A Few Words With John Waraniak

Waraniak’s resume began in an aerospace off-the-grid hangar where some of the industry’s most brilliant renegades got their start, including Alan Mulally, CEO of Ford Motor Company. But it also encompasses a range of industries where his innate curiosity and knack for systems thinking and vehicle technology made him one of the most respected executives in the automotive world—and well beyond. Waraniak is equally at home in an aerospace skunkworks in Pico Rivera, California, a boardroom in Mumbai, India, on a motocross track in Buchanan, Michigan, or on the Vehicle Technology Center stage at the SEMA Show in Las Vegas.

As part of our annual look at where automotive technology currently stands and where it is heading, SEMA News again engaged in a wide-ranging conversation with Waraniak, delving deeper into the impact of technology on SEMA members’ companies and the four megatrends central to the future of the automotive performance aftermarket: Driving Green, Driving Connected, Driving Safe and Driving Cool.

SEMA News: Technology constantly creates changes to automobiles and, consequently, to automotive aftermarket businesses. What should SEMA members understand about the disruptive nature of technology and how to protect their businesses in the face of technological changes?

John Waraniak: Technology is disruptive by design. A disruptive technology is one that helps create a new market and value chain and eventually displaces an existing or established technology. Disruptive technologies drive innovation, and innovation drives growth. Innovation and growth for SEMA members don’t lie in disrupting large, over-served mass markets but in finding ways to provide products and services that meet the wants and unarticulated needs of under-served emerging markets for automotive and performance enthusiasts.

Disruptive technologies are not necessarily disruptive to customers, and they are often difficult for companies to recognize or acknowledge. Even if a disruptive technology or innovation is recognized, most businesses often ignore it, deny it or discount its impact because it threatens their existing technological expertise and understanding. Disruptive technologies are integral to both the relevance and the future of SEMA and the performance aftermarket. To ignore their impact is a fundamental mistake.

Disruptive technologies are not a new phenomenon. They have been around since the beginning of the industry. Cadillac introduced the first starter in 1912; Oldsmobile introduced the first automatic transmission in 1939; Chrysler offered the first production power steering system in 1951 and antilock brakes in 1970. Each of those disrupted what had been in place previously, and the list goes on with fuel injection and many other body, chassis, powertrain, interior and electrical system technologies.

Today, we have voice-activated infotainment, electronic stability control, drive-by-wire, Internet radio and cars that tweet. Just last year, Google introduced a fleet of autonomous vehicles, one of which drove itself from Carson, Nevada, to the SEMA Show and parked itself in the Vehicle Technology Center! And Neil Young is integrating many of the latest self-driving technologies into his ‘59 Lincvolt, which was introduced at the 2010 SEMA Show.

Disruptive technologies don’t totally eliminate existing technologies, but they do often eliminate businesses and companies. Television did not eliminate radio; automobiles and planes did not eliminate trains; the Internet has not eliminated print media. But many companies that failed to acknowledge the impact of these disruptive technologies on their businesses no longer exist. Kodak is a contemporary example of a company whose core competency was chemical photography. It ignored and failed to future-proof its business by understanding the impact of digital-photography technology on its future.

	Disruptive technologies don’t totally eliminate existing technologies, but they do often eliminate businesses and companies.

“Future-proofing” is the process of anticipating emerging and future technology developments in order to mitigate potential negative consequences and leverage new opportunities for your business. Creating a technology roadmap is one of the best tools SEMA companies can use to help them future-proof their businesses.

Many companies, organizations and associations create strategic business plans; however, relatively few create technology roadmaps to assess the impact of technology on their future. In today’s hyper-competitive performance aftermarket, you need both a strategic business plan and a technology roadmap. A technology roadmap is a plan that aligns your short-term and long-term business objectives with specific technology developments, innovations, applications and solutions to help you achieve your strategic, tactical and operational goals.

Developing a technology roadmap for your business has two major benefits: It helps you develop a common understanding about a set of goals and the technologies impacting those goals, and it provides a framework to help you link those
technologies to your products and markets and create your preferred future.

Brian Smith, vice president of marketing at Lexus, participated on our panel entitled “The Future of Performance and Customization” at the 2011 SEMA Show and introduced an excellent series of videos that sum up technology disruption and how Lexus is future-proofing its business. SEMA News readers can view the videos at http://www.lexus.com/Engineering_Amazing/?A-Future-Proof-Approach.

Last year, Google introduced a fleet of autonomous vehicles. This one drove itself from Carson, Nevada, to the SEMA Show and parked itself in the Vehicle Technology Center!

SN: SEMA has been working with the Clemson University International Center for Automotive Research (CU-ICAR) on advanced-vehicle technology and a performance aftermarket education program. What are the latest developments in vehicle dynamics and the Clemson partnership with SEMA?

JW: SEMA’s partnership with CU-ICAR is an excellent example of the association’s innovative approach to vehicle technology and generative thinking. SEMA and CU-ICAR teamed up three years ago to offer SEMA members special access to world-class resources and engineering talent. SEMA held its quarterly Board of Directors meeting last November at Clemson in Greenville, South Carolina, to help communicate the benefits, resources and opportunities available to members. For many, it was a step into the future and a better understanding of the technologies driving the automotive industry. It also included an interactive discussion on how SEMA companies can help future-proof their businesses.

September 1, 2011, marked the date when the U.S. National Highway Traffic Safety Administration (NHTSA) issued Federal Motor Vehicle Safety Standard (FMVSS) 126, which requires all motor vehicles with a gross vehicle weight of 10,000 pounds or less to have an electronic stability control (ESC) system that complies with specific design, performance and diagnostic requirements. Original-equipment manufacturers must now have ESC as standard equipment on all applicable vehicles. Thanks to the efforts of SEMA, the aftermarket was granted a one-year exemption, and the regulation for aftermarket companies goes into effect on September 1, 2012.

ESC monitors vehicle motion. When loss of driver control is imminent, ESC strategically applies the brakes to help stabilize the vehicle. Similar requirements for the rest of the global automotive community are contained in the United Nations Economic Commission for Europe 13H regulations. While performance purists may not want ESC on their vehicles, I think they welcome the technology for their families and the distracted drivers on America’s roads.

SEMA’s Vehicle Dynamics Program and member companies have made great strides in understanding how performance products such as suspension, brakes, wheels, tires and steering as well as engine modifications may interact with ESC systems. As part of our comprehensive effort over the past five years, members were invited to attend the Vehicle Dynamics Forum presentations, demonstrations and solutions regarding FMVSS 126 and the ESC performance of aftermarket-modified vehicles at the SEMA Show. The hardware-in-the-loop technology available to members is the same as that used by all OEMs and major suppliers around the world to develop, test and simulate vehicle dynamics, new chassis system components, engines, powertrains, drivelines, suspensions and vehicle electronic control systems.

The collaborative approach developed by SEMA has minimized cost while establishing unique capabilities for members that are interested in evaluating the impact of their products on vehicle dynamics and ESC performance. ProComp, Superlift, Hellwig, Tenneco and Eibach as well as Ford Motor Company have participated in this effort, while SEMA technology partners such as dSPACE, Mechanical Simulation, Morse Measurements, Link Engineering and Clemson have provided their expertise and equipment to the program. The SEMA Vehicle Dynamics Program continues to expand with several new members beginning in the spring of 2012.

SN: Ever-increasing vehicle complexity is obviously a concern to SEMA members, not only as it applies to the development of original-equipment systems within vehicles but also in how the carmakers permit or limit aftermarket participation and innovation with those systems. What should members know about the newest systems?

JW: Disruptive technologies are driving automakers and aftermarket companies to new levels of collaboration and profitability—particularly in the area of integrating consumer and automotive electronics. Growth and innovation are all about connecting vehicles to consumer’s lifestyles, brands and experiences through vehicle performance, connectivity, dynamics and personalization.

Technology and open innovation are central to profitable growth. When combined with what I call the Aftermarket X-Factor and collaborative business, revenue and organizational models, they are rapidly democratizing traditional product, service, marketing and branding strategies. Together, these technologies, collaborative practices and megatrends have the power to make, move and reshape markets and are leading the automotive industry to one of the most exciting times in history for both OEM and aftermarket industry players.

The Technical Briefing Seminars program provides SEMA members with in-depth information and networking opportunities with leading industry experts. Speakers at the sessions held during the 2011 SEMA Show included Paul Mascarenas, chief technical officer and vice president for Ford research and innovation.

SN: The Vehicle Technology Center (VTC) was introduced at the 2011 SEMA Show and included seven Technology Briefing Seminars (TBS) with 55 leading industry experts as well as a host of interactive displays, vehicles and exhibits to help attendees understand emerging automotive technologies. What have you got in store for the SEMA Show this year?

JW: The VTC and the continued expansion of our TBS program are great examples of SEMA’s commitment to member education. The VTC was located in the upper South Hall in the Las Vegas Convention Center last year. The purpose of the VTC and the TBS program is to educate SEMA members and to introduce them to the programs, tools, resources, partners, solutions and benefits available to them at affordable costs.

The association’s vehicle technology programs and initiatives are an investment in SEMA’s collective future. The VTC and its four tech zones focused on vehicle performance, dynamics, connectivity and personalization and were designed to be relevant to today’s enthusiasts as well as to appeal to tomorrow’s next generation of performance and technology enthusiasts by bringing greater focus to current and emerging aftermarket opportunities.

The TBS program provides members with in-depth information, hands-on and networking opportunities with leading industry experts to help them understand the impact on their businesses today as well as to prepare them with the knowledge and information to leverage tomorrow’s technologies and business opportunities.

Last year’s speakers included Paul Mascarenas, Jim Campbell and Brian Smith from the OEMs; Beau Boeckmann, Chip Foose, Myles Kovacs, Tony Vanillo, Melanie White and Wilfried Eibach from the SEMA community; nonendemic leaders such as Anthony Levandowski from Google, Justyn Amstutz from NPA, Roland Sands from Roland Sands Designs and Alex Striler from XplayNation. This year’s roster of speakers will be equally impressive and will include an even wider range and depth of speakers representing a who’s who in the performance aftermarket as well as experts in the technologies, trends and opportunities that are driving the automotive specialty-equipment industry. Members can view videos of Paul Mascarenas’ keynote address and the performance branding panel session at the SEMA website’s vehicle technology landing page (www.SEMA.org/vehicletechnology).

The VTC and TBS program this year will focus on the impact of advanced vehicle technologies on the aftermarket, the future of performance and customization, brand democracy, youth sourcing and marketing to enthusiasts, design and social thinking. We’ll also focus on designing for customization, vehicle dynamics of aftermarket-modified vehicles, connected-vehicle technologies and a new race series, Global RallyCross.

	“Future-proofing” is the process of anticipating emerging and future technology developments in order to mitigate potential negative consequences and leverage new opportunities for your business.

The center’s exhibit space will highlight SEMA-developed solutions, SEMA’s technology partners, simulations, demonstrations and workshops throughout the week. This year’s VTC will include one of SEMA’s newest partners, A2Mac1, the worlds’ leader in vehicle benchmarking information, data and services, and members will be encouraged to meet with SEMA’s partners and network with session speakers.

SEMA is developing a pilot program with A2Mac1 to help support our members with vehicle benchmarking data and information for product development, installation, service, customization and marketing. A2mac1 is the leader in providing benchmarking services to the automotive industry. It is an independent, family-owned company with a team of 100 staff based in France, Detroit and Shanghai.

A2Mac1 supports nearly every OEM and more than 50 suppliers in their benchmarking needs. The company’s portfolio of services includes auto-show coverage, vehicle teardown, 2D, 3D, body-in-white and special studies. By working jointly with OEMs and suppliers, A2mac1 has the potential to add significant value and benefits to our vehicle technology, Tech Transfer and Measuring Session programs.

Hellwig, ProComp, Superlift, Tenneco, Eibach and Ford Motor Company have worked with SEMA in a collaborative approach to establishing the capability for members to evaluate the impact of their products on vehicle dynamics and electronic stability control systems.

SN: Musclecars have made a dramatic resurgence over the past few years. Describe some of the technologies that are going into performance vehicles that also make them environmentally and economically cutting edge while increasing the Driving Cool factor.

JW: The musclecar and performance vehicle market segments are alive and well. Jim Campbell, General Motors vice president of performance vehicles and motorsports, invited me to a special preview where he introduced the new Hot Wheels Camaro and Chevy’s new Central Office Production Order (COPO) crate engines, and he elaborated on the ZL1 and new technologies at the SEMA Show.

The COPO nameplate pays homage to the iconic high-powered 1969 Camaros created back in the day through a loophole in Chevy’s special-order program. The ZL1 Camaro features a supercharged, intercooled 6.2-liter V8 engine with an estimated 580 horsepower and 556 pounds-feet of torque, a six-speed manual transmission, a dual-plate clutch, active suspension, 20-inch tires with aluminum wheels and 14-inch brakes. The ZL1 is expected to be available this month. Campbell was quick to point out that 60% of the 50 new Chevys featured at the SEMA Show were Sonics and Cruzes and represent the company’s emphasis on making small cars cool with personalization and performance upgrades.

Jamie Allison, Ford’s director of racing for North America, and Darrell Behmer, designer of the 2012 Ford Mustang Boss 302, also provided a very interesting presentation at our Technology Briefing Session at the Show. The Boss 302 comes with two keys. Ford’s Track Key technology is an innovative solution and excellent example of the technologies powering today’s performance vehicles.

Track Key adds powertrain control software and gives the car full race calibration and two-stage launch control without negatively affecting the warranty. The software is installed after the car is purchased and is accessed through a separate key. Use the black key, and you get typical street performance from the 444-horsepower Boss. Use the red key, and the track programming takes over. Switch back to the black key, and the car goes back to street mode.

The idea is that weekend racers can simply use a key to switch up the car’s performance, using the black key to get to and from the track and using the red key during track time. There are over 200 engine parameters that can be adjusted, including spark maps and engine braking. Ford created a dual-patch powertrain control module to avoid the complexity and cost issues with using two powertrain control modules. This is a truly innovative approach to performance, and I wouldn’t be surprised to see SEMA tuners developing similar solutions and products.

Ford also announced that enthusiasts who think that the 2.0-liter engine from the 2012 Ford Focus would be a fine fit for their project vehicles will be able to buy one from Ford Racing’s crate-engine program. While the need for speed is not going away any time soon, horsepower is competing with the computing power of today’s vehicles. Your future-proofing strategy and technology plan depends on the market segment your company is focused on.

According to Deloitte’s recent study of young car buyers, Gen-Y—the 80 million people born in the U.S. from 1980 to the early 1990s—prefers vehicles packed with safety and connectivity technology. On the other end of the demographic spectrum, performance often trumps connectivity for many Baby Boomers born between 1946 and 1964. I often tell companies that if it’s too connected, you’re too old. By old I
do not mean age; I mean your world view of technology and your perspectives on optimization.

Friends and family influence over 60% of young people’s brand and technology decisions. Earned media is quickly replacing paid media as the top driver of youth consumer behavior. Almost nine of 10 Gen-Y consumers surveyed say that fuel efficiency is a key factor in choosing a vehicle. Half of them say that they are willing to pay an additional $300 per vehicle for each one mile per gallon of improvement.

Onboard, instrument-panel technology is the most important element of a vehicle interior for 59% of Gen-Y buyers. Nearly three-quarters prefer touch screens, and nearly as many rate smartphone applications as highly desirable. Most young buyers also want to be able to customize their vehicle interiors with accessories and upgrades after purchase. Deloitte says they are willing to spend an average of $3,000 on vehicle hardware for connectivity, and they would pay an average of $2,000 per vehicle for safety systems such as collision avoidance, blind-spot detection and sleep alerts to offset the dangers of driver distraction.

Following and integrating with Gen-Y, there is also a cohort called Generation-O by my friend Graham Brown, principal of mobileYouth and author of All is Social. This is the generation of 10- to 29-year-olds known as optimizers. Gen-O will be the generation that shows the industry the way forward in how new technologies, apps and products will be used to optimize the customer experience.

The Hot Wheels Camaro is one of several Chevrolet projects that include Chevy’s new Central Office Production Order (COPO) crate engines as well as new technologies that General Motors Vice President of Performance Vehicles and Motorsports Jim Campbell spoke about during the SEMA Show.

SN: Connected-vehicle technologies are providing drivers with increased navigation, safety and infotainment options but also need to balance consumer demand with the risks of distracted driving. What is the latest in the Driving Connected megatrend and OnStar’s FMV aftermarket program?

JW: Cars aren’t smartphones on wheels yet, but they will be soon. More than 100 million people in the U.S. have smartphones and want their phones to work with the head unit in their vehicles. Alan Mulally, Ford Motor Company CEO, recently stated that, “The car is a mobile application. If you want to be connected, use your own smartphone in the car, have it voice-activated, hands on the wheel and eyes on the road—that’s the Ford strategy.”

Mulally was one of the first auto industry executives to recognize the disruptive technologies and new business opportunities of connected vehicles and the importance of connectivity to car buyers. Ford is doubling the infotainment applications available on Ford vehicles to 14, including applications with National Public Radio, an online coupon vendor called Roximity and a custom Internet radio service called Slacker.

Applications, or apps, are programs that operate web and Cloud services such as iTunes. The technology and ability for companies to send apps and software updates to vehicles by satellite or over the Internet allows automakers and aftermarket companies to greatly reduce the complexity of onboard vehicle systems. Taking the complex technology out of built-in embedded vehicle systems and putting it in the Cloud not only reduces complexity but also accelerates the adoption and commercialization of brought-in and beamed-in services and products provided by aftermarket
companies.

Ford is not alone with SYNC AppLink in recognizing the potential of connected-vehicle technologies and telematics opportunities for navigation, infotainment, diagnostics, maintenance, crash notification and many other features and conveniences demanded by consumers. Mercedes has mbrace2; Chrysler has Uconnect; Kia has UVO; Hyundai has Blue Link; Toyota and Lexus have Entune and Enform, respectively; and the industry’s first connected-vehicle technology—now in its ninth generation—was GM’s OnStar.

OnStar is offering its safety, security and connectivity services for non-GM and older GM vehicles already on the road through the aftermarket. A standalone rearview mirror known as FMV (For My Vehicle) packs all of OnStar’s core technology and is now available through consumer electronics and automotive aftermarket retailers. OnStar FMV offers key features, including automatic crash response, turn-by-turn navigation, stolen-vehicle location assistance, one-button access to emergency and roadside services, and hands-free calling, including Bluetooth connectivity.

	Gen-O will be the generation that shows the industry the way forward in how new technologies, apps and products will be used to optimize the customer experience.

All of these services are available directly through the OnStar mirror without requiring the driver to bring along a mobile phone or even own a mobile phone. In the event of an accident, emergency services are alerted even if there is no mobile phone in the vehicle, the phone is damaged in a crash or the driver is unable to use a phone.

OnStar FMV is currently certified to work on more than 90 million of the 100 best-selling non-GM vehicles sold over the last 10 years, which equates to more than 75 models. OnStar expects to certify additional models in the months ahead and is giving selected app developers access to its application-programming interface for OnStar products and vehicles. Nick Pudar, OnStar’s vice president of business development, will present the latest aftermarket strategies for in-car mobile apps at the SEMA Show this year.

Distracted driving is obviously a major concern. Automakers want to build vehicles that can download apps, games, music and movies from a smartphone to a car’s entertainment system. But for every potential distraction automakers and aftermarket companies add, they find themselves having to build in ways to prevent drivers from crashing their new smartphone on wheels—automatically applying the brakes at a traffic light; alerting drivers when a car is in a blind spot; or reading traffic signs and slowing a car as speed zones change.

“We can’t stop the prolific growth of consumer technology,” said Paul Mascarenas, chief technical officer at Ford. “We can’t stop people bringing phones in their cars. We endeavor to make sure people do it in the safest way possible.”

Track Key adds powertrain control software to the 2012 Ford Boss 302 Mustang, giving the car full race calibration and two-stage launch control without negatively affecting the warranty. The black key provides typical street performance tuning, and the red key switches to on-track programming.

By 2014, 70% of all consumer devices will be connected to the Internet, and many consumers want to extend their digital lifestyles into their vehicles. Voice activation, gesture recognition and other technologies to mitigate distractions are already in or on their way into the latest vehicles. Apple’s iPhone Siri assistance function will certainly raise consumer expectations for voice-controlled user interaction with apps.

Many automakers offering in-vehicle technologies already use voice-based interfaces, but Apple’s approach goes beyond voice recognition to enable app interaction and task completion, such as “make appointment at noon.” It will be a natural fit for navigation apps, enabling the user to verbally update routes or check road conditions by voice rather than by touching a screen or device.

One of the latest technologies is being introduced by Delphi. It uses a camera to track the orientation of your face. Take your eyes off the road for more than two seconds, and a yellow light flashes in the heads-up display, drawing your attention back to the road. Keep your eyes off the road for five seconds, and your smartphone screen dims.

Connected-vehicle technologies have the potential to avoid up to 80% of crash scenarios. David Strickland, head of NHTSA, recently said that federal safety regulators will decide next year whether to begin making rules governing technology that enables vehicles to electronically avoid collisions. NHTSA is completing several pilot studies, some of which included Denso’s aftermarket safety device presented at last year’s SEMA Show, to provide enough data to decide whether the government should mandate communication technology in cars. NHTSA also recently issued a set of voluntary guidelines for automakers to disable applications that allow drivers to manually access social media, surf the web or send text messages while on the road. The recommendations urge that OEMs seek to prevent any in-car technologies that require drivers to use both hands or take their eyes off the road for more than two seconds.

There are 250 million vehicles on the road in the United States today, and OEMs sell only 14 to 15 million new vehicles a year. At that rate, it will take decades to get to a critical mass of new cars that can talk to one another to achieve the vehicle-to-vehicle (V2V) communications network effect. But we could reach critical mass years sooner while simultaneously increasing sales for aftermarket manufacturers, retailers and installers by adding V2V communication capability through personal navigation devices, specialized aftermarket devices and smartphones—which is the Aftermarket X-Factor.

SN: How are social media affecting—or being affected by—advanced automotive technologies? What is the difference between “design thinking” and “social thinking”?

JW: Design thinking is focused on product content, problem solving and logic. It is a top-down, focus-group, expert-driven product development process that gives you things like a cleverly designed vacuum cleaner. Social thinking is quite the opposite and is focused on product context, benefit optimization and emotion. It is a bottom-up, frontline, crowd-driven innovation process that gives you things like Facebook.

	Growth and innovation are all about connecting vehicles to consumer’s lifestyles, brands and experiences through vehicle performance, connectivity, dynamics and personalization.

Design and social thinking both matter. They are critical to your success and how you think about technology and its impact on your business. As part of our Technology Briefing Seminar program this year, Graham Brown, the author of All is Social whom I mentioned earlier, will present and discuss the latest trends in brand democracy, youth sourcing and frontline social and design thinking as well as help members understand how disruptive and democratized technologies and consumer expectations are impacting the platforms, systems and perceptions of vehicles today and in the future.

Advanced vehicle technologies combined with social media have democratized traditional design, marketing and branding models. Disruptive technologies have the power to make, move and reshape markets and have led the auto industry to one of the most exciting times in history for consumers, endemic and new aftermarket industry players.

Performance branding isn’t about choices in media but choices in mindset. Brand management is old school. The future of performance branding, brand democracy, designing for customization, youth sourcing and social networking is all about connecting vehicles to consumer’s lifestyles, brands and experiences. From vehicle dynamics and performance accessories to smartphone applications that interact with consumer vehicles and onboard technologies, successful designing and marketing to automotive enthusiasts today requires strategies that make customers part of your brand through design, movements, storytelling and advocacy.

Your company’s ability to deliver a superior, personalized customer experience will set you apart from your competitors, inspire fans and advocates and drive spending on your products or services. Customers buy your stuff but, more importantly, they buy what your stuff does for them. You need to sell the benefits of your products and services to your fans and enthusiasts.

	Disruptive technologies are integral to both the relevance and the future of SEMA and the performance aftermarket. To ignore their impact is a fundamental mistake.

Enthusiasts and fans are 10 times more influential than mainstream customers. Youth sourcing taps beachheads of enthusiasts and fans with ideas and empowers designers and marketers with powerful insights and frontline context. Leading companies think of their products as the content, and they think of the design, marketing, branding and social packaging as the context. Your product content is certainly important, but your brand context is central to your success. Apple and Google are excellent examples of companies that effectively think of their products as content and their social packaging as context.

SN: Of all the ideas and insights we’ve discussed here, what are the one or two most essential takeaways that SEMA members should keep on top of? How is SEMA helping them to increase their awareness and take advantage of emerging and disruptive technologies?

JW: Never stop questioning and learning. Go to the Gemba—the place where value is created. There is an old Chinese proverb that says the best time to plant a tree is 20 years ago; the second best time is today.

OnStar is offering its safety, security and connectivity services for non-GM and older GM vehicles already on the road through the aftermarket. The standalone OnStar FMV rearview mirror packs all of the core technology and is now available through consumer electronics and automotive aftermarket retailers.

When I was head of motorsports program management at GM Racing, I had the very fortunate opportunity to work with the late quality guru, W. Edwards Deming. Dr. Deming told me something very profound that I have always remembered. He said: When the student is ready, the teacher will come. His point was that learning is not compulsory, but neither is survival.

SEMA’s vehicle technology programs and partnerships are designed to provide members with relevant information, knowledge and solutions to help them compete today and prepare for tomorrow. The SEMA Vehicle Technology Center provides members with valuable resources, and the association’s Technology Briefing Seminars are must-attend education sessions for serious technology enthusiasts and performance professionals committed to developing technology roadmaps and business plans focused on future-proofing their survival and growth.

The automotive specialty-equipment industry has been and will always be challenged by complex vehicle technologies, federal regulations, systems integration and safety considerations. SEMA is continually working to provide unique benefits and value to members by developing vehicle technology solutions and building relationships that foster collaboration between automakers, suppliers, retailers, research organizations, industry associations and member companies.

It may be tough, but the grid is set for the next few years to be podium years for many specialty-equipment companies. The question is, are you prepared to win? Like many of the successful racers I have known, you have to ask yourself if you have done everything you can do to future-proof your success and give your company the best possible chance of winning. Do you have a technology roadmap? Does your organization understand the impact of emerging technologies on your core competencies, future product development plans and new business opportunities?

Clint Eastwood provided excellent insight and great advice to those SEMA members committed to facing the challenges and leveraging the opportunities of disruptive technologies. In the gritty “It’s Halftime in America” commercial that Chrysler aired during the Super Bowl, Eastwood essentially said that if you can’t find a way through tough times, make one.

For additional information, please contact John Waraniak at 248-363-5313 or johnw@sema.org. A comprehensive list of advanced and disruptive vehicle technologies, along with their descriptions, can be found at the SEMA Vehicle Technology website: www.SEMA.org/vehicletechnology.

The move to less toxic, water-based finishes is already well under way elsewhere. Waterborne paints are currently in extensive use in Europe and Canada, and many OEMs now use water-based paints on their newest products. Paint manufacturers are also moving quickly to develop low-VOC primers and clear-coat products in addition to the color coats available now.

In high-smog states like California, regulations requiring low-VOC technologies have been in place for years, and now other states are following suit. To find out what these requirements will mean as low-VOC requirements spread across the country, SEMA News contacted a variety of stakeholders in the paint industry. We specifically sought information about the newest technology as it stands today and what it will mean to companies that paint.

The consensus among the people we talked to is that the transition to waterborne finish products may not be as difficult or as costly as some first supposed. In fact, the changeover may bring with it a number of advantages.

Paint Formula Advancements

An entirely new paint booth, such as this one on display at the SEMA Show, would not likely be required to make the transition to waterborne paint. However, an ample supply of clean air is an upgrade most production body shops choose to make in order to shorten drying time.

One of the biggest areas of activity is at the paint manufacturer level, where the transition to waterborne paint has prompted paint companies to develop new products from scratch. Some are now releasing second- and third-generation water-based paints.

“We’ve been doing waterborne for quite a long time; CroMax Pro is our third-generation waterborne product,” said Harry Christman, brand manager for DuPont Refinish. “This is a product that has a brand-new technology.”

The newest waterborne paint from DuPont is a good example of the kinds of paints the industry will need to come up with to help shops achieve low-VOC requirements. It’s formulated with 88% less solvent but 25% more pigment. The result is a product that offers advantages but also requires re-educating painters.

“Most other waterborne products went in the direction of trying to create a waterborne paint that was like solvent-based paint,” Christman explained. “Solvent is the old technology, and painters tend to dislike change. So many paint companies, when they created their waterborne paint, said ‘we’re going to make them like solvent.’ We went a different direction.

“It’s a higher solids product, so it’s got more of the stuff that gets left behind when the water evaporates off. It’s a one-and-a-half coat, wet-on-wet process. Rather than having to lay down a coat of paint, let it flash, then lay down another one, let it flash—and, depending on what you’re working with, lay down four, five, six coats—with Cromax Pro, you cover in one and a half coats. And anything that doesn’t cover in one and a half coats covers in two coats. So you go in, put on the first coat, go right back and put on your mist coat, your ‘effect’ coat, which is half a coat. Then you’re done. You can put the gun away; leave the booth. It will dry, and then you can clear coat it.”

Next-generation waterborne paints such as the DuPont product shown here are now becoming available to the industry. Formulated with much less solvent but more pigment, this third-generation paint is designed to cover completely in one to two coats using a fast, wet-on-wet application process.

The newest DuPont paint costs a little more per gallon but offers the advantages of speed and better coverage, making it less costly to use. According to Christman, painters can reap benefits once they understand the process.

“It’s much faster, which high-volume direct repair program shops love, and you use less material,” said Christman. “So it’s great not only for reducing the cost, but because it speeds cars through the shop, it increases the capacity of the body shop. They can sell more jobs and create more revenue.”

Conversion Equipment Requirements

In California, most shops have already converted to waterborne paint. In other states, many paint shops have put off the transition, in part because of cost concerns.

“It’s a myth that you’ve got to buy all kinds of new equipment and put in new spray booths to convert,” Christman noted. “The truth is, they’re going to need a new gun—a stainless-steel gun, because you don’t want rust in your spray gun.”

In addition to a new paint gun, waterborne paint does like to have large volumes of clean air to enhance drying.

“For water, the key to drying is air flow—getting air to move across the surface of the car to make it dry,” Christman said. “However, the car will also dry without great air flow; it just will take longer. So if you’re a production shop that’s trying to move cars through, you’re going to want to put in blowers to get a lot of air movement to get the cars to dry super-fast. But if you’re a custom shop or a smaller shop that doesn’t have cars stacked up outside and you want to put in a small box fan to get a little air movement, that’s all it takes. The difference will be, maybe, instead of drying in 10 minutes, you’ll dry in 30 minutes. For a production shop, that’s a big deal. For a custom shop, probably not to them.”

To add another voice to the conversion, we talked to Douglas Albin of Bodyworks Collision Center in Murietta, California. His shop, which grosses about $250,000 a month, has been using waterborne paint for about five years.

“I converted before it was mandatory,” he said. “I wanted to be ahead of the curve.”

After a period of experimentation, Albin has adjusted his process to make the most of waterborne technology, and he noted some differences.

“With water-based versus solvent, it’s a lot more forgiving,” he said. “Your blending techniques are a little bit easier. It’s not as susceptible to contamination, dirt. We also had to fine-tune our prepping—we had to have a cleaner job, a tighter wrap.”

Even though waterborne paint is less toxic and offers easier disposal and cleanup, painters will still want to use a fresh-air system, gloves and a spray suit, because paint is still a chemical.

Initially, Albin was using a waterborne paint from his long-time supplier. And he stuck to a process that required multiple coats.

“When water-based paint came and we made the change, I was only getting through two to three cars a day with a $100,000 full-downdraft, 30-foot booth with mixing room,” he explained. “Then I noticed a big difference in the actual manufacturers of the paint. When I first made the transition, I was literally putting on five and six coats and waiting 20 minutes between coats for it to completely flash. Now I paint 12 cars a day, without a $15,000 retrofitted jet dry system. So we mastered it really quick,” said Albin, who now uses DuPont Cromax Pro. “The major expense was training.”

“Painters are going to have to be completely retrained. A lot of them struggled with it. So we really had to go in and retrain them, but once they’re trained, they will never want to go back to the old paint system.”

The Don Ayres Honda Collision Center, located in the area of Fort Wayne, Indiana, is another top-tier production body shop that recently switched to waterborne and does about $2 million a year in total sales. Manager Kevin Cox agreed that painters will need to get used to the new paint technology.

“Painters need to learn a little different technique,” he said. “Both my painters spent two and a half days at a DuPont training center. And then Dupont was in here for one full week after with both of them. But the transitions that the industry went through in the days of lacquer, then to acrylic enamels, then to base coat/clear coat—this transition from solvent to water is a baby step compared to the days of spraying lacquer.”

Waterborne paint requires a spray gun with stainless-steel parts, which means most shops will want a new gun for each painter. Suitable spray guns are widely available; companies such as Optima, Eastwood and Iwata all had newly designed stainless-steel guns on display at the SEMA Show in 2011. This gun, introduced at the Show by SATA Spray Equipment, is a special-edition SATAjet 4000 B.

Cox decided to make the jump to waterborne paint just recently as VOC requirements began to get tighter.

“Everybody’s kind of wigged out over water,” he said. “I was one of those guys—why fix something that’s not broken? But we have some compliance issues with regard to the state of Indiana for VOC compliance and overspray containment. And we thought, well, if we’re going to do this, let’s go ahead and make our transition to water-base paint, so when they walk in the door, they see we’re proactive.

“In all reality, we’re probably four to five years away in this part of the country from any sort of mandate. But I would say embrace it. The time factor and the coverage of the base coat is so much better than solvent, and there is so much waterborne product being applied at the OEM level, it gives you a lot better chance to hit color matches, because you’re putting water against water.”

Cox doesn’t think there is a huge amount of risk in making the conversion to a waterborne paint system.

“I would think any jobber in a given market who is representing any of the Big Three, if they’re transitioning a shop to water, they’re not going to set that shop up for failure,” he said. “And the manufacturers—be it BASF, DuPont, whoever it is—they’re walking on top of each other to get the business. They’re not going to shoot themselves in the foot when it comes to support.

“Cost, for most shops, will depend on what they go with. We went with a blower system with a stainless-steel fan about 12 inches in diameter and about 8 inches deep. We spent maybe $5,500. It’s air driven, so we did have to run some air lines to it, but it wasn’t any big engineering feat.

“You do have to get a new gun; there’s a couple out there to choose from. Actually, through our jobber, it was all part of a kit—they give you the choice of the gun. It changes your cleaning process a little. It’s also going to lower some of your waste issues.”

Albin, with his shop in California, confirmed a reduction in waste-disposal costs.

“We put anything solvent-based in a 55-gallon drum,” he said. “We have thinners to clean that, so we’ve got our thinner cost—about $300 bucks. It’s gone down because of water-based, so we’re only buying one of those a month, versus two.”

When Speed Is Less Important

Collision and repair industry manufacturers have already geared up with disposable products suitable for use with waterborne paint, such as masking tape that resists waterborne paint’s tendency to bleed under tape. The tack cloths shown here are marketed as ideal for use with waterborne paint.

Brian Ferre, a long-time professional painter and instructor at LA Trade-Tech, worked in a volume body shop when waterborne paint was first introduced and now is involved in training young painters to move into body-shop jobs. In his arena, speed is not so important, but technique and quality are.

“My advice would be not to be scared of it,” Ferre said. “If you’re an open-minded professional painter, the transition will be no problem at all. “

Through his teaching, Ferre has had experience with a lot of different paint formulas.

“I’ve painted with pretty much all the water bases; teaching wise, I try to shoot pretty much everything I can get my hands on,” he said. “All the waterborne products, across the board, the technique for the painter has to be very even. It’s almost like painting custom paint jobs, where you have to be on your game a little bit more to make it even. The DuPont brand, I would say, is pretty goof-proof, even for a student.”

Ferre noted that using waterborne paint offers advantages but also requires using different masking materials.

“In the beginning, when doing multiple colors and taping up, the paint manufacturers had to come up with different tape where it wouldn’t bleed underneath,” he said. “Water has a tendency to bleed a little bit underneath the tape. So they came out with different plastic tapes.”

Water-based paint also offers certain advantages to a custom shop, where speed is not the primary consideration.

“Another advantage,” Ferre said, “is your clear has better adhesion. So you can leave the base coat open longer than you can a solvent-based paint. There’s a certain window that you have to hit to clear coat solvent-based paints, and that window is open longer with water-base. You can leave it open and come back on top of it later, and you won’t have any adhesion problems later on.” According to sources at DuPont, painters can wait up to 72 hours before applying clear.

Ferre also noted that water-based paint is now often used on race cars. Although the paint itself is not lighter, the thinner waterborne paint film adds less weight. “Racers are very conscious about adding weight,” he said. “So racers like it.”

The move to less toxic, water-based finishes is already well under way elsewhere. Waterborne paints are currently in extensive use in Europe and Canada, and many OEMs now use water-based paints on their newest products. Paint manufacturers are also moving quickly to develop low-VOC primers and clear-coat products in addition to the color coats available now.

In high-smog states like California, regulations requiring low-VOC technologies have been in place for years, and now other states are following suit. To find out what these requirements will mean as low-VOC requirements spread across the country, SEMA News contacted a variety of stakeholders in the paint industry. We specifically sought information about the newest technology as it stands today and what it will mean to companies that paint.

The consensus among the people we talked to is that the transition to waterborne finish products may not be as difficult or as costly as some first supposed. In fact, the changeover may bring with it a number of advantages.

Paint Formula Advancements

An entirely new paint booth, such as this one on display at the SEMA Show, would not likely be required to make the transition to waterborne paint. However, an ample supply of clean air is an upgrade most production body shops choose to make in order to shorten drying time.

One of the biggest areas of activity is at the paint manufacturer level, where the transition to waterborne paint has prompted paint companies to develop new products from scratch. Some are now releasing second- and third-generation water-based paints.

“We’ve been doing waterborne for quite a long time; CroMax Pro is our third-generation waterborne product,” said Harry Christman, brand manager for DuPont Refinish. “This is a product that has a brand-new technology.”

The newest waterborne paint from DuPont is a good example of the kinds of paints the industry will need to come up with to help shops achieve low-VOC requirements. It’s formulated with 88% less solvent but 25% more pigment. The result is a product that offers advantages but also requires re-educating painters.

“Most other waterborne products went in the direction of trying to create a waterborne paint that was like solvent-based paint,” Christman explained. “Solvent is the old technology, and painters tend to dislike change. So many paint companies, when they created their waterborne paint, said ‘we’re going to make them like solvent.’ We went a different direction.

“It’s a higher solids product, so it’s got more of the stuff that gets left behind when the water evaporates off. It’s a one-and-a-half coat, wet-on-wet process. Rather than having to lay down a coat of paint, let it flash, then lay down another one, let it flash—and, depending on what you’re working with, lay down four, five, six coats—with Cromax Pro, you cover in one and a half coats. And anything that doesn’t cover in one and a half coats covers in two coats. So you go in, put on the first coat, go right back and put on your mist coat, your ‘effect’ coat, which is half a coat. Then you’re done. You can put the gun away; leave the booth. It will dry, and then you can clear coat it.”

Next-generation waterborne paints such as the DuPont product shown here are now becoming available to the industry. Formulated with much less solvent but more pigment, this third-generation paint is designed to cover completely in one to two coats using a fast, wet-on-wet application process.

The newest DuPont paint costs a little more per gallon but offers the advantages of speed and better coverage, making it less costly to use. According to Christman, painters can reap benefits once they understand the process.

“It’s much faster, which high-volume direct repair program shops love, and you use less material,” said Christman. “So it’s great not only for reducing the cost, but because it speeds cars through the shop, it increases the capacity of the body shop. They can sell more jobs and create more revenue.”

Conversion Equipment Requirements

In California, most shops have already converted to waterborne paint. In other states, many paint shops have put off the transition, in part because of cost concerns.

“It’s a myth that you’ve got to buy all kinds of new equipment and put in new spray booths to convert,” Christman noted. “The truth is, they’re going to need a new gun—a stainless-steel gun, because you don’t want rust in your spray gun.”

In addition to a new paint gun, waterborne paint does like to have large volumes of clean air to enhance drying.

“For water, the key to drying is air flow—getting air to move across the surface of the car to make it dry,” Christman said. “However, the car will also dry without great air flow; it just will take longer. So if you’re a production shop that’s trying to move cars through, you’re going to want to put in blowers to get a lot of air movement to get the cars to dry super-fast. But if you’re a custom shop or a smaller shop that doesn’t have cars stacked up outside and you want to put in a small box fan to get a little air movement, that’s all it takes. The difference will be, maybe, instead of drying in 10 minutes, you’ll dry in 30 minutes. For a production shop, that’s a big deal. For a custom shop, probably not to them.”

To add another voice to the conversion, we talked to Douglas Albin of Bodyworks Collision Center in Murietta, California. His shop, which grosses about $250,000 a month, has been using waterborne paint for about five years.

“I converted before it was mandatory,” he said. “I wanted to be ahead of the curve.”

After a period of experimentation, Albin has adjusted his process to make the most of waterborne technology, and he noted some differences.

“With water-based versus solvent, it’s a lot more forgiving,” he said. “Your blending techniques are a little bit easier. It’s not as susceptible to contamination, dirt. We also had to fine-tune our prepping—we had to have a cleaner job, a tighter wrap.”

Even though waterborne paint is less toxic and offers easier disposal and cleanup, painters will still want to use a fresh-air system, gloves and a spray suit, because paint is still a chemical.

Initially, Albin was using a waterborne paint from his long-time supplier. And he stuck to a process that required multiple coats.

“When water-based paint came and we made the change, I was only getting through two to three cars a day with a $100,000 full-downdraft, 30-foot booth with mixing room,” he explained. “Then I noticed a big difference in the actual manufacturers of the paint. When I first made the transition, I was literally putting on five and six coats and waiting 20 minutes between coats for it to completely flash. Now I paint 12 cars a day, without a $15,000 retrofitted jet dry system. So we mastered it really quick,” said Albin, who now uses DuPont Cromax Pro. “The major expense was training.”

“Painters are going to have to be completely retrained. A lot of them struggled with it. So we really had to go in and retrain them, but once they’re trained, they will never want to go back to the old paint system.”

The Don Ayres Honda Collision Center, located in the area of Fort Wayne, Indiana, is another top-tier production body shop that recently switched to waterborne and does about $2 million a year in total sales. Manager Kevin Cox agreed that painters will need to get used to the new paint technology.

“Painters need to learn a little different technique,” he said. “Both my painters spent two and a half days at a DuPont training center. And then Dupont was in here for one full week after with both of them. But the transitions that the industry went through in the days of lacquer, then to acrylic enamels, then to base coat/clear coat—this transition from solvent to water is a baby step compared to the days of spraying lacquer.”

Waterborne paint requires a spray gun with stainless-steel parts, which means most shops will want a new gun for each painter. Suitable spray guns are widely available; companies such as Optima, Eastwood and Iwata all had newly designed stainless-steel guns on display at the SEMA Show in 2011. This gun, introduced at the Show by SATA Spray Equipment, is a special-edition SATAjet 4000 B.

Cox decided to make the jump to waterborne paint just recently as VOC requirements began to get tighter.

“Everybody’s kind of wigged out over water,” he said. “I was one of those guys—why fix something that’s not broken? But we have some compliance issues with regard to the state of Indiana for VOC compliance and overspray containment. And we thought, well, if we’re going to do this, let’s go ahead and make our transition to water-base paint, so when they walk in the door, they see we’re proactive.

“In all reality, we’re probably four to five years away in this part of the country from any sort of mandate. But I would say embrace it. The time factor and the coverage of the base coat is so much better than solvent, and there is so much waterborne product being applied at the OEM level, it gives you a lot better chance to hit color matches, because you’re putting water against water.”

Cox doesn’t think there is a huge amount of risk in making the conversion to a waterborne paint system.

“I would think any jobber in a given market who is representing any of the Big Three, if they’re transitioning a shop to water, they’re not going to set that shop up for failure,” he said. “And the manufacturers—be it BASF, DuPont, whoever it is—they’re walking on top of each other to get the business. They’re not going to shoot themselves in the foot when it comes to support.

“Cost, for most shops, will depend on what they go with. We went with a blower system with a stainless-steel fan about 12 inches in diameter and about 8 inches deep. We spent maybe $5,500. It’s air driven, so we did have to run some air lines to it, but it wasn’t any big engineering feat.

“You do have to get a new gun; there’s a couple out there to choose from. Actually, through our jobber, it was all part of a kit—they give you the choice of the gun. It changes your cleaning process a little. It’s also going to lower some of your waste issues.”

Albin, with his shop in California, confirmed a reduction in waste-disposal costs.

“We put anything solvent-based in a 55-gallon drum,” he said. “We have thinners to clean that, so we’ve got our thinner cost—about $300 bucks. It’s gone down because of water-based, so we’re only buying one of those a month, versus two.”

When Speed Is Less Important

Collision and repair industry manufacturers have already geared up with disposable products suitable for use with waterborne paint, such as masking tape that resists waterborne paint’s tendency to bleed under tape. The tack cloths shown here are marketed as ideal for use with waterborne paint.

Brian Ferre, a long-time professional painter and instructor at LA Trade-Tech, worked in a volume body shop when waterborne paint was first introduced and now is involved in training young painters to move into body-shop jobs. In his arena, speed is not so important, but technique and quality are.

“My advice would be not to be scared of it,” Ferre said. “If you’re an open-minded professional painter, the transition will be no problem at all. “

Through his teaching, Ferre has had experience with a lot of different paint formulas.

“I’ve painted with pretty much all the water bases; teaching wise, I try to shoot pretty much everything I can get my hands on,” he said. “All the waterborne products, across the board, the technique for the painter has to be very even. It’s almost like painting custom paint jobs, where you have to be on your game a little bit more to make it even. The DuPont brand, I would say, is pretty goof-proof, even for a student.”

Ferre noted that using waterborne paint offers advantages but also requires using different masking materials.

“In the beginning, when doing multiple colors and taping up, the paint manufacturers had to come up with different tape where it wouldn’t bleed underneath,” he said. “Water has a tendency to bleed a little bit underneath the tape. So they came out with different plastic tapes.”

Water-based paint also offers certain advantages to a custom shop, where speed is not the primary consideration.

“Another advantage,” Ferre said, “is your clear has better adhesion. So you can leave the base coat open longer than you can a solvent-based paint. There’s a certain window that you have to hit to clear coat solvent-based paints, and that window is open longer with water-base. You can leave it open and come back on top of it later, and you won’t have any adhesion problems later on.” According to sources at DuPont, painters can wait up to 72 hours before applying clear.

Ferre also noted that water-based paint is now often used on race cars. Although the paint itself is not lighter, the thinner waterborne paint film adds less weight. “Racers are very conscious about adding weight,” he said. “So racers like it.”