When Federal-Mogul Corporation (Southfield, Michigan) declared Chapter 11 bankruptcy, few realized the company's bearing vendors would be taking the largest hits of all non-bank creditors.

F-M's largest non-bank creditor is NTN Corporation (Osaka, Japan), owed more than USD $3.1 million. The fifth largest non-bank creditor is Kasper Industries (Gaylord, Michigan), owed over $1 million.

Taken together, bearing vendors represent the largest product family in Federal-Mogul's pool of creditors. But the two companies are quite different.

NTN Corporation has a long history with Federal-Mogul and a longstanding series of direct relationships, best explained with a bit of history.

Federal-Mogul got into the ball and roller bearing business in 1950, as a distributor of Bower Roller Bearings. In 1953, F-M acquired Bearings Company of America (BCA). Then in 1955, Federal-Mogul merged with Bower Roller Bearings and changed its name to Federal-Mogul Bower Bearings Inc. The name was changed back to Federal-Mogul in 1965.

In 1985, F-M's Bower division entered into a joint venture with NTN, forming NTN-Bower. Two years later, in 1987, F-M ended the joint venture and sold the Bower division to NTN. Nine years later, in 1996, Federal-Mogul sold the BCA Ball Bearing Division to NTN.

From the time their 1985 joint venture was initiated, NTN has been a close business partner and Federal-Mogul's primary source for ball and roller bearings. There is no reason to believe that relationship will be affected by the bankruptcy filing, and NTN should not be materially affected by it.

Kasper Industries (Gaylord, Michigan) is by far the smallest company listed as a major Federal-Mogul vendor creditor (see below).

Privately-held Kasper is primarily a manufacturer of aftermarket wheel hub assembly units for automotive and light truck applications.

The impact of the bankruptcy filing on Kasper and similarly situated small vendors is yet to be seen. eBearing has interviewed a number of F-M suppliers, all of whom indicated they had been cutting back their financial exposure to Federal-Mogul, on the assumption bankruptcy was inevitable.

  
NTN Corporation . . . . . . . $3.1 million
  
Cummins Corporation . . . . . $2.9 million
  
Waupaca Foundry . . . . . . . $2.0 million
  
Leggett & Platt . . . . . . . $1.2 million
  
Kasper Industries . . . . . . $1.0 million
  
General Electric Lighting . . $0.9 million