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gene cellenceSUMMITS IN CROSS-GENERATIONAL EDUCATION

DEALERS:Solve your Millenials sales challengeautonews.com/SummitSeries See page 29

APRIL 27, 2015

‘Rational exuberance’Neal E. Boudettenboudette@crain.com

LANSING, Mich. — Jeff Williamsfeels pretty good about the futurefor the Audi, Volkswagen and Sub-aru stores he owns on two lots over-looking U.S. Highway 127 here.

But he can still hold up a handand tick off reasons to worry.

VW doesn’t have the small cross-overs so many buyers now favor,while Subaru and Audi supplies are

tight. Interest rates are bound toedge up, pinching his finances andhis customers’ purchasing power.And he’s convinced that the comingpresidential election campaign willbring a lull in sales that will lastthrough early 2017.

“It always happens,” he warns.“People wait to see the outcome,

whichever way it goes, and they putoff big purchases.”

There are many signs suggestingthe U.S. auto industry is on a posi-tive, sustainable track, but perhapsthe most reassuring sign is the kindof caution Williams espouses. Whilehe’s investing generously in his oper-ation to seize on the current boom,he’s also thinking about the eco-nomic threats around the corner.

Most manufacturers are walking

this same line. Although pushingfor higher sales and investing innew capacity, they remain wary ofoverreaching, and so far they havestopped short of the kinds of ex-cesses that in the past caused themto get ahead of the market.

Just last week, Ford said it will layoff 700 workers at its Wayne, Mich.,plant, where it builds the compact

see EXUBERANCE, Page 37

> SAE WORLD CONGRESS

Driverless cardilemma: Howto interfacewith a human

David Sedgwickdsedgwick@crain.com

ETROIT — Soon we’ll bedriving vehicles that cansteer, accelerate and brake

themselves on the highway with-out the motorist’s intervention.

The technology isn’t foolproof,however, so drivers must be readyto take over if the vehicle encoun-ters an unexpected obstacle. Butif a motorist is texting a spouse or— heaven forbid — taking a nap,he or she may be too distracted todo so.

Indeed, if autonomous drivingis Megatrend No. 1 in the globalindustry, the matter of how tohandle the human interface maybe Conundrum No. 1. It was cer-tainly a hot topic last week here asauto executives debated the tech-nology of driverless cars duringthe annual SAE World Congress,an event that attracted thousandsof engineers.

“This is one of the most chal-lenging parts of the develop-ment,” said Cadillac spokesmanDavid Caldwell. “There are manyschools of thought and manyconcepts being tried.”

Automakers have devised dif-ferent techniques to ensure thatthe motorist stays alert. Some,

see AUTONOMOUS, Page 34

> SHANGHAI AUTO SHOW

Priced to sell:China’s cheapcar strategyfor the U.S.

Hans Greimelhgreimel@crain.com

HANGHAI — How muchwill a Chinese brand needto discount its cars to suc-

ceed in America? Wu Song, general manager of

aspiring U.S. entrant GuangzhouAutomobile Group Motor Co.,says he has that magic number:His cars will have to be priced 30percent cheaper than rivals in thesame segment.

If everything goes his way, Wuwill be testing his bargain-base-ment pricing strategy with theU.S. launch of his company’s GS4crossover sometime in 2017.

“We are confident. It could bepopular in the market,” Wu toldAutomotive News at the Shanghaiauto show. “Considering the lowprice, it should be competitive.”

The company’s top executivealready is seeking U.S. dealers,importers and distributors.

Guangzhou Automobile, whichgoes by the abbreviation GAC, isthe latest Chinese automakerfloating plans to sell made-in-China cars in the U.S., followingsimilar pronouncements by GreatWall Motor Co. and BYD Auto Co.

Skeptics often pooh-pooh suchgoals, noting the many Chinese

see CHINA, Page 33

> AUTOMOTIVE NEWS PACE AWARDS

Celebrating innovationGame-changing innovations — new ideas, executed well and brought to market as an automotive product — are the fuel that drives competitiveness in this industry. They also were the focus of a gala evening on April 20, when 12 suppliercompanies won 14 Automotive News PACE Awards. | PAGE 22 |Our photo gallery captures the excitement at the 21st annualPACE black-tie celebration. | PAGE 23 |

SD

HEADEDWHERE WE’RE

What a week! From the Shanghai auto show to theSAE engineering extravaganza in Detroit, the

industry’s future seemed to come into sharp focus. SAE coverage | PAGES 4, 25, 27 |Shanghai auto show coverage

| PAGES 32, 33, 39 |

Industry revels in good times but manages to avoid overdoing it

Dave Smith buyerplans to expandThe buyer of Dave SmithAuto’s two Internet-powered dealershipswants to spread thatbusiness model and storename in the Northwestand beyond. | PAGE 8 |

■ Comment: Experts debate therise of subprime lending | PAGE 14 |

Innovation inspires suppliers along with industryBradford Wernle

bwernle@crain.com

ETROIT — Great innovation doesmore than just make better vehicles.It can inspire companies to trans-

form themselves and create jobs. That’s what happened to Magna Closures,

which won a 2015 Automotive News PACEAward for its Pure View sliding rear windowfor the 2015 Ford F-150 pickup.

Bruce Warren, general manager of MagnaGlass and Sealing Systems, told an awardsceremony crowd of about 500 last week thathis company had dreamed of winning aPACE Award several years ago.

“But it was just a dream. Our business wasshrinking due to outdated product lines anda difficult industry. Our chance came whenFord opened the design competition for thecompletely new F-150 sliding window. Weweren’t the incumbent, so we knew we hadto do something really special to win.

“The most important thing is we created125 jobs at the factory in Holland, Mich.,

That was the same factory that we had shutearlier due to a downturn in the economy.”

The PACE Awards kicked off the SAE 2015World Congress here, and attendees werewelcomed by Jeff Hemphill, chief technicalofficer of Schaeffler Group North Americawho also is SAE International’s vice presi-dent of automotive.

He summed up the challenges facing theindustry as it strives to boost fuel economyand prevent accidents: “This industry needsinnovation like never before.”

Dave Anderson of Nvidia Corp., a SiliconValley computer chipmaker, invoked the in-

dustry’s long history of partnership and in-novation in accepting his company’s awardfor its Tegra visual computing module.

“It’s also kind of cool to be here in Detroitbecause this is a new point in time in historyto see other companies like our own cominginto this industry and lighting a fire aroundnew innovation,” said Anderson, seniormanager of automotive integration atNvidia.

“A hundred years ago that same type of in-flux of innovation was happening with twoof the pivotal figures in Detroit,” ThomasEdison and Henry Ford, he said. “A lot of theelectrical innovation that became part ofFord’s vehicles was fundamentally createdout of that partnership.”

He welcomed similar partnerships be-tween Detroit and Silicon Valley to bring“the same level of innovation into the interi-or of your vehicle, redefining the cockpitand user experience.”

The 21st annual awards were handed outApril 20 at the Max M. Fisher Music Center

here. The awards are sponsored by EY, theTransportation Research Center Inc. andAutomotive News.

Twelve suppliers won 14 awards. Conti-nental Automotive and Federal-MogulCorp. won two awards each.

Seven of the 14 winners of the competi-tion, which recognizes game-changing newproducts and processes, were honored forefforts that will help their customers meettougher mileage and emissions rules.

“A new level of efficiency is being achievedwith basic science — new materials andelectronics,” said J Ferron, director of judg-ing for the PACE Awards.

For instance, one of Federal-Mogul’sawards was for a piston-ring coating madeof a carbon material with properties of dia-mond, which cuts friction up to 20 percent.

As part of the event, three automakerswere awarded Innovation PartnershipAwards for fostering innovations with sup-pliers: Audi AG, BMW AG and Volvo CarCorp.c

The PACE Award winners by category

PRODUCT■ BorgWarner TorqTransfer Systems, Auburn Hills, Mich.: Front-wheel-drive electronic limited-slip differential■ Continental Automotive, Auburn Hills, Mich.: Printed circuitboard substrate technology for transmission electronics■ Continental Automotive, Auburn Hills, Mich.: Multiapplicationunified sensor element■ Denso Corp., Southfield, Mich.: Highly standardizedautomotive heating, ventilation and air conditioning control unit■ Federal-Mogul Corp., Southfield, Mich.: MicroTorq seal ■ FTE automotive, Auburn Hills, Mich.: Hydraulic gear shiftactuator module■ GKN Driveline, Redditch, U.K.: Two-speed gearbox for electricvehicle applications■ Magna Closures, Holland, Mich.: Pure View seamless slidingwindow■ Mahle Engine Systems and Components, Stuttgart:Evotec 2 lightweight piston for gasoline engines■ Nvidia, Ann Arbor, Mich.: Tegra visual computing module■ Osram Opto Semiconductors, Northville, Mich.: Black flatmultichip family for mass market■ Sika Automotive, Madison Heights, Mich.: Ultra-high modulusadhesive for mixed material bonding■ Valeo Electrical Systems, Creteil, France: EG efficiencygenerator

MANUFACTURING PROCESS■ Federal-Mogul Corp., Southfield, Mich.: Low-friction DuroGlidepiston ring pack

In addition, three automakers were honored for fosteringinnovative partnerships with their suppliers: ■ Audi AG for partially coated multilayer steel transmissionseparator plates with Dana Holding Corp.; printed circuit boardsubstrate technology for transmission electronics withContinental Automotive; and hydraulic gear shift actuatormodule with FTE automotive■ BMW AG for ultra-high modulus adhesive for mixed materialbonding with Sika Automotive■ Volvo Car Corp. for RACam integrated radar/vision systemwith Delphi Automotive

2015A U T O M O T I V E N E W S

PACE AWARDS

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22 • APRIL 27, 2015

More PACEon the Web

■ Summaries of 14 winners,with judges’ comments and 36 finalistsautonews.com/pacewinners

■ Video clips of the winnersautonews.com/pacevideo

innovationPACE Award winners: Front row, from left, Steffen Hoppe, Federal-Mogul; Philippe Masson, Valeo ElectricalSystems; Michael Godwin, OSRAM Opto Semiconductors; Rick Smith, Denso; Bruce Warren, Magna Closures;Jochen Adelmann, Mahle; and David Jones, Sika Automotive. Back row, from left, Mike Gerulski, Federal-Mogul; Martin Baumeister, Continental; Michael Mueller, FTE automotive; Kregg Wiggins, Continental; DaveAnderson, NVIDIA; Hans Engström, BorgWarner TorqTransfer Systems; and Ray Kuczera, GKN Driveline.

Celebrating

Thrill of victory: PACE winners celebrate, thank their teammates and hold high their awards: 1. Bruce Warren, Magna Closures and Randy Miller, EY 2. Magnus Olsson of Volvo making remarks afterwinning the innovation partnership award with Delphi 3. Franz Linner of BMW Group pumps his fist afterwinning an innovation partnership award with Sika Automotive 4. Martin Baumeister of Continental withhis PACE trophy

1

2

3

4

PHOTOS BY JOE WILSSENS

20150427-NEWS--0022-NAT-CCI-AN_-- 4/23/2015 12:50 PM Page 1

Michael Mueller of FTEautomotive accepts the PACEtrophy from J Ferron, right,PACE director of judging, andJason Stein, publisher ofAutomotive News.

Above, from left, fromFord Motor Co.: CarleneBills, Nicole Petite, Julia

Woodhouse, KeithCombs and Chris Alberty.

At right: Jeff Basas ofAxalta Coating Systems

and his wife, KarenBasas.

Lynn Tilton, CEO of Dura Automotive Systems, and Dura execs, from left, Martin Becker, Jerry Lavine and Pierre Beyer.

Eugene Mann plays the saxophone at the reception.

o with sales rocking, automakerspaying well for innovativeproducts and new factories going

up, what’s a supplier executive to do?That’s easy: Have a party.At last week’s gala evening to hand

out the 2015 Automotive News PACEAwards, suppliers toasted theirsuccess.

Engineers who stuck out the Great

Recession now find it’s a great time tohave automotive expertise. Their skillsare in high demand to improve everycorner of the automobile.

Do you have an idea to save a gram of weight? Let’s talk, say automakers.Can you add a tenth of an mpg to apowertrain? Let me buy you a cup ofcoffee.

Times are good. Time to celebrate.The envelope please: Teams from PACE finalists wait for their

company to be named a winner.

Keith Crain, editor-in-chief of Automotive News,welcomes supplier execs and their guests.

SUPPLIERS PICK UPTHE PACE AND PARTY

APRIL 27, 2015 • 23

S

PHOTOS BYJOE WILSSENS

> Variable steering helps parkingand high-speed cruisingTakata Corp.

■ WHAT: Active steering■ INNOVATION: Variable ratio steering hasbeen limited mostly to luxury vehiclesbecause it’s expensive. While parking,it causes substantial steering changeswith little movement of the steeringwheel. But while cruising at highspeeds, it causes only small steeringchanges with the same steering wheelrotation. Takata’s solution embeds agear set, electrical motor and computercontrols in the steering wheel. This

achieves variable ratio steering inexpensivelyfor mass-market vehicles.■ FIRST CUSTOMER: Ford, March 2015■ WEBSITE: www.takata.com/en

28 • APRIL 13, 2015

■ WHAT: Automotive News PACE Awards, whichhonor innovation by automotive suppliers■ CO-SPONSORED BY: EY, Transportation ResearchCenter Inc., Original Equipment Suppliers Associationand SAE International■ WINNERS ANNOUNCED: April 20■ WHERE: Max M. Fisher Music Center, Detroit■ OTHER FINALISTS:autonews.com/pacefinalists

Here are summaries of eight finalists for the 2015 Automotive News PACE Awards, which honorinnovations in products, manufacturing processes and information technology.

❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙

Competition is intense for PACE Awards

> Compact EGR valve is easy to packageBorgWarner

■ WHAT: Gasoline exhaust gas recirculation module■ INNOVATION: To help control emissions of direct-injection gasoline turbochargedengines, BorgWarner engineers developed an exhaust gas recirculation valve with anew type of steel that can withstand exhaust gas temperatures above 750 degreesCelsius, or 1,382 degrees Fahrenheit. The new valve, which features anintercooler, is smaller and more compact than existing EGR valves, whichmakes it easier to package on engines.■ FIRST CUSTOMER: Fiat Chrysler 3.6-liter Pentastar V-6 gasolineengine, March 2015■ WEBSITE: borgwarner.com

> Completely recyclable — and fancy stitches, tooInteva Products

■ WHAT: Olefin soft-stitch instrument panel■ INNOVATION: Inteva developed a complete instrument panel — skin, foam andsubstrate — made of olefin, a recyclable synthetic fiber. The instrument panel isefficiently recycled with no scrap. The material is soft, wrapable and permits decorativestitching on the full skin of theinstrument panel. Roboticstitching cutsmanufacturing time to afew minutes from up tothree hours.■ FIRST CUSTOMER: 2013Buick Enclave, Chevrolet Traverse and GMCAcadia■ WEBSITE: intevaproducts.com

> Precise manufacturing cuts bearing friction

Federal-Mogul Corp.■ WHAT: High precision bearing profiling■ INNOVATION: Federal-Mogul engineers found thatengine-bearing friction can be reduced if bearingshave a slight convex shape. The weight of thecrankshaft on the bearing flattens the convexsurface, reducing friction. The company’s precise

manufacturing creates a convex surface just a fewmicrons higher in the middle of the bearing thanon its edges. (A micron is one-thousandth of 1 millimeter.) The surface can be customizedfor different bearings without loss ofmanufacturing productivity. ■ FIRST CUSTOMER: Hyundai’s A2 inline-fourdiesel engine, 2012

■ WEBSITE: federalmogul.com

> Piston coating reduces friction up to 20%Federal-Mogul Corp.

■ WHAT: DuroGlide piston ringcoating■ INNOVATION: Federal-Mogul’sDuroGlide piston ring coating cutsfriction up to 20 percent. Thecoating is a durable carbonmaterial with properties ofdiamond that resists abrasionsand scuffing. Fuel savings can beup to 1.5 percent. ■ FIRST CUSTOMER: Volkswagen1.6-liter and 2.0-liter BlueMotionmodels, 2014■ WEBSITE: federalmogul.com

> 2nd gear savesfuel forelectrifiedvehiclesGKN Driveline

■ WHAT: Two-speed gearboxfor electrified vehicles■ INNOVATION: Thetypical electricpowertrain uses aone-speed electric-drive transmission,which takes the vehicleto a certain speed, thendisconnects. GKN’stwo-speed eTransmissionallows optimal powertrainperformance with electricpropulsion for high speeds, too. In the BMW i8, whichgoes from 0 to 60 mph in 4.4 seconds, theeTransmission, guided by innovative computercontrols, stays engaged with the vehicle’s six-speedautomatic transmission up to the vehicle’sprogrammed limit of 155 mph.■ FIRST CUSTOMER: BMW i8, 2014■ WEBSITE: gkn.com

> 1 sensing device, many powertrain usesContinental Automotive

■ WHAT: Multiapplication unified sensor element■ INNOVATION: Continental developed a sensing device that can beprogrammed to act as five powertrain sensors. For example, acamshaft position sensor can become a crankshaftposition sensor via a programming change. Anadded bonus: The element does not require rare-earth materials. It uses ferrite magnets, whichcost 70 percent less than the magnets used by atypical sensor.■ FIRST CUSTOMER: 2.0-liter gasoline direction injectionand 2.4-liter turbo direct injection engines in the Hyundai Sonata and SantaFe Sport and Kia Optima and Sorento, January 2014■ WEBSITE: conti-online.com

> Lightweight awd for small fwd vehiclesGKN Driveline

■ WHAT: Awd disconnect system■ INNOVATION: GKN’s compact and lightweightdrive system is suitable for a range of smallfront-wheel-drive vehicles. It connects the rearwheels when needed for traction and

disconnects them for high-mpg cruising. It meetsall of Jeep’s Trail-Rated off-road requirements. ■ FIRST CUSTOMER: Jeep Renegade, Fiat 500X,2014■ WEBSITE: gkn.com

> Coated steelplates replacepaper gasketsDana Holding Corp.

■ WHAT: Steel transmission separator plates■ INNOVATION: Automatic transmissions with up to 10 speeds need high fluid pressure to operate clutches, valves and other internal parts. Under high pressure, traditional papergaskets can leak or foul transmission fluid. Dana’s multilayer steel plates replace papergaskets with technology found on cylinder head gaskets. The steel plates are coated with a flexible sealing compound, preventing leaks and contamination. ■ FIRST CUSTOMER: 2014 Audi A4, A6 ■ WEBSITE: dana.com

> Less expensive LEDsfor mass-market carsOsram Opto Semiconductors

■ WHAT: Oslon black flat multichip family■ INNOVATION: LEDs create elegant auto lighting. Butthe diodes and related parts are complex electronicdevices that have been restricted mainly to luxury vehiclesbecause of high costs. Osram’s family of LEDs, by reducingcomplexity and cutting manufacturing costs, are suitable formass-market vehicles. ■ FIRST CUSTOMER: Audi, 2015■ WEBSITE: osram-os.com

20 • APRIL 6, 2015

> Hydroforming creates artful Lincoln liftgateAmino North America Corp.

■ WHAT: Sheet hydroformed clamshell liftgate■ INNOVATION: Lincoln wanted a liftgate that wrapped around the rear corners to lend stylingelegance to the MKC. Conventional stamping could not do the job. So Amino used high-pressure water to bend sheet steel, a method called hydroforming.The process also forms a recess in the liftgate forone unbroken light bar from side toside. ■ FIRST CUSTOMER:Lincoln MKC, 2014■ WEBSITE:aminonac.ca

■ WHAT: Automotive News PACE Awards, which honorinnovation by automotive suppliers

■ CO-SPONSORED BY: EY, Transportation ResearchCenter Inc., Original Equipment Suppliers Associationand SAE International

■ WINNERS ANNOUNCED: April 20

■ WHERE: Max M. Fisher Music Center, Detroit

■ OTHER FINALISTS: Featured weekly through the April13 issue and online at autonews.com/pacefinalists

Here are summaries of seven finalists for the 2015 Automotive News PACE Awards, which honorinnovations in products, manufacturing processes and information technology.

❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙

Game-changing suppliers seek PACE Awards

> Special coating on pinscuts chain wear 67%BorgWarner

■ WHAT: Inverted tooth silent timing chain■ INNOVATION: Timing chains in turbocharged gasoline direct-injectionengines tend to wear out early due to severe oil conditions.BorgWarner’s new chain, with specially coated stainless steel pins,reduces wear by 67 percent over a chain using traditional chromiumcarbide coated pins. ■ FIRST CUSTOMER: Volkswagen AG’s 1.4-liter GTDI engine, May 2015■ WEBSITE: borgwarner.com

> Engine, transmission converse to boost fuel efficiencyEaton and Cummins

■ WHAT: SmartAdvantage Powertrain■ INNOVATION: Engineers at Eaton and Cummins took their long-standing cooperation to a higher level by devising advancedcomputer controls to operate the Cummins heavy-duty engineand Eaton 10-speed transmission. By sharing data, the engine

and transmission determine the torque curve and powerneeded to match the load, which

optimizes fuel economy andperformance.

■ FIRST CUSTOMER: CalArk Inc.,September 2013■ WEBSITE: eaton.com,

cummins.com

> Only one HVAC unitfor SUVs, minivansDelphi Thermal

■ WHAT: Integrated front and rearHVAC unit■ INNOVATION: SUVs and minivanstypically have two units, front andback, for heating, ventilation and airconditioning, or HVAC. Delphi’s single unitin the instrument panel saves weight and meetsall heating and cooling requirements for the entirecabin while still permitting front and rear passengersto control temperatures.

■ FIRST CUSTOMER: 2014 Acura MDX■ WEBSITE: delphi.com

> Multiple sparks causecomplete combustionDelphi

■ WHAT: Multicharge ignition■ INNOVATION: Modern direct injection of gasoline causes an uneven mix offuel and air in the cylinder. The uneven mix requires expensive, high-energyignition coils. Delphi’s computer-controlled coils provide multiple sparks forcomplete combustion without increasing the size or weight of the coils. ■ FIRST CUSTOMER: Mercedes four- and six-cylinder engines, April 2011

■ WEBSITE: delphi.com

❙ ❙ ❙ ❙

■ WHAT: Automotive News PACE Awards, which honorinnovation by automotive suppliers

■ CO-SPONSORED BY: EY, Transportation ResearchCenter Inc., Original Equipment Suppliers Associationand SAE International

■ WINNERS ANNOUNCED: April 20

■ WHERE: Max M. Fisher Music Center, Detroit

■ OTHER FINALISTS: Featured weekly through the April13 issue and online at autonews.com/pacefinalists

Here are summaries of seven finalists for the 2015 Automotive News PACE Awards, which honorinnovations in products, manufacturing processes and information technology.

❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙

18 • MARCH 30, 2015

> Improved traction for fwd vehiclesBorgWarner

■ WHAT: Limited-slip differentialfor front-wheel drive■ INNOVATION: When a drivewheel hits a slippery spot,such as ice, the limited-slip differential sendstorque from the wheelon ice to the wheelwith better traction.BorgWarner, workingwith VW Motorsport, deviseda cost-effective limited-slip differential for fwd vehicles. It usesBorgWarner’s controls and clutch actuation to operate the frontdifferential.■ FIRST CUSTOMER: Volkswagen Golf GTI, November 2013■ WEBSITE: borgwarner.com

Game-changing suppliers seek PACE Awards

> Steerable rear wheelsZF Friedrichshafen AG

■ WHAT: Active rear axle kinematics■ INNOVATION: With steerable rearwheels, a vehicle is more stable athigh speeds and more maneuverablewhile parking. ZF’s system uses anelectric motor, sensors and a controlcomputer to activate rear steering whenit’s needed.■ FIRST CUSTOMER: 2014 Porsche 911 GT3■ WEBSITE: zf.com

> Elegant rear windowMagna Closures

■ WHAT: PureView seamless slidingwindow■ INNOVATION: A typical pickup’srear window has two panes of glassthat slide on an exterior track.Magna’s single panel slides insidethe rear window. It gives the rearwindow a clean, elegantappearance, and it reducesmanufacturing complexity.■ FIRST CUSTOMER: 2015 Ford F-150■ WEBSITE: magna.com

❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙ ❙

> Low-cost substrate for transmission computersContinental AG

■ WHAT: Printed circuit board for transmission control units■ INNOVATION: Computer control units for transmissions typically use ceramic substrates. But ceramic isexpensive and time consuming to cure. Also, the same substrate cannot house logic circuits, which performoperations on data, and power circuits, which transfer and control higher amounts of electricity.Continental’s nonceramic substrate solves these and other problems. ■ FIRST CUSTOMER: Mercedes-Benz seven-speed transmission, February 2012■ WEBSITE: conti-online.com

> Standard HVAC units for many vehiclesDenso Corp.

■ WHAT: Standardized HVAC unit■ INNOVATION: Most vehicle heating, ventilation and air conditioningunits are designed for specific models. Denso’s standardized unit canbe used in a variety of models, cutting design and tooling costs. Theinnovation also reduces the unit’s size, weight and powerconsumption.■ FIRST CUSTOMER: Toyota, December 2013 ■ WEBSITE: densocorp-na.com

> On-board callsfor serviceappointmentsXtime Inc.

■ WHAT: ServiceTelematics ■ INNOVATION: The cloud-based system connectsdealers’ service departments withvehicles. If, say, a check enginelight comes on, a driver can use theon-board system to make a serviceappointment with a dealership. ■ FIRST CUSTOMER: Hyundai vehiclesequipped with Blue Link, September 2012■ WEBSITE: xtime.com

> Better bird’s-eye view for driverValeo

■ WHAT: 360Vue 3-D Surround View System ■ INNOVATION: Current bird’s-eye camera views of a car’s surroundingshave a significant limitation: They show only about seven feet around acar. The Valeo system shows a larger area, and presents it to drivers in 3-D. The system uses four cameras mounted in the rear, grille andexterior side mirrors. ■ FIRST CUSTOMER: 2015 Volkswagen Passat■ WEBSITE: valeo.com

■ WHAT: Automotive News PACE Awards, which honorinnovation by automotive suppliers

■ CO-SPONSORED BY: EY, Transportation ResearchCenter Inc., Original Equipment Suppliers Associationand SAE International

■ WINNERS ANNOUNCED: April 20

■ WHERE: Max M. Fisher Music Center, Detroit

■ OTHER FINALISTS: Featured weekly through the April13 issue and online at autonews.com/pacefinalists

18 • MARCH 23, 2015

Here are summaries of seven finalists for the 2015 Automotive News PACE Awards, which honorinnovations in products, manufacturing processes and information technology.

> Alternator eliminates voltagedrop, boosting efficiencyValeo ElectricalSystems ■ WHAT: Efficient alternator■ INNOVATION: Auto alternators

universally use diodes to changealternating current into direct current. Valeo uses transistors, whicheliminate voltage drop and boost fuel economy. The alternator’sefficiency is increased by 10 percent, or the equivalent of 0.7 mpg.■ FIRST CUSTOMER: 2016 Audi A6

■ WEBSITE: valeo.com

> Programmable computer keepsinfotainment freshNvidia Corp.

■ WHAT: Tegra visual computing module■ INNOVATION: Consumers want up-to-date software andentertainment in their autos on a par with their smartphones.Nvidia’s programmable computer module for auto infotainmentand navigation accepts software updates and new features afterit is installed in a vehicle. ■ FIRST CUSTOMER: Tesla Model S, June 2012■ WEBSITE: nvidia.com

> Seal for shafts cuts friction lossesFederal-MogulPowertrain

■ WHAT: MicroTorq seal for rotatingshafts■ INNOVATION: The elastomeric sealfor today’s high-pressure and high-heat crankshafts and other rotatingshafts reduces friction losses up to80 percent compared with competitiveseals. It is customizable for differentengines and boosts fuel economy by about 0.15 mpg.■ FIRST CUSTOMER: Volvo, August 2013■ WEBSITE: federalmogul.com

Game-changing suppliers seek PACE Awards

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> With coolant, turbo cuts weight,extends life of catalytic converter

Continental AG■ WHAT: Turbocharger with aluminum housing

■ INNOVATION: Continental’s double-walled aluminumhousing surrounds the hottest area of the turbocharger with

coolant water. The coolant allows the housing to be made ofaluminum, which cuts weight and reduces heat. It also cools theexhaust, which extends the life of the catalytic converter. ■ FIRST CUSTOMER: BMW, 2015■ WEBSITE: conti-online.com

> Flexible adhesive holds i3 togetherSika Automotive

■ WHAT: Adhesive for mixed material bonding■ INNOVATION: BMW needed to bond the i3’s carbon fiber-reinforced plastic body to an aluminum chassis. Sika’s adhesiveflexes after curing, maintaining the bond as the plastic andaluminum expand at different rates with changing temperatures.The adhesive is still strong to withstand crashes. ■ FIRST CUSTOMER: BMW i3, September 2013■ WEBSITE: sika.com

> Cooling gallery makespiston more durableMahle GmbH

■ WHAT: Evotec 2 lightweight piston■ INNOVATION: The piston for gasolineengines combines lightweightaluminum and high structural strength.A key feature is an advanced coolinggallery to increase durability andperformance.■ FIRST CUSTOMER: Audi, February2012■ WEBSITE: mahle.com

> Knee airbag built intoMustang’s glove boxFaurecia

■ WHAT: Active glove box/integratedknee airbag system■ INNOVATION: This airbag to protectthe front passenger’s knees is builtinto the glove box’s door. The airbag isnot made of the usual fabric. It’s aplastic bladder. ■ FIRST CUSTOMER: Ford Mustang,fall 2014■ WEBSITE: faurecia.com

> Lightweight gear shifter for AudiFTE automotive GmbH ■ WHAT: 2Polymerhydraulic gear shiftactuator■ INNOVATION: Thepolymer actuator,

mainly for double-clutchtransmissions, uses

hydraulic pressure to shiftgears. With high-tech plastics,

the module is 35 percent lighterthan comparable units that use steel

and aluminum. Using polymer facilitatesmolding-in cavities for sensors and connectors. That’s not feasible withmachined aluminum.■ FIRST CUSTOMER: Audi, June 2014■ WEBSITE: fte-automotive.com

MARCH 16, 2015 • 17

> More efficient torque converterSchaeffler

■ WHAT: Torque converter with piston back pressure compensation■ INNOVATION: Most torque converters, which transmit power from theengine to the transmission, have two or three fluid circuits.Schaeffler created a torque converter with four circuits. Fluidpressure from the fourth acts on a piston that locks theconverter’s moving parts, the impeller and turbine, over abroader range of speeds. The result is higher fuel economy. ■ FIRST CUSTOMER: Mazda2, July 2014■ WEBSITE: www.schaeffler.us

Game-changing suppliers seek PACE Awardsith pressure mounting to save fuel, cut weight, improve

safety and connect to the Internet, automakers increas-ingly are turning to major suppliers for solutions.

Suppliers are responding with substantial r&d budgets and cre-ative ideas in everything from basic materials to software wizardry.But while the technology is complex, the motivation is plain: Suppli-ers with the most attractive technology typically command the bestprices for their products and deepen their relationship with au-tomakers.

Here are summaries of seven of the 36 finalists for the AutomotiveNews PACE Awards, which honor innovation in products, manufac-turing processes and information technology.

■ WHAT: Automotive News PACE Awards, which honorinnovation by automotive suppliers

■ CO-SPONSORED BY: EY, Transportation ResearchCenter Inc., Original Equipment Suppliers Associationand SAE International

■ WINNERS ANNOUNCED: April 20

■ WHERE: Max M. Fisher Music Center, Detroit

■ OTHER FINALISTS: Featured weekly through the April13 issue and online at autonews.com/pacefinalists

W

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> Paint method eliminates primer baking Axalta Coating Systems

■ WHAT: 2-Wet Monocoat coating system■ INNOVATION: Since about 2000, autos have been coated with a basecoat and aclearcoat. But the method can be costly. Axalta’s system permits paint shops to applya wet coat over another wet coat, eliminating the primer baking step andthe clearcoat.■ FIRST CUSTOMER: Ford Transit, August 2013■ WEBSITE: axaltacs.com

> Dry clutch works smoothly as temperature variesValeo

■ WHAT: Dry friction facing formulation■ INNOVATION: In 2007, VW introduced dryclutch facings for its dual-clutchtransmission to cut costs and fuelconsumption compared with wet plates. Butdry-plate transmissions are difficult to tunebecause friction changes with temperature.Valeo’s facing, a dry mix applied to a steelback, is stable at different temperatures. ■ FIRST CUSTOMER: GM, August 2014■ WEBSITE: valeo.com

COURTESY FORD MOTOR CO.

> Compact package for radar visionDelphi Automotive

■ WHAT: RACam integrated radar■ INNOVATION: Vision systems tocontrol automated driving typicallyhave three parts: radar, cameraand control electronics. Delphicombined all three in onecompact package that fitsbetween the windshield and rearviewmirror. ■ FIRST CUSTOMER: Volvo XC90, January 2015■ WEBSITE: delphi.com

> Automatic park lock for electric vehiclesDura Automotive Systems

■ WHAT: Compact shift-by-wire park lock for EVs■ INNOVATION: The system uses software, sensors andother technology to actuate a locking pawl in the gearboxto prevent backward creep on a hill. The system detectsthe speed of the vehicle and other conditions on an inclineat a traffic light and automatically puts the gearbox intopark-lock mode.■ FIRST CUSTOMER: BMW i3, September 2013■ WEBSITE: duraauto.com

> Detector keeps driver’s hands on wheel IEE SA

■ WHAT: Hands-off detection■ INNOVATION: Under European law, a driver must maintain control of a vehicle, even if the vehicle is under controlof an automated system. IEE’s system detects, with a conductive layer in the steering wheel, when a driver takeshis or her hands off the wheel, ensuring the driver can regain control if necessary.

■ FIRST CUSTOMER: BMW i3, September 2013■ WEBSITE: iee.lu

Body-in-lightTM

shiloh.comStrong. Quiet. Safe. Green.

Performance gained with every pound you lose.

Shiloh delivers the leading technology solutions that eliminate weight without compromising performance.

We produce lightweight solutions in aluminum, magnesium, steel and steel alloys, offering the broadest portfolio of products through our expertise in die casting, joining and stamping.

36 supplier innovations named finalists

> PRODUCTAxalta Coating SystemsClinton Township, Mich.2-wet monocoat coating system

BorgWarner Emissions SystemsAuburn Hills, Mich.Gasoline EGR module

BorgWarner Morse TECAuburn Hills, Mich.Inverted tooth silent timing chainfor GTDI engines

BorgWarner TorqTransfer SystemsAuburn Hills, Mich.Fwd electronic limited-slipdifferential

Continental AutomotiveAuburn Hills, Mich.Turbocharger with aluminumturbine housing

Continental Automotive Auburn Hills, Mich.Printed circuit board substratetechnology for transmissionelectronics

Continental AutomotiveAuburn Hills, Mich.Multiapplication unified sensorelement

Dana Holding Corp.Maumee, OhioPartially coated multilayer steeltransmission separator plates

Delphi AutomotiveAuburn Hills, Mich.RACam integrated radar/visionsystem

Delphi AutomotiveBascharage, LuxembourgMulticharge ignition

Delphi AutomotiveLockport, N.Y.Integrated front and rear HVAC unit

Denso Corp.Southfield, Mich.Highly standardized automotiveHVAC control unit

Dura Automotive SystemsAuburn Hills, Mich.Shift-by-wire park lock actuationsystem for EVs

Eaton Corp.Southfield, Mich.Eaton and CumminsSmartAdvantage powertrain

Faurecia Interior SystemsAuburn Hills, Mich.Active glove box/integrated kneeairbag system

Federal-Mogul Corp.Southfield, Mich.MicroTorq seal

Federal-Mogul Corp.Southfield, Mich.DuroGlide piston ring pack

FTE AutomotiveAuburn Hills, Mich.Hydraulic gear shift actuatormodule

GKN DrivelineRedditch, U.K.2-speed gearbox for EVapplications

GKN DrivelineRedditch, U.K.Awd disconnect system

IEE SAContern, LuxembourgSteering wheel hands-off detection

Inteva ProductsTroy, Mich.Soft-Skin stitched full instrumentpanel system

LuK USAWooster, OhioTorque converter with piston backpressure compensation

Magna ClosuresHolland, Mich.Pure View seamless sliding window

Mahle Engine Systems andComponentsStuttgartEvotec 2 lightweight piston forgasoline engines

NvidiaAnn Arbor, Mich.Tegra visual computing module

Osram Opto SemiconductorsNorthville, Mich.Black flat multichip family for massmarket

Sika AutomotiveMadison Heights, Mich.Ultrahigh modulus adhesive formixed material bonding

TK Holdings Inc.Auburn Hills, Mich.Active steering wheel

ValeoCreteil, FranceEG efficiency generator

ValeoCergy Pontoise, FranceDry friction facing formulation

ValeoBietigheim-Bissingen, Germany

hirty-six innovations in a diverse rangefrom adhesives to vision systems are finalistsfor the 2015 Automotive News PACE Awards.

The awards honor supplier innovation inproduct, manufacturing process and informationtechnology.

In the coming months, the finalists will hostPACE judges, who are experts from industry, acad-

emia and business. The independent judges willevaluate the innovations for creativity and marketimpact.

Next spring, the finalists’ innovations will be fea-tured in issues of Automotive News.

Winners will be announced April 20 at the MaxM. Fisher Music Center in Detroit, kicking off SAEWorld Congress week.

The awards are sponsored by EY, the Trans-portation Research Center Inc. and AutomotiveNews. SAE International and the Original Equip-ment Suppliers Association provide further sup-port.

PACE stands for Premier Automotive Suppliers’Contribution to Excellence.

Here are the finalists’ innovations, by category.

2 0 1 5 A U T O M O T I V E N E W S PA C E AWA R D S

●●●

360Vue 3D surround view system

ZF Friedrichshafen AGNorthville, Mich.Active rear axle kinematics forpassenger cars

> MANUFACTURINGPROCESS

Amino North America Corp.St. Thomas, OntarioSheet hydroformed clamshellliftgate

Federal-Mogul Corp.Southfield, Mich.High-precision bearing profiling

> INFORMATIONTECHNOLOGY

Xtime Inc.Redwood City, Calif.Service telematics

OCTOBER 13, 2014 • 33

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Hans Greimelhgreimel@crain.com

TOKYO — Acura, trying to rein-vent itself yet again, is taking a cuefrom one of America’s hottest-sell-ing brands.

Honda Motor Co.’s premiumbrand wants to position all-wheeldrive at the center of its revival bid,much the way Subaru did in the1990s, to great success.

Awd, already on half the vehicles

Acura has sold in the U.S.this year, could be offeredas a standard technologyon all vehicles.

“I think that’s the way weshould go,” said KoichiFukuo, Acura’s top globalexecutive.

Linking the brand’s im-age to the technology would dove-tail with the arrival of next-genera-tion awd technology on Acuras. On

the other hand, Acura hasrenewed all its volumenameplates in the lastthree years. That cadencemeans that shifting to anall-awd lineup may takeyears.

The awd plan is one ofseveral ideas backed by anew U.S.-based AcuraBusiness Planning Office

formed in February to rethink thebrand and stoke stagnating sales.None of those ideas is finalized.

Fukuo presented the committee’sevolving strategy to the Honda Mo-tor board here on Tuesday, Oct. 7.

Much of the game plan is in flux,he said. But elements are emerg-ing. Acura plans more powerful en-gines, but it won’t be tempted intobig V-8 or V-10 powerplants, Fukuosaid. It also will stay clear of rear-wheel-drive layouts.

Acura had planned to roll out anrwd V-8 but scrapped the idea when

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DON’T MISS the next BIG event!See speaker lineup on page 37.

OCTOBER 13, 2014

see ACURA, Page 49

Steel pipes stacked withinsight of auto dealerships

in Marietta, Ohio, will sooncarry energy that had beentrapped in the shale below.

A HEAVY-DUTY ENERGYBOOM FOR DEALERS

ustomers who couldn’t get financed on a $5,000 car threemonths earlier pay cash for a $60,000 pickup. AChevrolet dealership’s heavy-duty pickup sales skyrocket.

A controversial energy boom — hydraulic fracturing, or fracking —is pouring vast sums of money into rural communities across the U.S. Automotive News’ Larry P. Vellequette looks at whathappens to auto dealerships when the white pickups of energyexploration companies come to town. | PAGES 36, 38, 39 |

Fukuo: Seeking“clear direction”

Awd could anchor revival strategyAcura takes page from Subaru

Celebrating the bestAutomotive News will honorthe Best Dealerships To WorkFor on Wednesday, Oct. 15, in Chicago. Checkautonews.com/bestdealerships2014 at 10:30 p.m. EDTthat day to see rankings of the top 101 finishers as wellas feature stories and video.

INSIDE TODAY

36 innovations viefor PACE AwardsThe finalists for the 2015Automotive News PACEAwards have been chosen.The awards honor supplierinnovation in products,manufacturing processes andinformation technology. Seethe 36 finalists on | PAGE 33 |

Can Facebookmove metal?Facebook is a fine way toconnect with friends orwaste an afternoon. But canit really help sell cars?Dealers are divided on thatquestion.| MARKETING: PAGE 24 |

Cherry-picking or brand building?Amy Wilsonawilson@crain.com

When Mercedes-Benz scuttled Jona-than Sobel’s $30 million deal to buy a NewJersey dealership last year by exercising itsright of first refusal, Sobel sued. And hegot a lot more cautious about where he’dbuy more dealerships to add to his storesin New York.

Sobel declined to discuss specifics of

his lawsuit. But in general “right of firstrefusal has a chilling effect on the buy-sell market,” he told Automotive News.“Why would I spend the time and the ef-fort to structure a complex transactiononly to find out a manufacturer is goingto use their right of first refusal to cherrypick my best deals?”

Sobel is one of many dealers caught upin the increasing use of right of first refusal

by manufacturers in buy-sell transactions.Franchise agreements have long givenmost automakers the right to refuse theoriginal buyer on a dealership transactionand assign the sale, with no changes to theterms, to a dealer of its choosing.

In the past couple of years, automak-ers are exercising that right at an un-precedented level, say dealers, buy-selladvisers and dealer lawyers.

see REFUSAL, Page 46

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““Why would I spendthe time and theeffort to structurea complextransaction only tofind out amanufacturer isgoing to use theirright of first refusalto cherry pick mybest deals?”Dealer Jonathan Sobel

Factories, dealers clash over first refusal ““It’s a costlything, but wedo it when it’snecessary andit’s right.”Anna-Lisa Corrales,Jaguar Land RoverNorth America

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