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2004 Issue 1
Reman E-News

A Bi-Weekly Review For The Remanufacturing Community
A joint effort by The Remanufacturing Institute (TRI)
and the OEM Product-Services Institute (OPI)


Providing news for the $100B global remanufacturing community:
market trends, innovative offerings, government initiatives, acquisitions, expansions,
professional societies, trade groups, legal rulings, financial results, the environment,
productivity improvements, publications and events.

Our Goal Is To Assist The Global Remanufacturing
Community To Double Its Market Size By 2014


Government Actions
President Bush Supports Remanufacturing: President Bush issued this statement from the recent G-8 meeting, “Last year at Evian we agreed to support the development of cleaner, sustainable and more efficient technologies. We reaffirm our conviction that cooperative scientific research on transformation technologies offers potential to improve public health by cutting pollution and reducing greenhouse gas emissions to address the challenge of global climate change.

As we continue to implement the G8 Action Plan on Science and Technology for Sustainable Development adopted at Evian, we commit to launching the Reduce, Reuse, and Recycle ("3R") Initiative to encourage more efficient use of resources and materials. The initiative will be formally launched in the coming year at a ministerial meeting in Japan.

….Reduce barriers to the international flow of goods and materials for recycling and remanufacturing, recycled and remanufactured products, and cleaner, more efficient technologies, consistent with existing environmental and trade obligations and frameworks….” Entire press release is available at:
http://www.whitehouse.gov/news/releases/2004/06/20040610-53.html 


Acquisitions
GE Energy, a $18B unit of GE, headquartered in Atlanta, has signed a definitive agreement to acquire the assets of Ohio Transformer, a business unit of S.D. Myers, Inc. of Tallmadge, Ohio, a leading supplier of services for electrical distribution transformers and substations across the global power industry.

Ohio Transformer is an industry leader in repair, rewind and remanufacturing services for transformers. Over the past 50 years, the company has delivered more than 6,000 transformers.

S.D. Myers Inc. will continue as an industry leader in its core business of transformer oil testing and analysis, with training on how to extend the reliable life of transformers, and with PCB de-chlorination services outside the US.

AB Volvo’s truck and construction-vehicle unit bought the engine-remanufacturing assets of Echo Industries Inc. for an undisclosed amount. The company said it bought the facility to establish its own engine remanufacturing business in North America.

Charlotte, N.C.-based Echo Industries is the primary supplier of remanufactured engines to Volvo Construction Equipment North America Inc. Volvo said it would retain the plant's 31 employees and continue operations at the facility without interruption.

RELCO Locomotives leasing affiliate acquired Joseph Transportation Services Inc.'s locomotive leasing division. The leases, many of which include full-maintenance provisions also include extensive remanufacturing services.

"The acquisition brings us almost 50 new operating leases and positions us as the largest operating lessor of switcher locomotives in North America. We look forward to continuing to provide these customers with excellent motive power and maintenance support services," said Donald L. Bachman, RELCO's Chairman and CEO.

Since 1961, the RELCO companies have been a leading provider of quality locomotives and locomotive maintenance services throughout the United States and Canada. RELCO Finance, Inc. provides a full range of locomotive leasing options including both switcher and road power under net, full-service, financial, and sale/leaseback arrangements. RELCO Finance has become one of the largest operating lessors of locomotives in North America. RELCO Locomotives, Inc., carries a full line of switcher and road locomotives for sale and provides locomotive maintenance, remanufacturing, painting, system upgrades, rebuilt components, parts and nationwide field service. The RELCO companies supply the needs of industrial rail users, commuter agencies, shortlines, regional and Class One railroads.


Expansions

Finning International, of Edmonton Canada, is building a new 254,000-square foot building, sitting on 21 acres, focused almost exclusively on the remanufacturing of components that are utilized on Caterpillar products. Its subsidiary, OEM Remanufacturing, formed last year from a merger between Headhunters Diesel and Reliable Engine Service will be performing the work. The plant is initially planning to employ 300 workers.

ArvinMeritor's Commercial Vehicle Aftermarket (CVA) group is planning to take a bigger share of the remanufactured parts business after making major improvements at its 275,000 sq ft reman facility in Plainfield, Indiana.

The company's CVA group has a broad line of remanufactured products for the heavy-duty truck aftermarket. Meritor reman offerings include axle carriers, brake shoes, transmissions and Lucas brake cylinders. Euclid reman products include brake shoes, hydraulic brake cylinders and calipers. All told, the aftermarket arm of ArvinMeritor has 21 key product lines and more than 115,000 individual part numbers.

“Remanufactured components are a growth market right now,” said Harry Howard, vice president and general manager of CVA. The plant now processes 35 percent more remanufactured class-8 brake shoes annually than previously possible, and during the heaviest months (February to May) that means eight truckloads a day.

"If you lined up the reman brake shoes produced [in Plainfield] in one year, they would stretch from the Plainfield plant to New York City (700 miles)," said Howard. Brake shoes are remanufactured with an OE-genuine core lining and hardware and are not simply relined or rebuilt. Many different friction formulas are offered, each designed to accommodate different truck operators’ needs.

The recent process improvements have freed up 25,000 square feet of space that can now be devoted to other functions, Howard said, including additional capacity or new product lines. Further efficiencies to be created this year will make another 16,000 square feet available.

Some of the changes are dramatic. The differential reman section, for instance, has been compressed from 22,000 to just 8000 square feet. Or take the transmission area, which used to be two – teardown and rebuild – that were 150 feet apart. Now combined, this area is down to 3,947 square feet from 15,361, material handling has dropped by 80%, and throughput time is down to two hours from 16.

ArvinMeritor CVA operates a second remanufacturing facility in Brampton, Ont

Silicon Services Consortium (SSC), a remanufacturer and remarketer of Novellus and Applied Materials semiconductor fabrication systems and parts, has expanded to a new 43,000 square foot facility in Austin, Texas.

The new facility previously served as a fabrication plant for a semiconductor company, and features a fully-functional 11,000 square foot clean room certified Class 1,000. The site will accommodate 25+ system bays, allowing SSC to increase production more than five times over what was possible at their previous location. In addition, the larger warehouse space allows SSC to maintain a larger parts inventory, offering customers a larger selection and faster response times.


Market Size
The Department of Defense, the largest remanufacturer in the world, spends over $10B/year, equally distributed, in support of the Air Force, Army, and Navy/Marines. (Note that the term “overhaul” is interchangeable with remanufacturing). Public Private Partnerships (PPP) are being used by DoD to outsource non-strategic work to the private sector. This effort is being accelerated due to the surge in equipment, requiring extensive remanufacturing, returning from West Asia operations; this surge will result in an estimated 20% increase in DoD remanufacturing activities.


Publications
In the first study of its kind, the German lawyer Gerhard Riehle, in the book, “Trademark Rights and Remanufacturing in the European Community-With Special Emphasis on the Rebuilding of Automotive Parts” has concluded, based upon European case law and his own analysis, that OEMs cannot use the law to prevent independent remanufacturers from rebuilding components bearing their trademark.

Riehle’s research is opening the doors for the distribution of remanufactured products in the EU; currently a small market compared to the US. For inquiries regarding the purchase of this publication e-mail: Fernand Weiland at fernand.weiland@netcologne.de


Events
The APICS Remanufacturing & Service Parts (REMANSP) Special Interest Group (SIG) and The Remanufacturing Institute (TRI) are presenting “Reman U” at the “International BigR Show” on October 28 through November 2 at the Riviera Hotel In Las Vegas. Information is available at http://www.bigrshow.com/apics/ This educational event is the largest of its kind in the world for the remanufacturing community. The Body Of Knowledge (BOK) to be presented will benefit all industry sectors.


Final Note
We encourage you to forward this newsletter to friends in the remanufacturing community. It is our intent to carry news on all industry sectors. If you have news to share or comments, please contact the Reman E-News editor:

Ron Giuntini

rgiuntini@oemservices.org
570.523.0992


Ron Giuntini, Executive Director
PO Box 48
Lewisburg, PA 17837
rgiuntini@reman.org
570.523.0992

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