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GKN Sinter Metals Adds $85 Million in Assets

13 October 1998

GKN Sinter Metals Adds $85 Million in Assets as Company Finalizes Acquisition of Three Plants

           Facilities in U.S. Augment Auto Connecting Rod Business,
             Manufacturing Capability in Non-automotive Bearings

             Buenos Aires Operation Gives Global Industry Leader
                     Strategic Beachhead in South America

    AUBURN HILLS, Mich., Oct. 12 -- GKN Sinter Metals said today
that it had completed strategic acquisitions in Pennsylvania, Michigan, and
Buenos Aires, with a combined value of $85 million.
    The announcement was made by Seifi Ghasemi, President & Chief Executive
Officer of GKN Sinter Metals.
    Laurel Manufacturing Inc., based in Du Bois, PA, and employing 140 people,
has been a leading producer of bearings and other small powdered metal parts
for the lawn & garden, hand tool, and domestic appliance industries.  Among
its major customers are Frigidaire, Whirlpool, General Electric, Raytheon, and
Bosch.
    Borg-Warner Automotive Inc. , has been producing precision
forged powder metal connecting rods from its Romulus, MI, facility, employing
330 people. General Motors and Chrysler are its two leading customers.
    Metalurgica Lujan SA, Argentina, with 150 employees, has been operating in
the automotive components industry.  Producing sinter metal components for oil
and water pumps, shock absorbers, and other systems, it serves such global
clients as Renault and Fiat from its Chivilcoy plant and Buenos Aires
corporate offices.  Under the Duncan brand, the company manufactures and sells
complete water pumps for the automotive aftermarket.
    "We intend to use our current leadership position to create a world-class
powder metallurgy group," said Mr. Ghasemi.  "These acquisitions all are
excellent fits under our strategic umbrella for profitable growth."
    The head of GKN Sinter Metals went on to explain that the Laurel
acquisition "gives us an important entry into the non-automotive business in
the United States," where the powder metallurgy market is split 70:30 in favor
of automotive products.  "Our aim is to provide centers of excellence for
these bearings on a global basis," and this acquisition "complements our
established operations in Bruneck, Italy."
    On the Romulus acquisition, Mr. Ghasemi noted that only 10 percent of the
connecting rods in cars are made from powder metallurgy.  "The connecting rod
business is experiencing rapid growth due to the substitution of powder forged
components for traditional cast and wrought forged components in automotive
engines," he said, adding that the Company had already gained significant
contracts with Ford and General Motors.
    According to Mr. Ghasemi, acquiring Metalurgica Lujan SA was "consistent
with our intention to expand in Argentina, Brazil, Mexico, and select
countries in the Asia Pacific region."
    GKN Sinter Metals, with 31 locations globally and sales in excess of $500
million, is the world's largest independent producer of powder metal parts.
The Company employs more than 5,000 people, and produces over 4,000 different
parts for the automotive, lawn & garden, power tool, and home appliance
markets.  GKN Sinter Metals is a wholly owned subsidiary of British-based GKN
plc, a publicly held, global industrial company.