GM’s top buyer Bo Andersson, who is global vice president of purchasing and supply chain, made headlines recently when he commented at a press conference that “scary” increases in raw materials prices are triggering a shift from steel to plastics and aluminum to magnesium. The comments caught my attention because so much engineering goes into a materials substitution. How can you do that in the face of short-term price increases? I put calls into GM’s communications’ staff, and was referred to purchasing communications, who understandably, referred me to technical communications, who then a few days later tossed me back to purchasing communications. You can draw your own inferences from that. But I did catch up with Bo Andersson this morning, and he elaborated on his comments. First, of all, he is studying options in close collaboration with his engineering counterpart, James E. Queen, global vice president of engineering. Suppliers’ engineers are also involved, and they are using Web-based tools to facilitate communications. All of the details, with specific examples, will be reported in the Design News materials newsletter going out next week. You can sign up here.
One tidbit from the interview can’t wait: Automakers such as General Motors have moved dramatically from steel to highly engineered plastic fuel tanks in the past 20 years. Plastic offered lower weight, more design flexibility and other advantages. Even as long ago as 1993, about a quarter of passenger cars had nonmetallic fuel tanks. Andersson says that GM recently decided to allow steel fuel tanks as an option in a future program. “That’s a good example of changing the strategy before we even design the vehicles,” Andersson said in an exclusive Design News interview. “We have been using plastic fuel tanks for the last 10 years and the resin price has been going up. Secondly, we look at transportation cost, because with everything we buy, we look at best landed cost. So in short you can say that a steel fuel tank can be welded together very close to the assembly plant and now you have reduced transportation cost and that is another key driver.”
Wow. Companies pushing steel fuel tanks launched a big marketing and technology drive several years ago through the Strategic Alliance for Steel Fuel Tanks, and they never really got much traction. Multi-layer plastics systems just kept getting better and better. But the steel guys had a story too, including: 1) New steels are increasingly formable, allowing more design freedom, and 2) they are100 percent recyclable. And they are increasingly cost competitive. With a landed cost approach and ballooning hydrocarbon prices, they are even preferred on a cost basis. Andersson did not identify the new program.