9/1/2002
Blowin’ Smoke; Internal Combustion Not Going Away
By Brendan Baker
Government regulations" – just doesn’t sound good rolling off the tongue, does it? It adds yet another wrinkle to an already difficult mix. Hybrid, hydrogen, clean-air diesel...the government’s direction seems so uncertain. However, to operate "in the black" one must be armed with all the necessary tools. You wouldn’t build an engine with just one tool, would you? Therefore, you probably wouldn’t want to make decisions about your company’s future from just one perspective.
Even before that fateful day last September 11, our nation’s energy policies have been scrutinized, analyzed and politicized from every direction one can think of. Nevertheless, it may actually take a rocket scientist to figure out how to convert this nation of gas-guzzling, foreign-oil-relying, automotive-loving people into something else, although no one can agree precisely on what that should be.
In the meantime, you have businesses to run and engines to build. Are you worrying about whether or not the government is going to do away with the reliable, but old, internal combustion engine? Will they swat us all out of business? Do not fret, we at Engine Builder have delved deep into this topic of what to do about surviving the future, and came up with, well, some answers...but don’t put away the antacid yet.
What’s the Outlook For The Future?
According to Engine Builder’s own legal-eagle, Mike Conlon, whose real job is as a legal counsel for the Engine Rebuilders Association (AERA) and the Automotive Parts Rebuilders Association (APRA), "the outlook for those issues that affect rebuilders and the vehicle aftermarket is mixed at best." He points to the fact that, "there is an increasing movement to deal with additional emissions from internal combustion engines, such as particulate matter from diesel engines and carbon dioxide from all engines, which could fundamentally change the engine rebuilding market."
Alternative fuel engines are another gray area for the industry. This could potentially affect engine builders, who might see market demand shrink. Especially, says Conlon, if states decide to regulate air quality by promoting alternative fuel technology. Still, gas and diesel powered engines will likely remain the dominant power plants for the near future because it will be a long slow process to convert to any new fuel source. There is just too much invested in the infrastructure to completely abandon the current internal combustion engine.
"There will be pressure," notes Conlon, "for greater durability and longer emissions warranties so that the first rebuild may not occur until much later in the life of the engine." In effect, this has already begun to happen. With late model engines lasting longer, that means fewer cores available. Moreover, that leaves engine builders with even less quality cores from which to rebuild.
"On the positive side," he continues, "there seems to be an increasing awareness among legislators and regulators alike that there is a need to ensure that independent parts and service facilities have the information necessary to deal with today’s more complicated parts and more precise repairs. This awareness will likely result in more governmental decisions requiring the vehicle manufacturers to disclose all information relating to the service and repair of their vehicles."
A hotly debated topic right now in congress is Senate Bill 2617, the companion bill to House Resolution 2735, commonly referred to as "The Motor Vehicle Owners’ Right To Repair Act." If this bill were passed, it would require that original equipment manufacturers (OEMs) to disclose all pertinent information necessary to service and repair their vehicles. Owners and independent repairers would have access to all emission and non-emission related service information. If passed, this could prove beneficial to late model engine builders.
Frank Bohanan, a technical consultant to the Specialty Equipment Market Association (SEMA), says that in the future, "processes and technologies previously only found in exotic and/or race engines will become more commonplace in the pursuit of getting as much of the energy in each molecule of fuel converted into propulsive work. While a majority of these innovations will be based on electronics, or will at least be electronically controlled, many will also be in the area of the base engine." This bodes well for the future of the engine building industry.
Additionally, "materials which are lighter and more durable will continue to proliferate" predicts Bohanan. "Assembly techniques which assure better sealing and fewer production variations will be the norm."
Furthermore, Bohanan says, "designs which reduce mass yet increase strength, etc. will be found on even the least expensive powertrains. Where race engines take their designs to the limit to maximize power vs. fuel consumption (for limited durability), future production engines will continue to balance output, fuel use and emissions against a need to certify durability for 150,000 miles or more. The bottom line is engine builders of tomorrow will have to look more like the race engine builders of today due to these technologies."
Roadblocks Ahead
Much of what is happening from a legislative standpoint is out of our hands. Which type of engines and fuels will be used in the future? That is the $64,000 question. The people making the decisions, so far, have not shown concern for the well being of engine rebuilders.
"The biggest problem in dealing with most regulatory and legislative issues which affect the industry is that much of our fate is beyond our control," says Conlon. "Decisions on the types of engines and fuels that will be used in the future are being made by the manufacturers, government agencies and environmentalists for reasons which have nothing to do with rebuilders."
The cost and complexity of new engine technology continues to be a stumbling block for many rebuilders, especially the smaller, less-equipped shops. Training will be paramount to keeping up. New processes will have to be learned and new equipment must be purchased.
"The concern is the pace will quicken over the next few years due to government requirements and the potential issue of "critical mass" relative to facilities and personnel," SEMA’s Bohanan explains. "While it’s debatable to what extent business may be able to pass on their increased costs through higher pricing, one hurdle that surely will continue to be significant is the ability to hire, train and retain competent personnel. As technology levels continue to increase many businesses will find this to be the ultimate challenge in terms of remaining profitable."
What’s EPA Got To Do With It?
How will the Environmental Protection Agency (EPA) regulations affect the industry? Bohanan thinks that EPA regulations will manifest themselves into new powertrain technologies. In addition, those businesses will have to adapt to working with the environment as well. "Many business owners are already familiar with the EPA’s requirements in terms of waste disposal and venting," he says, "and these will remain issues as allowable emission limits change."
Additionally, many of the cleaners and fluids that engine builders use regularly would likely be reformulated so they release fewer volatile organic compounds during use. "In many cases these new formulations are more expensive than those they replace," Bohanan notes. "They are also not always as effective as the formulas they replace."
Conlon thinks there will be a favorable effect in that the EPA will require greater and easier access to emissions related information. There is, as Conlon also points out, uncertainty. Manufacturers will be motivated by the EPA to develop new technologies and alternative fuel vehicles, "which may or may not need the same level of rebuilding service."
Will alternative fuel engines cut into profits? Most doubt it because of the present infrastructure we have with internal combustion engines. It’s more likely a possibility that some internal combustion engines will be converted to run on a hydrogen-rich fuel to decrease emissions and our fossil fuel dependence.
But it is unlikely most re-builders will find this a growth area. It may make sense to work on these types of engines to some rebuilders who are geographically located, say, near a fleet that is converting to an alternative fuel, e.g., to take advantage of an emission related incentive program.
The engine rebuilding industry is changing – and fast. It’s probably changing at a rate faster than many businesses wish, but those are the cards that were dealt. So how we as an industry react to this change will determine our future success.
It’s true that much of our fate is out of our control. Or is it? Now is the time to get off the sidelines and get involved. We are fortunate to live in a place where our voices can be heard. It is your responsibility to see that your representatives represent you and your business interests.