REMANUFACTURING INTERNATIONAL
APRIL 2016 | NO 2 | VOLUME 16
Preparing SMEs for a tougher future
Reviving industrial robots through remanufacturing
Scotland – executing reman strategies
Industry giants and investors go for reman www.rematecnews.com
CONTENTS
ReMaTecNews | 3
12 | Bringing failing industrial robots back to life
18 | Options for remanufacturers in a changing environment
22 | Renault and other giants are increasingly turning to reman
Quietly, but steadily a German entrepreneur has created a remanufacturing niche for himself: reviving industrial robots that would otherwise have been heading for the scrapyard. ReMaTecNews visits the village in Northern Bavaria where Ingo Förster returns robots to life.
Last year, Professor Carsten Bücker, owner of the BU Power group, sold part of his business to a German investment group. The sale reflected some of the changing circumstances that other remanufacturers will encounter in an increasingly competitive environment. Carsten Bücker provides an overview of what lies in store for the industry.
France’s Renault are among the global vehicle manufacturers that are following the circular patch. Its reman factory in Choisy in Paris is one example. US experts Bill Burkhart and Jamie Butterworth go into detail.
“Big business has begun to recognise that circular strategies are necessary for future success” William Burckart, CEO, Burckart Consulting
www.rematecnews.com
Page 22
Editorial
4
Scotland invests in remanufacturing
5
3D printing
6
World Reman Summit comes to Beijing
28
FIRM
30
APRA
31
TransTec sets up European team
35
International exhibitions
38
EDITOR’S LETTER
ReMaTecNews | 4
ReMaTecNews April 2016 | Number 2 | Volume 16 Published by Amsterdam RAI B.V. P.O. Box 77777, 1070 MS Amsterdam The Netherlands In association with
Editor-in-Chief William Schwarck Phone +45 (0)20 55 84 42 editorial@ReMaTecnews.com US Correspondent Denise Rondini Office +1 (0) 773 334 5740 Cell +1 (0) 773 951 8563 drondini@gmail.com
ReMaTecNews - the next stage This editorial must be more or less the hundredth I’ve written since the first edition of ReMaTecNews was published 15 years ago. Perhaps not the hundredth, but near enough to look back and take stock. Having penned every editorial in the magazine over such a long period, there may be some who would argue that the time has come for a change of editor. Perhaps they have a point. Nobody is indispensable. Now the owners of ReMaTecNews have plans to take magazine in new directions, so it’s time for me to move on. Consequently, from Edition 3, 2016, the editorial content of the magazine will be the responsibility of a new team. I wish them the best of luck. Being involved with the reman industry has afforded me great pleasure, not least because this industry attracts so many skilled and innovative individuals as well as delivering services that genuinely benefit society as a whole. I would like to take this opportunity to thank all the dedicated and inspiring people, who have contributed to ideas, suggestions, articles and visions for ReMaTecNews over all these years. The magazine, indeed the entire automotive remanufacturing industry, has benefited from their help, enthusiam and advice. From CEOs, executives, marketeers, technical specialists, line operators and entrepreneurs, the message has uniformly been one of pride in their profession and commitment for what they’re doing. As for myself, I have enjoyed watching ReMaTecNews play a part in the provision of news and information within the industry as well as to a broader public. Much remains to be done in terms of informing consumers, authorities and local and national governments of the indisputable value of remanufacturing. Nevertheless, much has also been achieved – and there’s more to come. Hopefully, you will continue to support such endeavours wherever they may originate. Remanufacturing is on the right track. Long may it continue. I hope to meet you again at some point.
William Schwarck Editor-in-Chief ReMaTecNews See also pages 14, 15 and 16
Marketing Communications & PR Sanne van Dartelen Phone +31 (0)20 549 3061 s.v.dartelen@rai.nl Advertising Sales Ewoud Barink Phone +31 (0)20 549 1431 Fax +31 (0)20 549 1889 advertising@ReMaTecnews.com Publisher Niels Klarenbeek (responsible under Dutch Press Law) n.klarenbeek@rai.nl Production & Artwork MB voorheen VMTB Design Jenb, Graphic design, Hilversum, The Netherlands www.jenb-online.nl Printing SDA Print + Media Copyright RAI Amsterdam, Amsterdam, The Netherlands Reproduction No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, or otherwise, without the prior written permission of the publisher, RAI Amsterdam B.V. Subscription magazine and e-newsletter www.ReMaTecNews.com Change of address E-mail info@ReMaTecNews.com Website / ReMaTecNews magazine online www.ReMaTecNews.com Circulation Approx.13,500 readers per edition. The magazine is delivered on a controlled circulation basis to recipients in Western Europe, Eastern Europe, Africa, North America, South America and Asia.
NEWS
ReMaTecNews | 5
FER to extend member benefits The UK’s Federation of Engine Remanufacturers has launched an extensive membership drive to encourage British engine remanufacturers to take advantage of its services and benefits.
•U se of the FER logo on all stationery and advertising media; • FER Training Programme – to protect and improve key skills and the business; • Free Business and Legal Help Line, provided by the law firm, Lawgistics; • Specialist insurance offers provided by AJP Partnership; • Technical bulletins and Technical Help Line; • An ‘in-house’ service by phone and email; • FER website, including a member section – to promote an active and supportive community; • Quarterly FER ‘News & Views’ magazine; • Regional meetings and visits to places of interest.
The initiative comprises an 11-point service plan designed to strengthen the association’s members’ position in the market and help broaden general knowledge of engine reconditioning and remanufacturing. “As the only corporate body representing the interests of the engine re-manufacturing and re-conditioning industry in the UK, FER works domestically and internationally to support its members”, FER said in a statement. “With a strong philosophy that focuses on the importance of working together to protect and develop the interests of the industry, we are proactively seeking potential new members.”
The 11-point service plan comprises: • A FER Code of Practice aimed at maintaining standards and protecting warranties; • Recognition as part of a high quality organisation;
FER says that enquiries about membership, services and benefits can be submitted to: info@fer.co.uk. n
Scotland cheers on remanufacturing Theo Lingmont leaves RAI Amsterdam
As Scotland, the home of whisky, kilts and bagpipes, increasingly flexes its muscles as an independent state within the United Kingdom, the Scottish government continues to demonstrate its commitment to the circular economy and remanufacturing.
The latest example comes in the form of a range of grants awarded to nine businesses working within the field of remanufacturing, totalling £238,000. The recipients include Cummins Diesel ReCon, ACS Marine, Campers Scotland Ltd and WEEE Scotland. Projects involve areas such as
Richard Lochhead
logistics in recovering products for remanufacture, material wear, cleaning technologies and end-oflife assessment.
The recently formed Scottish Institute for Remanufacture, SIR, which is hosted at the University of Strathclyde, selected the grants to help remanufacturing businesses explore how to make the most efficient use of materials. Among the recipients, WEEE Scotland is a waste management service focused on remanufacturing and promoting zero waste while Cummins Diesel ReCon is investigating cleaning methods for the removal of carbon residue in high horsepower engines. ACS Marine, a marine consultancy, is looking to reuse and remanufacture end-oflife shipping assets while Campers Scotland Ltd, manufactures greener energy camper van components.
Potential “Remanufacturing already contributes £1.1 billion to Scotland’s annual economic activity and has potential to add an additional £620 million by 2020. I welcome these projects and hope to see these companies start to fulfil some of that growth potential,” said Richard Lochhead, Cabinet Secretary for the Environment in the Scottish government. “Alongside our new circular economy strategy, this is an excellent example of the type of action which we are promoting in EU negotiations on a Europe-wide package of circular economy measures.” n
After nine years as Director, International Exhibitions at RAI Amsterdam, one of Europe’s largest exhibition venues, Theo Lingmont has announced that he is stepping down. A wellknown figure in the automotive and heavy duty remanufacturing industries, Theo Lingmont had ultimate responsibility for the two-yearly ReMaTec shows in Amsterdam and since 2014, also for the Big R/ReMaTecUSA show in Las Vegas. In his post at RAI Amsterdam, he was in charge of a portfolio of 15 international trade exhibitions in three continents. Before joining RAI Amsterdam Theo Ling mont held leading roles in a number of international businesses and organisations in his native Holland and the UK, the position of Managing Director UK & Ireland for the Netherlands Board of Tourism & Conventions and Director of Marketing Worldwide at Golden Tulip Hotels International. n Theo Lingmont
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Siemens – and others – join the quest for additive manufacturing Siemens, one of Germany’s industrial powerhouses, recently opened a production facility for metal 3D printed components in Finspång in Sweden. The 200 million Swedish krona investment represents an initial step in the company’s plans for the mass manufacture and repair of metal parts using additive manufacturing. The company considers the move “a long-term investment to build up the skills and experience to lead to new ideas and developments”. In particular, Siemens’ aim is to develop new and improved components for the industrial gas turbine SGT-800 significantly faster, and shorten repair times from months to weeks. “3D printing can be used to shorten design and technology validation, reduce manufacturing and repair time, integrate the design and manufacturing process, reduce the number of manufacturing steps, allow new materials, reduce the quantity
of material used, reduce cost, regionalise support, and reduce spare part inventory,” Rachel Gordon of UK-based analytics firm, IDTechEx, in Cambridge says. IDTechEx research for its report, 3D Printing of Metals 2015-2025, predicts that around 1,000 of these types of 3D printers will be sold in 2016, with a total market value of $540M. What Gordon did not specifically mention is that the new 3D Printing technology also opens up new horizons for remanufacturing. Could it even lead to, if not a revolution in the field of remanufacturing, then at least radical change?
Markus Kasara
Technical advances One research engineer who has been following the development of 3D Printing technology closely is Marcus Kafara of Bayreuth University’s Faculty of Environmental Production Technics in Germany. Kafara points out how technical advances in the field of Additive Manufacturing (AM) in
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recent years have led to increased use of such technologies to produce not only prototypes but also serial parts.
quantities or when the remanufacturer wants to optimise parts. The available materials range from thermoplastic polymers to several metal alloys up to ceramics depending on the additive manufacturing technology.”
“In the beginning, additive manufacturing was driven by demand from the product development of the automotive industry but today the technology is used in several other branches like the aircraft industry, the medicine industry or the machine building industry,” he says. “Additive Manufacturing Technologies like Selective Laser Sintering (SLS) or Fused Deposition Modeling (FDM) now produce high-quality parts at a competitive price.”
Intriguing example An intriguing example of the power of 3D printing technology came into evidence some weeks ago in Germany when the famous 3,500 year old bust of Egypt’s Queen Nefertiti in Berlin’s Neues Museum was copied by “thieves”. Using a concealed 3D scanner the illegal copyists produced what the press called a “breathtakingly precise copy” for a Cairo museum. The culprits, two artists, claimed that they wanted to redress the plunder by German archaeologists who discovered the sculpture in Egypt in 1912. Ever since, Egypt has been demanding the return of the bust.
Other aspects of additive manufacturing/3D printing mean that the processes are highly attractive because of their definable material use in the products as well as the low waste of material during the process. By using Additive Manufacturing, parts are built up layer by layer and are not chip-removal machined. Egypt’s Queen Nefertiti Markus Kasara explains: “Additive Manufacturing Technologies can show their full potential in single parts, small batch series and reverse engineered parts as they often appear in the reman process.
Remanufacturing Additive Manufacturing becomes interesting when parts aren´t present or undeliverable, or only deliverable in too large
The Choice is Yours
The German-Iraqi artist Nora al-Badri and her German colleague, Jan Nikolai Nelles, say that they will make the ancient secrets of the bust freely available to anyone who wants to print a 3D copy. This could mean that thousands of Nefertitis may be found around the word in the not too distant future. That’s remanufacturing for you! n
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European automotive industry welcomes GEAR 2030 Brussels-based CLEPA, the European Association of Automotive Suppliers, welcomes launch of the so-called High Level Group GEAR 2030, the association has said. GEAR 2030 is the EU consultation process for sectoral policy in the automotive industry.
European plan in order to facilitate the roll-out of autonomous and automated vehicles. Commitment CLEPA CEO Paul Schockmel said, “European Automotive Suppliers are fully committed to deliver on transport sustainability by improving air quality, energy efficiency and road safety. The automation of driving tasks is one of the emerging technical evolutions which will help in meeting these challenges while contributing to European technological leadership.”
The High Level Group’s main objective is to develop recommendations which reinforce the competitiveness of the European automotive industry by discussing the main challenges for the automotive industry in the next 10 years. Member States and representatives of industry, consumers, trade unions environmental protection and road safety will hold a regular dialogue on all matters relating to the competitiveness and sustainable growth of the automotive industry, advise the Commission on policy and formulate a set of sector-specific policy recommendations. The Group will also support the EU Commission in identifying key areas and setting up a
CLEPA CEO Paul Schockmel
CLEPA represents 116 of the world’s most prominent suppliers for car parts, systems and modules and 23 National trade associations and European sector associations comprising more than 3000 companies. Member companies employ more than 5 million people and cover all products and services within the automotive supply chain. Based in Brussels, Belgium, CLEPA is recognized as the natural discussion partner by the European Institutions, United Nations and fellow associations such as ACEA, JAMA, MEMA and others. n
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VW sees further decline Volkswagen brand’s global vehicle sales fell 4.7 percent in February, hit by declines in China, the U.S., Brazil and Russia, the newsagency, VW has reported. However, Europe was a bright spot for VW Group’s core unit.
Demand in China, the brand’s largest single market, fell by 3 percent due to the Chinese New Year celebrations, while sales in the U.S. dropped by 13 percent amid negative publicity over the automaker’s cheating of U.S. diesel emissions tests. Over the first two months, VW sales dropped 13.8 percent in the U.S., a market that gained 3.4 percent. Sales in Brazil plunged 40 percent while volume in Russia was down 7 percent. Improvement in Europe VW brand’s sales in Europe, where the company is recalling 8.5 million diesel cars fitted with manipulated software, rose 3.7 percent. “Our
customers remain loyal to us in a challenging period,” sales and marketing chief, Juergen Stackmann, said in a statement. Stackmann said the latest-generation Tiguan, which rolls out in Europe from next month, will give the brand a big push. VW said it has received 15,000 pre-orders for the compact SUV in the past seven weeks. The Tiguan is Europe’s second best-selling SUV after the Nissan Qashqai with a European volume of 148,940 last year, down 1.3 percent, compared with sales of 232,788 for the Qashqai, up 14 percent, according to data from market researchers JATO Dynamics. n
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VW brand deliveries dropped to 394,000 last month from 413,700 a year earlier, the company said in a statement today.
GB wins award Aftermarket Auto Parts Alliance California-based GB Remanufacturing has received the prestigious Diamond Award from the Aftermarket Auto Parts Alliance. The Diamond Award is presented to a partner that stands out amongst its competitors in areas such as customer service, changeover support, marketing and sales assistance, and support by its sales representatives. Michael Kitching, GB’s President & CEO and Russ Barker, GB’s Director of Sales and Marketing, accepted the award on behalf of GB Remanufacturing. “We are honored to receive the inaugural Diamond Award from the Alliance. We have been supplying the GB gasoline and diesel fuel injection program to the Alliance Shareholders since 2006. We have worked very closely with the Alliance Parts Warehouse to bring incremental business in a category that previously was in a downward trend,” said Russ Barker. n
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Bringing robots back to life A visit to many, if not most, production plants is likely to reveal an often bewildering array of industrial robots, all of them replacing manual tasks and those who perform them. Today, across the world, tens of thousands of robots undertake increasingly complex work for manufacturers whose productions are dependent on the reliability of their robots. Accounting for substantial investments in machinery, time, skills and money, robots are a crucial part of today’s production environments. If and when they fail, or reach the end of their useful life, it may have a major impact on a business. Do we discard the old equipment and buy new? Is it necessary to instal new computer
systems and retrain staff to use them? Do we have to admit to customers that their order cannot be met due to equipment failure? There is another solution and a 50 year-old German business entrepreneur in a tiny village hidden away in the northern part of Bavaria has
Ingo Förster (right) and co-director Michael Ettenauer
found it. Ingo Förster remanufactures robots – and on a scale that vastly exceeds the apparently modest surroundings of Harsdorf in the region of Upper Franconia. Global customers In fact, his service team can, in urgent cases, reach
Robotif has established itself as a world-leading remanufacturer of industrial robots
ReMaTecNews | 13
a customer more or less anywhere in the world, within a time frame of 48 hours. If, and when, the four-man service team is engaged elsewhere, Robotif will ship a robot for temporary use by the client until a proper repair can be carried out or a remanufactured part installed. The year of the company’s foundation, 2009, suddenly seems a very long way away. ”Besides Germany, we have customers in Malaysia, Israel, Brazil and the US and we can get to them within a day and a half or two days,” Förster explains. ”In most cases, even within 24 hours. We also, of course, offer training courses for the customers’ operators. Robots can be very complex machines and to get full use out of them, you have to know what you’re doing.”
the world while the total production figure for all robot manufacturers is estimated at 1-1.5 million. In other words, there is plenty of scope for expansion. This is not least in view of the fact that robots are used worldwide and in different sectors such as automotive, aviation and aerospace, semi-conductor manufacturing, pharmaceutical, solar, food, glass and porcelain industries as well as in shoe production, musical instrument manufacturing and industrial watch production, just to mention a few. However, Ingo Förster does not want to appear
over-optimistic. The market runs in cycles, he says. Some years it may grow by as little as 1 per cent whereas other years see growth of 15-20 per cent. “Only a few years ago, everyone wanted to be fully automated. Since then, you see more manufacturers who want to maintain a degree of manual control on the shop floor, which is a good thing because it preserves jobs and maintains skills. Nevertheless, I think there’s little doubt that remanufacturing robots will still provide Robotif with a solid business well into the future,” Ingo Förster says. n
Almost like a case-story from a business school, Robotif’s early beginnings were modest indeed. From day one, Ingo Förster, who had previously worked for a robot manufacturer, was the only person on board, handling everything himself, from repairing the first robots, dealing with customers, dispatching deliveries and answering the phone. ”I realised that robot manufacturers at the time offered terms of service and parts supply, so I decided to have a go. However, if someone had told me how the business would develop, I would have laughed,” he says. ”Today we’re around twenty people here and I expect that we will be some more before the end of the year.” Key players Possibly the world’s leading remanufacturer of industrial robots, Robotif specialises in remanufacturing parts from three of the key players in the market, Adept, Bosch, Denso and Staubli. The potential for expanding the business is perhaps best illustrated by the fact that between them, these manufacturers have around 14,000 industrial robots in use around
Robotif’s emergency teams can reach all parts of the world in less than 48 hours
Ingo Förster started out as a one-man band
ReMaTecNews | 14
Industry voices appreciation for work of Editor-in-Chief As editor of ReMaTecNews William Schwarck created the Remanufacturer of the Year Award in 2005. In the photo he and fellow judges, Doug Wolma, Dana Corporation (left), and Volker Schittenhelm (right), congratulates Jack Stack, President and CEO, SRC Holding with the 2014 Award. This edition of ReMaTecNews will be the last presided over by William Schwarck in the position of Editor-in-Chief, a position he held for the past 15 years. During a period of tremendous change to the remanufacturing industry, William Schwarck has built a magazine that has reflected the extensive development of remanufacturing for the past one and a half decade. ReMaTecNews asked a number of industry leaders to assess the impact of the magazine since its beginning.
He gave everything to our industry
Thank you
By Jack Stack, President & CEO, SRC Holdings Corp. US
By Professor Rolf Steinhilper, Chair of Manufacturing and Remanufacuring Technology, University of Bayreuth, Germany
William Schwarck called me the other day and told me he was leaving ReMaTec to pursue new opportunities. Two thoughts flashed through my mind - one self-serving and one about our industry as a whole. My first thought was, what could be more exciting than remanufacturing? And my next thought hit me like a ton of bricks - and that was how William Schwarck could be leaving the industry that he spent so many years building throughout the world. A good part of his life he gave everything to our industry and asked for nothing in return. He gave us so much through his distinctive written style bringing us together with real stories, sometimes brave and always strong. His obvious aim was to grow the industry internationally through recognition of its people and the companies who contributed to it. We will miss his tenacity to excite and unite us and we will always love this man and this industry for what he has done for it. William Schwarck moved this industry with a story, an infectious smile, a small camera and a big heart. It is with a sense of sadness that we see him leave and wish him a triumphant new beginning.
As I have been working with new remanufacturing technologies and applications for 35 years - since 1981 - I see two distinct periods: one is the the first twenty years of struggle where it was hard to make the outside world aware of the exciting business called remanufacturing. The second period began in 2001 when William Schwarck started editing his ReMaTecNews, promoting remanufacturing with professionalism, enthusiasm and a flair for interesting, up-to-date news. We would not have arrived where remanufacturing is today without William´s endeavours and commitment, which one could define as “media statesmanship”. His magazine has bridged readers east and west of the oceans and formed a real global community for remanufacturing. Last but not least, he set the stage for the successful World Remanufacturing Summits, William´s idea back in 2011, which today is in its fifth annual edition. Thank you, William.
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A hard act to follow By Ian Buxcey, Senior Manager, Global Remanufacturing in BorgWarner’s Turbo Systems business unit To my surprise I recently heard that William was leaving his post as editor of ReMaTec News, a post that he has held to my knowledge for at least the last 15 years and an act that will be hard to follow. William has been a great supporter of the automotive remanufacturing industry and with ReMaTecNews developed a communication and information channel that has given visibility to the players within it and an insight to many companies’ activities which would otherwise remain unknown to us.
His global reach and reputation has enabled us all to follow the development of automotive remanufacturing around the world and not forgetting the Remanufacturer of the Year Award which he instigated several years ago and which many of us are proud to have on display.
William, good luck in your next venture, our industry will miss you.
I shall miss his telephone calls where his opening statement “can you spare me 5 minutes” always turned into a 30 minute conversation where he asked if there was any interesting news that was worth reporting and despite you thinking “not really” he always managed to squeeze snippets of information out of you which he then turned into informative articles.
All around the world By Rex Vandenberg, Managing Director Innovative Mechatronics Group Pty Ltd Being in Australia, we sometimes feel a bit isolated from what is happening in the reman world, so it’s been great that for many years now we have been regularly receiving ReMaTecNews. It has been keeping us informed about what is happening in the reman industry, not only in Europe, but all around the world. It’s a huge credit to William Schwarck that he has delivered this quality magazine for many years now
and his obvious passion for our industry is clearly seen. At each remanufacturing trade show or conference, whether in Europe, USA or Asia, it has been good to personally catch up with William and hear about what’s happening in various parts of the world. The respect he has obtained from others in our industry is obvious and with his many contacts he has been able to connect us personally to many others in the industry as well. I wish all the best to William for whatever he takes on in the future. I am sure that his legacy of the ReMaTecNews magazine will go on for many years serving our industry.
Part of an elite group By William C. Gager, President of APRA 1988-2013
one of the real leaders of the automotive press community.
When William Schwarck became Editor of ReMaTec News back in the early 2000s, I was sure that they had hired a “winner”. He built up the publication to become a real leader in the industry.
He was very instrumental in promoting and lifting up the remanufacturing industry, which I have always thought of as the world’s “Hidden Green Giant Industry”. Not many people really knew what the industry was all about and its contributions to the world economy, job creation, and extending product life so that all products would have a longer life and benefit the consumer.
William had the right temperament for the job. He was very cordial and friendly to everyone he met who was involved with the Automotive Parts Remanufacturers Association (APRA) and the remanufacturing industry. I had been involved with APRA since 1978 and had known all the Editors of the various industry publications. William joined this elite group of editors who reported on the happenings of the industry and what it meant for the future of the industry. And he became
William attended all the International BIG R Shows in the USA and the Automechanika
shows in Germany as well as the ReMaTec shows that started in Europe. He was always looking for a good story about the good people in the industry who were building their businesses. In 2011 APRA was pleased to make him an Honorary Life Member of the association. He deserved the honour. I do not know what is next for William but I’m sure whatever he does he will meet and conquer the challenges. With his departure as Editor-in-Chief of ReMaTecNews, the remanufacturing industry has lost a real contributor to the growth of the “Hidden Green Giant”.
ReMaTecNews | 16
A cold call One afternoon in the autumn of 2001, I received a call from a journalist, whom I didn’t know and from a magazine which I’d never heard of. As the CEO of Holger Christiansen A/S, formerly owned by Hella and today by Bosch, I was often contacted by journalists and had developed a dislike of being cold-called. Consequently I, perhaps not too politely, told the caller that I would call him back later, if I was interested. Absolutely no need for him to call me again!
the magazine into a valuable source of both information and inspiration for the entire automotive remanufacturing industry. I can’t think of many, who could have achieved this in a niche industry which, at the time, was still sorely lacking general recognition, let alone information. Several had given it a try, but no one had really succeeded!
However, this particular journalist didn`t give up easily. His name was William Schwarck, his newly established magazine was called ReMaTecNews and over the intervening 15 years he, much to my initial surprise, succeeded in building
Over these many years, William has helped to give automotive remanufacturing a sense of community that did not exist to the same extent prior to his arrival on the scene. I believe that his contribution to
By Jens Lindholm, Owner, Artec, Illingen, Germany
the industry has been significant and I am sure that many remanufacturers across the world will share my view. William and I have since then joked many times obout our first contact, but I have always said to him – and I will say it again – that I´m happy that he persisted. Without that kind of persistence there would have been no ReMaTecNews in the form as we all know it today. I believe many will join me in wishing William all the best in whatever he chooses to do going forward. Hopefully he won’t be lost to automotive remanufacuring entirely.
The voice of remanufacturing By John Collins, Managing Director Autoenterprises UK For Autoenterprises, ReMaTecNews has been a valuable asset throughout our growth and continues to be so. It is something that has kept, and continues to keep,the industry up to date with all that happens within it. I have seen the magazine develop from being just a few issues a year to nearly one per month. It has always led the way and pulled the different parts of our industry together - allowing different sections to overlap when we have all come together at various shows and symposiums.
It is with sadness I hear that William will be leaving the team. I wish him all the best in what he does in the future and I am sure whatever he chooses to do will be a success. He has been ever present at all the events and it will take a little getting used to not having him around.
ReMaTecNews is the voice of the remanufacturing world. Provided it keeps to its original benchmarks of driving the remanufacturing industry forward, I hope it will continue to be the leader in its field for many years to come.
I know the ReMaTec team has seen some changes in personnel over the years and I know I am not the only one who has been sorry to see certain people go. I do hope that the future of the magazine does not start to diversify from the main challenges that it faces and will continue to be the voice of the remanufacturing industry for the years ahead. I would like to say a big thank you to all the ReMaTec team for doing a splendid job so far and long may it continue.
Professionalism and passion By Nabil Nasr, Associate Provost and Director of the Golisano Institute for Sustainability, Rochester, New York I was sorry to learn of William Schwarck’s upcoming departure from ReMaTec, and I know everyone in the remanufacturing community will want to join me in sending him our thanks and appreciation for all his hard work over the years as well as our very best wishes for his future endeavors. I first got to know William many years ago through his insightful work at ReMaTecNews, and I was impressed by his professionalism and
passion for the remanufacturing industry. For over 10 years, I have seen William walking the aisles at various reman events; making connections, asking great questions, sharing information and contributing great ideas for the reman community. When Rolf Steinhilper and I were working on developing the concept of the World Remanufacturing Summit, William was a wonderful collaborator. He understood the importance of bringing the industry together to
learn about latest advances. He was instrumental in pushing this event forward and contributing to the success of each one over the years. I will always remember and appreciate his knowledge and dedication to the industry, as well as his willingness to listen and learn. His friendship and guidance have meant a lot to me over the years. We will always be grateful to William for his friendship, his leadership and insights. Thank you, William – you will be missed!
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How smaller reman companies can cope with an uncertain future By Prof. Dr.-Ing. Carsten Bücker Remanufacturing in Europe is dominated by OEs. Less than 5% of reman companies manage and account for more than 70 per cent of the revenue generated by remanufacturing. Future growth in the reman market will mainly be governed by the decisions of OEs and by political considerations. Political decisions like the G7 “resource efficiency” programme, therefore, will have a major impact on the resource efficiency strategies of all OE companies in respect of: • Product portfolio and product design • Warranty and service strategies • Resource efficient sustainability policy of OE. The need for responsible use of natural resources and emissions reduction as well as the requirements of the circular economy combined with the politically enforced sustainability programmes will have a deep – and positive – impact on all business activities aimed at these targets. As a result, the
remanufacturing industry will experience a kind of renaissance as the top management of industrial and automotive OEs integrate resource efficiency into their business strategies and plans. What is clear is that product development programmes will increasingly integrate “designedfor-reman” aspects, existing remanufacturing portfolios will be expanded and products that are not yet remanufactured will be analysed for remanufacturing opportunities. A major part of OE reman strategies will, therefore, focus on reman sourcing: • More and more OEs will centre in-house reman
Professor Carsten Bücker Prof. Dr.-Ing. Carsten Bücker is the managing owner of BU POWER GROUP, currently one of the world‘s largest Perkins distributors. He is also Vice Chairman of APRA Europe and lectures in Remanufacturing & Service Engineering at the University of Bayreuth. In 2000, he took over the Bücker family engine remanufacturing business, Motoren Bücker & Essing. Having reorganised the company between 2000 and 2003, Carsten Bücker established two independent business groups under the BU umbrella: BU
activities on their own IP products. They will insource many outsourced remanufacturing operations from current reman suppliers. • On the other hand, some OEs may increase their outsourcing activities on remanufacturing of products supplied by tier 1 suppliers. These changes offer tremendous growth opportunities for the remanufacturing industry, largely depending on decisions made by OEs and influenced by political considerations. Once these decisions (political pressure on resource efficiency, reman as businesses with their own strategies, design-for-reman, reman focused and skilled management etc.) have been made, the necessary organisational structures will be implemented. Subsequently, when consumers become more aware of remanufactured products, the reman industry could well become a rising star - either as stand-alone businesses or as part of aftermarket or service enterprises.
DRIVE (engine remanufacturing & turbocharger distribution) and BU POWER (Distribution of Perkins engines & parts). Growing the revenues of the former Motoren Bücker and Essing from 17 million euros in 2003 to a powertrain specialist with a revenue of 145 million euros in 2014, he decided (based on considerations as mentioned above) to refocus the group’s business activities on BU POWER and subsequently sold BU DRIVE and its shareholding companies to two investors. Going forward, the company’s focus therefore will be the distribution of Perkins branded products (engines & parts) including international service for its OE customers.
ReMaTecNews | 19
Mergers and acquisitions will change the face of the reman market A further effect of market growth will be that merger & acquisition (M+A) activities over the next five to ten years will change the face of the European remanufacturing market. Today the market is served mainly by OEs and SME family businesses (as OE suppliers or as Independent Aftermarket (IAM) remanufacturers). However, as usual for growing markets, the reman segment will become very interesting for financial investors. In order to share in the growth and to defend - or even improve - present market positions, companies require sufficient financial resources to grow their businesses on a national or even international level. While financial capability is usually available for OEs, it’s bound to become a major challenge for SME/family businesses. Cash flow in a profitable and healthy SME reman business allows for the financing of good organic growth. But in case of disproportionally high market growth, SMEs need additional financing in order to share in that growth. Typically, additional financial resources are provided to SME/family businesses by banks. But when fast growing (and eventually internationally growing) family businesses are seen as a “risk” rather than an “opportunity” by banks, financial investors will see attractive business potential because their business models are based on rapid and disproportionally high growth markets. Financial investors, therefore, are going to change the face of the European remanufacturing and service market by buying SME/family businesses and merging them into large reman and service organisations on an international level. Such M+A generated reman companies/conglomerates are likely to emerge as strongly competitive players alongside the abovementioned OE and SME family businesses. Growth will be taken by OEs and Tier 1 Hence the major challenge to SME/family businesses will be to find their role within the
new growth opportunities. There is no doubt that the biggest portion of this growth will be taken by the industrial and automotive OEs and their Tier 1 suppliers. Nevertheless, there will remain a large segment of the growing reman market that will be served by SME remanufacturers. In order to participate, however, they will have to focus their activities on innovation and financial stability. In addition, a few large SME family businesses might also use the opportunity to grow by the acquisition of other SME reman businesses as long as these fit their strategy and business focus.
“SME/family businesses have to find the right balance between growth and sustainable economic stability. The prime target is “surviving” not just maximising profits.” Challenges to SME/family reman businesses One of the critical success factors for SME reman companies will be to defend or improve their market position through profitable growth. In addition to some other criteria, achieving such profitable growth depends on innovation and the capacity to develop new products, reman solutions, service strategies and processes. SME/family businesses must find the right balance between growth and sustainable economic
stability. As the prime objective is “surviving”, not just maximising profit, growth must be linked to an acceptable risk level. Uncontrolled growth through searching for every apparent opportunity can be a very dangerous game while healthy growth will improve market position as well as enhance productivity. In the competition between SMEs and the large OE and financial investors the family business usually has one big advantage - “Entrepreneurship”: • ... creating the future and making decisions • ... driving in-house innovation of products and processes • ... driving executive excellence based on lean corporate structures and short decision processes • ... sense of proportion • ... courage and charisma • ... vision • ... assertiveness Other success factors comprise “human capital”, which is probably the most important individual resource for SME/family businesses aiming to achieve sustainable success, successful innovation, entrepreneurship and value orientation. Human capital In many cases, human capital can be considered even more crucial for innovation than technology. While large companies “buy” innovation through acquisition of businesses, brands, patents as well as external R&D activities, SMEs tend to develop innovations internally, based on the ideas and experiences of their employees. In addition, human capital is a source of valuebased management, i.e. the prerequisite for sustainable increases in the value of companies and correspondingly higher chances of survival and success. Both entrepreneurship and human capital are essential to survive, to protect market positions
ReMaTecNews | 20
and overcome critical internal growth barriers such as: • Strategic deficits • Organisation & leadership • Operational deficits • Lack of competencies By combining focused, new business fields (and the appropriate support for these “babies”), with an existing company culture, qualified employees and excellence in execution, SME/ family companies are well set to compete against large, dominant OEs and financial investors. If, at the same time, SMEs are able to eliminate internal resistance to change (whether from employees or management), they should be well placed to achieve leading market positions in well-defined or niche market segments. Summary The G7 decision on “resource efficiency” is already becoming a new driver for the reman industry. As OEs will now make decisions and changes aimed at growing their reman business, I believe that the entire reman market is set to see very substantial growth.
As in all growing markets, M+A activities will also change the reman market. Large companies will grow through acquisition of SME/family businesses, new players will arrive and some financial investors will create large reman companies through mergers and acquisition, thus establishing themselves as significant factors in the market. At the same time, the banks (as the main funding sources for SME/family businesses) will emerge as a kind of risk for SMEs that need to grow (internationally) in order to protect their market position and survive as independent remanufacturers. Refocus business models SME/family businesses have to re-focus their business model in order to achieve healthy, sustainable growth. They need to analyse their business models and exit business areas that require excess liquidity and deliver reduced profitability - even if this were to review the entire (family) business history. Supporting the development and enhancing the human capital base while creating lean
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Professor Carsten Bücker, owner of BU Power Group organisation structures, fast and good decision processes will become essential for SMEs to survive. Moreover, against the dominating OE and PE players of the future, owners and managers also put in an extra effort towards synchronising the innovation and streamline executive management in order to implement innovation. n
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ReMaTecNews | 22
Renault: spearheading reman – and the circular revolution The outskirts of Paris might not seem like the most likely home of the next industrial revolution – but along the bank of the River Seine, the vehicle manufacturer Renault is operating a groundbreaking re-manufacturing plant that is transforming old car parts into like-new or better-than-new condition – all to be used in its new cars. The plant is the most profitable of all of Renault’s operations, and uses just 20% of the energy and 30% of the materials required by traditional automotive plants, according to its former COO. Renault is among a new wave of businesses that have adopted the principles of a circular economy, which shift away from the traditional, linear way of production (take, make and waste) to a circular approach (reduce, reuse and recycle). This allows both growth and the development of clever ways to use fewer limited (and costly) resources like energy, land, and materials.
to cycle through the economy many times, which means less waste and more opportunities to sell and resell a product. If a company recycles its own parts and generates its own supply of renewable energy, it becomes more self-sufficient, resilient, competitive, and usually more profitable.
Global brands are adopting the circular economy framework in response to increasingly volatile commodity prices and advances in technology – consciously re-designing business models, products, and services so that they are restorative and regenerative.
Remanufacturing and refurbishment – key parts of the circular economy model – are not new concepts, but they have the potential to be game changing as part of new business models. For instance, Philips, the Netherlands-based electronics and healthcare giant, now leases both lighting and healthcare equipment to its customers rather than selling these products outright. When a customer is done with the
Huge savings Within a circular economy, products are meant
A relatively small increase in circularity could save European manufacturers $630 billion by 2020, according to an analysis by the Ellen MacArthur Foundation and McKinsey & Co. Expanded globally, the savings would be in the trillions.
The authors
Jamie Butterworth Partner, Circularity Capital
William Burckart CEO, Burckart Consulting
equipment or needs an upgrade, Philips takes back the old product, refurbishes it, and sends it on to another customer. The company, now as a service provider, is beginning to redesign its products to fit this new business model. IBM has also adopted this circular economy model: Since 2002, it has processed over 1.09 billion lbs. of machines, parts, and material; harvested and sold over 44.4 million parts; and processed and sold more than 3,893 rebuilt mainframes.
ReMaTecNews | 23
Renault and remanufacturing Renault’s remanufacturing plant in Choisyle-Roi in Paris is part of the powertrain manufacturing department. It has a technical department and an operations department (reconditioning for standard exchange and production). Regarding standard exchange, the site manages seven engine families (1,200 part numbers) as well as JB/JC, JH/JR and PK5/PK6 transmissions, three generations of injection pump (mechanical, digital and common-rail).
New types of investment But to seize the opportunity that circular business models offer, we need to finance them. In a new report released by the Money Management Institute entitled “Bringing Impact Investing Down to Earth: Insights for Making Sense, Managing Outcomes, and Meeting Client Demand,” we examine how circular economy business models create new impact investment opportunities. Impact investments are meant to make both a profit and a positive social or environmental impact – something clients are asking for more than ever before.
“Big business has begun to recognize that circular strategies are necessary to future success.” The growing demand for impact investment opportunities reflects a broader reshaping of global priorities. Rising income inequality, climate change, and increasing demand for water, energy, and other resources are factors investors consider as they decide where to put their money. They are looking for ways to help solve global problems while also generating economic growth. Creating incentives We believe that impact investing and circular economy models are a natural pairing to do just that; they share a social and environmental consciousness, and dynamic vision of business.
ING analysts have made this connection, too. In a recent report, analysts identified a few ways impact investors can help develop the circular economy by working with businesses to, for example, create incentives for customers to buy into the concept of circularity and to incorporate circularity characteristics in risk and pricing models. Investors should also check out the Circular Economy 100, a platform bringing together leading companies like Coca-Cola, H&M, Unilever, and Apple, to collaborate and learn from one another as they look to adopt circular economy business models. Together, businesses that may be competitors in other realms are collectively solving problems, building a library of best practices, and providing a scalable mechanism for generating circular economy capabilities within companies. Big business has begun to recognize that circular strategies are necessary to future success. Untapped opportunity Investing in circular economy businesses is a logical next step – and a largely untapped opportunity. For example, Regeneris – a UK based firm that focuses on the repair, refurbishment, and re-deployment of IT and electronic products – was listed in 2005 with revenue of £18 million ($28 million) and operating profits of £1 million ($1.5 million). But the company currently generates revenues of £197 million ($308 million) and operating profits of £11 million ($17.1 million) because of the staggering growth of connected devices as well as circularity thinking. This example provides compelling evidence that doing things in a smarter, more resource productive way may be good for your bottom line.
History Before its acquisition by Renault in 1949, the Choisy-le-Roi plant built gliders for Caudron and trucks for SAVIEM. It went on to begin engine reconditioning for standard exchange but also engaged in rebuilding railcar bases for France’s railways, SNCF, until 1962. From 1959, the plant focused increasingly on the automotive sector. In 1980, it produced gear controls for the Renault 9 and 11. Renault’s European Centre for the Reconditioning of Powertrain Sub-systems was founded in the early 2000s and in 2004, Choisy began reconditioning K4 and K9 engines, followed by PK gearboxes in 2005.
It’s an example worth remembering. Impact investing and circularity, concepts that are each in their infancy, are currently being developed in separate silos – but both concepts share a vision of a robust economy where high performance businesses have a positive financial, environmental, and wider societal impact. To make that happen, it is time for these two promising fields to join forces. n
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INFORMATION For more information please contact the ReMaTec Sales team phone +31 20 549 14 31 advertising@rematecnews.com www.rematecnews.com
PEOPLE ON THE MOVE
ReMaTecNews | 26
Tana L. Utley takes over as head of Caterpillar reman In a significant development Caterpillar, the world’s largest remanufacturer, has announced a new head of its remanufacturing business. The successor to Greg Folley, Vice President at Caterpillar’s Sustainable Solutions Division (SSD, Tana L. Utley is currently Vice President with responsibility for CAT’s Large Power Systems Division (LPSD). In her new job Utley will oversee Caterpillars very extensive reman operations world-wide. Since joining Caterpillar in 1986, Tana L. Utley has held a variety of engineering and general management positions across Caterpillar. “Her deep expertise and decades of leadership make her an ideal fit for the reman business, and it
is also a natural extension of her engine responsibilities since much of the remanufacturing business is related to power systems.” Caterpillar Chairman & CEO Doug Oberhelman said. Until today Utley’s technical career has been focused primarily on solving the challenges of reducing diesel engine emissions Tana L. Utley in accordance with U. S. Environmental Protection Agency (EPA) and equivalent global regulations, the company says. In 2007, the Caterpillar Board named Utley vice president with responsibility for the Technology & Solutions Division) and Caterpillar Chief Technology Officer. n
Core specialist MCI merges with ACE A substantial new player in the core market has been created through the merger of ACE of Kansas City, Missouri, and MCI of St. Louis, Missouri. Completed in February the agreement between the to parties comprises the collection, harvesting, and distribution of ‘big’ automotive cores (engines, transmissions, transfer cases and rear ends) and commodities processed by ACE with that of the ‘small’ automotive cores. “Small” cores include complex electrical, A/C, brakes, rotating electrical, and hydraulics as well as commodities processed by MCI. “The purpose of combining ACE and MCI is to provide a one-stop-shop for our suppliers and customers,” Benny Cunningham, CEO of ACE explained. “We have an advanced and modern vision of the future of the recycling industry and we start by combining resources and providing recyclers with an easier sales transaction.” As a result, ACE will be moving its facilities from Kansas City to St. Louis where the new company has purchased a 430,000 square foot facility to supplement MCI’s existing 150,000 square foot facility. In addition, ACE/MCI Commodities have attained an 836,000 square foot facility in Appomattox, Virginia for future projects and expansion.
TransAxle adds new remanufacturing facility TransAxle LLC, a leading remanufacturer of drive train components, has announced a major expansion of its distribution footprint. This follows TransAxle’s addition of a remanufacturing facility/ distribution center in St. Paul, Minnesolta, and three warehouse/ distribution centers to its nationwide coverage. The new facilities are Dave Olsen in Dallas, Texas, Los Angeles, California and in Seattle, Washington. With the existing 24 branch network, New Jersey-based TransAxle is now a nationwide supplier of all makes and models of remanufactured transmissions and differentials, Transaxle CEO, Dave Olsen, said in a statement. n
“By teaming up with ACE, MCI has the opportunity to break through barriers in the ‘small’ automotive core parts industry, expand product offerings, and take the business to the next level. Our entire team is excited to work with ACE,” said Ed Matejcic, CEO of MCI. n
Ed Matejcic
An experienced reman veteran takes over at RIC The Remanufacturing Industries Council has appointed Joseph W. Allen as its new Executive Director. J. W. Allen has over 30 years of experience in remanufacturing, government affairs, and policy advocacy field at the State, Federal, and International level. A veteran with a 34 year career with Caterpillar Inc., he served as Caterpillar’s Commercial Manager for the company’s global remanufacturing business and later as Director of Energy Policy in Washington, DC. “Joe’s extensive experience will bring renewed leadership
and creativity along with a deep passion to advance remanufacturing in the U.S. and around the world” said Mark Stratton, the Council’s Board Chairman.
Joe Allen
The Remanufacturing Industries Council (RIC) is a non-profit organization and represents a strategic alliance of businesses and academic institutions that works across industry sectors to support the entire remanufacturing industry through a combination of collaboration, education, advocacy and research. n
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Official German report recommends greater use of remanufacturing After four years of work, the University of Bayreuth and Germany’s research giant, Fraunhofer Institute, in partnership with the Chamber of Craft in the Upper Franconia region in Bavaria, has submitted a major report on opportunities for the Bavaria’s automotive aftermarket in general and its remanufacturing sector in particular. Delivered to Bavaria’s Minister of Technology and Media, Ilse Aigner, at a recent event in Bayreuth’s new Franhofer Institute Teaching and Research Centre, the report, entitled ”KFZ Service Engineering 2020” sets out a range of measures to strengten garages’ abilities to apply up-to-date repair technologies with higher added value and at the same time saving money for its consumers. Based on extensive surveys among more than one thousand garages and other suppliers
of automotive services, the KFZ 2020 survey, focuses on five main themes: innovations to replace smaller automotive components instead of comprehensive expensive subassemblies, extending the scope of remanufacturing into new product areas, development of on-site service technologies for passenger cars instead of replacing their components and the creation of new communication and partnership networks for the diagnosis of difficult electronic failures. A fifth area is remanufacturing through the use of additive methods, i.e. so-called 3D printing, which is gaining ground within the automotive industry. Authored by a group of scientists and engineers (Professor Dr.-Ing. Rolf Steinhilper, Dr.-Ing. Stefan Freiberger, Dipl.-Ing. Alexander Nagel, Dipl.-Ing. Christian Schuh from Bayreuth University and two representives from the Upper Franconia’s Chamber of Craft, Dipl.-Geogr. Thomas Koller
Professor Rolf Steinhilper, University of Bayreuth demonstrates high-tech equipment to Bavarian Minister of Technology, Ilse Aigner and Dipl.-Ing. Johanna Erlbacher, the report runs to 147 pages. As far as is known, this makes it the most extensive report dealing with service technologies for independent garages for many years. n
Industry leaders to assemble for World Reman Summit in Beijing Prominent figures from leading remanufacturing organisations in Europe and America are lined up for the fifth World Remanufacturing Summit in Beijing on May 25. The second to be held in China, the summit will highlight the increasing focus of the Chinese authorities on remanufacturing and its role in preserving resources, creating jobs and, perhaps, above all, contributing to China’s huge environmental problems, including pollution. “Having seen rapid development over the past ten years, China’s different remanufacturing sectors now include not only the automotive segment but also other important areas such as engineering machinery, electronic products, medical devices, and electronics technology,” the organisers say. “The World Reman Summit will provide an in-depth insight into the latest developments, thus enabling
Professor Xu Binshe
attendees from across the world to familiarise themselves with a sector that is bound to maintain high-level support from China’s leaders.” Keynote speakers Keynote speakers will include Gregory S. Folley, Vice President with responsibility for remanufacturing at Caterpillar Inc, the world’s largest remanufacturing business; Professor Rolf Steinhilper, Bayreuth University, Germany; Professor Nabil Nasr, Rochester Institute of Technology, U.S and Professor Zhu Sheng, National Key Laboratory for Remanufacturing, China, the Summit’s three co-Chairmen. Other speakers will include Professor Li Jun, China FAW Group Corporation; Professor Cao Huajun, Chongqing University, China; Professor Carsten Bucker, BU Group, Germany and William Schwarck, former Editor-in-Chief of ReMaTecNews, media partner for the World Remanufacturing Summits. Professor Xu Binshi, China’s premier
remanufacturing expert and a member of the Chinese Academy of Engineering, will act as Chairman of the Summit’s Committee. Prominent officials from China’s key economic body, the National Development and Reform Commission (NDRC) and the Ministry of Industry and Information Technology (MIIT), have also announced their participation. Established in 2012 for the purpose of bridging the gap between remanufacturing research and remanufacturing companies across the world, the Word Remanufacturing Summits have attracted a broad range of reman leaders since the inaugural event in Bayreuth, Germany, in 2012. Subsequently, the summits have rotated annually between USA, China and Europe with the latest addition Singapore announcing its participation in 2016 or 2017. Immediately following the May 25 summit at the Hotel New Otani Chang Fu Gong, Shanghaibased consultancy Duxes will host its 6th China remanufacturing conference with participants from Chinese and foreign businesses and associations. The event will coincide with the so-called 3R China Expo, which the organisers claim will become the largest reman expo ever held in China. n
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ReMaTecNews | 30
The material for this page has been supplied by FIRM, International Federation of Engine Remanufactures and Rebuilders
Commonly Agreed Reman Definitions It is a fact that the synergic cooperation of reman relevant associations and work groups within the automotive industry (including FIRM) has led to a significant increase in awareness of remanufacturing amongst governments, politicians and environmental-related ministries in the EU and the US over the past two years. Our industry as the first choice for environmental protection has arrived in Berlin, Brussels and other capital cities. Examples are listed in the last edition of this magazine on page 30. Now, another challenge arises: all the associations that have together established common reman definitions (see box), must strengthen their activities towards all ministries involved in reman (circle economy), that reman definitions are existing and the only these industry-matched definitions shall be used. Example: the Federal Environment Ministry in Germany and its Ressource Efficiency Program has just publish a sustainability status report. The good news is that the report discussed the terminology of remanufacturing. However, the definition they use is the following:
by Volker Schittenhelm “Remanufacturing: treatment of a used product (core) for its 2nd-lifecycle and by the genuine manufacturer”. This definition excludes the independent aftermarket and is not in line with the common definition created by industry associations. When discussing the definition of remanufacturing it was clearly defined in the footnotes that also batch one remanufacturing – individual customer’s engines that are remanufactured by independent remanufacturing workshops – is included in the definition. An industrial process and remanufacturing with transfer lines is not compulsory to qualify. What is mandatory, is the documentation of the individual remanufacturing process in each individual workshop. FIRM (and mainly the German member-association VMI) must work together to make sure our common definition, which includes the independent aftermarket is used by governments. n
Core Tax Tax On Used Parts According to the German Value Added Tax Law, § 10 Umsatzsteuergesetz (UStG), R153 (3), a tax is levied on used parts in the automobile industry. This tax is imposed on revenue that is generated on replaced parts and amounts to 10% of the German Value Added Tax on the replaced part. However, private customers in Germany are not able to reclaim this tax. So when selling to the end customer, the engine remanufacturer workshop is
obliged to surcharge this tax when selling the replacement part. In doing so, it is generally assumed that the used part has a residual value of 10% of the replaced part. FIRM is currently collecting the relevant tax rules in the countries of its national associations in order to obtain an overview of the various rules within the EU. In the event we find non-equal tax treatment, FIRM – together with APRA and CLEPA – will put that item on the agenda for political lobbying. n
For more information, please visit www.FIRM-org.eu or write an email to communication@FIRM-org.eu.
DEFINITIONS The reman relevant associations and work groups of the automotive industry from both sides of the Atlantic have finally agreed on these common definitions of some of the industry’s main terms: Core: A core is a previously sold, worn or nonfunctional product or part, intended for the remanufacturing process. • During reverse logistics, a core is protected, handled and identified for remanufacturing to avoid damage and preserve its value. • A core is not waste or scrap and is not intended to be reused before remanufacturing. Reman Process: Remanufacturing is a standardized industrial process* by which cores are returned to sameas-new, or better, condition and performance. • The process is in line with specific technical specifications, including engineering, quality and testing standards. • The process yields fully warranted products. * An industrial process is an established process, which is fully documented, and capable to fulfil the requirements established by the remanufacturer. Reman Part: A remanufactured part fulfills an equivalent or better function as the original part. It is restored from an existing part (core), using standardized industrial processes in line with specific technical specifications. A remanufactured part is given the same warranty as a new part and, it clearly identifies the part as a remanufactured part and the remanufacturer. The detailed definition including the footnotes can be requested at FIRM’s Brussels office secretariat@firm-org.eu These definitions will help FIRM to promote engine reman to politicians and to lobby our industry. All FIRM-member associations are invited to use it for their own national lobbying and marketing activities. The more these definitions are used, the more they are spread and fixed in the public.
ReMaTecNews | 31
For further news about
The material for this page has been supplied by APRA, the Automotive Parts ReManufacturers Association
APRA Europe, please visit www.apra-europe.org
APRA European Remanufacturing Symposium 2016 Do not miss out! You will surely regret it… Have you already registered for the most important remanufacturing event in Europe this year? It is the opportunity to catch up with the latest industry trends and to meet remanufacturing professionals from all over the world. APRA’s European Remanufwacturing Symposium with Exhibition 2016 will take place at the National Exhibition Centre in Birmingham, UK from April 20 -22, 2016. The programme is designed to meet the diverse expectations of reman professionals today. You can compose your own individual programme, choosing from modules covering technical, marketing or scientific subjects and networking opportunities. We have a variety of top industry speakers presenting on the following subjects:
Fernand Weiland to present his new book, “Make-New-Again,” in Birmingham Fernand Weiland, the founder of the European Apra division, and currently member of the division’s board, has written numerous articles and edited three books about automotive remanufacturing in Europe. He will present his latest work at the Birmingham Apra Symposium. Fernand will give a presentation about opportunities for remanufacturing in other industrial sectors on April 21 at 14:30. Read more about the book on page 33.
• How to analyse potentials of remanufacturing in Europe – ABH Market Research • ‘Current and future trends in rotating electrics’ CEVAM France • Possibilities to activate core surcharge for core in accounting - Circular Economy Solutions GmbH • ‘Secrets of successful exhibition planning’ RAI Amsterdam • Benefits and challenges with remanufacturing business models. Case studies from the Horizon2020 project called ERN (European Remanufacturing Network) • University of Strathclyde, Glasgow • Remanufacturing of Diesel Injection Systems at Bosch • ‘Make-New-Again, Remanufacturing in all industry sectors’ - FJW Consulting • ‘Market volume, core availability and technical challenges of the remanufacturing process EGRvalves • ‘How to master product development in remanufacturing today and in the future?’ • ‘Specific concepts for quality management in the remanufacturing industry’
On the last day of the Symposium, Carwood Birmingham will open its doors of their stateof-the-art Diesel Systems Plant. Starting out as a small electrical car parts business, Carwood Motor Units Ltd quickly expanded over the years and diversified into the diesel and auto electrical markets. Today, the assembly of their diesel parts, such as the injectors, is carried out in ultramodern class 7 clean rooms, which are unique in the UK and one of the most advanced facilities of its type in the world. The assembly suite ensures OE standards are maintained at the highest level with particle contamination limits down to 0.5 microns, resulting into some of the industry’s lowest warranty rates.
Plant visits Attractive plant visits complete the Symposium Agenda.
A GALA-Dinner on Thursday evening will further mark our 25th European Symposium. The evening will start with a drinks reception and continue with a 3-course meal and a surprise act to entertain you throughout the evening.
Ever wondered what the plant of the ‘Remanufacturer of the Year 2013’ looks like? We will start the Symposium with a visit to the extensive remanufacturing operation of ATP in Staffordshire. ATP Industries Group Ltd is one of Europe’s largest independent remanufacturers of automatic & manual transmissions, torque converters, transmission control units, instrument clusters, ECU’s etc. and the major remanufacturing partner to a world-wide portfolio of Original Equipment Manufacturers (OEM’s). They currently have contracts with the likes of Chrysler, Ford Motor Company, Ford Turkey, General Motors, Mitsubishi, Colt Cars, Unipart Jaguar and Unipart, London Taxi International, Aston Martin etc. Their commitment to high quality is recognised by accreditations to the following international standards. TS: 16949, Ford Q1, ISO 9001 and ISO 14001 (Environmental).
Networking Besides receiving all the latest information from the industry, there are also opportunities for celebrations and networking. During the legendary COREMania Party (Wednesday, 20th) you will be able to enjoy life music as well as food and drinks at a traditional English pub at the heart of Birmingham.
Join us as the remanufacturing industry meets in the UK! Sign up now! The complete programme incl. more detailed information about speakers, the exhibition, plant visits, venue, hotels etc. can be found at www.apra-europe.org/birmingham2016 n NEW APRA Europe MEMBERS since last issue of ReMaTecNews – Vol. 1-2016: • Almott Ltd., Bulgaria • Jefa Autoparts AB, Sweden • MPT Recycling, UAB, Lithuania • Tisako s.r.o./ Slovakia • Asysum, S. A./ Spain • D.A.C.O.I./ La Reunion Island/ France • Deutsche Turbo GmbH, München/ Germany
ReMaTecNews | 32
Free Trade Agreements – A challenge for international business associations TTIP and the impact on the automotive remanufacturing industry. The basic idea behind all “Free Trade Agreements” (FTA) is to support the industry in the countries of both contract parties by reducing trade barriers at the borders. Product categories are defined to have a preferred status for trans-border shipments. For each product category specific criteria are defined, so that at customs it can easily be evaluated if the requirements are met. In case all requirements are fulfilled a product can be shipped without customs fees, with reduced declarations. In case of doubt caused by an unclear definition, the FTA shipments can be stopped at customs; any customs officer can make business impossible.
With the current proposals for Transatlantic Trade and Investment Partnership between the European Union and the United States (in short: TTIP), two critical criteria are included for remanufacturing business: 1) Country of origin of the core (where it has been dismantled) and country of remanufacturing should be in the same territory of one of the contract parties. 2) The lifetime of the Reman product should be similar to the original new product. Point 1 will lead to the demand that remanufacturing cores have to be stored in separate locations if they accrue outside EU28 / USA or if they accrue inside the EU28 / USA. Based on the origin of the core, the status of priority of the remanufacturing product has to be declared differently. Huge extra cost will be created for the remanufacturing industry.
Point 2 will lead to the demand that the remanufacturers will have to know the lifetime of the original new units and will have to compare it to the expected lifetime of their remanufactured product. Nobody in our industry is able to do this task properly, so every customs officer will be able to stop the shipments at the border, whenever wanted. APRA´s task is to present to the negotiating parties, the US foreign trade department and the European Direction General Trade, an easy-to-handle, transparently worded proposal and to align industry associations on both sides of the Atlantic Ocean. A task for a worldwide active association like APRA. A task no national or regional association can fulfill alone. n
ReMaTecNews | 33
Making-New-Again – meeting the challenges of the future For fifty years or more, automotive heavy duty remanufacturing has represented the public face of the reman industry. In recent years, the industry has enjoyed a particularly strong surge in importance, carried along by the rising support for sustainability initiatives across the world. Indeed, today’s remanufacturers and their businesses are now reaping the benefits of many years of committed work. Is there more to be done as automotive remanufacturing reaches an unprecedented level of maturity? A great deal, in fact. Indeed, this is the nub of a new book, “Make-New Again”, edited by Fernand Weiland, the founder of APRA in Europe and publisher/editor of three previous books on automotive and heavy duty remanufacturing. This time he broadens his horizons to include other industrial segments with significant remanufacturing potential. By doing so, Fernand Weiland and his co-authors have performed a commendable service to remanufacturers, present and future. Aviation industry For the uninitiated it is surprising to learn that the international aviation industry is a major user of remanufacturing processes to keep fleets safe and flying, sometimes for up to thirty years. Perhaps one reason for this relative anonymity is the airlines’ and their suppliers’ preference for the term MRO (Maintenance, Repair and Overhaul) rather than the more conventional terms of remanufacturing and rebuilding. Nevertheless, Weiland estimates that the overall volume of remanufactured aviation components globally roughly equates to the volume and value found in the motor industry. Perhaps closer to traditional remanufacturing are several chapters on home appliances, medical equipment, fork lifts and industrial machinery,
consumer products such as mobile/cell phones and IT-equipment. All reman opportunities which have so far attracted only modest attention.
“Recycling generates a great deal of waste of materials that finish up in landfills and of embedded resources“ Nevertheless, within these segments there is very considerable scope for remanufacturing – or as Fernand Weiland prefers to call it, “Make-NewAgain”. At least from a general communications perspective, the term seems a better fit than the more conventional remanufacturing or rebuilding, etc. This is because “Make-New-Again” aptly describes what it’s all about, i.e. saving valuable resources and materials, cutting carbon emissions, delivering as good as new at better prices and thus advancing the sustainability culture. Major force in the the circular economy With the potential for creating close to one million jobs and an expected production of reman products valued at €175 billion worldwide, the “MakeNew-Again” industry clearly has the potential to become a major force in the rapid expansion of the circular economy. Within this context, the book makes one aspect of the sustainability debate particularly relevant. Whereas over the past 10-20 years recycling has been a key word in the debate, the time has now come to identify exactly what recycling means – that it generates a great deal of waste (of materials that finish up in landfills and of embedded resources ((i.e. the energy consumption and man hours that went into the original unit)). Consequently, Weiland says that recycling comes a poor third in the quest for sustainability after remanufacturing and rebuilding.
“Make-New-Again”, edited by Fernand Weiland The co-authors of “Make-New-Again” are: Peter Bartel Chairman of APRA Europe Regis Dando Remanufacturing Implementer revalueSystems, Lyon (France) Klaus Hieronymi Strategist for Resource Efficiency & Circular Economy HP Inc., Paolo Alto, Ca. USA Tracey Fox GE Healthcare Regulatory Director Michael Schmit GE Healthcare Remanufacturing Technology Director Michael.Schmit@med.ge.com Erik Sundin, Dr. Associate Professor in Sustainable Manufacturing Linköping University, Sweden Hui Mien Lee, Dr. Head of Sustainability, IKEA Singapore/ Malaysia/Thailand Anders Nielsen Plant Manager, Toyota Sweden’s remanufacturing facility. Mjölby, Sweden Central role In short, “Make-New-Again” offers the reader a highly informative view on how remanufacturing can take a central role in the development of the circular economy and how innovative players in the reman community can capitalise on the accompanying opportunities. Even within the relatively mature automotive reman segment, only 55-60 per cent of remanufacturable components are currently exploited to the full, Fernand Weiland points out. Among the book’s other segments, the opportunities are, of course, considerably greater. This is certainly worth reflecting on as the reman industry moves to the next stage of its development. n
ReMaTecNews | 34
Diesel Engine Emissions: What does this mean for turbocharging? By Carlton Smith, Group Head of Engineering Melett Ltd Tighter emission regulations are a hot topic at the moment, not only due to the latest Euro 6 regulations, but the automotive industry globally is facing scrutiny following the Volkswagen emissions scandal. Back in September 2015, Volkswagen admitted that it had circumvented the emission control systems in over 480,000 2.0-liter diesel vehicles sold in the United States since 2008, to meet strict NOx emission test regulations. For some time the automotive industry had been aware of issues with diesel engine emission testing and as a result, many new technologies have been entering the market to improve the efficiency of the petrol engine, in order to make it more comparable with the diesel engine. One of the key technologies for improving the efficiency of petrol engines is turbocharging, which is good news as this will increase the overall percentage of turbocharged vehicles on the roads. So, what are the emission standards? Emission standards were first introduced in July 1992, where Euro 1 required the switch from leaded to unleaded petrol and the universal fitting of catalytic converters to petrol cars to reduce carbon monoxide (CO). The standards have been
repeatedly tightened over the years, reducing levels of CO and introducing separate emission limits for petrol and diesel vehicles. It was in 2005 and the introduction of Euro 4, and later Euro 5 (2009), that concentrated on cleaning up emissions from diesel cars, especially reducing particulate matter (PM) and oxides of nitrogen (NOx). The Euro 6 (September 2015) standard imposed further, significant reductions in NOx emissions from diesel engines and established similar standards for both petrol vehicles and diesels. Overall, since Euro 1, PM levels have been reduced by 96% and NOx levels by 87%. What technologies have been introduced to reduce emissions? For many years before the Volkswagen scandal broke, Governments and Environmentalists were very vocal about the correlation between the increase in diesel passenger cars and the increased pollution in cities, created by CO, NOx and Hydrocarbon (HC).
To achieve the most recent emission standards new technologies have been developed and adapted to fit vehicle exhaust systems, despite vehicle manufacturers actively lobbying for more achievable time frames. To clean up CO and HC particulates released as part of the engine combustion process, catalytic converters were developed. They react to temperature, converting CO and HC to Carbon Dioxide and water. When Euro 5 was introduced, all new cars were fitted with a Diesel Particulate Filter (DPF) to capture soot and other harmful particles, preventing them entering the atmosphere. A DPF can remove around 85% of the particulates from the exhaust. To help reduce NOx, Selective Catalytic Reduction (SCR) systems were introduced in 2010. The SCR system is where Urea (AdBlue) is injected into the exhaust post combustion. In the exhaust, the fluid is converted into ammonia, which reacts with the NOx in the ‘NOx accumulator,’ breaking the
ReMaTecNews | 35
chemical bond and converting NOx into Nitrogen and water. The method for testing and proving that these systems actually achieve the set levels, appear to have been flawed. The correct levels measured in lab conditions do not relate to the actual emissions produced in real world driving conditions, which is now at the heart of the Volkswagen scandal. How does this affect Turbocharging? The DPF and SCR systems have been designed to help reduce emission levels, however, the DPF in particular can be responsible for many turbocharger failures. Having a filter in the exhaust system is very restrictive to gas flow and as a result limits a vehicle’s power output. The extra restriction on the exhaust system means that the engine, and in particular the turbocharger, will have to work harder, reducing fuel efficiency compared to the same vehicle without a DPF. The reduced fuel efficiency becomes more apparent as the filter blocks up and becomes even more restrictive. Driving a vehicle with a blocked DPF can seriously damage the turbo and engine, and it is not uncommon to have to replace the complete turbocharger if the DPF warning light has been ignored for extended periods. The cost of a replacement turbocharger, plus potential additional DPF costs, is leading to perfectly good vehicles in the aftermarket
being written off. The industry is also becoming plagued with low quality aftermarket variants of DPF’s, which fail and cause further issues to engines and turbochargers. Despite these new innovations, some vehicles are emitting worse than Euro 1 levels of emissions because the Diesel Particulate Filter (DPF) has been removed and ECU re-programmed. If older vehicles continue to be incorrectly or poorly repaired, there is a risk that
Governments may introduce scrappage schemes to reduce the worst polluting vehicles. For the industry as a whole it is more important than ever to ensure older vehicles are repaired to a high standard, using high quality aftermarket parts to ensure emissions are kept as low as possible. n
TransTec creates European reman team TransTec, the well-known brand of automatic transmission overhaul and power steering repair kits for passenger cars, light and medium duty trucks and heavy duty applications, has established a European team with a goal to expand brand awareness and increase market share in the remanufacturing markets for both product categories. Germany-based Timo Flettner has been named Commercial Manager, TransTec Europe, while Simon Vickers, who operates from the UK, is responsible for product range and region specific bill-of-material development as Product Manager, TransTec Europe. Both have technical backgrounds and long-term experience in managing inter national remanufacturing accounts. TransTec is one of the aftermarket brands of The Freudenberg Group. Headquartered in Weinheim, Germany, Freudenberg has production plants around the globe and is one of the world’s largest manufacturers of automotive sealing products
Simon Vickers – appointed Product Manager
Timo Flettner – new Commercial Manager
for original equipment suppliers and vehicle manufacturers.
has become the first call for remanufacturers in the U.S., South America, Central America, Australia-Asia and several countries within the European Union. n
The TransTec brand was established in 1978 a nd
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INTERNATIONAL EVENTS & TRADE FAIRS
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05/04 - 10/04/2016
19/04 - 24/04/2016
ZAGREB AUTO SHOW
AUTOSALON/AUTOSERVIS
International Fair of Automobiles and Supporting Industry Zagreb | Croatia
International Motor Show and Car Accessories Trade Fair Bratislava | Slovakia
06/04 - 09/04/2016
22/04 - 24/04/2016
TAIPEI AMPA
FIRAUTO-EXPOCAR
Taipei International Auto Parts & Accessories Show Taipei | Taiwan
Automobil and Parts Exhibition Elche/Alicante | Spain
25/04 - 04/05/2016 06/04 - 10/04/2016
AUTO CHINA
AUTOWORLD
International Automotive Industry Exhibition Beijing | China (PR)
International Motor Show St/ Petersburg | Russia
26/04 - 28/04/2016 07/04 - 10/04/2016
COMMERCIAL VEHICLE SHOW
AUTOMECHANIKA ISTANBUL
Birmingham | United Kingdom
International Trade Fair for the Automotive Service Industry Istanbul | Turkey
05/05 - 08/05/2016
08/04 - 10/04/2016
International Exhibition and Event for Car Tuning, Lifestyle and Club Scene Friedrichshafen | Germany
AUTOTREND
TUNING WORLD BODENSEE
Automobile Exhibition Mecklenburg-Western Pomerania Rostock | Germany
08/05 - 10/05/2016
09/04 - 17/04/2016
The Middle East’s Leading International Trade Fair for the Automotive Service Industry targeting Dubai | United Arab Emirates
AMI AUTO MOBIL INTERNATIONAL with AMITEC - Exhibition area for maintenance and repair of cars and commercial vehicles Leipzig | Germany
AUTOMECHANIKA DUBAI
21/05 - 22/05/2016 OLDTIMER MESSE TULLN Tulln | Austria
12/04 - 14/04/2016
23/05 - 25/05/2016
SAE WORLD CONGRESS
BUSTRUCKEXPO
Society of Automotive Engineers International Congress & Exposition Detroit | USA
China Beijing International Exhibition for Buses, Trucks & Components Beijing | China (PR)
13/04 - 15/04/2016
25/05 - 27/05/2016
EXPOINA PAACE AUTOMECHANIKA MEXICO CITY
AUTOTECHSERVICE
International Trade Fair for the Automotive Service Industry Mexico City | Mexico
International Exhibition for Vehicle Workshop and Service Station Equipment, Motor-Spare-Parts and Accessories Kiev | Ukraine
14/04 - 17/04/2016 BUSWORLD TURKEY
25/05 - 27/05/2016
International Trade Fair for the Bus Industry and Accessories Istanbul | Turkey
SIA International Motor Show Kiev | Ukraine
25/05 - 27/05/2016 JSAE Automotive Engineering Exposition Yokohama | Japan
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