateNovember 2023 April 2024
    End Date/DurationDecember 31, 2027 December 31, 2027
    Total additional amount$544 million $767 million
    Remaining authorization amount$0 $463 million
    DetailsReplaced by April 2024 program Allows repurchase based on market conditions and capital position
    YearAmount Due (in millions)Debt TypeInterest Rate (%)% of Total Debt
    202460European money market loanEuribor + 1.751.3% = (60 / 4,593) * 100
    20253343.375% Senior Notes3.3757.3% = (334 / 4,593) * 100
    20253435.000% Senior Notes5.0007.5% = (343 / 4,593) * 100
    20271,0952.650% Senior Notes2.65023.8% = (1,095 / 4,593) * 100
    20291207.125% Senior Notes7.1252.6% = (120 / 4,593) * 100
    20294954.950% Senior Notes4.95010.8% = (495 / 4,593) * 100
    20311,0991.000% Senior Notes1.00023.9% = (1,099 / 4,593) * 100
    20344935.400% Senior Notes5.40010.7% = (493 / 4,593) * 100
    20454954.375% Senior Notes4.37510.8% = (495 / 4,593) * 100

    Competitors mentioned in the company's latest 10K filing.

    • Robert Bosch GmbH, a major non-OEM competitor .
    • Denso Corporation, a major non-OEM competitor .
    • Garrett Motion, a major non-OEM competitor .
    • Hitachi, Ltd., a major non-OEM competitor .
    • Magna Powertrain (an operating unit of Magna International Inc.), a major non-OEM competitor .
    • Valeo, a major non-OEM competitor .
    • Schaeffler Group, a major non-OEM competitor .
    • Vitesco Technologies, a major non-OEM competitor .
    • Certain start-ups in electrification, also considered competitors .
    CustomerRelationshipSegmentDetails
    Ford
    Supplies automotive components under negotiated annual contracts.
    All
    14% of total net sales (~$1,988 million) in 2023.
    Volkswagen
    Supplies automotive components under negotiated annual contracts.
    All
    11% of total net sales (~$1,562 million) in 2023.
    NameStart DateEnd DateReason for Change
    PricewaterhouseCoopers LLP2008 PresentCurrent auditor

    Recent developments and announcements about BWA.

    Corporate Leadership

      CEO Change

      ·
      Nov 7, 2024, 12:00 AM

      Frederic B. Lissalde, the President and CEO of BorgWarner Inc., will retire effective at the close of business on February 6, 2025. Joseph F. Fadool, currently the Executive Vice President and Chief Operating Officer, has been appointed to succeed him as President and CEO .

      Board Change

      ·
      Nov 7, 2024, 12:00 AM

      Frederic B. Lissalde will retire as President and CEO of BorgWarner Inc. and resign from the Board of Directors effective February 6, 2025. Joseph F. Fadool will succeed him as President and CEO and join the Board on the same date .