API Scrutinizes GM GEOS


General Motors has been hard at work developing a global engine oil specification for its vehicles — and last week the American Petroleum Institute got a look at some possible certification costs that oil marketers may face under the new scheme. On Feb. 3, the API Lubricants Committee held a special Standards Meeting in Houston, where Kevin Ferrick, API’s manager for engine oil licensing, presented the automaker’s new Global Engine Oil Standard (GEOS) to the group.

The meeting heard how the GEOS standard was developed, the testing regime oils must pass for certification to it, and some ballpark figures GM is evaluating for licensing oils to the new specification. Worldwide, GM sells more than 8.3 million vehicles a year, so its certification plans will affect engine oil marketers around the globe.

Currently, GM uses the ILSAC/Oil system, licensed through API, to identify oils meeting the requirements for its gasoline-fueled engines. The current standard under this system is ILSAC GF-4, and its upgrade, GF-5, is on the anvil now. However, the GF standard is mainly designed for vehicles made in North America and Japan. The European market uses standards from ACEA (the Association des Constructeurs Europeens d’Automobiles), Europe’s auto manufacturers association.

While it voices support for development of the GF-series, GM says it needs its own global standard for engine oils. Last October, the company outlined the reasoning behind this decision. (See Lube Report, Oct. 15.) Speaking to the Independent Lubricant Manufacturers Association, Eric R. Johnson of GM Powertrain explained that GM maintains a large number of internal engine oil specifications. This leads to a lot of duplication or near-duplication of requirements and results in significant redundancy.

Johnson pointed out that GM uses 20 different engines which are produced at 18 manufacturing plants worldwide. With one “globally standardized engine oil platform,” the auto giant believes that it will achieve improved quality and greater customer satisfaction. GM also believes that GEOS will help meet environmental goals, such as increased fuel economy, optimized drain intervals and improved emissions performance.

GEOS actually includes two distinct products, GEOS A and GEOS B, Johnson explained. GEOS A is intended for worldwide use as factory-fill engine oil in GM gasoline engines, and as service-fill for GM worldwide, except in Europe.

GEOS B is intended for worldwide use as factory-fill and service-fill oil in GM light-duty diesel engines. It is also intended as the service-fill engine oil for GM gasoline engines in Europe.

Both versions require additional hurdles above and beyond the slate of engine sequence and physical and chemical tests that are used to certify oils for ILSAC GF-4. GEOS candidate oils will undergo most of those same tests – sometimes with stricter limits — plus a number of ACEA engine tests and proprietary General Motors tests. All of this will add up to a sizeable cost for achieving the certification.

Timing for the new standard was presented at last week’s API meeting. The first of the two to roll out, GEOS B, is to be introduced for factory fill in Europe in the first half of this year, and in time for service fill for the continent’s 2010 model-year vehicles.

GEOS A is targeted for introduction as GM’s U.S. factory fill in the first half of 2010, and for service fill in time for the 2011 model year.

Two big questions now are whether and for how much GM plans to license GEOS, as it already licenses Dexron VI transmission fluids. At the October ILMA meeting, Eric Johnson hedged a bit and said his company was “looking at” licensing fees. At last week’s API meeting, the issue of royalties was more pronounced. Participants heard that GM has identified the name and a logo, and is in the process of registering both.

API heard that GM was “exploring options” related to licensing, and got a peek at GM’s fee structure ideas. The following table shows the auto company’s thoughts compared to the current API structure.

GM Considerations

API Today

Possibility of both licensing fee and royalty on licensed products sold Minimum royalty:
$1,050 for API members
$1,250 for nonmembers
Fees considered with the following information in mind:
Application fees in U.S. range from $1,000 to $5,000 per year;
Underhood royalty rates in U.S. range from32 centsto $1 per gallon
Royalty of $0.0015 per gallon of API-licensed oils sold after the first million gallons annually

On Monday, Ferrick said the API Lubricants Committee has no idea yet whether a GM licensing program will make API licensing less appealing. “Members did express concern also on the impact GEOS may have on GF-5 development,” he told Lube Report. “In the meeting last week, some members raised the possibility that API may have to consider other alternatives, other options. But for now, we see GF-5 going ahead as normal. GM says they support it, and Chrysler, Ford and the Japanese Automobile Manufacturers Association all still want GF-5.”

OEM specifications are well-established on the heavy-duty engine oil side of the industry, “and it’s not unusual to have company specifications, even on the passenger car side,” Ferrick pointed out. “GM has made it clear that GEOS is a global standard and it’s different.” He also observed that GM has been a big player in every GF specification to date.

In response to questions from Lubes’n’Greases magazine, GM spokesman Tom Read said his company expects to release the brand name for licensing GEOS “before the end of the first quarter.” He also confirmed that GM has pending approvals on several oil products. This would make sense, given GM’s desire to have GEOS B oils as factory fill in European engines this year.

While GM is moving ahead with GEOS, it states it still supports ILSAC’s GF standards. “GM has worked cooperatively with ILSAC for many years now and we look forward to continuing that relationship,” Read reiterated. “The main advantage of the GEOS spec is that there would be one oil spec versus the current multiple worldwide GM oil specs.”

Lisa Tocci contributed to this story.

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