During our tour of Federal Mogul today, our tour guide told us a very interesting fact. He informed us that a large shipping company that constantly uses large vehicles saves $1 million dollars every month if they got a mere half of a mile more per gallon. So, as a parts supplier, Federal Mogul attempts to make pistons with reduced friction, even if it makes a minimal impact. A very minor and precise change to a piston to reduce friction that may only add .5 miles for every gallon will save a large consumer of vehicles such as a shipping company one million dollars. Therefore, car manufacturers, who are the consumers for Federal Mogul, will pay much more money for these pistons. This realization on the large impacts of minute changes to car parts is a commonality I noticed throughout the different parts of the tour.
Additionally, the concept of how Federal Mogul can enable car manufacturers to change the way they design their cars stood out to me. Mr. Keri used the example of the Corona, which is an alternative for a spark plug that Federal Mogul is currently developing. The Corona, immediately after being put in an engine, makes the car 5% more fuel efficient. This by itself is very significant and would be used by almost all car manufacturers if brought into the market. However, Mr. Keri pointed out that the Corona has the potential to create an even larger impact on fuel efficiency. The Corona uses less work, and because of this, it enables car manufacturers to change the way their engine operates. This gives them the opportunity to be even more fuel efficient, which they would not be able to do with a normal spark plug. So, the Corona not only is 5% more fuel efficient by itself, but with the type of engine changes that it enables car manufacturers to make, can help cars be up to 10-15% more efficient. This would be an incredibly impactful change in the market and, because of this, the Corona would undoubtedly be highly demanded in the market. Federal Mogul prides itself on its precision on the quality and large-scale impacts of its products. It is for this reason that large car manufacturers such as Ford and GM look to them to acquire the essential parts of an engine.