proactive The official e-magazine of Lotus Engineering

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1 proactive The official e-magazine of Lots Engineering Series hybrids and the Lots Range Extender Technology integration for low carbon A review of the Lots/IMechE seminar Lots Evora Type 124 endrance racecar Q&A with Oskar Goitia MD at Mondragon Atomocion Sep/Oct 2009 ISSUE 34

2 proactive Welcome Contents Indstry News 3-6 FRANCE: PSA wants 20% green material in vehicle plastics by 2011 UK: Road pricing to crb emissions JAPAN: Honda on fel cell learning crve with Clarity Lots News Lots Elise Clb Racer the perfect combination of performance, efficiency and style Lots trimphs at engineering awards First Evora is delivered to cstomer Lots appoints new CEO Lots Evora Type 124 endrance racecar Malaysian King and Qeen visit Lots UK Evora wins Car Magazine s coveted Performance Car of the Year Series hybrids and the Lots Range Extender Technology integration for low carbon A review of the Lots/ IMechE seminar Q&A with Oskar Goitia MD at Mondragon Atomocion It has been non-stop at Lots for the last few weeks. We have welcomed or new CEO, Dany Bahar, we have been honored by the visit of the King and Qeen of Malaysia to Hethel and the Frankfrt motorshow saw the retrn of Lots after ten years absence. It was in Frankfrt where we nveiled the fantastic Lots Evora Type 124 Endrance racecar that will see Lots retrn to Motorsport at the Nrbrgring, Sepang, Silverstone and Dbai endrance races next year. Frankfrt also saw Lots Engineering present the Lots Range Extender engine, designed specifically for series hybrid vehicles so that the benefits of electrification of the drivetrain can be realised, with less compromise on range, recharging and cost. Pblicly, at least, from what was seen at Frankfrt, the whole indstry s position on redcing carbon is primarily to move towards electrification. What was interesting, however, was the nmber of volme vehicle manfactrers that were showing pre plg-in electric versions of their mainstream vehicle lines. Whilst plastering 0g/km CO 2 on the side of a car makes a powerfl statement, there seemed to be little explanation as to how the isses of range and recharging wold be addressed. Consmer acceptance after all is key, and car byers will resist change that makes motoring less practical. It was pt to me recently that ftre EV motoring se will evolve like mobile phone se, a widespread availability of charge points being analogos to roaming. Bt is that a disingenos comparison? By choosing an EV, despite the environmental imperatives, srely motorists are being asked to go from the mobile phone to the phone box, nless range and charging times are drastically improved? Electric-only vehicles have a place in certain sectors small city cars and performance for instance bt beyond this range extenders in some form mst come into play. Enjoy the read Peter Morgan Marketing Manager Lots Engineering

3 proactive Indstry News FRANCE: PSA wants 20% green material in vehicle plastics by 2011 PSA Pegeot Citroën has presented the latest developments in its green materials plan, set p to limit the eco-footprint of its vehicles dring their service life. The grop has set an ambitios target in ecodesign: to inclde 20% of green materials in the polymers sed to bild its cars by A car is made p of 70% metal, already largely recycled, 5% miscellaneos materials (glass, etc) and 5% flids. The rest is plastics (polymers). The term green materials covers natral fibres sch as linen and hemp, non-metallic recycled materials and biomaterials, which are prodced sing renewable resorces rather than petrochemicals. The aim is to se fewer fossil fel plastics and to increase the se of raw materials from renewable sorces to make parts lighter, in some cases, to ct CO 2 emissions from plastics prodction and to promote plastics recycling. The company says end-of-life processing is factored in from the design stage. The aim is to boost recyclability and ths redce the potential impact of end-of-life vehicles. As a minimm, 85% of a vehicle s weight can be resed or recycled, and a frther 10% can be sed for energy recovery. The key featre of the action plan set p by PSA Pegeot Citroën in 2008 is that it concerns all grop vehicles and the three families of green materials. The green material content of each vehicle project mst be increased. This approach also involves existing vehicles, with green materials being integrated dring their prodction life, PSA says. Its engineering teams are working in close cooperation with sppliers in order to tilise these new materials. This effort also gives new impets to the recycled materials indstry, PSA maintains. The sbject of biomaterials is still at the research stage in the atomotive indstry. To address the isse, scientific partnerships have been set p as part of research grops bringing together pblic laboratories, chemical firms and parts sppliers. PSA says that the aim of these partnerships is to accelerate the application of these materials in the atomotive indstry. Sorce: jst ato.com editorial team Pegeot has a reforestation project in the Amazon Rainforest A car is made p of 70% metal, already largely recycled, 5% miscellaneos materials (glass, etc.) and 5% flids. The rest is plastics (polymers).

4 proactive Indstry News UK: Road pricing to crb emissions A report by the UK government s Committee on Climate Change is advocating road pricing and strict 70mph (110km/h) speed limits on motorways as well as eco-driving lessons to help the contry meet legally-binding carbon emissions targets. The committee, in its first annal report, said the Government was nlikely to be able to meet the target to ct greenhose gas emissions by at least 34% by 2020 nless there were radical changes in power generation, transport and homes. Committee chief exective David Kennedy said redctions in carbon emissions wold have to triple to 3% per annm by next year. He said Government policy needed to start introdcing policy to change lifestyles, inclding road pricing, in order to encorage lifestyle change. JAPAN: Honda on fel cell learning crve with Clarity A radical move to bring the fel cell car into mass-prodction is already yielding valable fresh knowledge and expertise in specialist manfactring techniqes at Honda, writes Marice Glover. Bt the Japanese maker still has a long way to go before it is able to close the yawning cost gap that separates the transport of today and tomorrow. No-one is more aware of that than Sachito Fjimoto, Honda s Mr Fel Cell and the engineer behind FCX Clarity, the pacesetting model that has jst We are not calling for government to rsh ahead and introdce road pricing bt it s something that shold not go off the agenda in years to come, he said. The main transport recommendations are: sbsidies for the car indstry to encorage 1.7m electric cars onto the roads by 2020; driving at no more than 70mph on motorways to conserve fel; teaching people to drive in higher gears and rev the engine less throgh eco-driving lessons; more se of pblic transport or car sharing by making driving more expensive by introdcing road pricing. Sorce: jst ato.com editorial team embarked on a major Eropean tor in spport of the motor indstry s call for a viable hydrogen spply infrastrctre to be in place by As two pristine examples of the flagship sedan set ot on an intensive programme of demonstrations to politicians, fel spply exectives, jornalists and other pblic opinion formers, Fjimoto acknowledged the present hge difference in cost between the fel cell and petrol or diesel power. This presents s with a considerable challenge bt we see it as or dty to do all we can to bridge

5 proactive Indstry News the difference and bring down the cost of the cell. We jst have to do it becase what we re talking abot here is of great importance it represents the next era in transportation, he said. Despite being lanched as a series prodction model last smmer, the role of the Clarity is to steer Honda throgh a dramatic learning crve in manfactring as well as providing realworld feedback from selected sers in leasing programmes in the US and Japan. Volmes are low - fewer than 30 examples have been bilt so far and Fjimoto, the company s research and development senior chief engineer, revealed that no more than 200 nits are de to be prodced over the three-year exercise. The nmbers are low, bt the fact is that the line is rnning for a proper mass-prodction vehicle and we are learning so many things every day - things that I obviosly don t wish to make pblic. Of corse, in time we will be involved in the prodction of thosands of nits. I can t say when that will happen, bt obviosly, it is taking s a long time to assemble each car. When I compare or prodction rate with the volme achieved in or factory at Swindon, where a vehicle comes from the line every two mintes, it is clear we have to accelerate or processes by a factor of hndreds. Bilding a fel cell stack is a very complex series of operations that take time. The simplest way to increase volme wold be to dplicate the stack prodction nits by a large amont, bt that is neither practical nor feasible from an economic viewpoint. That means we mst contine to work to effect cost redctions as well as frther increase efficiency - or target has to be to bring the Clarity to a level where it cold be offered as a viable option to conventionally-powered vehicles of similar size and specification, he said. Fjimoto was speaking in Germany as Honda Motor Erope pt two examples of its fel cell car, the FCX Clarity, on the road to back a campaign lanched by car manfactrers for spport from politicians, fel spply indstry exectives and pblic inflencers for a hydrogen spply infrastrctre to be in place by Both he and company Eropean engineering research spokesman Thomas Brachmann describe the demonstration drive programme as a vital part of the campaign. Said Brachmann: This is the classic chicken and egg problem that always exists for a new type of powertrain. It was tre for diesel in the past and is tre for electricity, natral gas and hydrogen. Bt the good thing is that hydrogen does not differ so mch from natral gas in terms of infrastrctre - safety measres are something else, bt a lot of the gas spply technologies can be applied. The spply indstry sally hesitates to start something fresh when they have no sign of bsiness, so we have to generate the bsiness case for hydrogen. And we have - major manfactrers have signed a letter of intent to introdce 100,000 fel cell cars to the market by In reality, this is figre is likely to be mch higher, so we hope this will give the indstry sfficient confidence to start bilding the infrastrctre.

6 proactive Indstry News According to Brachmann, Honda is confident abot fel cell mobility, regardless of the present infrastrctre, and remains nconvinced of the effectiveness of the plg-in electric cars favored by rivals. This is a soltion involving the se of a different type of fel. It reqires energy storage - the battery - and while power density is fine, energy density is not so good. The plg-in is not ndermining or confidence becase it has a restricted range. Or development of the fel cell car was the reslt of the poor experience we witnessed with batteries between 1995 and 1999, when lots of electric cars ended p parked in the desert in California becase they were not sed anymore. The energy density of batteries needs to be improved, he said. Asked how long it is likely to be before Honda is able to make the cost of its fel cell cars more comparable to those with conventional motors, he said: Or hope is to reach price comparability in 10 to 15 years time. We expect to enter serios prodction from 2015 bt not with the Clarity. This car has good performance, all the featres people want and an acceptable range of operation. Bt it has a dedicated platform that is expensive becase the tooling is for this car only. Prodction of the fel cell stacks is largely atomated and continal refinements mean we re always having to change the tooling and prodction methods, bt that s how we are gaining or experience. We re on a massive learning crve. The fel cell involves electro-chemistry and not mechanical engineering, bt it will present s with lots of new opportnities. Sorce: jst ato.com editorial team

7 proactive Lots News Lots Elise Clb Racer the perfect combination of performance, efficiency and style Making its debt at the I.A.A. in Frankfrt 2009, the Special Edition Lots Elise Clb Racer introdces new and exclsive color schemes, bespoke interior and lightweight components all in a world class, high performance and low emission sportscar: 179g/km CO mph in 5.7 seconds 0-100km/h in 6.1 seconds combined cycle fel consmption: 37.2mpg or 7.6l/100km Lots has taken for of the classic color schemes sed by Lots in the 1960s (Elite Yellow, Carbon Grey, Sky Ble and Old English White) and combined them with exclsive Clb Racer interior design featres to give a stnning sportscar that beatiflly morphs fnction and form. The firm and spportive Elise seats are clad with lightweight microfibre comfort pads, perfectly positioned to give the right amont of spport with the minimal amont of weight, bt still keeping the body-colored seat shell partly exposed. The exterior body color theme is carried over to the transmission tnnel and combined with silver and black paint highlights, bisecting the cockpit and tying together the whole sporty theme that is niqe to the Clb Racer. Other exclsive interior design featres of the Clb Racer are the anthracite-anodised gear knob and handbrake sleeve, the Clb Racer (CR) logo hand embroidered on the seat headrest and the niqe anodised alminim flooring in the driver s and passenger s footwell. The small 320mm diameter leather rimmed steering wheel has an on-centre marker, enabling the more spirited driver to qickly and safely identify the straight-ahead position of the front wheels. The lightweight six-spoke alloy wheels, shod in bespoke Yokohama AD07 LTS tyres, are also anthracite-anodised, complementing the key interior components. Sorce: Lots Cars

8 proactive Lots News Lots trimphs at engineering awards Mark James, Head of UK Operations at Lots Engineering, collecting the Jdges Special Award Lots Engineering has been victorios in the recent British Engineering Excellence Awards, winning the Jdges Special Award, while also being Highly Commended in the Consltancy of the Year category. The British Engineering Excellence Awards recognise the design engineering excellence of indstry and show the world the depth of variety of engineering design innovation throghot the UK. The Jdges Special Award was presented to acknowledge a company that epitomised the aim of the British Engineering Excellence Awards by being recognised globally as a world leader in its chosen field of engineering. The jdges looked at recent projects that had been ndertaken and assessed how First Evora is delivered to cstomer Lots Engineering has been able to diversify its knowledge base and deliver world class engineering soltions. They were impressed that the company had contined to thrive despite the economic problems experienced by the sector in the last 18 months. In smming p Lots Engineering s achievements, the panel of jdges said: Most of its bsiness is derived from engineering services and it is even more impressive when yo think abot the size of some of the companies that have gone to Lots for its help. Lots is a trly excellent organisation and an obvios flag bearer for all that is good in UK engineering. Sorce: Lots Engineering Lke Bennett, Director of Lots Cars (left) hands over the keys of the first cstomer Lots Evora to Matthew Melling at the Lots Headqarters in Norfolk, UK. Matthew Melling of Twickenham, UK received the keys of a Storm Titanim Lots Evora from Lke Bennett, Director of Lots Cars at the Lots Headqarters where the new mid-engined 2+2 sportscar is hand bilt. Many Lots dealers arond the world have already received their demonstrators and Lots has, so far, received orders for the next five months of prodction. Demand for Lots award-winning Evora has meant that 150 extra new manfactring staff have been recrited to spport assembly operations in Norfolk, UK, a very positive sign at a time when the global motor indstry faces hge challenges. Fll prodction is expected to reach the maximm rate by the end of November Matthew, a cstomer of Stratton Motor Company, in Norfolk said: I was determined to be the first in the world to get my hands on an Evora so with Stratton Motor Company s help, I laid down my deposit within seconds of the order books being opened last year. I have read all the press reviews of the Evora and am so excited abot getting behind the wheel what a great start to September! Sorce: Lots Cars

9 proactive Lots News Lots appoints new CEO Dany T. Bahar has been appointed as the new CEO of Grop Lots, effective 1 October 2009, replacing Michael J. Kimberley, who retired in Jly. Prior to this appointment, Bahar was Senior Vice President, Commercial & Brand for Ferrari SpA where he was responsible for worldwide road car sales and after sales bsiness, overall road car and F1 marketing activities, licensing, and merchandising bsiness. Before joining Ferrari SpA, Bahar was the Head of Corporate Projects Bsiness in Red Bll GmbH. He was responsible for the overall corporate project bsiness development, with emphasis on diversifying the bsiness sch as setting p its F1 strategy with Red Bll Racing and Scderia Toro Rosso and the US-based Nascar Team operations, acqiring football clbs in Salzbrg, New York and Ghana for commercial prposes. On his appointment, Bahar said, I am looking forward to taking on the challenges as CEO of this legendary and iconic company with a peerless motorsport history. Lots has a worldwide reptation for innovative engineering and sperb sportscars that lead the world in efficiency, design and dynamics. With the recent lanch of the award-winning Evora, there is proof that Lots is better placed than many to capitalise on the rapidly changing atomotive market. I can t wait to get my plans nderway in October. In welcoming Bahar, Dato Mohd Nadzmi Mohd Salleh, the Chairman of Lots Grop, stated With Dany s track record in motorsports and Ferrari, we strongly believe that we have fond the right CEO to enhance the Lots image, brand and reptation as a world class sportscar and engineering company. With a strong management team already in place, we are confident this objective can be attained. Bahar, a Swiss national, holds an MBA and is married with two children. Sorce: Grop Lots

10 proactive Lots News Lots Evora Type 124 endrance racecar The Lots Evora Type 124 endrance racecar has been developed from the award-winning Evora road car and is bilt to FIA reglations and safety standards. The Type 124 (prononced One Twenty For) endrance racecar is the next step in the evoltion of the Evora. The car will make its 24-hor racing debt at the ADAC Nürbrgring 24 Hors, which provides a great test for the Evora s performance, efficiency and drability nder togh and demanding endrance race conditions. At the heart of the Lots Evora are fndamental racecar elements: mid-engine layot, high-tech and sper-stiff extrded and bonded alminim chassis and very strong lightweight forged alminim wishbones. All these elements mean that it is a natral evoltion from the road-going Lots Evora to a competitive endrance racecar. From the otset, the design team had intentions to take the Evora racing and the chassis was designed with this in mind. Endrance races are the perfect events to showcase the efficiency, handling and drability characteristics that have been fndamental to the concept of the Evora. The Lots Evora Type 124 endrance racecar has a race-tned version of the mid-monted Toyota V6 engine, with power increased to over 400ps (depending on race reglations). Vehicle mass is expected to be redced by p to 200kg, bringing the weight of the racecar to less than 1200kg (depending on race reglations). Frther changes for the Lots Evora Type 124 Endrance Racecar inclde a six-speed seqential paddle shift racing gearbox, fll FIA specification roll cage, FIA-compliant 120-litre ATL fel system, FIA fire extingisher system, competition carbon fibre rear wing, diffser and front splitter. The racecar is fitted with AP Racing 6-pistoncallipers front and rear, with a race-tned Bosch ABS system, for-way adjstable dampers and adjstable anti-roll bars. The racecar rns on 18inch rims shod with Pirelli racing slicks and the wheels widths have been increased over the roadcar to 9 ½ J on the front and 11 J on the rear. The aerodynamically efficient Lots Evora Type 124 Endrance Racecar body design, made from lightweight composite and carbon fibre panels, remains predominantly nchanged from the road car, with the only modifications being to the lower sections of the front and rear clamshells and the side sills. Every Lots car is designed to be at home on the race track as well as the road, and the Evora is no different. Designed primarily as an everyday road car, the Evora s lightweight and stiff strctre, its aerodynamics and performance means that it is perfectly sited to taming race tracks arond the world.

11 proactive Lots News The racecar is expected to compete in a nmber of endrance races in 2010/2011 forming part of a factory-spported race programme. The races that are targeted are: the 2010 ADAC Nürbrgring 24 Hors (Nürbrgring Nordschleife, Germany) in May 2010, Merdeka Millennim 12 Hors (Sepang, Malaysia) in Agst 2010, BritCar 24 Hors (Silverstone, UK) in October 2010 and the Dbai 24 Hors (Dbai Atodrome, UAE) Janary Sorce: Grop Lots

12 proactive Lots News Malaysian King and Qeen visit Lots UK Grop Lots Plc, a sbsidiary of Proton Holdings Berhad, received an honorary visit by the King and Qeen of Malaysia, His Majesty Seri Padka Baginda The Yang di- Pertan Agong Al-Wathiq Billah Tank Mizan Zainal Abidin Ibni Al-Marhm Sltan Mahmd Al-Mktafi Billah Shah and Her Majesty Seri Padka Baginda The Raja Permaisri Agong Tank Nr Zahirah to its headqarters. It is an honor for s to have His and Her Majesty s presence here at or Lots facility and this indeed is a meaningfl occasion for all of s, both in Lots and Proton. I am certain that it will definitely inspire s to frther strive and work harder in bringing Lots to greater global prominence and in realising Proton s vision to become Asia s premier atomotive company, said Dato Mohd. Nadzmi. Lots has contribted immeasrably to the technological development and engineering capabilities of Proton. An nmistakable legend in the world of atomotive indstry, Lots thrives on its strong fondation bilt by its fonder Colin Chapman in 1948, and now after 61 glorios years, Lots still holds reign as one of the few esteemed sportscar makers, distingished especially for its lightweight engineering prowess and performance speriority, said Dato Syed Zainal Abidin. Dring the visit, Proton and Lots were honored to have the King and Qeen of Malaysia nveil the new Proton Higher Performance Engine, a new high-torqe pressre-charged engine to spport ftre prodct introdctions. The engine, developed in collaboration between Proton and Lots Engineering with active involvement of Malaysian engineers and vendors, boasts an improved rate of emission and performance qality. The engine, prodced within 18 months from approval of engineering proof of concept, promises a high torqe for enhanced driveability with improved economy, performance and emissions. The King and Qeen of Malaysia spent the morning taking in varios exhibits from Lots Cars inclding a brief on classic Lots cars by Clive Chapman, the son of Lots fonder, Colin Chapman. The King and Qeen were also escorted on a gided tor of the Lots Cars assembly line, and were briefed abot the latest Lots Design projects. The King also took time to test-drive the award winning Lots Evora as well as the Tesla and Exige models. Sorce: Grop Lots

13 proactive Lots News Evora wins Car Magazine s Coveted Performance Car of the Year The Lots Evora beat strong competition from 29 other cars to win the title of Performance Car of the Year The prominent competition inclded cars from some of the greatest Marqes in the world sch as Lamborghini, Ferrari, Porsche and Aston Martin. The 2009 Performance Car of the Year comprised 30 cars, and inclded exhastive sbjective and objective testing. The featre incorporated testing on some of the greatest driving roads in Britain, with objective testing at the Rockingham Motor Speedway, where Darren Trner, a Le Mans winning racer, pt the cars throgh their paces. Chris Chilton, Assistant Editor at Car Magazine was so taken with the Lots Evora dring the first drive activity in Scotland that he said he wold eat his Apple Mac if the Evora didn t win this year s Performance Car of the Year. In saving his Apple Mac, Chris commented, There are exective saloons that don t ride this well, spercars that don t trn in so crisply, and srely no car on the planet steers like this. To frther safegard his constittion, Chris added, Lots has managed to transfer everything that we love abot the Elise to a bigger, more refined, more grown p platform...it coldn t really be mch better to drive -the Evora is nighon perfect. A winner on every conceivable level. Roger Becker, Vehicle Engineering Director said that It is very rewarding to win the well established Car Magazine, Performance Car of the Year award against sch togh competition. I am personally very pleased that Chris Chilton so accrately informs on the character and performance that we set ot to achieve in the Evora: They are all yo wold expect from a modern everyday Lots. The Evora is a great ownership proposition, offering the great Lots driving experience in a very comfortable, practical, refined and efficient package. He added It is a great validation of the expertise at Lots to win this title against incredible competition from sch a highly regarded pblication and very pleasing to contine Lots otstanding record in this competition. Lots Evora: 205 g/km CO2 Combined Cycle: 32.5 mpg (8.7 litres/100 km) Urban Cycle: 22.8 mpg (12.4 litres/100 km) Extra Urban Cycle: 43.5 mpg (6.5 litres/100 km) Sorce: Grop Lots

14 Series hybrids and the Lots Range Extender With the global reqirement to redce CO 2 emissions driving a move to the increased electrification of the vehicle, the realities of economics provide a serios challenge for electrical cars. Whereas stationary energy consmers do not reqire a significant energy storage capability, vehicles do and crrent battery technology is both heavy and expensive. Althogh America and Japan are crrently the largest markets for hybrids and electric vehicles, these contries prefer gasoline as the liqid fel of choice for passenger car vehicles. Despite this, there are a significant nmber of hybrid vehicle options, particlarly in the US, with an increasing nmber of electric vehicle options being developed. Some observers believe Erope is behind the US and Japan in terms of the nmber of hybrid or electric vehicles. This is de in part to Erope s mch greater se of diesel in passenger car vehicles and the fel consmption benefits of diesel engines compared to gasoline engines. As emissions legislation tightens and diesel exhast after-treatment becomes increasingly expensive, the Eropean manfactrers are looking to hybrid and electric vehicles, with a focs on gasoline engines for lower cost vehicles, as a means of offsetting the overall cost of the hybrid systems. Elsewhere, China is increasingly looking to hybrids and electric vehicles. It is a net oil importer and the Government is pshing local vehicle manfactrers towards hybrid and electric soltions as a means of redcing the contries dependence on imported oil, increasing the sage of China s natral resorces, sch as coal and gas to generate electricity and lithim to prodce batteries. China s passenger car vehicle market is also primarily gasoline. Why not move straight to electric vehicles? Electric vehicles have for primary disadvantages when compared to a conventional liqid fel powertrain: range, charge time, mass and cost. Primarily these are all attribtable to the battery. Across the indstry there is widespread research into new battery technologies with the aim of developing soltions for electric vehicles that will be comparable or better than crrent conventional internal combstion engine powered vehicles in cost of se and sability terms. However, these may still be many years away from volme prodction readiness. In the meantime, to redce the effect of the primary disadvantages of electric vehicle technologies, while still reaping most of the benefits of fll electrification, the range extended plg-in hybrid electric vehicle (RE- PHEV) is a stepping stone to a viable electric soltion. What is a range extender? In its simplest form, a range extender (RE) is a device sed to charge an energy storage nit i.e. a battery or hydralic cylinder in a series hybrid vehicle. The range extender charging device is typically an internal combstion engine mated to a generator and some manfactrers developing a RE-PHEV have selected to se a small conventional internal combstion engine mated to the generator. However this is inevitably a compromise and there are advantages of considering a dedicated range extender engine. A nmber of engine configrations have been proposed by varios manfactrers, sch as rotary engines and conventional piston engines, with a variety of nmbers of cylinders, capacities and otpts. Alternative engine configrations have also been proposed, althogh these are often more leftfield and cold reqire a level of ble sky thinking and sally deep pockets to prove-ot the claims. The performance reqirements of a range extender engine differ greatly, from as little as 15kW, to engines in excess of 150kW. The reason for sch a varied performance range is down to the strategy of a particlar vehicle. Determining the vehicle reqirements with respect to economy, performance, and the specification of the vehicle, sch as mass and energy reqired to maintain a given speed, battery size, all have an inflence when specifying a sitable range extender performance reqirements. Fel cells are also effectively range extenders, being developed as they are for the same prpose of proactive

15 Series hybrids and the Lots Range Extender maintaining the charge level of the vehicle s battery, althogh the technology costs of fel cells may prevent them from being commercially viable in the short to medim term. How does the Lots Range Extender work within a series hybrid? A series hybrid provides drive to the wheels throgh an electric motor. There is no mechanical connection between the engine and the wheels. The prpose of the range extender is to charge the battery. The engine starts only when the state of charge of the battery drops below a certain point and contines to charge the battery ntil the state of charge is above a certain point. There are a nmber of permtations of operation that are possible, depending on the operation strategy being sed, sch as charge-sstaining or charge-depleting. The battery size and type have a significant effect on the strategy of engine operation and performance reqirement of the range extender. So how has Lots tackled the range extender? In assessing the reqirements for series hybrid vehicles, Lots conclded that the se of existing conventional engines as range extenders is both too costly and too compromised to be viable. A specifically, a designed range extender is not jst desirable bt a necessity for an optimised series hybrid drivetrain. This had led to the Lots Range Extender engine, nveiled in September at the Frankfrt motorshow, to great interest from the media and indstry alike. Now flly designed and in the bild phase, the approach Lots has taken with its range extender has many advantages. Ss a component of a drivetrain configred for redced environmental impact, clearly key to a range extender specification is a high thermal efficiency for low fel consmption which can be achieved for an engine designed specifically for this prpose. Series hybrid drivetrain crrently face the challenge of higher costs than conventional powertrain and as sch, the range extender fndamentally needs to be a low-cost engine. However, the narrower operating range for optimised thermal efficiency can be achieved with a simple, low technology engine if careflly designed, which also can lead to the elimination of expensive exhast aftertreatment. A simple engine architectre and technology specification has the additional benefit of redcing engineering risk, cost and time to market. Another isse facing series hybrid vehicles which a specifically designed range extender can in part address is vehicle weight and packaging. A low mass, small package range extender is important as this not only improves the vehicle performance and efficiency, it also allows redction of the battery pack to deliver the same vehicle performance, a real benefit both for vehicle weight and cost. Also, it is necessary to keep the mass of the engine low since, depending on the vehicle s all electric range and the ser s drive cycle, the engine may only be reqired infreqently, meaning that the vehicle is carrying arond what is, in effect, excess mass. So while the reqirements for high efficiency, low mass and cost and a minimm package space proactive

16 Series hybrids and the Lots Range Extender General Constrction Bore and Stroke Compression ratio Maximm power Peak torqe Maximm BMEP Maximm Engine Speed Fel System Fel Dry weight 1.2 litre 3-cylinder with 2 valves per cylinder, SOHC Belt driven Monoblock with Integrated Exhast Manifold all alminim Balance shaft (optional) Direct-copled generator 75.0mm x 90.0mm 10:1 35kW (47bhp) at 3500rpm via integrated electrical generator 107Nm at 2500rpm 11.2bar 3500rpm Port fel injection, Lots EMS 95 RON ULG / ethanol / methanol 56kg are argably fndamental for any range extender design, Lots has paid particlar consideration to the performance and engine architectre of its range extender. Looking firstly at performance, Lots condcted detailed simlations on varios vehicle types from MPVs and sedans to sports cars. The reslts of these simlations have shown that a 35kW power rating will sit the drive cycle reqirements of most C/D class vehicles, the class of vehicles that Lots believes will be most poplar for series hybrid applications. A typical forstroke gasoline engine is at its most efficient arond the 2,500-3,500rpm mark, so the Lots Range Extender has been optimised to prodce the reqired 35kW at 3,500rpm. Different operating modes, sch as a proactive power overboost for times that may reqire additional power or low speed operation to provide a qiet intown rnning mode have also been investigated and a fll programme of development of these strategies will form part of the in-vehicle engineering phase of the programme. The engine architectre of the Lots Range Extender has been careflly designed for low mass, cost and a compact package. It is a spark ignition (SI) gasoline engine, with ethanol flex-fel capability and easily adaptable for CNG/LPG options. A spark ignition architectre was selected to avoid the significant aftertreatment costs associated with a diesel engine and ensre sitability to all the major markets for initial plg-in hybrid ptake, where diesel may be less poplar. After all, optimising operation of the engine to rn at its most thermally efficient point, shold help bring the engine closer to the thermal efficiency of a diesel engine. The 1.2-litre engine capacity chosen may initially appear large, particlarly compared to some engines being promoted as range extenders. However analysis has demonstrated that this displacement is optimm for the performance reqirement when friction and pmping losses are considered. For example, a smaller capacity engine cold prodce the reqired power, bt wold need a higher engine speed, increasing friction, pmping losses and noise which wold negate the benefit. Alternatively, introdcing additional engine technology sch as forced indction cold allow

17 Series hybrids and the Lots Range Extender a smaller displacement bt wold incr greater nnecessary cost and complexity. A key featre of the Lots Range Extender engine architectre is the introdction of the monoblock design with an integrated exhast manifold, with a nmber of benefits. The monoblock effectively combines the cylinder head and cylinder block of a conventional engine, redcing component cont, complexity in assembly and it improves drability, eliminating what is a critical joint. The integrated exhast manifold, that Lots has sccessflly employed on several other recent engine designs, also improves efficiency, with redced engine warmp time for an emissions benefit. The crankcase is designed to allow simple modification of the casting to accommodate a variety of generator packages. The engine transfers power to the generator via a dal damped copling, to redce NVH on engine start p as well as power generation. The low engine speed also means that only two valves/cylinder are reqired, simplifying engine manfactre and redcing costs. The combstion chamber is designed with an offset slant sqish to focs the air-fel mixtre arond the spark plg to improve engine efficiency. The low engine speed again brings benefits by being able to optimise the engine internals to minimise mass, with the bearings being designed for minimal friction. Conventional port fel injection (PFI) is tilised, rather than the significantly more expensive direct injection (DI) option. As the engine operates on fixed speed cycles, the benefits of DI are redced to a point where an optimised PFI system can provide similar efficiencies. proactive A significant amont of investigative work was condcted on the nmber of cylinders reqired. Stdies showed there was little difference between sing two or three cylinders, each with inherent advantages and disadvantages. Ultimately three cylinders were chosen as there were minimal internal friction differences between the two options and the NVH of a two cylinder engine was seen as a significant downside, where a balance shaft wold be a likely reqirement for all applications, rather than an option as it is on the Lots Range Extender. While a typical three cylinder conventional gasoline engine might have a mass of 80-90kg, as a reslt of its novel architectre and design featres, the Lots Range Extender is incredibly light, with a mass of only 56kg. Prodction optimisation shold see this figre redce frther. Where can I see the engine? Clearly this Lots Range Extender, designed specifically as it is for series hybrids offers nmeros advantages for vehicles of this type. The test and development phase for prototype engines will prove ot this novel design which will first featre in a vehicle as part of the Limo-Green project. This Technology Strategy Board-spported project, in collaboration with Jagar Cars, MIRA and Caparo, will see the Lots Range Extender installed within a new Jagar XJ to demonstrate that a lxry vehicle can prodce CO 2 figres below 120g/km withot affecting the desirable elements of a lxry vehicle. And while the LimoGreen project will be the first to test the range extender in a vehicle, prodction versions cold be mch nearer that yo think. Lots is already talking to several vehicle and engine manfactrers and Tier 1 sppliers that recognise the benefits the Lots Range Extender offers. With engines like this, widespread ptake of series hybrids cold be a very real possibility soon. Sorce: Lee Jeffcoat, Lots Engineering

18 Technology integration for low carbon A review of the Lots/IMechE Seminar The Instittion of Mechanical Engineers (IMechE) recently held its latest seminar in a bsy calendar of events for the mechanical engineering commnity. Titled Integrating Technology for Low Carbon, it was the forth in the series organised by the IMechE in conjnction with Lots and the Hethel Engineering Centre and examined how technologies can be integrated to achieve significant gains in redcing CO 2 and looked at how varios technologies are being implemented to meet the challenges that need to be overcome in prsing low-carbon goals. The event attracted a wide range of engineers, consltants, stdents and academics. Presentations covered the integration of technologies related to advanced internal combstion engines, transmissions, hybridisation and electrification that enable the delivery of the low-carbon benefits withot compromising vehicle drivability and driver perception. The UK s transport sector crrently acconts for almost 24% of the nation s CO 2 emissions. Of this total, road vehicles accont for nearly 80%. It is apparent that no single technology alone can meet the legislative challenges of the UK government s target of an 80% redction in CO 2 emissions by Combined, however, real advances can be made, bt necessitate strategies for integration. Robert Evans, Chief Exective Officer of Cenex, started proceedings with a keynote address. Cenex is a delivery agency established with spport from the Department for Bsiness, Innovation, and Skills to promote UK market development and competitiveness in low carbon and fel cell technologies for transport applications. proactive Evans, althogh acknowledging that the atomotive indstry, economically, is in difficlt times, was qick to focs on the doors this sitation has opened with the increased hnger for new technology and new prodct development, with a higher nmber of innovative collaborative projects aided by pblic fnding. This, Evans stated, proves that the UK low carbon vehicle commnity is very mch alive and kicking and is well placed to establish a competitive position. In smming p, Evans accredited the indstry with the high level of technological innovation dictating that the sector has a nmber of alternative energy options and is determined to contine to ensre that the policy spport for the atomotive indstry low carbon investments in the UK is the best it has ever been. Pal Stewart, Professor of Aeronatical and Atomotive Engineering at the University of Salford, was next to present on the sbject of Novel Hybrid Electric Vehicle Research and Development. Stewart focsed on the latest advances on free piston engines and the advanced control techniqes for high efficiency, low emission hybrid electric drivetrains. Two free piston engines were discssed, the Lots Engineering forstroke experimental free piston engine and the Volvo FPEC free piston engine. The Volvo engine, Stewart explained, has the piston movement controlled by tblar permanent magnet electrical machine and the piston motion profile controlled to create variable compression ratio, which facilitates HCCI, leading to improved fel economy, and redced NOx and CO 2 emissions. In smming p, Stewart otlined the benefits of the for-stroke free piston engine variable swept volme, variable top and bottom dead centres, differential expansion and a high compression ratio. Plg-In Hybridisation Stdies for Premim Lxry Applications was the next topic, covered by Pal Bostock, HEV Systems Design at Jagar/Land Rover. Bostock focsed on decision making in target generation, setting and balancing key component specification and the opportnities for re-se. The

19 Technology integration for low carbon A review of the Lots/IMechE Seminar Jagar/Land Rover-developed Range_e project, part fnded by the TSB, was discssed. This ses a plg-in parallel diesel hybrid system in the 10MY Range Rover Sport to offer a premim SUV that can rn as a pre EV in charge depleting mode, sing energy from mains electricity, and can also operate as a conventional hybrid in charge sstaining mode. Bostock conclded that hybrid technologies affect premim lxry attribtes in two areas: with respect to existing generic attribtes and generating new hybrid attribtes that may interact with generic attribtes. Bostock contined that vehicle electrification introdces frther elements and their interactions may go otside the indstry and he also reinforced Robert Evans earlier sentiments that Government part-fnded projects provide a platform to investigate these areas more thoroghly and provide a basis for early attribte trading that will set the agenda for the exploitation of low carbon technologies. Ivan Loncarevic, Bsiness Development from Lithim Balance was next to the stage to confer on the Genine Hybrid System Marriage of Lithim and Fel-Cell Technology. Loncarevic analysed power packs for electric vehicles that enable ranges of miles per charge, power packs that enable refeling in mintes, power packs that more than doble energy effectiveness of transportation and totally eliminate particle emissions and power packs that have 5,000 8,000 working hors longevity. Lithim Balance, which makes Battery Management Systems for large Lithim-ion batteries, first piloted the technology in October 2007 with a 72V battery management system integrated with a 1kW PEM felcell, a 14.4kW Li-on battery on a city car which offered a 230km range. Loncarevic presented the latest development, a methanol based range extender for electric vehicles, a flly integrated system in one box which will have the capacity to enable electric cars to have a range of p to 600 miles. The Application Selection of Cell Technologies for Battery Systems was presented by Simon Sheldon, Managing Director of Amberjac Projects Ltd, who covered the sometimes bewildering array of battery chemistries and cell constrction and sitability for atomotive applications. Sheldon firstly otlined the application reqirements for hybrid electric vehicles, plg-in hybrid electric vehicles and pre electric vehicles before moving onto the capacity delivery and chemistries available, while also focsing on cell constrction. He highlighted one misconception that is generally misnderstood, that cell chemistry is not related to constrction type becase virtally all chemistries are available in all constrction types. Sheldon finished by stressing that choosing the correct cell chemistry is vital, choosing the correct cell constrction is vital and choosing the correct cell performance characteristics is vital, bt those three points are jst the starting point in bilding a sccessfl battery system. Physical, mechanical and electric design, battery management, thermal management and vehicle interface and integration are also vital areas of the decision matrix. Dr Leon Rosario, Principle Engineer, Hybrid and Electric Vehicle Technologies at Lots Engineering,then gave an Insight into Electric Vehicle Power and Energy Management, concentrating on the power and energy management of hybrid and electric vehicle systems and the introdction of a modlar power and energy management framework. Rosario started with the EV technology enablers and key events, acknowledging the invention of the capacitor in 1745, and then progressed onto the concept of EV proactive

20 Technology integration for low carbon A review of the Lots/IMechE Seminar power and energy management, with particlar focs on the hybridisation of energy systems. This in itself highlighted the problem a nified power and energy management system has of handling several tasks inclding energy resorce planning, power delivery in real time and power processing architectre. The next topic was the implementation of a modlar power and energy management framework with regard to power management shell, energy management shell and power processing shell and Rosario finished with a holistic description of power and energy management. The seminar then covered the Technology Combinations for the Redction of CO 2 Emissions with Hans Nglisch, senior manager, Advanced Development Engine Systems from Continental Atomotive presenting. Nglisch started by highlighting the actal and proposed CO 2 emission reglations worldwide and then proceeded to otline the energy needed to move the car throgh the New Eropean Drive Cycle. He covered the varios options to improve proactive Powertrain design and focsed on a collaboration between Continental and Lots Engineering, offering an affordable downsized nit with a 1.5-litre threecylinder engine with a single stage, fixed geometry trbocharger, which delivered performance eqal to a 2.2-litre for-cylinder engine. After emphasising the importance of engine downsizing, Nglisch finished with an emissions trend roadmap, stating what he believes to be the ftre of Powertrain technologies, provoking an interesting debate among attendees. Tony Martindale, Chief Exective Officer of Connaght Engineering, gave the attendees an insight into Connaght Engineering, delving into the history of the company and also where it sees itself heading in the ftre. Martindale, who co-fonded Connaght Motor Company in 2002 and became CEO of Connaght Engineering when the company demerged in 2007, was a sccessfl competitive racing driver in Historic Formla Jnior. Dring his presentation, Martindale gave his views on delivering carbon-netral transport by taking proven technologies and applying them in innovative ways, while also presenting the prodcts developed by Connaght Engineering. Moving onto something which the FIA have given particlar prominence to, Ian Foley, Managing Director of Williams Hybrid Power Ltd, presented on Flywheel, Energy Storage and Enabling Cost Effective Hybridisation. Foley, who has a prominent Formla 1 history while working for Team Lots, focsed on whole of life costs flywheel vs existing technologies, challenges for prodction se, technology readiness and limitations of the technology. He otlined the different applications for the technology: light rail, renewable energy and then proceeded to focs on the atomotive application, while taking the attendees throgh the latest flywheel developments, targets and timescales for prodction readiness. Lloyd Taylor, Sales Engineer of Poclain Hydralics, was the final presenter of the day giving an Introdction to Hydralic Hybrid Transmission. Taylor discssed why hydrostatic transmissions are widely sed in indstrial machines bt are largely nknown in the atomotive indstry and why combining the best available hydralic technology in hydralic hybrid transmissions offers hge improvements in fel consmption and CO 2 emissions compared to conventional or electric hybrid transmissions. Taylor closed on how battery powered vehicles can also benefit from the redced losses and improved energy sage to increase vehicle range, and he went throgh the varios development challenges for hydralic hybrids inclding noise control, system integration and the need for cost redction, while also re-emphasising the extensive benefits of familiar materials and the redced CO 2 emissions. The day conclded with a niqe opportnity to see the vehicle assembly process at the world renowned Lots factory, from receipt of the chassis to engine integration, right throgh to bonding of exterior body panels for the iconic sports cars. The Integrating Technologies for Low Carbon seminar proved a great sccess with the high nmber of presenters giving the attendees the opportnity to learn from the leading indstry speakers. It was an opportnity to reflect on the demands of ftre legislation and how this impacts on atomotive engineers, not only provoking debate, bt also generating ideas to ensre the atomotive indstry contines at the forefront of technological innovation. Sorce: Matthew Reed, Lots Engineering

21 Q&A with Oskar Goitia MD at Mondragon Atomocion Mondragon Grop, the world s largest workers cooperative, has grown ot of its historical Basqe roots to comprise an organisation with global presence. It is also a significant player in the atomotive indstry components sector with cooperative firms manfactring components, modles, machinery and tools. Oskar Goitia, MD of Mondragon s atomotive division, tells jst-ato editor Dave Leggett how the bsiness is developing and staying tre to its fonding principles. DL: How is bsiness this year? OG: To pt it in perspective, Mondragon Atomocion represents arond 10% of the Mondragon Grop bsiness. Dring 2009 trnover in the atomotive sector has been arond 25% lower than in We feel that compared to some of or competitors, the redction we have faced has been less dramatic becase of the wide range of prodcts in or atomotive portfolio. The scrappage programs in Erope have also helped to increase prodction activity dring recent months and they also give s a fairly optimistic short-term scenario. The main worries, of corse, are beyond the end of this year when spport from national incentive programmes becomes mch more ncertain as some schemes come to an end. A progressive redction of sch spport may help or companies to adapt to the new sitation. If the schemes were to immediately end that wold redce or volmes by at least 10%. Elsewhere, or operations in Brazil and China have been growing this year. Overall, or companies have been focssing on costs in order to face the new bsiness era while always maintaining or cooperative principles. Keeping or cooperative DNA has meant relocating some of or labor force to areas of activity faring relatively well dring the economic crisis and downtrn. We have also been able with or members to adjst or salary levels to the new demands in the market. Investments programs, too, have been adapted to ftre needs. We also have a priority to research new prodcts and services reqired in the new electro-mobility model for the ftre, with new components for the electric vehicles as well as adapting the existing modles and components to the new lightweight and downsizing reqirement to flfil the lower CO 2 emissions reglations. DL: Can yo explain how the Mondragon Cooperative works and say a little abot the atomotive element? OG: Mondragon Atomocion is part of Mondragon Cooperative Corporation, the largest bsiness grop Mondragon the first steps Many at the Mondragon Cooperative take inspiration from the arrival in Mondragon of a yong priest named José María Arizmendiarrieta in He is revered as the spark which created the cooperative and its ideals. It is said that his primary concern pon arrival was not the development of bsiness activity bt the welfare of his parishioners and a desire to provide opportnities for all as wells as to correct the acte social deficiencies of a poplation still sffering from the conseqences of civil war. Father José María is said to have worked tirelessly with the yong people of the parish, organising sporting, cltral and edcational activities. Two years after his arrival in Mondragon, Father José María fonded the Professional School, the seed which wold later become Mondragon Unibertsitatea - the University of Mondragon. This instittion has played a vital role over the decades, training many of those who later became key figres in the development of the cooperative project. in the Basqe region and the seventh-largest bsiness grop in Spain. Mondragon is a cooperative initiative celebrated on the global stage for its commitment to the cooperative principles laid down by both the fonders and Father José María Arizmendiarrieta - the inspiration behind the Mondragon movement. proactive

22 Q&A with Oskar Goitia MD at Mondragon Atomocion Prodcts Mondragon Atomotive, with Fagor and Maier as its leading trademarks, manfactres and spplies components and systems made from the following materials and processes: cast iron, alminim low pressre and gravity casting, alminim diecasting, hot stamping, machining, plastic injection and finishing, rbber molding and extrsion, composites, etc, collaborating in the design, development and manfactre of the final prodct. Companies making components and modles: Fagor Ederlan Taldea, Fagor Ederlan Tafalla, Mapsa, Ecenarro, Maier, Cikatxo, FPK and Batz Sistemas. Companies prodcing machinery and tools: Loramendi, Arrenak, Matrici, MB Sistemas, Batz Troqeleria and Fagor Arrasate. Mondragon s mission blends those basic objectives of a bsiness organisation that competes on international markets with the se of democratic methods in its corporate organisation. Important principles inclde the creation of employment as well as the personal and professional development of the workers and a pledge to develop the local commnity. Its bsiness approach is contained in its corporate vales, which inclde: Cooperation - owners and protagonists Participation - management commitment Social Responsibility - fair distribtion of wealth and involvement in the environment I nnovation - continal renewal. proactive Mondragon has seen a steady increase in trnover in recent years with a 12.4% increase in 2007 and a 6% increase in 2008 bringing the total trnover to EUR16.78bn of which EUR6.5bn was specifically attribted to the indstrial component of Mondragon. Mondragon as a whole employed 92,773 people in 2008, which represented a net increase of 1,700 jobs from 2007 despite challenging market conditions in most bsiness areas. In 2007 the workforce was 42.2% female, the resorces allocated to commnity schemes increased by 14.7% to EUR39m and the resorces allocated to research and development over valeadded decreased slightly to 4.6%. Mondragon Atomocion (MA) is a grop of companies spplying some of the world s main atomotive manfactrers and Tier 1 companies. It collaborates with clients at the design and development stages, prodcing and spplying a fll range of components, modles, machinery and tools. MA crrently employs arond 9,500 employees. In atomotive components, in 2007, trnover rose by 13.5%, a figre that vastly otperformed the sector average, with a significant increase in domestic Spanish bsiness for vehicles prodced mainly for export. International sales acconted for 64% of the total, with a growing contribtion by the seven foreign plants, whose otpt rose 20% and has been joined in 2008 by the three facilities Batz Sistemas bilt in China, Mexico and the Czech Repblic. Fagor Ederlan Taldea has also completed the commissioning of the new Marklete fondry, the most modern in Erope, characterised by its atomation and flexibility, its safety and environmentally friendly approach. MA is considered to be constitted of both Tier 1 and Tier 2 companies which spply the main global atomotive OEMs and many of the Tier 1 sppliers. Some 85% of MA prodcts and fnctions are spplied to the Eropean atomotive sector and 95% of prodcts and fnctions are spplied to the global

23 Q&A with Oskar Goitia MD at Mondragon Atomocion atomotive sector. Other indstries spplied by MA companies inclde hosehold appliances, railway, aeronatics and solar energy. proactive Recent highlights for MA have been the prize awarded to Fagor Ederlan as the Best Honda Spplier and the good performance of its sbsidiaries in Brazil and Slovakia. Maier, Cikatxo and FPK has a otstanding performance in the Eropean market leading with some of their prodcts in the Eropean market. Batz Sistemas strengthened its international projection throgh the bilding of three plants in Mexico, the Czech Repblic and China, initiated prodction in 2008 and will cater for the delivery of pedal sets and handbrake levers for several models at General Motors throghot the world. The Basqe cooperatives Matrici and Batz, part of the Mondragon Corporation, have signed a major contract with Renalt Trcks, within the framework of the development of ftre ranges. Loramendi and Arrenak are crrently leading the fondry eqipment and tooling deliveries and have been the biggest player in the world in flly atomated systems to prodce cylinder blocks and cylinder heads in iron and alminim. In addition to the benefits of having the Mondragon University, companies in MA benefit from the cooperative bank which will stick with a new coop ntil they can go it alone and, as well as the cooperation fnds which spports bsinesses in troble and finances expansion and international activities. Member cooperatives may also be assisted into diversification - since 1956 we have had only one total failre of a cooperative. DL: Is it difficlt to manage the different activities and sch a wide range of companies? OG: There is a very matre organisation working in three main fnctional activities the financial, distribtion and indstrial areas. Each area is as well divided into different divisions with a Vice-President leading each one. The companies belonging to a division are managed by a Managing Director and each company prodces exective bsiness plans which are yearly approved by the general assembly and aligned with 4-yearly bsiness plans. Horizontal strctres spporting the sectoral orientation allow a very flexible and effective approach to the market, as well as a very stable positioning with or prodcts. DL: And who are the main cstomers for the atomotive nit s prodcts? OG: Modles and components: GM-Opel, Renalt- Nissan, PSA, Honda, VW, Mercedes, BMW, Ford, Bosch, Continental Machinery and tools: GM, Renalt, BMW, Land Rover-Jagar, Tata, FAW, Mercedes, Volvo Trcks, Avtovaz, Ford, VW DL: I see that Mondragon has a very strong historical attachment to the Basqe region. Has that held back internationalisation of operations? Can yo say something abot yor strategy for international operations? OG: The atomotive sector is a very globalised sector and therefore we have been following or cstomers in their internationalisation programs. We have or main footprint in the Basqe Contry, Spain, Western and Eastern Erope - with a very high exportation level. In the last ten years we have been establishing manfactring facilities in Brazil, Mexico and China. The recent crisis sitation and the lack of financial

24 Q&A with Oskar Goitia MD at Mondragon Atomocion resorces has idled some expansion activities, bt we are strongly committed with or members to increase and ensre employment in or companies. This means that a better positioning in the atomotive world gives s sstainable growth and garantees or employment goals in or long-term bsiness strategies. The latest car sales figres shows that some of the emerging contries BRICs - will contribte more to global atomotive growth in the ftre and therefore Mondragon has already sccessflly set p some indstrial parks in those contries and will contine expanding its activities. DL: Are yo continally looking arond the world for other cooperative companies to link p with? OG: The Mondragon Grop is always open to all kinds of cooperation and is permanently in contact with all instittions arond the world with which we may share experiences as well as developing bsinesses together with entities that have similar principles as we have. This does not mean that we only cooperate between cooperatives; we do have joint ventres with other private capital entities as well arond the world. DL: How does the Mondragon bank - Caja Laboral - fit in? Does it provide finance to member cooperatives more cheaply than other banks? Can it help with overseas investments? OG: Caja Laboral (CL) is a part of the financial bsiness of the Mondagon Grop bt as a general policy in Mondragon Corporation, the companies are working also with some other banks and financial proactive instittions worldwide. CL is there and can provide spport, bt it is not the only option for member companies. Also, Caja Laboral is not only providing finance only for Mondragon companies it is a major competitive bank involved in all the kinds of things that the big banks do. These days only 20% of the bank s bsiness is inside the grop. It is open to the rest of the world. DL: If a company chooses to join the Mondragon Cooperative, what are the main benefits? OG: A very strong organisation focsed on spporting participative management models which can operate in any field with a very reliable and high qality standards. The cooperative offers spport from the management point of view as well as skilled personnel coming ot of the University. There is also a strong Mondragon-owned pension fnd and social welfare cover that incldes extraordinary spport to all members of the cooperative. DL: Can non-cooperative companies join Mondragon? OG: No. However, that does not mean that Mondragon belonging companies cannot establish joint ventre companies with other non-cooperative companies. The reslting entities are sbsidiaries

25 Q&A with Oskar Goitia MD at Mondragon Atomocion from the Mondragon member company, with the participative management model implemented also. It can be nderstood as a form of indirect participation in the Mondragon Corporation. DL: Is Mondragon an example of a mainly Basqe phenomenon or are there other cooperatives in Spain? OG: There are other cooperatives in Spain, bt those belonging to Mondragon are basically in the Basqe region. Mondragon Grop is nmber one in the Basqe contry, in terms of bsiness and employment and it s the seventh-biggest bsiness grop in Spain. There are many smaller agricltral and consmers cooperatives spread ot in Spain and arond the world, bt with or niqe indstrial organisation we believe we are the world s biggest at least in terms of or indstrial activity, financial and indstrial. I am not aware of another cooperative grop like ors. There are other cooperatives in places like Italy and the US, which are more bsiness associations based arond prchasing cooperatives, bt none are qite as diversified as we are or strctred as we are. DL: Are yo always looking for other cooperatives to hook p with? OG: That is not a priority and the way it has to work is that a company looks at s and says we wold like to join yor clb. The initiative shold come from the company that sees how we operate and or principles and wants to be a part of it. They jst have to meet some reqirements if they want to join it is open and there are no restrictions, bt obviosly a company that wants to join mst meet the cooperative criteria. There are other cooperatives in places like Italy and the US, which are more bsiness associations based arond prchasing cooperatives, bt none are qite as diversified as we are or strctred as we are. DL: Is it difficlt for a workers cooperative to shed workers when rationalising capacity in a recession? OG: This comes back to the basic principles governing or activity. Actally, a member of a cooperative of Mondragon does not lose his job and the solidarity process among all companies in the corporation allows s to relocate most of the members in other activities ths retaining jobs. At the beginning of the international economic crisis most of the affected companies resized the workforce by cancelling the contract of the temporarily employed persons (which by law cannot exceed 15% of the total employed persons in the company). After this, there is salary redction, relocation and other similar measres are taken to avoid any other employment and jobs redction. We manage or workforce in a different way to conventional companies as we are owned by the workforce and there are no nions. It is a participative model and maintaining employment and creating the bsiness conditions to grow and employ more people, helping to develop economic activity in a socially sefl way are key. DL: What happens to profits? OG: If a company makes a profit, that profit is shared by the grop and the grop ses the money for two main prposes: one is to spport the niversity and edcation, also inclding innovation projects to invest for the ftre; and the other is solidarity with the other companies not doing so well, to reinforce the balance and stabilise the projects financially. So companies not doing well are spported by those who are, ths maintaining the overall objectives of the cooperative. Another part dring the profit sharing process goes into new activities and new bsiness promotion. The rest is dedicated to associates and companies to reinvest in the cooperatives. DL: How do yo see prospects for Mondragon s atomotive bsiness in the ftre? OG: The main worry at the moment are prospects beyond the end of this year when Eropean incentive or scrappage schemes start to expire. A progressive redction of incentives rather than a sdden ending may help or companies to adapt to the new sitation. If schemes sddenly finish that cold create a big fall in volmes over 10% or more, which wold be bad for the whole sector. We are spplying OEMs across Erope, so what happens in the big manfactring centres where we spply Germany, France and UK, as well as in Spain very important for or bsiness. However, the strong position of or companies especially in the emerging markets - as well as or focs on innovation makes s qite optimistic abot proactive

26 Q&A with Oskar Goitia MD at Mondragon Atomocion the ftre. We are committed to or atomotive strategies, strengthening or position in the market and working very closely with or cstomers. All of these things will bring s more and better bsiness opportnities. And we believe that cooperation between all players in the atomotive bsiness will be increasingly reqired in the near ftre de to limited financial resorces. This cooperation will maximise the otpt of the synergies we have developed. Or participative model as employee-owned companies with committed teams allows s to keep a very competitive position in the market for these new and challenging times. I think we will see more companies increasing the participation of their employees in the ftre it s a trend we are already seeing. Overall, next year we expect to keep the same level of bsiness thogh it will be three or more before the market gets back to pre-crisis levels figres in Erope. It s a similar sitation for or plants in the NAFTA area. The growing areas for s will be India, China and Brazil. DL: What gives yo the greatest satisfaction in yor role? OG: After 20 years in the atomotive bsiness with very demanding market conditions, we are now in the middle of a new era. We are in the middle of a complete revoltion with new mobility concepts sing advanced clean technologies. This scenario gives me the opportnity to develop myself by creating sstainable employment and develop bsiness in this new era. Innovation and cooperation are now vales which are more and more demanded in order to be sccessfl. Having practised these vales in or organisation and or personal lives, it gives s a very good starting position for this new part of the race. Those challenges, as well as being protagonist of this worldwide atomotive change, are the most satisfying part of my job. Sorce: jst ato.com editorial team Oskar Goitia Zbizarreta In his crrent role, Oskar Goitia is Managing Director for Mondragon Atomocion, a corporate strctre that coordinates the activities of Mondragon s atomotive firms. Prior to that, he worked as CEO of Loramendi Grop a Mondragon member that specialises in manfactring machinery for the manfactre of cast iron engine block and alminim engine blocks and heads. He also worked for other Mondragon atomotive firms after stdying Mechanical Engineering at Mondragon University. He speaks English, German, Spanish and Eskera (the Basqe langage). proactive