Auto supply chain more environmentally friendly since recession

An industry transformation has occurred in the 10 years since the economic crash of 2008, when automakers and suppliers alike were facing layoffs, bankruptcies and an unclear future.

The North American auto industry is now heavily invested in more environmentally conscious products, lower-emission vehicles, components made of lighter-weight materials, vehicle systems that siphon off less engine power, and a widespread adoption of electric technologies and more efficient factory processes.

From the anguish and ashes of 2008 arose a decade of the greening of the auto industry.

At the moment, political uncertainties are hovering over the industry effort. The Trump administration has taken steps to ease off the drive, offering lower fuel-efficiency regulatory targets that could influence technology strategies in the years ahead. But in interviews with suppliers across the industry over the past two years, it is apparent that companies are determined to keep up their push to greener vehicles.

“Making products with increased fuel efficiency or lower emissions is just good business,” says BorgWarner spokeswoman Kathy Graham. “Eight or 10 years ago, fuel economy came at about 25th on the list of customer needs and wants. Since the recession, customers are asking for better fuel efficiency and lower emissions. The future is in being sustainable.”

BorgWarner moved into numerous new green technologies after the recession. Its “cam torque actuated” variable cam timing system, which launched in the Subaru Forester in 2011, helped Subaru meet U.S. super ultra low emissions vehicle standards. In 2016, BorgWarner invested in its plant in Water Valley, Miss., to produce its Eco-Launch hydraulic accumulator and solenoid valves, which enabled fast and smooth engine restarts for Cadillac’s new fuel-saving stop-start engine systems.

$63 billion

{{title}}


{{abstract}}

Read more >

{{/content}}

The industry’s 10-year transformation has been huge.

Since 2008, automakers have spent more than $63 billion to upgrade and modernize 100 auto plants, with $12 billion more in investments planned through 2020. Much of that commitment has been aimed at improving fuel-economy strategies, such as Ford Motor Co.’s overhaul of its truck factory in Louisville, Ky., to build its popular F-150 pickups with aluminum bodies, or Nissan Motor Co.’s investment to put the electric Leaf into production in Smyrna, Tenn.

Suppliers followed suit.

A report published this year by a partnership of environmental and union interests calculated that one-third of American auto industry manufacturing and engineering jobs rely on producing green products.

“Building clean vehicle technology directly supports 288,000 manufacturing and engineering jobs in the United States,” reported the joint study by Natural Resources Defense Council and the BlueGreen Alliance, a consortium of labor unions and environmental advocates.

The jobs are at more than 1,200 factories and engineering facilities in 48 states, the report concluded. The authors conducted the research to illustrate the point that the industry’s pursuit of greener parts and vehicles was not merely an environmental effort, but also an economic one.

Arconic invested $275 million and created 200 jobs to increase production of automotive-grade aluminum sheet at its rolling mill in Alcoa, Tenn., and $300 million to upgrade its Davenport, Iowa, facility where that aluminum is customized to facilitate bonding between aluminum automotive components.

Ford’s Cleveland Engine plant in Brook Park, Ohio, which has been building engines for Ford vehicles since 1952, changed over to Ford’s efficient EcoBoost family of engines along the way. By combining a smaller engine displacement with advanced turbocharging, gasoline direct injection and variable valve timing, the engines provided better fuel economy and often greater power and performance. Since introducing the line in 2009, Cleveland Engine has produced more than 1 million EcoBoost units.

Nearby, at ArcelorMittal’s giant integrated steel mill in Cleveland, the steel supplier began producing lightweight, high-strength steel to compete with aluminum. The upgrade helped rescue the century-old facility.

“After the crash in 2008, our plant was idle,” says Dan Boone, vice president of United Steelworkers 979 and a senior operating technician in the hot mill, who has worked in the plant for 46 years.

“We had about 250 people working, basically just to maintain the plant. We were served a WARN notice, a federal requirement when you do mass layoffs,” referring to the Worker Adjustment and Retraining Notification Act.

But in 2009, Cleveland was charged with coming up with the ability to cast and produce advanced high-strength steel. The plant reopened with 80 percent new hires, Boone says. Now the workforce is 2,000 people.

A bigger picture

Evolving U.S. customer preferences have played a role as well. More than 60 percent of F-150 pickup truck buyers have chosen an EcoBoost engine since the option became available in 2011.

But suppliers know that they now compete in a global market of green technologies.

“If you’re not focused on this in today’s environment, you’re behind the curve,” says auto industry consultant Bill Diehl, managing director at KPMG.

“China has very stiff penalties with a very aggressive timing each year on how much of your fleet has to be electric,” he says. “The U.S. is quite a ways down, as far as prioritizing electric vehicles. But since it’s a global market, the domestic automakers are all focused on electric — not because it’s going to hit the U.S. tomorrow, but because they have to service China and Europe.”

United Steelworkers spokesman Tony Montana puts the decade of transformation into perspective.

“In 10 short years, enforceable fuel-efficiency standards have increased the fuel efficiency of the average vehicle on the street today by 25 percent,” Montana says. “Is that going to stop global climate change? Probably not. But what it did do was act as a catalyst for American auto manufacturers and the companies that supply them to dig deeper, think outside the box, and find ways to make cars and trucks more fuel-efficient.”

Source link

Facebook Comments