Friday, 2 January 2015

Atlas Copco swallows Henrob of SPR fame

 Atlas Copco has now acquired the shareholding of self-piercing rivet (SPR) specialists Henrob Ltd of Flint in the UK.

More specifically, Atlas Copco U.K. Holding Ltd., Atlas Copco North America LLC and Atlas Copco Asia Pacific Pty Ltd. have acquired all the entities of self-pierce riveting specialist Henrob and its main facilities in the US and the UK.

Atlas Copco claims the acquisition offers the multinational an opportunity to expand in a fast-growing market segment, with state-of-the art technology.

Henrob Ltd of Second Avenue, Deeside Industrial Park, Flintshire, is a pioneer and market leader in self-pierce riveting, a mechanical fastening process for joining two or more sheets of material where welding is difficult, e.g. aluminum. The company, which is privately owned, had revenues of $US162 million in a 12 months period ending June 2014 from about 400 employees. A spokesman for Atlas Copco told this newsletter the two companies agreed "not to disclose the price tag".

Atlas Copco notes that the self-pierce riveting segment is expanding fast due to the growing use of lightweight materials in the automotive and other industries, a trend driven by increasingly stringent emission standards. Automakers are working hard to improve fuel economy, and weight reduction using aluminum is an effective measure in meeting these requirements. 

“Henrob is a strategic fit in our portfolio of adjacent fastening technologies for the automotive industry,” claims Mats Rahmström, president of Atlas Copco’s industrial technique business area. “It is a logical addition to our automotive body shop business. Now we can serve customers with three assembly technologies: tightening, adhesives and self-pierce riveting.”

He adds: “Henrob is a supplier to some of the leading auto manufacturers in Europe and North America. Atlas Copco’s global footprint will open up possibilities to serve customers in more markets. Henrob will become a business line within the MVI Tools and Assembly Systems division in the Industrial Technique business area. The brand will be kept.” 

One man’s view. Henrob is typical of a number is small British companies which pioneer new technology only to become absorbed by a giant in the field.

Large multinational companies such as Atlas Copco can afford to sit on the sidelines and quietly observe minnows like Henrob struggle against the tide until the point is reached that the technology they have been monitoring is refined and mature to the extent that the minnow becomes prime for a takeover.

Atlas Copco and others can avoid the hassle of developing new technology, and all the heartaches that come with the package. Then, finally, like an eagle seeking out its prey, it can swoop and collect a juicy morsel, ideal to meld with its own processes.

On the other hand, the founder of any privately owned company is anxious to maximize the returns on the asset he and fellow directors have cultivated. It is a question of having the best possible set of accounts and making a judgement when the ‘right’ purchaser comes along.

One might expect Henrob to fall into the hands of Sweden’s ABB Robotics, the Japanese robot maker Kawasaki or Germany-based automated assembly and robot specialist KUKA. After all, both ABB and Kawasaki’s robots have been linked the Henrob equipment at JaguarLandRover (JLR) in Castle Bromwich where much of the technology has been pioneered. Kawasaki’s machines have been based at Halewood too.

Of course, JLR is not the company it was when Ford Motor Company acquired – and disposed of it – now with its Indian owners and some top-flight German managers, it has its sights set on horizons far away from the heartlands of Castle Bromwich, Solihull and Halewood, like the US, China and elsewhere where it needs the systems backup of multinationals like Atlas Copco. China alone is known to be expanding "very quickly" and Henrob has "hundreds of systems" out there.

One could argue that every entrepreneur’s dream is to make a small fortune from developing an idea he seized upon years ago. Henrob goes back as far as 1985. Ideas such as self-piercing rivets could thrive only in the hot house of small and one-product focused teams driven with but one purpose: to make the system work and find customers which can apply it - profitably.

Certainly, Henrob, a small privately-owned business in Flintshire, will be remembered best as the company that pioneered the application of self-piercing rivet (SPR) technology.

There are other companies in the field but engineers at Henrob, thanks partly to Jaguar and Land Rover, but not wholly so, have been able to painstakingly develop their technology. Jaguar engineers have greatly helped Henrob – and vice versa.

But has been helped by a number of factors: first and foremost Jaguar primarily and Land Rover subsequently, has adopted aluminium body-in-white structures for passenger cars.

Ford in the US was the principal driver when it owned Jaguar. Engineers in Dearborn could use Jaguar in the UK almost as a skunk workshop, a kind of off-shore development base from which it could develop, almost out of sight of US-based executives, various joining techniques, including bonding, SPR and MIG welding.

Aluminium lends itself to SPR in a manner that adhesive bonding and MIG welding do not. Adhesive bonding is slow and travels with issues that affect repeatability, quality control and non-destructive testing. MIG welding of aluminium is tricky, to say the least, as Jaguar production engineers know to their cost; MIG is best probably confined to specific areas where visibility is important.

SPR, as Henrob has demonstrated, can be mechanised. Joints are strong and repeatable and quality control is straightforward. Indeed, SPRs can show significant strength advantage over traditional spot welds. It is also a visually checkable joint. But…..there are consumable involved which have to be taken into account. And the system requires high forces so the equipment, namely the tools, can be heavy.

On the other hand, SPRs can join dissimilar materials – like galvansied or pre-painted materials without damaging the coating. In the factory, SPRs can be applied manually or automatically, and they are environmentally-friendly – there is no heat, fumes, dust or swarf, which ideal in an aluminium environment where cleanliness is vital.

                                         Jaguar’s "road map"

A factor which cannot be overlooked is that of foresight. A number of leading Jaguar engineers in the late 1990s and since, Mark White among them, had the foresight, the diligence, the patience and the perseverance to drive through an SPR programme primarily with the massive XJ. White drew up his own “road map” for the advancement of new technology within Jaguar.

This car, the XJ or X350, offered the benefit of relatively slow reduction rates – in effect providing an almost off-line production environment where new technologies could be trialled. White must be one of the unsung heroes of the UK motor industry. He and his team worked to apply SPRs to the huge X350 bodyshell which offered the space for the large SPR tools to do their work. The BIW structure required some several thousand self-piercing rivets.

At the time that White and his team were developing SPR to suit Jaguar and Ford’s needs, Henrob could point to others in its customer base. The company claimed to have Audi, BMW, Daimler-Chrysler, Ford, General Motors, Peugeot, Mazda, Toyota and Volvo as customers.

Quite what was the actual level of involvement of each company at the time, only Henrob’s engineers could lay testimony. Certainly then, Jaguar was part of Ford’s Premier Automotive Group, which included Aston Martin, Land Rover and Volvo in Europe as well as Lincoln in the US. Jaguar was seen as a launch pad for new technology in the group. Indeed, the Castle Bromwich facility in the UK West Midlands was planned to become “a centre of excellence” for aluminium technology and ‘aluminium-intensive vehicles’ - AIVs. This it has done – and now other parts of the JLR empire are benefitting from this technology. Tata Motors, JLR’s owners are benefitting from this foresight.

SPR was seen as an essential technology for truck cabs. Production rates were low and new technology could be absorbed. In Sweden for example, Volvo reckoned that while the initial investment cost for SPR was $43,000 higher than for spot welding, a saving of $244,000 could be made overall by using the SPR process. In other words, SPR gave a 10 to one factor of improvement. At the time also, other companies making SPR equipment included Aerial, Textron and Tucker.

Now the circle has been completed and Keith Jones, Henrob’s founder, chief executive and majority shareholder, having signed the agreement to sell the Henrob companies to Atlas Copco, is retiring from the business.

Jones in the early 1980s, was introduced to self-piercing rivet technology during a business trip to Australia; shortly after he acquired the rights to use the technology. In 1985 he opened a manufacturing facility in Flint, North Wales. Five years later he opened an office in Brisbane, Australia. Henrob’s customer and distribution network now embraces Europe (in Germany it is particularly strong), China, Hong Kong, Indonesia, Malaysia, New Zealand, Japan and Scandinavia.

In 1992, Henrob was approached by Audi, part of the Volkswagen AG group, to develop SPR technology for the assembly of its ground-breaking A8 aluminium-intensive vehicle (AIV). Henrob claims that the start of the new millennium marked another first for Henrob with the launch of Jaguar’s XJ8 AIV with over 3,000 rivets for each car. Henrob declared “this project represents the most technical advanced use of SPR technology to date”. But the technology has moved on since then as Ford’s 2015 F-150 pick-up truck demonstrates.

In the last year alone, Henrob’s business has grown 100 per cent, according to sources – the company claims it ships one billion rivets a year to car companies including Mercedes-Benz and JLR. No wonder the company had a good set of accounts to offer any prospective purchaser. Henrob was at the top of its game when it came to selling the business.

Atlas Copco is a global engineering group with Swedish origins. It manufactures compressors, vacuum/air systems, construction and mining equipment, power tools and assembly systems.

According to Henrob, the existing management teams will stay in place and there are no plans for redundancies. Indeed, earlier this year the company announced plans to take on 100 people. Atlas Copco claims it is committed to support the current rapid growth of the company and further enhance its global reach.  

                                 2015 Ford F-150 pick-up

Henrob claims it is a pioneer and market leader in self-pierce riveting, a mechanical fastening process suitable for joining aluminium as well as mixed materials that cannot be reliably welded. This technology has become increasingly core to the design and assembly of lightweight vehicles with significant implementation by leading automotive manufacturers in Europe and North America.

Perhaps nowhere is this more evident that in the US where Henrob’s engineers have been working alongside their colleagues at Ford Motor Company in Dearborn, Michigan.

The aluminium technology that Ford left behind when it sold on Jaguar had notbeen not forgotten. It had been well proven at Castle Bromwich and so when Ford cultivated the idea of an aluminium-bodied F-150 series pick-up truck (above) – the best-selling pick-up in North America, where better than to go to refresh the technology but with Henrob.

The 2015 F-150 is as much as statement of Ford’s ownership and dominance of the pick-up truck market as it is of its process among North American pick-up truck makers of its prowess in the application of aluminium structures to vehicles The 2015 F-150 is also a statement of Ford's intent to introduce compacted graphite iron (CGI) as the cylinder block material of its 2.7-litre V6 Ecoboost turbocharged gasoline engine - another 'first', More will be heard of this engine in 2015.

But Henrob engineers were themselves busy pushing out the boundaries, especially in terms of rivet design. Pushed on by Ford’s requirements concepts of a hollow or tubular rivet emerged.

Back in Flintshire, Henrob used a £5.2 million funding package, managed by HSBC’s Liverpool commercial centre, to acquire new 150,000 square feet premises adjacent to its existing 100,000 square feet plant on the Deeside Industrial Park. 

At the existing plant, Henrob makes some four million rivets a day – each individually checked. Henrob plans to grow its staff numbers to 300 by the end of 2015, after adding 70 roles in the past year. The company speaks of creating 100 new jobs over the next 18 months

Part of the expansion is to accommodate the new tubular rivet which means less displacement of material at the joint, resulting in a shallower upsetting die and hence less potential for any cracking of material.

Such new rivets are specific to thick stack joints and Henrob claims that no other company can achieve the results it is returning through their use. No wonder that Ford regards these rivets and their associated technology as being crucial to its campaign to retain its pick-up truck crown. And Henrob’s engineers can right claim to be one of Ford’s assistants in this endeavor.  

                                      Lightweight materials

Henrob’s recent growth is set to continue strongly due to the clear trend for increased use of lightweight materials in the automotive and other industries, driven by ever more stringent emission and fuel economy targets.

There are limits to which small companies can grow without involving high levels of debt. By being part of a larger organization which needs this technology, Henrob should be able to grow along with the market, especially in Asia.

Indeed, as Jones says: “Atlas Copco has an extensive global market presence, range of products, service organisation and level of technical expertise. Backed by Atlas Copco’s resources and energised by this very exciting development, Henrob will now have every possibility of sustained success. There is considerable synergy both in products and in philosophy plus a clear commitment from Atlas Copco to fully support the further development of Henrob,”

“I am very pleased that Henrob will enter a new phase of its existence in the capable hands of a top global organisation. We could not have chosen better, a great future has been secured for Henrob”.

When Jaguar’s X350 was being planned, SPRs were considered ideal for production volumes of 30,000 a year. With that level of production, about 100 jobs a day on two shifts, cycle times were considered more than ample to cope with the new level of technology.

But SPR technologies have advanced since then and the arrival of Jaguar’s new XE X760) premium level medium-sized car will herald the arrival too of new manufacturing technologies of which SPR will be a part. The X760 manufacturing systems for SPRs will require 309 ‘systems’ or tools, but Jaguar is not stopping there. The upcoming Jaguar XF, due in 2016, will open up a new area of application for Henrob’s SPR technology. The XF or X260 will require even more ‘systems’ – namely 340. So the number of rivets per car might be expected to be higher than the 2,800 or so on the X760. All good business for Henrob – now Atlas Copco owned.                                                                        John Mortimer

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