The consensus is Richard A. Snell did a good job acquiring businesses to make Federal-Mogul Corp. a serious Tier 1 seal maker. It wasn't enough.
Snell, who stepped down as chairman and CEO of the automotive supplier Sept. 19 by "mutual consent" with the Federal-Mogul board, was a builder. Since he joined the company in 1996, he added businesses that helped boost annual sales to $6.5 billion from $1.8 billion, and declared they would reach $10 billion by 2002.
Snell won plaudits for concentrating on Federal-Mogul's core businesses, supplying the automotive industry and the replacement motor vehicle parts market. The acquisitions of Cooper Automotive, Fel-Pro Inc. and T&N P.L.C. were seen as good fits.
It's one thing, though, to put the pieces in place. It's another to make them work properly. Federal-Mogul has had a hard time digesting its purchases. Analysts following the company said it hasn't gained efficiencies from the acquisitions, and could take years to do so. The firm also suffered from the weak European currencies, a slowing North American aftermarket, a softening of the heavy-duty market and Ford Motor Co. production stoppages related to the Bridgestone/Firestone Inc. tire recall.
Federal-Mogul's profits haven't met projections, and Wall Street punished the company for its failure. Its stock price slipped to $7.38 a share on Sept. 19, compared with a peak of $70.45 on July 10, 1998. Snell's departure was inevitable.
Federal-Mogul is far from financial ruin, but it doesn't take long to head down that path. The company now must find someone to tap into the strengths Snell helped create, but couldn't exploit.