Delphi's president speaks out
Frank Ordonez is the president of Delphi Product and Service Solutions.
How has the foray into the collision repair industry been for Delphi?
You want to talk about trailblazing. Getting airbags into the aftermarket has been nothing short of a miracle. We've had to work with all the insurance companies. We had to prove to them that we are the OE company, that's the OE airbag. We're still in the process of doing all of that. Most of the time when you need an airbag you're in a vehicle collision situation, It's just another component, really. People ask, "Am I really qualified to do that?" If you're qualified to splice a wire, connect it to the steering wheel, put four screws on it, and put a cover on it, you're pretty qualified to do that, yes. The SDM will tell you if there is something wrong with the system after you install it anyway, because it checks itself. It's so lucrative what the dealers are charging. We can still get to the market way below the dealer.
Were there a lot of regulatory hurdles to go through to develop the new airbags?
It was primarily the insurance companies, and we had to prove to them that we are the OE (manufacturer). Part of the problem as you know in the steering wheel, the cover typically has the logo of the vehicle and the airbag tears through the cover to protect you. We had to redo the cover without the logo of the vehicle. We're not allowed to sell the G-M logo. We had to run tests on the sled to show them it's the same thing. It's taken the better part of a year. We actually had the airbag contract won last year.
We've discussed the advent of diesel technology for quite a few years now. What's Delphi's role?
We've had diesel operation for 10 years. But we've had diesel in the U.S. The only thing that was preventing us from bringing diesel to the more traditional aftermarket was our own paradigm. We never thought about it.
Is there still a perception problem with American drivers as it pertains to diesel?
I could take two Mercedes and put them side-by-side and ask you, "Which one is the diesel?" and you wouldn't be able to tell, especially if it's the Delphi system. It is so up the alley of the American consumer to have a diesel. We like big trucks. We like SUVs. We like all of that stuff. And the way the U.S. government measures miles per gallon in the highway and the city is in a controlled environment, not in the real world. The American driver doesn't drive 60 mph, they drive 70, and that extra 10 miles doesn't get accounted for in the mpg that you get in the sticker. In a diesel engine, that's when the diesel engine is at its best in terms of efficiency. I really believe you're going to see the diesel take off. We also have to recognize diesel is a premium gas, it's a dollar premium. In Europe, typically, there's not been a premium because the government in Europe actually taxes the gasoline higher to subsidize the diesel and encourage the use of diesel. It does take a little more, I guess, to refine diesel. Even with the higher price of the engine itself, the economy you're going to get versus the gas engine is still a pretty strong payback, especially at $4 or $5 a gallon. So that's why we think the diesel is going to get big here.
