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Fiat retrofits Chrysler engine, shelves 'dinosaurs' to save gas

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By Bloomberg
Sunday, June 28, 2009

Rinaldo Rinolfi may have the key to making Fiat SpA's partnership with Chrysler Group LLC work.

The 62-year-old engineer, who designed the Fiat diesel engine in the 1990s that became an industry standard and powers some of Europe's most energy-efficient cars, has a new invention he says will cut fuel consumption by at least 10 percent. His work is at the heart of the Fiat technology that Chrysler said was worth $10 billion when they formed the alliance.

"We needed to do something radical with the gasoline engine," Rinolfi said in an interview at Fiat's research center in the northern city of Turin, the company's headquarters.

Chief Executive Officer Sergio Marchionne, seeking to turn around Chrysler after two previous owners failed, has engineers flying between Detroit and Italy every other week on the project as Fiat prepares to offer models that meet stricter consumption and emissions levels required by President Obama.

Fiat fumbled its first attempt to enter the United States in the 1970s, when it lacked a big dealer network and earned a reputation for selling clunkers. Marchionne, who is CEO of both Fiat and Chrysler, now has to prove Fiat-made cars need fewer repairs and have technology Americans can't find elsewhere, in addition to persuading consumers to swap more powerful engines for fuel efficiency.

"The new Fiat-Chrysler is going to have a big job convincing the American public to buy its cars, with Chrysler coming out of bankruptcy and Fiat's reputation being less than stellar," said Andrew Close, an IHS Global Insight analyst in London.

Rinolfi's MultiAir engine uses an electronic hydraulic-valve lift system that allows the engine to automatically adjust the amount of airflow into the combustion chambers, without the use of a traditional throttle valve. In addition to saving fuel, it reduces carbon emissions by at least 10 percent, he said. The valve control system updates the internal combustion engine, where burning fuel in chambers filled with air creates pressure that applies force to moveable parts.

In the traditional engine, the valves that pump air into the chambers open fully, regardless of how fast the car is moving. Even if the car is coasting and needs less power to keep momentum, air and fuel get in and energy is wasted.

"For years, engines have lost energy in this pumping process," said Rinolfi, vice president of Fiat Powertrain Research & Development, who joined Fiat in 1971 after getting a physics degree at the University of Turin.

His team spent $100 million in a decade creating the engine at the center in Turin, home of the 2006 Winter Olympics. The research site is surrounded by bamboo gardens, ponds and loops of track where engineers test drive new models like the MultiAir-equipped Alfa Romeo MiTo, which debuts in September.

The MultiAir project stalled between 2000 and 2005 during the Italian company's joint venture with General Motors Corp. because GM didn't want to invest in the technology, Rinolfi said. Fiat in 2001 sold a license to Schaeffler Group, a German components maker, to raise research funds, Rinolfi said. When the GM alliance was dissolved in 2005, Marchionne created Fiat Powertrain and told Rinolfi to go forward independently.

"We were really held up during the years with GM, which were about anything but innovation," Rinolfi said. A spokesman for GM in Europe declined to comment on the partnership and the MultiAir technology.

Bayerische Motoren Werke AG and Honda Motor Co. also have worked on valve control of airflow. BMW added "fully variable valve technology" in 2001, spokesman Wieland Bruch said. The Munich-based company is introducing its next upgrade to the system this week, he said. He declined to comment on the Fiat design because BMW hasn't seen it.

IHS Global Insight's Close says Rinolfi's system is "breakthrough technology" because it regulates each cylinder individually and decides the timing automatically, making the setup more efficient and the engine more responsive. Marco Santino, a consultant with A.T. Kearney in Rome, says MultiAir can be mounted on different engines without having to redesign them.

Tokyo-based Honda developed a valve-control process called VTEC, for Variable Valve Timing and Lift Electronic Control, in 1989. Raj Johal, a Honda spokesman in London, confirmed that the company's process doesn't run valves individually and declined to comment further on a comparison with Fiat's technology.

Fiat hasn't said how many miles per gallon cars with the new engine will achieve. The company's two-door 500, which is smaller than BMW's Mini, gets more than 40 miles per gallon in city driving without the MultiAir engine in most of its gasoline and diesel versions, according to Fiat's Web site. Chrysler's most fuel-efficient car is the Dodge Caliber with manual transmission, which gets 24 to 30 miles per gallon.

The new MultiAir engines will probably cost about $1,400 each, the same as a diesel engine, according to Close. Fiat won't disclose prices until shortly before a model's debut, said Richard Gadeselli, a Fiat spokesman. Neither BMW nor Honda break out the prices of their engines with their valve-control technologies.

"Fiat is by far the first carmaker to bring out an industrialized product with this technology that is affordable," said Stefano Aversa, president of New York-based AlixPartners, who has done consulting work for Fiat and is advising General Motors Corp.

Fiat may find the bigger challenge is convincing American drivers that a smaller engine doesn't mean sacrificing power.

"It might be difficult psychologically for your average North American customer to downsize to a 4-cylinder engine, even if it has the same performance as a bigger one," said Marco Santino, an automotive consultant with A.T. Kearney in Rome.

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