During the last decade, typical performance outputs for automotive diesel engines rose from 50kW/litre (67bhp/litre) to around 70kW/litre (94bhp/litre). According to Rainer Jueckstock, Federal-Mogul senior vice president of Powertrain Energy, with increasingly pressing legislative targets for CO2 reduction in most major global markets, the trend is likely to accelerate. "Rising specific outputs place higher mechanical and thermal loads on many of the components where Federal-Mogul has considerable expertise," he said. "The DuraBowl piston process is an example of how we are succeeding in delivering specialized process technologies that help our customers successfully address these challenges across a range of growing market sectors."

The combustion in a diesel engine takes place in a hollow bowl in the top of the piston, where temperatures can reach over 400 degrees Celsius (750 degrees Fahrenheit) and pressures over 200 Bar (200 x atmospheric pressure). Under these increasingly difficult combustion conditions, the rim of the piston bowl has an increased failure factor. Following extensive analysis, Federal-Mogul's engineers have identified that both thermal and mechanical failures of the piston bowl can be traced to the presence of free primary silicon particles distributed throughout the aluminum matrix. Aluminum expands eight times as much as silicon, therefore stresses are set up within the piston every time the temperature fluctuates. Furthermore, repeated mechanical loads, each time the cylinder fires, could result in fatigue failure from the corners of the silicon particles. Silicon is a necessary constituent of the aluminum alloy, offering favorable properties such as low expansion and good castability, so it cannot be eliminated.

The only potential solutions to this problem, until now, have been fiber-reinforced pistons. "Fiber-reinforced pistons increase manufacturing complexity as the molten alloy has to infiltrate the fibers during casting," said Frank Doernenburg, Federal-Mogul director of technology, pistons and pins. "Furthermore, there is not yet a reliable, non-destructive way to test the integrity of the finished part whereas, with our DuraBowl process, we can do an Eddy Current test to ensure the quality."

Federal-Mogul's solution is to pre-machine the cast piston and then re-melt the alloy around the rim of the bowl. "The strength and efficiency of our solution is that the process is physically simple," said Doernenburg. "The sophistication is in the control of key parameters, which ensure consistent quality. The result is a technologically advanced, high-performing and very cost-competitive product when compared to both fiber-reinforced and steel pistons."

The re-melted alloy cools a thousand times faster than it did when originally cast, which leads to much smaller silicon particles; only one tenth of the previous size. Metallurgists refer to this as refinement of the microstructure; a technique known to increase the strength and durability of metal alloys.

The technological and cost benefits have been validated during extensive engine testing, both by Federal-Mogul and its customers. Doernenburg concluded, "The re-melting process certainly increases piston life and performance substantially, while at the same time, serving as a contributor to improve fuel efficiency and reduce CO2. A conservative estimate would be a fourfold improvement in the life of any cast piston which suffers from bowl rim failures." The first application of the DuraBowl process is on a high-performance diesel engine recently launched for a leading global vehicle manufacturer.

The metallurgy of DuraBowl(R)

Federal-Mogul's unique re-melting process for the aluminum-silicon alloy, combined with a rapid cooling process, significantly changes the alloy's microstructure by reducing the size of hardening phases such as silicon particles and intermetallics. The result is a piston bowl rim whose first few millimeters provide significantly improved aluminum strength, further enabling engine manufacturer's efforts to downsize or turbo-boost engines for greater specific output.

About Federal-Mogul

Federal-Mogul Corporation is an innovative and diversified $6.9 billion global supplier of quality products, trusted brands and creative solutions to manufacturers of automotive, light commercial, heavy-duty and off-highway vehicles, as well as to the power generation, aerospace, marine, rail and industrial sectors. It is recognised as a premier global innovator in the areas of powertrain, sealing, safety and protection and a leading source of advanced technologies that help increase vehicle performance, improve fuel efficiency and reduce engine emissions for a cleaner world. Federal-Mogul employs nearly 39,000 people located in 36 countries. More information can be found at www.federalmogul.com

CONTACT: Steve Gaut - 248-354-7826

SOURCE Federal-Mogul Corporation

http://www.federalmogul.com

Expected next investor conference call information:
Conference Call Date: 10/29/2009
Conference Call Time (ET): 9:00 AM
Conference Call URL: http://phx.corporate-ir.net/phoenix.zhtml?c=97066&p=irol-irhome

To participate in the call:

Domestic calls: 888-713-4214

International calls: 617-213-4866

Pass code I.D. # 92799663

To facilitate rapid connection the morning of the call, please click here (https://www.theconferencingservice.com/prereg/key.process?key=P3MJ6RKGB) to pre-register.

The live audio Web cast will be available in the Investor Relations section of the corporate Web site by clicking here (http://phx.corporate-ir.net/phoenix.zhtml?c=97066&p=irol-irhome) on October 29, 2009.

An audio replay of the call will be available two hours following the call and will be accessible until November 30, 2009 at:

Domestic calls: 888-286-8010

International calls: 617-801-6888

Pass code I.D. # 84343227

The third quarter press release can be downloaded on October 29, at 7:15 a.m., EDT, by clicking here (http://federalmogul.mediaroom.com/).

Investor Relations Contact:

David Pouliot

(248) 354-7967

David.Pouliot@federalmogul.com

About Federal-Mogul

Federal-Mogul Corporation is a leading global supplier of powertrain and safety technologies, serving the world's foremost original equipment manufacturers of automotive, light commercial, heavy-duty, agricultural, marine, rail, off-road and industrial vehicles, as well as the worldwide aftermarket. The company's leading technology and innovation, lean manufacturing expertise, as well as marketing and distribution deliver world-class products, brands and services with quality excellence at a competitive cost. Federal-Mogul is focused on its sustainable global profitable growth strategy, creating value and satisfaction for its customers, shareholders and employees. Federal-Mogul was founded in Detroit in 1899. The company is headquartered in Southfield, Michigan, and employs nearly 39,000 people in 36 countries. Visit the company's Web site at www.federalmogul.com.

Forward-Looking Statements

Statements contained in this press release, which are not historical fact, constitute "Forward-Looking Statements." Actual results may differ materially due to numerous important factors that are described in Federal-Mogul's most recent report to the SEC on Form 10-K, which may be revised or supplemented in subsequent reports to the SEC on Forms 10-Q and 8-K. Such factors include, among others, the cost and timing of implementing restructuring actions, the Company's ability to generate cost savings or manufacturing efficiencies to offset or exceed contractually or competitively required price reductions or price reductions to obtain new business, conditions in the automotive industry, and certain global and regional economic conditions. Federal-Mogul does not intend or assume any obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release.

CONTACT: Steven Gaut: 248-354-7826

steven.gaut@federalmogul.com

SOURCE Federal-Mogul Corporation

http://www.federalmogul.com

"These results demonstrate our ongoing ability to perform profitably even at these market and production levels. We had strong gross margin and net income with significantly improved cash flow versus the prior quarters of 2009. Federal-Mogul's variable cost company strategy has positioned us to take advantage of eventual volume improvements in the automotive, commercial vehicle and other market segments," said Jose Maria Alapont, Federal-Mogul President and CEO.

"The results of the third quarter show continuous improvement versus prior quarters and we believe we can further improve the performance of the company. We continue to implement cost reductions necessary to attain earnings performance consistent with our fundamental objective of achieving sustainable global profitable growth by providing customers with high quality products, leading technology and innovation, at a competitive cost," said Alapont.

Federal-Mogul reported $1.4 billion in sales during Q3 2009, increases of $76 million and $142 million over Q2 2009 and Q1 2009, respectively. With Q1 2009 as the baseline, Federal-Mogul has continued to improve operating results throughout the year and has raised gross margin by 2.6 percentage points. Sales, general and administrative (SG&A) expenses as a percent of sales improved steadily to 12.5 percent in Q3 2009 from 14.9 percent in Q1 2009. As a result of the company's global restructuring plan, Federal-Mogul has reduced its headcount by about 11,000 employees, or 22 percent, ending the quarter with global employment of less than 39,000.

Net income in Q3 2009 was $10 million versus a net loss of $(101) million during Q1 2009. Operational EBITDA(1) for Q3 2009 was $134 million or 9.7 percent of sales, an increase of $64 million or four percentage points over Q1 2009, when the company reported operational EBITDA of $70 million or 5.7 percent.

Federal-Mogul has improved cash inflows throughout the year, generating significant cash flow(2) of $112 million in Q3 2009, a $308 million improvement versus a cash outflow of $(196) million recorded in Q1 2009. This strong improvement was due to higher profitability combined with disciplined working capital management, including inventory reductions and improved accounts receivable performance across the company's diverse OE and aftermarket customer base. The company improved its strong cash position to about $800 million and when combined with an undrawn revolver of over $500 million, Federal-Mogul had $1.3 billion of liquidity at the end of Q3 2009.

On a year-over-year basis, Federal-Mogul reported Q3 2009 sales of $1.4 billion versus $1.7 billion in Q3 2008, or a decline of about 15 percent on a constant dollar basis, which compares favorably to the overall downturn in the markets served by Federal-Mogul. Gross margin was $212 million or 15.4 percent of sales in Q3 2009 versus $279 million or 16.5 percent in the same period of 2008. The company's ability to maintain margins comparable to Q3 2008 in a declining market environment reflects the success of Federal-Mogul's variable cost company strategy. SG&A expenses in Q3 2009 were $19 million lower than the same period in 2008.

Net income was $10 million in Q3 2009 versus $4 million in Q3 2008. Federal-Mogul's operational EBITDA(1) for Q3 2009 was $134 million or 9.7 percent of sales, compared to $179 million, reported during the third quarter a year ago. The company reported positive cash flow(2) of $112 million for Q3 2009, a significant increase versus $28 million during Q3 2008.

Federal-Mogul during the third quarter continued to expand its customer, market and product diversity, especially in China, India and Brazil, where the company's leading and globally recognized technology helps regional customers respond to the fast-paced demand to bring to market globally competitive vehicles.

Federal-Mogul also began high-volume production of its industry-leading DuraBowl(R) piston. This technology utilizes an innovative re-melting process to harden the piston rim, which is a key enabler for engine downsizing and turbo-boosting, allowing vehicle makers to improve fuel economy and reduce emissions.

"We continue to focus on strengthening our product portfolio to grow our revenue stream with new technologies, innovations and strong brands that bring value to our customers, especially given the increasingly challenging regulatory requirements for fuel economy, alternative fuels, reduced emissions and improved safety," said Alapont.

"Federal-Mogul's results during the third quarter demonstrate that our sustainable global profitable growth strategy has enabled the company to successfully operate in today's environment while also preparing Federal-Mogul to capitalize on new growth opportunities as the overall economy and global automotive markets strengthen," Alapont concluded.

(1) Operational EBITDA is defined as earnings before interest, income taxes, depreciation and amortization, and certain items such as restructuring and impairment charges, Chapter 11 related reorganization expenses, gains and losses on the sales of businesses, the impact on gross margin of the fresh-start reporting valuation of inventory, and the non-cash expense relating to U.S. based funded pension plans.

(2) Cash flow is equal to net cash provided by operating activities less net cash used by investing activities as set forth on the attached statement of cash flows, excluding cash received from the 524g trust and impacts of the Chapter 11 plan of reorganization.

About Federal-Mogul

Federal-Mogul Corporation is a leading global supplier of powertrain and safety technologies, serving the world's foremost original equipment manufacturers of automotive, light commercial, heavy-duty, agricultural, marine, rail, off-road and industrial vehicles, as well as the worldwide aftermarket. The company's leading technology and innovation, lean manufacturing expertise, as well as marketing and distribution deliver world-class products, brands and services with quality excellence at a competitive cost. Federal-Mogul is focused on its sustainable global profitable growth strategy, creating value and satisfaction for its customers, shareholders and employees. Federal-Mogul was founded in Detroit in 1899. The company is headquartered in Southfield, Michigan, and employs about 39,000 people in 36 countries. Visit the company's Web site at www.federalmogul.com.

Forward-Looking Statements

Statements contained in this press release, which are not historical fact, constitute "Forward-Looking Statements." Actual results may differ materially due to numerous important factors that are described in Federal-Mogul's most recent report to the SEC on Form 10-K, which may be revised or supplemented in subsequent reports to the SEC on Forms 10-Q and 8-K. Such factors include, among others, the cost and timing of implementing restructuring actions, the company's ability to generate cost savings or manufacturing efficiencies to offset or exceed contractually or competitively required price reductions or price reductions to obtain new business, conditions in the automotive industry, and certain global and regional economic conditions. Federal-Mogul does not intend or assume any obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release.

                                FEDERAL-MOGUL CORPORATION
                    Consolidated Statements of Operations (Unaudited)

                                    Three Months Ended   Nine Months Ended
                                       September 30        September 30
                                       ------------        ------------
                                      2009      2008      2009      2008
                                      ----      ----      ----      ----
                               (Millions of Dollars, Except Per Share Amounts)

    Net sales                       $1,380.0  $1,692.0  $3,922.0  $5,546.4
    Cost of products sold           (1,168.4) (1,413.1) (3,354.9) (4,605.5)
                                    --------  --------  --------  --------

    Gross margin                       211.6     278.9     567.1     940.9

    Selling, general and
     administrative expenses          (172.5)   (191.7)   (526.9)   (612.8)
    Interest expense, net              (32.5)    (46.6)   (100.3)   (137.2)
    Amortization expense               (12.2)    (21.4)    (36.6)    (56.7)
    Chapter 11 and U.K.
     Administration related
     reorganization expenses            (0.4)     (2.3)     (2.8)    (15.3)
    Equity earnings of
     unconsolidated affiliates           5.4       4.2       9.3      20.7
    Restructuring, net                   1.4     (11.3)    (38.4)    (14.0)
    Other income, net                    8.7      15.7      38.5      13.0
                                         ---      ----      ----      ----

    Income (loss) before income taxes    9.5      25.5     (90.1)    138.6
    Income tax benefit (expense)         5.8     (18.3)     11.4     (71.7)
                                         ---     -----      ----     -----

    Net income (loss)                   15.3       7.2     (78.7)     66.9
    Less net income attributable
     to noncontrolling interests       (4.9)     (3.6)     (8.9)     (5.2)
                                        ----      ----      ----      ----

    Net income (loss) attributable
     to Federal-Mogul                  $10.4      $3.6    $(87.6)    $61.7
                                       =====      ====    ======     =====

    Income (loss) per common share:
    -------------------------------
    Basic                              $0.11     $0.04    $(0.89)    $0.62
                                       =====     =====    ======     =====
    Diluted                            $0.10     $0.04    $(0.89)    $0.62
                                       =====     =====    ======     =====



                             FEDERAL-MOGUL CORPORATION
                      Consolidated Balance Sheets (Unaudited)

                                            September 30   December 31
                                                2009          2008
                                             -----------   -----------
    ASSETS                                    (Millions of Dollars)

    Current assets:
      Cash and equivalents                     $784.3        $888.2
      Accounts receivable, net                1,083.3         938.7
      Inventories, net                          841.3         893.7
      Prepaid expenses and other current
       assets                                   238.9         267.4
                                                -----         -----

    Total current assets                      2,947.8       2,988.0

    Property, plant and equipment, net        1,890.7       1,910.6
    Goodwill and other indefinite-lived
     intangible assets                        1,398.6       1,430.4
    Definite-lived intangible assets, net       527.3         563.9
    Other noncurrent assets                     326.0         342.7
                                                -----         -----

                                             $7,090.4      $7,235.6
                                             ========      ========

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities:
      Short-term debt, including current
       portion of long-term debt               $102.3        $101.7
      Accounts payable                          503.1         622.5
      Accrued liabilities                       464.0         483.1
      Current portion of postemployment
       benefit liability                         61.7          61.0
      Other current liabilities                 165.3         173.8
                                                -----         -----

    Total current liabilities                 1,296.4       1,442.1

    Long-term debt                            2,759.9       2,768.0
    Postemployment benefits                   1,279.9       1,240.1
    Long-term portion of deferred income
     taxes                                      537.3         553.4
    Other accrued liabilities                   179.8         235.9

    Shareholders' equity:
      Preferred stock ($.01 par value;
       90,000,000 authorized shares;
       none issued)                                 -             -
      Common stock ($.01 par value;
       450,100,000 authorized shares;
       100,500,000 issued shares; 99,404,500
       outstanding shares as of September
       30, 2009 and December 31, 2008)            1.0           1.0
      Additional paid-in capital, including
       warrants                               2,122.7       2,122.7
      Accumulated deficit                      (555.5)       (467.9)
      Accumulated other comprehensive loss     (577.1)       (688.0)
      Treasury stock, at cost                   (16.7)        (16.7)
                                                -----          -----

    Total Federal-Mogul shareholders' equity    974.4          951.1
                                                -----          -----
      Noncontrolling interests                   62.7           45.0
                                                 ----           ----
    Total shareholders' equity                1,037.1          996.1
                                              -------          -----

                                             $7,090.4       $7,235.6
                                             ========       ========



                          FEDERAL-MOGUL CORPORATION
                    Consolidated Statements of Cash Flows
                                 (Unaudited)

                                                  Nine Months Ended
                                                    September 30
                                                  -----------------
                                                 2009          2008
                                                 ----          ----
                                                (Millions of Dollars)

    Cash provided from (used by) operating
     activities
    Net (loss) income                           $(78.7)        $66.9
    Adjustments to reconcile net (loss)
     income to net cash provided from
     operating activities:
        Depreciation and amortization            240.5         265.8
        Cash received from 524(g) Trust              -         225.0
        Change in postemployment benefits,
         including pensions                       46.2           8.5
        Changes in deferred taxes                (22.3)          1.7
        Gain on sale of debt investment           (7.9)            -
      Changes in operating assets and
       liabilities:
        Accounts receivable                     (117.8)       (107.9)
        Inventories                               77.2          21.9
        Accounts payable                        (106.3)        (75.9)
        Other assets and liabilities              17.3         (30.7)
                                                  ----         -----
    Net cash provided from operating
     activities                                   48.2         375.3

    Cash provided from (used by) investing
     activities
    Expenditures for property, plant and
     equipment                                  (145.7)       (240.2)
    Net settlement from sale of debt
     investment                                    7.9             -
    Net proceeds from the sale of property,
     plant and equipment                           0.9          10.9
    Payments to acquire business                     -          (4.7)
                                                   ---          ----
      Net cash used by investing activities     (136.9)       (234.0)

    Cash provided from (used by) financing
     activities
    Proceeds from borrowings on exit facilities      -       2,082.0
    Repayment of Tranche A, Revolver and PIK
     Notes                                           -      (1,790.8)
    Principal payments on exit facilities        (22.2)        (22.2)
    Decrease in other long-term debt              (2.7)         (9.2)
    Decrease in short-term debt                   (2.1)         (0.2)
    Purchase of treasury stock                       -         (16.7)
    Net payments from factoring arrangements      (5.9)        (15.5)
    Debt amendment/issuance fees                  (1.0)         (0.6)
                                                  ----          ----

      Net cash (used by) provided from
       financing activities                      (33.9)        226.8

      Effect of foreign currency exchange rate
       fluctuations on cash                       18.7         (12.0)
                                                  ----         -----

    (Decrease) increase in cash and
     equivalents                                (103.9)        356.1

    Cash and equivalents at beginning of
     period                                      888.2         425.4
                                                 -----         -----

    Cash and equivalents at end of period       $784.3        $781.5
                                                ======        ======



                           FEDERAL-MOGUL CORPORATION
          Reconciliation of Non-GAAP Financial Measures (Unaudited)
                             (Millions of Dollars)

                                 Three Months Ended      Nine Months Ended
                                    September 30           September 30
                                    ------------           ------------
                                   2009     2008           2009    2008
                                   ----     ----           ----    ----

    Income (loss) before income
     taxes                          $9.5   $25.5          $(90.1) $138.6
      Depreciation and
       amortization                 82.3    94.7           240.5   265.8
      Chapter 11 and U.K.
       Administration related
       reorganization expense        0.4     2.3             2.8    15.3
      Interest expense, net         32.5    46.6           100.3   137.2
      Restructuring, net            (1.4)   11.3            38.4    14.0
      Expense associated with
        U.S. based funded pension
        plans                       16.6     1.1            49.7     3.9
      Fresh-start inventory
       adjustment                      -       -               -    68.2
      Other                         (6.2)   (2.7)           (8.8)    0.8
                                    ----    ----            ----     ---
    Operational EBITDA            $133.7  $178.8          $332.8  $643.8
                                  ======  ======          ======  ======


    Net cash provided from
     operating activities:        $144.8  $117.7           $48.2  $375.3

      Adjustments:
      Cash received from 524(g)
       Trust                           -       -               -  (225.0)
      Net payments for
       implementation of the
       Plan, including settlement
       of non-debt liabilities
       subject to compromise         0.8     2.1            11.0    19.2
                                     ---     ---            ----    ----

      Cash provided from
       operations, excluding the
       impacts of the Plan        $145.6  $119.8           $59.2  $169.5
      Cash used by investing
       activities                  (34.0)  (92.2)         (136.9) (234.0)
                                   -----   -----          ------  ------
    Cash flow                     $111.6   $27.6          $(77.7) $(64.5)
                                  ======   =====          ======  ======


    Management believes that Operational EBITDA most closely approximates
    the cash flow associated with the operational earnings of the company
    and uses Operational EBITDA to measure the performance of its
    operations. Operational EBITDA is defined as earnings before interest,
    income taxes, depreciation and amortization, and certain items such as
    restructuring and impairment charges, Chapter 11 related reorganization
    expenses, gains and losses on the sales of businesses, the impact on
    gross margin of the fresh-start reporting valuation of inventory, and
    the non-cash expense relating to U.S. based funded pension plans.


    CONTACT: Steve Gaut (248) 354-7826 for media
             David Pouliot (248) 354-7967 for investor questions

* Please note accent over 'e' in Jose Maria Alapont

SOURCE Federal-Mogul Corporation

http://www.federalmogul.com