Highway robbery The costly problem of counterfeiting - Haldex

DynamiX
A MAGAZINE FROM THE HALDEX GROUP NO 1/2006
Haldex Highway robbery
Highway robbery
The costly problem of counterfeiting
DaimlerChrysler
DaimlerChrysler
A search search for excellence excellence
No No Shortcuts Shortcuts
For For Mumbai’s Mumbai’s buses buses
A MAGAZINE FROM THE HALDEX GROUP NO 1/2006
Enduring advantages Winning combination in Grand Haven

PHOTO ANDERS KRISON
HALDEX DYNAMIX IS A MAGAZINE PUBLISHED BY THE HALDEX GROUP, BIBLIOTEKSGATAN 11, BOX 7200, SE-103 88 STOCKHOLM, SWEDEN.
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2 [ Haldex DynamiX 1/2006 ]
Safety is one of our core values
In this issue we focus on quality as a competitive
advantage. We also highlight a
growing problem in the vehicle industry
– counterfeit and ‘pirate’ spare parts, a phenomenon
that is a real and serious downside
for suppliers like Haldex. If you manufacture
something truly special, then
there are always others who want to copy
it. This obviously leads to economic losses,
although the really major losses cannot be
counted in terms of money. What happens
when the brakes fail on a school bus in an
unexpected situation or when a tractortrailer
carrying dangerous goods can’t stop
at a junction? Workshops and suppliers
who fit inferior parts to save money in the
short term will, in the end, be letting people
pay with their lives. And no one wants to
pay that price.
Safety, as a measure of quality, is the keystone
of our business. Haldex customers
in vehicle manufacturing choose, as a matter
of course, original parts for maximum
durability and safety. There are other advantages
too – original parts offer optimal total
economy throughout their working life. The
biggest problems occur with products that
do not meet the industry’s demands and
these are found on the unregulated aftermarket.
Here, stricter regulations would
be desirable but, for competition reasons,
among other things, they would be difficult
to implement and enforce. In this
situation it is comforting to see instances
where manufacturers and legislators have
jointly contributed towards improvements.
For example, in connection with our ongoing
establishment in China and Brazil, we
can inform our customers on these new
markets of the importance of using original
parts. Our efforts here are backed up by
changes in local laws, stipulating, among
other things, shorter braking distances.
www.haldex.com
These are current examples of how developments
can be driven from two different
angles. I am confident when I say that
the long-term result of this work will be a
reduced demand for counterfeit and ‘pirate’
spare parts. Now it is up to us to maintain
this long-term investment in quality products
at all levels. In this way, we will contribute
to a safer traffic environment for
children and adults.
After 8 months as Managing Director I
am most pleased to be able to say that my
first impressions of Haldex have been confirmed.
With world-leading products and
excellent customer relations we are strong
performers on our markets in Europe
and the USA. Our position as world leading
supplier of braking systems and fourwheel-drives
is confirmed by, among other
things, the fact that Volvo, Audi and Land
Rover have recently appointed us as suppliers.
Financially, 2005 was most encouraging.
Net sales increased by 11% to 7.48 billion
SEK while profits after tax and financial
items increased by 27% to 270 MSEK.
However, we must not rest on our laurels
but look ahead to a new and exciting
year. Haldex is an innovative company with
very interesting products and good growth
opportunities, factors that we will continue
to make the most of.
Joakim Olsson
President and CEO

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Contents
News
Meeting high standards. In the search for a reliable supplier, Daim-
lerChrysler needed much more than an excellent fuel pump.
No shortcuts. Economy made the choice self-evident, and Mumbai
Bus Company ditched cheap counterfeit parts in favour of originals.
Guest column. Design legend Einar Hareide asks for designs that give
us back time rather than take it away from us.
More ominous than fake brand-name handbags and watches. The
automotive industry is the new Klondyke for a growing industry of
piracy and counterfeiting.
Gallery
Tailor-made tradition. Lämneå Bruk has a long and distinguished
history of wire drawing for a wide range of clients.
Winning combination. The use of a new material has resulted in
more durable height control valves.
One step ahead. Malin Hallberg’s expertise on purity in steel wire
helps keep the competition at bay.
Thinner and stronger. Nitriding may be the solution as the car indus-
try requests smaller, yet stronger components such as valve springs.
18
PHOTO FREDRIK RENANDER
8
PHOTO CARL-JOHAN ERIKSON
24
[ Haldex DynamiX 1/2006 ] 3
PHOTO CARL-JOHAN ERIKSON

A positive report
Haldex full year report 2005 shows some very positive
facts and fi gures.
· Earnings after tax increased by 27% to SEK 270 m (212).
Earnings per share increased to SEK 12.19 (9.50).
· Earnings before tax increased by 18% to SEK 341 m
(290). Excluding restructuring costs of SEK 28 m,
earnings amounted to SEK 370 m, i.e. an increase of
SEK 80 m or 28%.
· Operating income increased by 11% to SEK 391 m
(353). Excluding restructuring costs, the profi t was SEK
419 m, an increase of 19%. The profi t margin, excluding
restructuring costs, increased from 5.2% to 5.6%.
Including restructuring costs, the profi t margin was
5.2%.
· Return on capital used (rolling 12 months) was 12.3%
(12.8). Excluding restructuring costs, capital employed
was 13.2%.
· Net sales increased by 11% to SEK 7,486 m (6,759). After
currency adjustment, this increase was 9%. Order intake
increased by 10% to SEK 7,592 m (6,923). After currency
adjustment, the increase was 6%.
4 [ Haldex DynamiX 1/2006 ]
ILLUSTRATION ISTOCKPHOTO
New heads
of Corporate
Communications and HR
Lena Olofsdotter has been appointed head of Corporate
Communications at Haldex. Lena Olofsdotter was previously
Director of Corporate Communications at Swedish
Match.
Per Ericson has been appointed Senior Vice President
Human Resources. He assumed will be a member of the
Executive Committee. Per was previously Executive Vice
President, Corporate Human Resources and Business
Excellence at Stora Enso.
Lena Olofsdotter and Per Ericson assumed their
respective positions on April 1, 2006. They report to
Joakim Olsson, CEO.
LENA
OLOFSDOTTER
PER
ERICSON

DAIMLER CHRYSLER PREFER TO WORK WITH
SUPPLIERS THEY KNOW AND TRUST.
Two pumps and one
big challenge
WHEN DAIMLERCHRYSLER ASKED HALDEX FOR A NEW DIESEL PUMP, IT WAS BECAUSE HALDEX HAD THE RIGHT
EXPERIENCE. BUT IN THE END, DAIMLERCHRYSLER COMMISSIONED TWO PUMPS FROM A HALDEX FACTORY
THAT HAD NEVER MADE DIESEL PUMPS BEFORE.
THE HALDEX FACTORY IN ROCKFORD, Illinois,
has been making diesel fuel pumps
for years. Among its customers is Daimler-
Chrysler, whose popular OM457 heavy-duty
truck engine and its US sister, the OM460,
both feature Haldex pumps. In recent years,
as part of its Optima program, Daimler-
Chrysler wanted to improve the pump to
make it lighter and smaller. Saving material
was one issue; saving money was another.
Manfred Meschenmoser, test engineer for
heavy-duty engines at DaimlerChrysler in
Stuttgart, Germany, says, “We always want
everything to be both better and cheaper.”
The new pump needed to be a bit shorter,
too, to make way for some additional elec-
TEXT MICHAEL LAWTON PHOTO THOMAS MÜLLER
tronics, and, says Meschenmoser, “You can
always use some extra space.”
Meschenmoser knew that Haldex was
already making a pump of the right dimensions
for the S60 engine of the Detroit
Diesel Company, which has since been
acquired by DaimlerChrysler. Andreas
Zepf, area sales manager for Haldex
[ Haldex DynamiX 1/2006 ] 5

Hydraulic Systems, recalls: “I came to see
Herr Meschenmoser with Matt Alagna
and Jerry Kiddell from Rockford and Rudi
Rehbach from Hof. Initially we planned to
make the new pumps there, but then we
started talking to DaimlerChrysler about a
pump for medium-duty engines.” And that
was to lead to a signifi cant development for
Haldex and DaimlerChrysler.
THE IDEA of the medium-duty engine series
BR900 was born back in 1992. The engine
went into production in 1995 with a perfectly
satisfactory diesel pump from another
supplier, and everything went well until
Mercedes-Benz decided to sell the engine
in the US. The BR900 was a big hit, but
the pump supplier simply didn’t have the
capacity to cope with the extra demand.
Mercedes pushed and pushed, and the
supplier pushed and pushed. Staff members
did without holidays, and machines
worked around the clock. Mercedes-Benz
even sent people to help out. Assembly
lines that were designed to make 80,000
pumps a year were pushing out 120,000.
“More, more,” cried Mercedes-Benz. Eventually,
however, there was no time to maintain
the machines, and quality began to
suffer.
Perhaps DaimlerChrysler should have
dealt with the potential problem earlier.
Indeed, Hermann Gehring, Daimler-
Chrysler test engineer for medium-duty
truck engines, admits that the company’s
purchasing department had been pushing
for a second supplier for some time, but he
says, “I work best with the suppliers I know
and trust.” However, there was no time for
sentimentality; a new supplier was needed
to fi ll the shortfall. And, as Bernhard
Schwarzkopf, in charge of medium-duty
engine production development, says, “We
all agreed – the quicker, the better.”
In 2003 DaimlerChrysler looked for
someone to build another suitable fuel
pump. The purchasing department suggested
to Gehring that the company might
try Haldex, since Haldex was working on
the new pump for the OM457/460.
Gehring says competitors tendered but
were either too expensive or technically not
as good [as Haldex]. And, partly because
the situation was urgent, DaimlerChrysler
wanted the development close by. “You
need to be able to pop over and see what’s
going on if you are to deal with the issues,”
Gehring says. So Haldex decided to take
what could have been quite a risk and make
the pumps in the Haldex factory in Hof,
Germany. Hof has a long tradition of making
high-pressure oil pumps, but it had
6 [ Haldex DynamiX 1/2006 ]
“We needed to be sure that
everything would work the
first time. ”
ANDREAS ZEPF
“Haldex had to solve them, but
in reality we worked together
on many issues.”
HERMANN GEHRING
never made a diesel pump before. Experts
from Hof came to Stuttgart and convinced
DaimlerChrysler they could do it.
Meanwhile, if Hof could supply the
BR900, why not the OM 457/460 as well?
That would mean lower transport costs,
and Haldex could run its assembly line in
Hof more effi ciently. The arguments in
favor were clear, and, says Zepf, “We could
always fall back on Rockford if it didn’t
work.”
ALTHOUGH ROCKFORD SUPPLIED the initial
drafts for both pumps, Hof quickly
took on the task of optimizing the design.
Among other things, the pumps had to be
adapted to European measurements and
working methods. Meschenmoser notes,
for example, that a check valve used mainly
for initial priming was originally designed
“We always want everything
to be both better and cheaper.”
MANFRED MESCHENMOSER
“It was easier to start
from scratch.” BERNHARD SCHWARZKOPF
for the US practice of pressurized fi lling
and was not suitable for the European practice
of hand fi lling. In addition, says Zepf,
“We saw some possibilities for improving
the S60 pump – for example, in respect
to cold-starting characteristics.” Meschenmoser
points out that every new pump
can be made better than the previous one.
“Modern machines build more precisely,”
he says, “and that works its way along the
line: Better machines can build better
machine tools, which in turn can build better
pumps.”
And there was the future to think about.
Meschenmoser is preparing for 2007,
when trucks have to fulfi ll new US Environ-

mental Protection Agency emissions standards,
known as EPA07. These standards
will demand treatment of exhaust particles,
requiring larger pump capacity. Haldex
made the new pump with space to pump 30
percent more diesel within the same housing.
Tests are currently under way to adapt
the pump for the new standard.
Meschenmoser’s job is to test engines
and components until they collapse. “We
have to overtest everything for pressure
and temperature,” he says. “We need damage
before we can see the limits.” In August
2003 he ordered the fi rst 12 prototypes,
which were put on test beds for overtesting,
sent out to truckers for real-life experience
and fi tted to trucks driving up and down
South Africa – a way to test over a distance
of 100,000 kilometers in double-quick
time. Haldex was meanwhile doing its own
tests. “I was fairly sure the pumps would
work because Haldex has experience,” says
Meschenmoser. “After all, it’s not as if
they’re building pumps for the fi rst time!”
BY MARCH 2004, tests were looking good
enough for Meschenmoser to send out an
e-mail preparing production facilities for
the fact that they would soon be getting new
pumps. “That way they could plan,” he says,
“and make sure they didn’t order too many
of the old pumps.” In September 2004, the
pump’s performance characteristics were
agreed, and in January 2005, Meschenmoser
called back all the pumps being
tested and sent them to Haldex for fi nal
evaluation. In April 2005, Meschenmoser
received confi rmation from the US that the
assembled pump met the current
EPA04 standard, and in May, the
fi rst production delivery was
sent to the engine assembly
plant in Mannheim. At the
end of 2005, the fi rst delivery
from Hof to DaimlerChrysler’s
plant in Sao Paolo (in
Brazil) for the US market
followed.
Haldex is now supplying
the total demand.
“That was a very short
development time,” says
Meschenmoser.
A mere four months was
the time allotted for Haldex when
it developed the new pump for the
BR900. Haldex had an engineer in Hof
working full time just on this project, Zepf
says, “and twice a week we had video conferences
with Rockford.” The fi rst prototypes
were delivered in January 2004, and
production started in May 2004.
Schwarzkopf admits it might have been
easier to build the new pump on the design
of the old one, but the decision was to start
from scratch. That allowed Haldex to design
smaller, more effi cient gears. “Normally we
would experiment with different materials
to see if we could save weight and cost,”
says Zepf, “but because of the short development
time, we had to work with a lowrisk
concept. We needed to be sure that everything
would work fi rst time.” The pump
housing included a roller for a belt driving
air conditioning, and the extra forces on the
housing had also to be taken into account.
Gehring, who was responsible for testing
the new pump, had to organize extra
test bed capacity to speed up the process.
Schwarzkopf had to prepare the pump for
production and develop the drawings. “We
noted errors and problems,” says Gehring,
“and Haldex had to solve them, but in reality
we worked together on many issues. We
went to Hof several times, and we could
see various things from our experience and
defi ne a number of modifi cations that could
then optimize the product and the production
process.
Gehring, Schwarzkopf and Meschenmoser
all agree that what they look for in
a supplier is punctuality, reliability and a
representative they contact easily. To these
qualities Gehring adds “the ability to deliver
the quantities,” and Schwarzkopf brings
up “value for money,” although he quickly
adds, “that’s a subsidiary consideration.”
This is after all DaimlerChrysler!
PASSED
EVERY
TEST.
HOF OPTIMIZED THE DESIGN FOR EURO-
PEAN MEASUREMENTS.
HOF IN SHORT
Haldex’s factory in Hof has a long history.
The Berlin-based engineering
company Reichert started making
high pressure oil pumps (in which the
flow is driven by the rotating gears
and pressurized by the load) in 1908,
and it moved production to Hof during
World War II to escape the bombing.
The company was acquired by Haldex
in 1990. The factory made high-pressure
oil pumps, working at pressures
of up to 275 bar. A diesel transfer
pump, which moves diesel fuel from
the tank to the engine, operates at
much lower pressures, typically under
10 bar. But the challenge is to make
the pump reliable in a wide variety of
temperatures; diesel is viscous when
cold and fluid when warm, and there
are many different qualities, some
more aggressive than others, but the
pump has to cope with everything.
And, because a diesel engine needs
disproportionately more fuel when it
starts even though the engine is operating
at low speed, the pump needs a
high level of efficiency at low revolutions.
[ Haldex DynamiX 1/2006 ] 7

When BEST
got even better
IN INDIA, TRAVEL BY PUBLIC BUS IS OFTEN ACCOMPANIED BY SQUEALING BRAKES AND BREATHTAKING STOPS.
BUT MUMBAI’S BEST BUSES ARE BRINGING A NEW LEVEL OF QUIET AND SAFETY TO THE JOURNEY.
IN INDIAN CITIES, if you hear a vehicle screeching on its brakes
behind you at an intersection, invariably it will be a public bus. But
in Mumbai these days, the public buses offer the drivers around
them – and their passengers – a calmer traffi c experience.
There are some 50 BEST (Brihanmumbai Electric Supply and
Transport Undertaking) buses now plying the streets of Mumbai.
With their cheerful Starbus logo, these swank, red, air-conditioned
buses carry passengers over distances of up to 30 kilometers for
less than one US dollar.
“Among the 64 state transport undertakings (STUs) in India, we
fi nd BEST to be the most innovative, technically savvy and professionally
run,” says Ganesh Pai, chief operating offi cer of Haldex
India, the joint venture between Haldex and Anand Automotive Systems,
a leading Indian auto component manufacturer. The joint venture
manufactures air brake systems. “We were the fi rst company in
India to market automatic brake adjusters (ABAs),” Pai says. It is not
yet mandatory for commercial vehicles in India to have ABAs, but
8 [ Haldex DynamiX 1/2006 ]
TEXT R.F. MAMOOWALA PHOTO FREDRIK RENANDER
legislation to make ABAs mandatory is expected in April 2007. A legislation
which will certainly make India’s roads a safer place.
In 1997, when Haldex India fi rst started working with the major
commercial vehicle OE in India, it also worked closely with BEST
and fi tted out two BEST buses, manufactured by Ashok Leyland.
The challenge was to persuade Ashok Leyland that the advantages
outweighed the greater cost. “It took us four years, during which
we worked with their technical team, to convince them that even
though ABAs were fi ve to six times costlier than the common manual
brake adjusters, in the long run ABAs would prove cost effective,
simple to install and easier to maintain,” says Sachin Kotwal,
senior manager at Haldex India, Mumbai.
Kotwal explains that, compared with a manual brake adjusters
where the space between the brake lining and drum must be
adjusted after a certain distance, (in BEST buses every six months),
ABAs are adjusted automatically and only require overhauling once
every four or fi ve years, and will not need adjusting throughout it’s

[ Haldex DynamiX 1/2006 ] 9

“ In the long run ABAs would
prove cost effective, simple to
install and easier to maintain.”
life. Obviously the need to pull vehicles off route to perform this
previously labour intensive service, costs through both lack of operational
revenue, staffi ng and increased fuel and tyre wear, between
route and workshop.
In addition, with ABAs the braking effort on all the wheels is
uniform, reducing the stopping distance, increasing reliability and
minimizing the sideway pull.
From 2001 to 2006 the story has been one of success; now BEST
not only demands Haldex ABAs from its OEM supplier as a standard
fi tting, and it has also retrofi tted most of its earlier buses – a
fl eet of about 3,400 – with Haldex ABAs.
10 [ Haldex DynamiX 1/2006 ]
SACHIN KOTWAL
So why, on a public utility like BEST are they opting for a costlier
product for its buses in a price sensitive market like India? A BEST
spokesman explains: “The obvious advantage was that ABAs do
not require overhauling every six months, the way manual adjusters
do. And because they offer quick, reliable and balanced braking,
they ensure the safety of the 4.36 million passengers that we transport
daily. Reliability and long life were two major factors in favor
of ABAs.”
According to India’s 2001 census, greater Mumbai has a population
of 11.91 million, and the traffi c on its roads is often chaotic,
clogged with an assortment of vehicles, making the job of

any Indian STU driver extremely challenging. “In a metropolis
like Mumbai, where at most traffi c junctions there is bumperto-bumper
traffi c and where panic braking is the norm, a reliable
and effi cient braking system is a big boon to the driver,” he
says. “Even though our drivers are generally not aware of technical
stuff, it is BEST policy to equip them with braking effi ciency
to ensure the safety not only of our passengers but of other road
users as well.”
Following the success of ABAs in BEST buses, Haldex has introduced
this customer to its air treatment product, Consep (Condenser-cum
Oil Separator). This removes dirt, oil and moisture from
the air system, increasing its effi ciency. “They’ve realized its benefi t
and have asked the OEM to make it a standard fi tting,” says Kotwal.
CURRENTLY HALDEX INDIA manufactures both manual and automatic
brake adjusters at its two plants in Nashik, near Mumbai,
grossing annual revenues of approximately Rs 340 million (about
7.7 million USD). If the legislation making ABAs mandatory for
commercial vehicles comes as anticipated next April, the company
will step up its manufacture of ABAs. Now 95 percent of the
brake adjusters its makes are manual. “We already have additional
capacity at one of our plants, where we’re also going to manufac-
[ Haldex DynamiX 1/2006 ] 11

ture Conseps, which thus far we’ve been importing from Haldex in
Sweden,” says Kotwal.
Meanwhile, says COO Pai, the company continues to look for
customers among other STUs.
But, he says, “not all of them are like BEST, which has been easy
to deal with, receptive to innovation and a very clean organization.”
Pai points to the painstaking care BEST takes in maintaining its
fl eet of buses. “This aspect of their operation is admirable,” he says.
“Other STUs should learn from them how to maintain and operate
their fl eet. They have a special facility to regularly train people and
upgrade their skills and are hence able to run their organization
effectively.”
BUT FOR HALDEX INDIA, BEST has been a demanding customer.
“Initially, after we had fi tted some buses with ABAs, we had a diffi
cult job, as their technicians would call us about any problem
related to the braking system,” says Suresh Babu, a Haldex service
engineer. For instance, changing a brake lining in a manual
adjuster is soundless, but in an ABA there is a rackety sound when
the lining is loosened, he explains, “and they used to think something
was broken.” But regular training sessions by Haldex engineers
at BEST workshops and depots solved this problem.
B.S. Choudhary is a mechanical engineer with Haldex India. He
devotes his time exclusively to BEST for troubleshooting operations.
“Actually they call us whenever there is a hitch in the braking
system, even if it has nothing to do with the ABAs. I go there, analyze
the problem and offer a solution.” A couple of times such calls
have come in the middle of the night, he says, “but we make sure
that the problem is sorted out in a few hours. BEST is our top customer
in India, even though they don’t buy directly from us.”
The interaction between Haldex India and BEST has been fi netuned
over the years. One senior manager at BEST puts it succinctly:
“We have good interaction. Haldex technical representatives
come regularly to our workshops and depots, and they deliver
spare parts bang on time.”
12 [ Haldex DynamiX 1/2006 ]
MUMBAI IN SHORT
One of the widely circulated stories about Mumbai, India’s
commercial and entertainment capital, is that, of its nearly
12 million people, not a single man, woman or child goes to
bed hungry, despite the fact that its slum population is the
highest in India (6.5 million, according to the 2001 census).
Some of its citizens may live on the pavement, but they will
find some way to earn at least one decent meal a day. Such
is the enterprising spirit of the city.
Situated on an archipelago of seven islands, Mumbai dazzles
you with the sheer width and range of what it offers
in terms of food and fashion, art and culture, shopping and
entertainment and investment and employment opportunities.
It houses the Reserve Bank of India, which is the country’s
central bank, and the two stock exchanges – Bombay
and National Stock Exchange. Both indices are seeing one
record high after another as FIIs (foreign institutional investors)
rush to India to get a slice of India’s booming economy.
The predicted growth for 2006 is 8.1 percent.
Real estate here is among the costliest in the world, and
yet the city has space for a national park, the Sanjay Gandhi
National Park, within its boundaries.
Except for IT companies, most Indian corporations have
their headquarters in Mumbai. Some of India’s wealthiest
live here in opulent splendor. The city is also host to some
of Bollywood’s biggest stars – Amitabh Bachchan and Aishwarya
Rai, to name two.
Through all of this run the bright red BEST buses. Not too
many Mumbai residents know that route Nos. 166 and 202
offer round-the-clock services in this city that never sleeps.

Design in the future will
give us back our time
“THE GREAT CHALLENGE AT PRESENT IS TO DEVELOP PRODUCTS THAT GIVE
US BACK OUR TIME. THAT GOES FOR EVERYTHING FROM CELL PHONES TO
CARS.”
COMPETITIVE FACTORS such as technology,
production and safety, which previously
formed decisive differences between
car brands in the same segment, are becoming
increasingly similar. This is due, among
other things, to practical limitations governed
by both the natural laws of physics
and international safety regulations. All cars
have airbags, windshields have similar characteristics,
and storage spaces have desired
heights and depths. These and many other
basic prerequisites reinforce the importance
of good design. Good design, in fact,
is the automobile industry’s fi nal and most
decisive competitive factor.
At the same time that design is becoming
more important to car manufacturers,
it is also becoming clearer that car buyers
today make their choices as much with their
hearts as with their heads. For well-educated
consumers who are used to taking in
advertising messages and information, the
product, the car, has to live up to its own
myth. Our choice of car is decided as much
by its design as by its perceived value based
on origin, such as German precision, Scandinavian
safety or Italian elegance.
Among the manufacturers who have succeeded
in the challenging task of fi nding
a distinctive long-term brand identity are
Volvo, with its clean, dynamic design concept,
and Toyota, which, in the face of great
competition, has succeeded in positioning
its hybrid models as No. 1 choice for the
EINAR HAREIDE
environment. At the same time, BMW has
exhibited a great deal of courage and awareness:
Despite its leading position as a trend
creator for cars with perfect proportions, it
has taken a daring step towards creating a
completely new design vocabulary. Lexus
has also worked long-term to establish itself
as a high-quality car, and, in a few years
time, it will become the most exclusive car
in the world.
“In essence, good design
is all about being
highly functional, as form
and function together
constitute good design.”
While good design takes on an increasingly
important role as a competitive factor,
cars are becoming available to more
consumers in a growing number of markets.
This will also increase demands on
design, as it is doubtful that there is a universal
design solution that will attract every
type of buyer. Car design in the future will
be based on very short series, with special
models for specifi c markets. I believe, and
hope, there will be an increased tendency
towards more smaller players. This is where
the innovative powers dwell, and today’s
technology and manufacturing systems
support this scenario. At the same time, we
must not forget that today’s developments
must go hand-in-glove with the availability
of fossil fuels. We have got to fi nd and
develop alternatives to oil as a fuel and manufacturing
material. More than anything
else, such developments will decide how we
regard communication and transportation
in the future.
In essence, good design is all about
being highly functional, as form and function
together constitute good design. In my
opinion, in the future, preference will be
given to a few good functions and not the
abundance that we see today, of which we
only use about 10 percent. The question is,
are the remaining functions actually necessary,
or would they be missed if they disappeared?
We have come to the point where
choice consumes our time. Just think of
how much time it takes for us to learn new
functions! Do we have this time, and do
we want to spend it on solutions that we
haven’t even asked for? The great challenge
now is to develop products that give us back
our time. That goes for everything from cell
phones to cars.
EINAR J. HAREIDE, FORMER CHIEF DESIGNER AT
SAAB AUTOMOBILE AB IN SWEDEN AND DESIGNER
AT MERCEDES BENZ AG IN GERMANY, STARTED
HAREIDE DESIGNMILL IN 2000. THANKS TO HIS
EXTENSIVE EXPERIENCE WITH THE AUTOMOTIVE
INDUSTRY, HE WAS ABLE TO DEVELOP A COM-
PREHENSIVE INDUSTRIAL DESIGN SERVICE IN
NORWAY. DESIGNMILL ALSO HAS AN OFFICE IN
GOTHENBURG, SWEDEN.
YOU CAN WRITE EINAR HAREIDE AT
EINAR@HAREIDE-DESIGNMILL.NO
[ Haldex DynamiX 1/2006 ] 13

Counterfeiting a
in auto parts industry
PIRATING AND COUNTERFEITING IN THE AUTO INDUSTRY IS A PROBLEM THAT IS GROWING DRAMATICALLY.
BY JOINING FORCES, MANUFACTURERS, DISTRIBUTORS, SERVICE PROVIDERS AND CONSUMERS CAN HELP PUT
MODERN-DAY PIRACY OUT OF BUSINESS.
WHEN MOST PEOPLE think of counterfeiting, an image of a man
selling fake fashion watches or handbags on the street usually
springs to mind. These images imply that counterfeiting is a fairly
innocent crime. In fact it is one of the most dangerous and costly
crimes in the world today. In the automobile industry, a counterfeit
part installed in a car or truck presents a major safety risk. The dramatic
growth in pirating and counterfeiting in auto parts is a global
problem that the industry is tackling head-on, not only to preserve
consumers’ trust but also to protect brand and reputation and to
prevent millions in lost sales annually.
“Until the 1980s, counterfeiting was thought of as a victimless
crime,” says Neal Zipser, vice president of marketing and communication
for the Motor and Equipment Manufacturers Association
(MEMA) in the United States. “But today the differences between
real and fake products are getting harder to detect, causing substantial
fi nancial and physical harm.
“The last thing consumers want is to have their brakes fail on the
freeway or on their child’s school bus,” he continues. “Not many
people understand that counterfeiting has become the drug traffi
cking of the 21st century, funding organized crime and even terrorism.
Profi ts are enormous, penalties are lax, and it is all too easy
to avoid being caught.”
Some 80 percent of counterfeit products originate in China, says
Zipser. It’s a situation that is largely due to the country’s burgeoning
economy. In the 1980s, when Japan’s economy took off, it also
became a hot spot for counterfeiting.
“Wherever there is an emerging economy, that is where counterfeiters
will pop up,” Zipser says. “There is no easier way into
the market than stealing someone else’s intellectual property. You
get instant access into a market without the years of research and
development.”
Although Asia and parts of Eastern Europe may be the center of
production, the problems and risks associated with counterfeiting
are part of everyday life in Europe and the US. The pirated parts
end up in the distribution chain, causing problems not only for
manufacturers but also for wholesalers, distributors, service providers
and consumers.
The International Chamber of Commerce estimates that 7 percent
of world trade is in counterfeit goods and that the counterfeit
market is worth 350 billion US dollars. According to the US Fed-
14 [ Haldex DynamiX 1/2006 ]
eral Trade Commission, counterfeiting costs the global automotive
parts industry USD 12 billion a year, USD 3 billion in the US
alone. However, these fi gures are from 1997, and MEMA
believes that they are conservative, with pirating and
counterfeiting increasing at an explosive rate.
There are serious consequences to this. Intellectual
property rights (IPR) are the lifeblood of any innovative
industry. Violations of IPR can cost manufacturers
hundreds of millions of dollars and signifi cant job loss
and brand degradation. Service providers, retailers, wholesalers
and distributors can also face signifi cant civil and criminal
penalties for traffi cking counterfeit parts, even if they were
not aware they were selling counterfeit parts.
“In the worst-case scenario, manufacturers lose market
share, which prevents them from making investments
in technology or new plants or from entering
new markets because the counterfeiters
have gotten there fi rst,” says Zipser. “In addition,
there is the cost of litigation and the loss of brand reputation.
Counterfeit products dilute the brand so that companies
must spend more money on marketing, with increased
warranty costs.”
While the auto industry faces stringent quality and
safety regulations and must thoroughly test products
before they can be put on the market, counterfeiters put
parts on the market with no regard for safety or quality.
Pirated parts may be cheaper, but in the end they
become an expensive liability, as they cannot match
the economy and life expectancy of original parts.
SEVERAL YEARS AGO, Zipser recalls, the issue of counterfeiting
made headlines in the heavy-duty and trucking industries when
fake Class 8 bolts made their way into the supply chain and onto
truck cabs. The bolts, made of sub-par steel, began to break because
of insuffi cient tensile strength. More recently, it was discovered
that fake fuel pumps, taillights and even brakes were installed in
Ford and Lincoln cars at an auto service dealer in New York City.
Most of the auto parts were manufactured outside the US, packaged
to look exactly like authorized Ford parts and sold far cheaper
than the real equipment.

costly problem
TEXT AMY BROWN
PHOTO MEMA, GOZZO
ILLUSTRATION LARS REHNBERG/STHLMILL
“This is really just the tip of the iceberg,” says Zipser. He notes
that law enforcement and customs offi cials often don’t have
enough resources to make a dent in the problem. In Long Beach,
California, the biggest port in the US, 9,000 containers of goods
come through each day, and only 2 percent of these are actually
inspected.
There are counter measures to the rise of counterfeiting, according
to experts. These include registering patents in all countries
where a product is sold, creating a company anti-counterfeiting
strategy, providing customs offi cials with the knowledge to detect
counterfeit goods and ensuring that the supply or distribution
chain is aware of the problem and has good knowledge and control
[ Haldex DynamiX 1/2006 ] 15

NEAL ZIPSER AND ANN-CHARLOTTE SÖDERLUND STRESS THE IMPOR-
TANCE OF INTELLECTUAL PROPERTY PROTECTION.
of its suppliers. Manufacturers are also installing hidden labels or
devices in their branded products to prevent counterfeiting.
But it all starts with protection of IPR, says Ann-Charlotte Söderlund,
a partner at the Swedish law fi rm Gozzo, chairman of the
Swedish Anti-Counterfeiting Group and an expert on international
IPR, Intellectual Property Rights.
“It is extremely important that manufacturers register for design
rights and, where possible, for patents or trademarks,” she says.
“A company should have a brand protection or anti-counterfeiting
strategy in which they survey the market and go after counterfeiters
immediately. It is expensive to protect your rights, but the potential
loss of sales and brand reputation can be even higher. Even if a
counterfeit part is at fault, it is the legitimate industry that takes the
hit. For instance, if I purchase a second-hand car with a good brand
name but the previous owner has been using counterfeit parts for
repairs and the car breaks down often, I blame the car manufacturer
because I have no idea fake parts are the problem.”
Not only consumers but also service shops, wholesalers, distributors
and manufacturers must be educated about the extent of the
problem, says Zipser.
THAT IS PART OF THE GOAL of the Brand Protection Council, created
by MEMA to help address and set the association’s priorities in
the areas of counterfeiting, diversion, non-compliant products and
intellectual property rights. The group is open to any member of
the Automotive Aftermarket Suppliers Association, the Heavy Duty
Manufacturers Association or the Original Equipment Suppliers
Association. The council meets four times a year and helps dictate
MEMA and the industry’s collective actions on various intellectual
property issues. The council also shares best practices and dialogue
on this growing industry challenge.
“We work closely with the US government so that they are aware
of the problem, and we try to get across to the media that this is a
serious issue for consumers,” says Zipser.
John Anderson is chairman of the Global Anti-Counterfeiting
Group, a network of anti-counterfeiting organizations. He agrees
that the industry must work together to support enforcement agencies,
to lobby governments for stiffer penalties for counterfeiters
and to raise awareness of the problem.
“It is important that we tackle demand as well as supply to
change people’s perceptions of what is very often perceived as a victimless
crime,” says Anderson.
Entering those markets that are the most prominent exporters
of counterfeit goods is a preventive measure for manufacturers,
Zipser says. This establishes the manufacturer’s legitimate pres-
16 [ Haldex DynamiX 1/2006 ]
CHINA’S BOOMING ECONOMY, MAKES IT A HOT SPOT FOR COUNTER-
FEITING.
ON THE LEFT; A SEIZED, FAKE, OIL FILTER,
ON THE RIGHT, THE ORIGINAL.
CHINESE CUSTOM
OFFICIALS RAID A
COUNTERFEITER AND
SEIZE AUTOMOTIVE
PARTS.
ence and brand reputation in the region and helps the company
directly control its intellectual property and the quality of the product
entering the supply chain in those markets.
While distributors may not be able to stop fake products from
being made, they can prevent them from making it into parts distribution
inventories or onto cars or trucks by only buying parts from
legitimate manufacturers directly or through their authorized representatives
or dealers. Price is a dead giveaway, says Zipser. “If the
deal sounds too good to be true, it probably is,” he says.
While counterfeiting is unlikely to be stopped completely, it can
be limited through the concerted effort of the industry, governments
and consumers. There is strength in numbers, says Zipser.
Getting the problem of fake auto parts on everyone’s radar screen
is the fi rst step in putting the counterfeiters out of business – for
good.

HALDEX’ NEW HEIGHT CONTROL VALVE
FEATURING CERAMIC TECHNOLOGY.

Conquering the world
SWEDISH LÄMNEÅ BRUK TAKES WIRE DRAWING TO A HIGH LEVEL. TO GAIN THE FLEXIBILITY NECESSARY TO
MEET CLIENT REQUIREMENTS, EXPERTISE IS KEPT IN-HOUSE.
THE WIRE DRAWING MARKET is vast and
almost infi nitely varied. Having the ability
to tailor-make solutions for a wide range of
clients is absolutely vital, says Anders Hagstedt,
CEO of Swedish Lämneå Bruk, one of
Haldex’s main suppliers.
Hagstedt should know. Lämneå makes
drawing machines for highly diverse tasks –
18 [ Haldex DynamiX 1/2006 ]
valve spring wire for the car industry as well
as armor for house construction. Dynamix
visited Lämneå Bruk on a cold day in January,
but the picturesque torrent that runs
through the old ironworks still had not
frozen. Lämneå has its own hydroelectric
power station about 100 meters from the
factory.
FOLLOWING IN THEIR FATHER’S FOOTSTEPS
ANDERS HAGSTEDT, CEO, AND HIS BROTHER
JONAS, GENERAL MANAGER.
TEXT HENRIK KARLSSON PHOTO CARL-JOHAN ERIKSON
“It provides us with about 60 percent of
the electricity we need,” Hagstedt says. “In
the event of a power failure, we can run the
workshop on our own electricity for several
days.”
This was necessary in January 2005,
when a huge storm caused major damage
in southern Sweden.

with tradition and trust
Lämneå’s business is based on 15 to 20
major clients who place orders on a regular
basis, but Lämneå often takes smaller
clients and single orders as well, says Hagstedt.
Each new order has its own peculiarities,
but it would be very costly to begin from
zero each time, he says. Hence, Lämneå is
always looking for common denominators
in the clients’ needs.
“The challenge lies in making the construction
processes as similar as possible,
but still being able to give each machine
exactly the properties that the clients
require,” Hagstedt says.
“The key to having this sort of fl exibility
is keeping all the necessary expertise within
the company.”
Mikael Abrahamsson, a long-time Lämneå
employee who is now in charge of Nordic
sales, echoes this sentiment. “Some
of the industry’s foremost experts work at
Lämneå,” he says. “This goes for mechanics
and electronics as well as for software.
Having such a broad range of competence
makes us an easy partner to work with. We
can adapt swiftly to our clients’ needs. Decisions
can be made on short notice since our
technical experts and managers are all in
the same building.”
FROM A COMPUTER ROOM next to the
workshop, Lämneå’s experts can remotely
control machines in all parts of the world,
says Hagstedt. “Whenever we get a complaint
we go to this room,” he says. “In
most cases we can fi x the problem online,
which saves a lot of travel expenses both for
us and for our clients.
“Once I received a call from Haldex at
11:30 on a Saturday night,” he continues.
“They were desperate to get a machine
working. At times like those it’s nice if you
can call someone you know personally.”
Wire drawing machines are known to
have a long life span; it is not uncommon to
[ Haldex DynamiX 1/2006 ] 19

“The key to having this sort of flexibility is
keeping all the necessary expertise within
the company.”
fi nd 40- or 50-year-old machines out in factories.
It’s no wonder then that the manufacture
of spare parts represents about 10
percent of Lämneå’s business. In the basement
of the headquarters is the archive of
designs for all the machines built since
1930. This is where the technicians come
when they need to make a new component
for an old machine.
“A customer called us recently and asked
for the design of a machine from 1947 that
is still running,” Abrahamsson recalls.
Lämneå always tries to stay ahead of the
game, foreseeing the needs of new components.
“A supply of spare parts goes with
the machines that we ship to Haldex’s factory
in China,” says Abrahamsson. “During
the warranty period, Haldex can pick
what they need, and after that they can
choose to buy the rest of the supply or send
it back to us.”
In recent years, Lämneå has acquired the
British company Hi Draw and the Swedish
Morgårds Hammar Wire Drawing Equip-
20 [ Haldex DynamiX 1/2006 ]
ANDERS HAGSTEDT
ment, thus strengthening its position on
the machine market and augmenting its
sales of spare parts.
THE WIRE DRAWING BUSINESS increasingly
depends on computerized automation,
with laser rays measuring the dimension
of the wire. Lämneå is at the forefront
of this development. Hagstedt’s father – the
former CEO of Lämneå – was something
of a pioneer in the fi eld: Back in the 1960s
he was working to create unmanned wire
drawing machine.
“Most of our research and development
work is done in collaboration with big clients,”
says Peter Holm, who manages the
delivery to Haldex’s factory in Suzhou,
China. “They have lots of user experience
with our machines and can often come up
with clever suggestions that we can implement
in our constructions.
“The partnership with Haldex has
meant a lot for us in terms of technological
development,” Holm contin-
ues. “Valve springs for cars is probably the
most demanding product in the wire industry.
The load on those springs is enormous.
It requires wire of the fi nest quality and
highly advanced drawing machines.”
Apart from surveillance technology, the
Lämneå-Haldex business relationship,
which dates back to the 1960s, has resulted
in a machine especially made for reeling off
wire rod from coils. It can be described as
an inversion of the spinning rod that you
use for fi shing. Holm points to a gigantic
drawing machine that is soon to be shipped
to Suzhou.
“I look forward to going there and working
on the installment,” he says. “It will be
exciting to see what Haldex can do on the
Asian market.”
LÄMNEÅ IN SHORT
Location: Ljusfallshammar in Östergötland, Sweden.
Turnover: SEK 95 million (in 1996, SEK 43 million).
Employees: 52 (in 1996, 31). Employees are mainly from small towns surrounding Lämneå, Sweden.
“The average age is fairly low,” says Mikael Abrahamsson, who is in charge of Nordic sales. “Many
positions require a lot of traveling, which probably is more appealing to young people.”
As a sales representative Abrahamsson also manages the installation and the startup of machines
in clients’ factories.
Main markets: Europe and the United States.
The main competitors are Italian and German manufacturers of wire drawing machines.
History: Lämneå Bruk is situated just outside of Ljusfallshammar, a small town in Östergötland, Sweden,
an area with a 700-year history of metalworking.
The company was founded in 1727, as a producer of iron ore to supply gun factories in nearby Finspång.
For the past 40 years, however, its sole business has been the manufacture of wire drawing
machines. Lämneå’s main markets are in Europe and the United States.
“But we follow our customers all around the world,” says CEO Anders Hagstedt.

TESTS ON A LOCAL TRUCK FLEET
PROVED THE NEW TYPE PR VALVES
TO BE A WINNER.
Three times more
durability with ceramics
THE HALDEX PLANT IN GRAND HAVEN, MICHIGAN, IN THE UNITED STATES, SUPPLIES LEADING TRUCK MAKERS
WITH HEIGHT CONTROL VALVES. THE QUEST FOR MORE DURABLE MATERIAL, RESISTANT TO CHEMICALS AND
TEMPERATURE CHANGES, HAS RESULTED IN THE USE OF A NEW MATERIAL – CERAMICS.
TEXT AND PHOTO DWIGHT CENDROWSKI
FROM HENRY FORD’S revolutionary production
line through today’s competitive world
market, Detroit remains an important
center for the auto business and auto parts
manufacturing. But 200 miles to the west,
along the shores of Lake Michigan, a hub
for auto suppliers is developing. And Grand
Haven is at the center of that hub. Nestled
along Lake Michigan’s sandy coast, it is
home to many suppliers, including Haldex
Suspension Control’s Grand Haven Operation,
a business within the Air Management
business unit and part of the Commercial
Vehicle Systems (CVS) Division.
The company’s 15,000-square-foot
assembly plant, with 41 employees, designs
and supplies the industry’s best truck makers
with height control valves. Height control
valves constitute an important and
growing market, and this operation has
been making a name for itself over the past
few years with an innovative valve design
featuring ceramic technology.
Haldex has been supplying height control
valves for Class 8 truck and commercial
trailer makers such as Kenworth, Volvo,
Freightliner and Mack for many years. The
air suspension valves automatically return
the truck to an optimum height when a load
is added or removed. In the United States
more than 90 percent of the over-the-road
truck chassis are now using air suspensions,
while only about 60 percent of the
trailers are air-equipped.
Thomas Bronz is the general manager
in Grand Haven. Back in the late 1990s his
team saw opportunities developing. “The
most signifi cant issues we identifi ed in the
market at the time were product reliability
and durability,” Bronz says. “For nearly 30
years we led the market with height control
valves that conserved air. The Type CR
[ Haldex DynamiX 1/2006 ] 21

valve is well known and respected. A new
competitor came in at a lower price, but the
lower price without reliability was not what
many customers were looking for.
“Haldex Type IR valves also led the market
in niche segments of extremely heavyduty
off-road and vocational vehicles such
as oil-fi eld equipment, front-discharge
cement mixers and dump trucks,” he continues.
“That low-volume product was well
regarded for its durability, but it was very
expensive and it would never fi t the cost
model of an OEM standard position. We
needed durability like that at a price point
that would fi t our target customer’s standard
position.”
Key customers such as PACCAR had
concerns about durability. Valves were usu-
22 [ Haldex DynamiX 1/2006 ]
ally lasting from one to three years, while
the trucks and trailers had a much longer
life. “Rubber seals in the valve’s core technology
were the culprits,” says Victor Plath,
lead engineer in the development of the
ceramic technology in Grand Haven. “Our
previous valves were elastomeric-based, and
those types of sealing mechanisms tend to
wear out and fail because of different things
– contamination, chemical attack.” The performance
of the rubber seals also varied
as temperatures changed, and they leaked
more easily.
Plath led the research to fi nd a more
durable material that was more resistant to
chemicals and temperature changes. The
engineers looked at several technologies,
but all had problems except for one clear
MODULARITY WAS THE KEY TO MAKING
CERAMICS AFFORDABLE IN HALDEX VALVES,
EXPLAINS VICTOR PLATH, LEAD ENGINEER,
AND GENERAL MANAGER THOMAS BRONZ.
winner – ceramics. The material is used
in many industries, including the highend
home water faucets and mining slurry
processing valves. “It’s a very chemical- and
abrasive-resistant product,” says Bronz.
“We knew it was extremely durable. But
altering it to work in our application was the
trick for us.”
The key to making ceramics affordable in
Haldex valves turned out to be modularity,
a key concept used in other Haldex applications.
“If we use enough of one core technology,
which includes the shaft, ceramic
seal and a bushing housed it in several different
modules, we can give customers a
lot of different variations of the Precision
Response (Type PR) product,” explains
Bronz. “The modular concept drives the
cost of that core technology down.” Adds
Plath, “Today we probably make upwards of
60 to 65 valve assemblies, and they all use
the same ceramics.”
AFTER TESTING THE NEW TYPE PR valves
in the lab and on local truck fl eets, the engineers
knew they had a winner. And once
important customers such as Kenworth
tried the product and saw how the modularity
concept could simplify their installations,
it was an easy sell. “We took Kenworth
from 94 to 11 installation drawings,
which is much easier for them to control
and easier for them to maintain on the
plant fl oor,” says Plath. “It was all part of
lowering their total installed cost.”
One of Haldex’s toughest competitors
makes a similar ceramic valve. But Haldex
has won this fi ght hands down. “We’ve
recently displaced them on premium truck
brands here in North America,” explains
Bronz. Haldex has pushed its market share
to nearly 40 percent, up from 30 percent.
It’s a nearly 16 million US dollar business,
with the majority of customers in North
America. For the customer, the new valve’s
purchase cost is a little higher but the total
installed cost is lower. No one else in the
business has the unique Haldex combina-
41 EMPLOYEES ASSEMBLE AND SUPPLY
HEIGHT CONTROL VALVES TO AN IMPORTANT
AND GROWING MARKET. HALDEX MARKET
SHARE HAS INCREASED 10%.

CUSTOMERS HAVE TESTED THE VALVES,
AND FOUND THEM TO BE THREE TIMES MORE
DURABLE THAN COMPETITIVE PRODUCTS.
tion of ceramic technology and modularity.
The best tributes for the Haldex type
PR height control valves come from satisfi
ed customers such as Kenworth and
Volvo. They did studies of the valves on
their trucks and praised the simplifi cation
of the installation process, the precise
response, the more accurate ride height and
the reduced opportunities for leaks. They
found the valves more than three times
more durable than the earlier generation of
valves.
One non-US customer provides a stunning
testimonial to the durability of the
Haldex valve. An Australian fl eet of residential
garbage trucks had been going through
a competitor’s valves every four to six
FACTS
The ceramic discs used in the Haldex
Type PR air suspension height control
valves are manufactured to exacting
standards by the largest technical
ceramics manufacturer in North
America.
The part is made of an aluminum
oxide powder that is 99.5 percent pure;
after firing it is highly polished to create
a superior seal. This key component is
instrumental in providing advantages
truck producers are looking for:
● Ceramic technology seals that are more
robust and contamination resistant
● Reduction of the total number of critical
dynamic seals to just one
CERAMICS IS A UNIQUELY CHEMICAL AND
ABRASIVE RESISTANT PRODUCT, USED IN
MANY INDUSTRIES.
weeks. Some 4,000 starts and stops a week
puts a brutal strain on valves in standard
air suspensions. Haldex Type PR ceramic
valves were installed and now the trucks
are approaching two years of life without a
failure. Bronz says that a similar segment
in the US market can’t be tapped because
most garbage trucks still use mechanical
steel suspensions.
Right now business is booming for Haldex
Grand Haven. A new EPA emissions
regulation goes into effect in 2007 that will
tighten standards, and all the big fl eet customers
are buying ahead of that regulation.
Of course, says Bronz, “business will
tougher in 2007, but our new customerspecifi
c placements are much more diffi cult
● Type PR valve dead zone of just 3
degrees, an industry best
● When housed in a modular assembly,
reduced installation cost and complexity.
All Haldex Type PR ceramic height control
valves are 100 percent electronically
leak-tested to 1 ccm or less. In severe
duty testing, the life expectancy of the
Haldex Type PR valve surpasses 100 million
cycles (and the reliability curves of
any competitor). Haldex Grand Haven
makes it tough, to exacting standards,
to make it last, and the company works
closely with customers to do it all at a
lower total installed cost.
THE GRAND HAVEN PLANT MAKE 60 TO 65
VALVE ASSEMBLIES, ALL USING THE SAME
CERAMICS.
for competitors to match. The Truck OEM
segment of our business is more solid than
ever. In 2007 we’ll have to focus on success
in our trailer segments and the aftermarket.”
The modularity of the Type PR valve
makes extension of the product to trailer
suspensions convenient, while Haldex
Grand Haven’s long history provides for a
signifi cant business in the aftermarket.
The Haldex Grand Haven Operation is
receiving recognition for its efforts. In October
2005 the Grand Haven plant was the
fi rst in the US to receive the Haldex Way
Copper Level certifi cation, and it is looking
to reach the bronze level in August 2006. It
is also certifi ed to ISO 9001:2000 and ISO
14001:2004 standards.
THE MODULAR CONCEPT OFFERS THE CUS-
TOMERS SEVERAL DIFFERENT VARIATIONS
OF THE TYPE PR VALVES.
[ Haldex DynamiX 1/2006 ] 23

A woman
of pure steel
MALIN HALLBERG HAS BUILT A CAREER AROUND THE PURITY OF STEEL. AT HALDEX GARPHYTTAN WIRE SHE
HAS THE PERFECT MIX OF HANDS-ON TECHNOLOGY OF AND INTERACTION WITH OTHERS. SHE WAS HIRED IN
2004 TO STRENGTHEN THE RESOURCES ALLOCATED TO DEVELOPMENT PROJECTS WITH STEEL SUPPLIERS.
24 [ Haldex DynamiX 1/2006 ]
Unternehmen & Partner
TEXT HENRIK KARLSSON
PHOTO CARL-JOHAN ERIKSON
IT TAKES PROFOUND TECHNICAL knowledge
as well as good social skills to do Malin
Hallberg’s job. She was hired in 2004 to
promote Haldex’s relations with steel suppliers.
It’s a key position at Haldex Garphyttan
Wire in Garphyttan, and it’s a job that
suits her perfectly.
“Most jobs at this high technical level are
quite solitary,” Hallberg says. “My workdays,
however, are a nice mix of advanced
technology and plenty of interaction with
others. I’m not always stuck behind a computer.”
Haldex maintains close relationships
with suppliers as well as with clients. It is a
system of feedback and quality audits that
has been worked out over the course of
many years.
“We monitor each other’s work processes,”
Hallberg says. “As long as we stay
on neutral territory in terms of business, we
can learn a lot from each other. I fi nd these
relationships to be highly rewarding.”
Steel purity is Hallberg’s area of expertise.
She has a PhD from the Royal Institute
of Technology (KTH) in Stockholm. Her
dissertation was on methods to measure
and exclude non-metallic inclusions in steel.
HALLBERG’S CHOICE of study was heavily
infl uenced by her father, Lars, who spent
his entire working career as a technician at
Ericsson.
“In my teens I had some vague ideas
about becoming a physiotherapist, but getting
into physiotherapy college was incredibly
diffi cult,” she says. “My father suggested
material engineering as a possibility,
and I thought I’d give it a try.”

“ The car industry wants to put more and more load on the springs.
This means that the wire has to be of extraordinary quality.”
Early on at KTH it was clear that she had
come to the right place. Hallberg recalls
with fondness the fi rst time she set foot in
a steel mill:
“It was in 1989, my fi rst college year. I
remember the big furnace that created this
sort of camp-fi re-like atmosphere. The place
was dirty but defi nitely an exciting environment
to work in.”
AFTER GRADUATION she was admitted to
the doctoral program at the Royal Institute
of Technology. By then she was well aware
of what the steel industry was interested in:
“I got involved in a great project at
Jernkontoret, an association for steel companies,
doing research on inclusions.”
Starting in the mid 1990s she worked
with process and product development at
Sandvik Steel and later Ovako Steel, steel
manufacturer in the small town of Hofors.
Although Malin was born and raised in
Stockholm, moving to the countryside was
never a problem.
”There is always the issue of social control,”
she says. “Everybody knows everybody
in a small community. But knowing your
neighbors can also be a good thing, especially
when you have children. I was actually
quite enthusiastic about trying the country
lifestyle. And you can always move back;
Stockholm isn’t going anywhere.”
In 2002 she followed her husband to
Örebro, where he’d been hired as deputy
general manager of the business area oiltempered
spring wire at Haldex Garphyttan
Wire, outside Örebro.
“I had been home with our children for a
couple of years and didn’t know exactly how
to resume my working career,” she recalls.
“A professor suggested that I complete
my dissertation, and it seemed like a good
idea.” She fi nished in 2004 and has been
with Haldex ever since.
INCLUSIONS CLEANLINESS in steel wire is a
central part of Haldex’s business.
“The car industry wants to put more
and more load on the springs,” says Hallberg.
“This means that the wire has to be
of extraordinary quality. With China’s rise
on the market, the competition for steel is
getting tougher. Prices are going up, and
there’s a lot more low-quality raw material
on the market.”
The risk margins for Haldex’s wire are
slim to none.
“In today’s car engines, a broken valve
spring is nothing short of a disaster,” she
says. “It would cause a collapse of the entire
engine. Steel cleanliness is often overlooked,
yet the degree of slag determines what sort
of construction the wire is good for.”
Apart from managing relations with steel
MALIN HALLBERG
suppliers, Hallberg is also head of the special
laboratory. She and her colleagues take
random samples from the wire rod coils
that come in, and they do fatigue tests on
spring wire and valve springs.
“It’s a lot of fun,” Hallberg says. “I get
to go down on the factory fl oor and work
hands-on with the big machines.”
MALIN HALLBERG IN SHORT
Family: Husband, Bengt, and children,
Jonathan, 7, and Elin, 4.
Career: PhD from the Royal Institute
of Technology in Stockholm.
Prior to Haldex she worked for
Sandvik and Ovako in process and
product development.
Hobbies: Hiking and fishing. “We
spent the past couple of summer
vacations hiking in Norway. It’s
something that the whole family
enjoys.”
[ Haldex DynamiX 1/2006 ] 25

THERE’S NOTHING NEW about this heattreatment
method – the steel industry has
used it for years in various applications
– but only in the late 1990s did European
producers of valve springs start to experiment
with nitriding.
Haldex has performed trials on large factory
scale, with heat-treatment companies,
and in smaller-scale research projects in
collaboration with AGA Gas.
26 [ Haldex DynamiX 1/2006 ]
Unternehmen & Partner
New technology
enhances fatigue strength
THE CHALLENGE IN VALVE SPRING WIRE IS HOW TO ENHANCE THE FATIGUE STRENGTH OF THE WIRE SO THAT
SMALLER SPRINGS CAN TAKE THE SAME STRESS LEVELS AS THE LARGER ONES BUT OCCUPY LESS SPACE.
NITRIDING IS THE ANSWER.
“There is a clear trend towards more
nitriding of valve springs, but European
and American carmakers are lagging
behind Japan in this respect,” says Johan
Norström, of Haldex’s department for
material and process development at Garphyttan.
“Western car companies are still
making cutbacks, and nitriding is probably
considered too expensive a method to use
for many applications. It’s also possible that
TEXT HENRIK KARLSSON PHOTO CARL-JOHAN ERIKSON
they haven’t fully understood the gains that
are to be made.”
In order to reduce fuel consumption, the
auto industry needs to decrease the motion
weight of the engines, says Tord Holgersson,
at Haldex’s special laboratory.
A smaller dimension of the valve spring
wire is a step in that direction. “Weight and
space are the factors we are always dealing
with,” he says. “If given enough space for

BY MODIFYING THE WIRE’S SURFACE LAYER,
SMALLER AND LARGER SPRINGS CAN TAKE
THE SAME STRESS LEVELS. TORD
HOLGERSSON, LEFT, AND JOHAN NORSTRÖM
CONDUCT SPRING FATIGUE TESTS.
the springs, we can make wire that endures
almost any sort of stress. But the auto makers
are always looking to cut down on space
around the engine.”
The challenge then becomes how to
enhance the fatigue strength of the wire
so that smaller springs can take the same
stress levels as the larger ones. This is done
by modifying the wire’s surface layer, says
Holgersson.
Nitriding has several benefi cial effects on
steel: Corrosion is diminished and resistance
to wear is enhanced. However, in
dealing with valve spring wire, the main
purpose of nitriding is always to improve
the fatigue strength. “The nitrides make
the surface a lot harder, and this in turn
makes the valve spring much more resistant
to heavy loads and load-changes,” says
Norström.
NITRIDE IS DEFINED as a compound containing
nitrogen and another more electropositive
element, such as phosphorus or a
metal. The method of nitriding is categorized
as a low-temperature heat treatment,
meaning that there is no phase conversion
involved. The temperature is usually kept
at 450 to 500 degrees Celsius. For valve
spring wire, the best results are achieved by
gas nitriding wherein the parts are heated
in a special furnace fi lled with ammonia.
Norström explains that with heat, the
ammonia splits into hydrogen and nitrogen.
Free nitrogen atoms then react with
the wire’s nitride-furming elements such as
chromium, silicon and vanadium, penetrating
the steel surface and forming nitrides.
Haldex recommends nitriding layers up
to 100 my for valve springs. The rest of the
material should be kept intact. For nitriding
to have the desired effects, it is of crucial
importance that the surface be clean. Heattreatment
companies must also have complete
control over nitrogen and ammonia
pressure, and they must keep track of the
ammonia residue. Not all of the ammonia
is dissolved.
To get maximum effect from nitriding,
Haldex recommends that it be combined
with shot peening, a tough treatment that
involves bombarding the wire surface with
small spherical steel shots. The purpose is
twofold: to remove the oxide layer on the
spring wire surface and to impart compressive
stresses into the wire, which further
increases the fatigue strength.
HALDEX CONDUCTS spring tests with different
loads. In the fi rst test the stress from
underneath is 100 MPa and 1,225 MPa
from above. The spring is allowed to work
between those stresses.
Typical results show approximately a
10 percent increase in the springs’ fatigue
strength after nitriding, compared with
non-nitrided springs. This refers to tests of
one specifi c spring design; results may vary
with other designs.
The wire that Haldex recommends for
nitriding is the OTEVA 90 – oil-hardened
and tempered valve spring wire. It is a
medium-carbon, low-alloy steel wire with
increased levels of chromium, silicon, vanadium
and nickel. OTEVA 90 was made
for nitriding, and the results are excellent.
However, its predecessor, the OTEVA
75, also produces good results in terms of
fatigue strength. For truck engines, weight
is not a big issue. Truck manufacturers use
OTEVA 70, and they only recently switched
from OTEVA 60. For car manufacturers,
however, the OTEVA 90 is defi nitely the
best option, says Norström.
But cost is no small concern here. The
price difference between OTEVA 90 and
the other wire types is considerable.
In Europe, less than 5 percent of valve
spring wire is nitrided. In Japan, 20 to 25
percent is nitrided. Today, nitrided wire is
most commonly used in high-end automobiles.
Japanese Kobe Steel has a broad patent
for OTEVA 90, which explains its
high price. It is difficult to produce a lessexpensive
copy.
Among the European brands that use
OTEVA 90 are BMW, Volkswagen and
Renault.
According to Haldex’s prognosis, sales
of OTEVA 90 will increase during 2006.
THE RECOMMENDED WIRE
IS CALLED OTEVA 90.
[ Haldex DynamiX 1/2006 ] 27

World leaders for 100 years
Since starting in 1906, under the name Garphytte Fabriks AB,
we have been at the cutting edge of development. The basis for
our operation was manufacture of cold drawn piano wire and
rope wire, but as the automobile industry expanded around the
world we quickly assumed a leading position in the manufacture
of valve spring wire. In 1927 we began production of
continuous oil tempered valve spring wire, which was the starting
point for our focus on the development of spring wire with very
high standards of quality, performance and endurance.
Today our products are sold Worldwide and demand is steadily increasing,
particularly in the American and Asian markets. As a consequence of this increased
demand, in 1997 we established a manufacturing plant for valve spring wire in South
Bend, Indiana, USA. During 2006 we will take the next step with the start of our new
manufacturing plant in Suzhou, China.
Today, after 100 years, Haldex Garphyttan Wire is one of the world’s leading suppliers
within advanced, alloyed steel wire products for applications with extreme demands
– a position that we intend to retain.
With production in Europe, USA and Asia we are well equipped for the challenges
of the future.
HALDEX GARPHYTTAN AB
SE-719 80 Garphyttan | Sweden
More information and contact details can be obtained from www.hgse.haldex.com
www.abyran.se