NADCA President Steve Udvardy gives us his insights about the current situation and outlook for die casting in North America in terms of tariffs, e-mobility while on tour with NADCA European Delegates trip.
From now until 2025, the outlook for the global die casting industry seems to be very good. What are the current and the future situations for the North American die casting industry?
The top two markets served by the NA die casting industry are automotive and housing. Domestic auto sales (passenger vehicles and light trucks) have been excellent the past 2.5 years with 2016 and 2017 hitting in excess of 17,000,000 million units. This has been a great recovery since the end of the most recent recession in 2009. Sales are now above the levels directly prior to the recession. Although some slight softening is anticipated for this year, this and the next few years should be good years. The worldwide forecast is continued growth in the automotive sector, especially with the rapid growth in China and India. Housing is at a healthy level of about 1.2 million single family homes being built this year. Although we like to see above 1.2 million, there has been great recovery since the recession period when less than 0.5 million were built. Housing is forecast to be at the same level for the next few years before climbing above 1.3 million units.
It is sometimes asked why housing is the second largest market for die casting in North America, and the answer is because of what we roll into housing. We consider not only hardware such as door handles, locks, and faucets, but things people typically buy when they purchase a new home, like appliances and lawn hardware.
The future also holds promise of expanding in other markets such as solar power, wind power, medical devices, robotics, and telecommunications.
There is a new trade policy in the US, including new tariffs on aluminum and potentially on cars. How does this affect the American die casting industry? Do you expect more direct investments by foreign OEMs in the US?
The tariffs are certainly a recent concern. Thus far the 232 tariff on aluminum (10%) has not impacted the U.S. die casters as yet, but could in the future if primary aluminum increases in price and the higher price primary hits the scrap steam for secondary aluminum production. Most of our industry utilizes secondary and a minority at present use primary, like the structural die casting companies. The 232 steel tariff (25%) has shifted harm to the U.S. tool makers since much of the tool steel comes from Europe and Japan. We only have two die steel producers in the U.S. So when the tool makers have to pass along a 25% increase in the material cost it makes it difficult to compete with foreign tool makers that do not have to pay a tariff. The 301 China tariff (25%) impacts the U.S. die casters that buy tooling and die casting machines from China. During a recent survey, the results indicated that about 30% of the U.S. die casters purchase die casting tooling, die casting machines, and other equipment from China. The automotive tariffs are currently being considered for automotive parts and complete automobiles.
It is uncertain how long the tariffs will be applied. Perspectives vary, but many think the tariffs are a bargaining tool and that other options may come into play to resolve trade imbalance. With the unknown future of tariffs, manufacturers in foreign countries have not been quickly setting up plants in the U.S., but some are considering doing so to avoid their products being subjected to the tariffs/taxes.
The global discussion about e-mobility is ongoing. How is electric mobility perceived in the US? What effects do you expect these challenges – e-mobility, autonomous driving, and car sharing - to have on the industry in the future in the US, say until 2030?
First off, the all electric vehicle will be more slowly adopted in the U.S. due to the relatively low fuel cost and pushback on fuel efficiency requirements and emissions. Also, the vehicles the public is buying are currently a higher mix of SUV’s and pickup trucks. Then there are the hybrid vehicles that have both a transmission powertrain and a battery. Some analysts lump these into electric vehicles because of the electrification. Some have predicted that we will need to be all electric by 2030 and some have predicted only a small percentage of penetration. If I had to guess, I would guess 25-30% penetration. Some of this of course hinges on how many options the buyer will have in the future and how competitively priced the electric vehicles will be. The autonomous vehicle will become a reality in specific demographic areas and will eventually prove to the public to be more safe than human driven cars.
The electric vehicle will have a different mix of die castings. When the drive train is eliminated, a large mass of aluminum die castings, such as engine blocks and transmission housings disappear. There are opportunities for die castings in the form of battery cases, different style cross members, motor housings, and different instrument panels for instance. Shock towers, A pillars, and B pillars for instance remain. There will be continued opportunity for lightweighting, especially if the weight of the batteries is not reduced so an electric vehicle des not weigh more than a fuel driven vehicle.
You will be leading a group of die casters from NADCA on a trip to Germany and Austria, where you will visit an excellent selection of European die casters. Is this trip an exchange of information about high-tech processes and machinery? What are your expectations?
The intent of our European Delegation is to tour and witness operations in Germany and Austria. By witnessing other operations one can get ideas on how to improve ones own processes and through discussion about differences in processing techniques, the company being visited can obtain ideas as well. Discussion may be on process flow, process techniques, new technologies, tooling design, and a host of topics that really won’t be known until the visits are made. My expectation is that through questions and answers and open discussions, we can help each other become better die casters and improve the ability for die casting to compete with other processes.
In October 2018, you will hold the NADCA Die Casting Congress and Exhibition in Indianapolis. Please tell our readers what they can expect.
NADCA will hold its 2018 Die Casting Congress & Exposition on October 15-17, 2018 at the Indiana Convention Center in Indianapolis, Indiana, USA.
This three-day event will encompass: an exhibition floor filled with suppliers to the die casting industry displaying their latest products and technologies; 12 congress sessions with a total of 36 technical papers presented primarily by researchers, die casters and suppliers on latest developments and technologies; and an awards luncheon where winners of safety awards, various industry awards, and our international die casting design competition will be recognized.