There is little argument that the remanufacturing industry has played a crucial role in the aftermarket for many decades. There is also little doubt that it is a sector that is in transition.
And, because change often begets change, it was with interest that Jobber News contacted Bob McKenna, president and CEO of the Motor Equipment Manufacturers Association, about its newest affiliate, the Motor Equipment Remanufacturers Association, and the industry challenges it is meant to address.
Jobber News: What are the key challenges facing the remanufacturing industry right now?
Bob McKenna: While the motor vehicle component remanufacturing industry faces many of the same issues challenging other manufacturers–onerous taxes and regulations at the national, state/provincial, and local level; the rising costs of logistics and supply chain management; and competition from low-cost, low-quality imported products–it also faces compelling challenges unique to the segment.
Full-service motor vehicle component remanufacturers strive daily to address the incorrect perception within the industry and among consumers that their products are lower quality and not as reliable as “new” parts. This prejudice has created another major challenge to remanufacturers: resistance to the use of remanufactured components by original equipment manufacturing and service providers.
One factor feeding this mistaken view of poor quality remanufactured parts is the lower-end remanufacturers, the so-called “spray and pray” segment. These businesses clean and paint recovered parts, then sell the components for a quick profit–without any of the rigorous remanufacturing and extensive testing done by full-service remanufacturers.
These challenges are why the Motor & Equipment Manufacturers Association (MEMA) stepped forward to speak out on behalf of full-service remanufacturers. MEMA has more than 100 years’ experience addressing challenges and opening doors to new business opportunities for its members. Its newest affiliate association, the Motor & Equipment Remanufacturers Association (MERA), has been established as “The Voice of the Motor Vehicle Remanufacturing Industry.”
JN: How do these challenges affect the aftermarket at the distribution level? At the installer level?
McKenna: Both the incorrect perception of poor quality and competition from low-quality, low-cost “new” products can influence both the distribution and repair professional’s buying decision. These aftermarket supply chain partners may be reluctant to sell or recommend remanufactured components. They may be uninformed on how to educate their customers on the quality and reliability of remanufactured parts, or apprehensive about core deposit carrying costs. They also may suffer from unfounded fears of “come-backs,” or returns due to remanufactured parts’ failure.
Yet the same distributors may mistakenly recommend low-cost, low-quality aftermarket parts as an alternative. As the industry awareness and education initiative mounted by AASA–the AASA Know Your Parts campaign–has demonstrated, these poor-quality parts can pose serious safety threats. High-quality remanufactured parts from full-service suppliers are a better alternative, due to the vital testing and quality control processes conducted by full-service remanufacturers.
JN: Where in the remanufacturing sector is the most significant upward/positive trend occurring?
McKenna: There are many positives in the component remanufacturing industry now. Quality remanufacturers are benefiting from their products’ price point, vehicle life cycle maintenance, the creation and retention of local jobs, and quality alternatives to replacement parts produced in low-cost countries.
But the biggest story that motor vehicle component remanufacturers have to tell is the industry’s environmental friendliness and responsibility. Motor vehicle component remanufacturers are the ultimate “green” industry. Quality remanufacturing facilities have one of the manufacturing industry’s lowest carbon footprints. Its products represent recycling at its best–motor vehicle component remanufacturing produces quality products, while helping reduce the amount of vehicle scrappage and lowering the volume at our nation’s landfills.
JN: How does the creation of the new MERA group assist the remanufacturing sector in coping with these changes?
McKenna: As noted earlier, the creation of MERA gives the quality full-service remanufacturing industry a voice to promote its contributions to the environment, to vehicle safety, and to the motor vehicle industry. MERA exclusively represents remanufacturers and will speak out on their behalf before elected officials and government regulators. MERA also will draw on MEMA’s long history as the advocate for motor vehicle parts suppliers in seeking cooperation between the supplier industry segments and exploring new markets for remanufactured products.
JN: What is its mandate?
McKenna: MERA’s sole mission is to help its members be more profitable, innovative, and competitive on a global scale. It will concentrate on five areas of strategic focus:
• exclusive representation of remanufacturers;
• legislative and regulatory advocacy;
• vital market research and analysis;
• technology and data leadership; and
• member engagement through collaboration, networking, and education.
JN: This is neither the first nor the only industry association or group to focus on remanufacturing. What does it bring to the table to make it a worthwhile endeavour? What’s changed to make its creation necessary?
McKenna: MERA is committed to working with other organizations representing the remanufacturing industry, but will remain committed to its members: the quality, full-service remanufacturers.
What makes MERA unique from the other associations representing this industry sector will be its focus on the issues facing large, major remanufacturers exclusively. It also draws from MEMA’s long tradition of service to all motor vehicle component suppliers and has the added advantage of MEMA’s high profile and respect in Washington, D.C.
MERA also will advance the business interests of its members by:
• providing a forum to address issues of common interest;
• serving as a resource for industry information and analysis;
• promoting the interests of the global remanufacturing community; and
• serving as a voice and positive change agent for the industry.
JN: Over the next 12 months, what is the plan and focus to be? Longer term?
McKenna: The immediate goals of MERA have been accomplished: identifying its volunteer leadership. Michael Cardone Jr., chief executive officer of Cardone Industries Inc., has been selected as its first chairman. Michael has been a driving force in MERA’s development, and his insights and leadership will be invaluable to its growth.
The recently appointed MERA Board of Directors is comprised of the top executives in the industry:
• David Coolidge, executive vice-president, Americas, global automotive aftermarket division, Bosch Group
• Selwyn Joffe, president, chairman and CEO, Motorcar Parts of America
• Steve Mance, vice-president and general manager, Bendix CVS
• Bob McKenna, president and CEO, MEMA
• David Overbeeke, president, global brake and chassis, Affinia Group Inc.
• Mark Shasteen, vice-president global service and engineering, Delphi Corp.
• Jack Vollbrecht, senior vice-president, business development, Remy Power Products
• Doug Wolma, general manager, remanufacturing, ArvinMeritor
The next step will be the hiring of a staff executive for MERA to handle the day-to-day operations of the association. An executive search is underway now to fill th is position.
Once the MERA leadership is fully established, its top priority for the next year will be development of its membership value proposition and member recruitment. Other association initiatives in 2011 will include the launch of its website and publication of a remanufacturing environmental and economic market research and analysis report.