The robotic welding cell was commissioned during a slow period in casting contracts and succeeded in improving cash flow for the factory with a more diverse production portfolio.
Part of the solution: With a flexible facility and workforce, Nissan’s casting plant was able to take on different products, but producing up to 40,000 alloy components will continue to be the biggest chunk of its business.
But with increasing aluminium component work, it was possible the towbar unit could be replaced with more casting machinery.
Speaking to GoAuto during an exclusive factory tour, Nissan Casting Australia Plant (NCAP) managing director Peter Jones said the company was not considering taking on more steel tube and welded component contracts, but the towbar business was safe for now.
“A few years ago we looked at doing this accessories business unit (ABU) and we were doing tube bending for sports bars and towbars and we’ve been very successful with towbars,” he said.
“That’s really where we stop because if you look at the capacity of the plant we are just under 80 per cent and we are going higher in the future.
“The plant is at capacity, the ABU is to offset some of the fixed costs of the plant and, in terms of the towbar production, that’s been really good for us. But outside that, no.”
With a recent contract to produce six new components for secret electrified vehicles under its belt, the company has invested just shy of $12 million in casting machinery upgrades and Mr Jones explained that further expansions would be unfeasibly costly for now.
“For us to take that next step means to invest millions of dollars in the infrastructure before you make the investment in the dies and tooling. At the moment our focus is on getting as close to 100 per cent utilisation,” he said.
“There’s ways to grow capacity without growing machines.”
One growth method has been to occasionally extend the three-shift, six-day production roster into Sunday manufacturing as well, but Mr Jones explained this would not be a permanent solution as it does not allow for essential maintenance work.
Another strategy has been to introduce two and three cavity dies, which are far more challenging to design and implement but double or triple productivity per casting shot.
With the new business securing aluminium alloy component business into the next decade, the going is good for NCAP, but Mr Jones explained that shifting economies still pose challenges for Australian production.
“The strong dollar has had an impact on us but some of these parts we do for Pathfinder get sent to the US,” he said. “From the time we started that the Australian dollar was $1.10; it’s now 70 something. It’s swings and roundabouts.”
While swinging currencies require constant monitoring, Mr Jones said changes at the other end of the business naturally balance the books to an extent.
NCAP Gallery – Click to enlarge
“Our parts are relatively cheap at the moment and when the dollar goes up that’s a problem, but the fact of the matter is it means we can buy aluminium cheap,” he said.
“When we do our pricing, we do a number of adjustments each quarter for the exchange rate and the cost of aluminium. It is a fluid number but we adjust to that.”
Establishing the business case at the start of a completely new product project is the biggest challenge, but the risks are somewhat mitigated by NCAP’s ability to produce parts most other global suppliers cannot, according to Mr Jones.
“When we are quoting parts, we don’t know (future changes) and that’s where it is more difficult,” he said.
“With the contracts that we have secured, we are the only place that can make it so that makes it a bit more secure.”
Australian manufacturing continues to teeter but NCAP remains viable thanks to a combination of high-quality production processes, a culture of continuous improvement and diverse manufacturing flexibility, but a buffer is provided by some government support, said Mr Jones.
“We enjoy some government subsidies but our aim was always to be better than break-even net of government subsidy. It is a big issue in Australia – the cost of doing business – and yet everything we make here is exported and everything we make, we are in a competitive tender process with others,” he said.
“You can’t rely on those because government subsidies aren’t going to be around post 2018, so you have to be planning for the future.”
By Daniel Gardner
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