Where LucasVarity is heading: September merger boosts technical and global capabilities

BIRMINGHAM, ENGLAND - You can't buy shares in Delphi, ford Automotive Components or Bosch. "Therefore, you should buy shares in LucasVarity," advises Victor Rice.

The new chief executive officer of the company formed in the September merger of Britain's Lucas Industries plc and U.S.-based Varity Corp. says that not only is LucasVarity one of only a few publicly traded companies on the automotive supplier Top 10 list, it's also now a stronger organization capable of serving its customers anywhere in the world they do business.

With operations in 23 countries, LucasVarity is the world's second largest supplier of antilock braking systems (ABS) and a leading supplier of diesel engines and aerospace products.

Mr. Rice is no stranger to merging companies and then cutting the overlap. In 1980, then just 39. he was named chairman of Massey Ferguson Ltd. The name was changed to Varity Corp. in 1986. Varity acquired Dayton Walther that year and Kelsey Hayes in 1987. The Massey Ferguson tractor operation was sold in 1994.

A UK native, Mr. Rice held various positions in Massey Ferguson's UK-based Perkins Group from 1970 to 1980. Before that he worked at Ford, Chrysler and Cummins. He has worked in North America for the past 21 years and maintains homes in both England and the U.S.

That there will be employment cutbacks is a given, but Mr. Rice says there also will be benefits. For example, he says financial difficulties at Lucas long had led to speculation that one or more Lucas businesses would have to be sold. "That no longer is the case," he says, adding that efficiencies from combining the companies will mean savings of about $100 million per year with another $100 million saved in taxes.

The new company has seven business units, four combining similar operations of the two partners. Diesel operations will remain independent to maintain both groups' integrity with customers.

New and upcoming LucasVarity technologies include brake-by-wire (BBW), a fully electronic, fluid-free braking system, expected out around 2005.

Less radical and nearer production is electronic brake management (EBM), which uses electronics to the point of applying proportional braking force to the individual wheels, and hydraulic fluid to enact mechanical actuating forces.

Other LucasVarity systems highlighted at the UK Motor Show here during October include the following:

Brake Assist - Developed jointly by Lucas and Mercedes-Benz AG, this may be the industry's best-yet response to insurance industry findings that ABS installations do not reduce vehicle accident rates.

The system, going on all Mercedes vehicles beginning next year, helps drivers follow through on their braking in emergencies. Mercedes/LucasVarity tests indicated that most drivers do not brake hard enough to activate their vehicles, ABS systems or maximize deceleration, mostly because after initiating a fast slam on the brake, they unintentionally enter a foot let - up stage that prevents them from completing the stop at the initially intended rate.

Brake-assist measures the initial force on the pedal and activates an electronic booster, which provides extra braking power and activates the ABS. The study found that adding brake assist reduced emergency stopping distances an average of 33%.

Electronic Power Assisted Steering (EPAS) - The company predicts systems such as this one will be standard on all new passenger cars within 10 years. Its key advantage over electro-hydraulic systems is that it increases fuel consumption by, only, about 0.5% compared with about 2% for electro-hydraulic systems and about 8% for. full-hydraulic systems. It's also lighter and more compact than competing systems and is installed on the steering column, freeing up valuable under-hood space.

The system contains only four main components - an electronic control unit (ECU), a torque sensor to measure driver effort, an electric motor and a gearbox - compared with 40 to 50 for a hydraulic unit. It operates via an opto-electronic torque sensor that provides dual-lane output. Future developments are expected to include four-wheel steering, lane control and collision avoidance.

EPAS is more fuel-efficient than a traditional hydraulic system because it draws power only when the steering wheel is turned, unlike the hydraulic steering pump, which runs whenever the car is in operation.

Although it initially will serve as a direct substitute for hydraulic systems, the company sees future interactive links with ABS, traction control, active suspension and Intelligent Driver Support (IDS).

LucasVarity currently is working on collision-avoidance systems that rely on video and radar to warn inattentive drivers via onboard computers of obstacles in front of, behind or to the sides of the car. Eventually, the company says, IDS will be able to control the steering, including automatic maneuvering around obstacles.