Hughes Shifting Gears for GM : Aircraft Unit to Mass-Produce Controllers for Electric Car

When General Motors bought Hughes Aircraft in 1985 for $5.2 billion, the Detroit auto maker had grand hopes that the aerospace giant’s wealth of high technology would make GM cars more competitive.

Since then, Hughes has embarked on 150 projects with GM, developing impressive--and sometimes quixotic--applications of defense technology for the car market.

The joint work has included an electronic system that projects a car’s dashboard gauges onto the windshield, an experimental night-vision system and a prototype radar warning system that is supposed to prevent collisions.

And now Hughes is taking its first step toward mass-producing a product for GM vehicles. The firm is preparing for production of electronic controllers for General Motors’ new Impact electric car at a newly commissioned plant in Torrance--a striking counterpoint to the recent exodus of aerospace firms from the state.

Harry King, director of electric vehicle technology within the Hughes Radar Systems Group, said Hughes is finalizing the design of the electronic engine control system and will begin setting up production tools in 1992.

Amid a protracted aerospace recession in Southern California, King said, the Hughes project shows that defense contractors can adapt to the commercial world--and that defense technology can be converted to other uses.

“We have demonstrated that you can do something that will be helpful for the California economy,” King said. “People can adapt, and organizations can change. It should encourage people in industry and government that there is a resource of engineering here to do big commercial jobs.”

The Torrance plant will eventually have 250 employees, including 150 production workers and 100 engineers. Hughes recruited the engineers from its technical staff that designed jet fighter radar. Only one senior scientist was recruited from outside the company.

“There is no paradigm that says you can’t have military engineers doing commercial work,” King said.

The Torrance facility was selected because Hughes wanted to keep its technical and production workers at a single location. In addition, a vacant Hughes building was ideal for the project, King said.

Still, the location of a new plant--even a small one--in Southern California is something of a contradiction amid an exodus of aerospace plants in recent years and amid a major retrenchment by GM, in which it is closing 21 auto plants nationwide.

Hughes Chairman Malcolm Currie said California has an opportunity to become an important part of the electric car industry, despite Hughes’ decisions in the past to locate new plants outside the state.

“I am a Californian, and I am all for industry in California,” he remarked. “I see the electric car and the electric hybrid car--that generation of products--as being something that can regain manufacturing industry in California, because the market is here.”

The electric car program is also part of a larger Hughes strategy to increase its commercial work. The Los Angeles-based firm has set a goal of deriving 50% of its revenue from non-defense work, compared to 20% in the past. Automotive work and communications systems are the two key commercial growth areas for the company.

The Torrance operation is expected to generate sales of $260 million annually by 1999 in power controllers, along with charging systems and electric drives for industrial motors.

If Hughes achieves those sales levels, it may finally rebut the skepticism long cast over GM’s acquisition of the company. The Hughes purchase--the brainchild of former GM Chairman Roger Smith--has been criticized by securities analysts and by former GM Director H. Ross Perot. GM paid top dollar for Hughes at the peak of the Reagan Administration defense buildup.

“When Roger Smith acquired Hughes Aircraft, it was a personal intuitive dream on his part,” Currie said. “He felt very strongly about the role advanced technology would play in GM.”

But, Currie added, “there was no scale attached to it. My feeling is that the contribution Hughes is making to GM is far greater than anyone even imagined at that time of the acquisition.”

Some senior technologists have a more modest assessment.

“It has been a good relationship, but it hasn’t been what Roger Smith wanted,” one observed. “It isn’t nearly as bad as those people who said it was stupid and would never return anything to GM. It is like any marriage where you go from illusion to reality. You settle into what makes sense.”

If the corporation maintains its commitment to retain Hughes and avoid a breakup of the company in this period of financial desperation, the scientist said, Hughes will produce all kinds of unexpected results.

Currie said persistent rumors that Hughes will be broken up--particularly that the firm’s space and communications group will be spun off--are untrue. “There are absolutely no plans for that, not even tentative thinking in that direction,” Currie said.

“A few years from now,” he acknowledged, “things could change.” But today, a potentially powerful strategic alliance is evolving between Hughes and GM’s various Delco electronics operations. Some examples: Hughes is developing new laser welding and cutting systems for GM and a new proprietary system for making stamping dies.

In addition, the Hughes Ground Systems Group in Fullerton is developing a point-of-sale computer that helps answer customers’ technical questions about GM cars. It has been tested at several dealers and has reportedly quadrupled the number of customers willing to enter into haggling about the price of a car.

King, the head of the electric vehicle program, holds the patent on GM’s technology for projecting dashboards onto vehicle windshields--a feature offered either as an option or as standard equipment on some GM cars. The system projects the speedometer, fuel gauge and warning lights onto the windshield, eliminating the need for drivers to take their eyes off the road.

“GM is selling them by the thousands,” King said. The system, which was designed by Hughes but manufactured by Delco Electronics, costs about $200 when offered as part of a package of features. That cost is a far cry from the quarter-million-dollar systems that Hughes builds for the military with similar technology.

Similarly, the electric car engine controllers developed by Hughes are not nearly as sophisticated as the military electronics that Hughes produces for the Navy and Air Force. But, King added, “in no way was it a no-brainer. There was a lot of hard work that went into reducing the parts count so we could sell it at a competitive price.”

GM’s Impact car is expected to go 120 miles on a single battery charge and attain a top speed of 75 m.p.h. That performance is partly attributable to the efficiency of the electronic controller, which regulates and converts power from the car’s batteries for the electric motor.

The electronic device is a small box, measuring about 9 inches long, 7 inches wide and 3 inches deep. It is packed with circuit cards and components, described by King as state-of-the-art electronics. The device was originally designed by electronics consultant Alan Coccino, who built the first box in his garage. Hughes then refined the design and eliminated about 84% of the parts.

King declined to say when formal production of the electronic controllers would begin, but GM has said it hopes to introduce the Impact to the California market by the mid-1990s.