Speed Rated

Chairman of the board is a thankless job. Sure, the pay's all right, but the maker of the tough decisions becomes awfully unpopular when it comes time to shut down plants or ask the union for concessions. Appeasing shareholders is a burden that never eases, and someone's always plotting your overthrow.

With such a full plate, it's understandable why the chairman of a major manufacturer might not be intimately acquainted with his company's products. That's the job of division heads and engineers.

Stephan Kessel doesn't subscribe to such a notion. He is completing his first year as chairman of the executive board of Continental AG, a major tire producer from Germany (more than 20 million a year for passenger cars) that got its start with pneumatic tires for bicycles in 1892.

Today, Continental is much more than a tire maker. Since its $1.9-billion partial acquisition of ITT Automotive in 1998, Continental has become a brake and chassis specialist, with a full range of electronic goodies such as antilock brakes, traction control, adaptive cruise control and Electronic Stability Program (ESP), which prevents a car from spinning out of control. The division has been renamed Continental Teves.

Even though these products are still relatively new within Continental, Mr. Kessel talks like an engineer who has devoted his life's work to developing them. His favorite topic is the so-called "intelligent tire" concept his company is advancing - a tire with built-in sensors to more quickly detect sudden changes in direction.

"The big advantage we can demonstrate is the ability to reduce stopping distances, and we improve the ride and handling comfort during cornering under slippery conditions," Mr. Kessel says.

Continental Teves begins producing the intelligent tire with sidewall torsion sensing in 2002. Mr. Kessel hints that the customer is a U.S. automaker.

"This is very interesting because usually the German or Japanese car companies claim to be advanced in technology," he says. "In this case, it's the other way around, and I must say we're a little proud that we have this customer."

The intelligent tire can replace expensive yaw sensors needed to determine the vehicle's direction. Whether this customer also will equip its vehicle with a yaw sensor, however, has not been decided. "It might be that the yaw rate sensor is used for something else," he says.

Competitors suggest that yaw sensors are more than adequate, and that placing sensors at all four corners is merely adding complexity and cost.

Mr. Kessel suggests it's a case of sour grapes from competitors who lack Continental's expertise in both tire and braking technologies. And he is convinced that sensing forces directly from the road is enormously beneficial.

"The tire does not bear any intelligence. It bears some magnetic indicators, that's it," he says. "All the intelligence is in the software of the ESP and the ABS. No, we are not adding cost to the system. Bottom line, we even save some sensors by doing so. I don't see us withdrawing from the project."

Like its competitors, Continental makes huge projections about the growth of ESP. Last year, the company sold 400,000 units; this year it will sell about 1.4 million units; within four years, it expects to sell 3.5 million units worldwide.

Most of that business is in Europe, where drivers have discovered its safety benefits.

"At the end of the day, and this will be very soon, I'm deeply convinced that ESP will be standard for almost all vehicles," Mr. Kessel says, referring to Europe, in less than 10 years.

Shortly after the demise of its joint venture with Breed Technologies, Siemens Automotive finds a new partner, Atecs Mannesmann, the automotive systems and industrial arm that will be spun off from Mannesmann AG this June. Siemens commits its entire Automotive Systems Group to the 50-50 venture, while Atecs Mannesmann will contribute all activities of Mannesmann VDO. Atecs Siemens Automotive AG aspires to become the world leader in driver information, cockpit systems and car communication. It will have annual sales of about $7 billion.

Sverdrup Technology Inc. completes one of three nodes at its new 200,000-sq.-ft. (18,580 sq. m) driveability test facility in Allen Park, MI. Ford Motor Co. has a 10-year exclusive lease with Sverdrup and is using the environmental wind tunnel for testing. Ford can sub-lease some test cells to keep costs down. The proximity to Dearborn will improve Ford's product development cycle (by as much as 13 months) by eliminating seasonal uncertainty. The facility can recreate virtually any climate. The final two nodes will be completed by September.

Robert Bosch Corp. is beginning production of common-rail diesel injection systems in Charleston, SC, following a $150 million expansion. The system fuels the new Duramax 6.6L turbodiesel, which appears on General Motors Corp. 2001 heavy-duty pickups. The engine is the product of DMAX Ltd., a joint venture between GM and Isuzu Motors Ltd. Bosch is betting that common-rail will create new demand for diesel in the U.S. The company has two other customers, including Detroit Diesel Corp., for the Charleston-produced system. Passenger car diesels remain rare in the U.S., but they make up 27% of the market in Western Europe.