October 27, 1999 Auto Parts Veteran Reinvents Itself for the New Millennium

Volume 2 | Issue 6

Michael Terreri takes a look at A.G. Simpson Automotive Systems, a leading supplier to the automotive industry.

The automotive industry will end its race toward the new millennium with far fewer competitors crossing the finish line. A frenzy of mergers, joint ventures and divestitures in the final lap has reduced the number – but increased the size – of both car manufacturers and parts suppliers in what has become a booming global industry.

A.G. Simpson, a family-owned metal-stamping company founded in 1947, has kept pace by building upon its strengths in bumpers and heavy tonnage, stamped components such as cross members, control arms and other structural products. What began as a one-man operation in 225 square feet of rented space has become North America’s largest bumper manufacturer, with over $550 million in sales, 2,500 employees and ten sites in Canada and the United States.

In the next century, AGS plans to accelerate its growth to become a $3 billion company. To get there, Keith Wettlaufer, president and chief operating officer, is implementing a three-part strategy: First, the 50-plus- year-old company is rationalizing and revitalizing its facilities with new equipment and technology to increase its efficiency and capacity. Robotics, automated press controls, quick die-change systems and computerized manufacturing management systems will reduce downtime, cut costs and increase A.G. Simpson’s flexibility to take on work with shorter lead times. Second, AGS will evolve its current bumper business into complete front-and rear-end systems. Third, it will develop its structural stamping business into niche products and offload.

A.G. Simpson currently manufactures a range of stamped components from oil pans, control arms and instrument panel assemblies to floor pans, pickup boxes and hinge pillars. AGS components can be found on many of today’s popular vehicles, from GM, DaimlerChrysler, Ford, Toyota and others. Apart from stamping, A.G. Simpson processes include chrome plating, coatings, welding, blanking, roll-forming and sequencing. Production for individual components fluctuates based on the ebb and flow of consumer demand for particular vehicles. To give you an idea of the volume, however, AGS processes over 250,000 tons of steel annually.

While A.G. Simpson’s factories are pumping out components for 1999 and 2000 models, the engineers are already working on 2002, 2003 and even 2004 vehicles. AGS engineers and technical designers work closely with product development teams from the car companies to fine-tune conceptual drawings and material specs and test the capabilities of the components to ensure the highest quality and durability at a reasonable price. In a recent example of this kind of value-added partnership, A.G. Simpson engineers, working in conjunction with Isuzu, introduced a number of product refinements to the prototype of the rear bumper for the 2003 Chevrolet S-10 pickup which, will be manufactured in Thailand.

It’s building upon such strengths as design engineering that A.G. Simpson plans not only to maintain, but also to grow, its niche in a rapidly consolidating field of competitors. “Our strategy is to focus on what we do best,” says Wettlaufer. “Right now, we have about one- third of the exposed steel bumper market in North America. Our next move is to expand into full front-and rear-end bumper systems, including plastic fascia, wiring harnesses, lighting and so on. We can provide a complete value-added solution to our customers, including chrome plating, coatings, assembly and sequencing – we’re a one-stop shop.”

“Our other main area of expertise,” continues Wettlaufer, “is in structural stampings. We focus on those heavy-gauge structural components that are hard to make and require 400-ton presses or greater. Our customer base is growing. Some of the larger system integrators [Tier I suppliers who combine components from several other suppliers into a single module, which they then supply directly to the car maker] outsource this type of work because they can’t do it cost effectively. For instance, we currently manufacture seat pans for Johnson Controls which end up on the Ford Ranger pickup trucks.”

Although the bumpers and stampings currently make up approximately 95 percent of A.G. Simpson’s business, we plan to develop and grow in offload. Offload opportunities are parts programs nearing the end of their production life. Car companies and Tier I suppliers often out-source this work to make room on their production lines for parts for new vehicle models. “The work we’re doing to upgrade our equipment and standardize our processes will allow us more flexibility to take on these jobs,” says Wettlaufer.

Flexibility is the name of the game when you’re competing on a global scale, and A.G. Simpson prides itself on its innovative solutions to customer needs. Sometimes the best solutions, however, involve developing partnerships or joint ventures to acquire the necessary expertise in a product area or market. A.G. Simpson is finalizing a deal with a Mexican company to build a facility to stamp and plate bumpers for trucks being built at Mexican assembly plants. This local partner not only offers knowledge of the labor market, economy and culture but also contributes to the start-up of the new facility. Production of the bumpers for the 2002 model trucks is scheduled to begin early in 2001.

So as the lights of this century disappear in the rear view mirror, A.G. Simpson is keeping its eyes on the road ahead. Behind the trademark orange walls of its facilities, teams are toiling away installing new technology, retooling equipment and reengineering processes to ensure the highest performance. Like any seasoned competitor, however, Wettlaufer knows that it takes both experience and performance to triumph in the drive for excellence – and A.G. Simpson has exactly that winning combination.

Subscribe to Industry Today