David Soyka reports on how this Japanese-owned, American-based company is at the forefront of die casting capabilities for a unique market niche.
All signs seem promising for the resurgence of the auto industry, which is all good news not only for car manufacturers, but the many parts suppliers that support the industry. However, the parts suppliers that survived the recent downturn, even a company that thanks to a global parent and dominance in its market niche managed to weather the upheaval in the auto industry better than most, are now looking to broaden their customer base and avoid overreliance on one or two key customers.
Ryobi Die Casting (USA) Inc. has made high-pressure aluminum die castings since it was founded in 1985 at Shelbyville, Ind. (about 20 miles southeast of Indianapolis). As a tier one supplier, Ryobi counts GM and Ford as major customers, and initially made large die castings mostly for transmissions. Today, it has added major product categories that include automobile engine cylinder blocks and subframes, as well as specialty castings for commercial highway and lawn and garden industries. While adding customers such as Powertech America (Hyundai and Kia Motors), Honda and Toyota, as well as Bendix Commercial Vehicle Systems LLC, Allison Transmission and Tuff Torq.
“Before the downturn, 80 percent of our business was with Ford and GM,” explains Jonclair “JC” Gonçalves, sales and business development manager. “Now we’re at about 70 percent and we’re looking to reduce that further to at least 65 percent as we develop relationships with other major OEMs. Just like everyone else in our industry, we want to diversify so we’re not so reliant on the fortunes of one or two customers.”
That said, Ryobi’s unique capabilities put it in a considerably better position than most other parts suppliers. “We specialize in one thing, high-pressure aluminum die castings,” Goncalves points out. “It’s all we do and there really isn’t anyone else like us that does large die casting manufacturing. We are one of only three other major die casters in the US some which are owned by the bigger OEMS.”
Still, you don’t grow if you just sit back and rest on your laurels, so Ryobi has added to its product family with new technologies and capabilities that will literally underpin a new generation of automobiles.
“We developed a new die casting process to use with our existing machines that allow the replacement of traditional ferrous structural parts with aluminum,” Goncalves explains. “We call it the HV2™ process – High-Velocity and High Vacuum. It drastically reduces the amount of gas inside the cavity to produce high-integrity weldable and heat treatable aluminum casted parts with improved ductility and elongation. These parts are strong enough for use as engine cradles, engine subframes, shock towers, base brackets, fender and door frames.”
ALMOST 70 YEARS CASTING EXCELLENCE
HV2™ is but one example of the new technologies Ryobi has adopted to expand its product base. “When we made mostly transmission cases and housings, the main thing we worried about was porosity; you don’t want the casting to leak. For the subframe and other structural parts, we’ve added all the necessary rigorous testing for fatigue, strength, hardness and impact,” Goncalves says. “We have a pretty extensive R&D operation onsite backed by over 65 years of die design and die cast process optimization with high-quality results. By using concurrent engineering and being involved immediately at the design stage, we’re able to ensure a very high-level PPM (parts per million) and cost benefit to the customer over the life of the program.”
He adds, “Our systems are vertically integrated, from prototype to design, to fabrication to casting, machining and final assembly and quality inspection.
While we only do about 20 percent of the machining on-site, we do partner with local machine shops that we trust and have worked well with. The reason for this is the strategic decision to put most of our new investment in the actual die casting process we excel at rather than basic machining which we can confidently rely on others to do for us.”
Another unique characteristic of Ryobi USA is that it is a private company held by a public Japanese company. “We service primarily North America and while technically Ryobi Mexico is a separate subsidiary, strategically suited to service South America,” Goncalves says. “Ryobi Limited, our parent company, has die casting facilities throughout Asia and in Northern Ireland, but we have the most equipment dedicated to large casting in the 2500 to 3500 ton categories. Overall, we have 43 die casting machines in Indiana and another 10 in Mexico, ranging in size from 500 tons to 3500 tons, and our casting weights range from four to 40 pounds.”
$300 MILLION IN REVENUES
There are two plants dedicated to die casting in Indiana along with another machining plant and warehouse/office totaling 600,000 square feet under roof located on about 58 acres. It is non-union shop that employs 835 and last year generated $270 million in revenues.
The facility in Mexico, which Goncalves likes to refer to as the “fifth building”of the Ryobi Americas operation, is located in Irapuato, Guanajuato. The plant has about 232,000 square feet under roof, employs 238 and accounts for $30 million in revenues. “Over the next two years, we expect revenue to continue to grow,” Goncalves says. “It’s a very convenient location between North and South America, and it is very close to major ports for export overseas.”
Ryobi USA is ISO 14001:2004 and TS16949:2009 certified. The company has also received various quality awards from Honda, Toyota. In 2005, Ryobi received the “Golden Pineapple Award” from the Shelby County Chamber of Commerce in recognition of its commitment to employee job satisfaction, cooperation and communication. Ryobi also earned Ford’s Q1 rating and was named ZF Batavia’s “Top Quality Improvement Supplier” in 2002 and in 2003 the North American Die Casting Association’s “Safety Award.”
Business is picking up as the auto industry has gone off life support and seems headed in healthy directions. As a reflection of this, Goncalves notes, “A few years ago, Shelbyville was down to about 450 employees and today we’re up to near 850. There was a consolidation of die cast manufacturers during the downturn and we were able to pick up people with the technical skills we needed, but lately we’re finding it a little tougher to get the right people with the skills we need, which is another indication that the industry as a whole is coming back.”
Looking forward, Goncalves says Ryobi USA will stick to what it does best while identifying new opportunities where it can put its capabilities to work. “We’re not a commodity casting company. We’re not trying to be everything to everyone. And we see areas where we can continue to expand and excel in, most notably the trend towards hybrid transmissions and engines that require our unique kind of precise engineering and high pressure aluminum die casting.”