DETROIT — General Motors Corp. is making a quicker-than-expected catapult into plastic fuel tanks, and three plastic parts suppliers not known for working with GM are benefiting.
ABC Group Inc. of Rexdale, Ontario, will open a new plant in Tennessee within the next year, a result of the Detroit-based automaker's recent move to outsource plastic fuel-tank production, according to other fuel-tank competitors.
ABC Group, a leading fuel-systems supplier, has not produced fuel tanks until now. The plant also will make plastic fuel pumps and other fuel-system components, sources said. ABC Group declined comment.
GM resolved to outsource more of its fuel tanks, and to convert more from steel to blow molded plastic, in the wake of the recent United Auto Workers union strike, sources said.
Several current car models will shift from metal to plastic, said sources involved in the negotiations. Also, a preliminary fuel-tank contract for a large new passenger-car program—an estimated $2 million annual contract— was awarded in late July to another outside supplier, those sources said.
Visteon Automotive Systems, the Dearborn, Mich., parts-making unit of Ford Motor Co., will receive that passenger-car contract, considered an industry plum by many fuel-tank competitors.
ABC Group and Cie. Plastic Omnium SA, a Paris company that makes multilayer fuel tanks in Anderson, S.C., received the contracts for the current programs, sources said.
GM makes metal fuel tanks at a Flint, Mich., stamping plant operated by one of its parts-making units, Delphi Energy and Management Systems. That plant had been one of those on strike.
Neither GM nor Delphi officials would comment on the supplier contracts.
Delphi has announced plans to spin off its operations. The company had considered shifting its production to plastic tanks but found the price of entry in coextrusion equipment too expensive, said several outside suppliers.
The six-layer tanks are made with a skin of high density polyethylene and inside layers that include reground HDPE and ethylene vinyl alcohol.
Officials with UAW Local 659 in Flint were not aware of GM's plans to shift to plastic tanks, said local Vice President Russ Brown. The UAW planned to sit down with GM to discuss the situation at the fuel-tank plant, which employs about 500, he said.
According to several sources, the automaker had asked for bids for plastic tanks during the strike. Suppliers bid on current programs involving the Chevrolet Cavalier and Malibu, Pontiac Sunfire and Oldsmobile Cutlass.
Those steel tanks are made at Flint and another facility in Lansing, Mich.
The bids were under what one supplier called a ``crash program'' to accelerate the shift from metal to plastic before the end of the model program.
Another source said most suppliers did not bid seriously on the program because they considered it only a strike ploy to rattle the union.
However, GM ended up outsourcing the business to both ABC Group and Plastic Omnium, sources involved in the discussions said.
Officials at those companies would not comment. ABC Group had helped develop multilayer tanks and had been rumored for some time to be entering that market.
The company ranked eighth on Plastics News' survey of North American blow molders with $270 million in relevant sales.
GM was lagging behind Chrysler Corp. in its shift to plastic fuel tanks, according to fuel-tank suppliers. Chrysler already uses plastic tanks on nearly all of its vehicles, working with outside suppliers. GM now makes about 60 percent of its tanks from metal, fuel-tank competitors said.
However, sources cautioned that GM is not yet fully committed to a shift away from metal tanks.
The largest new contract goes to Visteon, which is attempting to do more work outside Ford. The company will make fuel tanks for GM's new-generation passenger cars under GM's code-named Delta global platform.
Those vehicles, first due out by 2001 or 2002, include a redesigned Cavalier and Sunfire, the Opel Astra in Europe, a new sports utility vehicle and models within its Saturn line.
Visteon officials could not confirm the contract award, said spokesman Norm Johnson.
The company currently makes plastic fuel tanks at a plant in Milan, Mich. If Visteon were to expand its fuel-tank business, it would consider starting a fuel-tank operation at another plant, Johnson said.
With work snowballing in plastic fuel tanks, some key issues still must be worked out, said Boney Mathew, president of plastic engineering company Mathson Industries Inc. of Troy, Mich. The industry is considering lower-cost solutions, such as injection molding or a lost-core process.
In addition, plastic fuel tanks must better manage the issue of static discharge—or allowing a fuel buildup in the tank, Mathew said.
``That has to be addressed,'' Mathew said. ``The buildup of too much static discharge can cause pinholes [in the tank] and leakages. A conductive layer would be one method of solving this problem.''
According to sources, GM has made other recent moves to plastic tanks.
Last year, a large contract for one of the carmaker's highest-volume lines, its GMT800 pickup trucks and sport utility vehicles, was awarded to Kautex Textron, a division of Troy, Mich., supplier Textron Automotive Co., and Cass City, Mich.-based Walbro Corp., according to outside fuel-tank sources.