Many are the explanations why chief executive officers leave
their companies. Some, like bankers, do so after feeling the ire of public, shareholders
or government. Others feel they have reached the end of the road in what they
can achieve. Others are tempted by the prospect of new challenges.
Only Dick Elsy knows the real reason for leaving
transmission innovator Torotrak plc to join the High Value Manufacturing –
Catapult from the first of this month as chief executive officer, replacing the interim CEO.
This particular Catapult first opened in October 2011.
Elsy is replaced as CEO by Jeremy Deering, Torotrak’s
finance and commercial director; he has been with Torotrak since 2006.
By his own admission, Elsy leaves Torotrak “at such an exciting time when our plans are really starting to deliver.” If so, why not stay and enjoy the full rewards of his work?
When Elsy joined Torotrak from Jaguar Cars in January
2003, the share price was around 12p; at the end of his first year in March
2004 it topped 70p. Prior to announcing his departure, some eight years later,
the share price languishes at 34p.
Over the last nine years, almost routinely loss-making,
Torotrak’s turnover has blossomed seventeen-fold to £4.3 million; its cash
position has improved six-fold to £10.5 million, while employee numbers have
fallen 60% to just 40.
So what is Torotrak really about? And what is the future?
For more years than many can remember, Torotrak a tiny
company based in Leyland, Lancashire, has toiled to develop stepless,
friction-drive transmissions for city cars, buses and on- and off-highway
vehicles.
Its novel design of continuously (or infinitely) variable
transmission – CVT/IVT – relies on rolling components: usually toroidal cavity
discs containing rollers that link the engine with final drive. Speed ratio is
changed by varying roller angle.
So after all these years, could the end be in sight as
Torotrak views the prospect of its CVTs in trucks and buses? Is the prospect
tangible or merely a precursor to yet more waiting?
When new technologies
appear, it is easy to overlook how old some really are. In fact, CVT
activity began at Leyland in early 1983 when Leyland Vehicles announced plans
to replace its ageing Pneumocyclic semi-automatic bus transmission with a
ground-breaking 'new' design. Leyland inked in production for 1986 with £2
million to spend on plant and equipment.
However, Leyland engineers’ breakthrough CVT had its roots
in a toroidal patent first penned in 1899. Trials were set for 1984 and further
applications were planned, including cars and trucks; even F1 motor racing and
military.
Push the clock forward five years to January 1988 and the
name Torotrak appeared; the new company embraced seven of Leyland’s CVT
engineers and their technology. Torotrak soon claimed to be in talks with seven
potential licensees. Chrysler and Ford were among those tipped.
At the time, Torotrak Holdings was a subsidiary of
British Technology Group (BTG), itself earlier spun out of the National
Research Development Corporation (NRDC). BTG had begun work on CVTs some time previously and in
1988 aimed to commercialise this effort through Torotrak.
A year later, Torotrak made noises it was about to sign
up Ford Motor Company, whilst fitting a 'new' CVT (using half the parts of the
former design) in a Rover 800.
Roll forward to August 1994 and Rover Group look set to
follow Ford in exploiting Torotrak's CVT technology. By then, Ford Motor Company
had become Torotrak's first licensee; enthusiasts spoke glibly of 500,000
Mondeos a year with CVTs. The future looked bright.
Gradually, Ford fell by the wayside, but not before
serious attempts to apply CVTs to chunky sports utility vehicles. Other big
names in the automotive industry sidled up to inspect Torotrak’s technology,
like General Motors and Toyota, but without much success. In Japan, Nissan
Motor Company researched its own CVT design.
Early development
But why CVT? In early motor cars, a one-to-one connection between engine and final drive was out of the question if the power unit was to operate at its most efficient. Early manual gearboxes had few fixed ratios but the number gradually increased – and so did complexity; today's complex fully-automatic gearboxes can offer eight ratios.
Lately, dual-clutch transmissions (DCT) have opened up
new possibilities. Volkswagen and Ford have these in production for passenger
cars. Compared with CVT/IVT, DCT offers known technology, with cost and
packaging understood and containable.
Meanwhile, inventors persist with their attempts to
adjust speed ratio in a seamless, continuously variable manner to provide the
right connection at all times between engine and final drive, including
reverse.
In 1899, a patent using rollers to transmit power and
vary ratio was taken out by W. D. Hoffman. Following prototype work by
Cloudsley Engineering Company and consultant engineers Halford, Moult and
Brodie (later of the de Havilland Engine Company), the Austin Motor Company
produced limited numbers of the Hayes Self-Selector Transmission as a £50
optional extra for its 1934 six-cylinder saloon cars. Elsewhere, GM ran a big
test programme but no production followed.
In 1956, following an earlier private study by a British engineer, a
transmission based on parts from an old Austin, suitably modified and fitted to
a Hillman Minx, achieved fuel savings of 20-25%. Eventually, NRDC (later
BTG) took control and funded development.
In the US, GM persisted with CVTs until the mid-1960s; others briefly
entered the fray, like Lycoming Corporation in the US and English Electric in
the UK.
By the mid-1970s, several other UK companies became
captivated by CVT, most notably GKN and BL Technology. Indeed, BL
Technology in Gaydon, Oxfordshire, (then part of British Leyland but now JaguarLandRover) conducted detail studies into toroidal transmissions. It installed one
in a 1.8-litre car, but while the traction drive aspects gave little cause for
concern, work on the CVT was eventually halted.
Meanwhile, Leyland Vehicles continued its work on
toroidal designs for trucks and buses, providing the roots for Torotrak's later
work.
In 1998, Torotrak demerged from BTG and floated on the
London Stock Exchange. It pursued several options to find “strong and reliable
potential routes to market”, ranging from passenger car, outdoor machinery
equipment, trucks, buses and construction equipment. Over 75 patent families
and 448 patents have been lodged.
Elsy’s first annual report bowed in 2004. By the time of
his 2005 annual report, Torotrak could announce a new partner, leading German
transmission manufacturer ZF. With pride, Torotrak noted: “ZF recognises
Torotrak as an innovative and highly competent partner in full toroidal
traction drive (IVT) technology. We will continue in partnership with Torotrak
to explore the full potential of IVT to meet the demanding requirements of our
automotive and off-highway customers.” Mention was also made of Getrag, another leading German automotive transmission maker with links to Ford.
Torotrak also confirmed a three-way tie-up with Equos and
Koyo in Japan, claiming transmissions had been “installed in target customers’
vehicles”.
By late 2005, Torotrak embarked on the next stage in its
“strategic development” and formed Infinitrak with MTD Holdings Inc. of
Cleveland Ohio, signing away CVT rights in the 0-45kW range for outdoor power
equipment, like sit-on mowers. This offered the then biggest potential IVT
application.
Ironically, Torotrak’s 2006 annual report made no
reference to ZF, so was ZF merely “having a look-see” at the UK company’s
ideas? However, Torotrak reported it had worked with a European truck and bus
maker for a year to “achieve fuel economy and emissions reductions”. A project
with a European bus maker led to an IVT bus. First drives suggested “our fuel
economy targets should be achievable”.
By June 2007 Xtrac, which designs and makes gearboxes for
racing cars, signed a license agreement to develop part of a mechanical energy
recovery device for F1 cars. The mechanical hybrid system to store braking
energy in a flywheel used Torotrak's CVT, linked to the car's existing gearbox.
Recurring names include India’s Tata Motors
and Allison Transmission Inc. of the US, not to mention the
ever-elusive "European truck and bus manufacturer" or ETBM. Likewise,
new "with-it" technologies appeared, like hybrids, and Flybus with
its KERS or kinetic energy recovery system.
At the Geneva Motor Show in March 2011, Tata
highlighted its Pixel city car. Its ability to manoeuvre and park in tight
spots was possible through Torotrak’s "zero-turn" traction-drive IVT.
Nothing more has been heard of this project which on paper offered much
potential, especially for Torotrak. That does not mean it is dead.
With a 1.2-litre three-cylinder turbo-diesel engine, Tata
claimed Pixel could offer fuel economy of 3.4 litres/100km and CO2 emissions of
only 89 g/km. In city cars, unit powertrain manufacturing costs and packaging
are vital to overall cost-effectiveness, with pressure to contain these through
design simplicity and control elegance.
CVT development
In development, giving focus to the following can bring improved toroidal CVTs: film traction and suitable fluids; disc and roller design and related fatigue life; losses; noise; effects of temperature on maximum shear strength which in turn determines the limiting traction; regime gearing arrangements; materials development; machining; production packaging; and an effective and durable control system. Last year, Torotrak completed over 25,272 hours of durability and fatigue testing with a design life of 300,000 miles declared.
Roller diameter is vital for compactness. For the same
power rating, Torotrak has been able to reduce roller diameters. Rollers now
range from 140 mm for heavy trucks to only 47.5 mm for its new V-Charge
supercharger.
Traction fluids too are critical to CVTs. The basic
principal of a toroidal CVT is: the end-load which must be applied for the
rolling assembly to transmit torque is inversely proportional to the
coefficient of traction; and life is inversely proportional to the end-load
cubed. So an increase in traction coefficient gives a cubic increase in life
for the same torque, or a pro-rata improvement in torque rating for the
same life, all for no change to transmission configuration. High traction
therefore has to one prime goal of fluid suppliers as it impacts on fuel
economy and durability. Oil giant Shell has played an important role in
developing traction fluids.
The future
Torotrak's annual reports have grown thicker and glossier over the years, but its main ethos remains unchanged: "The design and development of traction drive technology based on the toroidal variator as a means of infinitely changing gear ratio."
The latest report – for 2012 and Elsy’s last – gives the
clearest indication of where the future lies: passenger cars and light vans
using M-KERS, the mechanical kinetic energy recovery system; city buses using
M-KERS; hybrids; off-highway vehicles using IVTs; and finally medium and heavy
trucks, again using IVTs.
Across all these fronts in Europe and the US, the message
is the same: emissions’ legislation and demands for fuel improvements of 20 per
cent are driving change. Torotrak claims its systems can deliver this level of
fuel saving and bring new ‘business’.
For example,
Torotrak has secured £600,000 additional license fees from Tata to extend its
non-exclusive license to encompass M-KERS and V-Charge. And on 18 May, Torotrak
signed a co-operation and license agreement with Univance Corporation of
Nagoya, one of Japan’s leading car and industrial vehicle transmission makers.
Tata, JaguarLandRover and Volvo Cars are Torotrak’s
partners for passenger car applications with Flybrid Automotive of Silverstone
playing a vital part. In particular,
Volvo Car Corporation, Volvo Powertrain and SKF are engaged in a flywheel development
programme that brought together Flybrid Automotive’s flywheel technology and
Torotrak’s CVT for use in volume car applications.
For buses, Optare,
Ricardo and the ETBM are Torotrak’s principal partners. And the Flybus M-KERS
system for city buses is moving to next stage hardware for installation into fleet
trial vehicles with bus operators.
Carraro Group of Campodarsego, Italy, a global leader in power transmission
systems, and farm machinery maker Iseki & Co. Ltd of Tokyo, Japan are
Torotrak’s partners for construction equipment applications, But it is in
distribution trucks that the first major returns could come. Here ETBM, Allison
and Volvo Powertrain are all in various partnerships with Torotrak.
Allison is the world's largest manufacturer of
fully-automatic transmissions for medium- and heavy-duty trucks, with
first-half 2012 sales reaching $1.161 billion and net income topping $470 million
(adjusted net income $231 million). Although Allison will not disclose how many
transmissions it makes a year, it is a huge company and its total cumulative
license fees paid to Torotrak have passed £15 million since the agreement was
signed 9 March 2009.
Allison continues its commitment to Torotrak through a
multi-million dollar option, implying it has ample internal resources to
develop toroidal technology.
If Allison is equipping a facility to make the new IVT it
is tight-lipped; it is certainly keeping quiet about how many engineers are
engaged on the project and what they are doing. Allison’s headquarters in
Indianapolis could be the first to produce any novel design, as this is where
development has been conducted under tight security.
Tide turning?
So is the tide turning in Torotrak's favour? On 26 July 2012 the company announced Allison had agreed "an advance commitment of £2.5 million against its final £10.62 million option, to be paid this August. The final option, exercisable in 2013, would secure exclusive rights for main drive transmission applications in commercial vehicles".
In Europe, Allison’s rights will co-exist with Torotrak's
other two commercial vehicle licensees: Tata and ETBM. Shareholders can but hope
that any such transmissions will catch the expected doubling of global new
commercial vehicle registrations expected by 2020, with EBTM in a “strong
first-to-market position”.
However, such is the clandestine nature of the ETBM
programme that no one will declare how well this activity is performing; or
even hint at percentage fuel economy gains. As fuel economy is an important
parameter in commercial vehicle operation, any figure would yield an insight
into how effective or ineffective the IVT development work has been. But it has
to be assumed gains of over 20 per cent have been achieved.
The latest company statement continues the mystique of
smoke and mirrors that has surrounded the programme for years, claiming that
"further testing reported previously has now been concluded with very
positive results". It suggests fuel economy gains from Torotrak’s
technology extends "further into their vehicle range. This presents a
stronger opportunity than previously thought.” This statement contains no
precise depth of meaning – except to those “in the know”.
Torotrak has another iron in the fire, although not yet
as significant as the Allison project. V-Charge (previously called Rotrak)
supercharger boost technology is said to be "seeing significant
strengthening of interest".
Torotrak claims V-Charge, a forced induction system that
combines supercharging with the best of turbocharging, provides “the only
cost-effective route to affordable downsized engines" and low CO2 with the
driveability of a larger, naturally aspirated engine. Tests in a development
vehicle confirm the system can boost torque from zero to 95% in 400 ms.
Such programmes are “work in progress”. Meanwhile,
shareholders continue to wait for a return on their investments. As they do so,
some might ask if this technology is one in which the goalposts are constantly
moving? Others might begin to wonder, if they have not done so already, in
whose best interests is the company being operated: employees, including of
course directors, clients (i.e. customers) or shareholders?
