Engine builders involved in the industrial market say parts generally don’t cross over even though they may resemble their automotive counterparts. And shops that specialize in this market typically don’t build automotive engines.
But don’t discount the opportunities these engines present, even if you don’t consider yourself an industrial expert.
The builds are about the same, however, the traditional automotive parts distribution channels will not work to source components for these engines. Many of the manufacturers’ partnerships means standard distribution channels are blurry at best, and you will find that paying higher prices for a similar automotive part is the norm. But with today’s market, many automotive machine shops need to find other ways to utilize their existing equipment and manpower to turn a profit.
Many of the engine builders interviewed for this article that specialize in these engines say it is not as easy as it looks to cross over from automotive to industrial engines. There are many quirks and engine configurations to deal with, say our industrial experts. There’s nothing very unusual or unique about industrial engines, although some of the older equipment may seem a bit antiquated to automotive shops that haven’t built a flathead in a while. One advantage that engine builders who want to enter the industrial market may have is that industrial engine building won’t require any special tooling that you don’t already have.
Midsize engines in this market are not what would be considered midsize in automotive/on-highway markets, say our experts. Midsize industrial engines typically range from 3- to 6-cylinders. Though forklift trucks seem to be the most common application (using gas, diesel, natural gas and liquefied propane (LP)), there are several other applications for midsize industrial engines. The term “industrial engine” mainly refers to off-highway applications such as those found in construction, mining or logging company dozers, backhoes and bobcats. The most common engines are from familiar sounding manufacturers such as Mazda, Mitsubishi, Toyota, Nissan and even GM. But these engines likely will have several different configurations for you to figure out, depending on the application.
Domestic engines such as Continental and others used to rule the market back in the day, but they are now obsolete, due mostly to their flathead engine design, and the fact that the market is flooded with less expensive Japanese engines. However, these durable engines are still around in abundance so engine builders need to be familiar with them. Industrial customers typically hang on to their equipment for a long time and often engines have several rebuilds on them before equipment is replaced all together.
“Older forklift engines such as Continental are still very popular engines for our shop to rebuild,” says Charley Arnold, CharNor Remanufacturing, Milan, IL, who remanufactures about 1,200 engines per year for several dealer and OEM programs. “The Continental, for example, represents 10-15 percent of our production, and it has been out of production since 1985 and was abandoned by many manufacturers well before that. Parts for these engines are, surprisingly, not a problem to find. There are some oddball OEM parts that are more difficult to locate.”
Industrial engine blocks and cylinder heads are the same or similar to automotive engine counterparts, but the external accessories differ from application to application. There may be differences in flywheels, water pumps, timing covers, manifolds, fuel systems and engine block mounting bosses. Identifying the correct application is extremely important when rebuilding these engines because customers expect an exact replacement if you sell on an exchange basis. However, this will be less of a problem if you are rebuilding the customer’s engine.
Rick Ervin, Pioneer Engine Company, Warminister, PA, specializes in remanufacturing forklift truck, construction and agricultural engines, and says that some of these midsize engines are remarkably similar to automotive engines but for a few differences. “Some of the engines on the forklift side – FE Mazdas, which some people call the 2.0L Mazda, and the 2.2L, which is an F2 – are similar to the 2.0L Mazda automotive engine except for a few slight differences,” explains Ervin. “Many of the industrial applications may not have the air pump or air valves that the automotive engines have.
Most of the time these engines don’t cross over. You can’t go into a junkyard and pull an engine from a B2000 Mazda truck and be assured it will work in a forklift truck. EPA standards are quite different for these two applications.”
Ervin says the same thing is true of the Mitsubishi 4G54s, 63s and 64s. “These, too, are similar in some aspects but often you’ll get one from a passenger car and it won’t work. “You used to be able to buy plugs to cover some of the unused air holes in 54 Mitsubishi heads, but customers aren’t very happy when they see stuff like that. Customers in the industrial market want apples for apples,” he says.
“We’re also in the core business so if we get an automotive core back we don’t want to pass that on to our industrial customers,” Ervin explains. There are some crossover engines, but most of them don’t fall into that category. And none of the diesel applications cross over.”
Another sticking point for industrial engine builders is sourcing parts. “Sourcing parts is always a challenge,” says CharNor Remanufacturing’s Arnold. “It’s the availability of parts: Some of our suppliers are two and three days away instead of the one day that most automotive shops are used to. It can be very difficult to find the parts you need and then you have to deal with the time issue because it will take three days between order and delivery. And it’s difficult to stock everything you need.”
David Gaydos of All Industrial Engine Service, Willoughby, OH, agrees. “The cores and parts for these engines are the biggest issue. The cores are getting more difficult to find, and the parts for these engines are harder to track down. With all the company mergers and licensing agreements, sometimes you have to go through a different manufacturer for parts for another manufacturer because they have a distribution partnership. As crazy as it sounds, for example, you have to go through CAT to get any parts for Mitsubishi because they own the rights.”
Another big challenge in this market, say our experts, is the range of different engine combinations you need to be familiar with. One of the daunting tasks is realizing that these engines have several applications and variations, and many of the engines have unique drive accessories.
“We have 8 different combinations for the 4.3L GM – but that isn’t so bad compared to some others,” says Arnold. “Some Continental engines have as many as 25 or 30 different combinations of assembly. That’s a big challenge for us because we must correctly specify an engine and provide our dealers with exact fit engines. We don’t sell engines that ‘will fit’ – we sell exact replacements.”
Ervin echoes what Arnold and others say about parts availability being difficult to find for every application. “Parts can be difficult to find for the more obscure model engines. On many of the diesels you have to go back to the dealer for parts because they aren’t usually available in the aftermarket. And it can get expensive, having to buy from a dealer and wait for the parts. It can sometimes be a challenge to build an engine at a competitive price if you have to buy everything from a dealer. On the flipside of that, though, some industrial applications, especially diesels, are not available from the dealer or anywhere else. Many of these engines simply weren’t built in large enough volumes to justify tooling up to build more parts. Subsequently, new engines may not be available from the dealer so a customer will come to us to rebuild what he has instead of investing in new equipment.”
Industrial engine builders say that another difference with the automotive world is that standard oversizes are not always available. You will need to keep this in mind when ordering parts and doing the machine work. Some engines will only have .010″ and .020″ oversizes available.
“There are some engines such as the Komatsu 6D95 and 4D95 where .010″ and .020″ or the metric equivalent are the only two oversizes available,” says Pioneer’s Ervin. “I can get pistons for a 6D95 Komatsu in .25 mm, which is .010″ over, but how often can you use a .010″ over piston? There are a few other engines like this also – the Mitsubishi S6E and S6S and some Perkins engines – where the biggest oversize is .020″, which is very hard to make in most cases. So we have to sleeve the blocks when we can’t get the right oversize.”
Getting the Job
Industrial engine builders take different approaches to the market. Some shops specialize in only industrial work through various dealer networks and manufacturers while the smaller shops tend to work more with individual companies in their region who use the equipment. One engine builder says that there is a lot of work out there through local construction and agricultural companies as well as factories, but he believes it also helps to be able to service the whole machine, not just the engine.
Greg Kulak of Automotive & Industrial Machining Company, Souderton, PA, says he takes almost any job that walks in the door but right now he’s not getting all the industrial jobs he could get because he can’t service the whole equipment – yet.
“Most people who operate industrial machinery are not capable of doing the installations and removals themselves,” explains Kulak. “They are lucky if they can perform basic maintenance. Many of these customers don’t want to hassle with the mechanical work on top of what they already do. There is a market in our area if we can service not just the engine but also the full equipment from start to finish. We have a number of companies who will bring us the equipment if we can do the work, so we feel we’re missing out right now. We plan to expand at the beginning of the year and add a bay door to handle the extra work.”
Some industrial engine specialists utilize partnerships with manufacturers or dealers to reman engines for them. “We have three markets that we sell to,” says CharNor Remanufacturing’s Arnold. “One of our markets is an OEM program representing CAT and Mitsubishi. We rebuild their engines and return them to these manufacturers for distribution among their dealer networks. We also have a partnership relationship with Yale and Hyster in which we provide product directly to their dealers for support to their aftermarket. And finally, we sell directly to forklift dealers and forklift repair shops. A very high percentage of our business is directly related to forklift engines and also other material handling equipment such as sweepers and tow tractors.”
According to some industrial engine specialists who have done both automotive and industrial engines, the automotive market has changed too much and they prefer doing industrial engines.
Pioneer’s Ervin says his shop is a lot like an Italian restaurant. “We don’t have a huge menu, but we’re very good at what we do. If people come in with high performance work, we usually send them to someone else in the area because there are a lot of shops that are good at doing that kind of work. We have transformed and become primarily an industrial engine remanufacturer, so we don’t go after automotive work at all. I saw 10 or 15 years ago the way the automotive industry was changing and that it was going to be increasingly more difficult to service that market for us. We decided back then to go with what we knew best – that was the industrial market, and it has paid off for us.”
Many engine builders in the industrial market full-time (and even those who have only part-time involvement and come from the automotive side) say that there is money to be made in industrial engines. One industrial engine specialist candidly admitted that his shop is making good profits, but says the industry is very competitive and he doesn’t necessarily want more competition. However, it’s unlikely most automotive engine builders will drop what they are currently doing and jump into industrial engines full-tilt.
It’s a good market to help supplement what you may already be doing, and the tooling and manpower requirements will not be any greater than what most shops already have. Profit margins tend to be a little bit higher than the production automotive market because new industrial engines from OEMs tend to cost a bit more than an automotive engine.
Subsequently, parts also cost a bit more, but industrial engine customers expect to pay more for parts and labor.
Some experts caution, however, that the industrial market can be difficult to get into if you plan to sell exchange engines. You must first develop an extensive core bank, which is not that easy and can be very expensive. Some cores can cost as much as $600 and you also have to know all the variations so you can give your customer the correct application.
Special thanks to Pioneer Engine Service and CharNor Remanufacturing for providing photos and information.