Automakers screw and weld all the pieces together on their assembly lines… we’ll give them that.
But among the myriad of components that make up their modern vehicles, the GM and Ford and Chryslers of the world only make about a third of them.
“Sixty-five to 75 percent of the overall component cost of a car comes from outside suppliers,” notes Steve Rodgers, president of the AMPA, the association for Canadian-based firms that engineer and build these original equipment parts.
When I ask Steve to list which parts typically get built “outside,” he notes it would be much easier to talk about the parts the automakers do build.
“The ‘body in white’ is the big piece that gets built in-house… think of the hulk that gets dipped into the paint tanks. Doors, hoods and fenders, and other pieces built in stamping plants are also typically done in-house.”
After that, the biggest in-house pieces are engines and transmissions, which are usually built by the manufacturers in their own facilities. But again, Rodgers notes that someone else builds a lot of the components that go into them, everything from connecting rods to steering pumps to fuel injection systems.
After that, all bets are off. Some automakers may have a dedicated axle, wheel, or fascia plant here and there, but typically everything else is pretty much sourced from an outside supplier.
According the Rodgers, the only thing that automakers would not think of outsourcing is their conceptual and development role — how everything they build, or assign someone else to build for them, comes together to define their brands.
New Manufacturing Model
Didn’t used to be this way. At the beginning of the last century, automakers embraced the “let’s build everything” model. The pinnacle was certainly Ford’s Rouge Complex;
when it was completed in 1928 it was the largest integrated automotive facility in the world. Basically, raw iron ore was delivered in one end and brand new Fords came out the other.
“We send 32 truckload of seats there every day…A truck leaves every 32 minutes.
The major flaw of this model, however, is when sales fall off for the main vehicle line, it means all the supporting on-site plants need to slow down too. And because they’re dedicated to a particular make and model, they have few options to stay productive.
This ultimately led to the adoption of the “Centres of Excellence” model. In this model, a supplier company develops world-class expertise in a certain automotive component or sub-system. They are then able to stay at the top of their game, and provide a number of automakers with a turnkey, world-class solution.
Notes Rodgers: “A Ford, GM or Chrysler, for example, would not want to pay what it takes to operate their own world-class door latch operation. It would have to know and be aware of everything that’s possible in the world of door latching. They would rather go to the door latch expert, and ask them what’s possible.”
Multimatic Door Hinges
“We make more than 150 million door hinges and door checks every year,” says Hao Wang, Executive Director, Business Development, Multimatic Engineering. “We have 60 percent of the North American market, and about 35 percent of the European market.”
So this company, based in Markham, Ontario, would be one those “world class” specialists that an automaker would call on, if it be needing some door hardware bits for a new vehicle.
For this article we wanted to profile three Canadian auto supplier companies that contributed to a Canadian-made vehicle. We chose the Lincoln MKT and it was no stretch that something from Multimatic would be on this Ford-built product, as Multimaitc has particularly close ties to the Dearborn-based automaker.
When it’s not building door hardware, it’s developing and selling Ford factory race cars, like the new Boss 302R, or actually running the Ford factory race team in Grand Am.
Multimatic’s engineering division was established in the 1980s, to cater to the automakers’ increasing desire for “Full Service” suppliers. “Typically, the (OEM) customer will give us general product requirements, performance and functional specifications, and package space, and of course a cost target, and we are responsible then to deliver a part that meets all of these criteria,” says Wang.
And this was the case with the side door hinge and check systems for the MKT. “We designed and engineered these parts, and produce them at the Multimatic Anton manufacturing facility in Concord, Ontario.”
Mutlimatic’s latest project dramatically illustrates how much engineering muscle is now located at the supplier level. In conduction with its U.K. engineering facility, Mutlimatic has engineered the complete rolling chassis of the Aston One-77 — a $2 million super car. It also constructs the state-of-the-art carbon fibre chassis structure right at its Markham (Ontario) facility.
Is it possible, Mr. Wang, to get excited about door hinges, when you just built the structure of one of the most exciting sports cars in the world?
“We get equally excited about getting a contract like the MKT door hinge and check system as the One-77, because in both cases we are utilizing our technical capabilities and experience to provide the best possible solution…”
Infographic courtesy of Automotive News
Magna Seats
The Lincoln MKT’s seats were designed and are built by Magna Seating, an operating group within Magna International — one of the world’s largest and most diversified auto companies. (And Canadian if you didn't know all ready.)
Magna Seating alone has 12,827 employees, operating 37 manufacturing plants and 6 engineering facilities throughout North America, Europe and Asia.
One of those employees is Shea Hardman, general manager of Mississauga Seating Systems. His plant sends a lot of seats to the Ford assembly plant in Oakville, where the MKT is made.
“We send 32 truckload of seats there every day,” says Hardman. “A truck leaves every 32 minutes.”
This would be an example of the “just in time” delivery system, much used today in automotive manufacturing. To make this happen, Hardman says the Magna plant gets a broadcast of the build that’s planned for the Oakville plant.
“We ship according that broadcast, trying to stay about six hours ahead. The seats we make at 9 a.m. will be on an MKT by the end of the day.”
Getting the right seats into the right MKT coming down the line is no small feat. It is a complicated build — the three-row MKT offers customers many seat variations.
“We ship in the exact sequence as the MKT models coming down the line,” adds Hardman. “The seats are unloaded onto pallets, which are then put on a sequenced conveyer system, to take it to the line. As long as the conveyer system is working, the seat set arrives at the line just when the vehicle is ready for it.”
Because it is part of a luxury vehicle, the MKT seat is also complicated — it has many features, like extra trim, lumbar, heating, and power adjustment.
Hardman says the MKT seat build includes 64 different “sub suppliers” providing 429 different items.
Leggat and Platt Lumbar Support
One of those 64 suppliers contributing to Magna’s MKT seat build is Leggat and Platt Automotive Group, based in Windsor, Ontario. The Leggat and Platt power lumber support is just one of many items that that the auto parts company builds and sends to Manga seating in Mississauga.
“We make the tooling and the part right here in Lakeshore, which is just right beside Windsor,” notes Peter Hoene, Vice-President, Sales and Marketing.
Leggat and Platt engineers and builds lots of automotive components, but the “seat comfort” line is the big dog in its catalogue.
In fact, according to Hoene, the company is the world leader in automotive seat suspensions, lumbar supports, and massage units. “And we can say world leader both on the technology side and on the numbers side. We lead the industry on all continents.”
That’s the other developing aspect of the supplier industry. With automakers going global, they want their supplier companies to go global too, as they prefer dealing with a few “global” suppliers, rather than a larger number of regional suppliers.
“We have to follow our customer,” says Hoene. “If they're in China, we’re in China.”
Special thanks to Supplier Business and Automotive News, which created and first published the Linclon MKT Supplier Cut-away, and granted us permission to reproduce it here.
