What Are The Costs? - Engine Builder Magazine

What Are The Costs?

In the equipment industry, it’s a similar situation. Change and development have been furious. Advancements in technology have made nearly every step of the rebuilding process more exact than ever, which has made it easier for shops to meet the ever-tightening tolerances and reach OE specifications.

But these advancements haven’t come without their costs, both financial and otherwise. Manufacturers and suppliers acknowledge that significant challenges face this business as we move ahead. Have we reached the limits of what is needed – or expected – in the engine building equipment market?

Where Are We Now?

“There’s no question that there is an increase in both the desire and need for accuracy,” explains Deron Lock, Peterson Machine Tool. “The materials in the components – blocks, heads, inserts – will likely continue to advance. The OEs will continue to push for accuracy, meaning it will continue to be important at the rebuilding level.”

Lock suggests that accuracy, speed and repeatability will be critical, and rather than settling for one or two, rebuilders will need to achieve all three in order to compete.

Automation has, in many cases, made these three elements a more easily achievable reality for engine rebuilders. We can thank the innovative thinkers in the computing industry for that.

“Almost every machine made has some form of electronic control, whether it is a variable speed driver or digital monitoring,” explains CWT Industries’ Randy Neal. “You could consider it related to more sophisticated computers.”

Rottler’s Anthony Usher agrees that computing power has been a great advantage to this industry. “As we’re able to reduce the cost and simplify the controls, we’re able to put them on more machines,” he says. “In turn, the market is getting less ‘scared’ of computerized controls.”

New multi-purpose machines allow engine builders to not only achieve OE or better quality in surface finish and tolerances, but also give the ability to manufacture parts for sale to their customers. “For example,” says Usher, “we have a customer who is making cylinder heads for vintage, nostalgic vehicles. He’s able to design the product and the process right on one machine. He’s not making hundreds of them a month – just one or two – but he’s making a fortune on them.”

This, say the experts, has been one of the biggest advancements we’ve seen in the market. Just a few years ago, you would need to buy a $30,000 CAD/CAM package, go to school to learn to use it, then get it all converted to your machine’s language. Once you had done those steps, then you could try it out on your machine and try to get the whole thing to work. Today’s electronic technology means you can do it all on the computer screen connected to the machine itself, in an easy-to-use “conversational” language that guides you through each step of the process.

“Do you need CNC to achieve accurate machining?” asks Lock. “No, but for speed and repeatability, you do need CNC. These have always been important and they’ll be that way more than ever.”

Ed Kiebler of Winona Van Norman agrees. “Computer controls don’t make a machine any more accurate. They allow an inexperienced operator to make as accurate a part as an experienced operator. But it is the construction and quality of the machine that ensures the accuracy.”

CWT’s Neal points out that computer controls are just part of the machine advancements. “The new machines that use controllers are proportionally redesigned in almost every area. Servo motors with position encoders are attached to precision ball screws that traverse a moving component on a precision way system that has been secured to a computer design (CAD/CAM) base. This has been ergonomically structured to enhance the machining tolerances and operator efficiency.”

Neal admits that this statement doesn’t cover every aspect of the advancements found on today’s machines and says the general public is unaware of the changes that continue to be made to each generation of equipment. He stresses this one point, however: “Older equipment simply does not measure up to today’s standards.”

Rottler’s Usher believes that while advancements will continue, some customers may need a bit more time to adjust. “While people are more accustomed to computers today, there is still a range of users who may be intimidated by fully automatic machines with touch screens. Today’s manual machines are easy to operate and provide improved head and block deck surfaces and cylinder bore finishes. Frankly,” Usher says, “we feel they are good investments for certain customers.”

Still, this industry hasn’t gotten its level of technical expertise by standing still. To a man, every equipment company spokesperson, when asked if we have seen the limit of engine rebuilding equipment innovation, gave an emphatic “no!”

“Have we reached a limit? No, I don’t think so. It’s always been a very ingenious group of people, and when things look the darkest, that’s when people have some of the brightest ideas as to how to remanufacture, rebuild or salvage something,” says Ed Kiebler.

Jeff Law, of Haas Automation echoes Kiebler. “I don’t believe we’ve reached the limit of potential advancements,” he says. “Emissions regulations continue to tighten and performance demands continue to increase. As a result, engine designs must continually improve. As designs become more complex and tolerances become more critical, the machining processes and equipment must also advance.”

Gerry Schnitzler, from Sunnen Products, suggests that future advancements may be seen in 5-axis cylinder head machining with a focus on reasonable cost. In addition, says Schnitzler, the market will see much more unattended machining operations, including floor-to-floor block honing without intervention after loading the block.

“All machines that make chips will see direct improvements due to tool holder designs along with insert composition and coatings,” says Randy Neal. “What every manufacturer is trying to achieve is an insert positioned in the best possible geometry that will machine the part with less tool load and give improved surface finish. The CBN and PCD inserts that are accepted today will be replaced with newer and less expensive inserts that will yield better results.”

Neal says he believes that the direct result of the advancements yet to come will be radically faster process cycle times and moderately faster floor-to-floor times, both positive benefits for rebuilders. He, like others, also foresees continued acceptance of computer-assisted and user-friendly machines.

The science fiction writers promised us flying cars and wildly exotic engine composites by now. We can’t be sure if the anti-gravity vehicles are on the drawing boards, but the basics of an engine haven’t changed much over the past few decades. So many of the machinery developments are likely to be dictated to the equipment industry by changing OE technology, of course.

Perry Crabb, of Axe Equipment, says that his company’s approach to development is “‘How can we make things better?’ not necessarily, ‘what is the cutting edge technology?’ We tend to take what we already have and improve it to meet the needs of our customers.”

Crabb says that from his perspective, the basic cleaning needs of rebuilders haven’t changed much. “We still have grease and carbon deposits, and we’re still working with mainly cast iron and aluminum.”

While the basic engine may not have changed, some of the chemistry used to clean it may be advancing. Sunnen’s Schnitzler says better solutions are undoubtedly on the horizon. Winona Van Norman’s Kiebler expects breakthroughs in aluminum cleaning technology and the reduction of multi-step cleaning processes. Peterson’s Lock agrees that one-step cleaning operations – either through improvements in solution chemistry or delivery – can help rebuilders and remanufacturers realize real efficiencies.

Research and Development

Of course, crystal ball predictions don’t really do anyone much good. In fact, as those science fiction writers found out, what sounds exciting may not be possible…or feasible. While we obviously haven’t reached the limit of innovation, the reality of what can be developed and what will be developed are two different things.

“When we had the initial gas crisis (in the 1970s), everything got scaled down,” says Kiebler. “There was a push from our customers for smaller equipment. But as gas freed up – or the public has grown accustomed to the expense – we’re all back to driving SUVs again.”

Now, fuel mileage is much better than it used to be, of course, and we’ve gotten accustomed to cheap gas. “But we recently had another shock to the system,” Kiebler continues. “Whether the OE’s attention to hybrids is real, it may cause people to look more seriously at them. If so, I think we’ll see smaller displacement motors and, as a result, a tremendous downsizing in equipment.

Customers won’t want to buy a machine that can do a 37? long head if they’re working on heads that are 8? long. There will definitely be a need for adjustment and we’ll have to address that.”

Others agree that the prospect of hybrid car engines may impact the rebuilding business, but to what extent remains to be seen. To some, the OE interest in hybrids is seen as a real change in focus; to others, it’s a technology that’s so far down the road that it doesn’t warrant immediate concern; to still others it’s simply a marketing ploy. Regardless, changes in engine technology will require that rebuilding machinery be equal to the task.

The fact is that the “D” in R&D usually takes another significant “D”: dollars. Unfortunately, say many of these equipment suppliers, the reality of the situation in the industry is impacting those dollars. It’s not that there aren’t new ideas; it’s simply a matter of where to draw the line. Some major equipment companies have reportedly reduced or dropped their R&D programs, figuring that they’ll let other companies lead the way into the unknown.

Development on one end – new ring compositions, fuel system innovations, surface finish advancements, for example – has led to engines that last as much as three times longer than they did just a few years ago. Because of this, shops that can no longer compete have closed, leading to a shrinking marketplace for equipment. “The profit rule that applies to the machine shop equally applies to the manufacturer,” says CWT’s Neal. “All research and development comes from the profits received from the sale of new products. As the volume of new sales decreases, the available R&D dollars are decreased.”

Equipment suppliers say they are hit with the double whammy of fewer shops to buy the new equipment and much more used equipment available from failed shops in the marketplace.

“As an example,” Kiebler explains, “let’s say there were 10,000 shops 10 years ago, and now there are 6,000 shops. Not only have we lost 4,000 potential customers, but there is a glut of used equipment out there. Out of the remaining 6,000, say 1 in 10 is a potential equipment purchaser at any time. Now you have 600 possible customers and my estimate is that 30-40 percent of these will go for used equipment (some sources suggest the used equipment market may actually be as high as 60-70 percent). We’re looking at a much smaller potential market.”

Kiebler says that manufacturers may be therefore reluctant to invest in new, innovative technology because there’s not enough market to justify the costs. This loss of R&D is, according to Neal, “the cancer that can kill this industry.”

“Once a customer has purchased a used machine, he has financially removed himself from purchasing a new one,” cautions Neal. “The main reason to purchase a used machine is price, not features, and once a shop commits to low-tech, inefficient machinery, he has set a course for his own demise.”

Rottler’s Anthony Usher says he finds that it’s harder than ever to sell new technology, but it’s more important as well. “We almost have to convince our customers of the importance of being better businesspeople. This isn’t about survival in this industry anymore – if you’re not prospering in this engine rebuilding industry you’re actually dying.

Usher says his sales and marketing travels take him all over the world, and it’s the same story: “The shops that are buying new equipment are the ones who are making money. The ones who are hanging in with the old stuff find their productivity going down. Unfortunately, they often think the way they’ve been doing it for years is fine. They don’t see the downward spiral.”

Of course, it’s not only budget-minded companies who buy on price, according to our sources – the concern is that price becomes paramount to features and specifications. Law from Haas Automation says, “New product development and updates are a fact of life for any equipment manufacturer that wants to remain competitive. The same goes for engine builders. On the other hand, the availability of used equipment has put downward pressure on equipment manufacturers to develop lower-cost machines. As a result, it’s now possible, in many cases, to purchase new equipment for about the same price as used.”

Says Neal from CWT, “There must be a balance of these two issues. If the new or used machine is to be financed, then cash flow (payment amounts) should be part of the evaluation process. In most cases the cost per month is not radically different between the two products, in fact they are generally quite close.”

Shortened Lifespan

A conundrum in this industry is that, while engines are lasting longer and longer, the equipment used to rebuild them has a much shorter lifespan than it used to. Generally, equipment that had a useful life in the past of 10, 15 or even 20 years, may now be considered obsolete in as little as 5-10 years…or less.

The basic functions of the machines – what they do and how they do it – haven’t changed much. The “iron” stays the same. But the computer control – the electronics and software – are constantly changing. Much like desktop computers, machine tool controls are always advancing, in search of higher speeds, more features and ease of use.

These advancements are necessary not only to meet the increased accuracy from the OEs, but also, say suppliers, to meet the expectations of future employees.

It’s one of the reasons that much of the high tech machinery these days comes in both “manual” and “automatic” configurations. While there are still a lot of the “old guard” who can run manual equipment and achieve a high degree of accuracy, there aren’t a lot of young machinists coming into the industry.

“Shops aren’t going to be able to attract the next generation with 30-year-old machines,” explains Rottler’s Usher. “They don’t want to use big levers and wrenches – they are motivated to get the job done, and in many cases to let the machine do the job. They want to push some buttons, do the machining and make the money.”

Kiebler concurs. “This is a rapidly changing industry on all sides. As suppliers, we have to look at ways to help our customers. The increasingly automated and computer controlled equipment can help them be more precise. And it takes the learning curve out of the equation.”

Deron Lock says the changing face of the industry includes demands from your customer as well. “Increasingly, engine builders will find they can’t make their customers wait. They’ll need to have some ability to stock engines at a fairly low level and have a high level of capability to assemble an engine in a short amount of time. Lean manufacturing will come to the engine builder, with the need to keep the inventory of complete engines low. That’s where the capabilities of the new machines will help. The speed and flexibility that they offer will allow you to quickly produce what you need when you need it.”

It’s a fine line, according to sources: how much inventory can you stock? New technology will allow you to shorten the order-to-delivery time on new engines. That gives you the opportunity to work smarter, not harder – and be more productive and profitable.

Machine Equipment Buyers Guide

Sunnen Products Co.


Winona Van Norman


CWT Industries


Haas Automation


RMC Engine Rebuilding Equipment


K-Line Ind. Inc.


Axe Equipment


Block Pro


BHJ Product Inc.


Charlie Cockey Precision Inc.


Goodson Tools & Supplies for Engine Builders


Peterson Machine Tool, Inc.


Quality Power Products


Gehring LP


Rottler Mfg.


Kwik-Way Products




Serdi Corp.


T & S Machines and Tools Inc.


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