TRAVERSE CITY, MI – During the heyday of the internal-combustion engine, there was a bad name for automotive suppliers with obsolete technologies such as carburetors: “buggy whip makers.”
As the industry moves into a new era with electrified propulsion systems and autonomous guidance systems, there isn’t yet a name for suppliers who have stuck too long with outdated products, but you can bet there will be one, and no one will want it mentioned in the same sentence as their company.
In a refreshingly candid presentation here at the CAR Management Briefing Seminars, Freudenberg Sealing Technologies CEO Claus Moehlenkamp says his company could lose 70% of its automotive sales if it doesn’t embrace new e-mobility and fuel-cell opportunities and then went on to explain what his company is doing to avoid being stuck in a bygone era.
Freudenberg is a supplier of automotive seals and gaskets that are crucial to the function of internal-combustion engines, transmissions and many other vehicle systems. Quality seals play a key role in limiting warranty costs and improving customer satisfaction by not leaking and leaving spots on driveways and garage floors.
The company has spent years developing world-class components and materials that address some of the auto industry’s toughest powertrain challenges. And Moehlenkamp expects conventional engines to remain a key part of Freudenberg’s business in the short term, especially as hybrid-electric and plug-in hybrids with combustion engines continue to grow.
But Moehlenkamp is expecting battery electric vehicles to start having significant volumes by 2025, followed by fuel-cell applications. “It is no longer a matter of ‘if’ but a question of ‘when’ disruption will impact automotive suppliers,” he says.
Freudenburg is preparing in several ways, he says. For one, it is figuring out how its most highly developed products can be revised to address challenges with battery-powered and fuel-cell systems. Sealing technologies that lower friction, increase power and efficiency and address lightweighting and compact design requirements will be equally important in the era of new mobility, he says.
The company also has reorganized itself internally and begun pursuing system and module capabilities in lithium-ion battery and fuel-cell technologies through new external partnerships and established an e-mobility sales and marketing organization.
The company already has expanded its products to include specialized sealing solutions that address thermal management, higher safety standards, electrical transfer, electromagnetic shielding and a longer service life, Moehlenkamp says.
In an interview with WardsAuto, Moehlenkamp says the structural changes he is implementing should not have a huge impact on the company’s plants or workers.
“We have 60 factories doing sealing technology and a very significant supply chain, and I think most of it we can refit,” he says. “Even in electro-mobility we can create a lot of components for those applications, but they will be different components, so we have to reinvent our product portfolio” while reusing the factories and fundamental technologies.
Freudenberg has a lot of expertise in chemistry and creating highly engineered new materials. It is aiming to apply this expertise to battery cell development, he says.
Asked if it’s possible he’s moving too fast, Moehlenkamp lets on this is not his first rodeo. “You can be too late. But you can also be too early,” he says. “Being too early can be very costly and demotivational for employees. We learned the hard way with fuel-cell components 15 or 20 years ago. We burned through a lot cash and we definitely were too early,” he says.
“When do we know when the timing is right? When the market is ready, our customers are ready, and we have real use cases. There’s no point in inventing stuff with no customer. I think we now have market readiness and clear user cases.”