Delphi Eager to Leave Bankruptcy Behind, Build Connections to Auto Industry’s Future

4/22/10

Auto parts manufacturer Delphi has a simple description of what it’s been up to during these past four years of bankruptcy reorganization. “We’ve been quiet, but we’ve been busy,” says Jeffrey Owens, president of Delphi’s electronics and safety division.

The recent Society of Automotive Engineers (SAE) World Congress in Detroit was a kind of coming-out party for Delphi, which emerged from Chapter 11 in October 2009, and Delphi representatives were eager to show the industry and media what exactly they’ve been busy with.

The new mantra for the Troy, MI-based automotive parts manufacturer, which was spun out of General Motors in 1997, is “green, safe and connected.” But it looks as though “connected” has been its main focus—connected to where consumer products meet the automobile, and to where the nascent electric vehicle market meets the home and the electric grid.

First, the connection to the home. The apparent rise of the plug-in electric vehicle opens up “new product and market opportunities for those with the skill and foresight to pursue them,” Owens said during an SAE panel discussion that posed a kind of chicken-or-egg-style question: “Does the smart grid enable electric vehicles, or the other way around?” The answer, in Owens’ view, is that it does not matter—each can take advantage of the other. A vehicle plugged into any future smart grid can help with home energy management through smart chargers that can both provide cars with the juice they need  and give back to the home and to the grid.

JeffOwensBut, Owens said in an interview later with Xconomy, that there is no need to wait for the “smart grid” to arrive to take advantage of the commercial opportunities. Delphi can be an enabler for electric vehicles by providing the hardware needed to make connections today.

“We don’t do batteries … and we don’t do rotating machines,” Owens says. “But all of those variants require different types of electronics that have never been in the car before. So, that’s what we do and we’ve got 20 years of experience working on just that.”

Remember General Motors’ first (failed) experiment with electric vehicles, the EV1? Delphi, in partnership with Hughes Electronics, was instrumental in putting it together. But just because the EV1 failed doesn’t mean the knowledge gained from its development went out the window.

“We fortunately kept those folks engaged and working on future generations,” Owens says.

So, while other automotive suppliers are jumping into what will be a highly competitive race to produce the connectivity infrastructure necessary to support electric vehicles, Delphi has a head start—working with, as Owens says, the “second, third, fourth, and in some cases fifth generation” of the technology, which includes inverters, converters, and systems to manage the state of health of the cells in the entire battery pack.

It’s not that other companies cannot produce these things, Owens says. The technology certainly exists today to plug your car into a standard home outlet. The trouble is, none of the equipment is “automotive grade” yet.

Delphi_charge_coupler_handles“That’s where companies like ours come in,” Owens says. “A charger’s a great example. You’ve got a lot of charger companies in the world, and I don’t want to say anything negative about them, but they don’t specifically design to automotive standards.”

Chargers for your laptop love a vibration-free, room-temperature, dry environment. Which works fine in your home. In your car, they just won’t last—at least, not for the five, 10, or 15 years you’d like your car to keep running.

The industry has “seen this before,” Owens says, most recently with in-dash or portable navigation systems, or even simple LCD displays. If they won’t work in temperatures that can range from -40 degrees to 125 degrees, they’re not good for the rough-and-tumble, real-life environment of your automobile.

“We’ll go through the same cycle here,” Owens says. “And companies like us that have been through that cycle can help accelerate and give an advantage to some of those companies that don’t have that experience.”

So, Delphi does battery-pack management, devices that can power your car with 300 volts, then step it down to 12 volts to run your cell phone—or chargers that can slowly juice your car overnight, or can power it right away in a quick burst.

None of these projects are really a conscious attempt to diversify, Owens says. They’re simply leveraging Delphi’s core capabilities to enter additional markets around the automobile. If the electric grid did not touch your car, Delphi probably would not bother.

Randy Sumner, director of hybrid vehicle business development at Delphi, shows one of the company’s new products—a portable charging unit that plugs into your car and a regular outlet. Delphi is out “beating the pavement trying to sell them to customers,” he says. “They’re all going to need them.”

Fortunately, Sumner says, this won’t be like cell phones, where every model has a different, proprietary charging device. The SAE’s industry standard, known by the prosaic name J1772, defines what all portable charging units will look like.

But when it comes to a different kind of connections—the ones that bring all your portable gadgets into your car—Delphi’s John Yurtin, a data connectivity specialist, is downright giddy about the future. He smiles while he talks in a way that makes it sound as if he’s laughing while he describes the technology that he’s developing, and loves. It all started with the iPod, he says. Customers wanted to connect their music storage devices to their car sound systems. So, Delphi added USB ports in automobiles.

DelphicomboUSB PortIt’s Yurtin’s job to think of some of the “little things” that go with that connectivity. “OK, I put a USB port down in my center console,” Yurtin says. “Well, it’s dark down there, so what do I do? I add some LEDs and I get nice illumination around the port. Things like that.”

Next year, he says, we’ll see cars with slots for SD cards for uploading navigation data or backseat entertainment programs for the kids.

And after that, LDVS, which is a protocol for connecting different types of video screens. Cameras mounted on side-view mirrors, for example, will all be connected together with LDVS for easy viewing by the driver on a dashboard-mounted screen.

What about the argument that all these consumer gadgets in the car are just distracting people from driving? Yurtin laughs. “I believe it’s going to be the opposite,” he says. Once you plug in your iPod, you stick it in the glove box and forget about it—while controlling it from the steering wheel or by voice.

Yurtin clearly enjoys his job. “I’ve been on one of the most exciting product lines to come into the car,” he says, adding that through the bankruptcy process, Delphi did not slow down. “The data connectivity business was increasing.”

Kevin Quinlan, a vice president in the Powertrain Systems division of Delphi, says that the development pipeline never stopped during bankruptcy reorganization, and now the company is hitting the ground running.

“Yeah, we’re ready,” Quinlan says. “We’re pretty pumped about it, actually. We’re seeing good market response. It’s an exciting time.”

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