BorgWarner has agreed a settlement regarding approximately 90% of claims related to previously disclosed alleged environmental contamination from a Kuhlman Electric Corporation (KEC) plant site in Crystal Springs, Mississippi.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more


The contamination predates BorgWarner’s purchase of Kuhlman Corporation, the former parent company of KEC. BorgWarner and other defendants will pay up to $US39 million in three equal instalments ending on January 2, 2006.


The company will incur an after-tax charge of approximately $29 million in the second quarter, or $0.50 per share, as a result of anticipated costs associated with settling all Crystal Springs-related claims.


BorgWarner is also “vigorously pursuing” recovery of the settlement amount from various insurance carriers and other third parties and will reflect those recoveries as income in future periods as they become resolved.


As a result of the $0.50 per share after-tax charge, the company says it now expects 2005 earnings per share in a range of $4.15 to $4.31 which includes the ($0.50) per share second quarter charge related to the Crystal Springs settlement and $0.38 per share associated with divestitures, the release of tax accruals and net of the immediate write-off of the excess purchase price associated with Beru’s in-process R&D reported in the first quarter.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Previous earnings guidance for 2005 was $4.65 to $4.81 per share. The company reconfirms its expectations for earnings per share in a range of $4.27 to $4.43 on its base business plus the anticipated contribution from Beru, excluding the aforementioned items.


“We are pleased to have the vast majority of this issue behind us and expect that the remainder can be resolved quickly and in a satisfactory manner,” said Timothy Manganello, chairman and CEO of BorgWarner in a statement.