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VARITY'S KELSEY-HAYES UNIT RECEIVES $135 MILLION ANNUAL CONTRACT TO SUPPLY ANTI-LOCK BRAKE SYSTEMS TO VOLKSWAGEN GROUP

 BUFFALO, N.Y., July 14 /PRNewswire/ -- Varity Corporation's (NYSE: VAT) Kelsey-Hayes Group announced today that it has received a long-term contract valued at more than $135 million annually to supply anti-lock braking systems (ABS) to the Volkswagen Group in Germany, according to Ed Gulda, group president, Worldwide ABS and Controls.
 Kelsey-Hayes will supply its latest generation EBC 10 family of ABS to the Volkswagen Group beginning in 1996 for the 1997 model year. This is the third major European contract won by Kelsey-Hayes ABS, introduced internationally in 1991.
 Gulda said that the contract was another step in penetrating the European market, a key strategy for Kelsey-Hayes. "With the large, untapped potential in low-priced, compact cars in Europe, our leading cost position is particularly advantageous," he said. Earlier this year Kelsey-Hayes established a European Technical Center in Wiesbaden, Germany, and broke ground on a new manufacturing facility in Heerlen, the Netherlands.
 Gulda noted that the European ABS market is growing rapidly. Whereas 25 percent of vehicles manufactured in Europe today have ABS, almost 60 percent will have ABS in 1997, he said.
 Kelsey-Hayes is the world's leading producer of ABS units, with locations in North America, Europe and Japan. Kelsey-Hayes also is a major supplier of conventional brakes and electrical control devices to the automotive industry.
 Varity Corporation (NYSE: VAT) had sales in 1992 of $3.4 billion and is one of the 150 largest industrial companies in the United States. Its other businesses include Perkins diesel engines and Massey Ferguson farm equipment.
 -0- 7/14/93
 /CONTACT: Jerry Hostetter of Varity Corporation, 716-888-8073/
 (VAT)


CO: Varity Corporation; Volkswagen Group ST: New York IN: AUT SU: CON

AR -- CL008 -- 1314 07/14/93 10:44 EDT
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Publication:PR Newswire
Date:Jul 14, 1993
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