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Federal-Mogul Announces Change and Reduction In Q3 Earnings

19 September 2000

Federal-Mogul Announces Leadership Change and Reduction In Third Quarter Earnings Estimate

            Dick Snell Steps Down as Chairman, CEO and President;
 Outside Director Steve Miller Assumes Interim Chief Executive Officer Role;
      Outside Director Roderick Hills to Conduct Search for Replacement

    SOUTHFIELD, Mich., Sept. 19 Federal-Mogul Corporation
announced today that, by mutual agreement, Richard A. Snell, 59,
has stepped down as chairman, chief executive officer and president, effective
immediately.  Roderick M. Hills, a Federal-Mogul director since 1977 and
chairman of the Governance and Nominating Committee, will coordinate the
search for a new chief executive officer including the review of internal
candidates.  Robert S. (Steve) Miller, Jr., a Federal-Mogul Director since
1993, will serve as chairman and interim chief executive officer during the
transition.
    "Notwithstanding recent financial results, the board recognizes we are a
company of good dedicated people, serving customers with high quality products
and services," said Hills.  "Our immediate efforts will be to improve our
operational execution to take advantage of these fundamental strengths."
    Federal-Mogul expects to report lower than anticipated earnings for its
third quarter period ending September 30, 2000.  Based on the company's
current projections, earnings per share for the quarter are expected to be
approximately breakeven.  The company expects fourth quarter operating
earnings to be modestly improved from these levels.  Regarding expected cash
flows, the company expects asbestos payments to exceed $310 million for the
year.  These payments are either reserved or are covered by insurance and will
have no impact on earnings.  Along with the earnings shortfall and working
capital changes, cash usage is now expected to be in excess of $200 million
for the year.
    The projected earnings shortfall is attributable to continued weakening of
European currencies against the dollar, significant softening of the heavy-
duty market, continued weakness of the North American aftermarket and failure
to fully achieve planned efficiencies.
    "In the short term, we are taking some immediate actions to curtail non-
customer related expenses and capital projects," said Miller.  "Without any
loss of customer focus, our highest priority will be given to specific
strategic initiatives for performance improvement.  These new initiatives
include the acceleration of our lean manufacturing techniques, expansion of
our supply chain management initiatives and further consolidation of our
global operations.  In addition, we are adjusting our cost structure and
capital base to reflect the ongoing structural changes in the aftermarket."
    Federal-Mogul intends to release actual third quarter earnings on October
19, 2000.
    "The Board of Directors appreciates Dick's service for Federal-Mogul,"
added Hills.  "His growth strategy has resulted in making Federal-Mogul a
leading global player in the automotive industry."