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May 2005
SAE 100: Gloom and hope send mixed messages
After a record-breaking 2004, the PM industry faces some
tough challenges in the shape of base metal surcharges, rocketing
alloy prices and entrenched customer reluctance to pay more,
says Joe Capus...
The Society of Automotive Engineers (SAE) celebrated its
centennial year on a relatively muted note (for Detroit) as
industry delegates pondered the future of the North American
automotive manufacturers. The Metal Powder Industries Federation
(MPIF) has traditionally participated in the Congress programme
by helping to organise technical sessions highlighting PM
automotive applications and hosting a reception and luncheon
meeting at the Detroit Marriott Hotel in the Renaissance Center,
which also houses General Motors World headquarters.
MPIF Executive Director/CEO Jim Trombino welcomed about
250 PM and auto industry attendees at the 20th Annual Automotive
Suppliers Luncheon Program and introduced MPIF President David
Schaefer (Cloyes Gear & Products, Inc.). In his review
of the PM industry, Mr Schaefer reported that 2004 had been
a "break-out year" for the North American as well
as the European and Japanese PM industries.
North American iron and steel powder shipments, a bell-weather
for the industry, rose 7 per cent to a record 473,800 short
tons (429,800 tonnes). Ferrous powder shipments in Europe
set a new record with a 9 per cent rise and there was also
a 9 per cent increase in Japan. Consumption of PM parts per
vehicle in North America rose to a new high of 43 pounds (19.5
kg.) in 2004 despite the ongoing loss of market share among
the "Big Three" auto producers. Mr Schaefer took
this as a sign the PM industry was doing a better job of marketing
to the "Little Three", although he knew there was
room for improvement in this respect.
Following the record-breaking 2004, dark clouds were now
forming over the PM industry as with other manufacturing industries.
Base metal powder surcharges and escalating alloy prices caused
a threat to the PM industry's growth, simply from the reluctance
of most customers to absorb the full impact of material cost
increases.
It was a case of simple economics, he said: no profits equalled
no new investments, which equalled no growth. The capital
investment needed for new programmes continued to increase
and without an adequate return they wouldn't go forward. He
went on to add that this year it would be a challenge just
to match the production levels of 2004.
After the surge in oil prices over the past two years, and
with gasoline prices at $2 per US gallon in most parts of
the US, there were now signs of consumer resistance in auto
sales, particularly for the large and profitable sports utility
vehicles (SUVs). When the rising health care costs for the
auto industry were factored into the equation with lower demand,
the picture for the commercial side of the PM industry was
not a rosy one.
On the technology side, things looked more hopeful. PM's
customers in the auto industry were continuing to push the
envelope on many fronts to achieve lower fuel consumption.
Mr Schaefer cited some of the technology being offered in
new generations of engines: cylinder-deactivation, variable
cylinder management, VVT-equipped engines, fuel stratification,
and hybrids. On hybrids, he noted that the "experts"
all had opinions on their future (in North America), some
saying there would be sales of one million hybrids/year by
2010.
Mr Schaefer reported that PM continued to make significant
gains with transmission carrier frames. Ramp-ups were also
going ahead with GM's global V-6 3.6 litre engine that contains
close to seven pounds (3.2 kg) of PM VVT components alone.
DaimlerChrysler is switching to PM main bearing caps, and
the overall trend towards all-wheel-drive was a positive industry
development that could lead to 8 - 10 pounds (3.6 - 4.5 kg)
of additional PM parts. He went on to note that efforts by
the industry to produce PM components with densities exceeding
7.5 g/cm3 economically were continuing from the materials,
equipment and processing sides-urged on by the exciting possibilities
and new potential that this could bring.
Finally, he referred to the Global Powder Metallurgy Property
Database that had been two years in the making and was unveiled
last October at the PM World Congress in Vienna, and was being
officially launched in North America during the SAE Congress.
He reported that so far, more than 700 people from 40 countries
had registered to use the Database and that 30 per cent of
these had been identified as PM end-users. Early feedback
from end-users indicated that it was a "terrific aid",
and placed the PM industry in the same league as other metal
industries - in the designer's eye. He said it represented
a major step in taking the PM industry from a "conversion"
industry to an "applications" industry. The luncheon
programme concluded with a step-by-step video presentation
introducing the database.
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