Kolbenschmidt Pierburg AG is one of Germany's largest quoted automotive suppliers. Part of the engineering group Rheinmetall AG, Kolbenschmidt Pierburg makes pistons, engine blocks, roller bearings, air intake manifolds and pumps, as well as other components around the engine. Kolbenschmidt Pierburg has been growing rapidly in the USA. In March 1999 it acquired Zollner Pistons LLC of Fort Wayne, Indiana. Kolbenschmidt Pierburg now claims to be the largest piston manufacturer in the USA and second worldwide. Automotive News Europe's Edmund Chew talked to Kolbenschmidt Pierburg Chairman Dieter Seipler in Stuttgart.
What are the main factors affecting your business at the moment?
The changing environment means lower emissions, lower weight and better consumption - and that is a driving factor in our components. The mergers of car manufacturers mean they exchange technical information - and they exchange component prices. That's also very challenging for us.
Has the consolidation among vehicle makers had an effect on pricing?
It has. But at the same time the growth of platform concepts has reduced the number of engine options. That has improved our cost situation and means we can give our customers a price reduction.
Is your business becoming more modular?
We are actively involved in piston modules or power cylinder modules (PCMs). We are delivering a PCM to the Navistar/Maxion joint venture from our Brazilian facility. We have carried out a project with General Motors that we showed at the SAE 2000 World Congress in Detroit in March. It will start high volume production this year. We are also working with Ford. If the customer requires a high degree of integration, we can offer that. We are willing to invest money in those activities.
What are the benefits?
By integrating these components, at least on the engineering side, we can reduce costs and assembly work while increasing performance.
Do you need to change to deliver these capabilities?
To assemble a piston module we need some specialist skills on the engineering side and on the logistics side. We already put rings onto pistons. The next step is to assemble conrods and the pins. That is a simple process but to really be efficient and cost effective in terms of the logistics we have place these assembly activities near to the engine plant. We are working on all the fields and I am very optimistic that we can become one of the major suppliers of such modules in North America and in Europe.
Are you looking for more partnerships?
We will cooperate with other suppliers when we do not have in-house competencies. Although we cover most of the components around the engine, we do not have motor management in our portfolio. We have to link our activities with the system suppliers such as Bosch, Delphi, Siemens or Magneti Marelli. We want to be compatible and we would like to have a higher degree of integration. We want to be able to show some advantages to our customers in specific areas such as piston modules or intake modules.
Can you give some examples of areas that are growing because of emissions reduction requirements?
We see that new concepts for low emission vehicles could use secondary air pumps, for example. To achieve low emissions a car will in many cases need a secondary air pump. In Europe we are the leader in this area. Another area is for example EGR (exhaust gas recirculation). Last year we were the first to begin mass production of electric EGR valves for diesel engines for Renault and Fiat. Another prime example of Kolbenschmidt Pierburg's technology is the pressure die-cast magnesium intake manifold for the Audi A8 4.2-liter V-8. This is new. This manifold gives the engine a higher torque level over a wider engine speed range by having three intake manifold lengths. This allows higher torque at low speeds that reduces fuel consumption and exhaust emissions.
How are your North American operations developing?
We have made a substantial step up in the USA. We have added Zollner and we are bringing new products such as oil pumps, water pumps and secondary air pumps, and new components such as air intakes and fuel pumps, to our plant at Greenville, South Carolina.
Are you looking for further growth in North America?
We want to continue to think about partnerships with American colleagues in the supplier industry, in both sales and production. We need to focus on our core competences. We are lacking in piston rings, pins and the assembly of those components, and that is one of the next steps that we must take. If we want to grow our business in North America we also have to give more support and service to our customers. We have bought a piece of land in Auburn Hills, Michigan, close to the Pierburg Instruments technical center. We are planning to install a test facility and design center for between 120-130 people.