Ballard production hopes charge up stockholders
by STEVE MERTL, The Canadian Press 5/21/99
VANCOUVER (CP) - Applause echoed through the Ballard Power Systems (BLD) shareholders meeting Thursday when a company director announced the company expects to deliver commercial versions of its hydrogen fuel-cell bus engine by 2002.
The pioneering Canadian fuel-cell developer has spent 10 years proving hydrogen fuel cells can produce smog-free power for everything from cars and buses to submarines, power stations and portable generators.
Now it faces formidable challenges to take the technology to the manufacturing stage and shareholders were hungry for news its plan was on schedule.
Director Ferdinand Panik, a vice-president of Ballard partner DaimlerChrysler, said plans for Mercedes-Benz and Ford-badged fuel-cell cars are on track for 2004, and bus engines from the DBB Fuel Cell Engines subsidiary will be commercialized by 2002.
But Ford vice-president Neil Ressler, who also sits on Ballard's board, hit the recurring theme of the meeting - Ballard and its partners must push down costs to mass-produce engines and vehicles as competitively as conventional internal-combustion models.
"Ford cars cost about as much per pound as a Big Mac hamburger," Ressler said.
Ballard's transition from a research company to the core of a worldwide manufacturing operation was the main theme of the meeting.
Firoz Rasul, Ballard's president and chief executive officer for the last 10 years, was appointed chairman, replacing the retiring Fraser Mustard. Rasul remains CEO, while chief operating officer Layle (Kip) Smith, a former Dow Chemicals vice-president, becomes president.
The shuffle will help Ballard focus on its product-development and manufacturing capabilities, said Rasul.
"Kip is going to be looking after the day-to-day operations," Rasul said later in an interview.
"I will be involved in the relationships with our strategic partners, looking at the issues of external relationships with governments, with fuel suppliers - making sure the fuel infrastructure is in place."
Rasul noted Ballard has grown from 18 people "in a garage doing R and D," to 525 people in the Vancouver area, and more than 1,000 counting affiliated companies jointly owned with partners Ford and DaimlerChrysler.
"It's basically beyond my wildest imaginings that we would be this far along, with commitments of two large auto companies that represent 25 per cent of the world market between them."
Rasul told shareholders Ballard is three to five years ahead of its competitors in fuel-cell development, but it fell short last year in its goal to get at least one commitment from a public transit authority to use fuel-cell buses in 2002.
"We continue to work on that and I'm confident that by the end of this year we will have a commitment," he said.
Ballard has been testing buses with the Vancouver and Chicago transit systems.
Smith said the buses in Chicago ran into teething problems in "real world" experience, but the drivers liked them.
The Vancouver buses, he said, benefited from the Chicago experience and have a better on-road breakdown record than older diesel and electric buses.
Rasul said Ballard did not acquire a strategic partner for its portable power initiative as planned. Applications for small fuel-cell units - about the size of conventional portable gas generators - are so diverse that Ballard plans to seek more than one partner, he said.
Despite being barely profitable last year - $765,000 on revenues of $25 million - and losing $8.8 million in the first quarter this year, Ballard has plenty of cash for research and development. Its kitty grew to $378 million in the first quarter from $66 million a year ago.
Having shown its fuel-cell technology works, Smith said, "now our job is to demonstrate that they can be made reliably, at low cost and high volume."
Ballard shares slipped 35 cents to close at $53.25 Thursday on the Toronto Stock Exchange.
© The Canadian Press, 1999 |
