Heavy-truck composite specialist Core Materials Corp. has its first major contract for a passenger vehicle, part of a planned move that could help it tap into the growing automotive composites market. The Columbus, Ohio-based company will use sheet molding compound to produce seat bottoms and backs for three new vehicles, a deal worth an estimated yearly paycheck of $25 million.
Core now has about $90 million in annual sales, making SMC hoods, fairings, sunshades, air deflectors and other parts for heavy trucks, tractors and personal watercraft.
"We've looked for alternatives for our company to grow," said Core Chief Financial Officer Kevin Barnett in a June 7 telephone interview. "This diversifies us and opens up a new market."
And it is a significant one. Non-automotive SMC sales are worth up to $600 million annually, with few opportunities available for growth.
In the auto industry, however, composite use is expected to increase by 44 percent between 2000 and 2004, with carmakers using 467 million pounds of thermosets, up from 325 million, according to Automotive Composites Alliance estimates.
"In the heavy-truck market, composites already have a pretty high penetration, but it's stable usage," said Mike Dorney, ACA chairman and vice president of sales for the plastics division of The Budd Co. of Troy, Mich.
Automakers, meanwhile, have just started transferring composites onto traditional metal parts, he said, with General Motors Corp. joining Ford Motor Co. in launching composite pickup truck beds this year.
"It's a growing market," Barnett said. "We're not necessarily looking at doing a lot of Class A painted material, but it's an opportunity."
The company has had contact with the auto industry in the past, making molded pieces for GM's electric vehicle line. The new contracts represents its first extensive foray into the business, Barnett said.
Core will ship the seat components to Tier 1 supplier Lear Corp. for use in three unspecified sport utility/pickup truck hybrids.
One model is set to hit the streets this summer with production of the other vehicles beginning in 2001.
The company may expand or build new sites to meet demand, Barnett said.
"It all depends on how this takes off," he said. "We're very excited to begin a relationship with Lear and establish any other contacts we can out there."
Core spun off from truck maker Navistar International Transportation Corp. — now called International Truck and Engine Corp. — in 1997. The truck maker remains its biggest customer, but officials are looking for more variety to their base, he said. In April, it announced a tentative agreement to produce fiberglass-reinforced molded parts for Mack Trucks Inc., a deal worth more than $5 million annually.
It also turns out parts for Volvo Trucks North America Inc., Case Corp. agricultural equipment and Yamaha Motor Corp. personal watercraft.