DETROIT-Manufacturers of steel automotive wheels have lost many battles to aluminum in the last decade. But that doesn't mean they've lost the war. As aluminum captures an ever-larger share of the wheel market, steel-wheel makers are grudgingly ceding market share and seeking ways to keep their factories busy.
Hayes Wheels International Inc., for example, has developed a new method to fabricate aluminum wheels. The Romulus, Mich., company said the new method makes a lighter and stronger wheel than cast aluminum. But the innovation also allows Hayes to use machinery formerly used to make steel wheels.
Motor Wheel Corp., in Lansing, Mich., is looking to Japan to soak up extra capacity. Bolstered by the expensive yen, Motor Wheel sold about $3.5 million worth of steel wheels to Toyota Motor Corp. in 1993-about 1.3 percent of its $260 million sales to carmakers.
The Japanese sales are ``small, but it's a good beginning,'' said David Haviland, director of marketing for automotive products at Motor Wheel. ``We plan to double that in the next three years.''
Motor Wheel, the No. 2 steel-wheel maker behind Hayes, also took a more traditional approach to over-capacity.
Three years ago it closed an older factory in Chatham, Ontario. But at about the same time it built a new, more efficient factory in Bowling Green, Ky., partly to take advantage of lower wages. The new factory can make about 14,000 wheels per day with 130 workers, compared to 19,000 per day with 350 United Auto Workers in Chatham.
Manufacturers of steel wheels are scrambling because aluminum wheels have exploded in popularity in the last decade. Aluminum wheels save weight and look good.
In 1983, aluminum wheels were on just 7 percent of all U.S. cars. In 1993, 40 percent of new cars had aluminum wheels.
By 1999, aluminum's share of the wheel market will hit 60 percent, said Jeffrey Ornstein, vice president for finance and treasurer of Superior Industries International Inc. of Van Nuys, Calif., a major aluminum wheel maker.
Aluminum wheels, formerly a luxury-car item, rapidly are moving onto compacts and light trucks, which traditionally used steel wheels. For example, Superior makes such wheels for Chrysler Corp.'s subcompact Neon.
Mr. Ornstein predicted more light trucks will order aluminum wheels in the coming years as the federal government boosts fuel-economy requirements for them.
Meanwhile, steel-wheel makers are struggling with dwindling demand. In a strong auto market, steel-wheel sales will decline from 45 million units last year to 43 million in 1997, Bernstein predicted.
While bulk aluminum is four times more expensive than steel, aluminum is only about half as heavy. Thus, automakers can save about 60 pounds per vehicle using aluminum wheels.
Saving weight is critical for automakers to attain government-mandated fuel-economy standards. Aluminum wheels are typically styled, which adds another benefit for automakers-they needn't buy a wheel cover or other trim to gussy it up.
GM has a peculiar problem competing in the steel-wheel business. According to Bernstein, GM's Warren plant is a high-cost producer, partly due to its high-wage UAW work force.
Why doesn't GM outsource all of its wheels? Because under its UAW contract, the company pays UAW employees 95 percent of their wage even when they're idled. So if the plant's workers are going to be paid anyway, GM has decided it is more efficient to put them to work, Bernstein said.
Traditionally GM and Ford have used their own wheel plants as competitive levers to pry lower prices out of independent wheel makers, said Mr. Haviland.
In recent years, though, GM's leverage has declined because it is the high-cost producer, he said. Ford, on the other hand, has stayed more competitive than GM because it has invested heavily in its Monroe, Mich., wheel plant to boost quality.
While Motor Wheel has cracked the Japanese market for steel wheels, it also has formed a U.S. joint venture with Japan's Asahi-tech Inc. to cast aluminum wheels. Called Alumitech Inc., the Somerset, Ky., firm has contracts with Honda and GM.
Superior also is trying to crack the Japanese market. It formed a joint venture with Topy, a Japanese wheel maker, to market Superior-made wheels to car-makers in Japan.