EPA-460/3-74-026-a
DECEMBER 1972
ASSESSMENT OF DOMESTIC
AUTOMOTIVE INDUSTRY
PRODUCTION LEAD TIME
OF 1975/76 MODEL YEARS
VOLUME I -
EXECUTIVE SUMMARY
FINAL REPORT
I'.S. ENVIRONMENTAL PROTECTION ACENCY
Office of Air and Waste Management
Office of Mobile Source Air Pollution Control
Emission Control Technology Division
Ann Arbor, Michigan 48105
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EPA-460/3-74-026-a
ASSESSMENT OF DOMESTIC AUTOMOTIVE
INDUSTRY PRODUCTION LEAD TIME
OF 1975/76 MODEL YEARS
VOLUME I - EXECUTIVE SUMMARY
FINAL REPORT
Prepared by
D.E. Lapedes, M.G. Hinton, Torulura, and Joseph Meltzer
Aerospace Corp.
El Segundo, California
Contract No. 68-01-0417
EPA Project Officer: F. Peter Hutchins
Prepared for
U.S. ENVIRONMENTAL PROTECTION AGENCY
Office of Air and Waste Management
Office of Mobile Source Air Pollution Control
Emission Control Technology Division
Ann Arbor, Michigan 48105
December 1972
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This report is issued by the Environmental Protection Agency to report
technical data of interest to a limited number of readers. Copies are
available free of charge to Federal employees, current contractors and
grantees, and nonprofit organizations - as supplies permit - from the Air
Pollution Technical Information Center, Environmental Protection Agency,
Research Triangle Park, North Carolina 27711; or, for a fee, from the
National Technical Information Service, 5285 Port Royal Road, Springfield,
Virginia 22161.
This report was furnished to the Environmental Protection Agency by
Aerospace Corp. , El Segundo, California, in fulfillment of Contract
No. 68-01-0417. The contents of this report are reproduced herein as
received from Aerospace Corp. The opinions, findings, and conclusions
expressed are those of the author and not necessarily those of the Environ-
mental Protection Agency. Mention of company or product names is
not to be considered as an endorsement by the Environmental Protection
Agency.
Publication No. EPA-460/3-74-026-a
11
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FOREWORD
This report, prepared by The Aerospace Corporation for the
Environmental Protection Agency, Division of Emission Control Technology,
presents an assessment of available information pertaining to the production
lead time requirements of the automotive industry for 1975/76 model year
automobiles.
The status of the production lead time reported herein is that
existing at the time of data acquisition visits made to selected firms in the
period August 1, 1972 through October 5, 1972. The results of this study
are presented in two volumes. Volume 1, the Executive Summary, presents
a brief, concise review of important findings and conclusions in the Highlights
and Executive Summary sections. Volume 2, the Technical Discussion,
provides a comprehensive discussion of each study topic and is of interest
primarily to the technical specialist. In Volume 2 a brief discussion of basic
automotive product development phases is given in Section 2. A summary of
emission control systems currently proposed by domestic automobile manu-
facturers for model years 1975/76 is presented in Section 3. The assess-
ment of the industry's production lead time requirements, with particular
emphasis on the impact of critical emission control system components and
subsystems, is discussed in Section 4. Specific lead time schedules obtained
from automobile manufacturers, catalyst and substrate manufacturers, auto-
mobile component manufacturers, and production equipment manufacturers
are given in Sections 5 through 8. Similar lead time schedules for non-
automotive industry manufacturers and for a government automotive procure-
ment agency are presented in Sections 9 and 10, respectively. Section 11
contains a discussion of platinum-group metal production and usage. Finally,
Appendix A, Section 12, contains a listing of the companies visited in the data
acquisition activity.
111
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ACKNOWLEDGMENT
Appreciation is acknowledged for the guidance and continued
assistance provided by Mr. F. P. Hutchins of the Environmental Protection
Agency, Division of Emission Control Technology, who served as EPA
Project Officer for this study.
The following technical personnel of The Aerospace Corpora-
tion made valuable contributions to the assessment performed under this
contract.
L. Forrest
O. Hamberg
R. B. Laube
W. U. Roessler
W. M. Smalley
K. B. Swan
D. XE^ iJapedes, /Manager
Production Lead Time Study
Approved by:
Merrill G. Hinton, Director
Office of Mobile Source Pollution
.oru lura, Assistant GroupIHrector
Environmental Programs
Group Directorate
h Ivleltzer, /GVoup Director
ronmental Programs
roup Directorate
IV
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HIGHLIGHTS
A summarization and assessment were made of available
information pertaining to the production lead time requirements of the
domestic automotive industry for 1975/76 model year automobiles. Assess-
ment of the status of the industry as of the time of data acquisition visits and
technical discussions (August 1 to October 5, 1972) resulted in the following
findings.
1. General Motors, Ford, Chrysler, and American Motors are currently
proceeding on 1975 model year production schedules which call for the
start of full mass production at the normal new model production start
date of August 1974.
2. All domestic automobile- manufacturers have basically similar 1975
production schedules which are consistent with the historically estab-
lished guideline for management approval of the new model car devel-
opment program at approximately 28 months prior to mass production
initiation.
3. These 1975 production schedules include provisions for the incorpora-
tion of an emission control system consisting of an oxidation catalytic
converter, exhaust gas recirculation, air injection, improved
carburetion and ignition, and devices or techniques to promote fast
warmup of the induction system and catalytic converter.
4. The catalytic converter is identified by all automobile manufacturers
as the most critical production lead time item in their schedule. It is
schedule - controlling because of the lead time required by suppliers to
develop facilities for mass producing both substrates and finished
catalysts (approximately 2 years).
5. The lack of satisfactory test results from prototype automobile test
programs is having a major impact upon the decisions of automobile
manufacturers pertaining to final catalyst commitments. To date, no
domestic manufacturer has successfully completed mileage accumulation
tests to 50,000 miles, although some prototypes have come close to
meeting the emission standards at extended mileage. The automobile
Production lead time is herein defined as that time period allocated or
required for the refinement of mass manufacturing techniques, construction
of manufacturing facilities, and the procurement and installation of
equipment.
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manufacturers have, therefore, placed orders for long lead time
equipment and tooling based on their best judgment as to what will
constitute a final design. Some companies still have to choose between
pellet and monolith substrates and between promoted base metal and
platinum-group metal catalysts. Many final commitments to substrate
and catalyst manufacturers are being delayed as long as possible in
order to have more data available before making such high risk
decisions.
6. Partial and staged financial commitments to catalyst and substrate
manufacturers have been made by the various automobile manufacturers
in order to enable the catalyst manufacturers to initiate preliminary
facility de sign and site selection activities. However, final commit-
ments to the catalyst suppliers are required before facility construction
will be initiated.
7. Available estimates of capital cost requirements per individual supplier
are in the range of $4 to $5 million for substrate production facilities,
and $4 to $15 million for catalyst production facilities with capacities
ranging between 3 and 10 million units per year. At these cost levels,
the substrate and catalyst manufacturers will not commit venture
capital without a firm production contract or other form of guarantee.
It is this fact which presently most strongly impacts the projected
catalyst lead time schedules, since the required production facility
construction will not commence until such agreements are successfully
concluded.
8. Current production lead time schedules of contending substrate and
catalyst manufacturers require production order commitments, or other
forms of venture capital guarantees, from the automobile manufac-
turers by November to December 1972 in order to ensure quantity
production of oxidation catalysts in time for 1975 model year vehicles.
In every case, the critical, or pacing, item in the overall catalyst
production lead time schedule is the time required by the vendor for the
design of the production facilities, site selection, and construction of
the facility or plant.
9. The status of contractual agreements between the automobile manu-
facturers and the catalyst manufacturers is one of uncertainty and
change because serious negotiations were apparently under way during
the period of investigation (August to October 1972). Most commit-
ments to date have been of a preliminary nature and only cover funding
for preliminary engineering design of production facilities and site
selection. These initial commitments have enabled the automobile
companies to defer their final commitments until the November to
December 1972 time period. Of the known agreements, the Ford/
Engelhard agreement is the most extensive, with Ford commitments
VI
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rising to about $10 million in March 1973 (when product-design-
oriented equipment and facilities are to be purchased) and to
$14 million by April 1974.
10. Substrate manufacturers state, in general, that no appreciable lead
time compression can be made at the present level of schedule
definition. In the finished catalyst area, there is some hope of minor
schedule compressions (from 0 to 3 months for monoliths; 3 to 6
months for pellet catalysts). Estimates of cost penalties for such
schedule compressions range from negligible to 10 percent product
cost increases for overtime pay and increased capital costs.
11. Mass production of oxidation catalysts of the automotive type has never
been accomplished by any company; however, the catalyst firms
believe that related production and quality control techniques (in the
chemical and petrochemical industries) provide a firm basis for
assurance that their proposed production lead time schedules can be
met. The automobile companies, however, have expressed some
reservations about the capability of the catalyst manufacturers to mass
produce the catalysts in the volume necessary while maintaining
quality control.
12. If substrate, finished catalyst, and converter canister elements used
in certification test vehicles are not made with production equipment
(e.g., if batch processing rather than continuous processing, soft
tooling, etc. , are used), it may raise an issue as to whether or not
the catalytic converter tested was the same "in all material respects"
as production units. Items of concern in this regard include catalyst
loading, uniformity of loading, substrate physical properties, and
canister dimensional, physical, and weldment characteristics.
13. The production lead time requirements of conventional automobile
component suppliers (body stampings, frames, transmissions,
carburetors, exhaust systems, wheels, brake parts, etc.) appear to
be adequately met by currently projected automobile manufacturer
design release and/or vendor commitment dates. The key schedule
dates for such component suppliers are those for the delivery of pro-
duction samples to the automobile manufacturer for certification test
vehicles and for car pilot line production.
14. Conventional production equipment items (automatic transfer lines,
cold stamping presses, resistance welders, etc. ) can be procured
as required within the lead time remaining for 1975 model year auto-
mobiles. Electron beam welders, required for edge-welding of the
General Motors pelletized catalytic converter canister, are being
manufactured by Hamilton Standard on a schedule consistent with the
1975 production requirements of General Motors.
vii
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15. The current production capacity of platinum-group metals in the world
is not sufficient to satisfy projected requirements of the automotive
industry in the United States in the post-1975 time period. However,
the demand can be met by the opening of new mines in South Africa.
In order to ensure adequate platinum-group metal availability in the
1975 to 1980 time period, final contract agreements between the auto-
mobile manufacturers and the South African platinum-group metal
mining firms must be signed in the near future.
16. The platinum-group metal supply-demand balance is determined by
the platinum-group metal loading requirement, the number of catalysts
required for the various vehicle classes, the catalyst replacement
interval, the mining industry capacity, and the degree of platinum-
group metal recovery from spent catalysts. A thorough study of these
parameters is urgently needed in order to provide all the data required
for a complete and meaningful assessment of the platinum -group metal
availability and demand issues.
17. The automotive industry's stainless steel requirements for the 1975
model year (for exhaust systems, catalytic converter canisters,
thermal reactor liners, etc. ) have not been fully quantified as to type
and amount. Raw material availability is not a problem, but material
processing capacity may be a problem unless the additional equipment
required is ordered in a timely manner.
18. The 50, 000-mile durability certification test requires approximately
5 to 6 months to complete. In order to provide for the contingency of
durability test vehicle failure, the first durability test should start no
later than September 1973 if two full durability test periods are desired
(based on an August 1974 vehicle production start date).
19. Emission control systems currently under consideration for use in
1976 model year vehicles incorporate all components of the 1975 system
plus a reduction (NOX) catalyst(s), more sophisticated air injection
systems, and further modifications to carburetion, ignition, and
exhaust gas recirculation systems. Production lead time schedules
for the 1976 model year have not yet been disclosed by the automobile
manufacturers due to the uncertainty attending critical lead time
elements of the 1975 model year production schedules and the lack of
satisfactory development of reduction catalysts for control of oxides
of nitrogen.
20. The full-size thermal reactor is not considered a viable option or
alternative to the catalytic converter for 1975 model year vehicles, as
the thermal reactor is not fully developed and the automobile companies
have not ordered the long lead time production equipment required for
its manufacture. Ford states that the time is now past the critical
point for ordering such foundry equipment for 1975 model year production.
viii
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The foundry industry (exclusive of automobile company foundries)
indicates that if additional foundry capacity on its part would be
required, it would take 36 months to bring it to full production status.
21. Less effective partial thermal reactors, smaller in volume and less
complex than full-size reactors, are currently programmed for use in
1975 emission control systems. These could be used without catalytic
converters but tho resulting emission reduction capability is at present
not well defined and could vary among the different automobile manu-
facturers, according to individual design details.
Some statements made herein may make it appear that the 1975
model year automobile production schedules have changed with time since they
were originally presented at the EPA Suspension Request Hearings in April
1972. However, the overall lead time schedules have remained relatively
constant during the intervening period. Adherence to these schedules has
been accomplished by making (a) timely design decisions as required,
(b) minor compressions in supplier lead time schedules, and (c) partial or
staged commitments in critical Icing lead time areas.
The risk to the automobile firms in following the original lead
time schedules has been increasing with time. This is due to the fact that
decisions in accordance with schedule milestones have had to be made with
incomplete data regarding the adequacy of proposed emission control systems.
Therefore, il would appear that the current production lead time schedules
will permit 1975 model year production to begin in August 1974, unless the
automobile manufacturers judge that the systems under development are so
unsatisfactory that further commitments will not be made on the dates
required.
ix
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CONTENTS
FOREWORD iii
ACKNOWLEDGMENT iv
HIGHLIGHTS v
EXECUTIVE SUMMARY
1. Introduction 1
2. Automotive Product Development Phases 2
3. Proposed 1975/76 Model Year Emission
Control Systems 4
4. Lead Time Schedules for Automobile
Manufacturers
5. Lead Time Schedules Tor Catalyst and
-Substrate Manufacturers 20
6. Lead Time Schedules for Automobile
Component Manufacturers 27
7. Lead Time Schedules for production
Equipment Manufacturers 28
8. Noble Metal Production and Usage 28
9. Lead Time Schedule for a Government
Automotive Procurement Agency 30
10. Lead Time Schedules for Nonautomotive
Industry Manufacturers 31
11. Assessment of Automobile Manufacturers'
Production Lead Time 31
XI
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FIGURES
1. Automotive Product Development Phases 3
2. General Motors Master Timing Schedule for 1975
Emission Components 7
3. Ford Overall Schedule: 1975 Vehicle and Emission
Engine Program 11
4. Chrysler Overall Schedule for the 1975
Emission Control System 15
5. American Motors 1975 Emission Control Program
Timing Study - 19
6. Production Lead Time Schedule for Catalyst
Manufacturers 21
7. Production Lead Time Schedule for Substrate
Manufacturers 23
8. Overall Production Lead Time Schedules 32
TABLES
1. Current and Pending Contract Agreements--
Oxidation Catalysts and Substrates 29
xn
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EXECUTIVE SUMMARY
1. INTRODUCTION
This report presents a summarization and assessment of
available information pertaining to the production lead time requirements of
the domestic automotive industry for 1975/76 model year automobiles.
The status of the production lead time reported herein is that
existing at the time of data acquisition visits made from August 1 through
October 5, 1972. During these visits, discussions relevant to production
lead time were held with selected domestic automobile manufacturers,
catalyst and substrate manufacturers, automotive component manufacturers,
production equipment manufacturers, nonautomotive industry manufacturers,
and a government automotive procurement agency. To supplement this infor-
mation in certain areas, data were used from the open literature and from
previous responses by industry to EPA requests for production lead time
information.
The main topic covered in this report is the production lead
time requirement ol automobile manufacturers and their associated compo-
nent and equipment suppliers. Emphasis has been directed toward identify-
ing critical lead time components, subsystems, and raw or processed mate-
rials associated with the introduction of emission control systems required
to meet the 1975/76 emission standards--in particular, catalytic converters.
In addition, associated lead time requirements for tooling commitments, sys-
tem durability and certification testing, and prototype test programs have
been evaluated. A description of automotive product development phases and
a summary of proposed 1975/76 emission control systems is included to
clarify and augment the discussion.
This section of the report summarizes the more pertinent
information from this assessment. Further details are given in the main
body of the report (Volume II).
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2. AUTOMOTIVE PRODUCT DEVELOPMENT PHASES
The process of developing an automotive product from concept
to mass production can be viewed as proceeding in discrete phases. These
phases, though highly interrelated and in some instances overlapping in time,
may be isolated and characterized in terms of specific activities and
ope rations.
The term "lead time" is a generic phrase that can be (and is)
applied to any one of a. number of different processes in the automotive devel-
opment cycle. Two specific terms involving lead time are useful in viewing
the automotive development cycle. One of these is Product Development
Lead Time and the other ia Production Lead Time. Product Development
Lead Time is the total time required for the development of the automotive
product, starting from the initial formulation of the design concept and end-
ing with Vehicle Job No. 1, the first of the production run of automobiles of
a model year off the assembly line. That part of Product Development Lead
Time encompassing activities concerned with the development of mass manu-
facturing techniques and facilities is designated as the Production Lead Time.
Specifically, Production Lead Time is defined as the time reserved by the
automobile manufacturer to (a) detail the product configuration for mass
manufacture; (b) analyze the manufacturing processes; (c) design or plan the
equipment and facilities needed to perform these processes, (d) construct,
install, and check out the production equipment; and (e) escalate the manu-
facturing process to full volume output.
A representative product development cycle maybe considered
to consist of eight different phases. These phases, along with their timing
and typical duration, are shown in Figure 1. The data shown are broadly
representative of the practice in the automotive industry; however, the spe-
cific details in any one manufacturer's schedule may differ considerably.
Except for Research and Advanced Development, the overall product devel-
\
opment cycle spans approximately 48 months. The milestone marker shown
in the chart identifies the point selected as the Production Lead Time refer-
ence, which represents the start of significant activity on the development of
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hr
PRODUCT DEVELOPMENT.
LEAD TIME
RESEARCH AND ADVANCED
DEVELOPMENT
PRODUCT CONCEPTUAL-
IZATION
CONCEPT DEVELOPMENT/
VEHICLE PRELIMINARY
DESIGN
CAR PROGRAM APPROVAL
PRODUCTION ENGINEERING/
CAR PROTOTYPE TESTING
PARTS PROCUREMENT/TOOL
CONSTRUCTION, INSTALLATION
AND TRYOUT
PILOT ASSEMBLY
PRODUCTION BUILDUP
////n
.PRODUCTION.
LEAD TIME
I7////////////////////W//////////////1
PRODUCTION
LEAD TIME REFERENCE
UTJTft
48
36 24 12
MONTHS TO VEHICLE PRODUCTION
Figure 1. Automotive Product Development Phases
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mass-production processes and facilities. The indicated lead time to Vehicle
Job No. 1 is 26 months as compared with a range of 24 to 28 months indicated
by historical data from the individual manufacturers.
3. PROPOSED 1975/76 MODEL YEAR EMISSION
CONTROL SYSTEMS
The 1975 emission control system is exemplified by the fol-
lowing package of components and engine modifications:
Oxidation catalytic converter
Air injection
Partial thermal reactor
Exhaust gas reci rculation
Ca rbu re tor modifications
Ignition system modifications
All first-choice systems selected by the automobile manufacturers incorpo-
rate an oxidation catalyst with air injection for the oxidation of the unburned
hydrocarbon (HC ) and carbon monoxide (CO) species contained in the engine
exhaust. The catalyst type which appears most frequently is the platinum-
group metal/monolithic converter. Base metal/pelietized and promoted base
metal/pclleti/,ed catalyst designs also are being evaluated by some manu-
facturers, including the General Motors Corporation and American Motors
Corporation. Some automobile manufacturers are considering the use of a
catalyst overtemperature protection device in their projected 1975 emission
control systems to prevent catalyst damage under extreme/abnormal engine
operating conditions (spark plug misfire, etc.).
Exhaust gas recirculation (EGR) systems will be employed in
all domestic 1975 model year automobiles to control the oxides of nitrogen
(NO ). These systems will be improved versions of the EGR systems used in
X
most of the 1973 model year vehicles.
Promoted base metal catalyst formulations contain small amounts of
platinum-group metals.
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The emission control systems of a number of manufacturers,
including those of the Chrysler Corporation, Ford Motor Company, and Gen-
eral Motors, utilize a partial thermal reactor in place of the conventional
exhaust manifold primarily to provide more rapid warmup of the catalyst
under cold start conditions. However, full-size thermal reactors are not
completely developed and are not being considered for 1975 systems.
Carburetion/intake system modifications include such features
as altitude compensation, quick-release choke devices, and intake manifold
heating. All domestic manufacturers propose, or have in development,
electronic (breakerless) ignition systems which are targeted for inclusion in
their first-choice emission control system. These systems generally pro-
vide an improvement in spark-timing precision, consistency, and reliability.
Alternate systems under investigation by the automobile man-
ufacturers for potential use in 1975 model year vehicles incorporate different
types or designs of catalytic converters but are otherwise similar to the
emission control packages selected as first-choice systems.
Emission control systems currently under consideration by
the automobile manufacturers for use in 1976 model year vehicles will incor-
porate all components in the 1975 system plus:
Reduction catalyst(s) installed upstream of the oxidation catalyst(s)
More sophisticated air injection systems
Modified carburction, ignition, and EGR systems
A number of automobile manufacturers are experimenting with unconven-
tional engine configurations, including the rotary (Wankel), stratified charge,
gas turbine, Rankine, and Stirling engines. With the exception of the rotary
engine, it appears that these unconventional engines will be neither developed
nor be manufacturable in large quantities in time for the 1975/76 model year.
Therefore, these engines are not considered in this study.
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4. LEAD TIME SCHEDULES FOR AUTOMOBILE
MANUFACTURERS
This section summarizes the current status of the 1975 model
year production schedules of the major domestic automobile manufacturers,
the major factors impacting current schedules, and the critical or limiting
lead time items. Current and pending contractual agreements with potential
suppliers are also delineated.
4. 1 GENERAL MOTORS CORPORATION
4. 1. 1 Production Schedules
The 1975 emission control system master timing schedule for
General Motors is presented in Figure 2. This schedule shows only the
deadlines for those component systems still under development and which
could impact the 1975 production lead time. Car assembly starts approxi-
mately the first week of August 1974, with component full production com-
mencing a month earlier for the carburetor and catalytic converter, and
2 months earlier for the unitixed ignition and early fuel evaporation (EFE)
systems. It is to be noted that the first lead time milestones for carburetors
and catalytic converters, the tooling and facilities appropriation approval
dates, occurred in May and June of 1972.
General Motors considers this timetable to be more theoreti-
cal than realistic, since it is based on the assumption that all the devices
needed to achieve 1975 emission levels can be developed in time, and that
the manufacturing and assembly equipment necessary can be designed, built,
installed, and brought up to production capacity within this period.
With respect to the catalytic converter system, General
Motors has indicated a basic change in direction since the April 1972 Sus-
pension Request Hearings. It is now planning to incorporate a mix of both
platinum-group metal and base metal pellets in the under-floor catalytic con-
verter instead of all-base metal pellets. Also, General Motors is actively
working on the development of its new triple-mode (or T-MECS) emission
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CY 72 CY 73 CY 74
iJlF|M|A|M|J|J|A|S|OiNlp|j|F|M|A|M|J|J|A|S|0|N|D|j|F|M|A|M|J|J|
30 25 20 15 10 5 0
MONTHS TO VEHICLE PRODUCTION
CATALYTIC CONVERTER
A B
G H
NEW CARBURETORS
B
G H
QUICK HEAT MANIFOLD
(EARLY FUEL EVAPORATION)
B
G H
ELECTRONIC IGNITION
A/B/C
F' G' H'
(1974 MODEL YEAR)
G H
(1975 MODEL YEAR)
A - PRODUCTION DESIGN PRELIMINARY APPROVAL
B - TOOLING & FACILITIES PROGRAM APPROVAL
C - START PRODUCTION TOOLING
D - START PRODUCTION PRETEST BUILD FROM PARTIAL TOOLING
E - START PRODUCTION SAMPLE BUILD
F .- START VEHICLE PILOT PART PROGRAM
G - FULL COMPONENT PRODUCTION
H - START VEHICLE PRODUCTION
Figure 2. General Motors Master Timing Schedule for 1975 Emission Components
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control system in which the catalyst container is cast into the exhaust
manifold. The final system selection has not yet been made; however the
under-floor system is still considered as its first-choice system.
4. 1.2 Major Impact Factors
General Motors maintains that to date no tests have success-
fully demonstrated the capability of its emission control systems to meet the
1975 Federal emission standards. Despite this lack of promising results,
General Motors is making commitments for equipment and components to
meet its production lead time schedules.
The major component impact factor on production lead time
is that of the catalytic converter. With regard to the under-floor converter,
the General Motors recent decision to incorporate platinum-group metal
pellets has further intensified the testing activity and delayed certain deci-
sions regarding this system. At the time of this investigation, the catalyst
supplier had not been selected although General Motors indicated a decision
was near.
With respect to the manifold-mounted T-MECS system, Gen-
eral Motors is investigating an extruded monolithic converter. Although
it is still considering outside suppliers, General Motors is proceeding with
plans to build its own monolithic converter. It presently has a pilot-type,
manually operated extruding machine at the AC Spark Plug Division.
An improved carburetor design is still under development: and
therefore is considered to be an impact factor. For 1975, General Motors
plans to have revised versions of existing carburetors as well as new-design
carburetors. Additions to the plant at the Rochester Products Division are
being made, and the plant is scheduled to be occupied in November 1972.
The EFE system is a system which accelerates the evapor-
ation of fuelduring engine warmup to reduce HC and CO exhaust emissions
during the initial phases of the Federal test cycle. Tooling commitments
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for EFE do not appear to be critical at this time, based on its early
successful development. The tooling and facilities appropriation approval
milestone is scheduled for March 1, 1973.
4.1.3 Critical Lead Time Items
The critical lead time item is the catalytic converter system
For the under-floor catalytic converter, the longest lead time item is the
electron beam welder. General Motors feels that this welder is a possible
source of delay due to a lack of experience with it in this particular applica-
tion. Good corrosion-resistant steel (not stainless steel) for the catalyst
container has been developed by General Motors, but it has had no production
experience with the material in regard to its formability and weldability.
The Hamilton Standard Division of the United Aircraft Corporation manufac-
tures the electron beam welding equipment and has recently delivered the
first prototype welder to the AC Spark Plug Division for equipment evalua-
tion and development and training of personnel.
Specifically critical items were not delineated by General
Motors for the T-MECS system; however, since this system has had less
development time than the under-floor catalyst system, it should be identified
as a critical lead time item.
4. 1.4 Current and Pending Contractual Agreements
General Motors has $630,000 committed to the W. R. Grace
and Company for tho preliminary design of production line facilities for both
monolithic and pellet catalyst plants. No other catalyst-related commil-
ments are known to exist at this time, although preliminary contract negotia-
tions with nine potential oxidation catalyst suppliers are under way.
General Motors is negotiating with a number of platinum - group
metal mining companies in South Africa and with the Soviet Union. To date it
has entered into a contract with Impala Platinum, Ltd. of Johannesburg,
South Africa to develop the production capacity required to supply General
Motors with 300,000 ounces of platinum and 120,000 ounces of palladium per
year. General Motors considers the contract with Impala as a statement, of its
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intent to buy the quantities cited and has placed a high priority on this issue.
A number of decisions are expected to be made very soon. The actual yearly
amount of platinum-group metals required by General Motors is dependent on
the results of current road tests in which a cross-section of vehicles with
different catalyst loadings (0. 025 ounce to slightly above 0. 1 ounce) are being
run.
4. 2 FORD MOTOR COMPANY
4. 2. 1 Production Schedule
An overall schedule depicting Ford's 1975 mode] year produc-
tion development program is shown in Figure 3. This schedule combines
elements of Ford's timing plans for the vehicle and the engine/emission sys-
tem. Key milestones are shown on the lead time schedule by letter designa-
tion with explanations as noted.
Milestone "B" (May 1971) represents Ford's initial commit-
ment to Engelhard Minerals and Chemical Company covering the development
of pilot plant facilities for the production of catalytic converters. Twenty-
eight months prior to vehicle Job No. 1, at milestone "D" (April 1972), the
car manufacturing development program begun at 43 months was given a
final review by Ford management and approval was issued to proceed with
manufacturing development. The program approval point usually signals
the beginning of large-scale capital equipment and tooling procurement oper-
ations and is therefore frequently identified with the production lead time
requirement, even though some initial capital commitments (for example,
Ford's milestone "B") already have taken place.
4. 2. 2 Major Impact Factors
With regard to 1975-peculiar, emission-control - related
impact factors, Ford is proceeding with production development based on
the use of a catalytic converter emission control system design that is pres-
ently unproven with respect to 1975 performance requirements. The 1975
car program approvals (April 1972) were issued shortly after the Ford dur-
ability test program at Riverside, California had begun and the catalytic
10
-------
1971
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MONTHS TO VEHICLE PRODUCTION
A - INITIATE CAR DEVELOPMENT PLAN
B - FIRST COMMITMENT TO ENGELHARD
C - START 50,000 MILE DURABILITY TESTS
D - CAR PROGRAM APPROVAL
E - COMMITMENT TO ENGELHARD MAIN PLANT/ORDER
PRODUCTION TOOLING AND EQUIPMENT
F - START TOOL SET-UP AND TRYOUT
G - START CERTIFICATION TESTING
H - COMPLETE TOOL SET-UP AND TRYOUT
I I - DELIVER/FABRICATE PRODUCTION SAMPLES
J - VEHICLE JOB No. 1
Figure 3. Ford Overall Schedule: 1975 Vehicle and Emission Engine Program
-------
converter emission system road performance and durability characteristics
were largely unknown for the specific designs in test. The Riverside tests
are continuing, but according to Ford show little promise of meeting the 1975
emission goals.
According to Ford, if EPA elected to issue interim 1975
standards which might also be met by other control devices, such as thermal
reactors, the result would be a serious impact on the engine compartment
packaging design which is usually fixed at 37 months prior to Vehicle Job
No. 1. Ford stated that this design milestone was critical because changes
in the compartment geometry can progressively affect the entire body struc-
ture, starting with the engine cowl and proceeding to the "A" pillars flanking
the windshield, the door supports, the overhang, etc. Furthermore, the time
is now past the critical point for ordering arc and holding furnaces for
foundry operations involved in the manufacture of full-size thermal reactor
manifolds for the 1975 model year.
As much as 75 pounds of stainless steel per car may be
required for converter canisters and exhaust systems and Ford is concerned
about the available supply. It is unable to provide a forecast of its needs on
the basis of prototype testing conducted to date. Therefore, stainless steel
procurement and the associated vendor lead time requirement may be another
Ford schedule impact factor.
4.2.3 Critical Lead Time Items
The controlling item in the Ford schedule is the development
of vendor facilities for mass producing the catalytic converter. The critical
aspect of catalytic converter production is the completion of facilities for
mass manufacture of the catalyst substrate and for the wash coat and
catalyzing operations.
12
-------
4. 2. 4 Current and Pending Contractual Agreements
Known Ford contractual agreements include commitments
made to Engelhard relating to catalyst manufacturing operations, and com-
mitments made to the American Lava Corporation relating to substrate
manufacture.
The first commitments involving Engelhard occurred May 24,
1971 and concerned the development of catalyst pilot plant facilities (Plant
No. 1). In this agreement, Ford and Engelhard committed funds totaling
$2. 4 million for site procurement and initial construction operations. Half
of this consisted of (nonrecoverable) Engelhard funds. The next major incre-
ment of commitment was made late in March 1972. By June 1972, Ford had
committed $4. 0 million to the pilot program, of which $3. 7 million were
direct capital investment guarantees to Engelhard. Of this total, $300, 000
were reserved for assignment to American Lava.
On August 1, 1972 Ford made another commitment to Engel-
hard, this one relating to the development of the main plant facility (Plant
No. 2). The capital involved in this agreement is not known. The Ford
commitments to Enge]hard plant development will rise sharply to about
$10 million in March 1973 when product-design-oriented equipment and
facilities are purchased, and to $14 million by April 1974.
In addition to the facilities development commitments described
above, Ford has a 3-year contract with Engelhard which guarantees the supply
of one-half million troy ounces of platinum per year. The contract was said
to be written on a price-protected, no-cost-for-cancellation basis.
Ford's commitment to American Lava covers capital expendi-
tures through calendar year 1972 for the scaleup of production facilities to
meet a portion of Ford's (Engelhard's) substrate requirements. This agree-
ment has been extended (capital commitment unknown) to cover, on a time-
phased basis, the development of additional American Lava production capa-
city through the first quarter of 1974. This is a maximum cancellation
agreement, similar to Engelhard's.
13
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4.3 CHRYSLER CORPORATION
4. 3. 1 Production Schedules
Figure 4 shows the lead times on an overall basis for the 1975
model year vehicle. The longest lead time item is the catalytic converter
system which had a production design approval date of April 1972. This lead
time is 28 months prior to vehicle production which starts approximately on
August 1, 1974. Milestones based on available information are shown on the
lead time schedule by letter designation with explanations as noted.
4. 3. 2 Major Impact Factors
An important factor in the schedule for the critical lead time
catalytic converter system is the start of production of the assembled mono-
lithic catalyst converter. Chrysler will subcontract the major components
of this device. Subcontracting will involve three separate industries, since
no single manufacturer has been found to manufacture an assembled con-
verter. These industries will perform substrate manufacturing, catalyst
application, and container manufacturing.
Certification of 1975 model year automobiles requires that the
certification test vehicles be constructed with hardware similar in all
material respects to production vehicles; therefore, in some cases, pro-
duction samples are planned to be delivered earlier than the normally planned
pilot runs. This would require very concentrated effort and tight coordination
with all vendors to have production equipment and tooling checked out and
operational for this purpose.
4. 3. 3 Critical Lead Time Items
According to Chrysler, the procurement of the substrate is
the most critical lead time item since this must precede the application of
the catalyst and as sembly of the catalyzed substrate into the container.
Chrysler has not placed purchase orders for substrates and has not received
commitments from any vendor on meeting specific manufacturing schedules
in the quantities required. The application of the catalyst to the substrate
14
-------
CHRYSLER CORPORATION
1975 PRODUCTION SCHEDULE
OVERALL LEAD TIME
MAJOR FRAMES & BODY
STAMPINGS
ELECTRONIC SPARK
ADVANCE & ECR CONTROL
CATALYTIC CONVERTER
SYSTEM
CARBURETORS
VEHICLE PRODUCTION
START
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TOOLING & FACILITIES PROGRAM APPROVAL H -
START PRODUCTION PRETEST FROM SOFT TOOLING I -
START PRODUCTION TOOLING J -
LIMITED PRODUCTION START K -
START PRODUCTION SAMPLE BUILD
START EPA CERTIFICATION TESTS
START VEHICLE PILOT PROGRAM
EARLY USE
FULL COMPONENT PRODUCTION START
START VEHICLE PRODUCTION
NOTE: 1. D, - START PROCUREMENT OF DIE CAST DIES
2. D2 - START OTHER MAJOR TOOLING
Figure 4. Chrysler Overall Schedule for the 1975 Emission Control System
-------
is the second most critical item and a potential exists for the container to
become critical if the design is not definitized in the near future.
4. 3. 4 Current and Pending Contractual Agreements
In September, Chrysler signed a contractual agreement for
catalysts with the Universal Oil Products Company (UOP) and is considering
Matthey Bishop, Inc. as another potential catalyst supplier. The required
substrates will probably be obtained by Chrysler itself.
Relative to lead time compatibility, UOP states that it could
provide catalysts by April 1974 if given an initial commitment by September
1972 and a commitment to construct a catalyst manufacturing facility by the
end of December 1972. At this time, UOP is only performing engineering
design, manufacturing process development, and planning work on the plant.
If UOP were to procure the catalyst substrate, a substrate com-
mitment would be required by January 1973 with orders placed by May 1973.
Matthey Bishop provided similar lead times to Chrysler to
meet an April 1974 volume production date. Chrysler is currently negoti-
ating with both of these vendors and reports are that UOP would obtain 50%
of the Chrysler catalyst requirement and Matthey Bishop 25% to 30%. The
supplier for the balance has not yet been determined.
In September 1972, Chrysler also entered into an agreement
with the Ore and Chemical Corporation for the delivery of 100, 000 troy
ounces of palladium from the Soviet Union. Since Chrysler's catalyst will
probably be a mixture of platinum as well as palladium, a commitment for
procurement of platinum is still required.
It appears that Chrysler intends to manufacture the majority
of the catalyst containers itself. However, Arvin Industries, the Walker
Manufacturing Company, and the Hayes-Albion Corporation are potential
subcontractors to manufacture the container, but at this time Chrysler has
made no commitments to any of them.
16
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4.4 AMERICAN MOTORS CORPORATION
4.4.1 Production Schedules
American Motors has been working to schedules based on
achievement of full production of 1975 model year automobiles by August 1,
1974. The schedules are influenced by American Motors relatively small
size, which requires that it rely to a large degree on component and equip-
ment technology developed outside the company. Its production program
timing schedule for the 1975 model year vehicle is shown in Figure 5.
American Motors 1975 model year cars will require changes to the
engine cylinder head, engine intake and exhaust manifolds, and body floor pans,
as well as the addition of a catalytic converter. Key points to be noted are:
a. Preliminary release of all 1975 engine changes is planned
for November 1, 1972.
b. Detail drawings on critical long lead time items (e.g., the
cylinder head design change) would be released on March 1,
1973.
c. EPA certification tests would begin on November 1, 1973.
d. Tool construction would be completed on March 1, 1974.
e. 1975 engines would be installed in sales prototype vehicles
(first build from production tool parts), beginning March 1,
1974.
4.4.? Major Impact Factors
Incorporation of the emission control system requires many
design changes to different areas of the automobile. These design and sub-
sequent manufacturing changes are major factors in establishing the final
lead time requirement for 1975 model year production development. The
changes anticipated in 1975 American Motors cars involve the following
components and subsystems:
a. A new cylinder head for the V-8 engine to reduce exhaust
valve leakage, improve cooling capacity, and improve
casting techniques.
b. Body and structural changes to accommodate the catalytic
converter.
17
-------
Tooling and equipment (involving new machines, welders,
and assembly transfer stations) would have a major schedule impact if
American Motors had to revise its engine installation process. Presently,
the engine is installed from below after the body is completely assembled.
If a catalytic converter system of another design required that the engine be
installed from above, major changes in design and assembly would be
necessary.
Experimental prototype testing is currently being conducted
on the emission control system mounted in test-bed vehicles. To date, this
program has not been successful in demonstrating to American Motors that
the system can meet Federal emission standards for 50,000 miles. Cata-
lytic converter configuration changes emanating from this program may
have a serious impact on the design of the 1975 model year automobile as
well as on the design of equipment and tooling.
4. 4. 3 Critical Lead Time Items
The critical path lies with vendor lead time requirements for
catalytic converter production. (At the time of the EPA Suspension Request
Hearings in April 1972, the critical path was associated with the require-
ment for new cylinder heads; this is still considered to be a serious timing
factor. )
The anticipated changes required for or related to the Ameri-
can Motors 1975 emission control system, ranked in terms of critical lead
time, are as follows:
Catalytic converter/new cylinder head for the V-8 engine
Body and structure changes to accommodate catalytic converter
New carburetor
New intake manifold
Breakerless ignition system
American Motors is carrying two different catalytic converter designs at
this time, and may use different converters on different cars.
-------
ENGINEERING /•
DEVELOPMENT/
PROGRAM f—
CY 72 CY 73 CY 74
iJiF|MiA|MiJiJiAiSiOiNiD|j|FiM|A|M|J|J|A|S|0|N|D|j|F|M|A|M|J|J|Ai
30 25 20 15 10 S 0
MONTHS TO VEHICLE PRODUCTION
COMPLETE
1-1-7
-U74_V
PRODUCTION
ENGINEERING DESIGNS
PRELIMINARY RELEASE
ON ALL 1975 ENGINE
CHANGES 11-1-72^
ENGINE CHANGES/
FINAL REL. OF DETAIL
DRAWINGS ON ENGINE CHGS.
_V3"'"73 „ COMPLETE ALL
RELEASES 10-1-73
MAJOR BODY PROGRAM
APPROVED 5-1-72^
BODY CHANGES
ALL BODY STRUCTURAL
DETAIL DRAWINGS COMPLETE
5-1-73^7 , ALL BODY RELEASES
COMPLETE 9-1.73
PURCHASE ORDER PLACED ON
LONG LEAD TOOLING 3-1-73
A ALL STRUCTURAL
DIE MODELS COMPLETE
5-31-73
I
TOOL CONSTRUCTION
(CYLINDER HEAD EQUIPMENT)
INSTALLATION AND REARRANGEMENT
IN AMC PLANT
VENDOR CATALYTIC CONVERTER.
DESIGN DEVELOPMENT.
TOOLING & FACILITIES
VCOMPLETE
— 3-1-74
COMPLETE
7-1-74
V
PACKAGE SIZE FINALIZED. 11-I-72
V
COMPLETE. 3-1-74
V
AMC COMMITMENT
TO VENDOR. 8-15-72
START CERTIFICATION TESTINGV
11-1-73
START SALES
START VOLUME
PRODUCTION
8-1-74
PROTOTYPE
3-1-74 START
PILOT
5-1-74
Figure 5. American Motors 1975 Emission Control Program
Timing Study
19
-------
4. 4. 4 Current and Pending Contractual Agreements
A verbal commitment to one catalytic converter supplier for
a completely packaged device was made in August 1972. Neither the details
of the arrangements nor the name of the supplier are available at this time.
It is expected that the verbal agreement will be bolstered by a formal con-
tract after design and delivery details are reviewed and agreed upon. Talks
are continuing with potential suppliers and more than one contract may be
released by American Motors.
From the timing chart shown in Figure 5, purchase orders
were scheduled to be released in November 1972 for V-8 engine cylinder
block castings from General Motors and for new machine, transfer, and
assembly equipment for fabrication of new cylinder heads. Subsequently,
release should be given for the purchase of carburetors. Purchase orders
are also pending for other elements in the emission control system such as
the ignition system and EGR valves.
5. LEAD TIME SCHEDULES FOR CATALYST AND
SUBSTRATE MANUFACTURERS
As noted previously, all domestic first-choice 1975 emission
control systems incorporate an oxidation catalyst. Therefore, a key element
in 1975 model year production lead time requirements is the ability to mass
produce the required catalysts in a timely manner. Industry's status with
respect to this capability is discussed next.
5. 1 CATALYST MANUFACTURER LEAD TIME SCHEDULES
A summary of the production lead time schedules currently
proposed by representative oxidation catalyst manufacturers is shown in
Figure 6. As can be seen, all schedules are structured to start full produc-
tion for 1975 model year requirements in the April to July 1974 time period.
Oxidation catalysts needed for preproduction stockpiling and/or vehicle
emission certification testing, etc. , would be provided from units produced
20
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|J|A|
lOlNlD J
CY71
S
CY72
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CY73
JlAlSl
CY74
|F[M|A|M|J|J|A|5|0|
ENGELHARD(1)
• PLANT NO. 1
• PLANT NO. 2
OXY-CATALYST
35
30
25 20 15 10
MONTHS TO VEHICLE PRODUCTION
ui
(2)
MATTHEY BISHOP
(2)
W.R. GRACE11'(MONOLITH)
MONSANTO
(2)
UNIVERSAL OIL PRODUCTS
RESEARCH, DESIGN, DEVELOPMENT
lllMinihlllinh!!.!! PROGRAM APPROVAL PERIOD (COMMITMENT AGREEMENTS, PRODUCT
SPECIFICATION DEFINITION, ETC.)
PLANT SITE SELECTION, DESIGN, CONSTRUCTION
EQUIPMENT DESIGN, CONSTRUCTION, DELIVERY, INSTALLATION
' PLANT STARTUP, SHAKEDOWN
:•» FULL PRODUCTION
(1) INITIAL COMMITMENT RECEIVED FROM AUTOMOBILE MANUFACTURER
(2) START DATE SELECTED BY CATALYST MANUFACTURER
Figure 6. Production Lead Time Schedule for Catalyst Manufacturers
-------
during the plant startup and shakedown period (January to July 1974) or
from separate pilot and batch processing lines. Where it is necessary to
use catalysts not produced with production manufacturing equipment and
processes in certification test vehicles, the issue as to whether or not these
catalysts are the same "in all material respects" as production units may
arise. Due to the basic nature of the substrates and deposited catalytic
materials, it may be difficult to verify that catalyst loading, uniformity of
loading, and substrate physical characteristics are indeed representative
of quantity production units.
As of the time of data acquisition (August to October 1972),
there was considerable variability with regard to financial commitments made
by the automobile companies and the amount of in-house funds being expended
by the various catalyst manufacturers to retain a competitive position for
potential 1975 catalyst requirements. In all cases, there was reasonable con-
fidence that if contract negotiations pending with automobile manufacturers
would shortly result in firm production orders, the schedules as shown
could be met.
5. 2 SUBSTRATE MANUFACTURER LEAD TIME
SCHEDULES
Corresponding production lead time schedules currently
proposed by representative substrate manufacturers are summarized in
Figure 7. As was the case with catalyst lead time schedules (Figure 6), full
production of substrates is planned for the April to July 1974 time period.
Again, substrate units required for preproduction stockpiling and/or vehicle
certification testing, etc. , would be provided from units produced during
the plant startup and shakedown period (January to July 1974) or from
separate pilot and batch processing lines. Whether or not these proposed
production schedules can or will in fact be implemented is of course dependent
upon timely receipt of firm production contracts from the automobile
manufacturers.
22
-------
CY71
|J|A|S|O|N|D
CY72
J|F|M|A|M|J|J|A|S;
|O|N|D|J[F|M|A|M|J|J|A|S|O|N|D
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35
AMERICAN LAVA'1'
• MODULE NO. 1 <~
• MODULE NO. 2
• MODULES
NOS. 3,4
CORNING {2)
KAISER(2)
REYNOLDS(2)
30
25 20 15 10
MONTHS TO VEHICLE PRODUCTION
RESEARCH, DESIGN, DEVELOPMENT
UWINIIiiiillllllHl PROGRAM APPROVAL PERIOD (COMMITMENT AGREEMENTS, PRODUCT
SPECIFICATION DEFINITION. ETC.)
PLANT SITE SELECTION, DESIGN, CONSTRUCTION
EQUIPMENT DESIGN, CONSTRUCTION, DELIVERY, INSTALLATION
WAREHOUSING FACILITIES
PLANT STARTUP, SHAKEDOWN
FULL PRODUCTION
(1) INITIAL COMMITMENT RECEIVED FROM FORD/ENGELHARD
(2)START DATE SELECTED BY SUBSTRATE MANUFACTURER
Figure 7. Production Lead Time Schedule for Substrate Manufacturers
-------
5. 3 MAJOR SCHEDULE IMPACT FACTORS
5.3,1 Plant Design and Construction
In every case, the critical or pacing item in the overall pro-
duction lead time schedule is the time required for design of the production
facilities, site selection, and construction of the facility or plant. Site
selection and preliminary facility design activities, at a level sufficient to
support the lead time schedules in Figures 6 and 7, have been or are under-
way. In some cases, these activities have been covered by contractual
guarantees (e.g., Ford/Engelhard/American Lava agreements), while in
other cases they have been supported by in-house company funds. Actual
construction of the production facility will not be initiated by either the catalyst
or substrate manufacturers until they receive a firm production order con-
tract or similar financial guarantee.
5.3.2 Equipment and Materials Procurement
Raw materials for substrates and wash coats are considered
available in either abundant or necessary quantities and do not materially
impact the lead time schedule.
Platinum-group metals used as the catalytic agent are
considered by the catalyst manufacturers to be available within the scheduled
lead time for catalysts. The acquisition of these platinum-group metals is
considered by most catalyst suppliers to be the province of the automobile
manufacturers; they are currently negotiating with suppliers in South Africa
and with the Soviet Union.
The necessary processing equipment and tools required for
both substrate and catalyst manufacturing facilities are largely conventional
in nature and do not represent limiting lead time items.
24
-------
5.3.3 Plant Startup
Operation of either the substrate or catalyst manufacturing
facilities is considered to be simple compared with the operation of a
chemical or petro-chemical plant. Allowances of 2 to 6 months are included
in the schedules of Figures 6 and 7.
5.3.4 Quality Control
In most cases, product specifications have not as yet been
specifically delineated and definitive quality control measures have not been
completely spelled out. Items of concern include porosity control, wash
coat control, noble metal control, substrate breaking and chipping (monoliths),
etc.
It is noted that the mass production of these types of catalysts
has never been accomplished by any company; however, the catalyst firms
believe that related production and quality control techniques (chemical and
petro-chemical industries) provide a firm basis for assurance that quality
control requirements will not adversely impact their proposed production
lead time schedules.
5. 3. 5 Pilot Plants
All catalyst manufacturers contacted, except Grace, the Gulf
Oil Company, and the Monsanto Company, have some form of pilot processing
production plant in operation for purposes of manufacturing process optimi-
zation. Monsanto has made no decision on the use of a pilot plant, while
Grace has decided that there is insufficient time to do so and still maintain
its projected lead time schedule. Such pilot plants do not directly impact
the lead time schedules as shown, but they do provide a means for providing
quantities of catalyst units needed for preproduction inventory buildup and
certification testing, etc., during the period prior to full operation of the
25
-------
completed catalyst production facilities. Where pilot plants are not available,
such required quantities would have to be processed in batch production
facilities.
In the case of substrate manufacturers (American Lava,
Corning Glass Works, the Kaiser Aluminum and Chemical Corporation,
and the Reynolds Metals Company), all have current pilot production
capability.
5.3.6 s Cost
Available estimates of capital cost requirements per individual
supplier are in the range of $4 to $5 million for substrate production facilities
and $4 to $15 million for catalyst production facilities, depending upon the
selected production capacity. At these cost levels, the substrate and
catalyst manufacturers will not commit venture capital without a firm
production contract or other form of guarantee. It is this fact which presently
strongly impacts the projected schedules of Figures 6 and 7, since the
required production facility construction will not commence until such
agreements are concluded.
5.4 SCHEDULE COMPRESSION POTENTIAL AND EFFECTS
With regard to the potential for compressing or shortening the
production lead time schedules shown above, the substrate manufacturers
have stated, in general, that no appreciable compression can be made at the
present level of schedule definition (Figure 7).
In the finished catalyst area, there is some hope of minor
schedule compressions, as follows:
a. Grace -- No schedule compression for monoliths; 3 to 6 months
schedule reduction for pellet catalysts at a 1 0 to 15 cents per
pound cost increase (due to premium pay and increased capital
cost).
b. Matthey Bishop -- One to 2 months schedule compression for
building construction with overtime work (at a negligible
product cost increase).-
26
-------
c. Monsanto -- Some reduction in plant construction and
equipment procurement time. The magnitude of schedule
compression and related cost effects are not estimatable at
this time.
d. Oxy-Catalyst -- Approximately 3 months schedule compression
at a 10% cost increase due to overtime pay.
e. UOP -- One to 1-1/2 months reduction in facilities construction.
The resulting cost penalty is not known.
5. 5 CURRENT AND PENDING CONTRACT AGREEMENTS
At the time of this investigation (August to October 1972), the
status of contractual agreements among the automobile manufacturers and
the catalyst and substrate manufacturers was one of uncertainty and change
because during this period apparently serious negotiations were underway
among most of the major domestic automobile manufacturers and the various
potential catalyst manufacturers. The status reported as of the time of
visits made to the various companies involved was previously discussed in
Sections 4. 1.4, 4.2.4, 4.3.4, and 4.4.4 and is summarized in Table 1.
6. LEAD TIME SCHEDULES FOR AUTOMOBILE
COMPONENT MANUFACTURERS
A large number of manufacturers normally supply
"conventional" components to the automobile manufacturers. Their products
include body stampings, frames, manual transmissions, carburetors,
exhaust systems, wheels and brake parts, valves, window assemblies, metal
trims, fans, ferrous castings, etc. Their lead time requirements," even for
new component designs, are generally less than 20 months and therefore
are well within the remaining time frame for 1975 model year production.
An exception could occur, however, if a given company were
required to build a new facility for achieving a significantly higher output
capacity. No evidence of this requirement has been indicated to date.
27
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7. LEAD TIME SCHEDULES FOR PRODUCTION
EQUIPMENT MANUFACTURERS
Various items of production equipment are essential to and
inherent in modern automobile mass production facilities. Principal equip-
ment items include automatic transfer lines (for automatic machining and
assembly operations), cold stamping presses (for bodies and frames), and
welders.
Although complex automatic transfer lines can require lead
times (as high as 30 months) which are inconsistent with the remaining time
frame for 1975 model year production, there is no evidence that such equip-
ment, if required, was not ordered in a timely manner. Lead times for cold
stamping presses and standard resistance welders (if required) imply they
could be ordered in 1973 and be obtained in adequate time for 1975 model
year production.
In the special case of electron beam welders planned for high
volume production edge-welding of the General Motors pelletized catalytic
converter container, Hamilton Standard is supplying six production welders
to AC Spark Plug on a schedule consistent with meeting the General Motors
1975 production requirements.
8. NOBLE METAL PRODUCTION AND USAGE
Currently the Soviet Union is the world's largest producer of
platinum-group metals. The Republic of South Africa is by far the most
important manufacturer of platinum-group metals in the free world (the
United States production amounts to less than 1% of the total world production).
Since future platinum-group metal sales by the Soviet Union cannot be
accurately predicted, it is likely that primarily South African platinum-group
metals will be required to satisfy the projected needs of the automotive
industry in the United States in the post-1974 time period.
28
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Table 1. Current and Pending Contract Agreements--
Oxidation Catalysts and Substrates
~^___^ Domestic Auto
*"— *-^^^ Company
Catalyst or ^"~"~--~~^__^^
Substrate Supplier • — ^
Engelhard
Grace
Matthey Bishop*
Monsanto
Oxy-Catalyst
UOP
American Lava
Reynolds
General Motors
$630. 000 engin-
eering commit-
ment
Bidding on 25%
of 1 975 requi re-
ments
Bid on 1975
requi re me nts
Negotiating
Negotiating
Bid on pellet re-
quirements of
potential catalyst
suppliers (Davis,
Oxy-Catalyst , Mon-
santo)
Ford
-60°; of 1975-re-
quirements (up to
3. 6 million units/year)
Current commitment
S4. 9 mil lion
Could increase to $14
million by April 1 9~4
Negotiating for
-30% of 1975 re-
quirement (-1.8
million units/year
•^egot iatini;
$300. QUO capital guaran-
tee (scale-up of facility
for portion of 19~5 re-
qui remrnt s. Acreomont
lor further scale -up in
1973; negotiating pro-
duction orders.
Chrysle r
Negotiating fo r
25% to 30% of
1975 requirement
Engineering com-
mitment (facility
design). Expect
production con-
tract for"sub-
st antia!" part of
1U75 reauirements
American Motors
ISJ
*May also bo asked to supply all of Inte r national Harvester requirements.
-------
Preliminary information relative to the projected production
of platinum-group metals indicates that the combined capacity of the South
African mining firms may be adequate to supply automotive catalyst needs.
However, these capacities can only be achieved if contracts are signed in the
near future between the automobile manufacturers and the mining companies.
Without such commitments, it is unlikely that the mining companies would
proceed with their projected expansion programs because of the large capital
investment required.
Accurate evaluation of the platinum-group metal supply and
demand balance is currently very difficult to make, because several factors
related to automotive catalysts are still unresolved. Preliminary analysis
indicates that the platinum-group metal supply-demand balance is determined
by a number of factors among which are: the platinum-group metal loading
requirement of the automotive catalyst, the number of catalysts required on
the various vehicle classes, the catalyst replacement interval, the mining
industry capacity, and the degree of platinum-group metal recovery from
spent catalysts. A thorough study of these parameters is urgently needed in
order to provide all the data required for a complete and meaningful assess-
ment of platinum-group metal availability and demand issues.
9. LEAD TIME SCHEDULE FOR A GOVERNMENT
AUTOMOTIVE PROCUREMENT AGENCY
The lead times for procuring government military vehicles
are considerably less than the production lead time associated with new
model commercial passenger automobiles (e.g., 11 to 14 months for a
jeep versus about 25 to 28 months for a new model year light-duty car).
The major influencing factors are the pre-existing develop-
ment and tooling status at the time of procurement decision and the low
production rate of government vehicles, one to two orders of magnitude less
than passenger car rates. At this low rate, it apparently is not economical
for a producer to make his own parts, so they are purchased from
30
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manufacturers who have equipment and facilities available, thus eliminating
the time to set up parts production lines.
Other factors impacting shorter lead times include (a) tooling
is available in some cases and furnished by the government to the producer,
(b) the design may be known to the producer and he may have had production
experience with it, (c) the government normally will not let a contract to a
bidder who requires major equipment or facilities, and (d) the government
establishes a slow buildup to the full production rate.
10. LEAD TIME SCHEDULES FOR NONAUTOMOTIVE
INDUSTRY MANUFACTURERS
In general, nonautomotive production lead times are similar
to automotive production lead times (24-28 months) only when a completely
new product design or a change of major complexity is involved. For
example, a new self-cleaning oven required a 24-month lead time, a com-
pletely new refrigerator design required a 30-month lead time, and an engine
model year change for an outboard motor with a new mechanical starter
required a 30-month lead time.
Normal model change lead times vary, of course, depending
oil the type and complexity of change being made. In the case of refrigerators,
for example, the changes are usually related to styling only and the relative
simplicity of design requires only about 6 months of lead time.
11. ASSESSMENT OF AUTOMOBILE MANUFACTURERS'
PRODUCTION LEAD TIME
11. 1 DEGREE OF INDUSTRY SCHEDULE CONSISTENCY
The overall production lead time schedules are summarized
for the major domestic automobile manufacturers in Figure 8. As can be
seen, all company schedules are in reasonable agreement with one another
and with the historical model year lead time requirement for major changes
of 24 to 28 months. Their consistency with one another is not surprising in
view of the fact that all manufacturers were faced with the same critical lead
31
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1971 1972
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40
35
30 25 20 15 10
MONTHS TO VEHICLE PRODUCTION
A PRODUCTION DESIGN OR PRODUCTION PROGRAM APPROVAL
B VEHICLE JOB No. 1
C PARTIAL COMMITMENT FROM AUTOMOBILE MANUFACTURER TO
CATALYST/SUBSTRATE SUPPLIER
D FULL PRODUCTION
Figure 8. Overall Production Lead Time Schedules
-------
time component, the catalytic converter, and were dealing with the same
types of suppliers for catalysts and substrates. Their experience with
historical production lead time precedents for major changes was undoubtedly
the major factor which led to the Production Approval Milestone at the dates
shown. Of course, all companies stress that their present schedules are
optimistic and may not be met, for the reason that they were required to
commit resources to a given unproven emission control system design in
order to achieve full mass production of 1975 model year automobiles by
August 1974,
Also shown in the figure are similar current production lead
time schedules for representative substrate and catalyst manufacturers.
Except for Engelhard, which had the benefit of early commitments by Ford,
their schedules are also consistent with one another. Again, this consistency
is really related to ihe time required to design and construct a production
facility, and the same factors are influencing each individual schedule.
Finally, the catalyst, substrate, and automobile manufacturers'
overall lead time schedules arc consistent when compared with each other.
This consistency prevails because the automobile manufacturers' schedules
are, in turn, based on the catalyst manufacturers' schedules as shown.
11.2 POTENTIAL FOR INDUSTRY SCHEDULE
COMPRESSION
A reduction in the normal scheduled time for a complete
automobile development cycle is possible through three approaches: . increase
the degree of overlap between various phases in engineering development
and manufacturing development, extend the use of overtime on a given work
shift, or increase the number of work shifts to a maximum of three per day.
However, the greater the amount of scheduled phase overlaps, the greater
the chance for making costly errors through premature decisions. Generally
a 10% to 15% compression is considered to be the maximum feasible with
acceptable increase in unit cost. Any additional compression is bought at
excessively large cost increases and at some point no further compression
33
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is possible even with costs discounted as a judgment factor. The skilled
labor market cannot suddenly be increased to meet a multitude of orders.
Schedule compression is primarily in evidence for only one
area--the production of oxidation catalysts. The pacing item is the construc-
tion of new facilities; this is where the 10% to 15% schedule compression
could be obtained. Equipment requirements for these facilities are generally
of a standardized design not requiring long lead times.
11.3 INDUSTRY CAPACITY TO MEET HIGH PRODUCTION
VOLUME
The impact of raw material reserves and production capability
is noted in the manufacture of catalytic converters. Alumina for the sub-
strate and wash coat is in plentiful supply, but the supply of platinum-group
metals for the catalyst is an issue that is not completely settled at this time.
It appears that the production capacity of the South African mining companies
can be sufficiently increased, providing that they sign contracts in the near
future with the automobile manufacturers.
There are three forms of processed materials that pose a
problem for industry capability. First, there is the production capacity
needed to form catalyst substrates and apply the wash coat and catalyst
material. Second, there is the production capability for rolled stainless
steel for use in catalytic converter canisters, exhaust systems, and thermal
reactor liners, etc. Third, there is the capability of foundries to produce
sufficient numbers of castings for full-size thermal reactors, if they were
to be eventually used.
As of the time of data acquisition (August to October 1972),
there was a noted variability in schedule status for the different catalyst and
substrate manufacturers. This variability was a result of both the status of
financial commitments made by the automobile companies and the amount of
funds expended by catalyst and substrate manufacturers themselves in order
to be able to compete for potential 1975/76 catalyst requirements. In all
cases, there was reasonable confidence on the part of substrate and catalyst
34
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manufacturers that if contract negotiations pending with automobile manu-
facturers resulted in firm production orders in the November to December
1972 time period, the currently projected schedules for quantity production
of oxidation catalysts could be met.
In contrast, the automobile manufacturers have expressed
some doubt concerning the ability of the substrate and catalyst manufacturers
to meet production demands. Much of this doubt centers on the fact that
catalysts of the automotive type have never been mass produced in the quanti-
ties required by the automobile industry.
With regard to stainless steel capacity, it appears that raw
material availability is not a problem. However, material processing
capacity is a problem but it can be resolved by the timely ordering of addi-
tional equipment needed. The Lact that the automotive firms have not defi-
nitely decided on the type of stainless steel required is a problem that will
become more significant as the end of 1972 approaches. Commitments must
be made in the November to December 1972 period by the automotive firms
if 1975 model year requirements for stainless steel are to be met.
Casting capacity for the simpler, partial thermal reactor
currently programmed for use in 1975 model year vehicles is presently
adequately accounted for in 1975 model year production schedules. Casting
capacity requirements for the larger and more complex full-size thermal
reactors have not been well defined because this system has not been pursued
as a first-choice approach and is not completely developed. Therefore, long
lead time production equipment has not been-ordered. Ford states that the
time is now past the critical point for them to order arc and holding furnaces
required to manufacture full-size thermal reactors for the 1975 model year.
The foundry industry (exclusive of automobile company foundries) indicates
that if additional foundry capacity on its part is required, 36 months are
needed to achieve full production volume.
Fabricated products have posed some problems, but it appears
that these will be resolved. Fabrication of the catalytic converter container
and assembly of the unit should be handled adequately by a division of work
35
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among the automobile manufacturers, the catalyst manufacturers, and inde-
pendent firms such as Arvin Industries and Walker which have long experi-
ence in the fabrication of exhaust systems.
No evidence of problems in the production capacity for
traditional components has appeared, although new fabrication and assembly
processes may be required if double-wall exhaust pipes become necessary.
11.4 TECHNOLOGICAL IMPLICATIONS OF
ALTERNATIVE PLANS
Were Federal regulations to be relaxed, a number of
alternative plans could be considered by the automobile manufacturers in
lieu of meeting the Federal emission standards with 1975 model year auto-
mobiles in full production by August 1, 1974. Consideration of these other
plans, of course, depends upon judgments leading to decisions that would
have to be made by the Federal government.
If the Federal government were to grant a 1-year extension
to automobile manufacturers for meeting the 1975 emission standards, the
risk of introducing unproven designs for the emission control system would
be reduced. Prototype testing could be continued for a longer period to allow
for development of higher performance and more reliable designs, and the
overlap between these tests and the manufacturing design phases could be
lessened to reduce the risk of making design decisions based on preliminary
information. The impact on the rest of the industry, of course, would be a
deferment in the purchase of equipment, tooling, components, and raw
materials. Most affected would be the catalyst industry, which is just starting
to implement facilities for the mass production of substrates, catalysts, and
container fabrication and packaging.
Furthermore, were a one-year suspension to be granted, the
Federal government must issue a set of interim standards for exhaust emis-
sions. If these standards could be met by the catalytic converter systems
36
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presently developed or under development (either by virtue of raising the
emission standards levels or by revising the replacement intervals for
converters, etc.), then the impact on the industry noted above could be
averted.
Alternatively, the use of full-size thermal reactors is not
considered a viable option for 1975 model year automobiles, even if interim
emission standards could be met by them. This is because the automobile
companies have not been developing the thermal reactor as a first-choice
system and have not, therefore, proceeded to order the necessary long lead
time production equipment, as they have been doing for catalytic converter
systems.
Less effective partial thermal reactors, smaller in volume and
less complex than full-size thermal reactors, are currently programmed
for use in 1975 emission control systems. These could be used without
catalytic converters but the resulting emission reduction capability is at
present not well defined and could vary among the different automobile manu-
facturers, according to individual design details. Some partial thermal
reactors resemble a slightly oversize standard exhaust manifold while others
resemble the full-size reactor in outward appearance, while having a volume
approximately 2/3 less. At present such partial reactors are designed
primarily to oxidize HC and CO during the cold start period and to aid in
warming up the catalytic converter.
If the interim standards would simply permit the continued pro-
duction and sales of 1974 model year type automobiles for another production
year, the manufacturers would have to be apprised of this situation prior to
January 1, 1974. There still would be a lead time consideration with the
extended production of the 1974 model year, since orders must be placed in
advance of August 1974 production in order to continue supplies of raw
materials and components and to replace worn out tooling. Practically
speaking, however, the automobile manufacturers require a decision of this
nature which is consistent with catalyst final commitment date requirements
in order to avoid premature or unnecessary expenditures.
37
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Without a 1-year suspension of the emission standards, the
automobile manufacturers might consider continuing the production of 1974
model year cars throughout calendar year 1974, subject to approval by the
Federal government. This would provide more development and certification
test time for the 1975 emission control system. From a competitive market-
ing standpoint, of course, this action might create a reduction in sales for
those manufacturers requiring the longest delay in the eventual introduction
of 1975 model year cars.
11.5 PROGNOSIS FOR 1975/76 LEAD TIME
REQUIREMENTS
At present, all major domestic automobile manufacturers are
proceeding on a high risk basis with the necessary steps to ensure that the
1975 model year cars will be in lull mass production by August 1974. Orders
have been placed for long lead time equipment for all well-defined car sys-
tems; component orders will follow shortly.
Design efforts are still in progress on components and systems
not fully defined. These relate to the catalytic converter and its impact on
other areas of the vehicle such as the floor pan and dashboard. Decisions
have been delayed in order to take full advantage of data from the research
prototype test car programs. These tests are expected to continue into 1973
since the automobile manufacturers maintain they have not been able to find
a case of an emission control system that meets government regulations.
With regard to catalytic converters, some automobile manufacturers must
still decide on pellet versus monolithic substrates and promoted base metal
versus platinum-group metal catalysts.
The delays in final design decisions have also led to delays
in commitments to critical suppliers. Some limited commitments have been
made to catalyst firms. These commitments cover only engineering and
design for new or expanded facilities. Except for the Ford contract with
Engelhard, no full commitments have been made that would entail actual
construction and ordering of equipment. Based on the lead time schedule
38
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projections made by catalyst and substrate manufacturers in the August to
October 1972 time period, quantity production of oxidation catalysts for 1975
model year automobiles is possible if production order commitments or other
acceptable venture capital guarantee arrangements were made by the
automobile manufacturers in the November to December 1972 period.
Current schedules have been compressed slightly from those
previously cited by the automobile manufacturers. Additional compression
is unlikely except for a few isolated cases and, in general, would represent
cost increases to the end product. In general, all the automobile manufac-
turers show good schedule consistency when compared with each other and
when compared with their suppliers, particularly those companies supplying
catalysts and catalyst substrates.
While staged commitments have proven successful in providing
for initial work efforts, the time is at hand for making full commitments to
all critical suppliers. These include catalyst and catalyst substrate manu-
facturers, stainless steel manufacturers, and producer/refiners of platinum-
group metals. Sometime in the period of November to December 1972 the
automobile manufacturers will have to conclude such arrangements in order
to meet the lead time requirements for 1975 model year cars that incorporate
the latest emission control system designs.
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TECHNICAL REPORT DATA
(Please read Instructions on the reverse before completing)
1. REPORT NO. 2.
EPA-460/3-74-026-a
4. TITLE AND SUBTITLE
Assessment of Domestic Automotive Industry
Production Lead Time gf 1975/76 Model year
Volume I: Executive Summary
7. AUTHOR(S)
D.E. Lapedes, M.G. Hinton, T. Tura, and J. Meltzt
9. PERFORMING ORGANIZATION NAME AND ADDRESS
Aerospace Corp.
El Segundo, Calif
12. SPONSORING AGENCY NAME AND ADDRESS
Environmental Protection Agency
Emission Control Technology Division
Ann Arbor, Michigan 48105
15. SUPPLEMENTARY NOTES
3. RECIPIENT'S ACCESSION-NO.
5. REPORT DATE
Dec. 1972
6. PERFORMING ORGANIZATION CODE
8. PERFORMING ORGANIZATION REPORT NO.
;r ATR-73(7321)-1
10. PROGRAM ELEMENT NO.
11. CONTRACT/GRANT NO.
68-01-0417
13. TYPE Of REPORT AND PERIOD COVERED
Final
14. SPONSORING AGENCY CODE
16. ABSTRACT
A survey and analysis of the factors involved in bringing automobiles into
the market place with emphasis on production engineering, prototype testing
and tooling for production of the automobile and the oxidizing catalyst.
17. KEY WORDS AND DOCUMENT ANALYSIS
a. DESCRIPTORS b.lDENTIFI
Automobile
Manufacturing
Lead-Time
Catalysts
Production tools
18. DISTRIBUTION STATEMENT 19. SECURI
„ ., „ , . . , Uncla
Ro 1 pme Unlimited
I\l,i(_a^c U1U.J.1U.I.1.CU 20. SECURI
Uncla
ERS/OPEN ENDED TERMS c. COSATI Held/Croup
rY CLASS (This Report) 21. NO. OF PAGES
ssified 51
PY CLASS (This page) 22. PRICE
ssified
EPA Form 2220-1 (9-73)
40
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