The gravy train was rolling right along for Carron & Co. in 1994. The Inkster, MI, prototyping companyhad plenty of business with its primary customer,Motor Co., including converting the F-150 chassis into the Expedition.
Carron also was developing a chassis system for the Econoline Super Duty van, helping fit a V-8 in the Explorer and working on the Ecostar and EV, as well as the Ranger Splash and F-Series Flareside pickups.
Sales had skyrocketed from $35 million in 1991 to $66 million in 1994, which was no small accomplishment for the 800-employee operation. The engineering and design firm provides prototype part fabrication and vehicle assembly, as well as testing, failure analysis and benchmarking.
When theprojects came to an end, Carron struggled to keep up the momentum, especially with Ford cutting back on outsourced engineering services. Sales have fallen each year since 1994, and this year's forecast calls for $35 million, back to the '91 level. Union workers have swallowed concessions, and the workforce has dropped from 800 to 550.
Carron isn't alone. Thousands of contract engineers are looking elsewhere for work as Ford cuts an estimated $200 million from its historically bloated product-development process (see WAW - Aug. '97, p. 38).
Today, Carron has a recovery plan that involves diversifying its customer base beyond Ford, much like, Ford's $16 billion parts operation, is trying to build its business independent of the parent company. About 95% of Carron's business is with Ford.
But like, Carron is understandably viewed with a cautious eye by potential new customers because of its long history with Ford. Temple Cumiskey, Carron's technical sales director who worked previously as an engineer for Corp., is finding it difficult to establish new business with his old employer.
"We're trying to expand that capability, but it's a hard sell," Mr. Cumiskey says. "Confidentiality has got to be maintained. You play in one arena long enough, and they have a certain perception about you."
Carron has done limited work for, as well as Corp., Budd Co. and Corp., but it wants to expand that non-Ford base. Not that Carron wants to cut the cord with Ford. "We'll do all the Ford work they'll give us," Mr. Cumiskey says. His company merely wants to diversify and pin its future on more than one customer.
The company's change of ownership in March also guarantees a new source of business for Carron. American Commercial Industries Inc., a Troy, MI, supplier of stamped automotive products such as door hinges and sunroof stampings, acquired Carron in March. In early November, the company will be renamed ACI Carron.
The purchase saved Carron from an uncertain future and gave ACI crucial engineering and prototyping support for all four of its manufacturing sites. Rod Juve, ACI's director of sales and marketing, says Carron's engineering expertise allows ACI to explore new hinge business.
ACI, for instance, just reported that it will supply door hinges on the 1999 Ford Explorer. ACI CEO Larry O'Dowd credits Carron with helping reduce the overall cost of the hinge.
While Carron has stumbled in recent years, Mr. Cumiskey is optimistic because automakers are expecting suppliers to do more engineering and testing, which is Carron's specialty. "We've had six to seven calls recently from other suppliers and Pacific Rim manufacturers who want to have a presence here in the United States," he says. "We can be the one to provide testing and validation for their products."
With an eye toward improving communication throughout the auto industry, IBM Corp. is launching a six-month pilot program that it hopes will help suppliers cut costs and product-development times. IBM says EnterpriseXspan will allow suppliers and their worldwide trading partners to work together in a secure network environment as a "virtual extended enterprise," with conferencing and file exchange services. The system would complement the Automotive Network eXchange, a network backed by the Automotive Industry Action Group.
opens warranty center in South Bend, IN
With so much talk about increasing supplier responsibility for warranty costs, it should come as no surprise that one of the largest suppliers has taken notice.Braking Systems, a subsidiary of Robert Bosch Corp., has opened a Warranty Center at the company's South Bend, IN, facility to better coordinate customer warranty returns from the field. In the past, warranty work was handled by each plant, which led to inconsistent responses to problems, says Josef Schenk, VP of quality.
Donnelly, Essex see window of opportunity
Barely a month after announcing a joint venture withCorp. to make headliners, Donnelly Corp. of Holland, MI, is linkingup with yet another supplier, this time to make ready-to-install window systems. Donnex LLC, a 50-50 venture between Donnelly and Essex Specialty Products Inc., of Auburn Hills, MI, already is talking with automakers who could be using the systems as early as the 2000 model year. Ready-to-install windows have primer and adhesives already applied to the glass, allowing for quick assembly. Donnelly makes mirror and window systems, while Essex, a subsidiary of Dow Chemical Co., makes adhesives.