Purchasing at automakers pushes recycled content
By Staff -- Purchasing, 9/2/1999
They want more parts that can be recycled, and they want them now. And suppliers had best be ready to come through if they want the business.That's the message that purchasing at some auto manufacturers are sending as the drive for more recycled and recyclable parts increases. It's a drive that is gaining momentum as we head toward the new millennium and beyond.
Ford Motor Co. was the latest to fire this volley. The company is now mandating more recycled materials and preparing aggressive standards that will make recycled content a main priority for materials and parts. The Michigan-based car company plans to send letters to its major material and parts suppliers, directing them to increase the amount of recycled material in vehicle components. The company will set mandated levels requiring suppliers to provide a specific percentage of recycled materials per vehicle weight.
Some suppliers are nonplussed by such mandates and say savvy suppliers must be ready to meet them head on.
"By the time they have that directive and you don't have a solution, it's too late," says Greg Hopton, director of marketing at the Michigan-based Sika Corp. Sika Corp. is a supplier for DaimlerChrysler. "They'll turn to someone else."
Others say automotive companies are stretching the limit as they put down their directives. They are directives that can be met, but not with great ease, they say.
"They have very aggressive goals," says Tom Susko, director of advanced engineering for Lear Corp., DaimlerChrysler Division.
Environmentally friendly
Ford spokesman Ron Lori would not discuss the mandates, saying the company wants to talk with suppliers before discussing them elsewhere. But he does say the company sees room for improvement when it comes to getting more recycled parts, or parts that can easily lend themselves to recycling efforts in the future.
"We are always looking to make our vehicles more environmentally friendly," Lori says. "Part of that may include recyclable content over time."
Bill Orr, manager of worldwide recycling planning at Ford, says this is the right time for the company to head in this direction.
"One important factor is contributing to corporate citizenship and defining our environmental strategy," Orr says. "Vehicle recycling is one of the pillars of that."
Ford is not alone in this belief. As at Ford, representatives from DaimlerChrysler and General Motors are members of USCAR, a council for automotive research that leverages the research of the companies in non-competitive areas. USCAR is dedicated to improving recyclability of vehicles.
As a result of this effort, DaimlerChrysler, too, has been pushing its own initiative since the early 1990s. The company's latest recycling standard requires plastic parts suppliers to add as much as 30% recycled content to future components.
Different approaches
But while the goal may be the same, the member companies are differing in their approach to suppliers. Some hinted that Ford's latest, letter-driven directive is nothing less than aggressive.
"We're going ahead differently," says Terry Cullum, manager of GM's public policy center. Cullum is also a member of USCAR's Vehicle Recycling Partnership Management Committee.
That's not to say that other companies believe Ford's approach is inappropriate. Representatives from auto companies including General Motors say industry members today have no choice but to keep pushing the environmental buttons. And one of the most important of these involves recyclability. "We're all coming up with more recycled content,'' says Cullum.
Cullum says GM has had a policy calling for dedication to recycling since 1994. That policy is being updated right now. He says GM will eventually add to the requirements it has given its suppliers, without a letter from a top official.
Cullum describes GM's recycling initiative as more supplier-friendly and less public. He says GM is content with coaxing suppliers along, and working with them to achieve a common goal.
"The main difference with us is we are not looking to set an explicit goal for recycled content," he says. "We have not gone public to say we will be recycled at a certain content."
Cullum says internal goals are set at GM, with established targets and goals made clear. The company then seeks suppliers who can meet those goals.
A common goal
Cullum says the important thing, in the end, is that all three companies come up with cars that are more recyclable.
"It makes economic sense, and we are trying to be conscious of the environment as well, make sure that waste products are no longer waste products," he says. "The waste products of one could be the raw material for another industry."
Orr says Ford's route is a sensible one for the company to take. He says Ford is "setting the tone" for competitors as it goes about its aggressive recycled parts campaign.
Ford has had internal recycling guidelines in place for five years. As a result, Orr says the typical Ford vehicle is up to 80 % recyclable. These include, on the high end of the scale, the F350 Super Duty truck, the Ranger, and the Ford Excursion. Ford cars that have a high content of recyclable parts include the Crown Victoria and Jaguar XJ8.
Upping the ante
But Orr says the company hopes to up the ante on the parts even further, and has been working on a new set of guidelines aimed aggressively at suppliers for the past six months. This means things like bumper systems, interior trim, hood parts, and tires must be made from recycled materials or be capable of being recycled at the end of the vehicle's life. "What are we looking for? As much as possible without having any negative impact to the other vehicle parameters like fuel economy, weight, and safety," he says.
Orr also says that, at all costs, the recycled parts must live up to the company's stringent standards. Among these are the fact that the new parts must be as affordable as the parts they are replacing. They must also offer performance improvement and weight savings. They must live up to Ford standards for safety and promote fuel economy.
A long process
Orr says the latest directives are probably the beginning of a long process. Although no one expects a vehicle to be 100% recyclable, he says, customer reaction will help direct Ford on just how far it should go. Orr says by increasing the recycled content of its vehicles, Ford enhances its image and reputation with its customers, as well as government agencies.
"If nothing else, people relate to pop bottles, milk jugs, and someone taking them and finding use for them," he says. "If customers overwhelmingly reacted to this, and make it a tremendously competitive parameter, we would probably adjust the standard."
GM's Cullum also believes that both manufacturers and suppliers are on the same page when it comes to this issue today. Cullum believes all automotive companies are heading more and more in this direction. GM, for example, employs engineers who are devoted to finding sources of recycled materials for the company's vehicles. In some ways, he says the increasing pressure from the automotive industry is not so much a shift, but an evolution of stated policy.
"Look at what our engineers are doing," he says. "They are not changing their focus, they are being asked to do more. We are creating cars that are lightweight, contain more recycled content at the end of their lives."
Greater expectations
Can the suppliers live up to these trumped up expectations? Orr believes they can. He says the suppliers' efforts thus far show that they can keep pace with the directives. "We couldn't do it without the enthusiastic endorsement of our supplier community," he says.
Representatives from the OEM supplier Sika Corp. agree with Orr and say they are willing to do what they can to remain competitive and able to meet the car companies' recycling mandates.
Sika Corp. supplies a small percentage of parts to Ford, while the majority of its parts go to DaimlerChrysler. The company specializes in recycled sealing products and polyurethane foam that can be used for noise and vibration control in vehicle cavities. Sika Corp.'s Hopton says the company has received similar directives from DaimlerChrysler. They are directives that the company is bending over backwards to comply with, Hopton says.
Making the jump
Hopton says it's not enough for today's suppliers to simply be willing to aid automotive companies as they strive to build vehicles with more recycled parts. He says today's competitive supplier must be prepared to make the jump--long before the automotive company makes the request.
"A supplier today has to be able to have the vision to see this stuff coming ahead of time," he says. "From the standpoint where if you want to be successful, you have to be ahead of the OEMs on the recyclability issue. You have to have it in your product."
Hopton says Sika Corp. had been dabbling in increasing the recyclability of its parts for years before automotive companies began making their needs known. He says this is only a sensible way for the companies to go, since parts made from recycled materials are cheaper to buy and make than parts made from fresh raw materials. "Recyclability represents a lower cost to everybody. It just makes sense," he says.
That's not to say it's easy for suppliers to make the parts. Hopton says such suppliers must work with specialty chemicals, obtain recycled material from raw material suppliers, and generally go the extra mile to make the parts. "It's a challenge," Hopton says of the directives. "I won't say it doesn't bother me. It's a challenge because you can't just turn these around overnight. You can't just find recycled products overnight."
Asking a lot
No matter how the directives are coming down, Susan Yester, senior manager for vehicle recycling programs for DaimlerChrysler, admits that the automotive industry is increasingly asking a lot from its suppliers. Yester says the companies are asking the suppliers to make parts from resources that aren't always readily available, or whose design has not yet been formulated. "It's really hard to go into a supplier's company, where they have been performing a certain process, and say they have to change everything," she says.
Lear Corp.'s Susko says it's true that the industry's increasingly demanding goals can be challenging to meet. The Michigan-based supplier of interiors, instrument panels and floor acoustic systems must be able to come up with goods and at the same time not skimp on quality.
Aggressive goals
"They are aggressive in the percent of recycled content they are looking for, and at the same time they want no degradation in performance, reduction in weight, all for a competitive price or less," Susko says.
Realistically, Susko says the industry must continue to work together as it heads toward increased recycling. It must begin to address, for example, the shortage of infrastructure now available to receive recycled raw materials from. Somehow, these materials must be made available at reduced prices for the suppliers who are being told to use them."
But Yester says the company is constantly encouraged by the steps taken by the suppliers. She says the company recently asked 26 suppliers to look at DaimlerChrysler vehicles, develop designs for environmental concepts, improve recyclability, and reduce the use of certain substances, like mercury. As a result of the request, some 500 parts were modified or changed, producing weight savings on many vehicles.
Yester says the company's directive paid off.
"They did it in a manner that was spectacular," she says. "We are finding that many are or have risen up to the occasion to meet some of the challenges we imposed on then and asked them to address."
A trade off
Hopton says suppliers are beginning to see a trade off here. He says the manufacturers are increasingly willing to make the effort worth a supplier's while.
"They say, 'I'll help you find business if you increase the recyclability of this," Hopton says. "OEMs help you win contracts if you can prove you have recyclability."
Yester says the automotive industry must continue to push in this direction. She says car companies obsessed over fuel consumption during the 1980s. Now, as the industry becomes increasingly global, it only makes sense for recycling to become a forefront concern. The industry should strive to give life to the parts that make up large, bulky vehicles that would otherwise only take up space in a dump.
She says the industry is making great strides in this direction, with up to 94 % of the vehicles being made in the United States being recycled in some way.
"If you talk about the 1980s, the early '90s, it was all fuel economy and safety," she says. "But if you look to 2002 and beyond, the impact of an automobile throughout its life cycle and environment is increasingly a concern."
Talkback
Related Content
Related Content
Sponsored Links
View All Blogs
Now Playing:
