2004 Issue 8
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.

Milestones
Detroit Diesel, 2 Million and Counting

At Detroit Diesel Remanufacturing North in Kentwood, demand for the rebuilt injectors, a pivotal part deep inside a diesel engine, has pushed production past the 2-million mark, said Caley Edgerly, vice president and general manager.

The company, owned by Detroit Diesel, has been humming in part because diesel engines must meet stiffer pollution standards this year. Injectors also can improve fuel efficiency.
"We have 4.6 million opportunities out in the field," Edgerly said. In most cases, the replacement is done as scheduled maintenance.
Grimy, used injectors arrive by the caseload at the Kentwood plant near 44th Street and Patterson Avenue SE. Workers disassemble each unit and wash them in solvents. Of the 40 parts in each, about 30 will be reusable. Items subject to wear like the seals and small screws are replaced.

But the costly parts -- the spray tip and forged body -- are worth reworking. The grinding, shining, and refitting shaves off as little as possible, to avoid breaking through the case-hardened metal exterior. When assembled, injectors are 6 to 12 inches long and are installed one per cylinder inside the engine. The injectors spray a mist of high-pressure fuel at 30,000 pounds per square inch into the engine's cylinders. "It leaves a lot of wear," Edgerly said. The high-precision injectors have tolerances 100 times finer than a human hair.

In the plant, 130 hourly workers form teams to solve problems. That approach was established in a labor contract between the company and United Auto Workers Local 167, said bargaining chairman Joe Ray.
Besides the Kentwood plant, Detroit Diesel has rebuild centers for other truck engine parts in Ohio, Kansas and Utah. Although most of the Kentwood plant rebuilds fuel injectors for its parent company, workers also are filling orders under new contracts with L'Orange in Germany, Mercedes Benz, and Mack Truck.

Detroit Diesel and its remanufacturing operations are owned by DaimlerChrysler. The business previously was owned by General Motors, and then Roger Penske.


Expansions
Caterpillar European Remanufacturing Center (ERC) in UK

With 200 people currently employed in remanufacturing, the Shrewsbury Caterpillar facility is projected to become the largest of its kind in Europe by 2006. Now named the European Remanufacturing Center (ERC), it is Caterpillar's first such site outside North America, and serves Europe, the Middle-East and Africa.

Bill Springer, vice-president of Caterpillar Product Services Division, said: "There is no point in shipping used components back to scrap them. Our skills as remanufacturers truly enables us to remanufacture, reprocess and reuse material that would otherwise be scrapped. Some of our emerging technology forms part of our competitive advantage - we can take a worn component and add to it in a way no other remanufacturer can. By weight, 61 per cent of the metal used in the engines and components returned to Caterpillar can be reused after refurbishment, saving 85 per cent of the energy used in the original manufacturing process. The rest is recycled in Caterpillar's mills and foundries for use in its products, or recycled elsewhere.” Recent research indicates UK remanufacturing operations contribute £5 billion to the economy and recover 270,000 tons of material that might otherwise go to landfill or be disposed of by less efficient recycling methods.

As end-of-life and take-back EU legislation becomes more widespread, the requirement for effective reuse, remanufacturing and recycling is likely to create substantial opportunities for remanufacturing operations.

Ryan Gustafson, Caterpillar's Shrewsbury facility manager, proudly notes that the site will remanufacture anything from a water pump to a 1,200bhp engine for the British Army's Challenger II tanks.

Kevin Thieneman, general manager of Caterpillar Remanufacturing Services, said: "Our customers are telling us they want lower operating costs - we can do that by increasing fuel efficiency, by making machines more reliable, but equally with remanufactured products costing half what they cost new. And we are also helping the environment."


Remanufacturing Innovations
Less is More: Xerox Adds up Successes in 10th Annual Environment, Health and Safety Report

Totaling up the waste saved from landfill, the energy not consumed, the air and water pollution prevented and the injuries avoided - all through positive initiatives - Xerox Corporation (NYSE: XRX) celebrated the success of its Environment, Health and Safety program in its 10th annual progress report, even as the company looked ahead to future challenges.

Among the landmark results cited in its 2004 report:
-- Xerox has kept more than 1.5 billion pounds of waste out of landfills since 1991 by taking back and remanufacturing copiers and printers that have reached their end of life and by reusing or recycling parts from them. That weight is equivalent to a line of more than 88,000 school buses stretching for 550 miles. Last year alone, the company prevented 161 million pounds of materials from entering landfills, through reuse and recycling of Xerox equipment and supplies.

The gains documented in this annual accounting result from a visionary environmental, health and safety policy Xerox established more than a decade ago. It committed the company to high standards worldwide. And it pledged that the company would operate in a manner that would safeguard health, protect the environment, conserve valuable materials and resources, and minimize the risk of asset losses - tenets that would not be compromised for economic considerations.

Operating this way has resulted in surprising opportunities for savings and innovation, according to Jack C. Azar, vice president, Environment, Health and Safety. And it has helped customers to meet their own sustainability goals as well. "We have made remarkable gains by embracing a philosophy of 'Waste-Free products from Waste-Free Facilities' throughout Xerox," Azar said. "Our remanufacturing operations, for instance, have saved the company several hundred millions of dollars each year. Now we are harnessing the creativity of employees, suppliers and customers, asking even more of ourselves and extending environmental, health and safety requirements even further across the product lifecycle."
In its quest for continuous improvement, this year Xerox has:
-- Required materials and component suppliers to meet a more stringent environmental, health and safety standard for the chemical content of parts and materials used in Xerox products.
-- Qualified additional cartridges and waste toners for remanufacture.

Legal
DMCA: Digital Millennium Copyright Act; OEMs versus independents

In a closely watched case involving DMCA, a federal court has ruled that a small North Carolina company can continue selling a chip that makes it possible to use refilled toner cartridges in Lexmark printers.

A federal appeals court overturned in October a preliminary injunction that barred Sanford, N.C.-based Static Control from selling its Smartek chip. Static, which sells printer parts and other business supplies, has been defending a lawsuit brought by Lexmark, the No. 2 maker of printers in the United States. The suit claims the Smartek chip violates the DMCA, and Lexmark hopes the case will slam the brakes on the toner cartridge remanufacturing industry and compel consumers to buy its cartridges.

Ed Swartz, Static's CEO, said in a statement that the "courts have spoken--companies cannot abuse copyright laws to create electronic monopolies and take advantage of the citizens of this great country."

The case has gotten a lot of attention because it's one of the first to test the limits of the DMCA, which Congress enacted in 1998 to limit Internet piracy.
Under section 1201 of the DMCA, it is generally unlawful to circumvent technology that restricts access to a copyrighted work or sell a device that can do so.

In court documents, Lexmark has claimed the Smartek chip mimics a technology used by Lexmark chips and unlawfully tricks the printer into accepting an aftermarket cartridge. That "circumvents the technological measure that controls access" to Lexmark's software, the complaint said.

But Congress also included exemptions in the DMCA explicitly permitting activities such as law-enforcement activities, encryption research, security testing and interoperability.

Static Control has seized on the last exemption, which permits reverse-engineering "for the purpose of enabling interoperability of an independently created computer program with other programs" and says its creation of the Smartek chip is also protected by traditional fair use rights enshrined in U.S. copyright law.


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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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