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This report explains the findings of the feasibility study conducted on the addition of
a new turbo-charged engine to the existing Chevrolet Silverado and GMC Sierra. Its purpose
is to evaluate the benefits of the new engine to see if adding it will be beneficial for General
Motors. This report should be used as a guide in the decision making process for investing in
a new engine technology. It is important for General Motors since millions of dollars can be
made or lost.
Chapter 1: The Need of a New Engine, discusses the already existing engines made
by GM, and the need for a new updated engine type. It explains the importance for the new
engine and the primary concerns of consumers.
Chapter 2: Research into the Turbocharged Engine goes into the details of existing
turbocharged engine in order to understand the good and bad components. It discusses how
the engine will work as well as benefits and disadvantages of it. The majority of the chapter
speaks of Fords already existing turbocharged V6 and the components of that engine.
Chapter 2 also explains some of the legal aspects of the building of a new engine.
Chapter 3: The Financials of the New Engine discusses the financial aspects of adding
the new engine. It goes into detail of the estimated costs and revenue the new engine will
produce as well as the financial availability of GM.
Chapter 4: Conclusions and Recommendations, summarizes the information given in
the prior chapters and explains my recommended plan of action.
Powertrain
Fuel Type
Displacement (liters/cu. in.)
Horsepower @ RPM
Torque @ RPM
Fuel Injection
Axle Ratio
4.3L V6 Engine
5.3L V8 Engine
Gas/E85
4.3L/262
285 @ 5300
305 @ 3900
Direct Injection
3.23
Gas/E85
5.3L/325
355 @ 5600
383 @ 4100
Direct Injection
3.08
18 MPG
24 MPG
16 MPG
23 MPG
Fuel Economy
City (MPG)
Highway (MPG)
While these current engines excel in producing horsepower, they lack in fuel
economy which limits the market.
According to consumerreports.org, two thirds of car buyers expect their next model
to provide much or somewhat better fuel economy. This means that the majority of people
searching to buy a truck will want the truck with the best fuel economy. Table 2, shown
below, was also retrieved from consumerreports.org, and outlines the most common reasons
people choose more fuel-efficient vehicles.
Table 2: Motivations for choosing a more fuel-efficient vehicle
Reasons
Percentage
79
53
52
43
28
The U.S. Department of Energy backs up this data and states that fuel economy is
important to people for the following reasons:
According to ENP Newswire, although for the past ten years most people have
expected trucks to come equipped with a V8 engine, in modern society the main
requirements when shopping for a new truck are, the combination of city and highway
mileage, horsepower, torque, towing capacity, payload and value.
With the one of the primary concern of new car buyers being good fuel economy and
GM made trucks lacking this quality, the most logical solution to the problem at hand is to
create a new, more fuel efficient engine.
Fords EcoBoost
I have looked into Fords already existing turbo-charged V6 engine which they have
available for their half-ton pickup trucks. The purpose of my research into their trucks was to
see if indeed the idea is profitable. According to Fords website, starting in 2011, Ford began
putting a 3.5L turbocharged V6 engine into their F-series pickup trucks. They called this new
engine the EcoBoost and with 365 horsepower it far exceeded the other V6 engines of its
time. According to Raj Nair, Ford groups vice president, The F-150's proven 3.5-liter
EcoBoost has become the industry benchmark for advanced and efficient truck engines.
With the Ford EcoBoost out selling all General Motors trucks, I decided to compare
the two engines and observe what the true difference is. Table 3, created using data from GM
and Ford websites, compares the Ford EcoBoost and the current GM engines.
Table 3: GM vs Ford
Ford 3.5L
EcoBoost V6
Chevrolet 4.3L
V6
Chevrolet 5.3L
V8
365
420
285
305
355
383
16
22
18
24
16
23
Performance
Horsepower
Torque (lb-ft)
Fuel Mileage
City (MPG)
Highway (MPG)
*Source: Chevrolet and Ford websites
As shown in Table 3, the EcoBoosts turbo allows it to output more horsepower and
torque than the Chevrolet engines while still maintaining similar fuel mileage.
According to Fords website, the new 2015 F-150 will not only have the option of the
3.5L Ecoboost, but also a new 2.7L turbocharged engine. Although this new engine is not on
the market yet, this engine will get even better fuel mileage than the existing EcoBoost.
I researched the Ford EcoBoosts patents in depth to be positive General Motors can
legally produce a V6 turbocharged engine for their half-ton pick-up trucks. According to PR
Newswire, Ford has 150 patents on the current EcoBoost engine. The majority of the patents
are for the internal components of the powertrain that allow for their engine to run smoothly
with little to no turbo lag. There however is no specific patent concerning the usage of a
turbocharged engine in a half-ton truck.
10%
25%
50%
(Median
)
75%
90%
$49.41
$59.30
Hourly Wage
$25.27 $31.43
$39.47
Annual Wage
$52,55 $65,37
0
0
$82,100
$102,77 $123,34
0
0
below, was taken from the Bureau of Labor Statistics website and shows the average pay for
mechanical engineers in the US.
The engineers that will be assigned to design the new engine will most likely be in the
75th percentile to assure the engine be made to the best quality. I have estimated that three
engineers will work on the project for approximately 40 hours a week for 3 months. This
brings the estimated cost of engine design to $80,044.
Manufacturing- The new turbo will be made from cast aluminum to allow for it to be
both strong and light weight. According to continental-corporation, aluminum turbochargers
allow for 30% less weight than steel, and are more affordable for automotive manufacturers.
According to afsinc.org, the manufacturing cost of cast aluminum can vary depending on the
quality of aluminum chosen, and the precision needed for the product. After researching on
dhgate.com, I compared the average price for wholesale turbo chargers. Although without the
design from the engineers I cannot be completely accurate with the cost of the manufactured
turbo, I estimate the cost on the high end at $350 per unit. With 382,000 half-ton Chevrolet
trucks sold in 2013, and an estimated 40% of those trucks being sold with the new engine,
the estimated cost per year would be 53.4 million dollars.
Additional Labor- With a turbocharger added to the engine, the time it takes to build
one engine will increase. According to bloomberg.com, the average General Motors
automotive assembly line worker makes $28/hour. From the information gathered in the
interviews with Mr. Vierus and Mr. Weiner, I estimate the time it takes to mount the turbo
onto the engine block will be 15 minutes. If one workers task is to attach the turbo, the
additional cost of labor per unit will be $7. If the estimated 152,000 trucks are built with the
new engine, the additional labor cost per year will be 1.07 million dollars.
I estimate the total cost of adding a new engine to be approximately 54.6 million
dollars per year.
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EcoBoost, the turbocharged engine was the chosen powertrain in around 43 percent of the
half-ton Ford pick-up trucks sold.
According to torquenews.com, by the beginning of this year Ford has sold more than
500,000 F-150s equipped with the turbocharged EcoBoost. This account for an average of
45 percent of all F-150s sold in the past 3 years. Figure 2, shown below, displays the past 3
years of F-150 sales of Ford. This data used to build this graph was collected from both
pickuptrucks.com and the social Ford page.
500000
450000
400000
350000
300000
250000
200000
150000
100000
50000
0
2010
2011
2012
2013
Year
12
years, the Chevrolet Silverado will go from 382,000 sold in 2013 to 511,880 by 2016. The
Sierra will go from 143,000 to 190,000.
Profits- The cost of the new engine estimated at $357 per unit plus $80,044 per year
for engineers. Going by Fords example, the average increase of price due to the
turbocharged engine will be $1395 per truck equipped with the new engine. The new engine
will produce $1038 per truck. I estimated 40% of the first years trucks will be equipped with
the new engine and at $1038 per truck, the revenue caused by the new engine will be $218
million. After factoring in the cost of the engineers, the overall profits from the new engine in
the first year will be $217.9 million. With the increase of total sales due to the new engine, by
2016 this profit margin should increase to around $291.4 million for the year.
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References
Ford. (2014). Retrieved July 12, 2014, from
http://www.ford.com/trucks/f150/specifications/engine/
Chevrolet. (2014). Retrieved July 12, 2014, from http://www.chevrolet.com/silverado-1500pickup-truck/specs/powertrain.html
U.S. Department of Energy. ( 2014). Retrieved July 20, 2014, from
http://www.fueleconomy.gov/feg/why.shtml
Ford Social. (January 26, 2012). Retrieved July 19, 2014, from http://social.ford.com/ourarticles/suvs/escape/guess-how-many-ecoboost-equipped-ford-vehicles-sold-in-2011/
PickupTrucks.com. (January 5, 2010). Retrieved July 20, 2014, from
http://news.pickuptrucks.com/2010/01/2009-year-end-top-10-pickup-truck-sales.html
PickupTrucks.com. (January 3, 2014). Retrieved July 20, 2014, from
http://news.pickuptrucks.com/2014/01/best-selling-pickup-trucks-december2013.html
ConsumerReports.org. (February 4, 2013). Retrieved July 19, 2014, from
http://www.consumerreports.org/cro/news/2013/02/survey-car-shoppers-want-betterfuel-economy-here-s-why/index.htm
Forbes. (June 3, 2012). Retrieved July 21, 2014, from
http://www.forbes.com/sites/dalebuss/2012/06/03/ford-guns-ecoboost-engine-techbrand-and-it-races-past-sync/3/
PR Newswire. (2014). Retrieved July 20, 2014, from http://www.prnewswire.com/newsreleases/ecoboost-contributes-125-new-us-patents-continues-ford-tradition-of-patentquality-63281852.html
USA Today. (May 16, 2013). Retrieved July 19, 2014, from
http://www.usatoday.com/story/money/cars/2013/05/16/ford-ecoboost-engineproblems/2168865/
CNBC. (February 5, 2013). Retrieved July 21, 2014, from
http://www.cnbc.com/id/100433542#.
Bureau of Labor Statistics. ( May 2013). Retrieved July20, 2014, from
http://www.bls.gov/oes/current/oes172141.htm
Continental. (July 15, 2014). Retrieved July 20, 2014, from http://www.continentalcorporation.com/www/pressportal_com_en/themes/press_releases/3_automotive_gro
up/powertrain/press_releases/pr_2014_07_15_turbocharger_en.html
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