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By Mary Scianna

Changes at the automotive OEM level impact machine shop suppliers

The automotive industry has undergone some significant upheaval in recent years.

OEMs and their extensive parts manufacturing supplier base have struggled to reinvent their businesses and their processes to remain competitive.

It has not been easy and no one knows that better than Steve Rodgers, president of the Automotive Parts Manufacturers’ Association, based in Toronto.

“Can Canada’s automotive industry survive? I believe the jury is still out. Short term, plants are focusing on high quality and maintaining capable work forces. Generally the news at this point is good with respect to the mix of products we’re manufacturing because of our modern manufacturing facilities.”

It’s not all rosy though, adds Rodgers, noting that the industry in Canada needs to look south of the border at new labour agreements that are bringing automotive investment back into the US.

“If we can achieve the same competitiveness - and we need to be willing to step and create a competitive structure - we can maintain a healthy industry here. I’m not talking about 50 per cent wage reductions, but fair agreements that are competitive with global standards.”

Those that supply the automotive OEMs or even the Tier 1 suppliers like Magna and Linamar pay close attention to changes in the industry because such changes can impact their businesses. Indeed, many of the trends emerging in automotive manufacturing have a big impact on suppliers, depending on the parts and components they supply.

Automotive trends

One of the biggest initiatives gaining steam in North America is reshoring, says Roy Verstraete, president and CEO of Anchor Daly, Windsor, ON. Anchor manufactures die sets, die components, steel plates and other fabricated metal components used in the production of tools, mouldmaking and plastic injection moulding.

“We’re seeing this in the appliance industry in the US with General Electric and Whirlpool investing manufacturing back into that country and we’re seeing reshoring initiatives with some tooling programs coming back into North America and benefiting Canadian tooling makers too.”

The environmental movement has had a significant impact on the automotive manufacturing industry. The move to more fuel-efficient vehicles, hybrids and all electric models have resulted in changes to automotive components and systems.

“Lightweight remains a significant factor,” says APMA’s Steve Rodgers. “Vehicles being sold today are heavier and have more horsepower but vehicle to vehicle fuel economy is better today, some 30 per cent. We know as we had into the next five years we need to make significant real improvements in overall fuel economy and lightweighting becomes a crucial factor.”

 

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Magna image: Fiat 500 side door

One of the results of lightweighting is the increasing use of lighter high strength alloys, such as aluminum, which requires different machining processes and tooling.

“We used to use magnesium castings and now we’re going back to stamped components of lightweight steel. We used to use TIG and MIG welding and had to deal with deformed parts but now with laser welding there is no deformation.

One impact of the growing green movement is that many shops are trying to become more environmentally friendly to mirror some of the efforts of their OEM customers.

Anchor Daly’s Roy Verstraete says his company has “ongoing efforts on energy conservation and more sustainable production processes. There are federal and provincial programs that encourage manufacturers to change processes. It’s not something that we’ve been called upon to document for our customers; we’re doing it more for social responsibility.”

One of the biggest changes in manufacturing that John Solecki has witnessed in the 34 years he has been in business is the growing complexity of automotive assemblies and the decline of the “human component.”  Solecki is president and owner of SEM Powertrain, Pickering , ON, and since 1978, his niche business has been remanufacturing automotive engines, transmissions and other power components.

“Everything in automotive assembly plants is robotics. A manufacturer can build an engine brand new cheaper than I can tear one apart and fix it. The labour component in automotive manufacturing is tiny now because of robotics.

And while he continues to have enough volume to keep his business alive, volumes are down from years past. He attributes part of this decline to the fact that automotive components are simply better built today.

“Twenty-five years ago the Chevy 350 was a popular engine and when the bores wore out we could new rebuilds in. Now we tend to see coded blocks that are good for the life of the vehicle and there is no repair allowance built into these components. So sometimes when we do have to make a repair, we need to change the design to repair it.”

Competition is arguably one of the most significant factors influencing changes in the automotive parts manufacturing industry. Automotive OEMs and their suppliers must continually look for ways to remain competitive to fight off competition from cost-competitive countries like Mexico.

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Magna imaage: Magna Dodge Journey rear suspension assembly.

The fierce competition in the sector impacts companies like Rapid Machining, a mould, die and fixture supplier based in Tecumesh, ON. The 14-year-old company operates a 15,000 sq ft plant with a 50/50 manufacturing split between CNC machining and EDM processes. Company owner Ralph Mastronardi says expectations from customers are much higher today.

“Timing is very restrictive, more so now than ever before. We supply primarily to the tool and die shops that in turn supply the auto OEMs. The OEMs are promising shorter delivery times, so that means all of the supply chain has to offer shorter delivery times.”

He says he can increase production to meet delivery times, “but our problem is the manpower shortage. I’ve had an ad in the local paper for ever it seems, and have had no luck. I’ve talked to the teachers at St. Clair College to see if we can get some young faces from apprenticeship programs come to our shop. We’ve trained some people from the college in-house, but there are not a lot of people out there who are taking the apprenticeship programs or who are trained for the work we need them to do in our shop.”

The future for automotive machining in Canada

While the jury is still out on whether Canadian manufacturers can achieve what it takes to remain a viable automotive manufacturing centre, APMA’s Steve Rodgers says one way Canada can assert its place is focusing on generating the higher skilled workers the industry will need to meet the designs of the future.

“The connected car and the growth in electronics - essentially everything going into a vehicle such as lane departure warnings, camera warnings, the ability to have a vehicle transmit information and have smart phone integration - all become crucial long term design factors. The assembly process itself won’t change much but the growth of electronics will play a greater role when taking a design of a vehicle directly from 3D models and transmitting that information to the machine that will produce the part. As these processes become more sophisticated, we’ll need a higher skill set of employees, so these future changes may drive a higher level of skills among automotive workers.”

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