Mr. Gingl: Tesma is a supplier of highly-engineered engine, transmission and fueling systems and components for the global automotive industry. Our origins as an independent operating entity date back to 1983, although prior to July 1995, Tesma was a wholly-owned subsidiary of Magna International Inc. On July 31, 1995 we were 'spun out' from Magna and established as a separate public company, with our Class A shares trading on the Toronto Stock Exchange and NASDAQ. Despite this spin out, we continue an affiliation with Magna, and are controlled by Magna through its ownership of our Class B multiple voting shares. Tesma was the first subsidiary to benefit from Magna's spin out philosophy ' that by providing a smaller scale environment where management and employees can more closely identify with their own company in a focused and cohesive manner, the growth and success of Magna can be replicated ' and proved that philosophy to work. Tesma has gone from sales of $345 million in 1995 to $1.2 billion in 2001. Over the same period, our net income grew from $15 million to $89 million. This is quite an achievement considering that over 90% of our top line growth has been organic and based on the supply of increasingly sophisticated modules and systems developed by Tesma. Tesma's business consists of three main product or technology areas ' engine technologies, transmission technologies and fuel technologies. These three core segments are the focus of our business strategy to continue to move up the supplier 'value chain' by developing, engineering and supplying larger and more complex modules and systems with greater value-added opportunities.
TWST: What are some of your lead products and what do you have in the
developmental pipeline?
Mr. Gingl: Originally, Tesma was a recognized supplier of good quality
pulleys, tensioners and other relatively simple engine and transmission
products. As the automotive OEMs have, over the last few years,
increased their outsourcing of larger powertrain modules and systems, we
have taken advantage of this trend and focused on the development and
supply of highly-engineered and higher value-added modules and systems.
Today, for instance, we are ahead of the competition in our capabilities
to develop and supply a complete engine front cover module. This
consists of an aluminum die-cast and machined engine front cover plate,
with an accessory drive system in place, an oil pump assembly and an
integrated water pump. Our front cover modules can sell for $80 or more
as compared to a pulley which is in the $2 to $3 range. Our ability to
engineer, produce, assemble and deliver complex modules to our customers
has contributed to our success. Another new product example is our
unique thinwalled stainless steel fuel tank which satisfies the
increasingly stringent governmental regulations dealing with partial
zero emissions, improved permeation and corrosion performance and full
recyclability. Many OEMs, right now, are interested in our stainless
steel fuel system solutions as alternatives to their existing blow
molded plastic or low carbon steel tanks.
Tickers included in this excerpt: TSMA
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