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Nexteer Offers EPS by Dozen

Executive Summary

“No one was envisioning being able to carry the loads on a heavy SUV or pickup truck” with anything less than a 42-volt EPS system, says Nexteer’s president. “We’re doing it now at 12-volt.”

WATERFORD HILLS, MI – Nexteer Automotive Inc. has unlocked the technological combination that enables fullsize pickups and large SUVs to be equipped with a 12-volt electric power-steering system.

The supplier is mum on applications for the breakthrough system, saying only that is has two such contracts – one of which launches in fourth quarter. But sources confirm to Ward’s Nexteer is referring to the ’11 Ford F-150 pickup.

Nexteer already supplies EPS systems to Ford Motor Co. on vehicle programs such as the Escape cross/utility vehicle and the Mustang. The migration of EPS to the F-150 also is consistent with an aggressive Ford initiative to equip 100% of its vehicles with the fuel-saving feature by 2013.

“It wasn’t that long ago we were sitting at our conference table in Saginaw, MI, and customers were saying, ‘Do you have a 42-volt system so that I can put electric steering on a pickup truck?’” says Nexteer President Robert J. Remenar.

Forty-two volts was considered the threshold. “No one was envisioning being able to carry the loads on a heavy SUV or pickup truck” with anything less, he adds. “We’re doing it now at 12-volt.”

The veteran industry executive is aware of the opportunity that awaits Nexteer as it aggressively moves to put a severe restructuring in its rear-view mirror.

Says Remenar: “Is it a lot of volume? Absolutely. Because pickup trucks are a lot of volume.”

Through August, U.S. fullsize pickup sales totaled 850,396 for a 16.2% increase over like-2009, according to Ward’s data.

Against a backdrop of moderate gasoline prices, pickups also accounted for an 11.4% share of the light-vehicle market – well below historic highs but up significantly from the 10.4% chunk of the market they occupied through the first eight months of last year.

“The state of the business is good and strengthening,” Remenar says, noting stricter fuel-economy requirements for the U.S. favor the proliferation of EPS systems, which afford weight savings and virtually eliminate the parasitic loss associated with hydraulic steering.

Auto makers also realize benefits on the shop floor because assembly operations can do away with costly annoyances such as belts and hydraulic fluid.

China’s growing market offers a faster pace for EPS adoption, Remenar says.

“They don’t stay at a technology stage very long,” he adds. “They get started. In two or three years, they move to the next step, vs. 10 years in other locations.

“The A-B segments in China are coming very fast. Some C-segment. We’re starting to get some requests for D-segment vehicles.”

South America offers still more opportunity, but that market has some built-in resistance, says Mike Richardson, vice president-engineering and global steering line. While EPS systems are “pretty bullet-proof,” poor road quality leads auto makers to stick with “tried and true” hydraulic systems.

Nexteer became a wholly owned subsidiary of General Motors Co. when captive supplier Delphi Corp. emerged from bankruptcy in 2009. Earlier this year, GM reached an agreement to sell Nexteer to Pacific Century Motors, an affiliate of the Beijing municipal government. No terms were disclosed.

But Remenar is steadfast about maintaining Saginaw as the soul of the company’s operations.

“Our engineering headquarters are staying here,” he says. “If I engineer for Brazil or if I engineer for India…China…or Europe, I pretty much engineer it here.

“I validate it. I test it. I develop the bill-of-material. I do all that work here. And then we apply it near the customer.”

Centralizing Nexteer’s engineering is an extension of its “building-block” strategy that helps boost speed-to-market.

“We don’t reinvent,” Remenar says. “It helps with the safety of the vehicle. They’re field-proven.”

To this end, Nexteer is on the lookout for engineering talent.

“We’re going to be in every major market looking for them,” Remenar says. “Whenever the right guy comes along, we’re going to grab him. We want to make sure we’ve got the best guys. And keep them, once we get them.”

Richardson says the supplier has enough work to accommodate up to 100 new hires by year’s end.

emayne@wardsauto.com

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