It’s been a busy past few weeks as far as regulatory/governmental developments are concerned. Cases in point: the SEC ruling regarding “Conflict Minerals”; a US government-sponsored programme supporting “additive manufacturing” technology; and, now, news from the Obama Administration concerning groundbreaking CAFE Standards.

In a nutshell, the new CAFE (Corporate Average Fuel Efficiency) benchmark aims to increase fuel economy to the equivalent of 54.5 mpg for cars and light-duty trucks by Model Year 2025 (by comparison, that number for 2012 models is about 28.5). When combined with previous standards set by the Obama Administration, the programme to improve fuel economy and reduce greenhouse gas emissions will save consumers more than $1.7 trillion at the gas pump and reduce U.S. oil consumption by 12 billion barrels (For perspective, the U.S. alone consumes more than 19 million barrels of per day – roughly 25% of the world total).
 
“These fuel standards represent the single most important step we’ve ever taken to reduce our dependence on foreign oil,” said President Obama. “This historic agreement builds on the progress we’ve already made to save families money at the pump and cut our oil consumption.  By the middle of the next decade, our cars will get nearly 55 miles per gallon, almost double what they get today. It’ll strengthen our nation’s energy security, it’s good for middle class families, and it will help create an economy built to last.”

The final standards were developed by DOT’s National Highway Traffic Safety Administration (NHTSA) and EPA following extensive engagement with automakers, the United Auto Workers, consumer groups, environmental and energy experts, states, and the public. According to an official release from The White House, last year 13 major automakers – which together account for more than 90% of all vehicles sold in the United States – announced their support for the new standards. By aligning federal and state requirements, and providing manufacturers with long-term regulatory certainty and compliance flexibility, the standards encourage investments in clean, innovative technologies that will benefit families, promote U.S. leadership in the automotive sector, and curb pollution, the release continued.
 
“Simply put, this groundbreaking programme will result in vehicles that use less gas, travel farther, and provide more efficiency for consumers than ever before – all while protecting the air we breathe and giving automakers the regulatory certainty to build the cars of the future here in America,” said Ray LaHood, Transportation Secretary. “Today, automakers are seeing their more fuel-efficient vehicles climb in sales, while families already saving money under the Administration’s first fuel economy efforts will save even more in the future, making this announcement a victory for everyone.”

That’s all well and good – Lord knows the average consumer could benefit from the savings, and any initiative that positively impacts the environment is welcomed news. But what remains to be seen is the potential repercussions the new CAFE Standards will have on the automotive supply side of the business and the PM industry at large.

The Metal Powder Industries Federation (MPIF) views the new CAFE Standards as both a challenge and tremendous opportunity. “We’ve always been able to assist in the light-weighting of components because we have the opportunity to use core rods very cost-effectively,” James R. Dale, MPIF’s vice president of member and industry relations, told Metal Powder Report. “That’s certainly an advantage that PM has vs other technologies that have to ‘machine-away’ materials to develop a similar design feature.”

Dale cites especially promising opportunities when it comes to improvements in drivetrain components. “Increasing PM’s portion of the transmission gearing is increasingly important as the manufacturers move from 3-speeds to 4-speeds – now they’re doing even 6-, 8-, and even 9-speeds! We certainly think PM might possibly have a place in some of these transmissions.”

Prospects for PM also abound in the latest engine systems, given the ability of modern motors to do a much better job of burning fuel more efficiently (at the expense, however, of higher engine temperatures). “One of the most widespread technologies that has benefitted the PM industry is the adoption of VVT, or variable valve timing,” Dale explained. “The need for increased mileage drove the adoption of VVT technology in engines in the first place. PM has benefitted from that development; being so close to ‘near-net shape’ we have been able to take a major leap in the marketplace.” (See MPIF’s Automotive Parts Catalogue online for award-winning examples of VVT components.)

Ahead of the curve

Ironically, many of the major auto manufacturers are already developing advanced technologies that can significantly reduce fuel use and greenhouse gas emissions beyond the existing model year 2012–2016 standards. Among the targets: advanced gasoline engines and transmissions; vehicle weight reduction; lower tire rolling resistance; enhancements in aerodynamics; diesel engines;, and more efficient air-conditioning systems.

But it’s more complex than that, according to a recently published article1 by Wards Auto (the information center for – and about – the global automotive industry). A recent survey2 of nearly 700 design engineers who subscribe to WardsAuto showed that although “light-weighting and optimizing internal-combustion engines will play the biggest role in meeting the new standards,” a more integrated approach will be required. Regarding today’s light-weighting challenges, “We believe we will see more hybrid material solutions, innovative fastening and joining systems, and different manufacturing techniques to make significantly lighter-weight vehicles that deliver safety and performance,” said Chris Murphy, director-global automotive industry for DuPont, which co-sponsored the study.

Initial feedback from the auto supplier community signals a willingness (and, more importantly, preparedness) to collaborate with OEMs to meet the new MPG standards. The Motor & Equipment Manufacturers Association (MEMA)3 is confident that the supplier industry will play a key role in the ability of auto manufacturers to meet the requirements outlined in the final rules announced by the White House. As described in comments filed with the Obama Administration earlier this year, MEMA supported the comprehensive National Programme because it permits vehicle manufacturers to focus their resources on investing in the best technologies available for their fleet in order to achieve the levels prescribed by the programme.

“Suppliers continually research, develop, engineer and manufacture the advanced technologies necessary to meet these ever-increasing goals,” said Neil De Koker, president and CEO of the Original Equipment Suppliers Association.4 “Working together, suppliers and vehicle manufacturers will continue to innovate and develop an assortment of technologies and products that improve vehicle performance, safety, fuel efficiency, and emissions.”

Other industry observers within MEMA are especially receptive to certain provisions of the standard – namely the inclusion of a “mid-term” review. “This review will allow for a transparent, public discourse for agencies, the auto industry, suppliers, and other interested stakeholders to review the regulatory effectiveness, assess key data, and make any needed adjustments to the standards,” Bob McKenna, president and CEO, MEMA, explained. “Because long-term planning is especially important to the motor vehicle industry, having a singular, National Programme provides regulatory certainty and consistency so that the industry can more effectively meet the regulatory requirements.”

All sounds great from a theoretical perspective. Here’s hoping for a smooth road ahead in terms of the actual execution. Personally, I see mostly upsides for the PM industry.



REFERENCES
 

  1. “Automotive Engineers Preparing to Meet 2025 CAFE Standards – 2012 CAR Management Briefing Seminars,” by Drew Winter, Aug. 7, 2012. http://wardsauto.com/vehicles-amp-technology/automotive-engineers-preparing-meet-2025-cafe-standards
  2. July 2012 Survey of Wards Auto subscribers sponsored by DuPont and conducted by Paramount Research.
  3. MEMA represents its members through four affiliate associations: Automotive Aftermarket Suppliers Association (AASA); Heavy Duty Manufacturers Association (HDMA); Motor & Equipment Remanufacturers Association (MERA); and, Original Equipment Suppliers Association (OESA). Visit www.mema.org for more information.
  4. OESA, 400 members strong, provides a forum for automotive suppliers by addressing issues of common concern through peer group councils, serving as a reliable source of information and analysis, providing an industry voice on issues of interest and serving as a positive change agent to the automotive industry.