(FORTUNE Magazine) – Is there some law of nature decreeing that manufactured goods keep getting lower in cost and higher in quality? Products such as cars, appliances, and consumer electronics rocket forward in performance and durability, while their prices, at least their constant-dollar prices, often hold steady. A big reason, of course, is that production migrates around the world in search of lower labor costs. But another major factor is at work here: manufacturing wizardry. While the rest of us are busy doing other things, machine designers and manufacturing engineers are ceaselessly finessing the details of factory processes new and old, wringing out ever higher levels of precision and productivity.

There's no better place to see this process at work than the motor-vehicle industry, where brutal competition and fast-changing fashions place huge pressures on factories to learn new tricks. The details of many technical innovations are kept under wraps by manufacturers wanting to stay ahead of rivals. For instance, we couldn't get Chevrolet to talk much about the exotic metal-forming process it uses to produce ultra-deep fenders for its new SSR. (They give the vehicle the stylish look of 1950s Chevy pickup trucks while meeting today's standards for the precise alignment of body-panel edges.) What we can offer is a look at four innovative metalworking processes that are helping vehicle makers boost performance and cut costs as they pursue their goals in the marketplace.

A warning buzzer sounds in the factory-like lab of the Edison Welding Institute, alerting bystanders to brace themselves. Seconds later, there's a truly startling flash-bang, and in a fraction of an instant, an aluminum sleeve has been fused around a rod of tungsten metal by a dramatic process called magnetic-pulse welding. A visitor recognizes this as a military application in the making; tungsten rods are used in projectiles designed to pierce a tank's ultra-tough skin. But magnetic-pulse welding is also of great interest to companies building vehicles that aren't intended to be shot at.

The Edison Welding Institute is a for-hire R&D outfit in Columbus whose busy lab employs 160 engineers and a squad of Ph.Ds. Today it provides a stage for Menachem Kimchi, EWI's Israeli-born lead engineer for solid-state welding, to show off a process invented in the former Soviet Union, which used it both for forming metal pieces and for joining them. Kimchi's experimental system consists of a cabinet full of huge capacitors that fire a whopping electrical charge into a coil encircling the metal parts (see diagram). "The coil induces a powerful current in the aluminum sleeve that is repelled by the magnetic force in the coil," Kimchi explains. "This implodes the sleeve against the tungsten rod at about 2,000 feet per second, causing instantaneous heating that welds the two metals." Think about a door slamming so hard that it fuses to the frame. The secret of the process is the speed with which just the top few microns of metal at the surfaces of the parts are heated. That jars electrons in the metal atoms into sharing their orbits and forming a strong bond without actually mixing the materials, which would cause all kinds of metallurgical headaches.

Magnetic-pulse welding is causing big excitement in industry, which has long sought a way to weld incompatible metals. One of the EWI clients Kimchi advises is Dana Corp., a $9.5-billion-a-year auto-components supplier in Toledo that already uses magnetic-pulse methods to form metal components. Now Dana is focused on incorporating magnetic-pulse welding into the making of assemblies ranging from driveshafts to truck and SUV frames. For about five years, Dana has kept manufacturing-and product-engineering groups busy developing machinery and component designs to exploit the new method's benefits.

The company now turns out tubular steel rear-wheel driveshafts and also lighter-weight and more-expensive aluminum driveshafts. Yet its engineers know that from a cost and weight standpoint, the ideal driveshaft would be an aluminum tube with welded-on steel ends. Recent experiments with such bimetallic components joined by magnetic-pulse welding have been encouraging; the driveshafts have impressed automakers with their durability in testing.

Magnetic-pulse welding is easiest to use on nested cylindrical parts, where the force from the magnetic coil can push equally around the part's circumference. Dana's engineers--including a Russian scientist with extensive magnetic-pulse experience--say they've also gotten the process to work for rectangular pieces of metal and even those with C-shaped cross sections, both widely used in vehicle frames and other structures. That opens the way for major applications in future vehicle programs. "We just need a little more time to finish proving out these systems," says Mark Kiehl, chief engineer for advanced manufacturing. "Our customers are harassing us to get it done."

Life is quite different in the business of building luxury performance vehicles. Here, the benefits of using lots of aluminum are twofold: to keep a car light, and to give the marketing people an exotic feature to brag about. "The car is always going to be cheaper to make out of steel," observes Anthony Mascarin, managing partner of Ibis Associates in Waltham, Mass., a manufacturing-technology consulting firm. "So the question people grapple with whenever they're talking about aluminum body structures is, What's the value of the weight savings?"

The designers of Audi's A8 sedan had no trouble answering that question because they wanted to gain experience in working with aluminum and to position their cars as technologically advanced. The A8s have all-aluminum bodies. Several years ago, when product planners at Ford's Jaguar subsidiary labored over a redesign of the XJ sedan, they decided that it, too, would get an aluminum body in place of its predecessor's steel skin. Aluminum's high-tech cachet was a fit with Jaguar's elegant yet racy image, and using the metal would help offset the weight of the inevitable plethora of features that creep into luxury cars. Once the planners picked aluminum, though, manufacturing engineers still had to figure out how the body would be made.

Jaguar chose a different road from Audi. Audi's A8 uses a welded and adhesively bonded space-frame onto which the body panels are attached. But Jaguar decided that the lightest-weight solution for the XJ would be a conventional unibody structure joined using adhesives and self-piercing rivets. Unibody construction tends to be lighter than a space-frame design because it is more efficient: The unibody car's outer panels can bear some of the stresses of life on the road, allowing for weight savings elsewhere in the structure.

Jaguar engineers were able to tap the expertise of Ford's advanced manufacturing technology development group in Redford, Mich., which has spent years researching aluminum-fabrication methods. "On this Jaguar project, we went over three or four years ago and installed a riveting machine in the plant making the old steel XJ body. It put a redundant fastener into the car just so the production people could feel comfortable with the technology," says John Eidt, manager of body construction and stamping in the Ford group. For Ford, the experience gained riveting the XJ is likely to spill into stateside vehicle programs. Ford pickups, which the company builds in huge numbers, already have aluminum hoods, and Ford may switch to automated riveting to join their inner and outer panels.

Jaguar says the XJ's aluminum body is about 40% lighter than a comparable steel body would be, a weight saving of about 400 pounds. It builds the XJ at its Castle Bromwich plant in the U.K. The plant's body-in-white shop, as it's called, features a mob of 88 robots like those you could see in factories around the world. But there are no sparks flying in this place: The robots are equipped with riveting tools in place of the familiar spot-welding guns. Spot-welding aluminum is a tricky business because the heat of the process distorts and weakens the metal, requiring the use of thicker gauges to compensate. Using rivets instead was a way around this shortcoming. Riveting also lets designers make various parts of the car from different alloys that wouldn't take kindly to being welded together. The self-piercing rivets that Jaguar uses eliminate the need to first drill scads of holes, as is common in most aerospace uses of riveting. In all, the Castle Bromwich process involves the application of about 350 feet of adhesive and 3,180 rivets per car.

Now to the place where lots of automotive engineers would like to work: the design group charged with getting the Ford GT supercar into production. For its 100th anniversary this year, Ford Motor Co. wanted to launch a spectacular car that would bring fresh glimmer to its name, just as the Viper sports car has for Dodge, and the Corvette has long done for Chevrolet. Such marketing-inspired products are nicknamed halo cars, and they give manufacturers a chance to show off their advanced-engineering and manufacturing ideas.

The GT is a mid-engined, ground-bound fighter plane of a car that harks back to the glory days of the 1960s, when chairman Henry Ford II vowed to beat Ferrari in the famed 24-hour race at Le Mans. His low-slung Ford GTs won the race four times in a row from 1966 to 1969 before the company decided to rest on its laurels. Ford plans to build about 4,500 reincarnated GTs early next year, each bearing a price tag of about $150,000.

Ford bosses decreed that the GT40 in 1960 would use all-aluminum construction, though the original cars--just 112 were built--had a fiberglass body. Stylists were charged with sticking as closely as possible to the earlier car's sculpting, and chassis and powertrain engineers were told to make everything fit within that skin. Figuring out metalworking processes to make it all happen fell to Matthew Zaluzec, the program's manufacturing manager.

"When we looked at the shapes and curves and deep draws on this body, we knew that traditional metal-stamping methods were not going to be the way to build it," he says. Here's where the fun part of working on a pricey halo car comes in; exotic processes that are too expensive to use on family cars can be drafted into service. In this case, Ford turned to superplastic forming, a method developed in the 1960s for aerospace applications. The wingtips of Boeing's 777 jetliner and parts of the Lockheed F-22 fighter are made this way today.

Superplastic forming works by tricking sheet aluminum into behaving more like plastic wrap, so that it can be formed into unstampable shapes. The aluminum involved isn't ordinary. Superplastic forming requires alloys that have an exceptionally fine grain size when seen through a microscope. "If you get the grains of the metal really small, they will slide against one another when the sheet is stretched over a form or tool, instead of tearing," explains A.J. Barnes, VP of technology at Superform USA in Riverside, Calif., which makes the Ford GT body panels.

When a carmaker needs aluminum parts in the low thousands or fewer, superplastic forming can make sense because its tooling costs are much lower than stamping methods, which use pairs of matched metal dies that can easily exceed more than a million dollars to build. In superplastic forming, a sheet of alloy is put into a press under a single electrically heated tool. When it reaches a temperature of about 950° F, the metal softens--think of a slice of Velveeta drooping atop a hot burger. Then compressed air is blown in to press the metal firmly against the tool's contours. The machine that makes Ford GT panels at Superform USA completes a part in about 20 minutes, fast enough to meet the supercar's low-volume production rate. The company also supplies aluminum panels for the flagship V-12 Vanquish model coming soon from Ford's Aston Martin unit, the Morgan Aero 8, and for the new BMW Rolls Royce.

Die casting is another metalworking specialty in which smart new ideas are paying off on the factory floor. Zillions of parts for vehicles and countless other products are made every year via this method, whereby molten aluminum is shot into a two-piece metal mold, or die, permitted to cool briefly, then automatically ejected. Ryobi Ltd. of Japan, which specializes in making die-casting machinery as well as the castings themselves, has come up with a refinement of the die-casting process that's allowing designers to conjure up beautiful parts with more intricate shapes than were previously possible.

Computer-aided design, or CAD, lets designers quickly posit the rough dimensions of the parts needed for a product. Then, using engineering software, they perform what's called a finite-element analysis, which breaks down the complex stresses the part must bear into bite-sized mathematical solutions that are easier to ponder. The result lets the designers see where there's unneeded metal, and weight, in the planned part. Through this conceptual carving away of surplus material, the part typically gains complex features such as reinforcing ribs and hollowed-out cavities that boost its all-important strength-to-weight ratio. Nature works the same way when it designs the hollow bones in our bodies.

Aircraft designers routinely devise such parts, which are then carved out of a solid block of aluminum by high-speed milling machines. Lightness and strength are everything in a plane, so the huge cost of such parts is considered acceptable. In products built to sell at an everyday price, however, castings are the way to go. That can be a problem: A part whose optimized shape includes many fine, thin-walled features can sometimes exceed the limitations of the foundryman's art.

Several factors have traditionally caused headaches for die casters. One is the rate at which the molten metal cools as it flows into the concavities of the die. If the inrushing metal cools down enough to begin solidifying before the mold has completely filled, the fine features at the perimeter of the part may not be properly formed. Air bubbles can also get caught in the flowing metal, causing porosities that weaken the casting. Another factor that bedevils casting engineers is oxidation--when hot metal entering the die encounters some air, triggering chemical reactions that create crusty metal oxides. These can act as logjams that prevent complete filling and result in imperfect parts. Oxide "inclusions," as they're called, can also be the starting point of a crack that causes the part to break in service. Not good!

Die-casting machinery builders have long been chiseling away at these shortcomings. A major innovation was to greatly increase the pressure at which the molten metal is injected, to better fill the die. Heating the die halves to slow the rate at which the metal cools was another advance. Finally, vacuum pumps have been added that remove much of the air from the die and hasten the flow of metal into it. The Ryobi New Casting process incorporates all these tricks, along with an improved die-sealing material that allows a stronger vacuum to be maintained. "The vacuum improves the filling and reduces surface defects in the casting," says Dr. Yeou-li Chu of Ryobi Die Casting USA's R&D department in Shelbyville, Ind.

Among the first to seize upon Ryobi's improved process are Japan's motorcycle makers, three of which use Ryobi-cast aluminum structural parts in the frames of outrageously fast sport bikes. These companies are in a brutal performance war in which high horsepower, low weight, and great handling win the day, and the Ryobi castings help them compete. A case in point is the chassis of Suzuki's SV650, a sporty model with a V-twin engine that has developed a cult following among motorcycle riders. This year, the SV650 got a new frame designed around a triangulated die-cast beam from Ryobi.

The beam has a pleasingly smooth cosmetic surface on the side that the customer sees, while its inner side is deeply hollowed, with numerous thin-walled reinforcing webs. Suzuki engineers say the one-piece beam replaces multiple parts that had to be welded to produce the earlier frame, which weighed three pounds more than the new one. Look for such parts to begin popping up all over as designers in other industries--hungry for weight-saving and cost-saving innovation--catch on to Ryobi's process.

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