production line AUGUST 20, 2018 11 Auria’s jackpot potential: Acoustic material Lindsay Chappell lchappell@crain.com Auria Solutions’ operations in Sydney, Ohio, where the supplier has begun the conversion of its 10 North American plants plants to produce the material. T e conversion has enabled the compa- ny to automate its production to a greater degree, using only two line operators where it once needed nine, and to make its factories inter- changeable. Any Auria production line can now produce any model of the package, he said. to woo luxury customers. GM is Auria’s fi rst customer for the new technology.
T e packages will arrive at the automaker’s assembly lines as complete acoustic modules that GM line workers can drop into place. Auria Solutions has begun con- verting its 10 North American plants to supply a new type of sound and vibration deadening material for General Motors’ T1 full-size pickup and SUV platform. Pour declined to say whether the technology conversion will continue across Auria’s other 19 plants around the world. He said it will depend on whether non-North Ameri- can customers opt for the change.
T e contract is one of the indus- try’s biggest, requiring Auria — the soft trim and vehicle acoustics busi- ness spun off last year by Interna- tional Automotive Components — to produce more than 1.2 million of the large acoustics packages a year. Previously, the supplier used an ethylene vinyl ace- tate dash insulation. T e new technology is a light- er-weight, multilayer, fi - ber-based material. Auria CEO Brian Pour told Auto- motive News that the GM contract is just the beginning. Auria is also win- ning contracts to supply the material to other unidentifi ed North Ameri- can auto programs and is in talks with European customers about it.
percent ownership stake and IAC re- taining 30 percent. “Our old technology was the most robust, best performing noise-vibra- tion-harshness product in the indus- try,” Pour said. “But that technology is now a thing of the past. All the OEMs now need to take weight out of the ve- hicle, and this is how we’re doing it.” T e new approach was not developed with pick- ups in mind. Auria is main- ly a supplier to luxury cars. Mer- cedes-Benz and BMW are two of its biggest customers worldwide. Luxu- ry vehicles have been more tolerant of heavy component weight, and Au- ria was seeking a way to create a lighter sound and vibration system Pour: GM deal is just the start.
But he said industry elec- trifi cation will be a factor in the material’s success. “As you move into more electrifi ca- tion, weight is more critical,” he said. “Every OEM wants it lighter and cheaper.” T e new approach, developed be- fore the spinoff at Auria’s r&d center in Albemarle, N.C., delivers a weight reduction of 13 pounds per vehicle. It is also easier to make and easier to drop into vehicles on the assembly line, Pour said. Auria had the technology ace up its sleeve last year when the company recapitalized as a spinoff , with Chi- na’s Shanghai Shenda Co. taking a 70 Auria had global sales to automak- ers of $1.1 billion last year, and is tar- geting sales of $2 billion by 2020.
a He said Auria is spending $100 mil- lion to retool its North American JCI investors. Sprague estimated that if the battery business were sold, the deal would yield net proceeds to JCI of about $10.2 billion. Batteries a big part of supplier’s sales Joe Ritchie, an analyst for Goldman Sachs Research in New York, said in a report, “We take no view on the po- tential outcome of any transaction.” continued from previous page power and energy storage sector. As a business, JCI’s Power Solutions continues to show promise, and Oli- ver made it clear that retaining the global operation is a viable option, particularly as JCI delves deeper into batteries for vehicle electrifi cation.
Power Solutions is JCI’s last major automotive holding. AMERICA’S FASTEST GROWING USED CAR AND FINANCE DEALERSHIP FRANCHISE COMPANY In October 2016, the company spun off its segment-leading auto- motive seating business as Adient, headquartered in Dublin, Ireland. 918,944 He said recent contract awards on vehicle platforms “position us well to gain share.
T e increasing electrifi - cation in vehicles, combined with a regulatory environment still pushing for stronger effi ciency standards, are supportive of our core battery tech- nologies.” Except for batteries, JCI, headquar- tered in Cork, Ireland, is primarily focused on building controls for sys- tems such as heating, ventilation and air conditioning, fi re suppres- sion and security. But the battery business represents a major chunk of JCI’s sales, ac- counting for 24 percent of fi scal 2017 sales. Power Solutions produced 154 million lead-acid batteries in fi scal 2017.
Of those, 76 percent were for aftermarket sales, and the rest — about 37 million units — supplied automakers, according to company fi nancial data. Power Solutions posted $1.84 bil- lion in sales during the most recently concluded fi scal quarter, up 14 per- cent from a year ago. Its pretax earn- ings were up just 2 percent, to $310 million. For JCI overall, net income from continuing operations rose 30 percent to $723 million for the quarter. TWO-YEAR AVERAGE ANNUAL NET INCOME FROM OPERATIONS* Our award winning franchise opportunity will help you maximize your financial return. A success story that has been proven for over 25 years.
Wall Street observers have re- mained neutral on JCI’s consider- ations. T ree years ago, the Automotive News list of the top 100 global suppli- ers ranked JCI as the world’s ninth largest supplier of automotive origi- nal equipment. T is year, JCI ranks No. 89 on the list, with estimated worldwide automotive parts sales of $1.84 billion in fi scal 2017.
a NEW AUTO DEALER OPPORTUNITIES Great option for credit turn downs “All options appear to be on the ta- ble including sale, spin or retain,” wrote Jeff rey Sprague, managing partner for Vertical Research Part- ners in Stamford, Conn., in a note to Growth without dependency on (APPROVE more customers) manufacturer (CONTROL) Profitable outlet for retail trades (WHOLESALE advantage) Constant earnings (STABILITY) TOOLS tool orders they made with Chinese vendors, she said. ‘Trouble right now is the uncertainty’ T e new border scrutiny is requir- ing Canadian tool suppliers to pro- vide certifi cates of origin to account for the content of their products.
Har- bour is advising clients to assign ded- icated managers to track trade issues. continued from previous page Vehicle projects require large numbers of new tools. A single front fascia package might require the cre- ation of 50 tools. A vehicle redesign could involve $200 million worth of tool orders. “On the positive side, this could be great news for U.S. tool producers,” Harbour said. “We’re already seeing some tool work leave China and come back to North America. I think you could see many customers de- ciding that it’s just too risky to rely on imported tools, and just opt to make what they need here.
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