Avoiding costly violations, examining fundamentals of the U.S. auto market and analyzing big data in the auto sector were topics of three speakers at the NACE Automechanika Business Outlook Conference today.
CCAR is a non-profit organization that stays self-sufficient by creating online training around pollution prevention. The organization also developed Hazmat training courses for the North American Automotive Hazmat Action Committee (NAAHAC) in 2005.
CCAR serves mechanical repair shops, collision repair shops, OEM dealers and technical schools. CCAR-greenlink.org is a new website launched this week featuring a more user-friendly format.
The Department of Transportation (DOT) and the Occupational Safety and Health Administration (OSHA), an agency of the United States Department of Labor, both require that collision and service repair shop operators provide automotive training to their technicians.
OSHA requires staff to be trained before entering the workplace and then annually after that, Ayers said. DOT requires training within 90 days of starting on the job and every three years after that.
The Top 10 workplace violations in 2016 listed by OSHA include seven that pertain to the automotive industry. They are hazard communication (number 2); respiratory protection (number 4); lockout/tagout (number 5; forklifts (number 6); electrical/wiring (number 8); machine guarding (number 9) and other electrical issues (number 10).
Many hazardous materials are commonly found in vehicles, Ayers said. Some of those include batteries (contain sulfuric acid); air bags (compressed gas); shocks and struts (hydraulic fluid and compressed gas); refrigerant (compressed gas); brake accumulators (high-pressure gas); and paint, adhesives and sealants (flammable solvents).
All businesses dealing with the disposal of these items must comply with hazardous material regulations or face stiff fines, Ayers said.
For information about training on handling hazardous materials, visit www.hazmatu.org.
Auto market fundamentals
Dan Hearsch, director, automotive practice at AlixPartners, presented a wealth of information on the U.S. and global auto markets in “Fundamentals of the U.S. Auto Market” He also addressed autonomous vehicles, crash avoidance technology and crude oil market trends.
AlixPartners is a global company that focuses on fixing EBITDA and cash flow issues with companies. It managed General Motors’ bankruptcy process after the last recession.
“Automotive is not a growth market. The number of cars people buy is growing at a slower rate than the population,” Hearsch said. “We are about to go into the next down cycle of auto sales.”
Adding to that problem is that used vehicle prices are forecast to drop because there is a used car “time bomb” of 500,000 vehicles coming off lease soon.
Vehicle pricing often will go up as interest rates go down. Conversely, when interest rates increase, as they have been lately, there is less opportunity to increase vehicle prices because almost everybody who buys a new car gets a loan, he said.
Automakers often rely on incentives or price discounts to sell vehicles during slow period. But when an OEM’s vehicle price discount exceeds 10 percent, they are giving away too much profit to capture sales, Hearsch said.
Asia has the strongest vehicle sales growth due to China’s economy. Flat vehicles sales are expected in the U.S. and Europe. AlixPartners predicts a U.S. sales downturn at 16.9 million in 2017 and a trough of 15.2 million in 2019.
In addition to a slow-growing economy, other factors influencing this are that younger generations are five percent less likely to have an operator’s license now than in 2000, despite economic growth and comparable employment.
The average cost of ownership per mile has risen steadily since 1990, much faster than the rate of inflation, making vehicle ownership less attractive.
Economic factors supporting the auto aftermarket have been strong, but slowing sales and advanced driver-assistance systems (ADAS) pose threats, because those vehicles cost more to repair due to numerous sensors and technology.
The good news for the aftermarket is that annual miles driven and vehicle age are both increasing. “These cars last a long time and will be on the road for quite a while. They will need parts and people who know how to fix them,” Hearsch said.
Big Data and analytics in the auto sector
Dan Ricci, global automotive industry cognitive solutions leader with IBM Corp., discussed
“Big Data and Analytics Impacting the Automotive Industry”
More data was produced in the last two years than all the data that was produced since the beginning of mankind until two years ago, Ricci said. New York City’s surveillance cameras record 520 terabytes of data in the interest of public safety every day.
But how is so much data manageable and useful?
The cloud is an on-demand computing and storage partner. There is no limit to what fits in a data center when you access the cloud. Even the auto industry is embracing the cloud instead of exclusively its own servers, Ricci said.
The challenge is to harness and analyze all that data so that it is useful, he said.
“Big Data and analytics improves the ability to explore and discover. You can use that info and make it actionable for your business,” Ricci said. “Amazon is a retail model but they make money on their data.
NHTSA vehicle safety recalls increased to 63.95 million vehicles in 2014, up from 22.1 million in 2013 because it was using big data to look for safety flaws. Toyota used Big Data to figure out its rapid acceleration problem several years ago.
“With the Internet of Things, 5G will take us to the next level. It’s need to bring ADAS to reality,” he said. ADAS requires vehicle to vehicle communication that will occur through the cloud.
There will be an aggregate of clouds that will work together to share information about the vehicles. The ability to support hybrid content will be important going forward.
On the cognitive side, Watson is IBM’s brand for cognitive capabilities.
The Watson computer ran unassisted on Jeopardy when it defeated the top two Jeopardy champions. Watson was trained and tested, but did not know the questions in advance.
“It searched through 16 terabytes of data and provided an answer, and it did that in one second,” Ricci said. “It did this by reading and understanding data. The computer read and understood all the data that it had absorbed.” Watson can read more than 6 million pages of data per second and understand it.
Watson had to be able to understand, reason, learn and interact to win Jeopardy.
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