Freudenberg-NOK Sealing Products will leave its thermoset parts business so it can focus on seals.
The firm supplies thermoset cam covers to Chrysler Group, a Chrysler spokesman said.
Thermosets are only a $10 million annual business for Freudenberg-NOK, but the move is significant because the firm no longer will compete against its supplier customers with that product.
``Why would they come to us to seek a solution for sealing a die-cast aluminum cover, for example, if they suspect or fear that we would go to that same customer and sell them a thermoset plastic solution, where we get the seal and the cover?'' said Richard Allen, automotive chief executive officer for Freudenberg-NOK in Plymouth, Mich.
Freudenberg-NOK Sealing Products is a subsidiary of Freudenberg-NOK, which is a joint venture of Freudenberg & Co. of Germany and NOK Corp. of Japan. Freudenberg-NOK's other major subsidiary, Vibracoustic NA, supplies noise, vibration and harshness products.
Mohsen Sohi, Freudenberg-NOK CEO, said he expects the company to reach at least $1.25 billion in annual sales within five years, with about half of those sales to the automotive industry.
Freudenberg-NOK won two more thermoset contracts with an undisclosed automaker this year, but backed out three months ago before the purchase order was signed. Freudenberg-NOK will continue to supply the cam cover for its current contract during the next two to four years.
Freudenberg-NOK Sealing Products' main competitors, in both the seals and thermoset market, are Dana Corp., Federal-Mogul Corp. and ElringKlinger Sealing Systems Inc.
No employees will be laid off as Freudenberg-NOK leaves the thermoset business, Allen said.
``Our focus on seals has led us to become a single-source-capable supplier,'' Allen said. ``We can supply every single seal, be it for an engine, a transmission, an axle or whatever.''