Conventional wisdom holds that there are few endeavors on the planet more difficult than rocket science. While not begging to differ, truly characterizing this year's U.S. automotive industry clocks in at an awfully close second. Through a series of mergers and acquisitions, Tier Ones have built themselves into total-system suppliers, responding to the demand from OEMs for a smaller supplier base, bolt-on systems or modules, design and testing responsibility, and overall lower costs. It doesn't appear this trend will change short term. In a recent study, the Office for the Study of Automotive Transportation concluded that all of the automotive "tiers" should continue to expect restructuring and realignment through 2005.
Mixed BlessingNow that the supplier conglomerates have gained some serious bargaining clout, however, automakers are stepping a bit more gingerly, perhaps afraid that they have created a monster. Meanwhile, back at the Tier One and Two ranch, the battle is still on to meet cost-down pressures without cutting either value or performance.
From a molder's perspective, these shifting alliances and consolidations can be tricky to navigate. Several sources told IMM at this February's SAE '97 Expo in Detroit that if you don't have automotive-level quality, ISO or QS 9000 certification, and guaranteed just-in-time delivery, you might as well find another market to solicit. From these three givens, say industry authorities, arises a fourth variable - namely, cost. One automotive molder who wished to remain anonymous likened the price quoting process to the infamous bloody battle scene from the movie "Braveheart."
Still, there are some promising opportunities opening up amidst the seeming chaos. Plastics usage is rising, not only for interiors, but also for underhood and external trim components. A study by Market Search, a Toledo, OH-based research firm, estimates that domestic passenger cars and light trucks assembled in the U.S. and Canada contained an average of 238 lb of plastic per vehicle in 1996. That figure doesn't include carpets, fabrics, or adhesives. In addition, automakers are turning their attention toward so-called "city cars," less expensive commuter vehicles that incorporate molded-in-color plastic body panels (see "Chrysler concept vehicle sports molded body," February 1997 IMM, p. 36). These prototypes, aimed at the export rather than domestic market, should further increase demands for molded plastic.
Even cost pressures seem to have a silver lining. Molders who want to keep an application for several years are realizing that they must add variety to their resin offerings to help meet typical OEM or Tier One demands for 5 percent annual cost reductions. In many cases, that means taking an engineering thermoplastic part and converting it to, say, a less costly custom PP grade. Often, this switch requires technical design support from resin manufacturers, a commodity that has been in short supply of late.
However, a new wave of strategic alliances between molders and materials suppliers - another result of the focus on pricing - promises to end the former no-win situation in which OEMs demanded lower prices while resin costs to the molder increased. Especially among resin distributors, there is a recognition that unless Tier One and Two customers get the support they need to meet OEM requirements, no one will profit.
Narcissism coupled with short-sightedness can be a dangerous combination. When it showed up in the automotive industry of the '80s, the results were often disastrous. Signs today point to the end of such "Lopez-era" tactics, in which costs were cut despite quality standards. Instead, the Big Three tend to drive reductions in overall systems costs while remaining committed to value and quality.
System InitiativesDelphi Automotive Systems (Pontiac, MI), owned by General Motors, is perhaps the world's largest automotive supplier. Donald Runkle, general manager, explains that as OEMs move toward a shorter, 24-month product cycle, it is becoming essential for Delphi to supply them with integrated systems. Two new such offerings are an integrated cockpit module and integrated door module. Says Runkle, "The future belongs to those who can integrate systems and subsystems, meeting four key vehicle requirements - control and communication, vehicle dynamics, power and propulsion, and interior systems."
Lear Corp., the global giant for interiors, also trumpeted several new systems additions to its product line that are targeted at emerging markets. World Seat systems consist of two high-back bucket front seats and integral headrests with bench rear seats. Lear also has an interior trim door module called the One-Step - it can be installed into the exterior door panel in one quick motion, according to Lear's David Emerling. Door subsystems and components are already mounted and pretested.
In keeping with GE Plastics' exodus from SAE some three years ago, several major resin suppliers were not in attendance. Speculation suggests that GE and others are instead investing directly in large customers, in essence conducting a one-man trade show at customer installations without fear of revealing trade secrets.
Overall, the automotive industry represents the bread and butter of resin supply, so these manufacturers are attempting to formulate polymers that meet several criteria: lower cost and higher value, recyclable monomaterials, and higher heat-resistance resins for underhood.
At SAE '97 Eastman introduced a new LCP with heat deflection ratings of 290C at costs significantly lower than competitive engineering TPs (see related story, p. 54). Pierre Muri, business market manager, commented: "Our new Thermx LCP is also inherently flame retardant, with excellent dimensional stability and faster cycle times. We envision it will be used for precision injection molding applications in automotive electronics markets."
Hoechst Technical Polymers turned out to be the body panel material supplier that Chrysler declined to name for its China Concept Vehicle. The material, a colored Impet thermoplastic polyester, is fully recyclable. Hoechst is also assisting an as-yet-unnamed molder in process and tool development for the panels.
The talk at AlliedSignal is about tripling its design and technical service staff in Detroit. According to sales manager Guy Vaughan, the next step in supplying automotive resins will require gas-assist molding support, design and technical assistance, and concentrated product development aimed at taking out fillers to shave weight without giving up any physical properties. Allied has not yet implemented a planned 48-hour delivery on 25 of its products using an online order entry system at its website.
Dow Chemical devotes 25 percent of its plant output to automotive customers. According to Jim Davidson, commercial director for Dow Automotive, its strategy for polypropylene involves supplying the resin at lower costs through compounding and in differentiating its PP based on Insite reactor technology. Insite TPOs are also on deck for lower cost fascias. And Dow introduced Pulse 2000, a new grade of PC/ABS for energy management and interior trim applications.
Powertrains are the target at BASF, from valve covers and welded manifolds, to throttle bodies and gear shift forks. And at DuPont Automotive, an oilpan windage tray under development with a number of OEMs is being prototyped in glass-filled nylon to replace aluminum, while a sealing engine-cover system is still in the concept stage, according to DuPont tech specialist Mark Schuchardt.