Banking on automakers to increasingly use composites, Owens Corning is predicting that annual sales for its automotive operations will double in four years from the $300 million the materials supplier reported in 2000.
It is one of the most significant growth initiatives in the company's 60-year history, and a gutsy prediction, considering Owens Corning declared bankruptcy in October. Automotive “has not been a core part of our business,” says Bill True, global Automotive Solutions Business leader. “In the last 12 to 15 months it was chosen as one of the areas we would focus on.”
In today's business world, most diversified companies in financial trouble wouldn't focus on automotive — with the industry's slim profit margins and high capital investment. But Owens Corning is banking on its consulting, engineering and design departments, which don't require assets, to provide the bulk of the increased revenue.
“That's really one of the nice things about how we're positioning this,” says Mr. True. “It doesn't require us to buy a lot of presses and other molding equipment.”
To help meet its automotive goals, the Toledo, OH-based company has embarked on an extensive recruiting program and soon will establish a facility in metro Detroit. The Detroit area facility will work with automakers on composite applications and initially employ about 100 people, with personnel levels growing to 250 to 300 in three to four years.
Owens Corning also says — and most industry forecasts indicate — automakers will use more composite parts to lighten vehicle weight and improve fuel efficiency. To better position itself against top competitors Dow Automotive and GE Plastics, Owens Corning wants to have total product solutions via a tie-up with another company. “The problem is the composites industry as a whole has not been reliable in the eyes of the carmaker. There have been times (automakers) have taken a risk by choosing composites. They've been late to market, the project's been considerably over budget and they haven't been able to — on an ongoing basis — get the reproduction of parts they've come to expect from other materials,” says Mr. True.
“What we're looking at is the capability to go into, or , through an alliance with a manufacturing partner and do the whole back end of the truck.”
Owens Corning's long-term plans got started in March when it announced a strategic partnership with SP Systems to develop and commercialize certain high-performance parts for specialty sports vehicles. Called Sprint Automotive Solutions, the alliance is aimed at automakers seeking differentiation through the quicker adoption of race car technology into their offerings — the Mercedes SLR with its full composite lower tub and body shell, the newVanquish with its semi-composite chassis structure and the proposed new Porsche Carrera GT with a composite lower tub structure. “This alliance means that Owens Corning and SP Systems will pool resources, skills and technology to ensure the customer will receive on-time delivery of a high-quality finished product,” Mr. True says.