Head Games - Eaton Corp, TRW enter cylinder head business

Automotive Industries, Nov, 2000 by Lindsay Brooke

Eaton Corp. and TRW are battling for a new chunk of powertrain supply profits -- the fully-assembled. modular cylinder head.

Powertrain executives, engineers and designers should get to know two new company names -- Cyltec and LTC. You might be doing business with them sooner than you think.

Throughout the industry, engine programs are steadily being parceled out into "chunks" - complete sub-systems and assemblies sourced from, and in some cases designed by, Tier 1 integrators. The trend is the precursor to what some experts see as the outsourcing of entire powertrains within the next few years.

The latest chunk of the business, fully-assembled cylinder heads, is the biggest one yet in terms of cost Cylinder heads join integrated intake systems (which include everything from the airbox through the fuel injector) and valve-timing systems (see photo on page 41) in the growing list of powertrain hardware that suppliers, rather than the OEMs, are handling.

"We believe it can benefit us in lower costs and perhaps speed engine-development cycles," says Tim Petersen, director of advanced power generation at we of the auto industry's oldest powertrain component suppliers are gearing up for it Engine valves have been core automotive business for both Eaton Corp. and TRW inc., and each company sees the assembled cylinder head as a logical leap forward into a new business model, as OEMs expand their module strategies.

"The automakers are telling us that the engine is still near and dear to their hearts, but they're willing to start outsourcing parts of it," explains Jeff Thompson, Eaton's general manager of Air Management Systems based in Marshall, Mich.

Adds Scott Burkhart, director of customer development for Global Engine Components at TRW in Cleveland, Ohio: "They're looking for ways to continuously reduce cost and purchase more value for the dollar. We believe this will help solve that"

Both suppliers see the head-supply door opening for them in stages -- and that's how they're approaching the business. Stage one, for the near term, is buildto-spec. Typically included in this will be machining and low-level assembly (just valves in the head, no camshaft or rocker gear). Stage two will be supplying a completely assembled cylinder head module. Stage three will be assisting the OEM far upstream, in head design and valvetrain dynamics testing.

Beyond that would come full design responsibility--still a dream of suppliers, as the OEMs treat certain areas of the head (particularly the combustion chamber geometries) as state secrets. Assuming the design role would also allow the suppliers to better integrate new sub-options into the cylinder head, such as Eaton's superchargers or perhaps new valve actuation technologies.

It's the last stage that offers OEMs the greatest savings, claim Thompson and Burkhart. "Serious cost reduction will come from the ability to reduce complexity within the head assembly and simplify its manufacturability," Thompson notes.

Eaton's Head Start

Of the two players, Eaton has the jump on its rival. Since 1998, Eaton has been methodically adding the capabilities it needs to do heads as a total system. First it purchased Amtec, an Italian cylinder head machining specialist. The companies had previously partnered a Detroit Diesel cylinder head supply deal in Brazil. Eaton also stragically aligned with Teksid, the Italian casting giant. "The intent was to take Tekside's expertise, which is critical to the design and functionality of cylinder heads, and combine that with our expertise in machining, valves and valve actuation," Thompson explains.

Then in September, Thompson helped finalize Eaton's joint venture with Uni Boring, a head-machining company. The venture, called Cyltec, is a minority-certified business enterprise, with Uni Boring as the principal owner. Cyltec is headquartered in Tecumseh, Mich., where cylinder head assembly is in trial production.

Cyltec's first contract will supply Ford's Romeo, Mich., engine plant with dohc heads for the SVT Cobra V-8.

Eaton also has a second head-supply program in the works, according to Thompson. Early next year, it will assemble dohc heads for Ford's 3.0L Duratec V6 built at the Cleveland engine plant. Those heads will be produced at Eaton's Saginaw, Mich., facility and shipped in pairs to Cleveland. Total volume will approach 75,000 engines per year. The package will include everything north of the head gasket, except the rocker cover.

"We want to position ourselves as a Tier 1 integrator on cylinder heads," explains Thompson. "We don't necessarily want to vertically integrate the entire head, but where it makes sense we will vertically integrate it" Eaton will produce the valves and lifters and will outsource the valve springs, keepers, rockers, camshafts, valve seats and the rest of the valvetrain hardware.

Now Comes LTC

TRW is busy putting its own cylinder head manufacturing network together. At last February's SAE Congress, the company divulged first details of a new joint-venture called LTC -- short for Linamar TRW Corp. Linamar is a Canadian company headquartered in Guelph, Ontario, with facilities in Mexico and Hungary.