Making Efficient, Fun Vehicles with Honeywell’s Tony Schultz & Steve McKinley

October 11, 2013

JOHN SHEGERIAN: Welcome back to Green is Good, and we’ve got a turbo-charged ending to today’s show. We’ve got Tony Schultz and Steve McKinley from Honeywell on with us. Tony’s the Vice President of Honeywell Turbo Technologies and Steve is the Vice President of Engineering for Honeywell Turbo Technologies. Both of you guys, Tony and Steve, welcome to Green is Good. TONY SCHULTZ: John, thanks for having us. We’re excited to have an opportunity to talk about our business and all the things at Honeywell, particularly around the turbo-charging business and an opportunity to talk to everybody to tell you guys what we’re doing. JOHN SHEGERIAN: For our listeners out there, I’m on your site right now and it is not only colorful and gorgeous. I want all of our listeners who’ve got their iPad or some other device in front of them to go to www.turbo.honeywell.com. Before we get into talking all things turbo, Steve, can you share a little bit about your story, your journey, how you got to this very important position at Honeywell leading up to this and the great work that you’re doing? STEVE MCKINLEY. Sure, John. I obviously started like a lot of engineers tinkering with mechanical things, loved tearing things apart and putting them back together to work on a car or a motorcycle, went to college, got an engineering degree, when out of college, started working for one of the automakers and really enjoyed that experience, then decided that I wanted to kind of specialize on some more interesting products and focused in on the turbochargers themselves. I’ve been with Honeywell for about seven years now, with a little more 20-year career in automotives industry since graduating from college. JOHN SHEGERIAN: And, Tony, how about you? What’s your background leading up to this important position? TONY SCHULTZ: Most of my career has been in the automotive sector. I’ve been with Honeywell for eight years. I think what really excited about me about Honeywell and all of it’s culture around environmental and the core of Honeywell is really around driving sustainability through bringing differentiated technology to the consumer and certainly, we’re going to talk a little bit about all the things that we’re doing in the transportation segment to make things green and have better fuel economy and have an opportunity for people to improve fuel economy and still have a fun to drive vehicle. JOHN SHEGERIAN: That’s awesome, and listen: I love getting in my car and going and I love watching car racing and everything and I’m on your site. Again, for our listeners out there that want to go to the site while we talk to Tony and Steve, it’s www.turbo.honeywell.com. I’m on the site now. It’s gorgeous. I see this beautiful Lamaze Victory racing car here, but before we even get into that, share with me, I don’t even understand what a turbocharger is. What is a turbocharger? STEVE MCKINLEY: Yeah, it’s a good question, John. We get that question a lot from people that don’t understand and the simplest form, it’s basically a device that recycles the energy from the exhaust gas that would normally be wasted to power a compressor, which essentially takes fresh air and packs it into the cylinders allowing the engine to act as if it were a much larger engine than it really is. In doing so, we’re able to downsize and improve fuel economy in vehicles by eliminating some of the frictional losses, as Tony said, without sacrificing that fun-to-drive feel. JOHN SHEGERIAN: In my mind, a turbocharger sounds like it’s going to use extra energy, but you’re actually saying it’s the opposite. A turbocharger increases a vehicle’s fuel efficiency and performance. STEVE MCKINLEY: It does, and there’s a couple different ways that automakers approach things and I think maybe that the paradigm’s shifting a little bit where you used to hear about turbos as a performance option. The automakers are finding ways to say let’s have equivalent performance so that larger naturally aspirated V6 and replace it with a Turbolight 4 and the overall equation is a more fuel-efficient vehicle. JOHN SHEGERIAN: Got it, got it; so talk a little bit about what this means for our cars in the United States. There’s been a growth or insurgence of diesel and gas turbocharged engines in the United States is what I’ve read and what does that look like and what does that mean to our environmental footprint and economy? TONY SCHULTZ: The regulatory changes in the U.S., there’s the regulations that have been implemented or are about to be implemented where car manufacturers have to meet a fuel efficiency of 35.5 miles per gallon by 2017. Those regulations will continue to increase through 2025 to 54.5. Turbochargers and downsizing, as Steve has outlined, is a big enabler for the DOEs to be able to be that and currently, turbochargers represent last year about 12 to 13% of all cars produced. This year, we see that increasing anywhere between 15 to 16% and as we look further out into 2018 timeframe, we’re looking at 23 to 25% so if you think about it, it’s about 10% increase and in the U.S., we sell probably about 15 to 16 million cars a year. That 10% increase is an additional 1.5 to 1.6 turbocharges, so the outlook for the business is outstanding for us and again, the big benefit is fuel economy, greener technology for consumers. JOHN SHEGERIAN: And, I’m here on your website, which again, for our listeners out there, is turbo.honeywell.com, and I’m looking at what you just were talking about in terms of how your technologies lay over so many different types of vehicles and the sheer numerical value of the vehicles you’re going to be touching so the turbo technology, actually what I’m looking at here is it touches light vehicles engines, both in diesel and in gasoline off highway engines. I’m looking at some sort of farming equipment, highway engines, and racing engines. Am I correct in what I’m actually look at on your website, you’re touching all these segments and more? TONY SCHULTZ: That’s absolutely right, John. With Honeywell, one of the great things is we were the innovators, the leaders, in the industry with the first production application dating back to the ’50s. It started with Caterpillar diesel engines in off highway tractors. It’s a huge part of the business. We have the broadest portfolio in the industry ranging from point eight leaders all the way up to 100-plus-liter large mining truck applications as well so we have a very broad exposure to all different sizes of engines, all different types of applications and different customers as well. It just adds to the excitement of the business and the turbos themselves are very different, whether it’s a gasoline engine or a passenger car diesel or a commercial vehicle engine like you mentioned in the agricultural business. JOHN SHEGERIAN: Interesting, and is there other options and things of that such? What other technologies besides these vehicles and those segments and vehicles you just mentioned, where else does turbo touch outside of just vehicles when it says other options and things of that such? TONY SCHULTZ: When we’re talking other options, we get a lot of our innovation from the motor sports side of things and we get a lot of very interesting requests for new innovations and that sort of thing. We’re always working on the next level of powertrain development as well. We’ve got some interesting projects going on in terms of electrification, whether it’s fuel cells or even hybridization. How does the vehicle electrical system interplay with the turbocharger itself? So, we’ve always got our eyes and ears open to developments in new power trains, new fuel-efficiency trends and how does turbo machinery play into that space? JOHN SHEGERIAN: Gotcha. That makes a lot of sense, so I’m just a general consumer really. I’m Joe Consumer. I love getting in a car and it going and I love it going correctly. What kind of new cars are going to be available with a turbo engine both this year and beyond? What do you guys see with regards to the new car market and things of that such? TONY SCHULTZ: John, we see a lot of new introductions this year. Gasoline downsizing and boosting has been something that’s been hitting the marketplace with cars such as the Chevy Cruze and Sonic, the Fiat 500, Chrysler, Dodge Dart, the Ford Taurus and some of the VW vehicles but this year, we’re also introducing some diesel vehicles in the marketplace. The Chevy Cruze is coming out with a diesel this year, Chrysler, Jeep is going to be introducing a Grand Cherokee, also the Ram. Mazda will be introducing a Mazda 6 with diesel, so we’re seeing a lot of new vehicles that people will have an opportunity to go to the showroom now and get behind the wheel of a diesel to see how it feels. JOHN SHEGERIAN: Wow, and I’m on your site and your site’s so good and I’m on the area that says, ‘a greener future,’ and all the great benefits of turbo, fuel efficiency, emissions, and performance, and I love this statistic and please update this for me if need be, ‘Global turbocharging penetration is expected to grow from 30% to 36% in 2016 driven by double-digit annual growth in North America and China,” so this goes way beyond the United States in terms of your macro marketplace so Honeywell think way beyond just North America and the United States. You have opportunities in turbocharging outside of the United States. Is that a true statement? TONY SCHULTZ: Absolutely. We are the market leader in turbocharging. We bring the market about 100 different launches every year. We have about 500 in the pipeline over the next four to five years, so it’s global and we’re able to bring technology to each of the regions meeting the problem statement of increasing fuel efficiency and having people drive vehicles that are fun to drive. JOHN SHEGERIAN: If our listeners have just joined now, we’re so excited and honored to have on with us Tony Schultz and Steve McKinley of Honeywell. They’re from the turbo technology division and we’re on their great website as we’re talking right now, turbo.honeywell.com, and we’re talking all things turbo. You know, one of the things that I’ve seen from sustainability when we’ve had guests on from around the world is that typically, Europe and Japan have led on sustainability. The United States is sort of catching up, catching up fast but catching up. Talk a little bit about Honeywell and what you’ve seen in Europe with regards to turbocharged vehicles and how that relates to the United States and its adoption of driving and using turbocharge technology and turbocharge vehicles. TONY SCHULTZ: One of the things in Europe, obviously, the fuel prices are much higher than they are in the U.S. Also, regulations have been stricter in Europe so because of the enabler that turbochargers provide, it has much more penetration. We’re seeing similar things here in the U.S. with regulations and also, as we see fuel prices continue to rise, consumers are looking for options that provide them with more fuel efficient vehicles that they can drive. JOHN SHEGERIAN: Got it, and also diesel, talk a little bit about diesel. When I was growing up, I used to see diesel cars and they had heavy emissions and things of that such and I never dreamed I would drive a diesel car or a diesel engine? Is there a growing popularity now in diesel in the United States and what do you think is behind or driving that growth if diesel engines? STEVE MCKINLEY: John, you’re correct in that the technology and the advancements that the automakers and engine manufacturers have made in diesel engines over the last 25 or 30 years has been really remarkable. To be able to see some of the advancements in after treatment systems, better turbocharging systems, and just better engines overall, you’d be hard-pressed to know in some cases whether it’s a diesel or a gasoline engine under the hood until you get the feel of the high torque that the diesel delivers so, as Tony mentioned before, that fun to drive and not knowing that it’s a diesel under the hood is really starting to attract a lot more buyers and attention to the automakers and, John, just to add to that, if you look at Europe, every diesel engine uses a turbocharger and when you look at Europe, roughly about 60% of the vehicles are diesel so certainly that shows a success rate and we’re looking forward to seeing how that plays out here in the U.S. also. JOHN SHEGERIAN: Got it, got it, got it, and when we talk about turbochargers and diesel, interrelate both of them. As I shared, my past perceptions have been totally off because you’ve just educated me and our audience with regards to turbochargers being better for the environment, diesel having a great place at the table also. Can you share again the intersection of past perceptions versus current realities and where we’re going in the future with regards to sustainability? STEVE MCKINLEY: Yeah, it’s a good question and what we typically find is that before vehicle manufacturers or engine manufacturers have embarked on real intensive efforts to improve fuel economy, if they’re replacing a larger, naturally aspirated V6 or a V8 engine, we can see anywhere around 20% improvement in fuel economy with a boosted gasoline solution. That number pumps up to 30 to 35% with a very solid, again, as Tony mentioned, turbocharged diesel engine as well, so the benefits were your standard technology engines are extremely attractive to the automakers. JOHN SHEGERIAN: I thank you both, guys. You’re always welcome to come back on Green is Good to talk more about the great work you’re doing with the wonderful and iconic brand, Honeywell. For our listeners out there, to see more of the great work that Tony and Steve are doing, it’s www.turbo.honeywell.com. Tony Schultz, Steve McKinley, the dynamic duo of Turbo Technologies and Sustainability, thank you for coming to Green is Good.