NorthStar Battery signs transport division’s largest deal

NorthStar Battery Co. LLC just signed the biggest contract in its North American transportation division since opening the second Springfield plant in 2011.

The Stockholm, Sweden-based company announced Sept. 20 that its Springfield manufacturing plant – also NorthStar’s North American headquarters – entered into a $500 million, seven-year agreement with Daimler Trucks North America. The deal represents a strong move into original equipment manufacturing.

“We’ve been working on growing that business sector,” said John Semeniuk, president of NorthStar’s Transport Products division. “We’ve been doing OEM for New Flyer and Motor Coach Industries buses, but this is our first really big announcement.”

Under terms of the deal, NorthStar’s high-performance, pure-lead, leak-proof batteries will become standard equipment on DTNA’s ParkSmart platform as well as other vehicle lines produced. The company’s batteries have traditionally been available as an aftermarket replacement for DTNA semitrailer trucks.

Declining to disclose exact figures, Semeniuk said NorthStar’s 2015 revenues exceeded $200 million – and the transportation division has only used up to 70 percent of its PIC West plant. Robotics have been key.

“Transportation is about 30 percent of our production, and over the next few years it will continue to increase, we think, to match or exceed the reserve power segment,” said NorthStar Chief Operating Officer Carlos Estrada, pointing to industry changes to leak-proof batteries that the company is well positioned to supply. “As the market shifts – and that’s started globally – we expect that to affect us.”

Stamp of approval
The deal with the North American arm of Daimler AG – the Germany-based owner of Mercedes Benz and other automakers – required an extensive review of NorthStar’s manufacturing processes, quality control systems and plant features by Daimler’s auditors and engineers before the deal could be approved.

Semeniuk said the auditors took into consideration environmental impact aspects of the manufacturing facility at 1320 N. Alliance Ave., internally dubbed NorthStar West, as well as using International Standards of Organization series 9001 and 14000 as benchmarks.

“Those are absolute – you have to have that,” Semeniuk said, noting both Springfield plants emit less than 10 percent of allowable water and air emissions under Environmental Protection Agency guidelines. “We were approved straight out of the gate.”

DTNA officials could not be reached by SBJ’s news deadline.

Now, Semeniuk said NorthStar’s products will be installed on Western Star trucks, Thomas Built Buses and Freightliner Chassis recreational vehicles. The batteries also will be a standard component of the ParkSmart platform, an auto start auxiliary power unit equipped to the next generation of Freightliner Cascadia trucks that allow drivers to use on-board electrical amenities without idling the engine.

That’s an important innovation for long-distance truckers, Semeniuk said, who often have to stop for the night but are prevented from idling their engines more than five minutes in states – mainly those on the east and west coasts – with environmental laws governing emissions. The feature is also a money saver for transportation companies, whose rigs would otherwise burn roughly a gallon of fuel per hour that the truck sits idle.

For NorthStar, it’s a market expansion.

“Just that truck series, Cascadia, they produce 64,000 of those trucks a year,” Semeniuk said, adding the units run off of an eight-battery setup.

He estimates well over 250,000 batteries will be produced in Springfield annually.

Although the current contract only covers DTNA’s North American operations – trucks are built to different specifications overseas – with a Daimler-audited and certified plant, NorthStar has its sights set on capturing Europe and the rest of the global market.

Springfield jolt
While NorthStar’s global headquarters are in Stockholm, Sweden, along with CEO Hans Liden, all of the company’s batteries are manufactured in Springfield across a combined 600,000 square feet of plant space in Partnership Industrial Center and PIC West. NorthStar West handles the Transport Products division, while 280,000 square feet at 4000 E. Continental Way is manufactures batteries for data centers and telecommunications antennae backups as well as industrial energy storage applications. The company also manufactures storage systems for the telecomm batteries outside the United States.

COO Estrada said the company employs 456 in Springfield across both facilities with sales and engineering support outside the U.S. bringing the total closer to 550. Officials expect to slowly increase staffing starting in early 2017.

“From a floor space standpoint, we probably have between 60 percent and 70 percent utilized,” Estrada said of NorthStar West. “Once we start expanding and adding equipment and lines, we’ll definitely be adding people and it will be in the hundreds.”

Much of NorthStar’s manufacturing process is automated, limiting staff needs.

“We use robotics, so we can double output without doubling the need for employees,” Semeniuk added, “but it’s a ramp up, so we’ll continue to add staff.”

Meanwhile, the company also is advancing its internet of things project. The goal is to enhance batteries with a connectivity feature, allowing users to access statistics such as current charge, projected life and cycle data in order to better manage fleet operations and unit downtime. Daimler is in line to receive the first peek.

“It’s more of a strategic partnership that way in that any of the advancements that are made we will disclose to them first,” Semeniuk said.