LucasVarity and TRW Form Joint Venture to Develop Next Generation Steering Systems
4 March 1998
LucasVarity and TRW Form Joint Venture to Develop Next Generation Steering Systems
LONDON, March 4 -- LucasVarity plc (London: LVA, NYSE: LVA)
and TRW Inc. today announced that they have formed a major joint
venture to design, develop and manufacture column and pinion drive electric
steering systems for passenger cars and light commercial vehicles on a global
basis.
Under the terms of the agreement, LucasVarity will receive $50 million
from the new joint venture company in return for its electric column drive
steering technology and assets. TRW will license its pinion drive technology
to the JV and take a 51% stake in the new company, with LucasVarity owning
49%. After the initial start up phase, the JV's Board will comprise an equal
number of directors from each parent and the business will be managed on a
standalone basis. Products of the joint venture will be integrated into TRW's
steering systems.
Electric steering represents a technology breakthrough by providing
steering assistance to the driver on demand, using electronically controlled
direct drive electric motors. Cost competitive with conventional steering
systems, the new technology is lighter, more versatile and easier to install
and results in a significant saving in fuel consumption. Electric steering
sales are expected to account for a growing proportion of the $10 billion
annual automotive steering systems market.
The new company, TRW LucasVarity Electric Steering Ltd, is planning to
start initial production at LucasVarity's Holford Drive site near Birmingham,
UK in 2000.
Welcoming the formation of the joint venture, Victor Rice, Chief Executive
of LucasVarity, said "Both companies are convinced that electric steering is,
quite simply, the future of power assisted steering for passenger cars and our
partnership is superbly placed to take advantage of this developing market.
"What's particularly exciting is that, in addition to the benefits it can
deliver now, column and pinion drive electric steering opens the door to many
innovative developments through integration with other electronically
controlled vehicle subsystems, such as those for vehicle stability."
Joseph T Gorman, Chairman and Chief Executive Officer of TRW, said, "We
are delighted with this joint venture. It combines TRW's leadership position
as a steering systems supplier and our electronic expertise in safety critical
sensors and controllers with LucasVarity's expertise in high-speed, safety
critical electronic actuation systems.
"This new partnership completes TRW's ability to provide vehicle
manufacturers with a full range of high technology, electrically assisted
steering systems for all car sizes."
The joint venture already has its first development order and is now
demonstrating the technology to major vehicle manufacturers in Europe, USA and
Japan. It is initially targeting small and medium vehicle segments and
expects more than 25% of the world's vehicles to have electrically assisted
steering systems by 2010.
LucasVarity designs, manufactures and supplies advanced technology
systems, products and services in the world's automotive and aerospace
industries. Its annual sales exceed $7 billion and it has around
50,000 employees.
With 122 automotive locations in 23 countries, TRW is one of the largest
independent automotive suppliers in the world. With 1997 sales of
$10.8 billion, TRW provides advanced technology products and services for
automotive, space and defense, and information technology markets worldwide.
SOURCE LucasVarity plc