DETROIT (Aug. 3, 2011)—New fuel economy standards set by the Obama administration present suppliers with challenges, but also opportunities.
Auto makers and suppliers will work together to meet the new corporate average fuel economy standard of 54.5 mpg by 2025. This means new processes, said Lyle Otremba, vice president of commercial and technical development for Novi, Mich.-based Cooper-Standard Automotive Inc.
“The new requirements mean at least 5 percent (fuel economy) improvement per year,” Otremba said at the Center for Automotive Research Management Briefing Seminars in Traverse City. “This has to drive significant developments in the way we do business.”
To meet the looming CAFE standards, Otremba said, the industry needs to cut in half the length of the product development cycle. The industry also must meet the 2016 CAFE standards for an average fuel economy of 35.5 mpg.
“There's just no time for traditional design, testing and engineering," he said. "We must learn concurrent development, where we're engineering and developing the product simultaneously.”
Suppliers must standardize processes to become efficient enough to expedite development, he said.
Cooper-Standard is working to standardize processes as well as the equipment used across plants worldwide. For example, the supplier's rubber extrusion machines are identical across most of its plants, Otremba said.
The supplier of body-sealing, fluid-handling and anti-vibration systems reported net income of $44.9 million on revenue of $688.8 million in its first quarter of 2011. That growth can be attributed to products that improve fuel economy.
Cooper-Standard expects more growth as the domestic automakers continue to chase fuel efficiency.
The company is aligning itself to bid on more work for General Motors Co.'s Delta platform—the global platform for GM's fuel-efficient Chevrolet Cruze. Cooper-Standard also will seek work on the Epsilon platform, used on the Chevrolet Malibu.