THE HANSEN REPORT ON AUTOMOTIVE ELECTRONICS. A Business and Technology Newsletter VOL. 14, NO. 8◆◆ RYE, NH USA OCTOBER 2001 Electrical Drowsy-Driver Warning The National Highway Traffic Safety tects driver alertness. The survey also as- Engineering at Risk Administration is aggressively developing sessed drivers’ comfort level with having a a drowsy-driver detection and warning camera-based monitoring system in their As the Big 3 struggle to make them- system for commercial trucks. That work, vehicles: 18% responded they were “very selves more competitive, some in the in- including forecasting the safety benefits of comfortable;” 49% were “somewhat com- dustry worry that electrical and software drowsy-driving monitors, should be com- fortable.” Another part of the Emerging engineering competence in the United pleted by 2004 and could lead to signifi- Technologies Study gave consumers a list States is in decline, or at least not up to cant adoption of the devices by the of ten possible features (each at a cost of the tasks before it, especially as automo- trucking industry. If drowsy-driver warn- at least $100) that could be included in a tive electronics increases in complexity. ing systems are shown to save lives, reduce hypothetical vehicle personalization and Faced with low profits and higher costs, accidents and reduce injuries, they could monitoring system. The respondents were both GM and Ford shed their in-house significantly move into passenger vehicles asked to select which options they would electronics suppliers: GM got rid of as well. be interested in. A driver-alertness moni- Delphi Automotive Systems, including Consumers are showing interest, ac- tor was the third most popular feature. Delco Electronics, in 1999, and in the cording to J.D. Power and Associates’ (Personalized vehicle settings ranked first, summer of 2000 Ford spun off Visteon. 2001 Wave I Emerging Technologies followed by authorization for entry into GM, Ford and Chrysler are taking addi- Study. That survey revealed a surprising the vehicle.) tional measures to lower costs. They are 66% of new vehicle owners/lessees would Drowsy-driving monitors have been laying off workers, promoting early retire- be “definitely or probably interested” in around at least since the mid-nineties ment (even among seasoned electrical owning a vehicle with a system that de- when a number of Japanese firms made engineers), and they are handing off a their developments public. In 1995, Drowsy-Driving Facts greater share of engineering work to key Nissan road tested a drowsy warning de- suppliers. ◆ According to a National Sleep Foundation vice that monitored the driver’s eye move- Had electrical and electronics systems survey announced in September 2001, ment and frequency of blinking. Nissan remained relatively uncomplicated, one-half of all American adults, also showed a drowsy/inattentive warning carmakers might have found it easier to particularly young males, admitted to system on a concept vehicle at the 2000 operate with limited engineering capabil- driving drowsy in the past year. Tokyo Motor Show. In 1997, Mitsubishi ity. But automotive engineering is getting ◆ In the United States, more than 100,000 Electric was developing a system that kept more difficult, as sophisticated E/E fea- crashes each year are tied to drowsy track of eye closures. Toyota continues to tures are added to vehicles and more soft- driving, says NHTSA (the National research drowsiness monitors, but has ware code is required. Systems integration Highway Traffic Safety Administration). nothing in production today. In Europe in continues, and electronic control units are ◆ NHTSA says that each year roughly 1,550 1995, Renault announced that it had de- becoming more interdependent as they people are killed in drowsy-related veloped a monitor that used an infrared are connected to multiple communica- crashes and 71,000 are injured. camera to keep track of the length of time tions networks. ◆ Drowsy drivers are often unaware of their eyelids are closed. Ben Baker, a top electrical engineer at deteriorating condition. Even when they Honda actually put a ‘Wandering Sens- General Motors, and Tim Donovan, a top are aware, they often keep driving. ing Device’ in some production vehicles electrical engineer with Ford, confirmed ◆ At the National Truck Safety Summit in Japan. Honda’s approach, introduced in that there is a growing trend to have sup- (1995), drowsiness was named the the 1998 Accord as a factory-installed op- pliers do more of the engineering work. number-one truck-driving problem. tion, uses the navigation system’s gyro Explained Mr. Baker: “We [at GM] have ◆ As cited by the Insurance Institute for sensor and speed sensors to detect any ab- tried hard to push a lot of engineering Highway Safety, FMCSA (Federal Motor errant zigzag driving pattern or wandering work down to our first-tier suppliers. That Carrier Safety Administration) estimates between lane markers, assuming such frees us to do more systems integration that fatigue contributes to 15 percent of driving patterns indicate drowsiness or and to work more on strategic technolo- all fatal and nonfatal injury crashes inattention. The driver is alerted by an gies.” Mr. Donovan concurred, “We have involving large trucks. FMCSA is part of audio alarm and a warning on the naviga- maintained technical specialists in-house the U.S. Department of Transportation. tion display. Turn to Engineering, page 8 Turn to Drowsy, page 3 Delphi Performs Poorly Since its spin-off from General Motors, price, $10.59 at day’s end, September 19, merchant market as fast as it will lose in February 1999 when it became a pub- 2001. With 560 million shares outstand- General Motors’ business. licly traded company, Delphi Automotive ing, that put Delphi’s total market value Even Delphi’s Electronics and Mobile Systems Corporation has not performed at just $5.9 billion dollars, only one-fifth Communications sector (formerly Delphi well. In the first half of 2001 Delphi suf- of sales. Delphi’s stock price was $19 when Delco Electronics) is losing market share. fered a net loss of $265 million as sales it was first offered to the public in Febru- While the worldwide demand for automo- declined to $13.5 billion, compared with ary 1999, and it reached a 52-week low of tive electronics grew 6.7% per year be- $15.6 billion in the first half of 2000. $10.50 back in December 2000, well be- tween 1995 and 2000, according to The From 1998 through 2000, Delphi’s annual fore the September 11 World Trade Cen- Freedonia Group, Delphi’s Electronics sales have grown slowly, from $28.5 bil- ter bombing and the subsequent stock sector sales was totally flat. In 2000, the lion in 1998 to $29.1 billion, a 1.2% an- losses. Electronics sector had sales of $5.3 billion nual increase. As of June 30, 2001, net Delphi’s stock price is likely to go down (the same as in 1997) and operating in- liquidity, measured as cash and cash even further. The company has already come of $470 million, down 18.5% from equivalents less total debt was minus $2.7 stated that sales will decline at least by $577 million in 1999. billion. It appears that Delphi will not 10% in 2001. Sales for the year 2002 and To show investors its success in one up- meet its goal of 5% profit margin by 2002. beyond won’t get much better, unless car and-coming market, Delphi has been Last December, Delphi decided it production suddenly takes off. Putting breaking out sales for its Mobile Multime- needed to fix, close or sell businesses that even more pressure on Delphi is the up- dia business from the Electronics sector in 2000 generated $4 billion to $5 billion coming expiration of an agreement with results. Mobile Multimedia develops prod- in sales. As a part of that portfolio review, General Motors that gave Delphi prefer- ucts that bring the Internet, telematics, Delphi is in the process of weeding out ential treatment over its competitors. entertainment and mobile communica- unpromising businesses, which together When that agreement expires on January tions technologies into vehicles. While account for $900 million in sales. Sched- 1, 2002, Delphi will have to bid for GM Mobile Multimedia sales have multiplied uled to be completed by March 31, 2002, business on the same basis as its competi- from $40 million in 1999 to $322 million this restructuring will eliminate 11,500 tors. The playing field will finally be level, in 2000, the business had an operating positions, worldwide. Nine plants, two of and Delphi will have to learn how to loss of $23 million in 2000. In the first- them in the U.S., will be sold, closed or profit even as its business with General half of 2001, Mobile Multimedia had consolidated. (During the period from Motors declines. In 2000, General Motors $213 million in sales, with a $10 million 1992 to the spin-off from GM in 1999, accounted for 71% of Delphi’s sales; GM operating loss. Slow to emerge, the Delphi sold businesses representing over North America accounted for 59% of telematics market isn’t likely to blossom $6 billion in sales.) Delphi’s total sales. It is unlikely that until 2004 or 2005. ◆ Given all the bad news, it’s no wonder Delphi will be able to pick up enough that Delphi’s stock is trading at such a low market share from the more competitive THE HANSEN REPORT ON 3.2 Million VICS Units in Use in Japan AUTOMOTIVE ELECTRONICS Launched in 1996 in Tokyo, VICS (Vehicle tion equipment sold in Japan today is VICS- © 2001 Paul Hansen Associates, 11 Went- Information and Communication Service) compatible, and the free service continues to worth Road, Rye, NH 03870, USA; Tele- now provides real-time traffic information to grow in popularity.