2005 Issue 2
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.

Expansions

Oshkosh Truck has entered into a definitive agreement with the Leach Co. Inc., and its parent, Federal Signal Corp., for the purchase of a factory in Oshkosh, WI. Oak Brook, Ill.-based Federal Signal decided last year to close the plant, which had 200 employees and produced rear-loading refuse truck bodies. Production was consolidated into a plant in Canada. Initially, Oshkosh Truck plans to use the facility, which contains more than 300,000 square feet of manufacturing, paint and office space, for remanufacturing operations for its defense customers.
 

Beyond Recycling: Manufacturers Embrace Cradle To Cradle (C2C) Design

Steelcase Inc.'s "Think" chair doesn't look particularly radical, but it embodies a lot of forward thinking by the nation's biggest office furniture maker. The $900 chair can be disassembled with basic hand tools in about five minutes and its parts can be used in a reassembly process or as service parts.

The "Think" chair is Steelcase's first product to meet a design ideal being embraced by a growing number of furniture and other manufacturing companies: using parts that can be reused several times, and manufactured in ways least harmful to the environment. The goal is to abandon the cradle-to-grave path of man-made products that end up in garbage dumps and instead make them C2C, or "cradle to cradle."

At the forefront of such thinking are architect William McDonough and his chemist partner, Michael Braungart. The pair's 2002 book, "Cradle to Cradle: Remaking the Way We Make Things" has become a manifesto for a growing group of "green" industrial designers. Mr. McDonough says many designers feel challenged to make better products. "We want clean production that's based on a regenerative technology," he says. "Pollution is a symbol of design failure."

Products that meet the strict "cradle to cradle" protocol currently account for only about 5% of sales, a figure that Herman Miller, a competitor of Steelcase plans to increase to 50% by 2010 as it designs new products and redesigns old ones.
 
Excerpted from a Wall Street Journal article
 

Government Officials Overseeing Insurance Companies Are Reviewing The Use Of Remanufactured Auto Parts For Crash Repairs
 
The National Conference of Insurance Legislators (NCIL), at their annual conference, again tackled the issue of auto crash repairs with parts not made by OEMs. They proposed endorsing the certification of aftermarket parts by third-party organizations, such as the Certified Aftermarket Parts Association (CAPA) and would require disclosure as to the use of such parts. These discussions began at their 2002 conference.

One of the key issues of the debate is over the safety of certified aftermarket crash parts; often used by OEMs to “block-out” the competition. According to Robert Zeman, senior vice president for the Property Casualty Insurers Association of America, the issue pits auto manufacturers against producers of aftermarket crash parts with the interest of the insurance industry remaining to maintain competition.

“This model is a good step in the right direction in that it creates a presumption that certified aftermarket parts can be safe,” Mr. Zeman said.

Car parts became a major issue in 1999 after an Illinois jury verdict against State Farm that found the company had defrauded customers by allowing the use of generic parts for repairs without telling them and slapped the company with a substantial judgment. Originally more than $1 billion was reduced on appeal.

Peter Bisbecos of the National Association of Mutual Insurance Companies noted that prior to the Illinois decision the use of non-original equipment manufactured (OEM) parts was a common practice.

“After the stunning ruling, many insurance companies, not even parties to the litigation, discontinued the use of non-OEM parts because they no longer knew the risks would face,” Mr. Bisbecos said.
 
 
Remanufactured Light Vehicles: Retro Motors Believes That Their Time Has Come

Retro Motors intends to supply completely remanufactured light vehicles in perfect mechanical condition, showroom looks, and carry a limited warranty.  Allen Jaffe, President of Retro Motors, believes that a remanufactured vehicle is the solution for 70 percent of vehicle buyers needing an affordable, reliable, safe, low maintenance transportation product.

Retro Motors vehicles will be sold directly to the public through branded factory outlets that also offer same day service for engine and/or transmission replacement.  Individuals may buy a Retro Motors vehicle or contract with them to have their own vehicle remanufactured.

Retro Motors will provide several offerings for fleet operators and exporters:

Fleet Remanufacturing.   Small and medium fleet operators (public and private) will be able to extend the life of their vehicles for a third or less of replacement costs.  Fleet remanufacturing services will be offered for individual services such as power trains, multiple service bundles, or complete remanufacture. It is believed that municipalities will now have an affordable solution to extending the life of their police cars and other fleet vehicles.

Export Sales.   The United States has 90 percent of the Western Hemisphere's supply of good quality used light vehicles and approximately 40 percent of the global supply. After years of the U.S. enacting trade agreements with numerous countries that eliminated or dramatically reduced export barriers and tariffs for motor vehicles, with more in the works, the U.S. glut of motor vehicles and the significant offshore demand presents a unique. No more than ten percent of licensed drivers in numerous countries can afford new or late model vehicles. With the previous import obstacles, their citizens couldn't buy affordable used transportation products from their domestic new car dealers, resulting in enormous pent-up demand for reman products, which Retro Motors will exploit.
 
The Retro Motors web site is http://www.retromotors.net/
 
 
"Remanufacturing; Saving the World's Environment" Pamphlet Available For Mailings

Have you been wanting to educate your customers about the many benefits of
using remanufactured parts, but don't have the time to put something
together? We have your solution. The Automotive Parts Remanufacturers Association (APRA) has a 16 page pamphlet entitled "Rebuilding, Remanufacturing, Saving the World's Environment." This 3-3/4 x8-1/4 pamphlet is available to APRA members at no charge. If you would like copies for future mailings, please contact Betty Summers at
summers@buyreman.com with your address and quantity desired. Offer available
while supplies last.
 

How to Save American Business: An open letter to President George W. Bush on the state of our entrepreneurial union

Below is an excerpt from Jack Stack’s letter published in the February 2005 issue of Inc Magazine. Stack is the President of SRC.

”As you know, we face a serious raw materials shortage that's likely to get worse as the economies of countries like India and China continue to grow. In the past year alone, the price of steel has more than tripled, from 15c a pound in October 2003 to 46c a pound in October 2004. Meanwhile, you've taken a lot of flak for refusing to sign the Kyoto Protocol without proposing any alternative plan to reduce emissions of carbon dioxide and other heat-trapping greenhouse gases. You've said you were concerned that such efforts would cost America jobs.

Well, I've got a way for you to kill two birds with one stone: Embrace remanufacturing. Tell business owners they need to come up with ways to recycle whatever they make. The effect will be to reduce pollution, relieve the raw materials shortage, and create jobs all at the same time. The company I work for is living proof of it. As a business, remanufacturing is labor-intensive and environmentally friendly, and it cuts down on our nation's need for raw materials by reusing the materials we have.

I should warn you that other developed nations are ahead of us in this regard. Japanese car manufacturers, for example, already figure out where every tire, rim, and crankshaft will go after their cars die. Last year, the European Union began requiring all automakers to recycle the cars they sell in Europe. Caterpillar is putting increased emphasis on its remanufacturing business because it sees it as a growth industry. The company melts down and reuses the plastic, steel, aluminum, and copper in its old worn-out equipment. Last year, it began offering that service to other companies. Why can't every business owner follow Caterpillar's lead? Considering that the U.S. is unable to meet its domestic demand for steel in any given year, I'd say that this is an urgent matter. Let's push the voluntary, patriotic remanufacturing of everything from cars to computers. Let's challenge U.S. companies to take the initiative and come up with the world's best recycling programs. I have no doubt we can do it.”

The entire letter can be found at http://www.inc.com/magazine/20050201/mr-president.html


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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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