Why do automakers design engines, too?

Lincoln introduced an optional automatic transmission in 1949 and it was Hydramatic made by GM. Nash, Hudson, and Kaiser-Frazer also used the GM Hydramatic in the early 1950s. The Kaiser and Frazer automobiles used the Continental flat head 6 engine as long as they were produced in this country. Checker also used the Continental 6 cylinder engine until about 1964. From 1960 the Continental engine in the Checker was available in both flathead and overhead valve configuration. From 1965 until it ended production, the Checker came with Chevrolet engines and could either be equipped with the 6 or the V-8. When Studebaker moved its operation to Canada in 1964, Studebaker then used the Chevrolet engines. Also, in the late 1960s, International Harvester pickup trucks used the American Motors engines.
I saw a Gleaner combine that was powered by a Chrysler slant 6 engine. One real interesting engine application I saw was a Jaeger compressor that had special heads, but used a 6 cylinder flathead Chrysler engine. The front three cylinders powered the compressor and the rear three cylinders were the compressor. It was driving a jackhammer outside my office. I couldn’t figure out why the engine sounded so odd when it idled, so I went out to take a look. The engine used an updraft carburetor and had special intake and exhaust manifolds for the front three cylinders.

Interesting discussion. All in all its just a business decision based on plant capacity, production needs, flexibility, and so on. Way back, Henry Ford for example was a stickler for total verticle integration and wanted to control every aspect of production and even made his own glass. I believe even he bought his engines from someone back in the 20’s.

In his pamphlet “A Short History of the Ford Plant” by Brian McMahon, put out by the MN Historical Society, concerning the Twin Cities Assembly Plant, on page 23 he says “Once he (Ford) realized he was in the “parts business, not the automobile business,” Ford focused on the infrastructure needed to assemble parts that were being made all over the globe”. He goes on to say that linkages to parts supplies became as important as the parts themselves and as much effort was put into the parts supply as making cars.

I kind of like having control over all the parts myself. When I worked summers for a hand truck manufacturer, they pretty much had control over everything. Had their own foundry for casters, rubber department to make the wheels, wood shop to make platforms and handles, and so on. Even steam bent their own wood handles. Of course some special wheels they bought, and steel, and nuts and bolts and paint, but most everything was controlled in house. No point paying someone else layers of profit for parts that you can economically make yourself.

To give an idea of the scope of things we’re talking about here, the Boeing 737 is the best selling jet airliner in history. It’s been made since 1967 and is still selling like hotcakes today. 7400 or so have been made in the 42 years since it debuted, which works out to less than 200 per year. They probably make maybe 1,000 planes per year across their whole lineup.

Last year, Chevrolet made almost 12,000 Corvettes. Toyota sold 308,000 Camrys in 2011.

In short, large automakers sell enough units that it makes perfect sense for them to design their own engines whereas even the largest airplane manufacturer puts out numbers closer to what a boutique car maker would produce.

A more apt comparison would be to compare Boeing to Lotus, which still makes a lot more cars than Boeing makes planes. And they outsource their engines too, usually to Toyota.

Sales volume is one part of the equation but not the sole answer. If it was, you couldn’t explain how certain businesses not only survive but flourish and fabricate nothing themselves. Case in point; McDonald’s, as a brand, serves 50+ MILLION customers DAILY yet they are 100% outsourcing everything they use.

No doubt there is a threshold that must be met before you can afford the infrastructure to build your own. If I build 5k cars per year, I probably cannot afford a subsidiary that designs engines and therefore will have to buy them elsewhere. On the other hand, I may sell 100k computer systems per year but choose not to expend resources to develop my own OS because I want to invest my money where my IP gives me the biggest advantage.

If any business that has McDonald’s volume decides to outsource EVERYTHING, when they could easily do just the opposite, that tells you maximizing profits isn’t always about fabricating your materials in-house. It’s more about managing quality and consistently delivering a product people want in the manner they expect (and beating down your suppliers prices so you can meet your price points).

Where I work, the in/outsourcing pendulum swings back and forth about every 5 years or so…

I would argue that McDonalds makes their own food in exactly the same conceptual way that Ford makes its own engines. Ford designs the engine and then sources a bunch of parts from a bunch of different manufacturers and assembles them in-house to produce an engine.

McDonalds designs the recipe and then sources a bunch of parts, which may or may not have more nutritional value than the Ford parts, from a bunch of different farms, and assembles them in-house to produce a burger.

The burger flipper at McDonalds is assembling their product just as the engine builder is (though with considerably less of a skill-barrier to entry, of course).

On the ‘flip’ side, so to speak, is Ferrari - they make a large fraction of their engine parts in-house, because the engine is central to their mystique. Ignition/fuel/computer controls all come from outside sources, though.

@texases: Just thought I’d throw into the fray that my gf’s Honda Passport, which is itself a rebadged Isuzu Rodeo, uses a GM transmission.

Auto manufacturers are masters of systems integration. They farm out most of the parts to smaller suppliers. Many don’t have unions to contend with, so the manpower costs can be significantly less. The auto manufacturers also strong arm their suppliers relentlessly to cut costs and pass on the savings to them. Walmart was by far not the first to do this.

Truck makers are now using engines made by themselves.
KW & Peterbilt use engines labeled PACCAR the parent company of these two.
Frieghtliner uses or Detroit Diesel or Cummins. Mercedes owns FRTLNR & DD
Mack has made their own engine for years.
I believe Volvo makes their own.

Of course Cummins is still an option in several of these.

It takes a certain volume for an engine plant to make an affordable product, handmade jobs like Ferrari and Aston Martin use excepted. Most of the big makes sell enough cars in the various sizes to make engines for all of them, but jointly owned engine plants and outright sales of engines are common enough. The Mini engine is made jointly with Chrysler, I believe, and the smaller European makes have had various joint engine plants over the years. Toyota has sold a lot of engines to various companies, especially GM, since GM wasn’t strong in small engines.

The boutique sports car makers often start with either a Corvette or a Mustang engine. They’re powerful and can easily be modified to put out more power, being tough, unfussy engines. And they’re readily available and cheap. Ferrari didn’t even like having to make engines for Maserati, despite common FIAT parentage. I think they finally got their way, with Maserati now grouped with Alfa instead. Must preserve the Ferrari mystique so they can open more mall shops and theme parks.

For the record, I hated driving a Volvo semi with a Cummins engine. Everything that was wrong with that truck could be attributed to the pairing of the two.

First, it shifted like crap, because evidently (I was told), the engine and transmission weren’t well paired. No matter how smoothly my trainer or I shifted, it would clunk into every gear as if we were doing a poor job of floating gears (shifting without using the clutch). Some of the trucks we used at truck driving school were also Volvo trucks with Cummins engines, and they shifted the same way. The Freightliners at truck driving school, on the other hand, shifted smoothly, in spite of the fact that they were abused by students.

Second, the Volvo I drove after training had an idle system that would start the truck based on the settings of a thermostat to keep the inside of the truck warm or chilled. After a while, I got used to the truck starting itself up and shutting itself down throughout the night. Unfortunately, the idle system stopped working, and nobody in Swift’s shops (the company I drove for) could figure out why the idle system stopped working. When I finally got permission to take the truck to a Volvo dealership, they said it wasn’t any of their systems, so they sent me to a Cummins shop. Cummins said it wasn’t any of their systems and sent me on my way. In the end, it was a burned out light bulb in the idle system’s dashboard display that kept the system from working. By the time it was finally diagnosed and fixed, I was so frustrated that I vowed I would never own a Volvo product or a Cummins product.

When it was all over, I had missed two weeks of work, mostly because Swift didn’t want to pay the Volvo dealership that finally diagnosed and fixed the problem. Swift had authorized me to take the truck to this Volvo dealership, and then they let the truck for another six days as they dickered over the cost of the repair.

I would argue that McDonalds makes their own food in exactly the same conceptual way that Ford makes its own engines. Ford designs the engine and then sources a bunch of parts from a bunch of different manufacturers and assembles them in-house to produce an engine.

They can all be boiled down to that level. None of them smelt metal to make the castings. The point that was being addressed is that some automanufacturers simply buy someone else’s design and install it. Others actually employ a separate division of folks whose job it is to design, assemble and integrate the package. Nobody in that industry is wholly self sufficient. But it certainly takes a lot more money and infrastructure to design and test various engine packages than it does for a hamburger :wink:

If McDonalds could maximize profits by owning the supply chain from raising cattle and trees to the hamburgers and boxes to hold them, they would. It’s not the magic formula for profitability…

If McDonalds could maximize profits by owning the supply chain from raising cattle and trees to the hamburgers and boxes to hold them, they would. It's not the magic formula for profitability...

We had a GREAT steak house (Hill Top Steak House) here in NH and MA that did that. The original owners of the steak house owned a cattle farm and processing plant out west someplace. GREAT steak. But it went way down hill when they sold the steak house. The new owners then had to buy their meat where all the other restaurants bought from.

There was also a Steak house in Nashua NH called Butcher Boys. It was owned by a butcher shop with the same name. The restaurant is closed now, but the butcher shop is still around (Andover MA). We buy all our meat from them. EXCELLENT place for good quality meat. You want some fresh ground round…they’ll pull some sirloin stakes from the cooler…trim off the fat and ground the meat right in front of you. They don’t sell pink slime.

Certainly true, but it’s a bit harder to vertically integrate the full engine supply chain. McDonalds is kind of a weird case - while they don’t own the farms/etc, they can pretty much set their prices and the producer’s policies - if the producer wants to sell to McDonalds, which they do because it guarantees everything they produce will get sold, they have to adhere to McDonalds’ wishes as far as how the food is produced.

For some manufacturers it’s simply cheaper and a better option to just strike a deal with a larger company for an engine that is already developed. Panoz bought lots of off the shelf parts from ford for their sports cars.

Lotus bought engines first from Rover (the k-series was used by many other small companies too) then to enter the U.S. market they bought engines from Toyota and then made Toyota their sole supplier when Rover went bust. This way they can focus on making the rest of the car better and in cars like the elise what engine actually is under the hood isn’t as important as the performance.

My nephew raises chickens for a well known restaurant chain. The chain has a tight spec, like Macdonald’s, as to weight, size amount of fat, etc. They guarantee many things, all he has to do is be a good farmer and avoid losses as much as possible. So the chain gets the best of both worlds, a steady supply of good chickens at a predetermined price, and my nephew has a guaranteed market and price for doing his bit. Both are specialists.

Heck, some automakers don’t even always make their own CARS! GM has rebadged numerous small cars.

Outsourcing has a lot to recommend it, in certain situations. Just as McDonalds isn’t expert in raising chickens, lots of companies are using outside companies for things they’re not expert in. In my business lots of companies used to develop their own proprietary software, now most have outsourced it and focus their efforts on using the software to get results.

Honda farmed out the first Passport to Isuzu and Subaru builds the Scion FR-S.

The older E series Mack engines were designed by Scania,the original architecture or basic design dated back to the 30s,one thing the europeans know,is diesel engines(among other things) I believe the “Paccar” diesel may be a “Mann” design,with full torque around 1000 RPM-Kevin