NORTH BALTIMORE, OHIO — If plastics are the wave of the future for pickups, then the companies riding the early crest are seeing signs it could cause a mighty big splash: Budd Co.'s Plastics Division is putting $30 million worth of improvements into one plant to build composite boxes for pickup trucks for Ford Motor Co.
Detroit's General Motors Corp. is getting ready to spend more than $250 million to buy plastic pickup boxes for two of its models, starting later this year.
Toledo, Ohio-based Owens Corning expects automakers will use more than 110 million pounds of composites in pickup boxes by 2004 — up from none just last year.
"We are excited about where this could take us," said F. Jackson Phillips, vice president and general manager for Owens Corning's automotive solutions division in the composite systems business.
"We believe this is a milestone."
Ford will bring its Explorer Sport Trac into American showrooms next month, a sport utility vehicle featuring a 4-foot thermoset pickup box produced at Budd's North Baltimore plant.
General Motors will begin selling its Chevrolet Silverado pickups with an optional reaction injection molded composite box in the fall, and next year will introduce its Chevrolet Avalanche, a cross between a pickup and sport utility vehicle with a standard RIM box.
"Who knows where this may lead," said R. Thomas Beaman, communications manager for GM's Truck Group. "We're prepared to increase production if that's what the market calls for."
The Automotive Composites Alliance estimates automotive thermoset composite use to grow from 250 million pounds this year to more than 467 million pounds by 2004.
Both Dearborn, Mich.-based Ford and GM made the commitment to composites in trucks last year. Now the first of the models is in production.
Budd, based in Troy, Mich., is adding six new presses and another 100,000 square feet to the 230,000-square-foot factory at North Baltimore to turn out the sheet molding compound beds and boxes for Ford.
It has brought back 60 people from layoff in the past two months and will have another 70 in place by spring. Within the next two years, the factory's employee base will climb to about 450 from the current 250. The Sport Trac contract will account for half of the business at North Baltimore.
"This has meant new life for this factory," said Michael F. Dorney, vice president of sales and marketing for Budd's Plastics Division, during a Jan. 27 tour of the North Baltimore operation.
With the Ford composite contract in hand, Budd had the financial backing to overhaul the site. And with the new equipment in place for the Sport Trac, the company can go after even more business with other companies.
"I know of some other projects in the marketplace for future models," Dorney said. "My expectation is that this will catch on and will grow. My goal is to get the Budd Co. a fair share of that emerging market.
"If I can get two or three more contracts like [this], then that's a new factory."
Budd's Van Wert, Ohio, plant turns out SMC for North Baltimore and other sites. Owens Corning supplies the glass fiber.
The 70 employees in Van Wert produce about 90 million pounds of SMC annually. Plant manager Gary Grossheim expects that will increase to 100 million pounds within the next two years.
"We expect big things out of this product line in the future," Grossheim said. "It has a good future."
The Van Wert operation has a capacity of 130 million pounds annually.
Madison Heights, Mich.-based Cambridge Industries Inc. has booked $250 million in work from General Motors during the next three years.
The $23 million cost of bringing a shuttered Huntington, Ind., plant back on line to produce boxes for GM contributed to Cambridge's recent financial problems. But the automaker's interest is an important development.
"Clearly, it's an emerging piece of an important business to all of us composite makers," said John Sieg, Cambridge vice president of marketing and communications. "We're pretty excited about it."
Cambridge had mothballed the Huntington plant after buying it from Eagle-Picher Industries Inc. two years ago. Cambridge is continuing to upgrade the site, Sieg said, and will meet GM's expectations.
Cambridge Chairman Richard Crawford confirmed Feb. 14 the business has hired Morgan Stanley Dean Witter & Co. to oversee any sale of the company, either in whole or in part. Cambridge had more than $487 million in sales in 1998, but also lost $16 million through the first nine months of 1999.
The company had spent $9.9 million on improvements for future contracts — including General Motors' truck bed — in the third quarter of 1999 alone.
"Our intent is to continue operating in a normal fashion," Sieg said. "[Huntington has] been recommissioned. Equipment has been ordered. We're continuing to bring it up to speed."
Ford first conceived of the composite box in 1986 and created several sample trucks with the box, said Pete Miskech, technology specialist for Ford who helped create the Sport Trac concept.
But Ford initially ended up shelving the project. The automaker already had a full production schedule for traditional metal boxes, and was not ready to bring plastics into the mix, Miskech said.
Besides, at that point, the biggest single plastic piece on a truck was an oil pan, he said. It was hard for some executives to conceive of anything as large as a pickup box.
Fifteen years later, light trucks have made up more than 40 percent of auto sales in the United States during the past four years. In search of new designs, Ford brought back its 1986 study.
"When the time was right, we picked it up off the shelf and implemented it," Miskech said.
Ford expects to sell 65,000 Sport Tracs annually.
General Motors has not released expected volume sales yet for the Silverado, but is aiming to sell up to 100,000 Avalanches per year once they come on the market.
The key to composites' growth in pickups, though, depends on the public's reaction. While automakers said their interest in plastic's possibilities grew from buyers' demands for a durable box that could withstand rust, dents and scratches, sales must depend on properly convincing consumers.
"We have been telling everyone we can about what this [box] can do," Beaman said. "We have tested it in extreme temperatures. We have given this to companies all over the country and told them to use this like you would a normal truck.
"We've done the homework to convince us that it'll provide value for the customers."
The Silverado will carry a full-size, 61/2-foot pickup bed. General Motors may offer an 8-foot pickup box if the first model takes off, Beaman said.
"There is an element out there that when you mention the word plastics, it just isn't macho enough for them," said Sieg. "Once this is out there, though, they're going to see what it can do.
"It's an exciting and emerging market."
Owens Corning's composites business President Heinz-J. Otto expects the composite boxes to provide a strong selling point once they are on the road. Consumers can see for themselves how they resist scratches and dings and how the beds do not rust out like traditional steel.
Otto admits he is biased toward plastics technology, but believes the boxes hold a strong promise for future business. Owens Corning is a supplier for both the GM and Ford projects.
"This is a prime example of how collaboration between the [original equipment manufacturer] and [suppliers] can move composites into a new area," he said.