Domestic Suppliers Playing Key Role in a New U.S. Automotive Industry
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U.S. automakers, including emerging startups, are partnering with American contract manufacturers to create innovative, fuel-efficient and electric vehicles
By Mark Shortt
Editorial Director, Design-2-Part Magazine
Baltimore Transmission to be First High-Volume U.S. Electric Motors Manufacturing Site
How the year 2009 will look to historians of the U.S. automotive industry when they look back on it years from now remains to be seen. But there's a good chance that many will see it as a year of transformation, as two of the Big Three automakers emerged from Chapter 11 bankruptcy protection with new, leaner business models aimed at producing fuel-efficient vehicles that comply with tougher fuel emission standards. Since then, the U.S. Department of Energy (DOE) has acted quickly to support U.S. manufacturers' efforts to develop innovative fuel-efficient vehicles by awarding grants and direct loans to large and small automakers and parts suppliers under the Advanced Technology Vehicles Manufacturing Program (ATVM). Also playing a key role in these efforts are U.S. auto suppliers--contract manufacturing companies that provide automakers with services ranging from new product development and prototyping, to precision molding, sheet metal fabrication, and machining.
The ATVM will provide approximately $25 billion in loans to companies to produce, in U.S. factories, cars and components that increase fuel economy at least 25 percent above 2005 fuel economy levels. Applications for the loan program have included vehicles running on electricity, biofuels, and advanced combustion engines. Among the companies that have submitted applications are U.S. automakers; U.S. manufacturing subsidiaries of non-U.S.-based companies; U.S. component makers and major U.S. auto parts suppliers; and innovative startups.
Ford Motor Company was one of the first three companies to receive approval last June for low-interest loans from the DOE for the development of innovative, advanced vehicle technologies. Under the ATVM program, Ford will receive $5.9 billion in low-interest loans through 2011 to retool its factories in five states--Michigan, Illinois, Kentucky, Missouri, and Ohio--for the production of 13 vehicle models with higher fuel efficiency. Also among the first to receive loans under the ATVM program were Nissan North America, which received $1.6 billion to retool its Smyrna, Tennessee plant for production of advanced electric automobiles and to construct an advanced battery manufacturing facility; and Tesla Motors, the recipient of $465 million to manufacture electric drive trains and electric vehicles in California.
"We have an historic opportunity to help ensure that the next generation of fuel-efficient cars and trucks are made in America," said President Obama, in a statement announcing the awards. "These loans--and the additional support we will provide through the Section 136 program--will create good jobs and help the auto industry to meet and even exceed the tough fuel economy standards we've set, while helping us to regain our competitive edge in the world market."
Last year, the Obama administration announced an agreement to raise passenger car fuel standards from 27.5 miles per gallon (mpg) to a target of 35 mpg by 2016. After receiving more than 100 applications for loans under the ATVM program, the DOE believes that "competition among advances in conventional engine technologies, next-generation biofuels, and transportation electrification holds the potential to increase U.S. fuel efficiency dramatically over the next several years."
A Transformed U.S. Auto Industry
Aided by the support of the Advanced Technology Vehicles Manufacturing Program, Ford and General Motors (GM) have announced plans to build or expand U.S. manufacturing facilities, and are renewing and strengthening their ties with American suppliers. Startups Tesla Motors--which in January became the first U.S. automaker to file for an IPO since Ford in 1956--and Fisker Automotive have also announced plans to begin manufacturing in the United States. Tesla will build its Model S sedan in Southern California, and plans to develop and manufacture electric vehicle components for its Tesla Roadster and other automakers at a recently leased 369,000-square-foot plant in Palo Alto, California. Fisker Automotive, maker of a premium plug-in hybrid electric vehicle called the Karma, is planning to build a less-expensive, family-oriented plug-in hybrid sedan at a plant in Wilmington, Delaware, beginning in late 2012.
Fisker announced last fall that it would purchase GM's former Wilmington Assembly plant for $18 million to build plug-in hybrid cars costing "about 39,900 after federal tax credits." The company plans to spend an additional $175 million to refurbish and retool the factory over the next three years before beginning production. Fisker expects that its development and build of the plug-in hybrid sedan, code-named "Project Nina," will ultimately create or support some 2,000 factory jobs and more than 3,000 vendor and supplier jobs by 2014.
Ford and GM started 2010 with a bang by announcing significant sales increases in the first two months of the year. After implementing leaner business models that emphasize quality and fuel efficiency in their vehicles, along with innovation and efficiency in their supply chains, both companies are positioning their operations to manufacture more fuel-efficient traditional (internal combustion engine) vehicles in the short term, while ramping up to produce more hybrids, plug-in hybrids, and battery electric vehicles for the long term. Ford recently announced that U.S. sales of its Ford, Lincoln, and Mercury brands were up 43 percent in February versus a year ago, and 22 percent higher than January of this year. The company estimated its U.S. market share at 17 percent in February, 3 percentage points higher than February of last year. North American production is also climbing, as the company announced plans to produce 595,000 vehicles in North America during the second quarter of 2010, an increase of 144,000 vehicles (32 percent) versus a year ago.
Ken Czubay, vice president for U.S. marketing and sales, attributed the sales and production increases to the strength of the company's new products and its efforts in the areas of quality, fuel efficiency, safety, smart design, and value. "The good news is we have even more new products and fuel-efficient powertrains coming this year, and we expect our progress to continue," he said in a statement.
Suppliers Team up to Produce Engine Cover for Award-Winning Ford Fusion Hybrid
Walworth, Wisconsin-based Miniature Precision Components, Inc. (MPC), an ISO/TS 16949 registered manufacturer of molded and extruded thermoplastic components and assemblies, recently collaborated with PolyOne Corporation (www.polyone.com), a provider of specialized polymer materials, to create an eco-friendly engine cover for the award-winning 2010 Ford Fusion Hybrid. The two companies teamed up to design the engine cover with a metallic appearance and a reduced carbon footprint. MPC (www.mpc-inc.com), a Ford World Excellence supplier, molds the engine cover from a metallic-effect PolyOne compound, MaxxamTM FX Metal, which mimics the luster of painted polymer versions but eliminates the extra energy requirements and environmental challenges of traditional manufacturing and painting processes. The supplier is said to have reduced the cost of producing the engine covers by approximately $800,000 annually by using Maxxam FX Metal, a talc-filled, pre-colored polypropylene compound, rather than traditional plastics that required post-mold painting.
The Ford Fusion Hybrid, named the North American Car of the Year at the North American International Auto Show in January, was also recently named the Motor Trend® Car of the Year and was one of the top 10 selling cars in the United States in 2009. Previously, its engine cover had been coated with metallic paint to achieve a high-quality finish. But the design team for the 2010 Ford Fusion wanted a more sustainable design, one that would eliminate painting and the associated VOC emissions without sacrificing the aesthetic quality of a metallic look. This led them to consider the possibility of using a pre-colored (molded-in color) material with a metallic effect. The new engine cover would also have to meet high visual standards by eliminating the knit lines often seen on other metallic-effect plastic components. This was accomplished by designing the injection mold to route the flow of material in such a way that the flow fronts would meet at the edges of the cover.
"This project underscores our focus on innovation and eco-friendly technologies," said Doug Callahan, MPC's vice president of engineering, in a statement. "It also demonstrates the level of success that can be reached with these types of collaborative relationships."
"PolyOne is committed to helping our customers win by creating sustainable solutions," said Craig Nikrant, PolyOne's president of Global Specialty Engineered Materials. "Each component of the award-winning Ford Fusion Hybrid contributes to its market success and critical acclaim. PolyOne is proud to play a leadership role in engineering an innovative technology that addresses the environmental goals we all share."
Baltimore Transmission to be First High-Volume U.S. Electric Motors Manufacturing Site
General Motors' sales are also up, as the company reported a combined 32% increase in February retail sales of its four core brands--Chevrolet, Buick, GMC, and Cadillac--over February 2009. The company said the increase was due to the "continued strong growth of new GM crossovers and passenger cars."
Last August, GM was awarded a $105 million grant from the DOE for the construction of U.S. manufacturing capabilities to produce electric motors and related electric drive components. "The new GM is about speed, and we are delivering quickly on the government's desire to grow domestic expertise in electric vehicle technologies, such as batteries and electric motors," said Tom Stephens, GM vice chairman, global product operations, in a statement. The company announced in January that it would invest approximately $246 million in the manufacturing of electric motors and hybrid components, creating some 200 jobs. Part of the investment will go toward construction of a high-volume electric drive production facility at the company's Baltimore Transmission plant, which is scheduled to begin manufacturing electric motors for GM's Two-mode Hybrid system in 2013. According to GM, the plant will be the first electric motor manufacturing facility in the U.S. to be operated by a major automaker.
"Electric motors are the engines of the future," said Stephens, in a statement announcing the investment. "By designing and manufacturing electric motors in-house at Baltimore Transmission, we can more efficiently control the design, materials, and production processes. It will also enable us to lower costs and improve performance, quality, reliability, and manufacturability of the electric motors we use in our vehicles."
General Motors also acknowledged that automotive electric motors require what it called "an unparalleled combination of exceptionally low noise, vibration and harshness (NVH); high reliability, and affordability," which the company said is "achievable only by understanding the entire value chain." For this reason, in addition to growing in-house capabilities, GM stated that it will continue to purchase and co-design electric motors with suppliers. "This is a strategy we use today with batteries," Stephens said. "We are partnering with suppliers to create innovations faster than ever before. Our goal is simply to establish GM as a leader in automotive electric motors. We see that leadership as a key enabler--both to our long-term success and to our nation's move away from oil dependence."
Demand for Capacitors and Ultracapacitors Expected to Increase
As the auto industry ramps up production of hybrids and electric vehicles, it will increase the demand for parts and components critical to electric drive propulsion systems, electric motors, batteries, and power electronics components. Examples include heat sinks, which transfer potentially dangerous levels of heat away from hotter components under the hood, and passive electronic components, such as capacitors, that are used for energy storage. One company that's preparing to meet this demand is KEMET Corporation (www.kemet.com), a Simpsonville, S.C.-based manufacturer of tantalum, ceramic, film, and electrolytic capacitors, all of which are critical subcomponents in hybrid electric-drive systems. KEMET was awarded a $15.1 million grant from the U.S. Department of Energy (DOE) last fall to support the development of electric-drive vehicles in the United States. The grant will help the company expand its U.S. production capacity to help meet the demand for these critical subcomponents.
"Manufacturers of electric-drive vehicles currently are dependent on offshore-based suppliers for DC bus capacitors," said Per Loof, KEMET's CEO, in a statement. "Increased production capacity in the United States will significantly reduce the supply-chain risks faced by hybrid-vehicle developers."
KEMET's customers include a number of the world's major Tier-1 automotive suppliers, such as Bosch, Continental, Delphi, Lear, Magneti Marelli, TRW, and Visteon. As a supplier of hybrid-system subcomponents, the company currently has a number of projects under way in various stages of design. The DOE award is intended to help the company expand its manufacturing facilities in Simpsonville, S.C., to support these projects, and is expected to create more than 110 new jobs. Loof stated that the DOE grant will enable the company to annually produce, at its Simpsonville facility, capacitors for up to 100,000 electric-drive vehicles.
Ultracapacitors, also called supercapacitors or electrochemical double-layer capacitors (EDLCs), are another technology expected to see greater demand. Known for having higher energy density than capacitors, these components are used as energy storage devices in hybrid and electric vehicles. One of the established manufacturers in the field is San Diego-based Maxwell Technologies (see Maxwell Introduces New Large Cell Ultracapacitors), which last summer formed a strategic alliance with ISE Corporation to develop and market high-voltage energy storage systems for fuel-efficient, low-emission, hybrid-electric buses and trucks. ISE designs and manufactures hybrid propulsion systems and components for heavy-duty vehicles. The alliance builds on a relationship dating back to 2002, when Maxwell began supplying its BOOSTCAP® ultracapacitors to ISE, which used them for braking energy recapture and torque assist applications in its hybrid drive systems for heavy-duty vehicles.
"ISE's pioneering energy storage system designs incorporating ultracapacitors gave our BOOSTCAP products their first production-level opportunity in the transit bus market," said David Schramm, Maxwell's president and chief executive officer. "Both of our companies' technology and products have come a long way since then, and rising fuel prices and new regulations aimed at reducing CO2 emissions are driving demand that is bringing hybrid drive systems squarely into the transportation mainstream."
U.S.- Manufactured Ultracapacitors Bring Key Benefits to Hybrid EVs
Another company making its case in the emerging market for hybrid and electric vehicle components is Ioxus, Inc. (www.ioxus.com), an Oneonta, N.Y.-based manufacturer of ultracapacitors for the military, transportation, and alternative energy industries. Ioxus, which states on its website that its ultracapacitors are engineered and manufactured entirely in the U.S., was established in 2006 by parent company Custom Electronics, Inc. (CEI), an ISO 9001:2000- and AS9100-certified manufacturer that has supplied military and commercial clients with high-reliability capacitors and integrated electronic assemblies since 1964.
Although Ioxus hasn't been around as long as Maxwell Technologies, it benefits from its close relation to CEI (www.customelec.com). Ioxus Chief Operating Officer Chad Hall worked for CEI for 14 years, the last six as engineering manager. He says that through heritage and strategic partnerships, Ioxus combines extensive engineering and manufacturing resources--including flexible manufacturing capabilities--with deep experience in high-voltage components and integrated systems.
"Ioxus ultracapacitors can be used to extend the charge time for electronics, and to power hybrid vehicles, wind farms, material handling equipment, and other green energy technologies," Hall wrote in an email to D2P. "In regard to transportation developments, large-cell Ioxus ultracapacitors provide large energy storage systems that significantly improve the efficiency of hybrid electric vehicles. Recycling the energy captured during braking will lower the peak power requirements on hybrid-diesel, fuel cell, or battery-based vehicles. And by stabilizing the power output of these devices with an ultracapacitor, significant life expectancy increases are seen for fuel-cell and battery-based applications."
Hall says that Ioxus ultracapacitors are characterized by "a unique prismatic design" that makes practical use of space, and are capable of more than a million recharge cycles. Ranging in size from 100 to 5,000 farads, they reportedly weigh only one-fifth of what a battery of comparable physical size would weigh. The ultracapacitors reduce power expenditures, Hall says, and can extend the life of other energy sources, such as batteries, when used in combination with them. They can also be packaged and tailored to fit standard, high-voltage, or high-energy applications.
"Smaller cells are ideal for hand-held communications and wireless monitoring systems, similar to those used in automated meter reading applications," said Hall. "Larger cells store enough energy to accelerate hybrid vehicles, or assist material handling equipment by using energy stored during regenerative activities." For more on Ioxus, see New Ultracapacitor Cells Provide Lower Cost for Overall System Design, Company Says.
A Need for Prototypes
Because product quality correlates directly with user safety, the U.S. automotive industry is unyielding in its requirements for precision parts and components. It's also at a point where emerging technologies for fuel-efficient, hybrid, and electric vehicles are being taken seriously by major automakers, creating demand for suppliers that can quickly create concept models and functional prototypes to validate new product ideas. Integrated Ideas & Technologies, Inc. (IIT), a metal fabricator and precision parts manufacturer in Post Falls, Idaho, uses skills honed on projects for the aerospace, defense, and electronics industries to meet the quick-turnaround requirements of companies seeking to introduce new products for the automotive industry. Most of the companies that IIT serves within the automotive sector are new, innovative companies, according to Mike Ray, president of IIT.
"Today's changing industry has a lot to do with emerging markets, and emerging markets are all about speed, efficiency, and lean manufacturing," says Ray. "Our business model has always been ahead of its time. We've always focused on quick-turn fabrication of prototypes and emerging technologies."
Integrated Ideas & Technologies manufactures a variety of sheet metal enclosures, steel parts, and precision machined parts from metallic and non-metallic materials. In addition to sheet metal fabrication and CNC machining, its capabilities include laser cutting, micro-machining, and hardware installation, among others. For more on IIT, see Quick-Turn Metal Fabricator and Precision Parts Manufacturer Works at Cutting Edge of Emerging Markets.
Plastics Molding Specialist Takes on Metal Stamping and Assembly Capabilities to Win New Automotive Customers
One company that's moving aggressively to take on more automotive work is Nashota, Wisconsin-based plastics molding specialist Dickten Masch Plastics (www.dicktenplastics.com). The company is in the process of adding metal stamping and complex assembly capabilities as part of an expansion project aimed at winning new business in the automotive and other industries. A custom thermoplastic and thermoset molder, Dickten Masch recently purchased the metal stamping equipment of long-time customer Charter Automotive and will use it to manufacture fluid level indicators that Charter had previously provided to the automotive industry. The expansion project includes the addition of four metal stamping machines, ranging from 50 to 300 tons in clamp force, and is supported by $293,000 in tax credits from the State of Wisconsin.
Both parts of the fluid level indicator--the metal dipstick and the plastic handle--will be manufactured at Dickten Masch's Nashota, Wisconsin plant. The company will stamp the metal blades, which will then flow into the company's overmolding operation. "We will be performing insert molding, which is one of our specialties, to attach the plastic around the metal blade," explains Steve Dyer, president and CEO of Dickten Masch Plastics. "The molded parts then flow into our secondary operations, where we might do O-ring insertions or pad printing, or whatever else is required by the customer."
Dyer says the dipsticks will be used for a number of different types of applications, including oil, transmission, and steering fluids. "We'll be making them for many different types of automobiles, but also for large industrial trucks, aviation motors, small engines, power sports vehicles, and ATVs," he said. "It will not only give us an entry into automotive work, but into four new markets that we currently don't serve today."
Before getting involved with the fluid level indicators, Dickten Masch had already been serving the auto industry, primarily as a Tier 2 manufacturer. One of its larger customers is a Tier 1 automotive supplier that's very active in after-market and accessory product lines. "We do running boards and step pads for them, and various mounting hardware for suspension systems," says Dyer. The company has also helped launch what Dyer calls "some very cool programs" for a major U.S. automaker, developing a front fascia assembly for an entire car in one instance, as well as badging.
Dickten Masch's specialties include insert and overmolding, which the company has utilized extensively for power distribution applications. An example is overmolding of copper inserts for high-voltage power distribution parts, which require strenuous scientific molding processes and strict testing protocols. The company's materials analysis expertise is well-aligned with its scientific molding processes, which are said to reduce part defects and ensure higher repeatability through the use of sensors that monitor the material during molding. Embedded in the mold, the sensors provide real-time monitoring of cavity pressures, fill time, and clamp pressures.
"The basic premise of scientific molding is that we develop molding parameters, through analysis, and monitor them," explains Dyer. "The real strength of scientific molding technology is that we're monitoring the process in real-time, and allowing the sensors to make the decisions. If the parameters are in specification, in the range we set, we know 99.9% of the time that it is a good product."
With plastics engineers on staff and what the company calls a "world class materials analysis lab," Dickten Masch has long succeeded in converting metal parts to engineered plastic or composite materials. The company has been able to accomplish these metal-to-plastic conversions while preserving the structural integrity of the part, reducing its weight, and improving its corrosion resistance. "Now that engineers are coming through here, and they see our capabilities, they see, for example, products we have taken in the water industry that used to be die-cast components, and are now plastic composite components," says Dyer. "We were able to maintain structural integrity and reduce weight, and improve corrosion resistance. They're now looking for us to do that with vehicle drivetrain systems, underbody, undercarriage, and around-the-engine components."
Dickten Masch recently passed a very rigorous testing standard in converting a die-cast metal, water pump part to a thermoset material. "It substantially reduced the weight and greatly improved the corrosion resistance of the product, which is submerged in water for the majority of its life," said Dyer. "Those are some of the test data that are catching the eye of automotive engineers, who are suddenly thinking about components that have been assumed to be die-cast components for years. They ask if we can match the performance characteristics closely in various composite materials, to be able to switch from a metal to a plastic material and, therefore, take weight out of the vehicle. With the mileage standards that are rolling up for 2016, they have to be in front of those design parameters now."
Dyer says that most of the company's engineering grade resins have very high dielectric properties, which means they're very good at handling arc/spark issues. "If you think about the evolution of where these vehicle systems are going, they're going from a traditional 12-volt battery system, which has been in existence since the mid '50s," he says. "It has been tested and retested, and issues found and solved over all those years. And now we're going to hybrid battery systems, which are going to be 24- , 36- , and, in some cases, 48-volt systems. So we're going to have a whole series of arc/spark issues.
"It's going to demand that engineers rethink some of the technology to ensure that these issues are addressed. Thermoset and engineering grade plastics have very high dielectric strengths and are able to handle these higher voltages, so there is no sparking that could be a safety issue. We believe we're perfectly positioned as we look at the overmolding of harnesses, connector components, heat sinks, and other around-the-engine items that are going to be necessitated for hybrid vehicle systems. We're going to be very well-positioned to utilize our tooling expertise, combined with our material analysis lab and our part design, to be able to bring these real-world technical solutions to engineers."
David Gaines contributed reporting to this article
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