Tenneco consolidates leadership with planned split on hold

LAKE FOREST, Ill.—With the planned separation of Tenneco Inc. into two separate publicly traded companies on hold, the automotive supplier eliminated its co-CEO leadership structure.

Roger Wood, board director and co-CEO, stepped down from both roles Jan. 7. Brian Kesseler will serve as the top executive in the consolidated CEO role, according to a Tenneco news release.

"As we pursue the separation of our businesses, the Board determined that consolidating our leadership structure now will help improve Tenneco's operational efficiency and achieve our near-term financial performance objectives," Gregg Sherrill, chairman of the Tenneco, said in the release.

The moves come amid a plan to reduce costs as the company has struggled with a large debt load since it acquired Southfield-based Federal-Mogul in a $5.4 billion deal in October 2018. Tenneco cut its forecast for revenue three times in 2019.

The maker of shocks, struts and mufflers has been struggling to follow through with plans to separate its powertrain unit from its aftermarket and ride-performance business, named Driv Inc.

Driv makes aftermarket parts, shock absorbers, suspension systems and brake parts and will remain in Tennecco's location in Lake Forest. Tenneco, which makes powertrain parts, maintains its plan to move into a new $23 million, 100,000-sq.-ft. headquarters in Northville Township, Mich. The build was supported by a $750,000 performance-based grant from the Michigan Strategic Fund on the anticipation that it would create 100 jobs over three to five years.

Approximately 200 employees will move from Tenneco's Southfield office to the new headquarters in Northville during the first quarter of this year. The original plan called for employees to move in 2019, but that plan was changed by construction delays, Steve Blow, executive director of global corporate communications for Tenneco, wrote in an email.

An undisclosed number of employees will remain with Driv at the Southfield location, Blow said.

Tenneco also will continue to operate locations in Southfield, Plymouth Township, Ann Arbor, Lansing, Grass Lake, Marshall, Litchfield, Greenville and Sparta.

However, the timeline of the separation of the companies remains a mystery. The supplier said in a release that market conditions are affecting its ability to separate the companies by its previously disclosed, and delayed, mid-2020 timeframe. The company said it's prepared to separate the businesses "as soon as favorable conditions are present."

Blow, however, said the split is still expected to happen this year.

Complicating factors include a reported $4.3 billion offer in December from private equity firm Apollo Global Management Inc. for Tenneco's powertrain unit. It's unclear whether Tenneco's board is seriously considering the offer.