When the California Air Resources Board in September reaffirmed its mandate that 10% of cars sold in the state be electric or hybrid vehicles by 2003, automakers grumbled. Not Cerritos-based Impco Technologies Inc.
Impco has been gearing up to tackle the market for alternative-fuel vehicles. Last year, the maker of fuel storage, fuel delivery and electronic control systems raised $87.5 million through a secondary offering. In the past six months, Impco has more than doubled its employment to 305 people.
The company has been making compressed gas and liquid propane fuel components since 1958. More recently, the company has gone after the auto market as regulators have pushed for cleaner-burning vehicles.
“What we are seeing is increased need for fuel system applications,” said Alan Niedzwiecki, the company’s vice president of business development. “The auto manufacturers are spending billions of dollars to develop alternative forms of propulsion.”
But automakers are doing so reluctantly. Many lobbied the California Air Resources Board to get the 10% mandate eased because electric vehicles and newer hybrid models haven’t caught on with consumers. The cost of producing alternative-fuel vehicles is too high considering the lack of demand, they say.
While some automakers doubt whether the 10% mandate can be achieved, they could face big fines if they don’t produce clean-burning cars. That’s where Impco hopes to come in.
In February, the company formed an advanced technology subsidiary, Irvine-based Quantum Technologies Inc. The unit has two facilities in Irvine and one in Lake Forest. Quantum also has operations in Detroit, but most of the unit’s workers are in Orange County.
There is only a slight differentiation between the two businesses: Impco makes aftermarket conversion kits to change gasoline-burning engines to liquid propane or compressed natural gas-burning engines; Quantum makes entire fuel systems for automakers.
Quantum has been working closely with automakers for some time. But with California forcing car companies to come up with more clean cars within the next two years, the relationship has become a lot closer, said Niedzwiecki, who’s also executive director of business development at Quantum.
Impco could use some new interest in alternative fuels. For the quarter ended Jan. 31, the company saw sales slip 21% to $22 million vs. the year-ago quarter. Impco lost $4.4 million in the quarter, compared with an $800,000 profit a year ago. The company blamed the slowing world economy and uncertainty over energy prices for the poor results.
Despite a global slowdown, Impco is looking for global markets for growth, according to Niedzwiecki.
“Natural gas is increasing in developing countries at a rapid pace,” he said. “Fuel-cell vehicles are finding markets in Europe, North America and the Pacific Rim. Toyota sold 50,000 Prias (a hybrid vehicle) in Japan. That is significant.”
Quantum recently received an order for 4,000 fuel systems for buses in India, a deal worth about $4.4 million, Niedzwiecki said. Earlier this month, Quantum said it had developed a natural gas fuel system for the first General Motors Corp.’s Zafira produced at the GM Thailand Assembly Center in Thailand’s Rayong Province.
“We have a global penetration,” said Eileen Oswald, a company spokeswoman. “In Europe, (compressed natural gas vehicles) are more prevalent. And India has declared that CNG vehicles are going to be national vehicle in the next three years.”
Quantum plans to continue working on its propane and natural gas systems and also is developing a hydrogen fuel system to improve the performance of electric vehicles. For the company’s most recent quarter, Quantum received 70%, or $6.2 million, of Impco’s research and development spending.
In the process of developing a fuel tank for its fuel system, Quantum wanted to reduce the weight of the 152-pound steel tank that holds the hydrogen. The company gleaned technology from the massive fuel tanks attached to the wings of the Navy’s F-18 fighter jets. The result: the new tanks are heat and puncture resistant and the new material reduced the weight to 39 pounds.
Quantum also is searching for new uses of the hydrogen fuel generators in light of California’s energy crunch, Niedzwiecki said. n
