Automotive Industry Trends
August 2004
Holding it all together: a look at the automotive fastener industry
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As consumers, it is difficult to fathom the sheer number of parts that go into making an automobile. Throughout every section of every vehicle, the key to all these parts – holding them together so they function properly – are the fasteners. Once just your standard nuts, bolts, and screws; fasteners have progressed over time to become highly engineered components specialized to the unique requirements of whatever needs to come together – whether it’s car door panels, small engine parts, or airbag housings.
Fastener roots
According to the Industrial Fasteners Institute (IFI), the North American fastener industry began in 1840, when a firm called Rugg and Barnes of Connecticut became the first company to manufacture and sell nuts and bolts. Their success drummed up a competitive market with no standards, creating a problem – screw threads varied from firm to firm. William Sellers proposed an American standard for screw threads, nuts, and bolts in 1884 that was eventually accepted, accelerating the growth of the industry as the industrial revolution marched on.
In the 1960’s, the North American fastener industry included 450 companies with 600 plants and 50,000 employees; it produced two billion fasteners per year. But the industry changed by the mid 1980’s, shrinking to just 250 companies with 360 plants and 35,000 employees. One cause was the switch to automated assembly equipment by equipment manufacturers, which requires virtually defect-free fasteners and just-in-time delivery. Another was the influx of foreign-made fasteners that were available at reduced pricing.
Many of these imported fasteners were inferior, bogus, mis-marked, or counterfeit and did not conform to the U.S standard. The problem fasteners posed serious product safety hazards, and were the impetus for the Fastener Quality Act (FQA), passed in 1990 and revised in 1999.
Today’s challenges
The automotive industry is the single largest fastener consumer of any industry, using 26 billion parts annually out of the 200 billion produced, or approximately 42% of the industry. This consumption makes the automotive industry a powerful player and trend setter in the fastener industry. According to Rob Harris, Managing Director of the IFI, the industry continues to change. Today, automotive fastener manufacturers in the United States produce highly engineered fasteners.
Harris notes that as manufacturing improvements have helped improve fastener quality. The move to automated assembly by automakers increased pressure on fastener manufacturers to decrease defects. Defects per million, which used to be in the mid-double digits, has decreased significantly into the single digits. The machinery used to output today’s engineered fasteners is capital intensive, with costs of $1 million or more per piece. These high-priced machines enable fastener manufacturers to automate their production lines and produce a higher quality product.
As the U.S. market moved to engineered fasteners, it pushed production of standard fasteners to Taiwan and India, with Taiwan representing 50% of the offshore producers. Taiwan is also the largest exporter of fasteners to the United States. Standard fastener production is now moving to China as well, taking advantage of even cheaper production costs.
With tighter (and differing) environmental regulations worldwide, fastener standards are moving from national to international. But to Harris, the biggest issue affecting the fastener industry today is the worldwide shortage of steel, caused by China’s explosive infrastructure building.
Because fasteners play such a crucial role in the safety of equipment, fastener manufacturers are sensitive to the quality of steel used in their products. Most fasteners are made from CHG steel, a high grade of wire rod. Harris notes that due to the steel shortage, manufacturers today pay two and a half times more for steel than they paid just six months ago. The problem for fastener manufacturers? They cannot recoup costs from automakers. “Automakers are resistant to taking on these extra costs because they don’t want to pass them on to consumers,” remarks Harris. Many fastener suppliers have contracts with automakers with fixed prices for supplies – prices set before the shortage took hold. Harris notes that some of the larger fastener suppliers, such as ITW and Textron, may be able to force the issue with automakers since these companies cannot justify losing money on product to their shareholders. But smaller producers may have no leverage and no choice but to wait out the short supply, hoping they can last while losing money on every fastener they sell.
Innovations
Textron Fastening Systems is betting on intelligent fasteners to change the way cars are engineered, assembled and disassembled. These fasteners allow auto parts to be assembled and disassembled by remote control, with no conventional tools, robots or assembly stations required. Intelligent fasteners integrate assembly logic into the way parts are joined.
Microchips embedded into these fasteners have secure addresses and respond only to an encrypted signal, which makes them accessible only to designated dealers and technicians. Dismantling cars and components for material recycling and hazardous waste disposal could, potentially, be more cost effective and less time intensive. The disassembly process would come from remote electronic commands, sent to fastener networks, generating instant disassembly according to programmed sequences.
Textron sees these fasteners as a way to solve airbag theft, a rampant problem, with more than 50,000 airbags stolen annually in the U.S. If outfitted with intelligent fasteners, airbags would conceal the fastener within the airbag housing. With this design, only two options would exist to remove an airbag: by authorized code transmitted remotely, or by destroying the housing and airbag, which would make it useless to a thief.
As with the airbags, intelligent fasteners can be integrated into parts, allowing for pre-finishing. Critical assembly processes are reduced, eliminating damage caused by tools during the assembly. It also eliminates the need for skilled labor in assembly and disassembly.
Are intelligent fasteners the next wave in fastener manufacturing? Time will tell if automakers will design parts with them in mind. Regardless, many factors are at play forcing change in the automotive fastener industry.