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Reman parts market remade
Imagine for a minute that the engine or transmission in your 10-year-old four-wheel-drive tillage tractor or combine has failed – just when you need it the most. In the past, repair generally meant a week in the shop while your dealer or mechanic overhauled the unit with a rebuild kit. If, on the other hand, the failure involved a smaller part like a starter or fuel-injection pump, the alternative was more often a new or rebuilt unit, depending upon availability.
Recently, though, manufacturers have realized that farmers often need a less-expensive alternative than a new component. Hence, there's been a dramatic increase in the availability of remanufactured components more commonly known as reman parts from original equipment manufacturers.
“We've offered reman components for several years now. But it's only been in the last two or three years that the reman program has been managed as a high priority,” says Nicholas Liarakos of AGCO. “Right now, we have reman parts divided into five key categories: engines and engine components, power transmissions, hydraulics, electronics, and rotating electrics (that includes alternators, starters, etc.). They're all covered by the same warranty as new original equipment parts (one year on parts when installed by an AGCO dealer and six months on labor).
“We currently have a more developed product line in transmissions and hydraulics than we do for engines,” he continues. “However, since we now have a proprietary line of engines in our AGCO Power brand, we're building a reman program from the ground up around those products.”
Meanwhile, CNH Reman launched a joint venture between Springfield Remanufacturing Corporation and CNH in 2009 to expand the reman product lines in the same basic categories for Case IH and New Holland equipment.
John Deere entered the reman arena approximately 11 years ago through a joint venture prior to full acquisition of the John Deere Reman facilities in Springfield, Missouri, and Edmonton, Alberta. The Missouri plant is responsible for engines, engine components, and fuel-injection systems; the Canadian location concentrates on transmissions, drivetrain components, and hydraulics, says Bay Mourer of John Deere Reman.
High quality, lower cost
The whole reman business has continued to evolve, primarily because dealers and customers are finding that it's a less-expensive option that still carries a high level of quality, support, and reliability, Mourer says. “Customers get a warranty that is as good or better than that of a new part. That means a minimum of one year and, for some of the complete engines, two years or 2,000 hours,” he says. “That includes parts and labor when dealer-installed, which translates into less risk for both the customer and the dealer.”
Joe Hays, service manager for Landmark Implement, a Deere dealership in Holdredge, Nebraska, says that's just one advantage of using a reman component.
“If we rebuild something in-house, there's a 90-day warranty on parts, whereas a reman part will generally carry a one-year warranty,” he says. “We just have to work with the customer and take a look at every situation to see what we're dealing with. Nine times out of 10, we will rebuild a transmission here. But there have still been times we've used a reman transmission or engine.”
Another benefit of using a major reman part, Hays and Mourer agree, is the reduced amount of downtime, which is becoming more expensive for farmers every year.
“I can recall one situation where a customer had the engine seize in a self-propelled forage harvester right in the middle of harvest,” Hays recalls. “In that case, we obtained a reman engine and instead of having the machine in the shop for a week or more, we had the farmer back in the field in two days.”
One of the biggest factors, though, is price. While a reman part may be more than a shop rebuild in many cases, it's usually in the range of 25% to 40% less than the cost of a new part. That's because remanufacturers reuse core parts like housings and engine blocks, which saves the cost of recasting major components.
Naturally, labor cost has to figure into the equation, which is why Hays says most of the rotary electric parts, like alternators or starters, are replaced with rebuilt or remanufactured components.
“In the meantime, customers can be assured that reman components undergo the same tests we use on new components to make sure they meet or exceed all current performance standards,” says Mourer, noting that in many cases, they're better than the original. “We will remanufacture an engine to the same engineering specifications and tolerances, using the same bill of materials we did 20 years ago. But we have better production processes and higher quality parts today, as well as more advanced techniques for hardening steel and maintaining tolerances specific to original equipment requirements.”
Mourer and AGCO's Liarakos agree that reman parts will continue to grow in selection and availability, with electronic components like guidance systems getting more attention. It all comes down to demand and return on investment, however. “When considering a part, we look at the number of original machines or units sold, demand from our dealers, and whether it's cost effective,” Liarakos says.
“It also depends on the availability of cores,” Mourer adds. “We probably sell 10 to 15 reman engines a year for Model 4020 tractors. But the older they get, the harder it is to find the core.”
Options to Mainline Reman
There are a number of companies that started off as salvage yards and have since added rebuilt parts, reman parts, and new parts. Worthington Ag Parts and Abilene Machine, for example, offer a wide selection of aftermarket replacement components for everything from starters and alternators to rotor flights for rotary combines. But most aftermarket parts companies carry even more reman components. By most definitions, a reman component is one that has been completely disassembled, thoroughly cleaned, and reassembled with parts that have been inspected and replaced (if necessary) using the same process and tolerances used to produce new components.
“We started out as a salvage parts business back in 1964,” explains Michael Winter of Worthington Ag Parts. “However, as we've seen the market change, we've evolved to where we are a scrap metal processor as well as a dealer for used parts, rebuilt parts, reman parts, and aftermarket new parts.”
Another option to reman is rebuilt components, which are disassembled only to the point of failure and rebuilt using the same, new or aftermarket part. Winter insists there's often a fine line between rebuilt and reman. “We're more of a rebuilder than a remanufacturer,” he admits. “But depending on the condition of the core, our engines, for example, end up being closer to a reman component than a rebuilt one, since we go through them top to bottom and use only top-quality replacement parts in all our rebuilt products.”
Worthington Ag Parts, Abilene Machine Co., All States Ag Parts, and similar companies have a wide assortment of rebuilt parts that are less expensive than either new or reman parts.
A third option to reman is used and salvaged parts. According to Winter, the only problem with used or salvaged parts is they eventually wear out, which is the reason his company evolved into reman and new parts. Still, there are plenty of used parts on the market that retain an adequate service life. Whether they came off a newer combine that was damaged by a fire or a tractor that was salvaged due to age, most reputable sellers thoroughly inspect each part and add a warranty that can be as long as 12 months.
But in other cases, a salvage yard may be the only option for finding replacement parts on older and antique equipment, which simply doesn't warrant the investment in equipment and parts to rebuild or remanufacture a replacement.