Jake Hirsch has worked in the automotive supply industry for 30 years, including as president and CEO of Teksid Aluminium, CEO of Textron Fastening Systems; managing director of TRW Occupant Restraints and COO at Magna Europe where he was also a member of the Board of Directors. He talked to Simon Warburton in Detroit about some of the challenges and opportunities in the business.
Hirsch rejoined Magna in 2007 and since 2008 has held the position of president for Magna Powertrain, responsible for global powertrain and electronics operations with more than 60 facilities in North America, Europe and Asia and a sales volume in excess of US$5.2bn.
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j-a: How would you characterise the nature of Magna Powertrain’s business at the moment?
JH: Our business segment is clearly in what I would consider to be one of the largest growth areas in the automotive industry, particularly with the trends to increasing electrification, strongly supported by legislation.
Legislation is driving electrification and safety laws. Even if vehicle build would not be as optimistic, we still gain through market penetration. Market developments for us are positive
j-a: Does Magna have a strong lobbying influence in Washington?
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By GlobalDataJH: From our point, Magna is not a very active lobbying company. We try to anticipate new laws and rules – that is basically market research and through our relationships with the customer.
Next to legislation the market driver is the consumer and his desire for enhanced safety despite a big debate on the effect of fuel efficiency of 4WD. How many times in your life [do] you actually believe you need a 4WD, however, you may not notice when it is necessary and it also make a huge impact on your wellbeing by saving you from a ditch or even worse.
We have major market drivers: obviously the green, environmental [and] electrification advances and depending on these areas we develop our vehicles. We have weight reductions – which are part of green technologies – other [s] involve oil usage, and alternate materials.
Major evolution in technology is transforming engine, transmission and drivetrain components from mechanical to electronic or electronically controlled.
We are also trying to make the systems less complex by reducing the number of components and their weight.
j-a: To what extent is hybrid technology important?
JH: Hybridisation overall helps to improve fuel economy. With the diverse selection of hybrid vehicles we are able to implement technologies such as start/ stop systems through to complete EV architectures.
Other areas within a vehicle may offer more enhancements to fuel efficiency, such as on-demand pumps and auxiliaries and reduction of parasitic losses in the drivetrain.
There is a huge percentage of hybridisation – that can be categorised in different ways. I would say hybridisation continues to be on the increase, but it also depends what other areas you can show fuel reduction.
It is predominantly driven by legislation. The number in 2020 is 54mpg and 2025 is already 68g-76g of CO2 emission. This continues to drive a lot of these activities.
Individual countries’ legislation will impact the degree and speed of implementation for these new technologies. It depends on what happens – obviously the OEs have their own ideas as they cope with average fleet requirements.
For full hybird and EVs the biggest obstacle is the price and cost of the battery which is driven by the cost of KWH.
j-a: You have a significant international presence, in Tianjin – how is that developing?
JH: We continue to expand our global footprint, our most recent expansion was in China in Tianjin. Our ability to provide our customers with global platform concepts supported by our global manufacturing footprint gives us competitive advantage.
A lot of our customers working on global platforms want us to be present in Europe, China and the Americas. In order to maintain our level of service and our market position, it is part of our key strength to support our customers globally. We have five locations in China [Tianjin, Changzhou, Shanghai, Zhangjiagang, but I don’t see Russia as dynamic as people anticipated.
China is a big prospect [for] electric vehicles, but when you look at it, they don’t have the infrastructure.
j-a: What are some of the other areas Magna Powertrain is working on?
Our focus is very heavily with electrification of auxiliaries away from mechanical areas as we see a lot of fuel saving potential. On-demand systems and electrification of auxiliaries are the main drivers for electrification as the industry prepares itself for full EVs.
Thermal systems is another area we focus on and this is how the entire cooling system is managed within a vehicle. Cooling will be more and more important with electrification, as there will be multiple cooling circuits to manage independantly.
Not only this is related to the changes required to support new legislation and improvements in fuel economy and Co2 reduction. [Some] 70% comes from modification to existing powertrains (engines/ engine components, transmissions and drivetrains), the other 30% is related [to] increased vehicle production globally.
Our strategy is pushed towards standardisation n support of global platforms. As volumes increase so do global platforms
j-a: There has been much talk of autonomous driving and other significant safety advances such as emergency braking – what is your perspective of the future?
JH: An important feature to enable autonomous driving are devices such as camera based vision/driver assistance systems. Features such as lane departure warnings, driver alerts, which for example watch your eyes to see if you are tired, collision mitigation through emergency braking and other warning devices are all prompted by the input received from the camera.
There is no doubt as a result of the changes made to internal combustion engines or electrification of the powertrain as well as the introduction of safety related products such as our DAS systems, there is huge potential for growth.
But all these features have their price and it is up to the OEM to decide how they will mitigate anticipated penalties by not meeting fuel economy and emissions standards.
Magna Powertrain operates in 14 countries with 46 manufacturing, 26 engineering, R&D and sales facilities, employing around 12,000 staff.
Its three main product lines include Driveline Systems, Fluid Pressure & Controls and Electronics, featuring specialisms such as 4WD, AWD, transmission, vacuum and oil pumps, as well as lane departure warning, traffic sign recognition and surround view.
Magna Powertrain is the largest independent supplier globally in a consolidated market with 24% of the US$7bn share. The company has completed two strategic acquisitions, namely ixetic and STT, while adding manufacturing facilities in Bulgaria, China and Germany.
Magna’s current portfolio includes electric rear axle drive, electric drive units, inverters, cooling fans with brushless motors and auxiliary water pumps with brushless motors.
Product under development includes crankshaft integrated starter generator (CiSG), next generation of inverters for CiSG, belt integrated starter generator, hybrid transmission and brushless motor platform strategy, as well as other electrified pumps and actuators.
