2005 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.

Awards
Springfield Remanufacturing Corporation (SRC)

Megavolt, a joint venture of Springfield ReManufacturing Corp. and Case New Holland, was named the Springfield, Missouri Area Chamber of Commerce 2004 Manufacturer of the Year.

Megavolt remanufactures starters, alternators and other products for agricultural and construction machinery, and also for the trucking industry. Megavolt is the second SRC subsidiary to win this award; ReGen won the award in 2002.

Megavolt is one of the "in-house startups that have come from this company (SRC)," said Robert Wyatt, director of Drury University's Breech School of Business Administration, who was a judge for the award competition. "They were impressive in each of the areas we considered."


OEMs Embracing Remanufactured Products
MAN Roland Provides Remanufactured Pumps And Blowers For Pressroom Operators

Printing Pressrooms operators now have new options in pump and blower management. Facilities that run MAN Roland sheet fed models can cost-effectively enhance the reliability of their pressrooms by participating in a remanufactured pump and blower program that the OEM launched recently.

Designed as an affordable alternative to the costly replacement of a new pump, the remanufactured component initiative features units supplied by the OEM’s authorized remanufacturer, Rietschle/Thomas, a world leader in vacuum and pressure technology. The program covers most models including Becker pumps.

At the printer’s request, a loaner pump will be provided to keep the press performing while its pump is being remanufactured. Operators can also opt to keep the loaner pump as a permanent replacement.

The OEM designed remanufacturing process is designed to bring the performance of the pump back to original specifications. All rebuilt pumps are fully tested and ship with a full one-year warranty against defects.


John Fargher, Ph.D.
The Death Of A Remanufacturing Leader

It was with great sadness that the remanufacturing community was informed of John Fargher’s death on Friday, December 17, 2004. At the time of his death, at 62 years old, John was Vice President of the Missouri Enterprise, providing support to small businesses in Missouri.

John had over 35 years of remanufacturing management experience with over 20 years of that experience working with the DoD’s remanufacturing/overhaul depot organization He received a doctorate in industrial engineering from North Carolina State University, a masters degree in systems management from the University of Southern California, a masters degree in industrial engineering from Texas A&M University, and a bachelors degree from the Montana College of Mineral Science and Technology.

John was a Fellow of the Institute of Industrial Engineers, the President of the Board of Directors of the IIE Lean Division, and the Founder and Chair of the IIE Lean Conference and a founder of the APICS Remanufacturing (Reman) Special Interest Group (SIG). He is the author of numerous articles on lean remanufacturing management, as well as many other publications. His popular course on Reman Lean was attended by 100’s over the last several ears.

John was a paratrooper in the 101st Airborne. He received the Meritorious Civilian Service Award from the Department of the Navy.

John will be missed tremendously. He has been a great leader locally, nationally and worldwide. John had a knack for educating others and an extraordinary ability to network between
business, academia and military bringing all communities closer together in many beneficial ways.

In celebration of his love of and endless pursuit to further teaching and learning, a memorial college scholarship was established in his name. Contributions to the fund can be forwarded to:
Ellie Fargher, 811 Burgundy Lane, Manchester, MO 63011


When A Remanufacturer Changes The Way It Accounts For Cores
Lessons Learned from Motorcar Parts of America

Motorcar Parts of America, Inc. ("MPA") (OTC:MPAA), a leading provider of remanufactured starters and alternators for the automotive aftermarket reported that, following MPA's recent announcement that investors and others should not rely on certain of MPA's financial statements, Grant Thornton LLP, MPA's auditors, has withdrawn its opinion included in the Form 10-K for the year ended March 31, 2004. MPA and Grant Thornton continue to work together to complete the audit of the restated periods included in March 31, 2004 Form 10-K and the review of the subsequent quarterly periods. As the audit and review of the restatement made to effect this correction to MPA's accounting policies remains incomplete, MPA announced that it did not file its Form 10-Q for the period ended September 30, 2004 on November 22, 2004, the extended filing deadline.
MPA previously reported that it intended to correct its accounting policy with respect to accounting for sales to customers and the recognition of the related core revenues and costs. The core refers to the portion of the used alternator or starter that is typically returned by the aftermarket customer and is a key component of the remanufacturing process. MPA will now account for revenues and cost of sales on a net-of-core-value basis. As a result, MPA will reissue its annual report for the fiscal year ended March 31, 2004 and its quarterly report for the three- month period ended June 30, 2004. As previously disclosed, MPA believes this change will result in a material decrease in net revenues and cost of sales but will not have an impact on its gross profit, operating profit, net income or cash flow from operations.


Enterprise Ownership
Remanufacturer Ownership Is Transferred To Employees Through An
Employee Stock Ownership Plan (ESOP)

After more than a half-century, a Virginia-based family-owned business is being turned over to its employees; brothers Charles and Larry Holland told employees at Holland Industrial Inc. that its 38 workers, rather than younger members of the Holland clan, or an outside buyer, would become the next generation of owners of the company.

Management of Holland Industrial, once known as Holland Supply, will remain in the hands of the same six-member team that has been running the company for the last two and a half years. But employees, based on their salaries, will be assigned a percentage of the value of the company. Workers will be given cash upon leaving the company or retiring. As part of the handover, an Employee Stock Ownership Plan (ESOP) will be formed. The plan will be a legal entity, like a corporation or a trust, which will borrow money to purchase Holland Industrial from Charles and Larry Holland. The payout to employees is contingent upon two points: the loaned money being paid back and, more fundamentally, Holland's continued profitability.

Charles "Butch" Holland and Larry Holland took over the company from their father, Charles Holland Sr., in 1965. The business was started on a part-time basis in 1946 and became a full-time concern in 1952. Today, Holland sells electrical parts and equipment and makes electrical control panels in addition to its core business of remanufacturing. Holland's specialty remanufacturing work on wastewater treatment pumps and motors has attracted customers from all over the nation. An Anheuser-Busch brewery in Los Angeles has shipped equipment across the continent so Holland could remanufacture it.

A straightforward sale might have been less complicated and involved less paperwork, the Hollands said, but they didn't think it was the best way to go. "The more we studied ... the ESOP concept, the more it seemed like the right thing to do," Charles Holland said.
"I like it (employee ownership) because I've heard of so many people buying up motor shops and running 'em into the ground," said Callahan, the foreman. Brown said the employee stock ownership plan could accrue more value than other types of retirement plans "as long as the company grows and we make a profit - which we've done since we've been here."


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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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