Honeywell Stops Friction Talks With Federal-Mogul

NEW YORK, Jan 19, 2004; Reuters reported that Honeywell International Inc. said on Monday it had ended talks with bankrupt auto-parts maker Federal-Mogul Corp. about the possible sale of Honeywell's automotive Bendix friction materials business.

Honeywell, the leading maker of electronic cockpit systems, said that after several months of negotiations, the parties could not agree on terms of a deal.

The end of the talks follows the November expiration of Federal-Mogul's letter of intent to acquire the unit. Any deal would have been contingent on Honeywell receiving a bankruptcy court-issued injunction shielding it from all asbestos liabilities related to the business.

Honeywell spokeswoman Victoria Streitfeld told Reuters that the company is not in any new discussions about selling the Bendix unit and it intends to keep operating the business.

"Our efforts with the automotive friction materials business are now focusing squarely on growth, serving the needs of our worldwide customers and continuing our long history as a global leader in friction materials," Chief Executive Officer Dave Cote said in a statement.

The end of the talks will not impact Honeywell's previously issued 2003 and 2004 financial guidance, the Morris Township, New Jersey-based company said.

Federal-Mogul, based in Southfield, Michigan, is reorganizing under Chapter 11 bankruptcy protection as a result of asbestos claims. It expects to emerge from bankruptcy this year