Automotive Markets: Making the case for Steel

UNITED STATES November 06 2015 9:04 AM

An Interview with Lawrence W. Kavanagh

Lawrence W. Kavanagh is president of the Steel Market Development Institute (SMDI), which is a business unit of the American Iron and Steel Institute (AISI). SMDI’s goal is to increase the demand for North American steel and to increase SMDI members’ share of that demand, in part by leveraging its partners and its technical and communications programs. Kavanagh oversees the AISI’s collaborative research and development programs.

Kavanagh recently spoke to Iron & Steel Technology about some of SMDI’s efforts to ensure steel’s place in the automotive market and to expand the industry’s use of advanced high-strength steels.

Iron & Steel Technology: How nervous should the industry be at the moment?
Larry Kavanagh: You may have seen that Novelis announced a new high-strength automotive grade. It means Novelis now has an aluminum product available that has the same strength of steels available in the 1980s. The aluminum industry is continuing to advance new materials, and this is going to be competition that isn’t going to end in the next year, but I’d rather be playing our hand. Automakers love to work with steel. We’re working with them to demonstrate that they can achieve their future fuel economy targets with our material and without increased use of alternative materials. The business case for steel is very strong.

I&ST: Other than material characteristics, what other advantages does steel have?
L.K.: In the steel industry, we have the power of collaboration. The steel companies under SMDI work together on a pre-competitive basis. That’s very powerful because all of us are stronger than any one of us. When you work collaboratively, you make fewer mistakes. You get to the solution much quicker, and in this intense materials competition, that’s highly valued. We think that’s a huge advantage for us. This makes steel a better product in the end. The aluminum industry does not do that. Alcoa, Novelis and Kaiser, they’re all developing new grades and strategies in silos.

I&ST: Are there any new grades or new products coming down the pike that are particularly exciting?
L.K.: We have a complete suite of projects through which we’re proving weight reduction is possible with advanced high-strength steel. Invariably we’re attaining a higher level of mass reduction with steel than our customers thought was achievable. The average vehicle on the road today probably contains less than 40% advanced high-strength steel, so there is much room for innovation and for much higher use of today’s steels. That’s influencing positive field results for vehicles that are going to be on the road in 2018 and 2019 and beyond. There’s a lot going on in terms of new grades and new properties, but the only one I can really speak to is a collaborative project among our members and the U.S. Department of Energy. We’re trying to develop higher-strength grades that have higher formability. In other words, a 1,500 MPa steel with 25% formability or a 1,200 MPa steel with 30% formability. That additional formability allows a lot of flexibility in making complex shapes and eliminating parts. Also, some products today need to be hot stamped, and that’s a cost to automakers. But if we have more formable steels, we may be able to do that stamping cold. That takes more costs out of the equation and, of course, delivers higher value to automakers.

I&ST: What is the timeline for the Department of Energy project?
L.K.: The project is intended to conclude in the early part of 2017. However, there will be products offered by individual steel companies before that time. We understand the timeline under which automakers are making materials decisions for their future vehicles — 2019 and beyond. Our schedule is being driven to have the materials ready in time for those decisions or to have solutions from currently available materials in order to keep steel in those vehicles.

I&ST: Where are you seeing the most competition at the moment?
L.K.: The truck and SUV market was targeted by alternative materials because, as the thinking goes, they not only represent half of the market, they are higher-cost vehicles that have higher profit margins and therefore could absorb the additional costs of using those materials. I think we’re doing very well with our customers in meeting the weight reduction requirements for trucks and SUVs. In terms of body structure, the only one that’s moved to an all-aluminum body is the Ford F-150. Every day, the value of steel in light truck and SUV applications becomes clearer. When we do really well in mass reduction for trucks and SUVs, that opens the door for continued steel applications in doors, trunk lids and fenders. Those are the easiest parts to switch to alternative materials. But if they’re the easiest to switch over, they’re the easiest to switch back. You can remove enough weight with steel in almost every vehicle application. This is a key point, which, in the near future, automakers are going to come to understand: they can meet their specific vehicle weight reduction targets with steel. When that moment is reached, the reason to go to aluminum for any application goes away.

I&ST: Over which types of parts do you expect to see the big battles between steel and alternative materials?
L.K.: Doors, lift gates and other closure panels — that’s going to be the battleground. There’s a cost penalty for switching to alternative materials, but switching those parts holds the lowest cost penalty. Some of those parts may be lost in the near term as automakers make a quick change to meet a fuel economy requirement, but they are going to come back as the full value of steel is recognized. We have done some excellent work on mass reduction with doors. Automakers that were considering switching to aluminum doors in certain vehicles are now staying with steel. At the same time, the strength of our material is allowing us to go thinner and thinner. Whereas a door may be 0.7 mm or 0.8 mm, some automakers now are successfully stamping at 0.55 mm and below. That’s a significant weight reduction.

I&ST: Which automotive components do you see as presenting opportunities for advanced steels?
L.K.: The chassis area is ripe for steel. There are a lot of aluminum components, but we’ve already demonstrated on some chassis components that we can match aluminum in weight. That was done on a front lower control arm for General Motors. We matched the weight at one-third lower the manufacturing cost. GM adopted it in production. Similar opportunities exist in the engine and powertrain area, which we are now investigating. If, for the sake of fuel efficiency, you’re going to go to smaller engines that are going to work harder, durability becomes an issue. We think that is going to open up some further steel penetration in the engine area. I’m not certain that will apply to the block, but the surrounding components that make up an engine are one of our most intense areas of investigation.

I&ST: Does SMDI have any projects along those lines in the works?
L.K.: We’re in the process of identifying specific projects with our members and customers for lightweight steel applications in the engine. These are projects that are going to be happening by the end of 2015.

I&ST: In the course of trying to sell the industry — and the public — on steel, what challenges, if any, have you encountered?
L.K.: The EPA promulgated these regulations in order to limit greenhouse gas emissions to the atmosphere, but the regulations only cover emissions when the vehicle is being driven. What about the emissions from when you’re manufacturing the materials to make the vehicle and making the vehicle itself? And that becomes an issue — the so-called lifecycle assessment. Making aluminum is five times or more as energy- or greenhouse gas-intensive as making steel. A shift in materials places an upfront burden on the environment. That’s only partially mitigated in the driving phase by mass reduction.

There have been some studies by WorldAutoSteel that compare an aluminum-intensive SUV and a steel-intensive SUV. Over the 11- or 12-year life of the vehicle, you’re talking about a fuel savings of about two fill-ups. Staying with steel ensures the intent of the regulations is going to be met. With a switch to alternative materials, there is a risk of increased emissions. Getting that information out there is something we’re working on.