How Blackhawk is adapting to lighter vehicles

Q: How is the lightweighting trend impacting Blackhawk?

A: Since the total weight of heavy vehicles is thoroughly regulated, each kilogram removed from the truck’s body is added as cargo. This incentivizes OEMs to push for weight reduction. In this environment, light metals like aluminum and magnesium compete against heavy metals such as steel and iron. Light metals weigh less but are also less robust, so not all heavy metal components can be substituted with aluminum. For instance, transmission gears, axles and some suspension components undergo great stresses, so they must continue to be produced with steel. On the other hand, components like monoblocs and cylinder heads are more suitable for aluminum, which is where Nemak, for instance, has promoted migration to new materials.

In the future, heavy-vehicle OEMs will continue to use axles and differentials in their electric trucks as they get rid of engines and transmissions because electric motors cannot deliver the torque that trucks need. This is great news for Blackhawk because there will be demand for axles, differentials and other foundry parts that we produce. 

Q: What new opportunities will the trade regulations established in USMCA create for Blackhawk?

A: New rules of origin will force automotive companies to procure more components in North America, which will push us to compete with US and Canadian companies. Nevertheless, the foundry industry in the US is in crisis as many foundries in that country are too old, metallurgical studies are no longer attractive for young students and cities have grown around foundries, which prevents expansion. Compared to the 1950s when there were around 6,000 foundries in the US, this figure has dropped to around 2,000 in 2019.

Meanwhile, metallurgical careers are gaining popularity among Mexican students and the foundry industry is surging. Up to 26 new foundries in Mexico have opened their doors or seen a major expansion since 2013. This is largely due to the arrival of automotive investments to Mexico. In the Bajio region, several Japanese foundries have opened as a result of OEMs landing in the country and bringing along their traditional suppliers.

Q: What is Blackhawk’s strategy to stand out in a highly competitive industry like automotive?

A: Flexibility is a key competitive advantage for Blackhawk, which has earned us the trust of world-class automotive suppliers like American Axle, Johnson Controls, Sisamex and Dana. We supply foundry components ranging between 5kg and 400kg in low to medium volumes, which is a segment that large foundries traditionally set aside. Blackhawk also constantly looks for ways to add value to its parts depending on client needs. For instance, we may paint or machine components before delivering them.

Q: How is Blackhawk improving its operations for the automotive industry?

A: In 2018, we invested around US$3 million to improve our foundry in Monterrey. About half of that went to automating the plant, particularly in the finishing area where components are deburred. This is a tough job as operators need to use heavy personal protection equipment to carry out a physically demanding job. Investing in automation has enabled Blackhawk to improve its working conditions and reduce accident rates at the foundry, while increasing the quality of its finished components. Parts for heavy vehicles account for up to two-thirds of Blackhawk’s automotive operations and the rest is comprised of agricultural equipment. 

Another part of our investment in Monterrey was oriented to reducing emissions at the foundry by improving our dust collection capacities. As a key raw material for foundries, it is imperative to keep sand waste under control. The remainder of the investment went to replacing equipment that had reached the end of its life cycle. 

Q: What are the main challenges that Mexican suppliers face to enter regional supply chains?

A: Development of quality talent is a key challenge. The dynamic growth of the automotive industry in Mexico has spurred demand for talent. The country needs to train more capable human resources to cope with the growth of the automotive industry and to be able to double its vehicle production over the next 10 years. The industry will have a growing need for robotics programmers and automation specialists as the industry adopts new manufacturing technologies.

Mexico still imports some foundry components that could be substituted with locally made products. There are also gaps in the local production of aerospace components made of novel materials. Supply of magnesium and new-alloy components for aircraft offers several opportunities for local companies.
 

Blackhawk is a gray and ductile iron foundry and part of Mexican industrial giant Grupo Quimmco. The company specializes in the production of casting components used in powertrains, hydraulic chassis and engines of commercial and heavy vehicles and agricultural equipment