Growing car parts
published: April 26th, 2008author: Peter Epp
source: Today's Farmer
website: http://www.todaysfarmer.ca
Agriculture can supply limited materials for the auto industry, but the business would be lucrative.
The auto industry needs agricultural-based materials to help lower costs, but those venturing into a new enterprise to serve the industry should be aware that it's a tough business to crack.
Dr. Peter Frise, a professor of automotive engineering at the University of Windsor, and scientific director and CEO of Auto21, says any company that supplies bio-based products for the automakers can expect to be rejected unless those products meet the industry's exacting standards.
“The auto industry is highly disciplined,” warns Frise. “It's not for boys and girls; it's for men and women.”
He made the comment at a conference, held in Essex on April 11, and organized by SOBIN, the Southwestern Ontario Bioproducts Innovation Network, the Windsor-Essex County Environment Committee, and the Canadian Auto Workers union.
Entitled Growing the Economy: Harvesting New Opportunities, the conference sought to explain some of the economic and environmental opportunities that exist between agriculture and the auto industry.
Frise said agriculture's role in auto manufacturing is limited to providing some basic materials, such as what Mercedes Benz uses in its vehicles.
But even that small sliver of business can be highly lucrative. Frise noted that the global auto industry is worth $2.9 trillion a year -- and $119 billion of that is spent in Canada.
“The auto industry is a money factory. That's why everyone else in the world wants an auto industry.”
He said Southwestern Ontario is blessed because of its strong auto industry and close proximity to the auto industry in the U.S.
But the region is also fortunate because of its agriculture -- and because the two sectors share the same geography, the potential for economic opportunity is greater.
Frise said the bio-products industry is “essentially a materials industry,” and any bio-products enterprise with aspirations to serve the auto industry would, if successful, serve as Tier 3 suppliers -- much like Dofasco, which provides steels, and DuPont, which provides paint.
But he warned that becoming part of the automotive supply chain is not for the faint-hearted. The auto companies routinely spend billions of dollars when developing new vehicle platforms, and are “very conservative” and cautious with their investment funds. They do not like to gamble and they won't spend money on materials and products that aren't made to their exacting standards.
The key to becoming part of the supply chain, Frise said, is to offer an innovative product that's cheaper than the product currently being used, but just as acceptable. Those materials would mostly likely be used for things like heat and noise insulation, and for parts currently made of plastic.
Frise said there are huge opportunities to make lightweight and inexpensive composite materials, but more research is necessary.
One company that has embraced the use of bio-products is Mercedes-Benz. Frise said the company's German-built S-Class contains 27 components that are made from bio-products, for a total of 100 pounds per car. They include inner door panels, the headliner, rear cargo shelving and thermal insulation.
Bio-product car seats:
“It's being done in Europe right now, but it's also being done here. Woodbridge Foam, a Canadian company, has developed seats that are made entirely from bio-products.”
Frise said the auto industry's quest for efficiency and cost reduction is being driven by the price of oil. As the price of a barrel of oil rises, the cost of using petroleum-based products rises, as well. Conversely, the opportunity for more bio-products also increases.
“We have an excellent opportunity to take advantage of the price of oil by leveraging the expertise and production that's found in our farm community,” he said.
But Frise noted that a lot more research and development has to be accomplished before some facets of the discussion can become a reality in Ontario
