AUBURN HILLS, Mich.—Frederic Lissalde, 51, who took over as CEO of BorgWarner Inc. last year, says the company has a key advantage over competitors in being able to adjust quickly to changing global markets. A veteran of Valeo and ZF, Lissalde will need that agility as demand drops for diesel-powered cars, automakers announce huge investments in electric vehicles, and politicians battle over tariff and fuel-economy standards. He spoke with Staff Reporter Richard Truett at the company's headquarters.
With auto makers investing as much as $200 billion by 2025 to develop electric vehicles, does BorgWarner have enough capacity to build electric drive motors and drive modules, or will you have to invest in more production facilities?
We usually invest as volume ramps up. We never put in capital and wait. We are going to be in line with the demand. Once we have a product, we can scale it up. We are really good at scaling things up really rapidly and globally.
How long does it take for BorgWarner to bring a plant or a production line online after you have a commitment from a customer?
We can do it fairly rapidly. So when we have a commitment from a customer, and the product has been validated in cars, it's a question of a few months. We can be pretty reactive. It's one of the things we do that is part of our DNA. We produce hundreds of millions of parts every year. So scaling up fast is what we do for a living.
The traction motor space is fairly new for the industry.
But one advantage we have is that we have a great product and we leverage our manufacturing know-how from stop-start alternators. It's a different product, of course, but the core manufacturing technologies are not that far different. It's not like we are starting from zero.
It seems auto makers want to spend their money on features for autonomous vehicles. Is it hard to persuade them to spend it on such things as BorgWarner's new eBooster electric turbocharger?
It's hard, but I'll remind you that autonomous features consume a lot of energy. When you replace your brain, your arm, your eyes, your ears, with radars and lidars, when you need to bring electricity to them and for computer power, you need to have an efficient powertrain if you still want to move the wheels.
If federal fuel economy standards are frozen at the 2020 level, how will that impact BorgWarner? Will automakers stop spending money to improve fuel economy and reduce C02 emissions?
They need global propulsion architectures. They might not use some of the features in the U.S. market, but they are global players. What we see is that they are still moving in the fuel efficiency direction. It would be damaging long-term versus the competition. Fuel efficiency is a competitive advantage no matter where you are.