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Exides woes not over yet

Although insulated by its chapter 11 bankruptcy status, Exide is still struggling. While competitor Johnson Controls has already made the move to build batteries in Mexico, Exide has no such facilities, relying on European manufacture. Industrial battery sales are suffering so Exide is reliant on automotive sales to provide the profits. The hope is that Exide could be out of chapter 11 within a year.(10-02BD79-17)

Batteries International
July 2002, p. 16

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 Presently deemed cost-prohibitive, new design features associated with 42-Volt systems must offer benefits commensurate with the price level charged. The switch to 42-Volts requires significant changes to the electrical system of the car, but with all the risks involved, vehicle manufacturers are reluctant to lead this initiative, notes Peter Bowlus, industry analyst at Frost & Sullivan. They may have played a pivotal role in the development of the underlying technology, but the philosophy of most vehicle manufacturers remains to wait until real demand for these systems leads to greater economic viability. Though carmakers are likely to try to push 14-Volts as fast as they can (the use of technologies such as liquid-cooled alternators being just one example), the migration to 42-Volts will ultimately become unavoidable. (Frost & Sullivan, http://frost.com) (10-02BD79-12)

Thai Storage Battery Plc shows 20 percent growth attributed to robust domestic and regional vehicle markets. Thai Storage can produce 1.8 million units of BAT-3K batteries per year. The company is Thailands largest battery market in terms of capacity and ranks second in the replacement market. The company plans to keep in the top end of the battery market where there are fewer competitors such as Chineese manufacturers.1 (10-02BD79-11)

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Need Exists for Fourth ALABC Program

The following article was provided by Batteries International editor Gerry Woolf.

With the Lead-acid battery market hurting from a slump in telecom, a downturn in the automotive industry and numerous structural and financial problems facing some key industry players, now perhaps isnt the best time to go out with a box marked give generously to fund battery research. But will one more push fix the whole thing? Like finding a cure for cancer, the answer is not quite that simple.

The timing to go out fund-raising may not be ideal, but ALABC Director Pat Moseley thinks it is essential. The auto industry is finally realizing that a Lead-acid battery offers the most cost- effective way to provide both 42-Volt and mild hybrid energy storage. The battery will be a high-rate VRLA battery operating in partial-state-of-charge duty, which the battery has not had to deal with before.

So where do the problems lie and how will ALABC begin to solve them? The clues lie in the proceedings of recent ALABC conferences. Essentially, were left with materials problems, explains Moseley. We solved a lot of the other puzzles; now the problems that remain are in the negative plate and the separator.

The big issue with partial-state-of-charge of VRLA batteries is sulphation. The formation of sulphate on the negative plate during simulated HEV duty appears to be a process that begins on the outside of the plate. But why does it occur? There are strong indications that it is the extraordinarily high rates of charge that are responsible, and that the problem can be tackled, at least in part, by the addition of conductive additives - high surface area carbon - to the negative plate material. Japanese battery developers have a already started to go down this route.

But there is still a lot of work to be done to determine the optimum form and the function of the additives - our theme is very much materials and process optimization, says Moseley.

More Australian work gives a pointer to the management of trace element inventories. Part of the process of improving VRLA performance is through the reduction of gassing, and the work of Dr. Lan Lam of CSIRO who has already shown that there are some trace elements that act synergistically to affect gassing rates. It appears that some elements work in concert to reduce gassing while others seem to enhance it, and these elements are only present in small amounts in both the expanders and in the alloys.
While the separator manufacturers have been ardent supporters of the research, they would concur with the view that the industry does not yet have a perfect separator material. Such a material will have to withstand very high compression, resist growth of positive active material and control the amount of oxygen reaching the negative plate.

We have to do a lot better in terms of battery life than the two years that might be expected from contemporary VRLA designs in high-rate partial-state-of-charge duty, says Moseley. Happily, some simple changes to the grid design have brought dramatic improvements to the life of the VRLA battery in this duty. The other issues, which weve talked about before, have not gone away - quality and uniformity of product and the manufacturing process - and we hope to bring those into a new program.

Moseley is not concerned if the carmakers time scales have slipped a little since the start of the year. Its in our favor. Weve got more time to get the thing right and to convince the car industry we have products that work. But the research that supports product development cannot be put off till nearer the time of market introduction, or turned on and off like a tap. Bearing in mind the time it takes industry to produce any kind of product innovation, and the time required for new product to be designed into automobiles, even 2008 is a bit soon.

Batteries are here to stay in automobiles, he adds. If the Lead-acid industry wishes to stay part of that future and not to be displaced from its role in the auto industry, it simply has to find the funds to support work which no one battery company or supplier can carry out on its own. Its going to be a multi-disciplinary exercise on some very tricky problems, but there is no doubt that it can be successful and the prize is worth the effort. (10-02BD79-10-11)

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Trends(09-02BD78-09-10)

Q? Can the Lead-acid battery compete in modern times?

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Johnson Controls Inc. reports third quarter profit up 15 percent due to brisk sales of auto interior systems and batteries. Income for the company rose to $175 million ($1.85/share) in the third quarter which ended June 30th. This is a rise of $153 million ($1.62/share) from a year ago.

East Penn Manufacturing receives Federal Mogul Corporations Quality Award for 2001. For the Quality Award, suppliers must maintain a zero defect rate in parts per million throughout the calendar year. (08-02BD77-10)

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Whither Exide

All the past problems of Exide are reflected in the current financial condition of this company which has brought Exides stock price from a high of over $50 a share in 1994 to its current value of under $1.00 a share. After the rebuilding of credibility with Bob Lutz and the addition of GNB, the overwhelming debt of $424 million over the last five years continues to plague the companys restructuring efforts. Now under the guidance of Craig Mulhauser, Exide seeks to find new sources of financing, asset sales and restructuring initiatives. Exides worldwide presence and leading Lead-acid product status make some form of improvement in business operations desirable. Improvements may require breaking up parts of this behemoth.(07-02BD76-12)

The Battery Man
March 2002, pp. 18-23
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Fall of the House of Hawkins

Exides problems are delineated from the expansion strategies of Arthur Hawkins into the repair strategies of Bob Lutz. Without focusing on the illegal activities of Hawkins, the author who has no commitment to Exide proposes a simple solution which includes a good product, low manufacturing costs, a solid customer base and little debt. While this might produce a high score answer in an Econ./B School 101 class, the huge impact of Hawkins illegalities and the demise of many business caps post 2000, which also included Exides business, were not considered.

The Battery Man
March 2002, p. 52

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Cullen BCI Market Reports(07-02BD76-4-8)

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Exides former president, Arthur Hawkins and former vice president, Alan Gauthier plead guilty to charges of fraud. The former executives were convicted in June of scheming to sell defective batteries to Sears in 1997.

Exide celebrated good news when Ford Motor Company recently selected them to supply 12- Volt batteries for the new Ford Focus Fuel Cell Vehicle. In this fuel cell vehicle the battery will absorb extra energy generated by the fuel cell and use it to power the vehicles many electronic features, power steering and other accessories.(07-02BD76-3)

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Auto supplier profits solid on strong demand


Johnson Controls reported profits rising by 16% to $115 million in its second quarter. They raised the current-year outlook for its automotive business. Sales growth for the Controls unit was cut, causing a drop in stock price of $1.06 after reaching a 52 week high of $93.20.

Johnson Controls Financial News Release
April 2002
www.JohnsonControls.com

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Johnson Controls (JCI) is named one of Fords best global suppliers. JCI also received the Market Engineering Leadership Award from Frost & Sullivan. Frost & Sullivan reported on JCIs leadership in the Pan-European market with 8.7 percent of the total revenue share compared with nearest rivals which account for less than five percent.

On another positive note, JCI, which garners about three-quarters of its sales from its growing automobile systems operations, said stronger demand on car and light trucks in the U.S. has improved its outlook for business. The Company said that its fiscal second quarter profit rose 16 percent on strength in demand for automobile interior systems and batteries.(06-02 BD75-6-7)

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EnerSys Inc. acquires Energy Storage Products Group of INVENSYS plc. John D. Craig, Chairman, President and CEO of EnerSys, said, Our expanded product portfolio will continue to serve two main markets; Motive Power, serving the OEM and aftermarket material handling, railway and mining markets through the Exide, General and Hawker line of products; and Reserve Power, serving utilities, uninterruptible power supply, telecommunications, data communications and internet markets through our Powersafe, Datasafe and Genesis line of products.(05-02 BD74-7)

 

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