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Three game-changers in the Automotive industry in 2018

New data-driven services, strong light-weight materials and a rapidly built out infrastructure for EVs (Electric Vehicles) are trends impacting the automotive industry throughout 2018.

Stefan Issing, the Global Industry Director for Automotive at IFS, presents his industry predictions for the year ahead.

1) Service revenue in Automotive will increase by 30 percent during 2018

When German car manufacturers Opel first launched in 1863 they made sewing machines, switching to cars in 1899. Peugeot milled corn and then steel for eighty years before turning their hand to cars in 1891. So although it’s sometimes seen as conservative, the auto industry has change woven deep into its DNA. Today’s automotive leaders need to show the same resilience, agility and adaptability so as not to fall behind when their competitors invest in new digitally-driven services.

Take the Schaeffler Group, one of the world’s largest suppliers of bearings, clutches, torque converters and transmission systems to the automotive industry. In 2016 it sold automotive parts worth US $10.88 billion and announced a new digital strategy for its automotive operations. In October 2017 Schaeffler acquired autinity systems GmbH, a German IT company specializing in digital condition monitoring and machine data recording.

Schaeffler CEO Klaus Rosenfeld said to US trade weekly Automotive News, “The scenario we prepare for assumes that in 2030, globally, 30 percent of the 120 million vehicles produced in the world could be purely battery-driven. Change is nothing new to us. We have great experience with changing our product portfolio with new technology.”

And Schaeffler is not alone. One IFS client, a major automotive supplier, recently finalized an important new contract in which it not only produces and supplies parts for the OEM, but collects data from the parts too, using it to carry out aftermarket services for dealers. This includes providing data for spare parts that may be needed for recalls, and completing the spare parts documents directly at the dealers. If it sounds futuristic, think again. The supplier starts implementing the contract in one month’s time. But it is a radically new scenario. Going from just producing components to producing customer schedules, and handling and managing spare parts throughout for the OEM, including warehouse management, requires connected business systems and thinking. But as Klaus Rosenfeld points out, the clock is ticking.

Start today. Tomorrow will be too late: Today’s gasoline cars typically require around 30,000 parts. EV cars require around 10-12,000. Britain and France will both begin phasing out gasoline cars by 2040, Paris has said it will ban gasoline cars in 2030, India wants all EVs by 2030. For manufacturers of components like exhausts (that don’t even exist in EVs), servitization is a lifeline. But they need to start counting backwards from 2020, 2030 and 2040 today — and get ready. It takes time to integrate the kind of enterprise software that will ensure the agility and capacity for this change. Waiting is no longer an option.

2) New lighter, stronger materials like CFRP will be the new silver bullet

What’s it going to be — lightness or safety? And why can’t we have both? Well, we can. But for many years automotive manufacturers have faced a dilemma, as they’ve tried to satisfy conflicting demands: One for lighter vehicles (that produce less CO2 emissions), and another for safer vehicles (that, paradoxically, require heavier components.)

In 2018, we will see an accelerating uptake of a new generation of materials that are lighter and safer — meeting tougher regulatory demands for safer vehicles that simultaneously emit less CO2. Materials like aluminum and high-tensile steel will become standard. And the exceptionally strong, safe engineered plastic CFRP (carbon fiber reinforced plastic), currently used mainly in sports cars, will start to be used more in other vehicles. Also called carbon-fiber laminate, CFRP is made of woven layers of tough, almost pure carbon fibers, bonded by a hardened plastic adhesive like epoxy resin.

Increased RD in CFRP will bring down costs: The new materials are expensive. A new study from Goldman Sachs, Cars 2025, shows CFRP is currently 40 times more expensive per kilo than normal steel. Plus it takes more specialist skills and equipment to produce. But developers are collaborating with universities across Europe on research in new plastic and carbon laminate materials. As uptake in regular vehicles accelerates, costs for high-tensile steels and aluminum could well fall, and ultimately the cost of CFRP too will come down as new production methods emerge. What will not change are regulatory demands on emissions and safety — and these materials are the solution to that.

3) 1 in 4 new cars will be an EV by 2022, and complete electrification could occur by 2027

Recent fluctuations in the fortunes of EVs are important, with 7.7 percent fewer EVs being sold in 2017 than in 2016 (when, famously, sales passed 2 million worldwide). The overall trend toward wider EV uptake is solid. But even in in China, where a strong, central government has legislated clearly for EVs, two major roadblocks remain: a lack of standardized charging stations, and battery capabilities.

China leads in the number of charging stations it has, with approx. 150,000 public charging points, and plans to install enough to support 5 million EVs by 2020. But lack of standardization on the ground presents a big problem for customers. A September 2017 Citylab article dives deep into how China handed out subsidies to a wide range of private companies to build charging stations — the result being that almost every station uses different payment models and takes anywhere from one to eight hours to recharge a vehicle, depending on its operator and which of the dozens of EV manufacturers it serves. One Chinese hybrid consumer said, “I’ve tried charging my car away from home, but couldn’t, either because the charger head would not fit or I had to buy a pre-charged card.”

It’s a clear warning to regulators, government and manufacturers that even in countries where EVs are actively being promoted, without standardized charging, EVs could take longer than previously predicted to reach their market potential. Batteries too remain an issue. Accelerating research into hydrogen fuel cells and recent Japanese government targets to significantly bring down the cost of fuel cells by 2025 are all encouraging. And the business potential for battery development too, estimated currently at US $240 billion, remains huge, and hard fought for. But right now there are no clear winners.

Manufacturers and OEMs need to keep their eyes on the big picture. A McKinsey July 2017 report on the car industry in China found sales of locally produced EVs would grow: “The domestic industry’s growing production share of EVs rose from 18 percent in 2016 to 23 percent in 2017, providing proof that Chinese brands may increase their presence in the EV segment as more car buyers recognize that Chinese carmakers produce acceptable EVs.” And McKinsey continues to keep China at the top of its Electric Vehicle Index. So the time has come for EVs. But batteries and standardized charging remain serious bumps in the road, holding up the speed of development the industry had previously aimed for.

Image Credit: MP_P / Shutterstock

Stefan Issing is the global director for the automotive industries. In his 11 years with IFS, he has been involved with automotive and supply chain management consulting, sales and marketing, and presales for IFS Applications. Stefan holds a diploma degree in computer science from the University of Würzburg, Germany.

Article source: https://betanews.com/2018/01/21/three-game-changers-in-the-automotive-industry-in-2018/

2018 will be critical for Slovakia’s automotive industry, sector representatives claim

This piece has been replaced with a story written by the Spectator’s staff.

Last year, carmakers in Slovakia again exceeded the magical level of one million cars produced, Slovakia still the biggest car producer per capita in the world. But representatives of the automotive sector fear that the accumulated problems regarding the lack of qualified labour, a malfunctioning education system unable to generate a labour force as well as intensifying pressure on higher wages could make Slovakia less attractive for new projects by carmakers. They are pinning their hopes on resolutions, upon which they agreed with the government in late 2017. If these are met, the industry will remain competitive.

“This year will be critical in terms of the sustainability and competitiveness of our economy’s key sector,” said Juraj Sinay, president of the Slovak Automotive Industry Association (ZAP) on January 16, when assessing 2017 in the country’s automotive industry. “If we fail to remove the main barriers in the development of the automotive industry, it won’t be possible to sustain these results for long and this sector’s productivity will take a downward turn.”

Read also:Read also:Automotive industry keeps growing

The automotive industry is one of the pillars of Slovakia’s economy, accounting for 13 percent of its gross domestic product and 35 percent of its exports. It employs, directly as well as indirectly, more than 300,000 people.

The parameters defining Slovakia’s competitiveness for investors within the automotive industry are starting to near their limits, claims ZAP. As a consequence, suppliers of carmakers are pondering the building of new plants outside Slovakia. The absence of qualified labour may significantly affect decision-making by the managers of carmakers’ parent companies about where to place new investments and the extension of existing ones.

ZAP has identified five main barriers for the further development of the sector. The first is the lack of a qualified labour force and the malfunctioning education system failing to generate the labour force for the industrial sector in general. The low number of workers has caused an increase in wages.

ZAP estimates that the automotive industry will need approximately 14,000 workers by 2020. While it originally expected that it will be primary, the dual education scheme followed by the requalification and import of workers from abroad will generate new labour, now seeing foreign workers as the primary source of the labour force to fill the vacancies.

Thus ZAP requires the government simplifying procedures for employing workers from third countries. In the time being this lasts even as much as six months.

The Labour Ministry is planning a change for selected jobs for which companies are unable to find workers and in districts with the jobless rate below 5 percent.

“In such a case labour offices will issue approving stands for the foreigners’ police automatically,” Branislav Ondruš, state secretary of the Labour Ministry told the private TV network Joj. This change should become effective from the start of May.

Other barriers are social conditions, including measures the government is taking within its social packages; the underdeveloped research and development sector; as well as university education and new technologies in mobility, either alternative flows, connectivity or autonomousness so that Slovakia becomes a more suitable environment for their development.

“These five barriers will or could prevent the development of the automotive industry in Slovakia,” said Sinay.

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Article source: https://spectator.sme.sk/c/20739579/carmakers-in-slovakia-produced-more-than-one-million-cars-last-year.html

The unlikely partnerships that are shaping the car industry

Keep abreast of significant corporate, financial and political developments around the world. Stay informed and spot emerging risks and opportunities with independent global reporting, expert commentary and analysis you can trust.

Article source: https://www.ft.com/content/fd96456a-fc2b-11e7-9b32-d7d59aace167

This CEO Is Racing to Be a Leader in the Auto Industry’s Future …

Car lovers will see a vast array of shiny new SUVs, trucks, and luxury cars at the Detroit Auto Show this week. And there will be plenty of talk about the new gadgets coming down the road.

Carlos Ghosn, Chairman and CEO of the Nissan-Renault-Mitsubishi Alliance, is one of the leaders talking about a “huge transformation” coming to the auto industry. Over the next five years, he says the automobile will be transformed from a “transportation device” into a “smart, intelligent mobile space.”

He also predicts that mass market, driverless vehicles will be on the road in four to five years. And he is racing to make sure some of those vehicles will be built by his giant automotive group.

One way he plans to do that is by investing in startups in the auto technology sector. Just days before the Detroit show, he announced a venture capital fund that will invest $1 billion in new developments in electrification, artificial intelligence, connectivity, and autonomy.

“We can’t do everything,” Ghosn says, adding that he’s turning to entrepreneurs because “they bring ideas, services, pieces of technology—things that take too much time for us to do, too much money for us to do.”

At the top of Ghosn’s to-do list is launching 12 electric vehicles by 2022 and moving boldly toward creating an autonomous, self-driving vehicle.

Watch the video above for more of our conversation with Ghosn.

Article source: http://fortune.com/2018/01/19/carlos-ghosn-nissan-renault-mitsubishi/

How does working in motorsport compare to the automotive industry

The motorsport and automotive industries are similar in some respects, and working in either will require a high level of dedication and expertise.

While they are two sides of the same coin, often requiring very similar skills and experience, they often suit very different people. It all depends on what you want from a career and what your skills can be best adapted to.

Both industries are investing heavily in new technologies, prompting a demand for a new generation of staff in tune with new developments or are willing to learn.

Check out the latest jobs available right now

Both industries can provide a stable platform, allowing you to learn on the job with some of the smartest minds in the business. Whether you begin your career in the automotive world or motorsport, all skills developed can be transferred into all areas.

Motorsport Jobs takes a look at how both industries compare and what challenges both of them can offer.

Why would you want to work in motorsport?

Motorsport gives you the opportunity to travel the globe and work with some of the most exciting cars the world has ever seen.

If you want to work in engineering, design or maybe even digital/marketing, motorsport can accommodate everyone’s passion.

Compared to the automotive industry, motorsport is considered the faster and more exciting bigger brother. Motorsport is designed to push the cars to their maximum. Every component on a racing car is designed for the pursuit of speed whereas a normal everyday car has very different demands.

Formula 1 is the first thing that comes to mind when you think of motorsport, but the motorsport community is much larger and more demanding than ever before.

As a global sport, motorsport can be extremely appealing, but the constant travelling can take its toll. Formula 1 especially is a very challenging career to maintain for a long period of time, due to an extensive travel schedule and the relentless demands and pressure.

What is the attraction of working in the automotive industry?

The automotive industry is a complex beast with car manufacturers developing new innovations, creating new jobs and continuously recruiting the next wave of talent.

With the introduction of hybrid energy and the increasing presence of electric cars, the automotive world is moving into an exciting period with new developments and innovations. These new concepts have allowed engineers and designers to expand into a new era of automotive transportation.

Although there are rules and regulations in automotive engineering it is nothing compared to the stringent rules applied in all forms of motorsport. Automotive designers have more freedom in terms of aesthetic appeal, whereas in motorsport only goal is speed and nothing else.

With hundreds of manufacturers continuously producing state of the art cars, demand is high, and companies are always looking to hire new talent.

Article source: https://www.autosport.com/netw/news/133971/racing-or-road-cars--where-to-work

How will a looming auto industry downturn impact Tennessee?

NASHVILLE, Tenn. (OSBORNE)  –  A longtime analyst says one of Tennessee’s largest employers is headed for a downturn.

Nissan, General Motors and Volkswagen all have large assembly plants in Tennessee. Nissan’s North American headquarters is located in Franklin.

Mark Wakefield with the consulting firm Alix Partners has been researching automotive trends for 25 years. He’s predicting the industry will build some 2 million fewer cars and trucks over the next 24 months.

Wakefield says large swings in auto sales are pretty routine, but that doesn’t lessen the sting whenever there’s a downturn.

“This might sound like quite a drop, but historically that’s about a thirteen percent drop and most of the cyclical ups and downs of the auto industry go more around the 15 to 25 percent drop.”

Wakefield says the good news for Tennessee is that its auto assembly plants are all relatively new and so were built to quickly adapt to market changes. He also notes that many local plants are already building the trucks and SUVs Americans prefer.

Looking further into the future, Wakefield says the automotive industry faces some daunting challenges. For example, young people are buying fewer vehicles.

“Below 29 years old are five percent less likely to have a license now than they were in the year 2000 for that generation. And so if you don’t have a license you’re probably not buying a car.”

Mark Wakefield says new technologies are also impact the auto industry. He notes the growing importance of electric vehicles, self-driving vehicles, ride sharing, and networked vehicles. 

Article source: http://wmot.org/post/how-will-looming-auto-industry-downturn-impact-tennessee

Detroit and the Automotive Industry – AZoM

Dr Don Cohen, Principal of Michigan Metrology LLC, talked about how Detroit has served the automotive industry over the last 70 years. His insight explains the evolution of Detroit from manufacturing powerhouse to technology powerhouse.

How did it all start, what made Detroit?

Why are we here in Detroit? Want to know why? Louis XIV, that’s where it all started in 1701. The king commissioned a guy called Cadillac from Montreal to come down the river and the Lakes and establish a fort on the Detroit River. You know what Louis XIV wanted more than anything in 1701? Fur! The beaver, that’s why we’re here – because they had totally destroyed the beaver population in Europe. So it all started in 1701 basically looking for fur. This is how Detroit got started. Detroit is French for ‘strait or narrows’ and I guess as it’s a narrow stretch between two lakes it’s a major crossing point for a lot of the waterways. From an industrial point of view, particularly where there were no trains and no planes and only boats, this is a great place to start a city because of transportation. It’s no surprise that we started as a transportation city for the fur trade, but then developed into the automotive transportation industry.

Tribology: Detroit and the Automotive Industry from AZoNetwork on Vimeo.

What drove the city into automobiles and industry?

We were fortunate enough to have people like Henry Ford who happened to be living here on farms and wanted to build cars. And also because of the lakes and the ability to get ore and other raw materials around and between the different suppliers. When you go through the history of Detroit, you realize that it all started with transportation and the river boats. The automobile really didn’t start until the early 1900s. Before cars this was known for wood. This was a huge lumbering area. The waterways allowed us to take all the trees from the Upper Peninsula and bring them down here. Really, the automotive industry is new here, but we’re tied to the automobile. The automobile is our bread and butter and as that economy comes and goes, that affects us greatly and we’re like a self-defeating entity. We’re trying to build cars that last forever, which probably isn’t a good thing if you’re trying to sell more cars.

The big auto companies – they all started here – then what happened? What happened to Detroit?

I’ve got a great expression for that, borrowed with apologies. In the country of the blind, the one-eyed man is king. To explain, here is what I think happened to Detroit: Detroit was a powerhouse. I mean, following 1945 there was only one manufacturing center in the world and that was Detroit, right here, in the United States. The city took off like crazy. The growth was phenomenal. The City of Detroit, I think at its peak, had over two million people living there. It was no big deal to grow up in a city neighborhood, and right down the street is where you worked. The city was a big factory and all the suppliers were all probably millionaires, making springs and clips and whatever it was that went into the car. That was just part of the life here. You never left more than a few square miles and you had all you needed. You had the whole world economy right there. Then, we took our eye off the ball. We lost sight of worldwide competition. As the world recovered after the War, by the ’60s and ’70s, Japan came on strong. Essentially, Japan made a better product at a lower cost and that’s how business works. The center of capitalism got a real dose of its own dogma. If you build a better product at a lower price, people are going to buy it and if you snooze you lose. Detroit lost its market share to the competition.

Who are the major competitors?

The American market is huge and we’ve got a lot of great technology here, but when it goes real high end it seems to be Europe. The whole concept of really high-end automotive engineering starts in Europe. When you go to mass production and incredible quality, high-volume, it’s Asia. Unfortunately, Detroit is right in the middle and that’s what happened in the ’60s and ’70s. If you wanted a real high-end car, it was the Mercedes. If you wanted a lower end cheap car, it was Toyota, and Detroit got squeezed. We thought we were invincible, but you build a better product at a lower price and you get a lesson.

How has Detroit managed to make a comeback?

Well, let me tell you what’s happened in Detroit in the last 20-years. I grew up here, I was born here. I left in the ’70s, came back in the ’90s. When I left, it was the worst of times. It was the mid to late ’70s. The Japanese were here, and there were all kinds of bad stuff going on in the streets. We were seeing the decline of Chrysler. But we didn’t realize that 20 or 30 years later we were going to see GM and Chrysler go bankrupt. We didn’t learn all that much. There’s a lot of political reasons and I won’t get into all that. But now Detroit has morphed into another world capital of automotive ─ but I wouldn’t want to say it’s strictly American. I think there was statistic out that the car in America, that’s built with most American parts, is actually a Toyota! It’s not an American car. Now, in Detroit you see the world tech centers for Toyota and Nissan. The area has changed because we are now a global center for automotive engineering. Sure, we still have the North American Automotive Market, which is like some 15 million cars a year, so who wouldn’t want to be here, right, whether you’re European or Asian! We have seen Detroit change from being just an American car company place to a worldwide car company place, and that’s where we are now. We had to respond and we can compete.

Would you say that’s because, other than those two big US companies, it’s all the supplier companies?

Well yes, to a degree. If you think about the infrastructure that’s here in terms of making a car. It’s amazing. The infrastructure is phenomenal since it’s been here for over 100 years. Whatever it is that you need to build a car, suppliers are literally right down the street from you. Also, your customers are right here as well. I mean, this is a big part of the country, the Midwest. This is a great place to be if you’re in the automotive industry. Why would you be anywhere else? That’s the main reason ─ the infrastructure is phenomenal. For example, are you familiar with Roush racing? It’s a big NASCAR racing team. Jack Roush lives in Detroit. He grew up here. He’s a math major from Eastern Michigan. He’s also a very successful entrepreneur and he’s into cars. Roush Industries does nothing but advance technology for the auto industry, and it’s all in this area of Lavonia ─ and NASCAR is one of his hobbies. I mean that’s kind of how it is, that’s Detroit. People don’t know about it. One of my friends says, “It’s just a very unsung place. There’s no Steve Jobs of Detroit,” but there’s thousands of people like Steve Jobs here. You just don’t know it.

How will Detroit manage in the future?

Transportation is really what Detroit’s driven by. Automobiles happen to be a key area and currently we’re getting more and more into other aspects of transportation. We have to constantly reinvent ourselves and create more value for our customers. As you see it now, the morphing that’s going on. We’re moving away from being a car city to a transportation city. Focusing on the concept of transportation, that’s why you see the various automobile companies getting involved in companies like Uber and Lyft and buying up these technology disrupters. Because we provide transportation we have to evolve, and I’m sure we will be building other modes of transportation as we progress. For example, you may not know the history of this, but the Ford Motor Company used to make airplanes in the early days. During World War II, most of the bombers were built not more than 20 miles from here, in Ypsilanti.

How do you fit into the new Detroit and has it changed you?

At Michigan Metrology, and at Bruker, we do a lot in transportation as the automobile in particular has all kinds of technology. And all that technology is driven by three things: styling, safety, and warranty or reliability, and that touches all kinds of material science. I spend my life measuring 3D surface texture. For the last 30 years I have been measuring an area one millimeter by one millimeter by about 100 microns to 500 microns tall. I’ve made a life out of that small volume of space because there’s so much that goes on in that space related to the automotive industry. Be it a piston ring interface, to the way your fingers feel on the steering wheel. All that relates to the surface finish. I remember when we never thought about gas mileage out here. Everything was power cars and muscle cars. We weren’t so sensitive to the cost of gas. But now there are two drivers, emissions and also miles per gallon. These things drive what we do and we start to be concerned about solder bores and surface finishing on an engine and the ring sliding up and down, the lubricants and related engine issues. This takes us to surface metrology and mechanical tester stuff─friction, wear, and lubrication. The thing is, I don’t think from what I’ve read these are what drives the buyer so much. The buyer still looks majorly at styling, safety, and warranty. The environmental considerations, they have by law, and they expect better mileage anyway, now that the price of gas has gone up. That’s kind of it.

Learn about the instruments in Don’s Lab

NPFLEX Optical Profiler

TriboLab Mechnical Tester

About Donald K. Cohen Ph.D

Dr. Cohen has an undergraduate degree in Physics from the University of Michigan – Dearborn and graduate degrees in Physics and Optical Sciences from the University of Arizona. Early in his career, Dr. Cohen worked with IBM on optical disk drive development. He later joined WYKO Corporation as Product Manger and finally Vice President, developing 3D surface texture metrology instrumentation. In 1994, Dr. Cohen established Michigan Metrology,LLC to help engineers and scientist solve problems related to “leaks, squeaks, friction, wear, appearance, adhesion and other issues”, using 3D Surface MicroTexture Measurement and Analysis.  

Disclaimer: The views expressed here are those of the interviewee and do not necessarily represent the views of AZoM.com Limited T/A AZoNetwork the owner and operator of this website. This disclaimer forms part of the Terms and conditions of use of this website.

Article source: https://www.azom.com/article.aspx?ArticleID=15060

Auto industry to provide 30000 new jobs in 2018

KUALA LUMPUR: The automotive industry is expected to offer almost 30,000 new jobs in the country this year.

Minister of International Trade and Industry (MITI) Datuk Seri Mustapa Mohamed said this is due to the growth of the automotive industry, especially in the parts and component making sector.

“Since the NAP2014(National Automotive Policy 2014) was announced, 27,125 jobs were created as at December 2017.

“This signifies the increasing perception that the automotive industry is a sector of career choice for school leavers and graduates, with 29,641 new jobs expected to be created in 2018,” Mustapa said when briefing the media about the updates of the Automotive Industry in 2017 and Outlook in 2018 held at his office here.

He added this is because the MAI2014 has developed a certified human capital programme which allows for faster penetration of skills into the industry.

Mustapa added the MAI2014 also managed to address the pertinent issue of foreign worker replacement among industry players in the country.

“Some 23,444 foreign workers were replaced since the introduction of MAI2014.

“Although we don’t deny that we still need their service, the important thing is we managed to address this issue and we can all look forward from here,” he said.

Mustapa said the Malaysian Automotive Institute (MAI), which is an agency under his ministry, saw an increase of 7.1% exports for parts and components this year.

He said the production of Energy Efficient Vehicles (EEV) has increased by 24.6% (from 247,912 units in 2016 to 308,807 units in 2017) while the EEV penetration in the country has increased by 9.2% (from 42.8% in 2016 to 52% in 2017).

Meanwhile, Mustapa also launched the Malaysian Autoshow 2018 which will be held at the Malaysian Agro Exposition Park Serdang ( MAEPS) from 26 to 29 April this year.

The theme of this year’s auto show is “360degree Mobility Experience” which will feature a deeper experimental immersion for visitors in the area of intelligent mobility and transportation systems.

Article source: http://www.thesundaily.my/news/2018/01/18/auto-industry-provide-30000-new-jobs-2018

Planemaker joins forces with auto-industry supplier Adient

By Julie Johnsson / Bloomberg

Fed up with delays that have plagued production of luxurious jetliner cabins, Boeing Co. is forming its own company with a major seat supplier to the auto industry.

The joint venture with Adient Plc will be based near Frankfurt, Germany, along with a technology center and an initial production plant, the companies said in a statement Tuesday. It will market seats to airlines and leasing companies that are ordering new planes and retrofitting older ones.

The strategy furthers Boeing’s foray into so-called vertical integration as Chief Executive Officer Dennis Muilenburg seeks to bring more work back in-house. That’s a reversal of the global outsourcing that dominated strategy at the Chicago-based planemaker a decade ago, when the company was building the first 787 Dreamliner.

Boeing said the Adient Aerospace venture was prompted by seat production foul-ups and a capacity crunch that have delayed jet deliveries and frustrated airlines. United Continental Holding Inc.’s premium Polaris seats were slow to make their debut on the Boeing 777-300ER last year when Zodiac Aerospace fell behind schedule.

“Seats have been a persistent challenge for our customers, the industry and Boeing, and we are taking action to help address constraints in the market,” Kevin Schemm, a Boeing senior vice president of supply chain management, finance and business operations, said in the statement.

Boeing, the biggest gainer last year and so far this year on the Dow Jones Industrial Average, fell less than 1 percent to $333.76 after the close of regular trading in New York. Adient tumbled 5.1 percent to $78 after the company said in a regulatory filing that first-quarter results would be hurt by hurdles in its seat structures and mechanisms business.

Possible Tension

The move risks adding tension to the sometimes fraught relationships between Boeing and some of its largest suppliers. Safran SA, which makes engines for Boeing’s 737 Max through a joint venture with General Electric Co., is taking over Zodiac.

Rockwell Collins Inc., a long-time supplier of radio and flight displays to Boeing, last year bought B/E Aerospace Inc., the largest cabin-equipment supplier. United Technologies Corp. later struck a deal to acquire Rockwell, a deal aimed at gaining bargaining clout with Boeing and rival Airbus SE.

Adient, a titan in the $70 billion automotive-seating business, has been hinting at a closer relationship with Boeing since the companies announced a collaboration last March. Boeing Vice Chairman Ray Conner, a former chief of its commercial airplane division, is on Adient’s board. The Plymouth, Michigan-based company was spun off from Johnson Controls International Plc in 2016.

Potential ‘Disruptor’

With 230 plants worldwide, Adient sees itself as a potential “disruptor” in the aircraft seating realm, Mark Oswald, vice president of investor relations, said at a conference in September. “The customers aren’t excited about the current supply base,” he said. When Adient was approached, a board member “was very influential” in spurring it to look at the opportunity, he said.

The two companies, in particular, are eyeing complex, lie-flat seats that can cost as much as a Ferrari. “The front-of-a-plane business, full-flat business class is kind of our initial entree,” Adient Chief Executive Officer Bruce McDonald said at a conference in August.

Adient is the majority owner of the venture with a 50.01 percent stake to Boeing’s 49.99 percent share. The company’s initial customer-service center will be in Seattle, where Boeing already has a hub catering to airlines shopping for cabin fittings. Spare parts for the seats will be sold through Boeing’s Aviall subsidiary.

By sourcing its own seats along with other aircraft components, Boeing gains greater control over quality, intellectual property and high-margin aftermarket sales — the main source of profit for aerospace suppliers. The company has expanded its reach into avionics, additive manufacturing, actuators and engine covers known as nacelles.

— With assistance by Craig Trudell


Article source: https://www.heraldnet.com/business/planemaker-joins-forces-with-auto-industry-supplier-adient/

Detroit and the Automotive Industry

Dr Don Cohen, Principal of Michigan Metrology LLC, talked about how Detroit has served the automotive industry over the last 70 years. His insight explains the evolution of Detroit from manufacturing powerhouse to technology powerhouse.

How did it all start, what made Detroit?

Why are we here in Detroit? Want to know why? Louis XIV, that’s where it all started in 1701. The king commissioned a guy called Cadillac from Montreal to come down the river and the Lakes and establish a fort on the Detroit River. You know what Louis XIV wanted more than anything in 1701? Fur! The beaver, that’s why we’re here – because they had totally destroyed the beaver population in Europe. So it all started in 1701 basically looking for fur. This is how Detroit got started. Detroit is French for ‘strait or narrows’ and I guess as it’s a narrow stretch between two lakes it’s a major crossing point for a lot of the waterways. From an industrial point of view, particularly where there were no trains and no planes and only boats, this is a great place to start a city because of transportation. It’s no surprise that we started as a transportation city for the fur trade, but then developed into the automotive transportation industry.

Tribology: Detroit and the Automotive Industry from AZoNetwork on Vimeo.

What drove the city into automobiles and industry?

We were fortunate enough to have people like Henry Ford who happened to be living here on farms and wanted to build cars. And also because of the lakes and the ability to get ore and other raw materials around and between the different suppliers. When you go through the history of Detroit, you realize that it all started with transportation and the river boats. The automobile really didn’t start until the early 1900s. Before cars this was known for wood. This was a huge lumbering area. The waterways allowed us to take all the trees from the Upper Peninsula and bring them down here. Really, the automotive industry is new here, but we’re tied to the automobile. The automobile is our bread and butter and as that economy comes and goes, that affects us greatly and we’re like a self-defeating entity. We’re trying to build cars that last forever, which probably isn’t a good thing if you’re trying to sell more cars.

The big auto companies – they all started here – then what happened? What happened to Detroit?

I’ve got a great expression for that, borrowed with apologies. In the country of the blind, the one-eyed man is king. To explain, here is what I think happened to Detroit: Detroit was a powerhouse. I mean, following 1945 there was only one manufacturing center in the world and that was Detroit, right here, in the United States. The city took off like crazy. The growth was phenomenal. The City of Detroit, I think at its peak, had over two million people living there. It was no big deal to grow up in a city neighborhood, and right down the street is where you worked. The city was a big factory and all the suppliers were all probably millionaires, making springs and clips and whatever it was that went into the car. That was just part of the life here. You never left more than a few square miles and you had all you needed. You had the whole world economy right there. Then, we took our eye off the ball. We lost sight of worldwide competition. As the world recovered after the War, by the ’60s and ’70s, Japan came on strong. Essentially, Japan made a better product at a lower cost and that’s how business works. The center of capitalism got a real dose of its own dogma. If you build a better product at a lower price, people are going to buy it and if you snooze you lose. Detroit lost its market share to the competition.

Who are the major competitors?

The American market is huge and we’ve got a lot of great technology here, but when it goes real high end it seems to be Europe. The whole concept of really high-end automotive engineering starts in Europe. When you go to mass production and incredible quality, high-volume, it’s Asia. Unfortunately, Detroit is right in the middle and that’s what happened in the ’60s and ’70s. If you wanted a real high-end car, it was the Mercedes. If you wanted a lower end cheap car, it was Toyota, and Detroit got squeezed. We thought we were invincible, but you build a better product at a lower price and you get a lesson.

How has Detroit managed to make a comeback?

Well, let me tell you what’s happened in Detroit in the last 20-years. I grew up here, I was born here. I left in the ’70s, came back in the ’90s. When I left, it was the worst of times. It was the mid to late ’70s. The Japanese were here, and there were all kinds of bad stuff going on in the streets. We were seeing the decline of Chrysler. But we didn’t realize that 20 or 30 years later we were going to see GM and Chrysler go bankrupt. We didn’t learn all that much. There’s a lot of political reasons and I won’t get into all that. But now Detroit has morphed into another world capital of automotive ─ but I wouldn’t want to say it’s strictly American. I think there was statistic out that the car in America, that’s built with most American parts, is actually a Toyota! It’s not an American car. Now, in Detroit you see the world tech centers for Toyota and Nissan. The area has changed because we are now a global center for automotive engineering. Sure, we still have the North American Automotive Market, which is like some 15 million cars a year, so who wouldn’t want to be here, right, whether you’re European or Asian! We have seen Detroit change from being just an American car company place to a worldwide car company place, and that’s where we are now. We had to respond and we can compete.

Would you say that’s because, other than those two big US companies, it’s all the supplier companies?

Well yes, to a degree. If you think about the infrastructure that’s here in terms of making a car. It’s amazing. The infrastructure is phenomenal since it’s been here for over 100 years. Whatever it is that you need to build a car, suppliers are literally right down the street from you. Also, your customers are right here as well. I mean, this is a big part of the country, the Midwest. This is a great place to be if you’re in the automotive industry. Why would you be anywhere else? That’s the main reason ─ the infrastructure is phenomenal. For example, are you familiar with Roush racing? It’s a big NASCAR racing team. Jack Roush lives in Detroit. He grew up here. He’s a math major from Eastern Michigan. He’s also a very successful entrepreneur and he’s into cars. Roush Industries does nothing but advance technology for the auto industry, and it’s all in this area of Lavonia ─ and NASCAR is one of his hobbies. I mean that’s kind of how it is, that’s Detroit. People don’t know about it. One of my friends says, “It’s just a very unsung place. There’s no Steve Jobs of Detroit,” but there’s thousands of people like Steve Jobs here. You just don’t know it.

How will Detroit manage in the future?

Transportation is really what Detroit’s driven by. Automobiles happen to be a key area and currently we’re getting more and more into other aspects of transportation. We have to constantly reinvent ourselves and create more value for our customers. As you see it now, the morphing that’s going on. We’re moving away from being a car city to a transportation city. Focusing on the concept of transportation, that’s why you see the various automobile companies getting involved in companies like Uber and Lyft and buying up these technology disrupters. Because we provide transportation we have to evolve, and I’m sure we will be building other modes of transportation as we progress. For example, you may not know the history of this, but the Ford Motor Company used to make airplanes in the early days. During World War II, most of the bombers were built not more than 20 miles from here, in Ypsilanti.

How do you fit into the new Detroit and has it changed you?

At Michigan Metrology, and at Bruker, we do a lot in transportation as the automobile in particular has all kinds of technology. And all that technology is driven by three things: styling, safety, and warranty or reliability, and that touches all kinds of material science. I spend my life measuring 3D surface texture. For the last 30 years I have been measuring an area one millimeter by one millimeter by about 100 microns to 500 microns tall. I’ve made a life out of that small volume of space because there’s so much that goes on in that space related to the automotive industry. Be it a piston ring interface, to the way your fingers feel on the steering wheel. All that relates to the surface finish. I remember when we never thought about gas mileage out here. Everything was power cars and muscle cars. We weren’t so sensitive to the cost of gas. But now there are two drivers, emissions and also miles per gallon. These things drive what we do and we start to be concerned about solder bores and surface finishing on an engine and the ring sliding up and down, the lubricants and related engine issues. This takes us to surface metrology and mechanical tester stuff─friction, wear, and lubrication. The thing is, I don’t think from what I’ve read these are what drives the buyer so much. The buyer still looks majorly at styling, safety, and warranty. The environmental considerations, they have by law, and they expect better mileage anyway, now that the price of gas has gone up. That’s kind of it.

Learn about the instruments in Don’s Lab

NPFLEX Optical Profiler

TriboLab Mechnical Tester

About Donald K. Cohen Ph.D

Dr. Cohen has an undergraduate degree in Physics from the University of Michigan – Dearborn and graduate degrees in Physics and Optical Sciences from the University of Arizona. Early in his career, Dr. Cohen worked with IBM on optical disk drive development. He later joined WYKO Corporation as Product Manger and finally Vice President, developing 3D surface texture metrology instrumentation. In 1994, Dr. Cohen established Michigan Metrology,LLC to help engineers and scientist solve problems related to “leaks, squeaks, friction, wear, appearance, adhesion and other issues”, using 3D Surface MicroTexture Measurement and Analysis.  

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