EDITORIAL A Return to Captivity
most OEMs have decided it is more economical to outsource components like metal castings and focus on the design and as- sembly of their products. Recent news items on two
O
OEMs show some firms are buck- ing this trend, deciding metalcast- ing is indeed a core competency. This issue of MODERN CAST-
EMs have been shedding their metalcast- ing operations the last 20-30 years. Sure, we have strong captive facilities left as part of GM, Caterpillar, John Deere, Chrysler and Lufkin, to name a few, but
Ultimately, with this facility remaining open, Navistar has maintained the foundation of its diesel engine production in-house. A second news item from The Oregonian news-
There are casting end-users who see the value of metal castings and believe these components are critical to their end-products.
ING looks at Navistar’s Pure Power Technologies metalcast- ing facility in Waukesha, Wis, in a feature on p. 16. Ten years ago, this facility was shipping out bed- plates for diesel engines by the thousands. Today, the metalcaster is aiming for a 50/50 mix of captive and jobbing work, focusing on complex, low- to medium-volume work in ductile, austempered ductile and Hi-SiMo irons. Navistar believes this metalcasting facility is a core competency for its organization and gives the truck and engine maker a leg up as it pushes low-emissions engine design with its advanced exhaust gas recirculation system and new MaxxForce engine. “We don’t want to be just an assembler,” said
Robert Carso, director of marketing and global brand strategy at Navistar. “We want to be a leader, and in order to do that, you have to have core competen- cies in key technologies. Pure Power Technologies is really focused on that mentality and strategic path.” “In five years, there will be a gap in the expertise
of manufacturing and casting design engineers in the U.S.,” said Houman Kashanipour, vice president/ general manager of components for Navistar. “But we’ll be positioning ourselves to fill that gap. We are going to know how to make castings, because castings are critical components for the commercial vehicle industry. This skill set will be a competitive advantage for us.” These comments are further supported by Navi-
star securing an agreement to keep its Indianapolis metalcasting facility open only two days before it was scheduled to close. Historically, this facility has been a leader in engine block and head casting tech- nology in gray and compacted graphite iron. While it is expected to continue to cast blocks and heads for Navistar, the facility also is looking to spread its wings to 50/50 captive and jobbing work in both the block and head and larger industrial casting markets.
MODERN CASTING / October 2010
paper detailed the decision of Peerless Industries, a manufacturer of television mounting brackets in Auro- ra, Ill., not only to bring back its casting production from China but to install diecasting machines in-house to service its needs. “We control
the process, we control the quality, we can
react to customer demand faster because the manufacturing is here,” said Michael Campagna, Peerless Industries president. “We’re just tightening up our processes and bringing costs down every week.” According to the article, Peerless had outsourced
35% of its overall manufacturing to China. But after analyzing the true results and factoring in lead time issues, product piracy and lack of manufacturing control, the firm decided to change. “We’re going to probably be within 12-15% of
the Chinese cost,” Campagna said. “It might cost us a point or two on the bottom line, but if we can provide more jobs and really get the plant humming, it’s worth it.” Not all OEMs should have captive metalcasting
facilities. The decision to maintain this competency is unique to every firm’s business case. These two instances do show that there are casting end-users who see the value of metal castings and believe these components are critical to their end-products. While we know it is true with many of our customers, I am sure we all wish we heard it more.
Alfred T. Spada, Publisher/Editor-in-Chief
If you have any comments about this editorial or any other item that appears in MODERN CASTING, email me at
aspada@afsinc.org.
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