24 avril 2008
Automotive decline could be deeper than expected
North American motor vehicle production dropped 9% during the first quarter due to the overall drop in consumer spending and the ongoing strike at parts supplier American Axle & Manufacturing Holdings, suggests analyst David Leiker at Baird Research.
This explains why bookings are in disarray for makers of automotive-grade plain and zinc-coated steel, common alloy aluminum sheet, copper wiring harnesses and lead for batteries. About 3,600 United Auto Workers union members have been on strike at American Axle's five U.S. facilities since Feb. 26. American Axle makes axles, drive shafts, stabilizer bars and other components for automakers.
The auto assembly cutback is much higher than the 5% forecast earlier by numerous automotive analysts and is pinned to weaker-than-expected sales. The Detroit News this week reported that “automotive sales are falling harder and faster this year than anyone anticipated because of a toxic combination of factors not seen since the oil shock of the 1980s”—citing a weak economy, sagging consumer confidence, record-high gasoline prices and hard-to-get credit.
Automakers, consultants and financial analysts have been cutting their forecasts after the weaker-than-expected start to the year. But they have not arrived at a consensus about this sales slump because it defies the usual patterns. "It's an unusual downturn. It's probably the deepest since the 1980s, but technically, this is still not a recession," Jesse Toprak, director of market analysis at online automotive research site Edmunds.com tells the Detroit newspaper. “Nothing like this has ever happened before.”
Economists Carlos Gomes at Scotiabank.com tells Purchasing.com this morning that “the deterioration in the auto marketplace probably will continue until summer,” when his forecast suggests stabilization and a slight pickup in assembly and sales in the fourth quarter. However, he still sees a 5% slide in U.S. and Canadian motor vehicle sales for 2008 to 15.3 million units from 16.1 million in 2007.
Normally, in a weakening economy, demand for oil falls and prices subside. And interest-rate cuts usually encourage banks to lend more generously, enabling consumers to keep spending. But this time, there's no such relief to encourage car buyers. Oil prices keep rising, pushed by strong demand in huge emerging economies such as China. In the United States, the impact of high gas prices has been magnified this time around because light trucks make up half the market.
And the Detroit Free Press says that Ford Motor Co. is forecasting a drop-off in industrywide sales of minivans to a 23-year low this year while large pickups decline to the fewest in a decade as more consumers turn to smaller cars. Minivan sales may drop below 600,000 for the first time since 1985 and large pickups may slide to fewer than 2 million, a level they have topped annually since 1998, says George Pipas, Ford sales analyst. Pickup sales have been hurt by a declining housing market.
27 avril 2007
Making China your second home market: An interview with the CEO of Danfoss
* In an interview, Danfoss CEO Jørgen M. Clausen discusses the challenges of making China this industrial-control company's "second home market."
* After glimpsing Greater China's many business opportunities on a journey through the old Silk Road, Clausen launched a strategy to achieve market shares similar to those Danfoss holds in Europe.
* Establishing R&D centers in China and acquiring local companies, Clausen says, is the way to address the key challenge: widening the company's product range to include products designed for the huge mass market. * Clausen explains that Danfoss aggressively protects its intellectual property, lobbies government officials tirelessly, and trains Chinese managers to speak their minds.
This article includes the following exhibit:
* Biography of Danfoss's Jørgen M. Clausen
19 avril 2007
Manufacturing gets in gear
By Maria Varmazis
Purchasing
April 5, 2007
Bosch and Timken team up for improved steel
Over the next two years, Sunnyvale, Calif.-based Spansion, currently the largest global supplier of NOR flash, will roll out a roadmap to reorganize operations and speed up information transfer along the supply chain. While still in the implementation stage of this rollout, executive vice president of operations Jose Mejia, and vice president of supply chain management Wilhelm Sterlin, both say that getting their manufacturers integrated in supply chain operations is a big part of Spansion’s operational overhaul that will take place in the next two years.
“We are revving up the ability of the manufacturing organization to move faster in providing supplies,” says Sterlin. “We’re connecting our applications areas with our final manufacturing organizations as well as connecting procurement in a much tighter manner with the needs of the manufacturing engines.” Sterlin and Mejia say this paradigm shift is all part of an effort to change the perception of the semiconductor fab as a time sink that the entire supply chain has to “plan around.”
With a wide global supply and customer base, Mejia believes increased communication between semiconductor fabrication nodes will allow for decreased leadtimes and greater flexibility in project prioritization. Part of the plan to get these nodes to exchange production information more quickly uses technology to the best possible advantage. Spansion is rolling out E2Open software, which will provide work-in-progress tracking as well as finished goods inventory. “Spansion expects to gain significant process efficiencies from implementing an integrated inventory management system across Spansion’s internal and external supply chain,” says vice president of business process integration Michael Lipsey.
Changes in the supply chain communications won’t just affect collaboration at the manufacturing level, but it’s one of the areas where the changes will have some of the greatest impact. Mejia says given the fluctuations in product demand for semiconductors, it’s a long-term cost-savings effort to get information to manufacturers more quickly so they can be more responsive to demand variations.
“The faster that information is sent the faster the collaboration takes place around where we should prioritize material or what kind of devices we might need,” says Mejia. “You need to have an infrastructure that can respond quickly, and the only way to get that is to allow my fabs to know what’s going on out in the field in a matter of minutes rather than days, weeks, or months later.”
Increasing flexibility and responsiveness in the supply chain is not a new strategy, says supply chain management vice president Sterlin, and leveraging new software is just one part of the two-year program Spansion is rolling out. The general roadmap is still in the fundamental stages, but Sterlin says it involves keeping his suppliers as close by as possible. Some of his global suppliers have offices in the same building, which aids in fast and regular collaborations. “I want to have my vendors at my fingertips. I’ll make sure they’re very close by,” says Sterlin.
Spansion steps up response times
over the next two years, Sunnyvale, Calif.-based Spansion, currently the largest global supplier of NOR flash, will roll out a roadmap to reorganize operations and speed up information transfer along the supply chain. While still in the implementation stage of this rollout, executive vice president of operations Jose Mejia, and vice president of supply chain management Wilhelm Sterlin, both say that getting their manufacturers integrated in supply chain operations is a big part of Spansion’s operational overhaul that will take place in the next two years.
“We are revving up the ability of the manufacturing organization to move faster in providing supplies,” says Sterlin. “We’re connecting our applications areas with our final manufacturing organizations as well as connecting procurement in a much tighter manner with the needs of the manufacturing engines.” Sterlin and Mejia say this paradigm shift is all part of an effort to change the perception of the semiconductor fab as a time sink that the entire supply chain has to “plan around.”
With a wide global supply and customer base, Mejia believes increased communication between semiconductor fabrication nodes will allow for decreased leadtimes and greater flexibility in project prioritization. Part of the plan to get these nodes to exchange production information more quickly uses technology to the best possible advantage. Spansion is rolling out E2Open software, which will provide work-in-progress tracking as well as finished goods inventory. “Spansion expects to gain significant process efficiencies from implementing an integrated inventory management system across Spansion’s internal and external supply chain,” says vice president of business process integration Michael Lipsey.
Changes in the supply chain communications won’t just affect collaboration at the manufacturing level, but it’s one of the areas where the changes will have some of the greatest impact. Mejia says given the fluctuations in product demand for semiconductors, it’s a long-term cost-savings effort to get information to manufacturers more quickly so they can be more responsive to demand variations.
“The faster that information is sent the faster the collaboration takes place around where we should prioritize material or what kind of devices we might need,” says Mejia. “You need to have an infrastructure that can respond quickly, and the only way to get that is to allow my fabs to know what’s going on out in the field in a matter of minutes rather than days, weeks, or months later.”
Increasing flexibility and responsiveness in the supply chain is not a new strategy, says supply chain management vice president Sterlin, and leveraging new software is just one part of the two-year program Spansion is rolling out. The general roadmap is still in the fundamental stages, but Sterlin says it involves keeping his suppliers as close by as possible. Some of his global suppliers have offices in the same building, which aids in fast and regular collaborations. “I want to have my vendors at my fingertips. I’ll make sure they’re very close by,” says Sterlin.
On paper it all looked good. Automotive supplier Robert Bosch North America was developing a fuel injector system for diesel engines and, as part of that process needed to machine steel for the part. Bosch wrote a spec for the low-alloy steel and steel supplier Timken Co. provided the steel as requested.
But it didn't work. The hot-rolled annealed steel was difficult to machine at the Bosch plant in Charleston, S.C., and was creating excessive metal buildup on the edges of the tool, impacting quality of the final product.
"Our specification was drawn up based on what appeared to be acceptable both from a machining and performance standpoint," says Wilt Staples, purchasing engineering at Bosch. "But as time went on, when the product was introduced to the higher volumes and higher speed machines and other equipment changes, it became apparent that our specification was too broad. Problems developed in machining."
The problems puzzled the supplier, Timken just as much as Bosch's team. "We were producing a soft annealed material for Bosch and we couldn't understand why they were having trouble machining it," recalls Dave Henderson, a metallurgical engineer with Timken. "But that's where the close relationship between buyer and supplier comes in. It's sometimes difficult to capture it all in the specification—they're difficult to write and interpret."
Rather than go back out to the market to put the project out to bid, Bosch focused on a deeper collaboration with Timken to help solve the problem. Staples presented the problem first to a team at Timken's plant in Canton, Ohio. Timken then assembled a team that visited Bosch's facility in Charleston to watch the process and ask a lot of questions.
A machine expert in Timken's technical services group helped determine that it was the high surface-to-core hardness gradient that made it difficult to machine. Timken actually needed to increase the hardness of this material to help Bosch improve its machining because it could be machined at a lower temperature, Henderson says. "Usually, you think if it's softer you can machine it better. We needed to increase the hardness to improve the machinability in this case. So that meant we had to change the process."
Timken presented Bosch with a product created through a hot-rolled temper process, which would produce steel that would machine more effectively during Bosch's heat-treatment process.
From there, a sample was developed and tested extensively in Bosch's production process. Staples and a team from Bosch visited Timken several times and vice versa. "The personal interactions and being able to see the processes at the other side is very important to developing ideas and strategies," says Henderson.
But before giving it the final green light, Bosch conferred with its primary customer on the project to ensure the new process and the end-product would meet their needs.
"Timken worked with us very closely through the entire process," Staples says. "The key to this project was their taking the time to understand our situation and our taking the time to explain in detail what our issue was and what we needed to achieve. There is rarely going to be a perfect relationship. To be able to make adjustments requires give and take on both ends. Sometimes it's a learning experience—we don't always have the best ideas."
—David Hannon
InStron emphasizes collaboration
When it came time to redesign a product at Norwood, Mass.-based InStron, Global Procurement Director Tom Murphy knew he had to pull all his available resources together to come up with the best solution. This meant purchasing sat down with both design engineers as well as external manufacturers to collaborate on all the details.
"We have a handset that controls the end product, and that's built by a contract manufacturer," says Murphy. "We're involving them with the design decisions of which switches we might use, how we might design the printed circuit boards and the skins. They're in there from start to finish."
This tactic of getting manufacturers involved in planning pays dividends. Murphy says the process allows for manufacturers and design engineers to give him the most cost-effective solution to a design issue, while the contract manufacturers improve their customer relationships and design engineers keep the product to specifications. If in-house manufacturers are making the product, they too are brought in to collaboration meetings. It's all part of the development process at InStron, which changed about four years ago, to make sure "the design is as good as it can be getting out of the gate," Murphy says.
When a product requirement comes in, Murphy calls the meeting with design and manufacturing to get the collaboration started as early as possible. If the manufacturer cannot make the product, purchasing knows ahead of time, avoiding later surprises. Most of the time, however, the meetings confirm that the manufacturer can make what engineering needs.
For the handset, purchasing, engineering and manufacturing are about halfway through their planning process for a new product. But already they've decided to change the switch technology and plastics in the component as well as add an organic LED display—all at the same cost as the old version.
It can take a bit of juggling to get all involved coordinated enough to come together to discuss design plans, even when the work is being done internally. And not everyone sees eye to eye when it comes time to critique design plans.
Despite the difficulties working together can bring to product design reviews, Murphy believes the change in corporate mindset from isolation to collaboration is worth it. "In the old days what used to happen is engineering would just design the parts, throw them over the fence and we would have to deal with it, and that doesn't happen here anymore," he says.
16 avril 2007
DaimlerChrysler Expands Japanese Presence With Dodge Brand
TOKYO (Kyodo) - DaimlerChrysler Japan Co. said Wednesday it will introduce the Dodge brand to the Japanese market in June as part of its ongoing efforts to expand overseas sales, amid increasing speculation about a possible sale of the unprofitable Chrysler Group by its German parent.
Dodge, which has a history of 93 years, is the Chrysler Group's best-selling nameplate, contributing to nearly 50 percent of sales at the North American division of DaimlerChrysler AG.
For the Japanese market, the automaker will introduce four models - its key Caliber five-door hatchback, the Nitro sports-utility vehicle, the Avenger midsize sedan and the Charger SRT8 muscle car with a 6.1-liter engine.
"International markets, including Japan, are extremely important" for the Chrysler Group's future success, Hans Tempel, president of the Japan unit, said at a news conference in Tokyo.
Tempel noted that the group's overseas sales in 2006 rose 15 percent from the previous year, marking the highest growth in 10 years on a year-on-year basis, supported by brisk sales of the Caliber in Europe.
He said Dodge is an "iconic American brand" and its bold and edgy characteristics will provide "very attractive options for the Japanese customers" and will complement the Chrysler and Jeep brands of the group already in the Japanese market.
The automaker refrained from commenting on the sales target of the new brand in Japan and the prices of the four models
08 avril 2007
GM Goes Urban With New Minicar Concepts
By Amy Radishofski, Staff Reporter, Manufacturing.net
Manufacturing.Net - April 04, 2007
At the New York Auto Show on Wednesday, GM unveiled three minicar concepts - the Chevrolet Beat, Chevrolet Groove and Chevrolet Trax - designed to appeal to buyers in the urban market.
GM has set up a website that will allow customers to vote for the minicar they like most. The results of that poll will help Chevrolet determine market interest and which design/capability package potential buyers are most interested in.
“The Chevrolet Beat, Groove and Trax concepts highlight the strength and diversity of GM’s Global Design capabilities, as well as the ability of our Global Product Development team to anticipate and quickly meet the evolving needs of our diverse markets around the world,” said Ed Welburn, vice president, GM Global Design.
The Beat is based on a micro import tuner, with front-wheel-drive. It’s a three-door hatchback powered by a 1.2-liter turbocharged gasoline engine with automatic transmission, as well as navigation and stereo systems.
GM describes the Groove as a “funkastalgia-themed vehicle.” It’s retro-inspired and powered by a 1-liter diesel engine.
The Trax is an urban crossover with all-wheel-drive and a 1-liter gas engine.
01 avril 2007
Visteon Selling European And Brazilian Chassis Business To SSVP II
By Amy Radishofski, Staff Reporter, Manufacturing.net Visteon Corp. said Thursday that it will sell certain European and Brazilian chassis businesses to Special Situations Venture Partners II L.P. (SSVP II). Financial terms were not disclosed and the deal is expected to be completed in the second quarter 2007 for Europe and the third quarter for Brazil. The deal includes Visteon’s chassis operations in Dueren and Wuelfrath, Germany, and Praszka, Poland, as well as other driveline assets in Sao Paulo, Brazil. The facilities involved manufacture driveline and steering systems for global vehicle manufacturers. “This agreement is an important part of Visteon’s plan to restructure our business, improve our base operations and position the company for growth,” said Don Stebbins, president and COO. Under the agreement, the manufacturing facilities and associated assets will be transferred to SSVP II and will be renamed TeDrive. The 2,400 Visteon employees currently working in those facilities will also be transferred to the new owners
Manufacturing.Net - March 30, 2007
24 mars 2007
GM Bringing Back Buick Brand To U.S., China Markets
DETROIT (AP) – General Motors Corp. said Tuesday it is bringing back its ''Super'' line of Buicks, about five decades after the premium models last were sold, as it makes broader efforts to reinvigorate the 104-year-old brand in the U.S. and grow in China.
Buick General Manager Steve Shannon said the automaker soon will unveil the ''Super'' line, last used in 1958. For now, he said, it will include versions of the LaCrosse and Lucerne sedans.
''These vehicles will elevate in terms of design, power and performance,'' Shannon said during a presentation to the Automotive Press Association in Detroit.
The line comes amid a push of new vehicles, including the Enclave luxury crossover sport utility vehicle in North America and the Park Avenue sedan in China, that Shannon says will help better define the brand –reflecting a focus on design, comfortable and quiet interiors, and quality.
''We think we can develop great products jointly that can do well in both markets,'' Shannon told reporters after the event, adding there aren't plans to build Buicks in China for the U.S. market.
After bringing out a fresh face for Cadillac and Saturn, GM is turning more attention to Buick, which traditionally is known for its appeal to older drivers. Longer-term, Shannon said there will be a focus on rolling out fewer – but better – Buick models to keep the brand profitable for Detroit-based GM.
Nearly all of Buick's new vehicle sales are in the U.S. and China. Buick's worldwide sales rose about 3 percent last year to more than 567,000 as sales in China jumped 25 percent to about 304,000.
Buick's U.S. sales, however, were down nearly 15 percent in 2006 to about 240,650. GM's effort to cut low-profit sales to rental car companies, as well eliminating aging models such as the LeSabre sedan, accentuated the drop.
Michael Robinet, vice president of global forecast services for CSM Worldwide, an auto industry consulting company based in Northville, said future Buicks will be designed to more clearly reflect the brand.
Robinet said GM has had success with its Cadillac and Saturn revivals, helping set the brands apart, and will carry those lessons over to Buick.
''They understand that the brand needs to stand for something,'' Robinet said.
As of last year, Buick still attracted the oldest buyers of all automotive brands in the U.S., according to an analysis by Power Information Network, a division of J.D. Power and Associates. Its buyers were 64 years old on average, compared with 55 for GM's Cadillac and Ford Motor Co.'s Lincoln and Mercury brands.
Shannon said the average Buick car buyer is about 67 years old, while the average Buick SUV driver is about 53 or 54. That has its benefits, he noted, since older buyers tend to be loyal to the brand and typically are more financially stable.
''Over time, with the products we have, we will probably get a little bit younger,'' Shannon said. ''Getting younger is not an objective, per se.''
With the help of golf superstar Tiger Woods, Buick has tried to reach out to younger drivers and golf enthusiasts. Shannon said Woods, who helped unveil the Enclave in person last year in California, will be a bigger presence as the brand's pitchman.
Buick models in the U.S. this year include the LaCrosse and Lucerne, the Rainier mid-size sport utility vehicle and the Rendezvous SUV, as well as the Terraza, Buick's minivan. And the Enclave is scheduled to reach dealer showrooms this summer.
Source: (Manufacutre NET)
19 mars 2007
BMW Eyes Sharp Increase In U.S. Production By 2010
FRANKFURT, Germany (AP) - Automaker BMW AG hopes to increase the number of cars it builds in the United States to more than 200,000 annually by 2010, Chief Executive Norbert Reithofer said Thursday.
Speaking to analysts at BMW's headquarters in Munich, Reithofer said the aim was to reduce the company's exposure to the weaker dollar, a paramount move given that the U.S. remains BMW's top single market.
''We also have to buy more goods (in North America) to improve our natural hedging,'' Reithofer said.
The euro has been running strong and steady against the U.S. dollar, up more than 14 percent in recent months. On Thursday, the 13-nation euro bought $1.3205 in late morning European trading, down from $1.3227 in New York late Wednesday.
BMW's annual production capacity at its U.S. plant in Spartanburg, South Carolina, is currently around 140,000 vehicles.
BMW's new X6 model will be produced in Spartanburg from 2008 onward as part of the company's effort to increase capacity in the United States.
This week, the automaker said it expects pretax profit this year to rise above the $5.43 billion it posted in 2006 on the expectations of increased auto sales.
The company also reported a 28 percent gain in net profit to $3.79 billion thanks to a one-time gain from the sale of a stake in British aircraft engine maker Rolls-Royce PLC.
18 mars 2007
Ford CEO: Challenge Is Significant, But We Have A Plan
Ford Motor Company CEO, Alan Mulally, told Congress Wednesday that it has a plan to turn around the troubled car-marker, as well as how to work towards lowering greenhouse gases.
“As you know, Ford is facing significant challenges in North America and some of you might be wondering what the future holds. I can tell you that we have a strong plan, with the right team, to turn around our company,” Mulally said. “Our plan is rooted in the deployment of advanced, innovative technologies to improve the fuel efficiency of our vehicles and to deliver outstanding quality and features that our customers desire.”
Mulally said that the transportation sector produces approximately one-third of the nation’s CO2 emissions, however an effective energy policy must have an “integrated approach” of all stakeholders in order to be successful.
Analysis from Ford has found that the most cost-effective solution to lowering CO2 emissions from vehicles must include a combination of bio-fuels and vehicle technology advancements.
“No one can predict if the powertrain of the future will be hydrogen, bio-fuels, battery electric, advanced diesel and gasoline or some combination of these technologies,” Mulally said. “There is ‘no silver bullet’ solution and that's why we are involved in so many development paths, sometimes with unique partners.”
Mulally also warned about using the Corporate Average Fuel Economy (CAFE) as the only resolution to the CO2 emissions issue, reminding Congress that the unexpected result was lower gas prices and higher fuel consumption by the consumer.
“While the number of vehicles on the road today is three times the number in the late 1960s, the miles traveled has quadrupled making us more dependent on foreign oil,” Mulally said. “Therefore, new solutions to address the energy security and climate change problems must not have unintended consequences or impede our U.S. global competitiveness.”
Mulally also emphasized the need for additional fueling stations across the country in order to have a great acceptance of alternative fuels by the consumers.
“Currently there are over 6 million flexible fuel vehicles on America's roads but only 1,100 E85 fueling stations and that's out of over 170,000 retail gasoline stations nationwide,” Mulally said. “We stand ready with the technology and we are willing to lead the way, but we need to partner with government and fuel providers – we must have the fuel infrastructure before we can effect change.”
16 mars 2007
Volvo Construction Investing $160 Million In Swedish Components Factory
Volvo Construction Equipment said Friday it will invest nearly $160 million in its Component Division in Eskilstuna, Sweden, over the next three years.
The Component Division develops and manufactures power trains for Volvo construction equipment. The current area of 53,000 square meters will be extended to 63,000 and the entire layout of the factory will be adapted to flow-orientated production methods similar to those in the car industry. Money will also be invested in a second furnace in the new hardening plant.
The production capacity of the Component Division has almost doubled since 2002. The investment will mean a further doubling of that capacity in stages, without requiring additional employees to be recruited, the company said.
“Nowadays it’s a question of such large volumes that we are forced to change from work-cell based assembly to line assembly”, says Jörgen Svenningsson, President of the Component Division, which has around 1,200 employees in Eskilstuna. “When the transformation is completed, we will be more efficient and make more components of a higher quality with approximately the same workforce as today, although we may possibly need additional employees during the running-in period."
Volvo Construction Equipment is part of the Volvo Group and is a major manufacturer of equipment for construction and related industries. Its products include wheel loaders, hydraulic excavators, articulated haulers, motor graders and compact equipment.