OEMs, Suppliers Should Take Holistic Approach to Hybrids
By William Diem WardsAuto.com, Aug 9, 2007 4:19 PM

TRAVERSE CITY, MI – Magna International Inc. wants to help hybrid-electric vehicle developers get more efficiency out of their powertrain.

A full hybrid system adds an average 500 lbs. (227 kg) to a vehicle, according to Chrysler LLC engineers working at Hybrid House in Troy, MI, and Magna says it can take out 110-221 lbs. (50-100 kg) in metal and plastic by working on the whole vehicle earlier in the process.

The key to major improvements is early involvement and a holistic approach, Magna International CEO Mark Hogan tells attendees at the Management Briefing Seminars here. Mutual trust between OEMs and suppliers will bring the full benefits of innovation to customers, he argues.

The former General Motors Corp. executive says he thought he understood relationships with suppliers then, but upon arriving at Magna discovered suppliers typically are not considered as trusted partners.

He urges U.S. auto makers to treat suppliers the same way as Toyota Motor Corp. and Honda Motor Co. Ltd. do, where parts makers are invited at the earliest stages of product development to propose ideas that will reduce costs.

“We should focus on harmonic relationships, where ideas are shared and visions implemented in an atmosphere of mutual trust to keep costs down,” Hogan says.

“Price reductions at the expense of margin, without cost-reduction ideas supporting them, leads to failure. Recent history shows many suppliers subscribed to that. Our industry needs a true partnership. Sadly, with few exceptions, that’s not exactly happening today.”

Mark Hogan

However, Hogan says supplier relationships with Ford Motor Co. and GM are improving, thanks to efforts by their purchasing chiefs.

“With (GM purchasing chief) Bo (Andersson)’s leadership style and what he has instilled in his people, there is a lot more collaboration and give and take” at GM, he says. “The same goes with Tony Brown at Ford.”

One weight-savings technology Magna is developing with a customer is polycarbonate panels to replace glass in roofs, hatches and quarter lights.

He says the systems, which were demonstrated in the Chevrolet Volt concept car, will go into production in 2010.

“Safety and weight reduction offer the best opportunity for early involvement in the product-development cycle,” says Hogan. “Every system must make a contribution to lowering emissions. We take a holistic view, reducing weight bumper to bumper, from seating to roof to powertrains.”

He says vehicles have grown in weight by about 1% per year, but the need for better fuel efficiency means “light weight” is important.

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Magna is focusing on magnesium and ultra high-strength steel to expand on the traditional use of aluminum and composites. Hogan says the company has developed a magnesium fabrication process that is an alternative to die casting that can produce large parts with a lower capital investment and bring a 50% weight savings.

He says companies must be flexible to remake themselves over time, using their experience to choose the right path. Today, that path is globalization.

Magna’s business currently is 45% in North America, 45% in Europe and 10% in Asia, Hogan says. New investments will be aimed at the BRIC markets: Brazil, Russia, India and China, which are expected to add the bulk of the 14 million vehicles in projected global-production growth.