I'll online after hours. Is brought to you by bridge Stone Tires Solutions for
your journey. Mister vassilash John doing very well? Actually yeah you too?
Okay, good? So do you want me to ask you one? Lay
it on me? Brother? All right? So today is the eighty eighth
anniversary of a low volume car that is still in production, that is in the collection of the Henry Ford Museum, and it is what I would argue to be the most recognized vehicle in the entire collection. I'm going to ask
you guys to join me on this one. A lot of clues there,
a lot of clues. By the way, while we're pondering this, let
me introduce who's who's got on on stage, so to speak. We've got
Gordon Heidecker from a company called Pure Forge. You're going to learn what that's
all about. And we've got Alan m. Michi from the Center for Automotive
Research in and our and we're gonna get into why he's on the show too.
But you guys got any idea what the hell Gary's talking about? Eighty
eight years old, so that's older than the Corvette. Yeah, and it's
still in production, still in production in low volume production. It's still being
manufactured. Glenda wagon maybe No, I don't think they've got one of the
Glenda wagons. All Right, you guys are not going to get You're not
going to get this, not a Morgan the thing. You're not going to
get this. We're not You're not going to get this. I'm absolute question
it's but it's it's it's it's a vehicle. It's in the collection, it's
in production. People drive it. The Wiener Mobile, the Wienermobile. That's
that old. I had no idea what it goes. Yeah, I mean
they they've had several, several iterations of the vehicle. But yeah, and
apparently there are six Wienermobiles rolling around the country today at any any point in time. So so, because we got an audience that are not based in
the United States. And what Garry's talking about here is there's a meat processing
company, I guess you'd call it an Oscar Meyer, and they make hot dogs Wieners, and they've made this vehicle that looks like a big Wiener and everybody in the United States know what the hell this vehicle is. Sure,
So there you go. It's a good, very cool Yeah, you win
barbets with their absolutely. Yeah. So we got a lot to talk about.
But let's get into pure forge. Sure, what the hell is this
company? And so my understanding is you guys got a treatment for breake roaders
or I guess any kind of metal, right, that makes it a lot of metals, but right now we're focusing on break roaders. Okay, uh,
it's it does harden the surface, but it's only four mic runs thick.
So the to start off, let me let me say this. What
I'm about to tell you is so out there of people would say there's no way that works. So that's what we get a lot. And one of
the highest issues we have is believability. And so we said, all right,
let's let's take an approach. And being from an OEM and Al knows
this as well. You want proof, you want data, you want to
be able to communicate on a data level. So we've spent the last several
years working on accumulating data that allows us to speak at an OE level.
So we've taken a higher standard or their aftermarket product. And then we said,
all right, we're in low volume production. We are on the scale
to try and get the scalability and how do we get there? But what's
really interesting about the technology, And you know, my background is in advanced technologies and development, and you can count on one hand the number of times you find a technology just kind of free floating in the wild that actually is disruptive. And you know, we basically came across this thing. They were
looking for somebody to take the company, which was a in San Diego, more of a medtech kind of company doing batch processing with this unique metallurgical kind of treatment which basically combined with a brake pad ma turial makes bre rotors last now wait for it, two hundred thousand miles, which is just outstanding.
Now it can work on other metals, it can work in other metal conditions.
We probably went down the rabbit hole of one hundred different applications we could put it on. But there's been an investment by stockholders to do this a
certain way and we're now trying to deliver on that promise on the first product, which is brake roaders. So you're taking a brake rotor. It's manufactured,
correct, you guys are not building the rotor. You're don't build the
rotor, so they send it to you. We specify the road. Okay,
so it is it a PVD CVD. It's a PVD process. So
great, great, you know, kind of intro into that. Explain that
to the rest of us. What's that mean? Physical vapor vapors position perfect
and and what we do is we put a variety of materials and gases.
And if you may be familiar with PVD when they did like chrome cladding, right, you put a positive charge and one a negative on the metal and you put it into a vacuum chamber. It gets attracted to the other part
and then it distributes on a molecular level. We're doing a very similar thing,
but at a much higher matrix kind of level. Our CTO is more
worried about atoms and things spinning in the right orientation on top of each other than he is about creating chrome. So it's very scalable, very scalable.
It's like anything else. It's it's time, money, and effort. Right,
So when you start out with can it be done? Secondly, can
you do it and make a business case, which we have, and then can you scale it so that it becomes high volume production. So we're in
that interim phase. You know, it's not unlike when I was at Daimler
working in research, particularly on an electrical we would take things and we'd put on the S class first, and usually S class could give at least a payback on your initial investment at some high level. Then you'd move it down
to an E class, and you'd move it down to A C and a B in an A and eventually Chrysler we get it right many years later.
At least that's the way the plan was supposed to work. But yeah,
right, and so we we you know, tongue in cheek there a little bit, but we did do a lot of that kind of of work.
And so we had to get this technology scalable to a level where it would make sense in a particular area and have a good payback. And so we're
we're targeting right now it's fleets. So the payback just on a basis of
Okay, I'm a fleet operator, I run through breaks. I run through
breaks all the time. We had one fleet come to us. This is
kind of amazing because it was on Mercedes Mercedes Metrice van doing last mile delivery three thousand miles metal to metal breakwear out right, so they were overloading them it was. It was horrible. They came to and said, well,
what can you do? We said, well, why don't you try us
out? So we went to three metris fans. Almost three years ago,
we're still running on the same three sets of brake roadors with zero wear on the roader. What's to do to break pads? Does it increase their longevity?
Yet it does? Now the wear is related to stops and on these
vehicles short distance, last mile. I hate to say this, but brake
pedals are more an on off switch than any modulation between that. You've seen
ups drivers and postal service drivers, and I mean they're on the pedal, both of them, right on off. So the pedals, when you have
a lot of brakes, a lot of brakes stops, you will wear the pads out. But we still go three to five x normal padwaar on that
and that scenario. In one case we did a dodge and I'm sorry.
At four one fifty in San Diego, one hundred and seventy thousand miles, both pads and rotors still going original, original well with art treatment. Yeah
yeah, yeah right, yeah. So basically, I mean, so the
only reason that I know about PVD is that at one point in my career I wrote about about metal cutting extensively, okay, And so PVD codings were put on inserts for machining, and so whether it was Sandvik or Cannimental or any of these other companies, the big argument was that these inserts were more expensive than things that were just coded otherwise, but you would be able to stay in the cut longer, okay, So you'd be you'd be more productive.
So this this fleet application makes like huge sense because it's the same sort of thing. Right, You're keeping your truck in operation longer because you're not
having it in service. The question I have is what about John's cart?
Probably not a good example because he probably uses brakes like mad It'd probably be a great driver. But I mean, so what about the natural consumer?
I mean, how does this plan to that or doesn't it? Well,
it does, But there's a morphology that goes along with this. Right,
So cost is one, but what are some of the other unintended benefits that we get out of this? So if you look at EU seven, right,
which is this whole break dust conundrum that we're chasing in Europe, Well, ironically, well we've all done this, right, on an old car.
We drive it, we only drive it in nice days, but we end up having to clean the wheels because of brake dust. Right, my
viper used to get a break dust all the way down the side because it would attract the dust, you know, as you're driving it. And I
only washed the car because it got dirty from a variety of either road dirt or brake dust or both. Our roder doesn't wear, so the break dust
that is attracted to your car that you have to actually physically dislodge to get off doesn't occur, and therefore your car stay clean, your wheels stay clean.
If you've got a high end car, you're not going to be cleaning your wheels on a regular basis. And I actually brought my viper here today
when we're done with the show, you can take a look at it.
I've got a set of these brakes and rotters on there. We clean the
Brembo calipers, clean them nice and clean you and put your finger on it, and you're not going to get them dirty. And I've got a thousand
miles on them since I put them on. We find that the unintended benefit
is that we get zero rotor ware therefore we are not contributing to the dust.
And as you know, the wheels when they're turning, they're always in contact one way or the other with the pads, and they're always creating dust, whether you're using them or not. The other thing is that the morphology
of the pad is that it's got a low contact point, so it just kind of falls off as it wears, and so you don't see that on the side of your car generally. So we found that we did a rotor
test on the EU seven protocol in Europe last year with Link and our result was, Gee, your rotor has unlimited life. I said, well,
that's pretty good coming from a third party source. We just did some really
really neat testing on our roters and our pads in our pad formula, and this also turned people around because now we have data. Now. I don't
know if you remember Paul stole Off, Paul stole Off has joined us.
He came in and he said to me, and I think to Dave Sherman and a couple of other guys, there's no way this works, but I really want to understand what you think you have. His push was towards data.
Well, we did this test at length, which is a padware data test. It's an FMBSS test. Ironically, our roter after the test gained
thirteen grams. So well, I'm glad you asked. The reality is the
pad and the roter create a kind of a handshake, and the pad creates this protective transfer layer and when you're breaking, you're actually breaking pad against pad.
We call it adherent friction. It loves heat, and we have a
bunch of tests that we've done, but it showed that of an OI pad, we see this significant wear. We're three to five times less, but
a portion of that pad where is established at the beginning to establish that protective layer on the rotor. Therefore we stay stable regardless of the heat. They
always have higher we're in higher heat and we were at PRI last year.
We showed some of our heat to heat at five hundred and fifty degree C and a racing company came up and said, how are you doing that?
So were we just treated rotors for them on a That was one of my questions. What about the racing community, especially the long distance, Right,
it's twenty four hours of something, Right, if you don't have change breaks, you probably win regardless of what you're doing right. Yeah, well we
haven't tested that yet, so I'm not going to go out there and say I can win a race just because of my breaks. But that's something we
do on a test. So we're on race cars, We're doing Vinagend,
We're doing some Formula Formula car work and vintage formula. We are doing some
stuff right now. We signed a contract with them. One concourse, we've
got some cars running out there, some Mustang GT's that are doing particularly well, and we're doing some stuff on road cars. We're doing a variety of
things on fleets, and we've got a bunch of customers from police fleets right now, police and emergency vehicles. How much are road is a problem from
a warranty standpoint for automakers, Well, it depends on the issue. So
my Dodge Ram, I have a twenty nineteen and we had a situation on my Ram before I even joined this company, where I had a reverse grown issue where the harmonics of the say early morning wet brakes scenario would vibrate through the cab and I'd put up with it, and then I'd put in gear and I go and after a while I'd say this is terrible. And then
there was a TSP that came out Technical Service Bulletin and we said, okay, this is horrible. I took it to the dealer, they put new
brakes on. Well, I think two days later I had the same grown,
so we put our brakes on and when I took over and no grown.
So I think we have some situations where we can do some things.
We just actually had an interesting thing with the Tahoe Police brembo package where we did a break pad and rotor solution for the Rapid City South Dakota Police department where they were having a lot of noise, and there's a TSB out on that one as well, and after fifty five hundred miles, we have no noise and we have nowhere. So we've been working with Rapid City South Dakota
for a while and now they're outfitting all of their police cars with what we have. So why would they have this problem there in the Farmington Hills Police
apparently doesn't have that. I think it's across the country. The Tahoe issue
right now. I think the Technical Service bulleton is across the country. It's
not in a particular area. We just happened to have some relationships with the
South Dakota folks that we said, all right, let's try it there.
Who makes foundation breaks anymore? Who makes rotors? Well, you've got your
traditional guys, but then you've got other manufacturers. One of the manufacturers we're
partnered with is Willpaka. Will Paca is out of Wisconsin. And when I
first came on as CEO, one of the first things we did we traveled out to Wallpaca and I said, I'm not leaving until I have an agreement with these guys, because one of the things is supply. Right, old
purchasing guy, you need supply. So we went out and said, let's
get a collaborative agreement with the PoCA. We're still working with them today.
They make roators for a variety of OEMs and the aftermarket, and so they're a source in the US. But then you've got a lot of things in
China. They are coming in right now. And you know, look,
when I was a kid working at a gas station and you had a car com in the needed brakes, you'd either turn the rotors on the car, you turn the rotors off the car. If there was still meat left,
you'd put new pads on and go. With the cheapness of rotors coming from
China today, it doesn't make sense, right, you don't even turn the road away put a new set on, you know. So it's been very
interesting for us as we've been getting into this. The paradigm shift on say
throwaway product throwaway parts has been I think prevalent with cheaper stuff coming into the marketplace. So is it possible you could take a cheap base rotor, coat
it and suddenly it's a really good rotor. Yes, the metallurgy short of
large inclusions and pock marks, Yeah, we can take almost any cast iron surface and we create a homogeneous surface on that rotor. Which one of the
things that's really interesting, and one of the things that I think stole Off told us was we think we have a process that eliminates DTV, which is disc thickness variation. And when you have that, if you guys have ever
stomped on your brakes and a panic stop and you get that shutter going through your steering column, that's usually people equate it to warped rotors, But it's really disc thickness variation that causes that. So we don't have that wear,
and yeah, it really. We've tried it on Chinese rotors, We've tried
them on roaters from India, We've tried them on roaters from Turkey, We've tried them on roads from the US. So if you had a really good
rotor and coded it, would it be any different than a really not good rotor that's been coded. I would hesitate to say that there's much of a
difference other than where we start to push the extremes right. So one of
the things we haven't tested yet, and we all love this, you can get rid of rotational unsprung mass. What happens if and this is just a
question because we haven't gone we haven't put the money into it, but what happens if you take a really good quality rotor, make it thinner to the minimum, then treat it. Since there's nowhere how much can you get out
of a rotor? But we did that on one that we're currently engaged with
Hyundai, and we just did a calculation, actually Paul did it. It's
one point two pounds per roter of unsprung rotational mass. That's pretty pretty effective
to get that out of a car. It's almost five pounds a car,
right right, everybody's fighting weight these days, but especially if you take out unsprung weight, at least amongst performance cars. That's gold. Well. On
one of the race cars, we did a there's an integral This is the sixty four Huffacre that we have in the shop. We took an integral hub
and rotor assembly. We lightweighted it by going to a two piece design with
our friction disk. We took four and a half pounds out of each corner
on a nine hundred pound car. That's pretty substantial. I'll change the suspension
set up. So how would you do this? Rotors get cast, they
get machined, and then what you would zap the surface of the rotor is we call it atomic forging, but okay, zapping works as well. It's
just putting it in a big container and waiting until it's done. The current
the current machinery. A couple of our guys said, it's kind of like,
you know, if you saw the movie The Fly and the guy walked into that machine. That machine is kind of what our machine looks like.
You just don't want to go in there. But yeah, it's a right
now, we're in a batch process, right, and that's where we're getting our current economics from. If we get something different, we've got some machine
designs that will make it a little bit more efficient and effective. So if
we were to take a really good top of the line broader right now, what would it cost in comparison to what one you could sell that would be comparable or better than this. So right now we have had set pricing because
we're actually in production. We're launching the brand in October with thirty six direct
fit applications that kind of permeate out to about a thousand different vehicle applications, and we'll have those in stock. So we're launching in October this new brand,
Pure Forge Atomic forde rotors, and we will have them in stocks so you can order them. The cost today and again just very specifically, is
about just for the treatment, is about one hundred and twenty eight dollars one hundred and twenty eight fifty wholesale per roter on a cost basis, If you're talking about an OEM cost and we were having to cut our margins down, this is an aftermarket margin we can get down much lower, and with scalability, we can continue to push that down to something that's highly repeatable. Again,
it just takes money, money, and investment to get there. We've
got all the different paths kind of figured out on what we would do.
But there's a variety of things we do prior to the roter coming in.
There's a variety of things we do the rot on the way out the door to make sure we ensure quality and that we have all of our quality steps in place, and we have some processing that we do that makes our treatment process unique that we don't share with everybody. So there are certain things you
have to do prior to getting the rot in the machine to condition the rotor to accept that surface treatment adjustment or modification. That's part of the secret sauce.
So what if the guy goes to AutoZone or O'reiley's or wherever, and you know they want to buy this, and let's say you have it there.
I don't believe you would, But so, I mean, again, what would they have to pay extra to get this? Right now? It's
it would be about i'd say about two hundred and fifty dollars a rotor in addition to the normal cost of the rotor. And then our pad our pads
are pretty much on par, although they're a premium pad on par with what you would pay for normal pads. So if you're talking about you know,
two fifty, you're talking about one thousand dollars a car, more than what you would do. But if that's the last set of rotors you put on
your car, and you're contributing to zero dust in the environment, and oh, by the way, you replace you know, six seven sets of bad rotors, you also capture that CO two. Yeah, I can see this
being very viable right now, but for very specific application, correct, you know, performance or like you said, fleet, Well, if if you look at the sweet spot, the really good place to get the customer is after the OE equipment has worn out your first change of brakes, right, that's really the optimal place. I mean, you're not going to change them
when you first buy a car. You're certainly not going to change them when
you lease a car. But if you're a operator of a fleet of four
hundred vehicles and you've got guys that are just abusing the equipment, like we had one company we're dealing with right now that is E three fifty, you know, vans, and they've got telemetrics and it said, our guys are driving one hundred and five miles an hour with six thousand pounds loading, and they got to stop fast. They're not stopping fast right sore. They're getting
those breaks hot and they're abusing them and they're wearing them out fast. So
we see that happening on a regular basis. We had one fleet operators.
One day down for me is fifteen hundred bucks, So your break costs are irrelevant to me keeping my vehicle up and running. So we haven't calculated uptime.
We've just calculated replacement parts, parody. Cool stuff. Yeah, Alan,
let's get you into the conversation. You know, I mentioned at the
beginning of the show you're at the Center for Automotive Research, but a lot of change has gone on there. Bring us up to speed in a minute.
Here. What changes have gone on at the Center for Automotive Research.
Sure, it would be happy to tell you. At CAR we're launching what
we're calling what we have a new platform and we're calling it Car two point zero. And so CAR two point zero is powered by auto industry executives that
we've known in the industry that we brought into the fold at the Center for automotive research. And these are executives with deep experience in designing, developing,
launching, and even fixing cars. So these are people that really understand the
nuts and bolts of product development and production in the automotive industry. And coupled
with our industry analysts, we have a really powerful combination at CAR. So
CAR two point zero is has some really strong technical prowess and I would put them up against any other organization out there that's going to do research in that particular space. I think there's a lot of uncertainty into what's happening in the
auto industry, and with CAR two point zero we can not only provide the what, but also the so what in terms of what's happening in the auto industry. So I think we can provide maybe a little clarity in what's happening
in what may happen in the future in the auto industry with CAR two point zero. So, so to use your so what who comes to you in
what would it be that you would deliver to them? So you know what
would be supplier OEM who and what's the deliverable. We have a broad range
of clients and in some cases it's it is the OEM or the Tier one or Tier two suppliers, And in the case of the OM, it may be an economic analysis. So what is the economic impact of an OEM placing
a new plant in a particular state, and so what does that mean in terms of jobs? How many McDonald's pop up, What happens with the community
colleges is their labor, what happens to the tax base. So we're able
to do that economic analysis for an OEM, and many times they'll place it in their annual report. But we have other constituents which can be large and
small. So, for example, the city of Sterling Heights or Macombe County
would also look at some of our research to see what's happening in their county in terms of risk assessment. So which plants in a particular county have evs
assigned to them and which plants do not, And so one could look at that and say, well, perhaps this plant is at risk because there is not a future car assigned to that particular plant. And so the community,
the county, or the meanis apality could look at that and say, okay, we need to do training. We need to talk to the state about
incentives or we need to engage the OEM to see how we can enhance that.
And there's some other areas too, like we do research for Capitol Hill and also the White House, and even in the last six months we've provided some research that was used on the Hill and has been made available to the White House to help inform some of the thinkers in terms of policy. And
so in our small way, we're a small organization, but in certain ways we're able to influence some of the policy that affects the auto industry. CARR
also organizes a big conference every year, the Management Briefing Seminars. Just weeks
away from this the show what are you Doing this year? With MBS it
is weeks away. Thank you John for bringing that up. So MBS Management
Briefing Seminar. We're in year fifty nine of this event, and so it
was way back out of the University of Michigan in the late sixties early seventies is when it was really spawned. But it's venerable event, well known in
the industry. It's a four day event August fifth through the three and a
half day event August fifth through eighth. It's in Traverse City, Michigan at
the Grand Travers Resort, and it's primarily for decision makers in the auto industry.
So we bring in C suite executives to talk about what are the things that are keeping CEOs up at night. And so this is a little bit
different than maybe SA World Congress. We're not talking about technical sessions with engineers.
We're really talking about what are the big problems facing the industry. And
we have a lineup that's going to knock your socks off, and so we have speakers from OEMs. For example, one of our keynote speakers is Mark
Royce, the president of General Motors, will be one of our keynotes.
Joe Henrick So the former coe Ford Motor Company who's now the CEO of CSX, will be one of our keynotes. And we have some other other speakers
as well. Alan Swan, who's the president of Panasonic North America, will
be a keynote, and Bob Lee who's the president of LG Battery Systems North America as well. So you know, we have players that are right in
the center of this ICE to EV transition or ICE to hybrid to EV transition, and we want to hear their thoughts about what's keeping them up at night and what are they worried about. But we also have a number of speakers
from Toyota and Honda and Ford and the supply base as well, so it's again we have a terrific lineup of speakers. So come up to MBS and
and you know, network and learn about what's happening in the auto industry.
But I want to get into this whole thing. Where's this industry going?
What keeps the CEOs up at night? But let's take a quick commercial break,
give a shout out to our sponsor, Bridgestone, and then come back and Gordon, you can weigh in on this too. You guys got a
lot of automotive experience. But first, Bridgestone, keeping your heart racing in
and out of the gym, that's what really matters. Bridge. Don't pretend
to sport as tires with a fifty thousand mile limited warranty. Okay, we
are back all right, before we lose this. So he mentioned EV's a
lot there, Gordon, what is this due to your business? EVS?
You know, actually it doesn't really affect us, EVS, And I see it. Vehicles need breaks, Hybrids need breaks. The one thing that I
think is beneficial on EVS is that you with the larger battery packs, you still need to spec larger rotors, so you have a lot more unsprung mass and you have a lot more rotational mass. That's that right. Even with
regenerates to breaking, you need bigger breaks. You need bigger breaks for emergency
situations because of the of the energy. If you really got to slam on
the brakes with regenerator breaking on regular driving, I think you're not really engaging them breaks. But if you have to, you need more braking surface.
I think you always have to engineer to the extreme, right, what are you going to do? But from our perspective, the other thing is that
the rotors. Typical rotor thought process is they stand out there. You've seen
you walk on and you see your rotors. They rust right when they sit
in the wet weather. Typically they're engineers that you apply your breaks first time.
It kind of rapes that rust off. One of the nice thing about
our transfer layers it doesn't rust, so it doesn't occur that way. Therefore
we also don't get any of that rust wear scenario. There's a beauty aspect
too. There's a beauty. Yes, there's a beauty aspect. If you
go out and look at our rotors, whether it's five thousand miles, ten thousand miles, one hundred thousand miles, you still see the Blancher grind marks that were created when you first machine the rotor through our transfer layer. So
there is a beauty aspect. But to prove our point, we also do
logo was on the surface because they don't go anywhere. Oh my god.
So I have some images I can show you. We went to the brake
Cloaquium. They essay show two years ago with a car that had a firebird
logo on a car that we did. I drove it and I had seven
thousand miles on them. We put it up, we put the light on
it. A couple injuries said, that's really cool that you print padded you
know, printed that on the rotor, But how do you keep it from a braiding when you take it on and off the trailer. I said,
I drove that here, and they're going there's no way you drove that here.
So with EVS back to your question, we feel that once you create a transfer layer, once you have some of the protective things that you still have to you know, protect the rest of the road with some coding treatment.
We don't have the rust cycle, and if you look at some of the EV's out there, there's some issues with that. And now there's other
solutions out there that are lower cost, but they may wear out over time.
One of the things that's unique about our treatment is that our treatment has same coefficient of expansion and contraction as cast iron, therefore doesn't crack, so you don't see this like with tungsten oxides and other things, where you know, with that expansion contraction they crack and flake. So we have some unique
attributes that would work both on evs and on regular cars, icy e cars, hybrids. I don't think the adoption rate on EV's will be as high
because you're adding an expensive break option on top of an expansion unless you can take mass out at the corner that that we and again theoretically we think we can do it. Have we done it yet, improved it and done it
on dino testing. No, that's one of the problems with ev evs are
heavy. They are, and they can be as much as a thousand kilograms
heavier than their ice counterclart and so automakers are looking for ways to take weight out, and you know they're primarily looking at battery packs. Can they increase
energy density and create smaller battery packs? But weight begets weight, and if
you can take it out, you're going to streak smaller, smaller chessis bits and so on. Well, and this is one of the things you're finding.
You know as you're putting together the conference, that there is interest in materials, that people are interested in ways and means of light weighting vehicles very much. There are two things that haven't gone away in this transition from ice
to hybrid to evs. One of them is safety and the other one is
lightweighting or weight and whether it was reducing weight to improve fuel economy in the kind of old days where it's reducing weight to improve range. It's a big
deal now, especially with evs being heavier, and of course the safety aspect.
So anytime I add weight to the vehicle, the impact characteristics change.
So I have to add ultra strength steel to the front end, which adds more weight as well. So lots of inquiries into are there alternative materials that
I can use to reduce weight. It's a big factor and addie onto that
one. You know, if you look at and I'm gonna throw a couple
ifts out here, assuming we can go to the minimum, and assuming we can handle the heat, and assuming we can do these things, which we will do, I mean, we're gonna spend the money to do it.
If you take that kind of unsprung mass out of a EV, which is just trying to find ways to lose weight, you can also with unsprung mass and also rotational mass, you can overcome momentium a lot easier, so you can actually extend range with lighter weight on the corners. And so those are
some of the things that we feel that we could probably add to once we get into our research program to do that. Let's go back to what you
were saying though earlier. Alan of what's keeping these CEOs of these OEMs awake
at night right now, it is the price war in China spreading throughout the world. We have not seen Chinese automakers come into the US, but there
are right now twenty nine Chinese suppliers setting up shop in Mexico. That their
capacity is not just going to be for Mexico. And I got to believe
that OEM CEOs are wondering do we have to do business with these guys because they've got such a cost advantage. And conversely, I got to believe that
their supplier CEOs are desperately worried that they're going to lose a lot of business.
How do you see this going? It is very component that you can
look to Europe to get a preview of what's happening. So Europe is imposed
now tariffs on EV sales, but also EV components, and there are some European manufacturers that are challenging the tariffs on EV components because many of their components, including engines, are manufactured in China, so it actually affects their cost spaces as well. So I think there's also about you know, the Chinese
retaliating against you're talking the German manufacturers really, I mean, they're the ones because they've got so much business in China, they're caught between a rock and a hard place, at least in Europe right now. That's right, So
the US isn't faced with that at present. However, China does supply a
significant number of components to US based or North American based automakers, and so that is a bit of dilemma, and I think the US government is probably going to be looking at them very closely in terms of policy, whether they are Chinese components or their Chinese evs. Presently there's one hundred percent terrify on
Chinese EV's imported to the US, and we're not seeing any significant evs at present. By the way, we will have a Chinese EV at MBS,
so come on up and take a look at it. Be careful. But
yeah, that's that's a dilemma. And I think I think really the two
things that are keeping CEOs up at night is how do you make evs affordable?
Okay, so I think they're first worrying about how do you make them profitable? And the second one is the profitability. Well, you know it's
interesting too if if you believe in man made CO two contributing to climate change, and if you believe that that's really the premise for evs and vehicles are twenty five percent of man made climate man made CO two emissions. So if
you believe that premise, I'll challenge you on that, but keep talking.
You believe EV's only help if you have democratization of evs. It does not
help for co two emissions of only the affluent drive evs, and so for this to work, you need democratization of evs. They need to be affordable.
And presently the transaction the average transaction price of ICE vehicles are forty seven thousand dollars. The average transaction price of EV's is about fifty four thousand dollars,
and so forty seven thousand dollars may be too expensive to begin with.
Fifty four thousand dollars is seen to be even more expensive. So CEOs are
looking at how do I bring that price point down so I get to democratization.
Certainly they want to be in the game for the long haul, so how do you make it sustainable and make it profitable? But have you found
that you know, it takes a long time to plan a conference, and you know you know better than I do for having done these, and you know, I got to wonder, aren't CEO is concerned about the fact that there seems to be comparatively low market demand for evs while there is growing market demand for PHEVs and hybrids. Well, I think you've seen that shift over
the past eight months or so, and you have the Toyota strategy and approximately twenty five percent of Toyota's portfolio was hybrid or hybrid electrics. And you look
at the Detroit three, Ford, General Motors in Stilantis, it was a much smaller wedge of the pie. And this is back in so Q four
of twenty twenty three. Well, you've seen a shift and General Motors is
now bringing hybrids back into the game and or so they say soon we expect to see some GM hybrids. Ford is shifting their portfolio to show more hybrids,
and Honda is also in that game as well. So what you've seen
what good companies do is they're going to match demand with you know, demand with supply. And the demand right now is a little bit lower on the
EV's and a little bit higher on the on the HV, on the on the plug in hybrids and hybrid electrics, and so they're simply matching that.
And so yeah, there's been some consternation, there's been some a little bit of pullback in investment or reallocation of investment. I don't see it being scrapped
entirely. I think most automakers think the end game, at least for the
midterm, is going to be some type of EV that that a hybrid is going to be a transition. So I think they still see a future with
evs. It's just going to take a little bit longer as their view.
Gordon, what do you think this this price war that started in China, started by Tesla by the way, too, is showing no signs of slowing down in China, and you gotta believe this is going to spread to the rest of the world. I do. I would agree. My I worked
at PAGV and I worked on I'll turn a propulsion back in the nineties, and back then we did some of the crazy stuff, you know, through the road hybrids, stuff like that. And even back then when we started
looking at you know, viability of not only infrastructure, so if you look at all of the aspects tied to an adoption of evs in any high volume, cost is definitely one of them, but also availability of charging fuel, you know, fueling or charging infrastructure and these other things. And when I
was at KPMG and when I was at b Riley we did some of these seminars. We started talking about batteries and when you look at batteries in particular,
the technology is not really there where I believe it's it's still we all play in this scalable business. And this war that's happening is because I think
there's overproduction, over capacity, and so you've got it, you've got to get rid of it at some point. You've got to lower the price to
a level where you can. Otherwise it sits in rots in a field.
And so you know, if you look at some of the things, we've seen some pictures in China where there's fields and fields of electric vehicles out there that are still not purchased, and I think that's misleading that that picture has been around and gotten a lot of attention. There was a scheme going back
about four years ago in China for ride hailing services, and it was and if you electric had electric ride hailing, you could get all kinds of government subsidies. So there was a lot of very smart people who gained the system,
started a ride hailing service, got all these evs, the government paid them for the whole thing, and then they walked away from it. So
they're you know, because look at what by D, look at what leouto, look at what neo hippong, And these are damn good evs. I
mean they're they're the best in the world. Again, I believe from the
things we studied that were just out there yet. And then the consumer,
even back in the day when I was in product planning when we looked at vehicles, you still have to plan a product that people want to buy, and they got to be able to afford it, and they got to look at it long term. And I've again anecdotally heard from a lot of people
that have adopted either a tesla or things. They had a good experience,
but they're going back to ice propulsion just for a variety of reasons. And
it's all over the map. And we were studying this for I did this
for four and a half years at b Riley when we did these automotive you know, consulting discussions, and so you really have to kind of head your bed on both sides. And I think what al said earlier is that it's
going to take longer. It's probably something that a lot of people said earlier,
but they didn't say it out loud, and they just think it's going to take a lot longer to get there. In the meantime, there are
a lot of things that we can do to continue to improve the performance of engines. There's a lot of things we can do to improve emissions. There's
still a lot of room out there for innovation in ice, and so I've seen some ice devices that have been looking for funding. But because the massive
flow towards evs and all the funding and all the devices that are out there went that direction, these guys are still out there looking for funding, but they've got ten to fifteen to twenty percent improvements and ice engines that can they can deliver, They can improve it, but nobody wants to invest in it.
There's a part of the equation that is off board from the car is the EV chargers. And quite honestly, you think people are skeptical until they
start seeing EV chargers that are plentiful and available. They're going to wonder is
this EV trip going to be a one way trip? Or am I going
to be able to get back? And so there's this NEVY program, this
seven point five billion dollar federal program that's been taking effect, and for example, the state of Michigan is allocated one hundred and ten million dollars to deploy the EV fast chargers every fifty miles. Alternative fuel corridors it's taken time.
You know, they're they're deploying them. I think the state of Ohio might
be a little bit ahead of the game. So if you go on on
the Ohio Turnpike and you go to one of their fabulous service centers, which are really gorgeous, you'll start seeing these EV chargers are starting to pop up.
I think people need to start seeing those to believe it's really going to happen. Well, what they also need to put out is signage because as
you know, most of these, uh these chargers are invisible to the general people who own that's actually written in the law that they put up signage.
Well, it's about the time they start getting the signs up because people who own e these. No, there's a lot of charge. It depends where
you are in the country. But even right around the studio here there's ample
charging, ample fast charging public And four years ago that wasn't the case.
There was nothing around here. So it's coming way too slow. But uh
yeah, I would agree the infrastructure Sean, what was the story in Outoline Daily today that we'll have more chargers than gas stations and eight years who said that? Do you remember? Anyway, there was somebody that just came out.
We reported it today, but they're saying in eight years, we'll have more fast chargers in the US than gas stations. So you don't need to
because you do the math. How long does it take you to fill a
car up Halloween to take you to charge of battery? Yeah, no,
no, So even a fast charge of twenty minutes versus five minutes for you know the math, except that except that most everybody can charge at home.
That's got an ev today. So and you can't do that with your gasoline
cardrue because you don't need to. Well, we can't. There was a
recent study showing the average time people it takes people to fill up their gasoline tank. And so of course, when you and I just run to the
corner station, it's only four or five minutes. But if we're driving from
Michigan to Florida, that stop is invariably longer because we go in and we get donuts, and we'll go to the restroom. So the average time when
you averaged it all together is about twenty six minutes, which is not far from that ev DC fast charging time. And so there's special cases, of
course, but you know that charging time is getting getting down and there's some innovation in that particular space. And if batteries get smaller, that thirty minute
time gets smaller, you know, gets shorter as well. I got to
ask you, are you one of those guys who leaves your car at the pump? The pump, That's what I was gonna ask. I try that.
Well. My wife and I travel together, so usually we'll yeah,
she'll go in and I'll do the pump and then we'll move the car, is what we try to do. To your point, it's the utility,
right, so if you gas and then park and then use the store, then somebody else can use it, right, But if not, then you have to have more places with the story that so we moved our company from San Diego, right, And of course California is very heavily into infrastructure trying to get this this whole evy switch over. But their power grid PG and
E goes down on a regular basis, particularly if there is any kind of fire out there or so forth. And then you get the lineup of the
evs trying to figure out where they can go to try and get a charging structure, and they're they're limited, and you may have, to your point, fifty cars lined up to do twenty thirty minutes worth of charging. How
long does that take? Do the math right? Those people are going to
be it's like sleeping out for concert tickets to get your car charge. Not
many people want to do that. And so yeah, we need many more
of these filling stations, but it's a multiple great. If we have more
than the filling stations we have, we probably need eight times that given the charge time that we have. But you're right, the home charging is a
nice solution. Works well for people that have homes and garages. For people
in apartment complexes, that's a different story. That's right, changing topics right
now, but the same theme of what's keeping CEO is awake at night.
This cyber attack on the company CDK that does dealer management systems, I mean, holy crap. This had an real impact on sales last month, definitely
a financial impact to every single dealership that uses CDK stuff. Is cybersecurity part
of the conference or what do you think about this? This whole cyber attack
and apparently CDK paid the hackers twenty five million dollars in bitcoin. Yeah,
it's almost a tragedy. And in fact, some of the dealers had to
go back to paper pencil systems to execute the sale. We do have a
session and cybersecurity at MBS, and it just shows you that cybersecurity is not going to be a one and done and it's fixed. Is it's in product,
it's in the services, whether it's your credit card, it's your home internet, it's on EV chargers, the EV charging network, it's on the cars themselves, it's on the back office system. So it's going to be
a continual fight. And you always have the guys. They keep changing and
so the good the white hats are going to have to keep changing. So
it's an ever evolving process. But it's not something that's going to be fixed
and we're done with it. It's going to continue over time. Hopefully the
industry gets better at it. But yeah, I mean, these things are
tragedies, especially when they affect healthcare, you know, the medical industry.
I mean, the hospital is getting shut down early stragedy. But we do
have the deputy director of cybersecurity will be speaking at our conference, and so that's one of our sessions that we plan to have up at MBS. What
you mentioned environment before, are you focusing on that in any way. Environment
and sustainability so one. So we do. We have three areas of research
and the first is Energy and Sustainability technology in the thurd's Labor, Economics and Policy. So the energy and sustainability captures batteries. So EV batteries really under
the energy portion, but the sustainability could be the circularity of the batteries, but it could also be sustainability and manufacturing processes, and so the premise was kind of interesting with batteries is the notion of being a national security issue is once I get lithium into the country, if it has to be imported, I keep it in the country because I simply do this recycling and so I reduce my dependence on foreign sources. I keep it in the country. It
helps the environment in terms of the circularity of it. So that is actually
one of our sessions as well up at MBS. But we've done some white
papers on circularity. And the demand for battery recycling is a little bit low
right now, of course, because there aren't there many EV batteries out there, but they are starting to. These hubs are starting to pop up.
There's one in South Carolina. There are some in California, and there's a
few more that are going to be building right here down the road. We've
got Serba in what is it Wixom, I guess it is Wick and I think they also have something in Ohio as well. But it's fabulous and you
really want these things to be fairly close to the R and D centers.
Is anything you learn from recycling you can quickly feed back to the R and D Center to say, if you make this little change, you know I've positively affected the ability to recycle and I can reduce waste or improve the efficiency.
So yeah, I mean it's a terrific topic. You're going to see
a lot more growth in that area. It's a little bit slow right now.
So Gordon, what do you think this is? Going back to the
cyber attack thing. Well, I've got a little bit of a personal investment
in cybersecurity. My son is in the Air Force doing cybersecurity for the government,
and so we hear a little bit about things. One of the things
that I can tell you that in running my company, it's not one type of cyber attack. It's a variety of different types. We had one that
was very sophisticated that. Fortunately, we have set up in our company some
some personal gaps that allow us to check certain activities, particularly when it comes to cash in and cash out. So we had a situation where I was
driving down to Indianapolis. Somebody had hacked into our email account, figured out
who was responsible for paying bills and authorizing payments. Send an email for me
to my CFO to pay a personal seventy five thousand dollars bill. Now we
never do that. We also have a discussion every Thursday that says, even
if I told you to pay it, we're still discussing it on Thursday.
So we have this roster that takes anything that's over a certain amount and does it. This was very sophisticated. Went in through our Microsoft software, set
up different parameters within our email so that we weren't communicating. I didn't even
see these emails. I just got a phone call on the road saying,
why are you sending these to me? And so we had to shut that
down. We had to set up second variety of other news security patches.
And that is just one example. We get on a regular basis. People
are saying, Hey, I'm so and so like somebody one of my employees.
We need to change where my account is being paid. These are small
fishing exercises, but it's a daily vigilance within our group and training to make sure everybody understands who's on first, what's going on, what does it look like. If it looks like this, it's probably something bad and let's try
and eradicate it. And so it's a daily struggle. We've been very fortunate.
I mean, Knockwood, I don't know to see anywhere around here, but we've been extremely fortunate so far. And we do manage our cash flow
a bit old school albeit, and it does slow things down a little bit, but it has been a lot safer. Let me change this up a
little bit. You know, we've got YouTube guys here. You've got plenty
of experience in the auto industry. Give us a sense of what competition was
like when you started in the industry, where you see competition today. It's
a great question. You want to start, I'd be happy to. So
I began came out of the University of Michigan in nineteen eighty five, and during that time, so I started at Chrysler and we were down in Highland Park, at that time, and there really wasn't much camouflage on vehicles that I recall, and the product life cycle, so it was about sixty months.
It was about five years to develop a car. And I grew up
in Dearborn, and so I could see the four development cars would drive around the city on occasion. There was no camouflage on those cars either. And
it was a time where we'll show you our car, because it takes you five years to catch up and you know, to mimic it, so it doesn't really matter. So fast forward through various incarnations of Chrysler and Daimler Chrysler
and Fiat Chrysler Automotive, and then I never made it to Stillantis but almost, and that product life cycle got down to nearly twenty to twenty four months and so, and of course it depends on where you snapped the truck line.
This is a top hat. And but it got to the point where
we had the cameouflash things because companies could react very quickly with you know, digitization and the ability to go with a CAD model very quickly to tooling and and so that whole thing had changed. And our friend Jim Dunn made a
career by photography, photography out at the Chelsea Proving Grounds and the Deerborn Proving Grounds and others, by taking yeah, by taking those photos, and you know, and internally there were more than a few tongue lashings about why that instrument panel wasn't covered up when he went inside to go to McDonald's to you know, grab lunch. And Gordon will remember that as well. So just
the speed, you know, going from five years down to less than two years in product development and it's going to get shorter as well. That was
my kind of recollection. So I started to graduating from YUVAM. I didn't
know you were at you Goblu nineteen eighty three, I graduated, and I started prior to that as an internet Pontiac Motor Division. So my father was
a Pontiac guy for forty years. It worked for John Dolrian back in the
sixties, and I grew up racing on Woodward with development cars with my dad asking me to take vacuum gage measurements at certain shift speeds. In those days,
it was very exciting because it was all about speed and chrome and style.
And I remember very explicitly when I was a kid that everything kind of hit the wall literally in nineteen seventy three during the oil embargo when my dad said we had to change from front engine railroad drive to you know, basically unibody transverse mounted for fore bangers to you know, boxy exteriors and style was really kind of falling apart, and then then you ended up with the GM combination and right about you know, nineteen eighty three when I came out,
I had this wonderful experience. Hokiy Al Dukushi was doing the Fierro and I
was on the Fierro program in nineteen eighty as a engineering intern at Ponti Mortivision on probably one of the last kind of really innovative cars that Pontiac ever did that I thought was really cool, and so there was a lot of that kind of excitement in that. And when I went and I graduated from engineering,
I ended up at American Motors, which was owned by Renault at the time, and I got to work on everything from the drive train back right, so I had the flywheels back through the axles and jeeps were cool, right, And then we were doing a lot of really kind of need off road things with those jeeps and then Renault had this little thing called Alpine that they were doing for the US market, So there were some cool cars.
I was a bit fortunate that all the way through my career at Chrysler, I got to do some fun things. So I got to work on Viper
and then Prowler, and i'll at Jim Dunn, we built the Pranglers really to do aero thermal and when they photographed that, Raz and I were laughing our butts off because the Pranglers were obviously out there for testing, but so explain. So the long and short of it, we were sitting there going,
well, we have to do aero thermal testing. Early, we didn't
have full bodies, so we made up the We determined, let's go take some junk Jeep Wrangler bodies that were over at the old Jeep truck building and we'll put those and modify those, and then we'll make our own kind of front end that would mimic the front end of the Prowler with its kind of weird plan view. And then they went out and they tested them on the
proving loop at CTC. And you know, again, I think it was
Jim Don, I don't remember, but it was some of the flobbers caught the Prangler on the track and go, what the heck is this right?
We made a few of them and they kind of were called, i guess affectionately the Prangler right because it was a Wrangler rear and a Prowler front.
But I remember building those cars in the in the labs down below at CTC, and it was just, you know, really kind of fun because we were doing whatever we had to, like hot rodders, bag borrow steel, put it together and see if we can make it work. And those days
were fun. I think it got more of a business as it got on
more and more. You know, you had more regulation, you had more
things you had to do, not that you wanted to do, but you had to do right. And then you had to try and price them.
You had to make it affordable, and you had to make them make a market. It was it became more difficult to have fun making cars. We
had a colleague. We used to entertain people from different industries who would come
in and do some kind of knowledge sharing and benchmarking and such. And we
had an industry ve from the computer industry, and one of their products was a commercially available tax program, and so their product was on a disc that they would send out to people. And so as part of our ben we
brought him into the pilot plant at CTC in Auburn Hills and we started out at the front end where we had big coils of sheet metal, and we showed him the stamping and we walked around the process and they were you know, forming the body and white and then you know, putting the interiors in, eventually the powertrain and then the painted and at the end of the line was a car. And he was just absolutely amazed. His product was a
three and a half inch disk drive and we started with raw material and had a car rolled off the line, and he says, you know, that's the most amazing thing I've ever seen in my life. And you know,
we all kind of walked out a little bit taller and a little bit prouder to say, yeah, this is cool. We see it every day and
we maybe take it for granted. It hasn't changed for people. I mean,
maybe the propulsion system's different, but fundamentally from the sheet steel to well, the pilot plant was really I think a great innovation because we're building you know, all the pre pilot cars right there and then they would reconfigure it to do the next one. And so for me that was you know,
when we built CTC and that was being put together, that was really cool because normally you'd run pilots down another assembly line, or you'd do it a little offline and then run it through the assembu line. But this was focused
and the learnings were invaluable, and that was really cool. So every once
in a while you got to walk out of work and say, we do some really cool stuff. You know, it's interesting what you're saying there,
Gordon, because it reminds me of the very earliest days of the automobile.
I'm talking you know, Henry Ford in the Piquette plant, even before they went to Highland Park. But even at Highland Park that in the earliest,
earliest days, there wasn't really an engineering department as we would recognize it today.
You had a master craftsman who led a small team of people, typically eight people that would do the whole car, and whenever they came up with an innovation of how to do something better differently, the master craftsman would call a runner and do a quick sketch and hand it to him and says, take it to engineering and make a blueprint out of it. So the innovation
and the engineering literally came off the plant floor, not some engineering department that's telling manufacturing here. Make this. So when you were just talking about that
pilot program, that kind of goes back to the earliest days. Well it
goes back to people who were really I guess, really aligned with cars and how they were made and how they were taken apart. If you remember,
you know, GM used to have these master texts that would sit in with the engineers and say, well, that's great, that engineer that well, how are you going to get that bowled out? Once you assemble that engine
in the car and it hits the side rail, I mean you can't get it out, and you can get it out, cut it and then try and get the rest out. And so they had used to have service engineering
embedded in with those guys to your point saying, not only can I build it and put it in in an assembulane, but I can also service it and take it back out when I need to and not spend a ton of money doing it. Today. I mean, the old joke was, you
know, we got to the point now where you put water on the top of the engine, there's nothing that comes out at the bottom because we've got it so well packaged. That's what CAD did for us. Right back in
the old days. You made models, you put them together. You know.
The joke was when I was working on my old overhead Cam six engine back in the sixties or in the seventies, I could sit on the fender and put my legs in the engine compartment and work on the engine. You
can't do that today. It's just we've become so efficient at packaging. In
fact, I want to say, what was the cab Forward cars at Chrysler LH Car. Yeah, they packaged the front end so well because of CAD.
They were having cooling problems are going through the engine compartment. They had
to move stuff back out. Yeah. I mean there's unintended consequences of being
better at what you do. That's right, right. Hey, look,
we're gonna have to wrap this up. Really good discussion. Amichi from Car,
thank you so much. But Gordon Heidecker from Pure Forge excellent, Thanks
Gary, really good show. We'll do one next week. We'll do one
next week. So we want to thank all of you for having tuned in
OLL online after hours is brought to you by bridge Stone Tires. Solutions for your journey
About this episode
Innovative technology from Pure Forge promises to revolutionize brake rotors, potentially allowing them to last up to 200,000 miles. Gordon Heidecker discusses the unique PVD treatment that hardens rotors and reduces brake dust, making them cleaner and more efficient. The episode also touches on the implications for fleet operators and the automotive industry's shift towards electric vehicles. Alan Michi from the Center for Automotive Research shares insights on industry trends, including the challenges of EV adoption and the importance of sustainability in automotive practices.
TOPICS: brakes, CAR PANEL: Gordon Heidacker, PureForge; Alan Amici, Center for Automotive Research; Gary Vasilash, shinymetalboxes.net; John McElroy, Autoline.tv