Aussie plant to steer the world

AN ALL-NEW factory to be established in Melbourne by global company Nexteer Automotive will generate export earnings of at least $150 million a year from a new range of electric power steering, lightweight steering column and driveline components that help cut vehicle fuel consumption and open up the possibility of advanced features such as automated parking.

The unique parts will be made exclusively in the Australian plant and exported to the United States, Europe, South America, China, Thailand and elsewhere in Asia on behalf of Nexteer, as well as meeting demand for new-age electric power-assisted steering systems and other parts from Australian manufacturers.

The federal government has tipped in $63 million from its now-defunct green car innovation fund to help fund the project, with additional funding coming from the Victorian government.

The federal grant is the biggest awarded to a component supplier under the scheme, which was killed off by the Gillard government in late January.

The Nexteer application for funds was already in the pipeline when the boom came down on new applications, and has been honoured by the department of innovation and industry minister Senator Kim Carr.

The Nexteer announcement reverses a run of negative news on Australian parts suppliers, with companies such as Bosch and Autoliv announcing cuts and job losses in recent months.

Left: Senator Kim Carr, Ford Territory steering system.

The plant – creating 250 jobs – is to be built on a site yet to be decided in Melbourne, where Nexteer already makes old-style hydraulic steering systems for Ford, Toyota and export customers at a factory in Somerton, in the city’s north.

Ford Australia already fits imported Nexteer electric-assisted power steering systems to its new Territory SUV. The updated Ford Falcon due in early 2012 is also in line for the new system.

As well, Holden has plans to “lightweight” its next VF Commodore due in 2014 – presumably including electric power steering and light steering columns as part of the fuel-saving package.

Nexteer, which was once owned by General Motors but is now part of the Chinese-owned Pacific Century Motors group, is one of the world’s biggest manufacturers of steering systems, including electric systems that are in hot demand from world manufacturers under pressure to reduce fuel consumption and CO2 emissions.

Nexteer Automotive Australia managing director Greg Malone told GoAuto the new plant should be up and running by the third quarter of next year.

He said there was even a chance it might be running by mid 2012 if “another couple of irons in the fire” came to fruition.

“At this point in time we would say third quarter,” he said.

Mr Malone said the current plant was too small for all of the new programs, so his company had been searching for appropriate sites to house some or all of the new facilities.

He said some of the engineering development for the new components will be done in Australia, where Nexteer has an engineering centre at Glen Waverley, in Melbourne’s east. Other development would be done at Nexteer’s central design centre at Saginaw, Michigan.

As well, Australian governments have promised the work will be supported by a new Melbourne Manufacturing Techology Centre.

Mr Malone said the factory would have an export focus, being designed to build specific, unique parts for Nexteer customers around the world.

He said next step would be to offer these components to the Australian manufacturers for future vehicles.

“We will be able to offer the OEMs best-in-class products as a consequence of what we are doing,” he said.

“You really need high volume to put this sort of money in, so the local OEM’s will get the opportunity to use this technology.” Mr Malone said that although the new Australian plant would not make specific parts for automated parking systems the electric-assisted power steering components to be made here would be compatible for such purposes, with an ECU capable of being programmed to handle the required sensors and other functions.

Senator Kim Carr said the project represents a major investment by a large global company in Australia's automotive supply chain and brings new manufacturing capability here for the long term.

"These high technology components will drive a need for skilled labour and create new manufacturing jobs for Victoria," he said.

Victorian manufacturing, export and trade minister Richard Dalla-Riva said the project was a vote of confidence in manufacturing in Victoria.

"Victoria will be one of the few places in the world manufacturing this world-class technology," he said.

"This is one of Victoria's biggest automotive investments in two decades and will further strengthen the sector's manufacturing and export capabilities." The current Australian factory is one of 20 operated around the world by Nexteer, which has almost 10,000 workers.

The company has roots dating back 100 years in the US. It was taken over by GM at one point, and later passed on to giant parts manufacture Delphi, before returning to the GM stable and finally being sold off to Pacific Century late last year.

According to the company’s international website, half of the world’s cars will be fitted with electric assisted power steering by next year, and 90 per cent of America’s new pick-up trucks will have Nexteer systems by 2013.

Ford in particular is proposing to adopt electric steering of all of its light vehicles, and already has the feature on cars such as the Focus and Territory in Australia.