The engine parts business has experienced dramatic change requiring nothing short of a total rethink for those intent on surviving and prospering.
At issue is the significant change in demand for stock engine rebuilding for the light vehicle market. Change has been great, and fast.
“Our light duty automotive business is off 32% in the last two years,” says Richard Miller, president of The E.R.I. Group, from his office in Markham, Ont. Since E.R.I. is the largest buying group for engine rebuilders in Canada, that assertion is a strong indicator of the market at large. “But overall business is up, so guess where it came from? The non-traditional side,” he adds.
That non-traditional side includes everything from building high-horsepower street and track engines, to spot-on classic restoration, to marine, agricultural, and industrial.
Miller says that those markets have gone from afterthought to absolute necessity in the last few years.
“In the month of April, 42% of our purchases were related to performance, restoration and marine. That is huge. Five years ago, that number would have been 10 to 15%. The market has changed that much.”
That change has, perhaps, been most difficult to cope with for the production engine rebuilding segment. Assembly line approaches that were so effective at providing the efficient production of remanufactured engines proved a barrier when it came to the greater flexibility required by the new engine market. For more than a few, that barrier was insurmountable, and those companies are no longer in a position to supply anything, beyond used equipment and parts inventories at auction.
For those who have more flexibility, however, the picture need not be so grim. While demand has certainly shifted, it has provided new opportunities and new margins, particularly in the performance and restoration business.
“That is engine parts today,” says Ron McMorris, engine division manager, Lordco Parts Limited, based in Maple Ridge, B.C.
“Basically the stock engine rebuilding business is on the downswing. Most of the engine parts we are selling today are performance-related,” he adds, hunting as he talks for a set of performance connecting rods in an engine parts shipment–“why do they always put them at the bottom?” he asks rhetorically.
“Old stock engine kits have gone by the wayside. It is a restoration and performance market.” More specifically, he says that demand is high for stroker kits, even for classic muscle cars. Nobody, he says, builds a stock engine anymore.
Those in the business of manufacturing engine parts have certainly recognized that fact; more effort has been expanded to provide the needed selection, including moves to add applications that had previously been deleted due to age and lack of demand.
“One thing that we are seeing is a renewed interest in the old muscle car engines,” says Bill McKnight, director of brand development, Mahle Clevite Inc.
“The 455 Olds, Pontiac and Buick, we are in the process of reintroducing the high performance bearings for those engines.” Declared obsolete years ago, they are making a comeback. “There are guys out there making 850 hp for those engines and they want these bearings. The older big block muscle car engines are hot.”
McKnight says that the rise in popularity of some of the older Detroit iron is part of the reason for the rise in bearing offerings, including an expansion of undersize options.
“We continue to get demand from customers who want options. We have just introduced a dozen more performance bearing options”– including 9, 11, 19, and 21 thou undersize bearings. “You can dial the clearance to what you want.”
Options like this may not be new for the Chevy crowd, but Ford and Chrysler Mopar fans can enjoy the flexibility–a dozen more options in all. Engine builders have their preferences for clearance, he says; “standard” clearances just don’t exist the way they used to.
Of course much of the talk in the performance market involves manifolds, cylinder heads, and cylinder head gaskets.
It is at least a little amazing that the small block Chevy continues to be the target of so much attention. You would think that after more than 50 years, performance gains would have been tapped out. This is not the case, and options continue to proliferate for this mainstay engine.
Lordco’s McMorris, for example, says that he has more than a dozen intake manifolds to offer, with the right option depending on whether it is a street or track performance build, and what rpm range the build is looking to work with.
“A lot of them have to do with new cylinder head technology,” says McMorris. “And we sell a lot of them,” from a number of suppliers. “The horsepower that you can build into a small block Chevy is incredible. It used to be a big deal to make 400 hp; now it’s 400 to 600 reliable horsepower. It’s all about airflow.”
With improved airflow and horsepower comes increased combustion pressure, which has led to the increasing adoption of multi-layer steel (MLS) gaskets for performance applications.
Once the sole preserve of the import nameplates, MLS head gaskets have become the option of choice for the most American of all performance applications: NASCAR.
“From a performance head gasket standpoint, the thing that is becoming huge for us is the MLS cylinder head gaskets,” says Ron Rotunno, product manager, Fel-Pro Performance, Federal-Mogul. With about 60 MLS gaskets in the Fel-Pro line, it remains a specialty number, but with significant inroads that would have been unheard of only a few years ago.
“For engines with a lot of head lift, the MLS gasket is very well-suited. It is kind of like a valve spring; it maintains that contact pressure.” MLS gaskets allow for head lift without losing sealing.
It’s not a case of always requiring MLS for an application, but in high-horsepower builds, it’s a wise decision.
“There are definitely benefits with MLS, especially at the higher horsepower.” They are more resistant to burnout, and can withstand coolant temperatures in the 260 degree F. range on the NASCAR circuit. “A composite gasket might not last that long, but the MLS is a difficult part to burn out,” says Rotunno. “Though you might put a hole in the piston [if you’re running that hot], which is not good either,” he adds.
“One of the trade-offs with MLS is that typically the very thin layer of rubber is all that seals the gasket to the head, so the surface finish must be very fine.”
“Generally this can be as smooth as 30Ra, but aftermarket manufacturers have learned how to apply a more forgiving coating to allow for reliable sealing, in line with traditional shop capabilities.
“Every Ford [team on the Nextel Cup circuit] uses an 1135 gasket. They can certainly hit the 30Ra surface finish, but that same part number may be used on an ’85 Mustang. We need to make a part work for all of our customers.”
He says that the decision on whether to go with an MLS gasket or a more conventional performance construction should be made carefully, and with an eye to future modifications, especially on street applications.
“You ask the customer what is the expected output of the engine, compression ratio, horsepower, the intended use: street, race, street and strip? Blower, nitrous?”
And, he adds, how much they want to pay for it, as there is a premium for the MLS technology. While he says that it may not be necessary to go MLS every time, “If it was for me, I would rather get the best available because someday I might want to get a nitrous bottle.”
As tempting as it might be, those selling performance modifications and complete engine packages to consumers should not just think in terms of the traditional performance model for their target market.
“Performance is a definition of many categories,” says Miller. “When people start talking about it, it’s two or three things. We think about performance as street racers, drag racers, stock cars, but that’s not all of it. That’s certainly 65 to 70%, but then there is restoration. There are a lot of gentlemen in their declining years who are no longer employed and perhaps have an early retirement package. Their needs are few, their cost of living is not what it used to be.” And, says Miller, they want a car like the one they had, or wish they had, back when they brought their dates to the drive-in.
“And they will spend any amount of money to have it.”
That is part of performance, and so is marine, he adds.
“People are spending a lot of money to make boats go fast. And then there are the younger guys with good-paying factory jobs and they want to have rice rockets.”
So it’s not just one thing, it is many; flexibility is the key.
“If you want to be successful and survive, you have to be diverse. Those stuck in the paradigm of ‘this is how we always did it’ will be on the outside looking in. You have to be flexible.”
It is, of course, not much different from the manufacturer’s perspective. There too, performance has become an important focus, and one that Mahle Clevite’s McKnight says has staying power.
“I can’t see anything but positive ahead. To kill the performance business would take a really sharp and heavy downturn in the economy. It has been a really solid business.
“Margins are still good. In production engine rebuilding, there is heavy price pressure. Customers who buy an engine never see what brand the parts are, so price becomes the main focal point.”
The educated performance customer doesn’t care so much about price, he says; he is willing to pay for the products he wants.
For jobbers and machine shops, that provides an opportunity beyond the grudge purchase. Performance, restoration, and marine engine parts buyers are happy customers.
“You have to be able to tap into discretionary work, as opposed to the necessary expenditures,” urges Miller. “The young and the old have the discretionary income and they are going to spend it fixing their toys.
“The engine business is solid, but not the traditional business,” he adds. “It is still performing the same functions, but on different applications. And there is lots of it if you are diversified.”