New Tennessee Plant Latest Milestone in Magneti Marelli’s Boom

PULASKI, TN – The future appears bright for Magneti Marelli, as the 94-year-old global supplier expects to accelerate a recent growth binge that saw its global lighting sales swell 13% to €2.1 billion ($2.7 billion) last year.

The latest evidence of its growth curve comes in September, when a newly minted lighting production plant here representing a $54 million investment and soon covering 213,000 sq.-ft. (20,000 sq.-m) is expected to start hitting its output stride.

Production at the Giles County plant, which currently employs 90 people but could reach 850 workers within the next four years, should grow to 5 million units annually as soon as 2016.

The Milan-based unit of Fiat Group also supplies global OEMs with instrument clusters; electronic-control units; infotainment platforms and telematics boxes; powertrain hardware such as injectors, manifolds and throttle bodies; and exhaust and suspension systems.

In addition, Magneti Marelli will begin supplying parts within the next three years to the hybrid-electric vehicle market based on systems it validated in motorsports competition, another key business area of the diverse but under-the-radar global parts supplier.

“We’ve been part of the automobile landscape for a long time, but our story is just coming out,” says James Rosseau, country manager-Magneti Marelli North America and president and CEO-Magneti Marelli Shock Absorbers North America.

Despite its size and broad business portfolio, Magneti Marelli until recently has not promoted itself much beyond communicating with customers. However, the supplier turned up in headlines last year as a potential divestiture for Fiat CEO Sergio Marchionne as he looks to raise cash to buy a bigger stake in U.S. auto maker Chrysler.

Marchionne since has said the Italian auto maker does not need extra capital.

Here in Pulaski, where Marchionne last month helped open the plant with a Father’s Day celebration for friends and family of the earliest hires, Magneti Marelli executives say the focus is on growing the North American business on lighting’s new role as a source of design distinction.

“We are moving into a technologically differentiated market,” says Andrea Stella, manager-research and development, Automotive Lighting North America at Magneti Marelli.

The facility currently supplies halogen, bi-Xenon and light-emitting-diode daytime running light headlamps to the Jeep Cherokee as its sole customer. Plans call for the plant to produce adaptive and smart-lighting systems, as well.

Pulaski also soon will begin supplying parts to General Motors and Daimler, which operate assembly plants in the region, although the product program has not been revealed.

Assembly plants building products for Volkswagen, Nissan and Toyota also are nearby. Magneti Marelli’s expansion plans at Pulaski are predicated on swiftly adding to its roster of customers looking to make design statements with lighting, especially through breakout LED technology.

The Dodge Dart’s “Ring of Fire” LED rear lamps are one such statement, as are the “Light Blades” contained in the headlamps of the Cadillac XTS. And look for a new forward lighting treatment for the next-generation Chevy Camaro – business Magneti Marelli took away from a competitor.

Other examples of Magneti Marelli’s work appear on Mercedes and BMW vehicles, most notably the all-LED adaptive headlamps for the Mercedes CLS and the new signature rear lights for BMW 7-Series sedans also using all-LED technology.

Fiat remains the supplier’s main customer, with its parent comprising 37% of its overall business.

Plant Focused Outside Industry to Recruit Workforce

Looming government mandates calling for reductions in fuel consumption and carbon-dioxide emissions also are driving LED popularity, because the technology can slash energy consumption of a vehicle.

In North America, demand for innovative lighting has driven up Magneti Marelli sales by $700 million in recent years. It expects the unit’s revenue to hit $1 billion this year.

Magneti Marelli currently ranks as the third-largest lighting supplier in North America, although it is the No.1 supplier of lighting technologies worldwide on the strength of 22 million headlamps and 22 million rear lights produced annually.

To accommodate North American growth, the supplier recently moved its Farmington Hills, MI, technical center into a bigger location nearer to Fiat-controlled Chrysler in Auburn Hills, MI.

A new exhaust-equipment plant in Michigan starts production in September, as well, and Magneti Marelli wants to open another electronics facility somewhere in the U.S. soon. It also operates manufacturing plants in Ciudad Juárez and Tepotzotlán, Mexico.

“The market is expanding, capacity is tight,” Rosseau tells WardsAuto during a tour of the Pulaski facility.

The Pulaski location is Magneti Marelli’s first lighting manufacturing site in the U.S. State of Tennessee investment incentives, as well as a Magneti Marelli shock-absorber factory already operating on the site, also played roles in choosing the location.

According to Greg Galloway, plant manager at Pulaski, the former shock and strut assembly area now accommodating the lighting shop moved through step one of Fiat’s vaunted World Class Manufacturing process with its opening and faces the first audit of its safety- and quality-maintenance program in December.

WCM already has yielded results, Galloway says.

Video surveillance of training sessions in the general assembly area revealed wiring harnesses loosely packed into shipping boxes would become tangled “like spaghetti” and cause a 6-second delay in attachment to a DRL headlamp.

Leaning on some local Pulaski craftsmen, a “gravity box” was designed and manufactured. Now the harnesses hang cleanly and workers can perform the task in four seconds, as required by WCM.

Galloway, who joined Magneti Marelli to open the Pulaski plant in his hometown of 8,700 residents from a lighting supplier to Hyundai-Kia, says the wiring harness solution says as much about the local talent pool as it does WCM.

The Tennessee Technology Center at Pulaski pre-screened 500 applicants to help the supplier find candidates already living in the area.

“That is a permanent solution,” Galloway says. “Recruiting people in is not a permanent solution. You can find qualified, capable people here.”

A tour of the plant begins in the injection-molding area, where Comau 6-axis robots and smaller SACMI units operate 12 presses – the largest a 1,500-ton (1,361-t), 2-color tool – and a pair of annealing ovens. Injection molding for the Cherokee lamps, performed in a 2-shot process, takes 30 seconds.

Additional presses and ovens will be added as the facility earns more customers.

Press dies are as large as 25 tons (23 t) and are built to last 1 million shots, or the product lifecycle of a vehicle plus 15 years of service parts.

The renovated facility gleams with fresh paint and cleanliness is a priority, says Mike Pillen, pre-production manager at Pulaski.

For example, spare arms for the injection-molding robots are stored in a clean cabinet near the tools so they can be switched out quickly and without becoming contaminated. Operator areas of the presses are outfitted with pressurized air hoses and vacuums so workers can tidy up after their shifts.

“It is critical in a lighting environment to have no contaminates,” says Pillen, who joined Magneti Marelli from Nissan as the second Pulaski employee behind Galloway. “We put a premium on a clean house.”

A metalizer, used to project aluminum onto plastic for styling and reflective purposes, sits alongside a hard-coating and final-inspection area.

Pulaski’s $1.4 million hard-coat booth uses a flow-coating process, rather than an atomized method, for parts to minimize scrap and maintenance costs.

“It takes longer to tune a part, but the payback is less scrap,” Pillen says.

In the general assembly area at the rear of the facility, operators use Allen-Bradley programmable controllers to assemble one lamp set per minute for the Cherokee. The operators undergo four weeks of training before joining the assembly line, focusing on safety first, proper ergonomics and parts handling.

Looking ahead, Magneti Marelli could branch out into interior lighting, where it currently has just a toe in the water. Do not expect a big push, however, says Stáphane Védi, CEO- Automotive Lighting, NAFTA, for Magneti Marelli.

“As we grow, we want to focus on our core competencies,” he says.

[email protected]