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Rebuilt Market Reviews - Electronics Market

By Tom Mesereau

If flexibility and the ability to quickly diversify are the marks of a successful rebuilder, then Denver, CO-based electronics rebuilding specialists, cciUPTIME, was destined for this industry. cciUPTIME remanufactures electronic control modules (ECMs) for Mercedes-Benz and other high-end import vehicles. These units include everything from on-board computers to climate control, cruise control, idle speed control, ignition control, seat control and instrument motherboard units.

Starting with its name, you can see that the company is one you wouldn't typically expect to find in the automotive section of the Yellow Pages. In 1982, current president and chief engineer, Craig Morris, along with Pete Thies, vice president and general manager, opened a company called Customs Cabling, Inc. For eight months, this company provided cabling services for mainframe computers. Clients, pleased with the service, asked Morris and Thies if they could also maintain their computer mainframes.

No problem. Morris had studied electronics in college, eventually becoming a missile guidance and control specialist, working on both digital and analog systems in the Air Force. Upon graduating second in his missile training class, the Air Force made him an instructor. When his military hitch was up, he went to work for Burroughs Corp. - now Unisys - repairing computers.

Morris left Burroughs and was hired at Data General by Thies, another Burroughs and military veteran. Thies had been working in inertial navigation found on submarines prior to joining the private sector.

Morris was the first to leave Data General to start SBS, a computerized security company selling systems and maintenance contracts to roller skating rinks. He then opened Custom Cabling and reciprocated Thies' earlier gesture by hiring him.

Once Morris and Thies began servicing computers, and to better reflect their firm's expanding offerings, they changed the name of the company to cciUPTIME. The name reflected the company's philosophy of keeping its customers' downtime to a minimum. "Instead of trying to repair a hard drive on-site, we would bring our own (hard drive) out and put it in their computer so we could repair their problem back in our own shop," said Morris.

For the next seven years, the company expanded to nine employees and mainly serviced government agencies. Middle-of-the-night telephone calls for service, accompanied by security clearances were not uncommon. Although Morris cannot provide many details, he did tell stories of being escorted by armed guards under closed circuit cameras through a series of locked doors to computers located inside a safe.

While their business initially flourished, it was not destined to continue over the long term. As mainframes evolved into more complex units, and PC networks made the need for many mainframe systems obsolete, cciUPTIME began to lose its contracts around 1990.

"We decided we needed to make some changes or the company was not going to be around," said Morris. A friend who worked on Mercedes-Benz vehicles had brought in a box of electronic modules several months earlier with the hope they could be repaired. The box was still sitting on a shelf when cciUPTIME recognized the need to expand its market.

"We got out this box of modules, took some of them apart and replaced some burned out components, said Morris. "We then put them into some cars, and they worked." This initial encouragement was enough to start what Morris described as an immense learning curve that required a tremendous amount of reverse engineering.

Without the benefit of factory drawings, Morris and Thies had to draw schematics of automotive ECMs and learn the original design. And while the first remanufactured components did, in fact, perform their intended functions, electronic testing equipment was needed to ensure that high-quality would be achieved consistently.

That testing equipment represents the single most time-intensive portion of the company's learning curve. Each different unit being rebuilt requires its own testing equipment. Testing equipment duplicates actual vehicle operating conditions.

Pointing to a box with dozens of lights, switches and codes, Morris said it initially took his company more than 200 hours to build each tester. Along the way were enough successes to keep them going, and enough failures to remind them of the need to get the testers working perfectly. "More than once, we borrowed a part and burned it to a cinder," explained Morris.

As soon as Morris and Thies were satisfied they could remanufacture a quality ECM, Morris began to do what seems to practically be a prerequisite for automotive aftermarket entrepreneurs. With product samples in the trunk of his car, he would visit Mercedes-Benz dealerships and independent repair shops. The first thing Morris did when he went to a shop was to buy all their cores. "There were always some sitting on shelves or in boxes, and I would just start handing over money for them," he said. "Then, I would show them the remanufactured modules. Sometimes they would buy some, or trade me their cores for them."

Learning the automotive industry on the fly, cciUPTIME began to establish a rapport with these dealers. The big step in the company's history, however, came when a local sales rep introduced cciUPTIME to a major WD. Once the first WD began carrying the cciUPTIME line, the next WD was easier to sell to. "The first couple, we had to beat on their doors," said Morris. "After that, they started calling us."

Growth has been managed, and some customers have been dropped. A program to South America, for example, was discontinued when the buyers never reciprocated with cores. Controlling the customer base is a luxury that resulted because of cciUPTIME's extensive coverage of the Mercedes-Benz market.

As with many rebuilders, ensuring an adequate core supply is critical. Many of the company's units are simply rebuilt on a custom basis. However, the company's marketing department makes extensive use of telemarketing across a broad range of aftermarket customers to meet core demands. Current director of marketing and core procurement, Jennifer Schlagel, worked as a consultant for the company for close to two years before being hired as a full-time employee.

Today, cciUPTIME's four-person telemarketing department spends its days contacting potential core suppliers on the phone, followed by a mass mailing of 200-300 pieces every Friday. By going as deep into the market as international core suppliers to WDs to repair shops, Schlagel and her department have done a good job of identifying most of the sources for Mercedes-Benz cores.

Schlagel's experience in sourcing Mercedes-Benz cores should come in handy as the company expands its product line into other high-end import vehicle models. The company rebuilds about 2,000 units monthly, but that number should grow substantially as the company begins ramping up production for BMW, Volvo and Audi modules. Plans call for continued expansion into other high-end car lines. "There is just not enough of a margin to justify rebuilding Chevy modules," said Morris of cciUPTIME's decision to stay with luxury model import units.

Although a major step for the company, the growing pains should not be as bad as the first time around. cciUPTIME has several advantages this time through. First, it has established its name within the industry and is well-know among Mercedes-Benz service providers and suppliers. Second, its remanufacturing systems can be transferred over more easily to other vehicle model lines. The testing machines can be built in about 40 hours now, versus the 200+ hours required with the original units. Suppliers for the decals (items such as the icons found on climate control buttons, etc.) and plastic pieces (buttons for climate control units, high-wear items that temperature wheels are attached to, mounting hardware, etc.) are already in place.

After several years of knocking down walls and cutting holes for doors in its present rental space, the company has just moved into a new building constructed especially to accommodate its needs. Moving from 4,700 sq. ft. into 10,000 sq. ft., the new facilities easily provide enough space for considerably more technicians and inventory. Presently, the company employs about 22 people.

While cciUPTIME is a rebuilding operation, it is unlikely it will experience the same competitive challenges that rebuilders in many other markets face. As Thies described the company, "we're really a hybrid between an electronics and automotive (rebuilder)." And, at least for the present, that means cciUPTIME is one of a limited number of companies that has developed the knowledge and expertise to rebuild and supply the growing number of replacement electronic modules required for today's vehicles.