Achates CEO on Growth, Obama’s Climate Plan, Fairbanks Morse Deal

In April, San Diego-based Achates Power announced it was opening a Michigan office to capitalize on the market momentum of its opposed-piston engines. I caught up with Achates CEO David Johnson this week to find out how things were going.

“We have a great facility,” Johnson said, referring to the company’s recently opened Customer Application Engineering Center in Farmington Hills, MI. “We are very, very busy. It’s a steady drumbeat in terms of growth. We have about 10 people working in Detroit but we have space for 25, and I’m sure we’ll fill it.”

Last Spring, Johnson told Xconomy that the next phase of the business involved licensing its technology to high-volume manufacturers and continuing to refine its two-stroke, three-cylinder engine prototype. Achates touts its engine as cleaner, cheaper, and more fuel-efficient than traditional internal combustion engines, and it can be used in cars, trucks, military vehicles, ships, and power generation.

That plan appears to be taking off with the announcement earlier this month that Fairbanks Morse, a Beloit, WI-based manufacturer of large engines for marine, power generation, and oil and gas applications, is developing a new range of medium-speed, opposed-piston diesel and dual-fuel engines that incorporate Achates technology.

“What our customers see is that we’re able to offer the biggest improvement for the lowest cost,” Johnson said. The Achates engine has proven to be up to 30 percent more fuel efficient compared to the best clean-diesel, light-duty engines, he said, and 85 percent more efficient compared to gasoline engines. “That’s a different order of magnitude,” he added.

Fairbanks Morse will begin producing the new engines next year at its 7,800-square-foot research lab in Beloit, and the engines should be on the market by 2017, Johnson said.

Work also continues on a project Achates has underway with TARDEC, the U.S. Army tank and automotive research center in Warren, MI, and Cummins. TARDEC awarded a second contract worth $14 million to Achates earlier this year to help develop the Advanced Combat Engine as part of the Army’s 30-year strategy to modernize tactical and combat vehicles.

Johnson said the Obama administration’s Aug. 3 announcement of a revised clean power plan, which aims to cut greenhouse gas emissions from U.S. power stations by nearly a third within 15 years, is also good news for the company.

“Achates is so well positioned to help meet these guidelines, but there is a lot of work to do,” Johnson said. Though he declined to get into specifics, Johnson said that Achates has signed contracts to develop products for “companies selling 40 percent of the world’s cars and trucks.”

Sarah Schmid Stevenson is the editor of Xconomy Detroit/Ann Arbor. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET_AA

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