Investments in paint shop facilities will increase dramatically over the next few years. Environmental regulations may soon get stricter, and modern plants provide more quality and productivity.
Paint shops are expensive, and they are highly customized. New paint shop technology has been largely developed by German companies who are world leaders in their construction as well.
Because most automakers ask for their own specifications and installations from subcontractors, there is little standardization.
The paint shop business is not as easily understood as, for example, robotic welding stations.
Paint shops are large capital investments, amounting to 25-30 percent of the cost of a new plant.
Generally, the capacity of the paint shop determines the maximum capacity of a plant. Cars cannot be assembled faster than they can be painted.
Shops are usually built for a duration of 20 years. Most recent installations have been modernizations of existing shops.
Future paint shops will be designed for water-borne processes, which reduce the amount of solvents that reach the environment. Specifications will vary, however, due to the lack of uniform European environmental legislation.
A fully equipped state-of-the-art paint shop built on a greenfield site will cost about DM500 million ($293 million), including premises. Spokesman Falk Possnecker of Duerr says his company holds orders for a total of DM12 billion for new and reconstructed paint shops worldwide. Duerr, of Stuttgart, says it is the global market leader in paint shop technology and construction, with a share of 30 percent. Duerr also owns Behr, a leader in spray application technology.
Eisenmann is another large German paint shop constructor, employing 1,660 people. Eisenmann has built or modernized 20 facilities over the past five years. It has four projects under construction now: for Renault at Douai, France; Opel in Poland; and Daewoo in the Czech Republic and Poland.
ABB is a relative newcomer in this field, but it has several hundred employees working on development and engineering of paint shops. It has projects under construction for Saab at Trollhattan, Evobus in Germany and Volvo in Belgium.
ABB headquarters are in Switzerland, but its paint activities are mainly in Germany and Sweden. It traces its Swedish origins to Asea, a specialist in automation. Flakt, another Swedish ABB subsidiary, specializes in air treatment and spray booths.
In France, Air Industrie Systems, (a subsidiary of state-owned GEC Alsthom), supplies some paint shops. Haden from the UK has formed a joint venture with the smaller German firm Drysis.
Modern paint shops are multi-story buildings, where dust-attracting processes and water-treatment are performed at ground level. On a top floor polluted air from the process is treated.
Dust is the biggest enemy in the process, so plants use a separate clean room where employees wear special clothing. The clean room tends to be located on the second level. Processing also takes place at this floor.
The level of automation depends on investment budgets, and a 10 percent price difference may cause a manufacturer to compromise on automation, says Dragoslav Milojevic, engineering r&d manager at ABB.
Growth of outsourcing
In the past a car manufacturer usually operated as the project manager for a new paint shop.
When Nissan built Europe's first Japanese transplant, it applied the principle in Sunderland, UK.
The UK construction firm McAlpine built the building. Haden-Drysis was responsible for the phosphate and top coat process systems. Air treatment installations came from Flakt. Air Industrie Systems of France supplied the curing ovens and electro-coating systems. Paint application came from Behr in Germany.
In Poissy, France, Peugeot did its own project management for a recent FF900 million ($156 million) investment. French firms Sames, Air Industries Systems and BSA supplied paint application, booths and ovens, and conveyor systems. That investment was the first stage of a three-stage modernization. Total cost will be FF1.8 billion when it is finished after 2001.
Now, 'the trend is toward complete outsourcing,' says Milojevic of ABB. 'We are able to offer a complete facility with approved systems. Some of them are our own development, others we purchase from specialist firms.'
In some cases main contractors ABB, Duerr or Eisenmann have to purchase specialist installations from each other to fulfill customer needs. In such cases, says Milojevic, 'there is a clear interface. For one of our installations at Saab, Duerr supplied the automation systems.'
Although they are moving toward complete outsourcing, manufacturers continue to specify criteria and sub-system suppliers. 'There is no standardization. Every manufacturer has its own needs and preferences,' says Eisenmann spokesman Bernd Wesche.
It can take months to work out details of a project after the initial bid has been accepted. Hard issues are price, terms of delivery, environmental conditions, materials and energy consumption. But soft issues like preference for certain suppliers because of good past experiences also play a role.
There is a lot of lobbying 'because a lot of money is involved,' says Milojevic.
ABB is involved in a well-publicized case involving money. ABB charged that individuals involved in the bidding process at Volkswagen solicited ABB for a kickback on a paint plant installed for Skoda in the Czech Republic.
Milojevic refuses to comment on the ABB case. 'It is a pity for the dedicated technical people that these affairs seem to happen,' he says.
Target pricing has spread from the purchase of components to the purchase of paint shops. Engineers don't care for it, but the practice seems to have taken hold. It is generally credited to Ignacio Lopez, the former purchasing executive for General Motors and Volkswagen.
With target pricing, an automaker says what it will pay for a certain part or service. Engineers prefer to start with the features they want to sell, and negotiate price afterward.
Target pricing 'is a new page in purchasing,' says Milojevic, 'but has not contributed to technology.'
One engineer says Volvo is the preferred customer. He says Volvo's purchasing principles are less offensive financially, and are more driven by technology.
Environmental criteria have become a decisive issue for some companies. Water-borne processes minimize carbon emissions.
However, the lack of a common European legislation has promoted compromising.
'In southern European countries, environmental awareness has been less than in the rest of Europe,' says Possnecker of Duerr. Christophe Gaulthier, who manages the Peugeot paint shop in Poissy, agrees. French legislation allows roughly 130 grams of emissions per square meter of body surface.
In France, PSA and Renault have signed a mutual agreement to reduce their emissions to 75 grams per square meter before December 2001. 'With our current investment and water-borne paint process, we can fulfill these requirements,' says Gaulthier.
German and Swedish manufacturers sometimes apply stricter emission limits than official German TA Luft emission legislation, which has a limit of 45 grams per square meter at most German plants. The German companies and Volvo tend to use their tougher standards in foreign plants, as Volvo does at Ghent, Belgium.
The move toward water-borne systems is slow. In all of Europe, only the Opel plant in Eisenach, Germany, uses 100 percent water-borne processes. Others with water-borne paint use a solvent-borne clear-coat on top.
Opel suffered early quality problems with its new paint shop, but they have been solved since November with the help of Herbert of Wuppertal, its paint supplier.
Frank Schepers of NedCar, in the Netherlands, says better quality costs more.
In the European car industry, 85 percent of metallic paints are water-borne. But 70 percent of solid colors are still processed with solvents.
Powder is next
Powder coating is likely to be the future beyond water-borne paint.
All three major paint shop suppliers were working on advanced application of powder coating systems, which are emission free.
Duerr installed a slurry-powder paint shop for the Mercedes A class plant in Rastatt, Germany.
The slurry-powder paint materials are developed by German chemicals company BASF. Rival companies with dry-powder processes say the slurry-powder application is not yet fully developed.
Eisenmann supplied a clear-coat facility at BMW in Dingolfing, Germany, where a dry powder process is applied. It also built a dry-powder primer facility for Chrysler's Eurostar joint venture in Graz, Austria. Volvo's AutoNova venture with UK entrepreneur Tom Walkinshaw in Uddevalla, Sweden, is also applying powder coating for the C70 coupe and convertible.
ABB is a partner in the US Low Emission Paint Consortium. Dry-powder application has also been studied, says Herbert.
'Powder coating has a great future because it can be applied without any emissions,' says Minko. 'But for the near future, the development still tends to water-borne zweischicht paint systems, because these can be more easily applied in existing paint shops without too many technical modifications.'
Zweischicht systems, also called 2K, use two paint components.