More than 4 million cars built in North America and Europe this year will come with the front end completely pre-assembled outside the automakers' gates. During the next five years, that number could more than double, with a third of all vehicles produced with front-end modules — headlights, engine cooling systems, bumper, latches, hoses and wires — all placed in a plastic carrier by a Tier 1 supplier, then shipped to workers at the assembly plant who pop them into place on the chassis.
But while one automotive consulting group expects the modules to grow as a major vehicle manufacturing trend, it also admits most carmakers and their suppliers have a lot of details to hammer out.
At this point, they're just laying down the ground rules of what the term "front-end module" entails, and trying to determine which plastic — or whether any plastic — will continue as the material of choice for the carrier.
European automakers are faster to board the module bandwagon, but some U.S. carmakers are taking their tentative first steps. Hella-Behr Vehicle Systems, which already turns out the units for Volkswagen AG and its Volkswagen, Audi and Skoda brands, is developing systems for Ford Motor Co. and DaimlerChrysler AG.
"All of the [Volkswagen] models have it as it is already, but it's a new concept for Ford, General Motors and most of the automakers here," said Mitra O'Malley, a principal with ITB Group of Troy, Mich., which published a 360-page study on front-end modules late last year.
Visteon Automotive Systems, Ford's parts division slated for independence later this year, will have its first modules on vehicles rolling out late this year.
"In the past 12 months, there's been tremendous changes," said Steve Gawne, business unit director with Visteon of Dearborn, Mich. "People didn't even know how to spell front-end module a year ago. Now, everyone is talking about it."
With the modules, workers at Tier 1 suppliers install lights, grilles, heating and cooling systems, connections, wires, and even hood latches to the automakers' specifications within a carrier, matching everything from the parts to the paint to each vehicle's specifications. In all, a fully loaded front-end module takes in more than 100 separate components, O'Malley said.
For the structural portion of the modules, manufacturers typically use compression molded sheet molding compounds in North America and glass-mat thermoplastics in Europe, ITB Group noted.
As more companies look at the systems, they're also bringing forward proposals to use different structural materials.
"That's a big question coming up," Emmanuel Boudon, customer center director for Hella-Behr's Plymouth, Mich., office, said during a Jan. 17 interview.
Hella-Behr now uses a hybrid system of compression molding for the carriers and modules it produces. The company makes the parts at three plants in Europe and one in Mexico.
"We use whatever the customer thinks is best," said Bill Frederiksen, vice president and general manager of Decoma International Inc.'s Troy, Mich.-based front-end module assembly group.
Decoma already produces modules for Volkswagen in Europe and is developing systems for North American vehicles.
Volkswagen, the pioneer in this application, has used modules from Hella-Behr since 1992.
"A lot of that is driven by the competitive nature of the [European] marketplace," Gawne said. "Over there, it's not just the Big Three or Four like it is in the U.S. You've got seven or eight of them all slugging it out.
"It drives innovation. Everyone's looking for the next step."
About 15 percent of the 31 million vehicles produced in North America and Europe had front-end modules in 1999, ITB Group reported. That number should increase to 34 percent by 2005, while Japanese automakers could sign on in the next few years.
For automakers, the modules offer a series of benefits:
They save money, always a top concern, O'Malley noted. Automakers no longer have to pay people to install headlights, hoses and switches, because the supplier handles that in the module. In addition, the Tier 1 supplier takes on liability and testing issues related to the pieces.
With the headlights, grilles and other elements produced off- site, the big companies no longer need to stock all the wires, tubes, connectors and other pieces that go into each vehicle.
Employees have easier access to the car they're building. In traditional assembly, steel tie bars that form the front of the chassis block workers from getting to the vehicle's interior, Boudon noted. They'd have to reach over, under and around each auto to install the engine and other components.
With that bar gone, they simply walk into the under-the-hood area, then install the module at the end of the process.
But there also are major concerns, especially convincing the large corporations to change the way they've traditionally thought about assembling vehicles, O'Malley said.
"In a big [original equipment manufacturer], you've got all these divisions," she said. "The people in the lighting division have no idea who the engine cooling people are, but you're making engineering changes that affect all of them."
And they must find another way of working without the traditional bar that holds the vehicle together as it passes through each stage of the plant.
"There has to be another mechanism to keep the frame without wobbling as it goes through an assembly line," O'Malley said. "It's like the chicken and the egg. For them to shift, the design, manufacturing and delivery logistics must change."
The suppliers, meanwhile, take on more that just a new contract. They must provide the testing needed to prove the front-end modules can withstand government regulations in crash tests and meet pending pedestrian safety standards.
"We have to make certain that we have full competence in our engineering," Frederiksen said. "We raise the standards of our people."
"It's high risk," Boudon said. "You need to do a lot of engineering."
Neither of Hella-Behr's parent companies were anxious to get into module production, Boudon said. They already had a solid business base.
Hella KG Hueck & Co. of Lippstadt, Germany, specializes in vehicle lighting and electronics, with annual sales of about $2.4 billion and more than 20,000 employees worldwide.
Behr GmbH & Co. of Stuttgart, Germany, meanwhile, turns out heating and cooling systems and cockpit modules, with annual sales of $1.8 billion and 11,500 employees.
But eight years ago, when Volkswagen wanted a company that could produce a module with elements of both companies' products, they decided to team up, rather than relegate themselves to dropping to Tier 2 supply status, Boudon said. The new business, incorporated last year with main offices in Lippstadt, has 330 employees.
"It was not a wish to get into this business," he said. "We were pushed by the OEMs to do this."
Hella-Behr's Meerane, Germany, operation has turned out more than 1 million front-end modules for Volkswagen since it opened in 1992. It launched a plant in Puebla, Mexico, in 1997, to produce modules for VW's new Beetle, while two more operations opened in 1998: one at Curitiba, Brazil, to supply VW and Audi and one in Mnichovo, Czech Republic, for Skoda.
It's not easy to get into module manufacturing, Gawne admitted. Established suppliers may have to team up, like Hella and Behr, or consider stepping aside.
"There are a lot of players who are attempting to protect their base business by getting into modules," he said.
It doesn't pay for the automaker or its suppliers to design a new module program for low-volume vehicles, Boudon said. It simply takes too much time and money to retool an entire operation for just a few thousand cars.
"If you have 50,000 cars per year, it just doesn't make sense," he said.
But at the same time, it doesn't pay off for automakers to gear the program at its biggest sellers either, O'Malley said.
"The problem with high-volume vehicles is they are not just made in one plant," she said. "Those different plants have different configurations, different ways of doing things.
"The best place to start is with one plant, where you're dealing with one management system, one group of workers. It's a massive upfront investment, but if you have a situation say, with a plant that produces 100,000 vehicles all in one plant, that's an ideal place."