State of cores
The good, the bad and the ugly of cores was the lively topic of debate at another panel during MERA’s Sustainable Manufacturing Conference Fall 2019.
The experts began their discussion talking about core changes. The consensus was that demand for core for some parts — specifically small parts — is low, while demand for engines and transmissions has not changed. One challenge that remanufacturers are facing is an influx of low-cost, high-quality parts being offered at good prices - and they are becoming competitive with remanufactured parts.
Ernie Flurry, president of ACE/MCI Commodities, said: “There is a threat from off-shore new parts, so it is up to us to work with our customers to find solutions and keep reman viable.” However, Derek McWhorter, president, River City Truck Parts, explained that when the off-shore product comes back as core, there is some question as to whether it is remanufacturable to the required standards.
Talk turned to the future, with Flurry saying: “It is not good if we just focus on traditional products.” Bob Grady, president, Rebuilders Automotive Supply, believes advanced electronics will be good for remanufactures: “There are 40-50 computers on any vehicle [that can be remanufactured].”
The pace of innovation was also a concern for panel members. According to Al Wilkie, general manager, LKQ Best Automotive: “We are challenged with how rapidly the technology is changing and how rapidly the auto makers are changing parts. Without a large population to draw cores from, the cores become rare. We know what that means - problems with how to economically remanufacture them.”
The various pressures on core suppliers are likely to result in some consolidation, believes Justin Greenberg, CEO of DieselCore. “We have already seen some consolidation over the last few years. Core supply is capital intensive - you will see people joining forces and some may go away. The smaller guys will not be able to stay viable.”
The future success for core suppliers may well be diversification. “We are getting involved in different areas that we were not involved in before,” Greenberg concluded. “I think there are lots of opportunities out there, we just have to look in the right places.”
