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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 .
- Air Management - Improves fuel economy, reduces emissions, and enhances performance with products such as turbochargers, emissions systems, and thermal systems.
- Drivetrain & Battery Systems - Includes battery modules, control modules, and torque-management products.
- ePropulsion - Provides technologies for electric and hybrid vehicles, including power electronics and rotating electric machines.
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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?
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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?
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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?
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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?
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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?
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 .
| Customer | Relationship | Segment | Details |
|---|---|---|---|
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. |
Recent developments and announcements about BWA.
Corporate Leadership
CEO Change
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
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 .