Today’s remanufactured parts provide cost-effective alternatives for fleets

Remanufactured parts offer fleet managers the opportunity to save costs compared to using new replacement parts. In many cases, the remanufactured parts produced today routinely equal or surpass original parts specifications. This reputation for high quality is due to the fact that many original equipment manufacturers (OEMs) now remanufacture their own –– and sometimes products made by other makers –– to rigorous OE specs. For example, ArvinMeritor remanufactures Meritor and Dana and Eaton axle carriers, Eaton and Fuller transmissions, and all brands of brake shoes. BorgWarner remanufactures its own and others’ turbo chargers and turbo pumps. Based on the broad coverage and volume of products that Haldex remanufactures, it remanufactures a greater percent of its competitors’ products than its own. Because the choice of reman parts available has grown as more OEMs have entered the reman market, there are more ways for a fleet to save money without compromising quality.

Parts that are most likely to be available as remanned are ones with durable cast metal housings or metal parts that are not subjected to much wear. The bearings, seals or moving parts that are subject to wear must be replaced while the metal shell that holds them is reused. The unit can be offered at lower cost as a reman part because the expense for raw materials and fabrication of a new housing is avoided.

Know the differences

It is important to know the differences between reman, rebuilt and repaired parts, because manufacturers are very particular about those descriptions and what each represents. Parts that are remanufactured by an OEM are put through a controlled process even before they arrive at the factory. They are dismantled, cleaned and measured to be sure they meet OE specs. “We assure that when these parts are disassembled, that each part is inspected, qualified and is deemed to have the same life as new when it goes back together,” says Doug Wolma, general manager of remanufacturing for ArvinMeritor. All reusable components are cleaned, and rust, corrosion or scale is removed. Inspections include magnafluxing to find cracks, and bearing surfaces and bore diameters are checked to make sure they are within the same tolerances as a newly manufactured part. Then work such as remachining, welding or repainting that needs to be done is performed. Next, on an assembly line that frequently resembles one for new parts, the unit is put together using OE-spec’ed replacement parts, such as new seals and gaskets, and refurbished-to-spec internal parts. The OE remanufacturers automatically incorporate upgraded components that can make a reman part better than when it was new, according to Tom Hujik, Horton Inc.’s director of aftermarket and field sales. “A rebuilder, on the other hand,” says Wolma, “will disassemble and clean reusable parts, and replace bearings or other wear parts, but typically without the full qualifying criteria or tolerance testing that an OE would use.” The same unit is returned to the customer. Bob Cowan, product manager and sales development manager, remanufactured product division of Haldex, adds that remanufacturers don’t reuse much of the internal parts, where a rebuilder will salvage every piece it can.

Considered least desirable, a repaired product generally offers just the replacement of a worn part, with minimal cleaning and testing before the unit is reassembled and returned to the cutomer.

Warranties

Another advantage that a remanufacturer offers over a rebuilder is nationwide warranty coverage, notes Horton’s Hujik. A reman part will have the same life expectancy as new and will be backed by a warranty similar to OE, with typical coverage against defects for one-year/100,000 miles, depending on the part and application. Other OEMs’ reman warranties can even be longer: two-year/200,000 miles on parts in the case of Horton.

Reman parts are often interchangeable for new in other ways. “Some-thing worth knowing is that in many cases when there is a warranty claim, the OEM will use a reman unit to replace the product that’s failed,” says Jack Lorimer, director of aftermarket, North America for BorgWarner turbo and emission 

systems. 

Cost, environment

Savings can vary from 25 percent to more than 30 percent off the cost of new parts, depending on the product, says Haldex’s Cowan.

“The price target in general for the entire reman industry is 70 percent of the cost of new parts for the customer,” says ArvinMeritor’s Wolma.

Along with cost savings to the customer, using reman parts can have a positive environmental impact. Not only are major metal parts being reused so they don’t end up being scrapped prematurely, but also remanufacturing cuts down on the raw materials and energy needed to make such parts new. “The OE remanufacturers have adopted the green culture to be environmentally friendly,” Borg Warner’s Lorimer explains, “and fleets have in many cases adopted the same culture.” Many remanufacturers are proud of their factories achieving ISO 14001:2004 certification for effective, environmentally sustainable practices.

Cores

Although reman parts may come off the same assembly line as new parts, they are typically sold through an OE aftermarket division, the existing OE dealer or independent aftermarket distributor network. Part of the reason is to accommodate the process of swapping used “core” parts for the remanufactured. Cores, the raw material of reman parts, are what customers exchange for a newly remanufactured part. Reman parts are typically sold with a core due, with a deposit charged to the customer at the time of sale. When a core is returned in a timely manner (for example, within 90 days) the customer gets that core deposit back. Longer terms are available from some remanufacturers which maintain a core “bank” to handle credits and returns. Most dealers and distributors of OE parts will handle the core returns, and issue a credit based on the condition of the exchanged core. To determine a core’s eligibility for trade, it must be identified against a list of accepted products. Each remanufacturer has its own criteria. To help with core identification, Haldex offers a “Like-Nu Product Core Identification Wall Chart” with photo-illustrated categories for “core groups” including compressors, water pumps, clutches, valves, dryers, alternators, power steering units –– even wiper motors –– that contains over 2,000 part numbers. Most remanufacturers publish core acceptance criteria on their websites.

Also, most remanufacturers are liberal with returns, requiring only a visual inspection to qualify, and meeting a few requirements (such as the core having a shaft that rotates and no broken mounting brackets). “We try to be as close to no-hassle as possible –– a simple visual inspection of the outside is usually enough,” says ArvinMeritor’s Wolma. Even cores partially damaged or missing a piece can receive pro-rated credit, so it is generally worthwhile to participate in a core return program, says Haldex’s Cowan. The returned core doesn’t even have to match the one purchased. “As long as it is in the core return program, we do not necessarily need an exact like-for-like core back,” Cowan adds. Core values vary from under ten bucks to hundreds of dollars, depending on the unit’s size, market availability, and complexity. There’s no limit on the number of times a core can be returned.

Other benefits

Remanufactured parts offer extended product life, less downtime, OE performance, and a warranty backed by a name brand with nationwide dealer/distributor support. Sometimes, a reman part may be the only alternative for a product no longer produced as new. Since many fleets no longer have the time, technicians or resources to devote to repairing or rebuilding equipment, a reman part can be cost-effective. There also are liability issues, warns Horton’s Hujik, such as if a fleet-rebuilt part fails, it might affect other parts’ warranties. Using a factory-remanufactured replacement part can offset that risk. 

Be aware

The price differential between choosing a reman part over new may not amount to much compared to the labor cost involved in changing parts, says Jay Pagano, director of business development for VIPAR Heavy Duty Inc., a network for truck parts distributors. There is the added paperwork needed to keep track of core credits to consider, and the commitment for storage and shipment of cores to be returned for credit. Pagano advises, “Know your state tax laws and what your liability is.” At least one state, Michigan, adds sales tax on the core charge, but does not refund that amount when the core charge is credited to the customer.

Final thoughts

Competing with reman parts are a growing number of “white-box” or “will-fit” parts produced overseas that may cost less, but come with the risk of being from an unknown manufacturer with no brand reputation to protect and no guarantee of meeting OE specs. “Some are high quality and some aren’t,” Pagano warns. “There are controls in the OE reman process to assure high quality, and that can’t be said of all non-genuine parts suppliers.” Dealer support, training and technical backup is another plus for reman versus white-box parts, according to Haldex’s Cowan. 

Horton’s Hujik sums up by saying, “With OE reman parts, fleets can have the comfort of having a warranted product that’s recognized at any truck dealer in the U.S.”