Engines are one of the major categories of remanufactured components discussed. Remanufactured engines are rebuilt to restore internal wear items (like bearings and cylinder surfaces) so the unit can perform like a new engine.
Term
rotating
In this context, “rotating” refers to rotating components that are commonly remanufactured, such as alternators and water pumps. These parts wear internally but can be rebuilt and rebalanced to restore proper operation.
A water pump moves coolant around the engine so it doesn’t overheat. Since it wears out over time, it can often be rebuilt and sold as a remanufactured part.
A transmission transfers power from the engine to the drivetrain and manages gear ratios. The episode notes that transmissions are rebuilt via remanufacturing, typically replacing worn internal components to restore shifting and durability.
Axles transmit torque from the drivetrain to the wheels. The episode mentions that axle components are among the drivetrain parts that can be rebuilt through remanufacturing to restore strength and proper operation.
Concept
end of the Second World War
They’re saying remanufacturing became common after World War II. When new parts were scarce, rebuilding used parts was a practical solution.
Remanufacturing means a company takes an old part, takes it apart, fixes or replaces what’s worn out, and puts it back together so it works like new. It’s often cheaper and can be more sustainable than making a brand-new part.
ZF is a company that supplies parts to carmakers—especially drivetrain components like transmissions. In this segment, they’re talking about where ZF rebuilds/remakes used parts.
Concept
remanufacturing over the world
They’re saying remanufacturing isn’t just one factory—it’s done in multiple places around the world. The goal is to be closer to customers so shipping and waste are reduced.
A dealer network is the chain of car dealerships that sell parts and do service for a brand. The episode is saying remanufactured parts can be sold through those same dealership channels.
Term
service customers
Here, “service customers” means businesses that supply parts for fixing and maintaining vehicles. It’s not about building new cars—it’s about repairing cars already on the road.
Gaskets are sealing components used to prevent leaks between engine/transmission housing surfaces. The guest says remanufacturing replaces gaskets and seals as part of restoring the unit to proper sealing performance.
Seals are components that keep fluids (like transmission fluid) from leaking out of moving or pressurized areas. The episode notes that remanufacturing replaces seals to address wear and restore leak-free operation.
Engineering updates are design or parts revisions made after the original manufacturing date to improve durability, performance, or reliability. The guest explains that if updated parts exist, the remanufacturing process incorporates those revisions.
After a remanufactured transmission is rebuilt, it gets run through a longer check to make sure it works properly. New parts can be tested faster because the manufacturer assumes components are already within spec.
The guest describes remanufacturing steps that include full disassembly and cleaning using equipment like washing machines and blast blasting (media blasting). These processes help remove contaminants and old residue before inspection and reassembly.
In this context, “salvage” means recovering usable material and components from a used core during remanufacturing. The episode emphasizes salvaging both the material itself and the manufacturing work already done (like casting, forming, and machining).
Embedded energy is the energy that already went into making a part—like mining the materials and processing them. Remanufacturing can save a lot of that energy because it reuses the original part instead of melting everything down.
Recycling usually means you take used materials and process them so they can be remade into something else. The hosts are saying remanufacturing can be better for carbon savings because it keeps more of the original part intact.
Class eight trucks are the biggest, heaviest-duty trucks on the road—think long-haul or heavy work. The hosts are saying the remanufactured part they discussed is for that kind of truck.
Term
CO2 equivalent
CO2 equivalent is a way to put different greenhouse gases on the same scale by converting their impact into “how much CO2 they’re like.” It helps you compare emissions fairly across different gases.
An alternator is the electrical generator in a vehicle that charges the battery and powers the car’s electrical systems. The episode’s point is that in a properly remanufactured alternator, the case can often be reused while internal components are replaced.
In this context, “rebuilt” describes a less comprehensive repair standard than remanufacturing. The speaker contrasts it with reman by noting rebuilt work often replaces only certain wear items and may not include full teardown, measurement of every component, or updated design changes.
“Limited replacement” means they only swap out the parts that are most worn. Instead of rebuilding everything from scratch, they keep some major components and replace the smaller wear items.
Piston rings are small metal rings on the piston that help seal the engine. If they wear out, the engine can lose compression and start burning oil, so rebuilds often replace them.
This phrase means taking the whole unit apart completely. The idea is that a full teardown lets the shop measure and replace more worn parts than a partial repair.
This means the remanufacturing is done with a consistent, factory-like method. Instead of a one-off repair, they follow the same steps every time to check parts and rebuild them reliably.
“Rubber parts” are things like seals and other flexible components. They wear out over time, so remanufacturing usually replaces them to reduce the chance of future leaks.
Concept
carbon footprints
A carbon footprint is basically how much pollution (greenhouse gases) is created by making something. Rebuilding old parts can lower that because you don’t have to make everything from scratch.
“End of life” refers to the period after a vehicle or component is no longer in production. For parts supply, it’s challenging because demand continues for years, but original manufacturing capacity and supplier availability may disappear.
These are the unique computer parts inside modern vehicles and machines. If they stop being made, it becomes hard to build replacement electronics years later.
In this context, “salvaging” means recovering usable material or components from returned cores rather than discarding everything. The speaker emphasizes high salvage rates as a key driver of both cost and sustainability outcomes.
Rare earth minerals are special materials used in things like magnets and electronics. If a remanufacturer can recover them from old parts, it reduces waste and helps secure supply.
Topic
remanufacturing vs recyclers
They talk about how rebuilding parts and recycling parts can overlap. Sometimes the same old parts get diverted to recycling instead of being rebuilt.
A “core” is the old, used part you bring back so it can be rebuilt. Think of it like returning the old transmission casing so the shop can reuse what’s still good and replace what’s worn out.
Remanufacturing means taking a used part, taking it apart, fixing or replacing the worn pieces, and putting it back together to work like a replacement. It’s usually cheaper and can be more environmentally friendly than making a brand-new part.
Replacement components are the individual pieces inside the transmission that get replaced during rebuilding. They’re important because the remanufacturer needs the right parts to make the rebuilt unit work properly.
Reverse logistics is the “return process” for parts—getting the old core back to the company that rebuilds it. It can be complicated because the company has to receive, sort, and process the returned parts.
A torque converter is part of an automatic transmission that uses fluid to transfer power from the engine to the gearbox. It’s included in the transmission package they’re talking about.
Repair kits are pre-packaged sets of components sold for fixing a specific part, often allowing a shop or DIY customer to rebuild a unit without buying a complete remanufactured assembly. The episode says some parts are sold as repair kits for people to do their own work.
“Spray and pray” is a joking insult for sloppy rebuilding—basically cleaning things quickly and hoping they’ll work. It implies the work isn’t thorough enough to be reliable.
“Eight and nines” means the transmission has 8 or 9 forward gears. More gears can help the car feel smoother and use fuel more efficiently, but the transmission is more complex.
“Bench builds” means rebuilding rare units in smaller numbers, more like careful hands-on assembly than a factory line. It’s used when there aren’t enough cars to justify mass production.
They’re saying there are specialized rebuild facilities in Germany that focus on harder-to-find or specialty transmission parts. Instead of trying to do everything everywhere, they send the work to the experts.
DFMA is a design method that helps engineers make parts easier to build and easier to assemble. The point here is that it’s great for making cars, but it doesn’t automatically help when you need to take parts apart later.
This means designing a part so it’s practical to rebuild later. If it’s easier to take apart and repair, remanufactured parts can be cheaper and better for the environment.
This means engineers consider environmental impact while designing a part, not just after it’s built. Here, they’re saying the best time to think about it is during the design stage.
Life cycle just means the whole timeline of the product—from making it to using it and eventually getting rid of it. The point is that early design choices have big effects later.
OE engineering is the team at the car company that designs the original parts for new vehicles. The point is that if remanufacturing is required, they have to design with future rebuilding in mind.
Service parts are the replacement parts sold for repairs after a car is already on the road. The discussion is about how important (and profitable) that business is for car companies.
The “design cycle” is the timeline and steps engineers follow to create a car part. Changing things early is usually cheaper than changing them after the design is locked in.
“Warranty production” refers to making replacement parts intended to be used when customers’ vehicles are covered under warranty. The speaker’s claim is that many automakers already do this, and that reman parts can be staged so returned failures feed the warranty and engineering loops.
Failure mode data is information about how and why parts fail (the “mode” of failure). Here, the speaker says that collecting returned reman parts from warranty returns lets the company analyze failures and share findings with the design team to reduce future warranty claims.
Concept
electronics program
An “electronics program” is an organized project to track problems with electronic parts. The speaker is using it to show how collecting return data can help engineers improve future designs.
The transmission filter is like a screen that catches dirt and metal particles in the fluid. If the transmission is “sealed,” you may not be able to change that filter easily.
“Sealed for life” means the manufacturer says you don’t need to change the transmission fluid. Some owners and mechanics disagree and believe the fluid still wears out and should be serviced.
Topic
Great Core facility
They’re talking about a facility where they take special care to keep things clean. The goal is to prevent dirt from causing problems in rebuilt parts.
A clutch is what lets the car smoothly start moving and change gears by connecting or disconnecting power. If parts inside the drivetrain get dirty, it can cause problems.
Renault is a car company. The speaker says Renault has been doing this kind of work for a long time and even runs facilities in France to make or rebuild drivetrain components.
A gearbox is the set of gears inside the transmission. It helps the car use the engine’s power in different driving situations.
Term
tribo chargers
This sounds like the speaker meant turbochargers. A turbocharger uses exhaust gases to spin a fan that pushes more air into the engine, which helps it make more power.
A remanufacturer takes an old car part, breaks it down, replaces worn pieces, and rebuilds it so it works like it should again. It can be cheaper than buying brand-new and can reduce waste.
Term
Reman Industries Council
This sounds like an industry organization for companies that rebuild and remanufacture parts. The speaker is saying they used to lead it and it includes members from different areas.
Retreading is rebuilding a tire by replacing the worn tread surface while reusing the tire’s casing (the body). It’s common in commercial fleets because it can reduce cost and waste compared with buying entirely new tires.
Commercial tires are made for work trucks and other heavy-duty vehicles. Because they’re used so hard, companies often plan for multiple rounds of repair or rebuilding to keep costs down.
The point here is that some cheaper tires may not be good enough to rebuild. If the old tire body is damaged or low quality, you can’t retread it reliably.
Electric motors are what actually turn the wheels in an electric car. The host is saying these motors can be rebuilt instead of replaced every time they wear out.
An inverter is an electronic box that changes the battery’s power into the right type for the electric motor. The episode is saying these can be remanufactured too, if they’re designed for it.
Design for remanufacturing means designing parts so they can be taken apart and rebuilt later. The podcast’s point is that if manufacturers don’t plan for that, recycling and rebuilding may not actually happen.
Chrysler is another big car company. The hosts are talking about how it went through a major financial rescue/restructuring period so it could keep operating.
“Chapter 11” is a U.S. bankruptcy process that lets a struggling company reorganize instead of shutting down immediately. The idea is to keep the business running while it fixes its finances.
Detroit is a major hub for car manufacturing in the U.S. The conversation uses it as a way to talk about how strong (or weak) the auto industry feels right now.
Topic
Keya's West Point, Georgia plant
They’re talking about a specific car factory in West Point, Georgia. The point is to show what modern auto manufacturing looks like on the ground.
Hyundai Genesis is a line of more upscale cars made by Hyundai. It’s meant to feel more premium than Hyundai’s basic models. The podcast mentions it to talk about how brands were represented in a particular setting.
Tariffs are extra taxes on imported products. The segment suggests that rules about Chinese vehicles matter because they affect how well those import taxes are enforced.
“US MCA” is a trade agreement framework the U.S. uses with North American partners. The point being made is that vehicles might be able to enter the U.S. through trade rules in a way that avoids the intended protections.
Modern cars can be “connected,” meaning they can send information over networks. The concern here is that this data could include sensitive details about drivers and infrastructure.
Tesla is a company that makes electric cars. The speaker mentions it to illustrate that connected cars can be treated differently around sensitive locations.
Government subsidies are financial support provided to businesses or industries, which can lower costs and distort competition. The segment argues Chinese vehicles should compete without being “upped up” by subsidies that create an unfair advantage.
This is Toyota’s way of building cars efficiently—reducing wasted time, materials, and mistakes. The goal is to make the production line smoother and more reliable.
Kaizen means constantly making small improvements instead of waiting for one big change. In factories, it’s how teams keep tweaking the process to reduce problems.
Concept
quick guye change
This is about speeding up how quickly a factory can switch from making one part to making another. The faster the switch, the less time and inventory you need.
Concept
moving together in tandem
It means the government and the car industry are working closely together. When they coordinate, it can be easier to plan and build new things faster.
Industrial policy means the government tries to guide which industries succeed. Instead of just letting the market decide, it may set goals or rules that push companies in certain directions.
These are government rules that control how much gas cars use and how much pollution they put out. If the rules keep changing, car companies have a harder time planning what to build.
This is about engineers at General Motors. They’re describing how the company’s teams respond when government rules and priorities keep changing.
Concept
internal combustion nagers
This is talking about regular gas/diesel engines. The point is that, while EVs get a lot of attention, engineers still have to keep improving the traditional engine cars too.
Stilantis is the big car company behind brands like Jeep and Ram. Here they’re talking about how the company is focusing its effort on a few main brands because it needs to manage costs.
Fiat is a car brand (especially known for smaller cars). The hosts mention Fiat as one of the main brands Stellantis plans to focus on.
Brand
Pougeo
“Pougeo” is referring to Peugeot, a well-known European car brand. The point here is that Stellantis wants to focus development around a few major brands, including Peugeot.
The idea is to make new cars that are closely related to the same main models, instead of designing everything from scratch. That helps a company save money while still offering different-looking cars.
Volkswagen is a big car company that also owns other car brands. The hosts are saying Volkswagen used to be very strong, but the market has shifted recently.
Peugeot is a French car brand. The conversation is basically saying that even if cars share the same underlying engineering, the brand name still matters for politics and marketing.
Stellantis is a large car company that was created by combining two big groups. The discussion here is about how different countries still have influence over which brands and models get prioritized.
A platform is the shared “base” that multiple cars are built on. If a company uses the same platform for different models, it can build them cheaper and faster.
Body-on-frame means the car has a sturdy “skeleton” frame, and the body is attached on top. Trucks often use this because it’s strong and can handle tougher work.
Leapmotor is a company that makes electric cars. The hosts are saying Stellantis (or the industry) may work with companies like this to build cheaper EVs.
“E-revs” here means a kind of electrified car that isn’t necessarily a pure plug-in electric. The idea is that cheaper electrified tech could show up in more kinds of cars over time.
Dodge is a car brand known for sportier, performance-oriented models. The hosts are discussing whether Dodge should bring in more exciting cars to attract buyers.
The Dodge Hornet is a small crossover vehicle name associated with Dodge. A crossover is a car type that blends the feel of a car with the higher seating and space of an SUV. The podcast mentions it as a model Dodge planned to bring out and connect to a shared platform.
Alfa Romeo is a sporty car brand from Italy. The discussion is about whether it can realistically sell enough cars in the US to justify keeping the brand and its dealer network.
The Dodge Ram is a pickup truck made by Dodge. It’s designed for hauling and everyday utility, like carrying cargo or towing. The podcast brings it up because it’s one of the brands that could get more attention or investment.
A dealer buyout is when a manufacturer pays to take over or compensate a dealership network, typically when a brand is being discontinued. The speaker suggests a strategy of letting dealers close gradually to avoid the cost of buying them out.
They’re debating whether a car brand can survive if it doesn’t have enough different models to sell. If there are only one or two cars, it may be hard to keep the brand strong.
An investors day is when a company updates investors about what it plans to do next. Here, they’re saying Chrysler’s big product news may come around that event.
Car
Chrysler minivan
A minivan is a family vehicle built for lots of people and easy access. The hosts are using the Chrysler minivan as the main example of what Chrysler has to sell right now.
They’re debating whether the next sedan will be electric. That matters because electric cars use a different power system than gas cars, and sales numbers can change what companies decide to build.
“Tooling” means the factory equipment used to make a car’s parts. If that equipment is already paid for, the automaker can update the car’s look without having to buy brand-new factory gear.
The Dodge Durango is an SUV model that’s been sold for a long time. The discussion is basically saying you can keep selling a familiar vehicle by updating its look often, instead of building everything from scratch each time.
Warranty costs are the money a car company spends to fix problems that are covered by the warranty. The hosts are saying these costs can be a big part of why companies watch spending closely.
“Capital spending” is big spending on long-term stuff—like factory equipment and major upgrades. The hosts are saying automakers need to be careful because these costs add up.
Tariff costs are extra charges that can apply when parts or cars cross borders. The hosts are saying these added costs make it harder for automakers to spend freely.
The Dodge Charger is a well-known Dodge model. The hosts are using it as an example of how a company might update the car’s appearance regularly without spending the money to redesign everything from the ground up.
The Dodge Challenger is another popular Dodge model. In this segment, it’s brought up to illustrate the same money-saving approach: update the car so it looks current, but don’t pay for a total manufacturing reset.
A “refresh” is a mid-cycle update to a car. It usually means changes to the look and features so it feels newer, without completely redesigning the whole vehicle.
“White space” means a gap in the market where a brand can do something different and stand out. The host is saying Chrysler shouldn’t add another SUV if it would just compete with other SUVs already in the same brand family.
Brand
Ralph Shield
Ralph Shield is mentioned as the styling leader—basically the person responsible for how the vehicles look. The host is suggesting his influence could make a future Chrysler product more appealing.
“Passenger cars” are regular cars like sedans and coupes, not trucks. The conversation is about automakers shifting back toward selling more of these cars.
The Ford Mustang is a sports car made by Ford. It’s popular because it’s designed for performance and driving enjoyment. The podcast mentions it when talking about which sports cars sell in large numbers.
Cadillac is a luxury car brand. The hosts mention it to illustrate how some American brands sell certain models, but not in big enough numbers to fully beat import brands.
Product development time is how long it takes to create a new car from scratch. The hosts are saying that if you reuse an existing design, you can build faster and spend less.
A remanufactured car is a used car that gets rebuilt and restored, often with parts replaced or refurbished, so it can be sold again. They’re asking whether enough people would want that instead of buying a brand-new car.
They’re talking about how much money the company is losing on its electric cars. Even if the company sells some EVs, the costs can be higher than the revenue, so the “losses” show up in the earnings report.
They’re figuring out how much money the company loses on average for each EV it sells. If the company’s costs don’t drop but sales do, the loss per car gets worse.
Fixed costs are bills the company still has to pay even if it sells fewer cars. So if sales drop but those costs stay, each car has to “cover” more of the remaining expenses.
They’re describing how big upfront costs get spread out over time and over the number of cars made. If fewer cars are sold, the cost per car goes up.
Concept
beyond compliance cars
They mean the cars are built to meet rules, and then some. The speaker is suggesting later EVs are designed with better planning than the earlier ones.
It means the car’s behavior is controlled more by software than by hardwired parts. That can make it easier to add features or improve the car over time.
Giga castings are extremely large metal cast parts used in the car’s structure. The idea is to build the body with fewer pieces, which can simplify manufacturing.
It’s how the car’s computers and wiring are organized. Instead of everything being controlled separately, the car is split into areas (“zones”) and managed in a more centralized way to simplify the system.
Stampings are metal parts made by pressing sheet metal into shape. The speaker is saying the newer car design uses fewer of these separate metal pieces.
The Tesla Roadster was one of Tesla’s first electric cars. People bring it up because it was an early test of how to build a real, fun EV—before the bigger models came.
Zonal architecture is a way of organizing the car’s electronics by different areas, like front, middle, and rear. The goal is to simplify wiring and make the car’s computer systems easier to manage and update.
Term
software to find vehicle
This phrase is about using the car’s software and connectivity to help you locate or manage the vehicle remotely. The hosts are saying traditional automakers weren’t as focused on that kind of software early on.
The Tesla Model S is an electric car (no gas engine). It was one of the first big, successful EVs that made people pay attention to Tesla and electric cars in general.
They’re talking about how some companies plan for the long haul—like 5 or 10 years—while others focus on shorter-term results. Building new car technology often takes years, so the long-term approach can pay off.
LIVE
Speaker 1: Auto Line After Hours. It's brought to you by Alex Partners.
For more than forty years, we have helped companies and their stakeholders around the world harness opportunity, overcome challenges, and achieve outsized outcomes. Alex Partners when it really matters.
Speaker 2: Everybody.
Speaker 3: Thanks for joining us on out of Line after Ours. Harry,
what do you think, Well, let's do a show.
Speaker 4: I think we should and you know, I think before we start, we should give a shout out to a home team because they have an automotive name, the Detroit Pistons.
They stayed alive in the playoffs last night, and so good good for them. See if they can hang on
against the Orlando Magic Zion in one of our guest our guests, I believe it is from Orlando.
Speaker 5: I don't have any dogs in this fight because I don't like either teams.
Speaker 3: Yeah, so you just heard from Richard Druid from Automotive News.
We've also got Jeff stuckenberg Borg from z F and Jeff, you handle remanufacturing for North America. You say you're a title.
Speaker 2: Yeah, you know.
Speaker 6: For a long time I was the head of Global Remanufacturing, so I was responsible for the remnufacturing for global side and today I'm more focusing in North America sides right now.
Speaker 2: So that's what I'm doing, right.
Speaker 3: Okay, So if we have newbies in the audience who have never heard of reman remanufacturing, what.
Speaker 6: Is what is remanufactur So so remnufacturing is an industrialized, standardized process. But we take a part that's was they
previously purchased used, we could go through this process of remnufacture just so somewhat put the part back completely back together again. It now performs like new, looks like new,
same warranty is new and about you know, maybe twenty three percent less.
Speaker 4: And what would these parts be?
Speaker 6: Yeah, traditionally you know, rotating what you go like if you go back in history, auderators and water pumps and things that that were very popular, steering with a break, helpers things at that. But of course engines, transmissions, a
lot of dry train axles, a lot of those parts are rebuilt today and re manufactured. But there's a lot
more things that we can re manufacture. And the ZF
we we really try to remanufacture.
Speaker 3: And you were saying that the whole remanned business really came out of the end of the Second World War.
Speaker 2: So yeah, so if you think about at the end of the Second.
Speaker 6: World War, all the automotive plants that were building parts started building parts of the war effort, right, So we were building parts for that and nobody was building spare parts.
Speaker 2: So when you think.
Speaker 6: About it, when as cars at the end of the World War two, when cars are shorting age, they're starting to fail, they remnufactured kind of was born at that point to try to take cars and you remnufacture rebuild them, they called at that time, and so they can get their cars running again because new new parts weren't available.
Speaker 4: So I mean, so does ZF have like a factory or I mean where do you do this?
Speaker 6: Yeah, so globally, you know, we have twenty factories that are involved with remanufacturing all over the world.
Speaker 2: So we're in really all the major contents.
Speaker 6: Maybe one day we're trying to go as more in the African area, but we're working with partners there to get into Africa. But here in the United States, we
have several locations here that we reminufactured parts, and you know, we want to be where our customers are and it's you know, from a sustainability standpoint, we want to we want to remnufacture in the region and we sell and it helps shorten the reverse logistics lines and helps really make more of a sustainabile uh prouty for our customers.
So so general, that's what we're spread out where our customers are, and that's why we're remnufacturing over the world.
Speaker 4: Un is your customer, Richard, who buys these things or is it is it a company or Yeah, so it's a good question.
Speaker 6: So like we have we have service, so our our OI customers or we call our O service customers, like the primary vehicle manufacturers is one of our biggest customers, probably the biggest customers, right, we do want of that for the OI service side, so that one of the remnufactured parts go through the dealer networks, whether that's on the road that could be you know, even our off highway so or it could be commercial vehicles. Right, So
we're remnufacturing for all those industries. But we also we
also do reman for the independ aft market too, so you can get parts through your your local auditory also as well.
Speaker 3: Yeah, let me jump in here because I visited one of your plants in Illinois, just outside Chicago a number of weeks ago, and I was flabbergasted, really, I mean, you know, we talked about this remnufacturing just assemble it and all. It's a factory. It's a factory with lines
of this stuff, and you know you're doing what eight and nine speed transmissions there primarily, but other things do.
And so they stripped the whole thing down, I mean strip the whole thing down. All the gaskets, all the
seals get replaced. If there's been updated parts since it
was first manufactured, engineering updates against the updated parts. Put
it all back together, you go through what a seven and a half minute test.
Speaker 2: It's a full full which.
Speaker 3: Is not what the factory does when they build them new, right, they don't have the time to do a seven and a half minute test.
Speaker 2: You didn't, Yeah, so you can think about remanufacturing.
Speaker 6: So when you're building new, you kind of assume all of the parts are are to spec right at the beginning.
But you can imagine when we bring our course back, we have no idea what these parts went through, right, so our process is a bit more intricate. To go
through a full re manufacturing, you know, disassemble completely clean this somewhere you saw some of our washing machines and our beat blasting machines right to make it look like new. Right,
that's important because the appearance is if you see a remanufactured part, it may look exactly new. In fact, there's
some cases we put the new and the reman say tell s, whitch ones is rema.
Speaker 2: It's hard. We do that a lot at our at
our shows, you know. But you know, so you have to.
Speaker 6: Go through and the determined what you know, you plug in, you sw we plug in so we can look at the mileage, we can look at a little bit of the history of the vehicle. That helps us through what
we need to do in the process and what we need to change.
Speaker 2: But we try. You know, the goal is the salvage
as much material as possible.
Speaker 6: And that's why you know remanufacturing is so environmentally sound and why it's so sustainable is because we're saving, you know, between sixty and nine percent of material we're reusing.
Speaker 3: Yeah, going to that a little bit more detail, what you call the embedded energy.
Speaker 6: Yeah, So the advantage of like if you look compared with just say, everybody knows where recycling is right. Recycling
is you you turn your popcins or whatever at your curb, and at that point you're the only thing you're really reusing is you're keeping the mining right from going on and you're able to bring you you have to bring the material back down to some kind of a bold state.
Speaker 2: And then make it whatever you want.
Speaker 6: In re manufacturing, though, we salvage a lot more embedded energy, So we're salvaging not only the you know, the mining, extracting, but also the casting, the forming, the machining. We salvage
all that because we're not bringing it back down to a mold state. We keep the part as it is,
so it's much courses.
Speaker 3: And I think one of the figures that you guys gave me, you reman an error compressor for Class eight trucks that had if I remember right, you said sixty percent lower carbon footprint exactly you want exactly.
Speaker 6: It's preciually sixty percent less Sea two equivalent, we call it.
Speaker 2: So let's equipment to make a new professor suvery is difficult.
Speaker 5: I'm just gonna say I'm a consumer of remanufactured parts.
As a matter of fact, I prefer remanufactured over new. Why,
First of all, there's usually a very good price advantage.
And not that I'm cheap or anything like that, but to me.
Speaker 3: They are properly with saving money.
Speaker 5: Well, a properly re manufactured part is essentially new because if you look at a transmission or alternator, the case never wears out right, it's the stuff inside. And you know,
Reman you can explain this better. It's not rebuilt. It's
a totally different level. Rebuilt is something you know, lower
than Reman re manufacturing. You know, they'll take it apart,
like clean it, they'll measure everything, they'll put it that, all the wear parts will be replaced, and essentially the things that don't wear are the big heavy parts and everything else inside is new. Reman and new is like
the line is very thin.
Speaker 2: Not there.
Speaker 5: For me, I would just rather have a Reman. So
what's the rebuild?
Speaker 2: I mean, what's Yeah, it's a good it's there's a lot of confusion about that.
Speaker 6: So you know, in a rebuild there's typically there's we'll say limited replacement. You're if you go to an engine,
you replaced the piston rings. You're looking to pistons, probably
try to keep those. Maybe some seals and gaskets and bearings,
but you're not stripping it all the way apart. You're
not tearing it all the way down like you saw our plant. So and you're surely not introducing like an
updated design component.
Speaker 7: Right.
Speaker 2: So it goes back to that.
Speaker 6: A lot of reboilts done in a garage, maybe an independent garage, versus going into a plant like a standardized industrial process, where you're taking that completely. You're looking at
every single part. We measure every single part. Of course,
we get rid of all the rubber parts, typically all the seals and things, but we reduse a wide of materials also and then introduce new And I think the avantage of that's being thee manufacturer. We know the design
and we can introduce new components where there is improvement.
We say they're durably improvement and performance improvement, and then you could say that that re manufactured part was actually better than it was new.
Speaker 4: Okay, So ZF makes transmissions. Those guys not like you
who transmission guys who are making they want to sell more new transmissions.
Speaker 6: And you're within my own community. There's a little bit
of canvaalism, cannabalism. People say, my sales guys. So I
want to sell new and I'm like, you know, but the end of the end of the day is I may may make more margin on my remait parts, you know, because if I can savage between sixty nine percent of the material, you know, I can justify the additional waver involved with the dis summit cleaning and actually have a better margin on the remit parts. So from a business side, uh,
maybe the sales dollars or maybe west because it's solo ore price, but be honest, the profit maybe.
Speaker 3: See that's an important thing that you just said there.
And you know, I'm blown away that you said You've got twenty facilities worldwide doing remand It's hard to get information on the remand business, you know, because after I visited your plant, you know, I was converted. I'm a
remand guy, right, amazing. I'm all in on this stuff
for a whole host of reasons that we need to get into. But it seems like it's a very healthy business.
Speaker 2: It's a good business.
Speaker 6: It's really really important for end of life because the biggest problem we have is trying to maintain building parts our customers. You can meague our pastor car customers one
between ten and fifteen years after production ends, but our highway customers and our commercial vehicle customers, you're talking twenty five years, right, We do a lot of sufferate John Deere.
So you can imagine you're trying to keep parts availble for twenty five years after production ends and trying the ability to be able to manufacture one hundred percent of the.
Speaker 2: New parts really difficult.
Speaker 6: And if you get in electronics, it's impossible issue because you does a lot of those specialized computer chips aren't available, So you're either making a lifetime by a decision and you're trying to justify how many chips do I need for the next fifteen years, which is a difficult decision.
Speaker 2: Never, by the way, we never get that right right.
Or you do.
Speaker 6: Remail electronics, where you're basically your electronics, you could be.
Speaker 2: Savaging ninety eight nine nine percent of the material.
Speaker 6: You're only going after the parts of that basically you know are either the effective or need to be replaced.
So electronics is even really really high percentage.
Speaker 3: So you're literally on salvaging chips. Yeah, you're salvaging rare
earth minerals out of magnets in the.
Speaker 6: Light exactly exactly, and that's really the special rare metals and everything that is really really being constentrated on the reman side, I think, is how to salvage stuff. And
we compete a over with the recyclers, and that's sometimes the trick is that the recyclers won't my core is also because they're trying to sell that stuff. And I'm like,
I always tell the guys, just wait your turn, Just wait your turn. At some point I won't be able
to remini fashion because maybe it's gone through me two or three times at some point it's maybe kind of worn out. But then I'll then I give it to you.
But I always tell the reccre just okay.
Speaker 4: When I think of factory and you know a factory line, I mean I think of lots of products going through Where do where do your parts come from? Where do
your transmissions come from? Where do the other.
Speaker 2: Nactual cores themselves? You're saying, I mean, yeah, so so
the course.
Speaker 6: The cores we work with our customers back. So like
in a lot of stuff, there's two places that cores are coming through. They're either coming through the dealer networks
in our case of the transmissions you saw, those are coming there from our customers, so they actually kind of own the core. They provide the course to us to
re manufacture, and then we give them back. So in
theory we're providing kind of a remnufacturing service. Now we
supplement with the new with new INFO parts. So the
parts coming from our they're coming from the If there are are design parts that are coming from internal internals f sources, sometimes in Europe, sometimes maybe in Great Court where we make transmissions down South Carolina. In some cases
the parts may come from the original that we supplier if it's not our design parts. So it's important to
have a source for those replacement components. But you know,
going back to my comment earlier is it's much easier to figure out the small number of parts I'm replacing versus a complete, harm percent new partment. So again it's
important we get the core back in good shape, by the way, and fast quickly. We have processes to return
cours easy with our customers. Generally, the reverse logistics is
pretty complicated, but we try to make it as easy as possible get the parts back. You've heard of court
charges like as buying a remap part. You always have
a court charge and when you give the used part back, you get your money back. It's kind of a little
bit like a pop deposit. We know it is bottom
deposit here in Michigan. Very important to get the core back.
I wish we didn't to deal with deposits, be honest, because it ties up cash a little bit.
Speaker 2: But it's just the way things are.
Speaker 6: But it's important that we get the course back and we have a good fill of info of Nehew material.
Speaker 4: Richard explain that deposit that you have to pay.
Speaker 5: If you, let's say, need an alternator or a master cylinder and you decide you want to get a rebuilt one, You're going to go to the auto part of store with your old one off the car and you're going to give that to them, or you can buy the reman one, but and you'll leave ten or fifteen dollars behind and when you bring it your old one back, then they'll give you your money back. And it works
like that, but just on a lot larger scale for a transmission, I'm.
Speaker 2: Sure, yeah, for transmissions.
Speaker 6: And then and there's the there's also Gascoll core brokers and these are guys you can run around with salvage trucks and they're going to the Savage yards, right, So the Savage yards are a great place for cores.
Speaker 2: Also, you can you can buy biparts are.
Speaker 6: If you know, there's people individually going to Savage Ards and just getting one parts. But the brokers, basically we
work for brokers ourselves. We have relayships and we say, hey,
these are what we need, and then they have access to the to the auto record yards and the auto wrecking yards.
Speaker 2: Now it's pretty pretty digital these days.
Speaker 6: They're really they know exactit's they're inventory wise and they know where to go and it's becoming a pretty big business.
Speaker 5: Coincidentally, yesterday I was on a Detroit salvage yard looking at transmissions because I was thinking of maybe another project.
You can buy a transmission from a ninety five Jag which is four hp, twenty two of ZF one hundred and fifty bucks and that's with the TORQ converter. Yeah,
and it doesn't guarantee it's gonna work, but if you got the core, but so yeah, would be also very happy to sell you a rebuilt kit for it. And
that's what I want to ask you do ZF the only place that you can buy a Reman transmission. And
if you buy the kid, is it going to be rebuilt by somebody else or kind of another company remanufacturer.
Speaker 6: There's there's definitely competitors out there. There's people in our space.
There's there's several transmission to ENJ places out there, so we could be with the independent.
Speaker 2: Guys as much as you know, as we do.
Speaker 6: We don't like that exactly, but there's there's guys out there remnufacturing our stuff for sure. So there's you know,
there's we some of our parts are available. We sell
summer parts as repair kits, so that is available for people to buy and do their own things. So whether
or not that's a rebuild process versus a Reman process, I don't know.
Speaker 2: And then there's terrible Reman guys out there.
Speaker 6: By the way, they say, you know, we we call these guys spray and pray guys, so they just spray water on them and clean it off and then pray that it works for the next guy. So I say,
if you're gonna buy a Remai apart, make sure you get it from a you know, a guy you can trust.
Speaker 4: So if Ritard where to buy that transmission. Would he
be able to send it to you guys to re manufacture or is or do you guys do volume and not?
Speaker 6: Yeah, I mean we don't. It's a good question. We
don't have like this whold four hps to talk about.
We don't do anymore in the house. But we have
service providers. We have our own guys that we we
sell parts to, so we can we can work with a service provider, one of our local service providers that's in addition to our twenty to help with you to resolve that issue.
Speaker 2: For sure.
Speaker 5: That would be what is the lifespan of your product to be re manufactured? So my old those old four
speeds went out the production in like the late nineties and were replaced by sixes and now there's eight and nines.
How far back do you go?
Speaker 2: Yeah, we go back pretty far.
Speaker 6: I mean our customers want to go back and uh, it's a good question, like how when do you stop?
And that's always a challenge for us as a big guy, you know, and I think that's where some of the independent guys are better. You saw in our shop like
Sammy Lines for the high volume stuff, and then you saw almost what looks like bench builds or very low volume like we're doing maybe three or four a year right of a certain off highway transmissioner or something like that.
So that's what's interesting about that Verne Hills facility is that.
Speaker 2: But it is hard. It's hard for us to go
back like forty years.
Speaker 6: I think we have specialized remnufacturing plants in Germany to handle specialty stuff like you're talking about.
Speaker 2: I went to a couple two years ago.
Speaker 6: I visited one of these plants and they're they're super creative on finding parts and stuff to remnufacturers. You know,
ZF products are fifty six years old, you know, I mean z F started remnufacturing in like sixty two. It's
a like a transmission some stuff. So there's these we
have like Germany, these special guys that keep some of this that stuff around, which is impressive.
Speaker 3: You have to talk to. We have a lot of
people in the auto industry watching this show, especially at the auto makers, especially in engineering, talk about designing for disassembly and remanufacture. They're very good at DFMA design for
manufacturing and assembly, but not for disassembly or Remand what's the message you would send you.
Speaker 6: Yeah, this is a great question because this is where I need help for my customers. My customers is the
GM fours so right, and those are my customers. And
what I really need and what I need help for is is putting your statement requirements to me that your next part from.
Speaker 2: ZAPF has to be designed for remanufacturing.
Speaker 6: Because what we found is that when you look at design for environment, which would could design for sustainable design for remnufacturing, like eighty percent of the of the inputs of that occurre at to begin the life cycle the design cycles.
Speaker 2: So it's important for us to consider our stuff right up front.
Speaker 6: And that's where I really need help from my customers is to demand that. What that forces my OE engineering
guys to do, you know, the new guys is to consider my stuff right y stuff. And it's a chime
for me because they're always worried about am I going to add cost?
Speaker 2: You know?
Speaker 6: And I could be competitive to my competitors, but if what's important is if my customer puts it in there, then then it well was the playing field that f as was my competition has to do the same.
Speaker 2: Designers.
Speaker 3: Yeah, and I'll give you a carrot to hold out to them. Uh, the service parts business is extraordinarily profitable
for the car companies. In fact, I'm told one of
the automakers in town makes twenty percent of their EBIT on service parts. Two billion dollars a year in service parts.
So if they did more designed for disassembly and reman it would lower your cost, which means that dealerships could offer lower priced components, i e. Repair costs go down,
brings insurance costs down. You're going to have a more
satisfied customer. But and this is the real caret for
the automaker in a market that sales are not growing.
Here's a way to increase your revenue without raising your car prices.
Speaker 4: All right, Jeff, But I see I'm going to dispute him.
Speaker 2: Okay.
Speaker 4: So I'm an engineer working on a program. Okay, I'm
worried about that program. I'm being measured on the cost
that I'm bringing to that program. I don't care about
what happens one year down the road, two years down the road, ten years down the road, Rich's case. But
forty years down the road, I don't care now. It's
it's I'm not being measured on that.
Speaker 8: So would it add costs for me to do this, or are there certain things that are simple enough that would allow this to happen without penalizing me.
Speaker 6: Yeah, it's for surely the earlier you had tackle this in the design cycle, the west cost it is to the point that it may be west costa. I was
involved with one of my commercial vehicle products back and I think to that and fourteen I got involved just a project that's not very designed or not re manufacturing friendly from a design standpoint, And I got in the beginning and I gave him a list of all the things I wanted, and I said, I got ninety five percent I want And if what the fund thing at the end, it was cheaper privacyeaper. So if you tackled
early on in design cycle, I would say you can minimize the impact.
Speaker 2: I would say, another thing consider is.
Speaker 6: Is bringing remnufacturing into the early design cycle. Will say
early production cycle. So I for warranty production. I mean
a lot of the automakers do it for warranty production.
If you bring all the Reman parts in, you will say you're supplying a Reman version maybe even six months atra production ends. You can imagine all those parts are
coming back for warranty. You can go through your process.
You can collect all that failure mode data and get it back to your design community and help them reduce a warranty.
Speaker 2: Cause back of.
Speaker 6: My former company, we had an electronics program by monitoring Reman.
With that program, we were able to reduce waranty by eight hundred send in the first year.
Speaker 2: Because we brought every product back through.
Speaker 6: We have a very detailed way to get that data back to design community.
Speaker 4: The information had value.
Speaker 6: Yeah, even for the guy you're talking about, that first year guy, right. So I wish that every engine had
to deal with their parts to the life cycle twenty years after they made the decision they made and experience the pain and agony.
Speaker 2: You know of that.
Speaker 6: But but if you bring reman in early enough, and if you do it or own design cycle, you can minimize the impact and there may be real benefits to learning.
Speaker 2: You know, the data come back on the real use parts.
Speaker 6: Because I think the struggle with vehicles have turned pretty quickly.
There's a lot of like you know, digital kind of reliabily testing and stuff, some limited testing white Baby GM Milford at the Milford proming grounds and stuff. The real
world stuff you don't know, you know, it's like you don't really have it. And if you can get data
back on that, you can get it right to the design community.
Speaker 2: It can be.
Speaker 5: Superl now you know, you know, you can't sit down with journalists. Are not getting at least one uncomfortable question. Oka,
We're seeing transmissions that are sealed for life and you don't even change the filter.
Speaker 2: Do we know yet if that.
Speaker 5: Life is the same as it was back when transmission serviceable or is it? And yeah, I have to put
you on the spotlight.
Speaker 6: That's a really good question because even when I said that transmission that's senior the kind of designed for life, right, But then I asked, are like guys are service guys?
Speaker 2: Roy is a better to change the food? And you
know it's not harmful to change the food, but they don't make it easy to do that. That is a challenge.
I agree with you.
Speaker 6: That's like, I don't know if they just think people are lazy these days and don't want to change foods.
Speaker 2: You know, but it doesn't hurt to change it.
Speaker 6: More often, you've got to make sure you replace the filter and stuff. And we have like for example, for
a speed HP kid, you can buy the pan. The
pan comes with the building and filter and anything like that, so when you change you you're changing the filter and all that.
Speaker 5: The same time, spend a lot of time watching independent mechanics on YouTube, and these guys have hundreds of thousands of followers, and every one of them, to a man, says sealed for life, being sealed for the life of the warranty. And then then you know, because they service
these things, and you know what, there's nobody censoring what they have to say or can or cannot say. And
I know it's a difficult position, but I feel as if the automakers simply don't want anybody in those transmissions because they're so technical anymore.
Speaker 6: It's if you saw, like in as Sbay at our Great Core facility or one of our owe plants, how they control dirt and all that stuff. It's it's amazing,
like they're so worried about microscopic anything, and they worry about that.
Speaker 5: I've been to Great Court, I've seen it. It's like
an opera hospital.
Speaker 2: Opera exactly exactly.
Speaker 6: And I think that contamination is the biggest killer for transmissions, so they worry and in the Bow bodies, right, The vow bodies is the megatrinic spark. That's really where they
do the damage. Not to clutches, but the vow bodies
that gets it. So yeah, So the question is like,
how many dewer garages look like a hospital?
Speaker 2: Not too many.
Speaker 4: Yeah. So you mentioned earlier that you know, z has
been doing this since the end of World War Two, and I discovered that Renault has been doing it since nineteen forty nine. They actually operate a factory in France
and they do gearboxes, tribo chargers, injectors the automaker.
Speaker 3: That's going to be unusual, right for an automaker to run their own reman No, No, No, it's pretty common.
Speaker 4: Is it coming to Europe? I mean, this is what
I was going to try to get to, is like, is there greater sensitivity there than there may be here in terms of doing some of this.
Speaker 6: I'd say the US is bigger for sure, the remanufacturer in Europe, and but Europe there's parts of Europe that are really into it, right, I mean the sustainability side of Europe today. You know Stoanis is a very big
customer ours and Stoanis is a big you know global company, and there's a lot of influence from France, from French guys there, right, so they really have a good set of design free manufacturer standards. They're really they pushing their
sustainability goals really heavy. So I'd say they're one of
our biggest customers for that. So I think that I
say the Europeans are probably a little bit more worried about the environment impacts, you know, and uh, you see that for sure. But from a pure remnufacturing, US is
a bigger market.
Speaker 3: Do many automakers do their own I thought they contracted out too.
Speaker 6: It's a combination, right, So a lot of these guys do their own well, some do it at house and some some some from it out.
Speaker 2: So it's a combination.
Speaker 6: But like the drive train stuff is almost whether they're contracted to the remnufacturer they do it themselves, it defends some generally they have.
Speaker 2: People like yeah, I mean a lot of people do.
Speaker 6: I mean there's there's customers we have, like like on the heavy duty side, time where is a big they do a wid their own Detroit reman you may, you guys, they're big here Detroits here. They do a lot of remaufaction.
So but then they also contract and two other customers to their supply based to help them out. But there's
we have, we have other suppliers that they they don't do anything in house. They just they contracted with one
percent outside. We're talking automotive, but goes way beyond automotive, right, huge, Yeah,
I mean it's to be honest, it's as big as commercial vehicle, as maybe bigger than passion cars.
Speaker 2: Right.
Speaker 6: So the parts are a lot more expensive, lower volume of course, but a lot more expensive.
Speaker 3: But I'm thinking outside of automotive.
Speaker 4: Oh, highway, Medical, yeah for sure, Yeah.
Speaker 2: You guys do this, We do all do this, but we're involved in it.
Speaker 6: So I was a past chairman of Reman Industries Council and we have members from all those those sectors and it's a there's about nine different sectors.
Speaker 2: At tires.
Speaker 6: We didn't talk about retreading, right, so we went through.
In fact last there's a retreader down down river that went to my first retreader. It was a phenomenal process
to watch these guys retread tires and a typical uh we say, a typical commercial vehicle tires retreaded three times.
Speaker 2: And they nate get to make sure they have a good core.
Speaker 6: And what's interesting is we talked about the influence of some of the Chinese products coming into our market. A
Chinese tire cannot be remnufactured because the core itself is not very good.
Speaker 2: So that's one interest.
Speaker 6: So when even though they're cheaper upfront when they're buying I will say a commercial vehicle tire, they're factoring in that they need to look at this four life cycles and they do the math for four life cycles to make decision on what they're gonna do for Reman. So
it's it's pretty cool, and I think that's we have the same issue with pasture cars. We we there's this
this the the Chinese reverse engine. New stuff is really
coming into things like all naders, water pumps, starters, break helpers, and it's really becoming U They're coming in cheaper than our REMA products. So when you go to the part
here like you talk about, you may look at a new and a Reman and maybe the same price, and then you're saying, why would I buy Reman? And what
you hope to say was I like reman I'm a sustainabil toy guy by the way, that probably that casting is probably better quality than maybe the.
Speaker 4: So would there be any sort of warranty that would come along with something that he'd buy for his car.
Speaker 6: Well, it's like it's for me, a good remanufacturer hasn't worth the same as new.
Speaker 2: I've seen warty birth new.
Speaker 6: So I'd say that's a good way to say, if it's gonna be a good remanufactured product, is is the warranty good?
Speaker 2: Should be good, should be the same as new or better?
Speaker 5: Really, would you have ever consider remanufacturing parts from BOSH or TRW or any of the compensation.
Speaker 2: We do today?
Speaker 6: We do some non z yet today and we're looking at we have some opportunities to grow into non set of products and we're looking to So.
Speaker 3: All this has triggered the thought in my mind, I'd love to see somebody do a remanned car.
Speaker 2: Well, you know, it's an interesting thing.
Speaker 6: So I think what's interesting about today's technology if you look at is maybe people don't really want to own their car.
Speaker 2: They just kind of lease them or whatever. We lease
the cars now.
Speaker 6: They But if you think about a model that the no customer ever owns a car, they just they just have for three years. Then when they come back out
of service, they go into some kind of a remanufactured process and bring it back, maybe update the audio products to the way this technology and you can imagine going through that process. I mean, that's our military products do that.
Military vehicles do that, right, that's kind of the same thing.
Speaker 2: I can see that.
Speaker 3: In a world where affordability is such a big issue in the automotive industry. You know, could you have a
remanned car that is substantially cheaper and better than a used one?
Speaker 5: You know, I think that the army does that with hummers or are used to right, they came back from the golfers they were taking apart.
Speaker 3: Oh yeah, and we Bradley's mammoirs the whole exactly effect.
Speaker 6: We you know, we supply parts of those guys, right, so they there are shops, there's quite a few of those things, and our parts go back into those guys.
Speaker 2: And that's so that's how they get a lot of the parts to basically bring it back.
Speaker 6: You know, there's harts to wear out and we of course that we either give them remnufactured parts or new parts for those cars.
Speaker 5: What does the future look like for you with I think avs, well, okay, engines, the motors can be remanded obviously, but they.
Speaker 2: Would ever wear out or almost.
Speaker 6: I mean, the future for Reman is really good just from the just took it the sustainablety area.
Speaker 2: So all of our especially the.
Speaker 6: Pasture cars, maybe not the input out to market so much, but the vehicle manufacturers all have sustainability goals. They're all
looking for ways to reduce their their carbon footprint and and remanufacturing gets them there. So there's a lot of
things we don't reman, right. But and then with electric
products very much, they're very easy. I mean it's again
we need designed for reman and I do battle our own guys about that, you know, but you know, electric motors and verters ECUs, and then they still have some gearing gears, right, We're still going to remainufacture those. So yeah,
all that stuff needs to be considered because but always worry about with this this these products that are designed to save the earth, we don't know, don't want to design them to kill it. If we don't design for
remay facturing the products that you're putting out there to save the Earth may do exactly the opposite, so it's important we consider it.
Speaker 2: This is a great story.
Speaker 3: Unfortunately we're going to have to wrap up this segment of the show. But I told you after my visit
to your plant, I'm a convert perfect. I think Reman
has got a lot of upside potential to it, and especially getting the message out to the auto makers to design for Reman, so that.
Speaker 2: Can really make a difference, huge difference for the future.
Speaker 3: Jeff Stuckenborg, thanks so much for coming on the show.
Speaker 2: Thanks very much.
Speaker 3: Good We're going to take a quick commercial break, come back and talk more about the news of the week.
Speaker 7: The automotive and industrial sectors are undergoing a historic transformation electrification, digitalization, supply chain reinvention, regulatory shifts. The pace is accelerating and
the pressure to adapt is real. This is not a
time for hesitation. It's a time for bold decisions backed
by fast, effective execution. You need a partner who understands
complexity from factory floors to boardrooms and delivers measurable results.
That partner is Alex Partners when it really matters.
Speaker 3: Right, we're back and thank you for your support. Alex
partner is much appreciated here.
Speaker 4: All right, quiz all right, April thirtieth, two thousand and nine, something very significant happened in the auto industry, which reverberates till today.
Speaker 5: Thanks got GM, was it GMM, was first Stalantis or not FCA or Diamond Chrysler whatever it was called back then they went for something Chris.
Speaker 4: Forty two days later they were out. Yeah, so it
was a and yes chapter eleven.
Speaker 3: Yeah, and it was Jay Alex of Alex Partners who figured out how to do this very fast paced bankruptcy for both GM and Chrysler probably saved them.
Speaker 5: You know, do you remember back then all the people who wanted these companies to die?
Speaker 3: Yeah?
Speaker 5: Right, and when you think about that, okay, we don' want to start any political arguments, but they survived. And
look look what they have contributed to the economy in the years that they have survived. People are working, factories
are running. I mean, how can anybody say just let
them die?
Speaker 3: Not only that, you know, now we've got the US military reaching out to Detroit to say, hey, we need your help of how we can scale up our armaments production.
Speaker 5: Yeah, I mean, I don't understand the logic behind.
Speaker 3: But I will say this, Richard, that was their last shot.
They get into economic trouble again on their own. I
just don't see the country bailing them out again.
Speaker 5: Well, I tell you you you mentioned that, and then it it makes me think of a trip I took not too long ago. I think Detroit is in the
worst shape it's ever.
Speaker 3: Been in an auto industry.
Speaker 4: Yes, yes, I went down to see the city in a long time.
Speaker 5: I went down to the Keya's West Point, Georgia plant, and one of the most impressive plants I've ever seen.
And I looked in the car park and everything was ke or Hyundai or Genesis. That whole area is lost
to the Detroit three. And then I thought, you know what,
We're about ten Chinese factories away from not having an auto industry because every single time a plan opens up and the suppliers that supply that plant open up, that geography is lost to the Detroit three.
Speaker 4: I I was at the Hundai plant in Label, Georgia two weeks ago, and it's the most magnificent yeah factory I've ever seen. I mean, it's.
Speaker 5: Incredible, it's amazing stuff. And you know, again, I don't
want to start any political arguments. But there's this window
of opportunity here where the Chinese are not allowed in.
And I think that if the Detroit three don't start getting it together and figure out how to compete, it's going to be pretty bad because maybe the next administration is going to have a different policy. And Americans like
a deal. I don't think they care where the car
comes from if it's cheap and it works. I mean,
I'm a perfect example. Look at all the crappy British
cars I've boned. We don't as long as we like
the way it looks and works and whatever, you know, it'll stand a chance.
Speaker 4: In a related and somewhat political perhaps thing. On Tuesday,
Representative Debbie Dingle, who is from the area, wrote a letter with seventy two colleagues seventy three colleagues ahead of the meeting that President Trump's going to have with President Shi in Beijing next month, and they write, quote, Chinese owned or controlled vehicles, regardless of where they're assembled, must not be permitted to enter our market through US MCA or any other mechanism. Allowing such circumvention would undermine existing tariffs.
We can trade enforcement and road policies designed to support domestic manufacturing. There are real national security implications as today's
vehicles are increasingly connected, capable of collecting and transmitting sensitive data about drivers, infrastructure, and surrounding environments.
Speaker 5: So this is essentially nothing new because the Chinese don't let teslas get near and they're sensitive military installations or whatnot.
So you know, we're asking for, you know, the same deal over here. But you know, I don't want to
give you, guys the impression against Chinese vehicles coming in.
I just think that they should come in, you know, on equal footing, in other words, not be opped up by government subsidies and have any unfair advantagers. They should
compete fairly. And if they can do that and win,
more power to them.
Speaker 2: Right.
Speaker 3: But to your point, I think the Detroit auto makers need a window to be able to get their act in order. And I don't know if that's the end
of this decade four years from now, maybe it's five years from now. But at some point I think it
would be healthy for the US who allow Chinese cars, and.
Speaker 5: I think so too, And you know, everybody does talk a lot about the subsidies the Chinese automakers get but let's give them credit for something. They've also done the
hard work too. They've figured out economies of scale on things.
They've done a great job with design. They they're when
it comes to electronics and self priduc stuff there like leading the world and all this stuff. They've done the
hardware too. They've also got a lot of advantages.
Speaker 2: Yeah they do.
Speaker 3: But you know, a lot of this discussion with the Chinese reminds me of the discussions in the nineteen seventies and eighties. Take out the word Chinese, put in Japanese
and it's the same store apps. All their government is subsidizing.
Yet they have unfair advantage. They don't pay their workers
any money. Blah blah blah blah blah.
Speaker 5: We accused of the Japanese of manipulating the currency, remember that absolutely, And they.
Speaker 2: Did, and they did.
Speaker 3: But what happened, you know, you had the MIT guys go out and write the book The Machine that Changed the World. They taught the industry and there were study
groups that went to Japan, studied the Toyota production system.
They learned about Kaizan, they learned about just in time production, they learned about quick guye change. They applied that here
and they came roaring back in the nineteen nineties. And
I think what needs to be done right now is go study the Chinese. What are they doing differently? Adopt
what they're doing.
Speaker 5: Well, I'll tell you what. Another advantage they have is
that the Chinese government and the Chinese industry are moving together in tandem, working together. Here we're constantly at war
with each other, the two entities are, and that doesn't make for a competitive industry.
Speaker 3: That's right now. They have a plan that gets updated
every five years. We have no plan whatsoever.
Speaker 4: But to be fair, to go back to the Japanese, remember me t the MITI, which was going to direct all of what Japan was going to be doing, and they were going to have fifth generation computers and the rest of us were basically using abicuses and none of that came to be. So national policy, industrial policy has
certain limitations.
Speaker 3: That we have to be aware of exactly, but so great point. So when you say industrial policy, a lot
of especially conservatives, get their hackles up. They don't want
to see the government dictating who's going to be a winner or a loser. That's why I say we need
a strategy and so part of that strategy would be we can't have this political whip saw and going back and forth when it comes to fuel economy and emissions regulations.
And I would even throw safety in there too. And
it's it's entirely likely that the Democrats win big time in twenty twenty eight, take the House, the Senate, and the White House.
Speaker 5: And race the last four years, swing the pendulum all the way back again.
Speaker 3: And so you've got this industry that has just wasted how many tens of billions of dollars on ev investments, and now you've got tens of billions of dollars of tariffs on top of that. This is we need a plan.
We need a strategy that says, look, yes, we will continue to push the automakers to improve fuel economy and reduce emissions, but we're going to do it in a predictable, methodical, cadenced way that they can afford to do it. And
they are not going to solve everything in the next few years. But after you look back of ten to
fifteen years of doing it, you're going to see massive improvement.
Speaker 4: No one thinks ten to fifteen years ahead. They're thinking
about the.
Speaker 5: Next quarter and now, yeah, they're thinking the next quarter and what the shareholders, And then we.
Speaker 3: Come back to what you said, Richard, and I totally agree.
We could lose this industry within a decade.
Speaker 5: We could, We absolutely could. But you know, I think
that and talk to some GM engineers for a story I'm working on, and they are working sort of in a vacuum now with policy because what they're focusing on is just making improvements. And I'm talking about internal combustion nagers.
I got a story coming out about that, and after being whipsaw so much, the focus is they can't pay attention to that noise in the system. If they see
a way to improve something, they're doing it. And I
think that's where a lot of the focus is now, because if you've already spent the money to develop something, you know, unless it's an EV, you're not going to throw it out the window. You know, you're going to
find a market for it or maybe put it on the shelf and take it back down later. So I
don't know that all the money is gone, but boy it sure it makes it tough to plan a business right now.
Speaker 4: Well, we just saw today that General Motors announced a three hundred and eighty million dollar investment in largely ten speed transmissions for pickup trucks. So they're clearly thinking about
how are we going to use these internal combustion engines existing as well as Gen six engines and going forward with that. So that's a long term sort of thing
be spending money on. And I don't know if ether
you guys saw yesterday. Ellen Bernard, who we had on
the show a couple of weeks ago, interviewed to Lee who we had on the show a few weeks before that, and two was in China having been at the Beijing Auto Show, and you know, to your point, Richard, he's just basically talking about, you know, these are phenomenal vehicles that are doing things that are just incredible.
Speaker 5: I saw a lineup of Chinese vehicles at CES and some of the stylings a little out there, but if you look a little closer, they thought interiors are downed.
You know, they look good.
Speaker 2: They look good.
Speaker 5: We don't know about long term durability and reliability yet, but on the surface they look like they can compete, and.
Speaker 3: Oh they can. And look, the Chinese are taken over
the global industry.
Speaker 5: Well, I mean if you look at they've ejected the US or the domestics from Australia, Zealand and South America and all these other places where they were, you know, dominant.
The number one selling car in the UK last month was a Jku seven whatever that is. I mean, so, yeah,
it's they're going to be tough competitors.
Speaker 3: Yeah.
Speaker 4: So we were talking about Chrysler earlier. So Stilantis has
announced that they're going to have four key brands that this is going to be where they're going to focus the product development, Ram, Jeep, Pougeo and Fiat. What do
you think, Jen, Well, look, you.
Speaker 3: Know they've got I don't know the number off the top of my head, what is it, eight, nine, ten brands.
That's a lot of mouths to feed. This is a
company that is a financial basket case right now. I
mean they're they're they're they're climbing out of the hole that Tavaris threw them into. And they can't give spend
money on new products for all these brands. So they're
going to have these four and my guess is all the other brands that are left, you know, whether it's Citroan and uh Daci or Lancia and Chrysler and Popel and uh, they're going to get derivatives of those four key brands, and it all comes down to dollars and cents.
They can't afford another strategy.
Speaker 5: Previously, I would have said, look at Volkswagen, they can do a great.
Speaker 2: Job at that, but lately not anymore.
Speaker 3: Yeah.
Speaker 5: For a long time though, Volkswagen did do a pretty good job with all those brands.
Speaker 3: That's right, But that's before the Chinese came in, playing by different rules and upending the industry and a little bit at the edges Tesla and the other startups as well, And so Volkswagen ruled supreme in a legacy world that no longer exists.
Speaker 2: Right, Well, what I wonder about?
Speaker 4: Okay, so she's got Ram Okay truck company. You got
Jeep off road vehicle company, Pougeo in Fiat. Now, at
first I thought, well, Pougeou would be like larger sedans and Fiat would be smaller vehicles. But then Pougeou has
some very wonderful small vehicles, you know, two O eights and and things like that. So I mean, is it like, well,
we have to have a French company and an Italian company.
Speaker 3: Therefore we'll keep Pugeau. Politically they have to.
Speaker 5: Of course, they have to have the national car company for each right.
Speaker 3: Yeah, remember the French and Italian governments still have big say in what goes on in Stilantis. And if you said, oh, Fiat,
we're not gonna kind, there would be bloody hell to pay.
So but what could happen going forward to your point, Gary is maybe Pougeot says, okay, we're going to take Fiat developed cars and we'll badge them Pougeot's Fiat's going to say, okay, we'll take Pougeot cars, will badge them fields.
But you know they've got what four platforms Stella small, Stella Medium, Stella large, and body on frame. I think
those are the four platform build it all off that get your volume with the four key ones and then do little derivatives for the other brands until I look long term, can Stillantis maintain that many brands? I think
it's going to be really hard to do. Okay, So
how do oh leap motor? Yeah yeah, yeah, Sean's timing
in from the control room and then there's you know, they're turning to leap motor to develop lower cost stuff.
So what happens to lower cost electric stuff? Lower cost
electric for now? I wouldn't be at all surprised to
see it spread to e revs, pehabs and ice.
Speaker 4: So does how do people who work for Chrysler and Dodge field right now.
Speaker 5: They're going to be around in some form? Just would
their lineups be what they were? No, clearly Chrysler's going
to have to have more than a PACIFICA, but Dodge is the performance brand. If they had three or four,
you know, I think an untapped area is what if one of those really hot European hatchbacks that they have over there came over here as a Dodge, you know something.
They could do things like that.
Speaker 4: But one thing I did is that spost be the Hornet though remember that it's going to be the Alpha, It's gonna be the hot Dodge Compact SUV.
Speaker 2: You know.
Speaker 5: I think the real tough discussion that they have to have is does Fiat Alpha, Romeo and Maserati really have a place in the US? Do they really? Are they
going to break through?
Speaker 2: Are they absolutely?
Speaker 5: I think that's that's the tough question. It's not so
much because if you don't have those three brands, then you maybe can allocate some resources to dodge Chrysler and Ram the vehicles that the brands that are more likely to sell in higher numbers.
Speaker 3: Here. Look, I've said it before, I'll say it again.
Fiat's a dead brand in the US market. It's dead.
The sales are abysmal. Same for Alpha Romeo. And they're
not going to like me saying this, but I think what they want to do is just slowly let the dealers die and go out of business so that they don't have to buy them out. So that rather than
declare we're shutting the brand down, then you got to buy out all the dealers.
Speaker 5: Now, you know, if there's any lawyers watching you right now, they're taking notes.
Speaker 3: But you why, I mean, you usually know these numbers off the top. You know what Fiat sales have been, perchance, abysmal,
abysmo Okay, yeah.
Speaker 5: I think in the first quarter it was under fifty I was you can't.
Speaker 3: Yeah, I know, but still if you've got a Fiat store, you can't survive on that volume. No okay, everybody's look
at me.
Speaker 8: No okay, because you're the thing pared one there. But
I mean I get back to this thing. You know, Richard,
you said that that Chrysler has a PACIFICA.
Speaker 4: Okay, and they keep saying, oh, we're going to have something, We're going to have something, and they keep having the PACIFICA, right, and that's it. And so here's a company that as
has been established fairly comprehensibly. I think that's in trouble.
How long can they keep that brand going?
Speaker 3: Well, they have said that I think May eleventh is their investors day. Mid May is their Investor's day, and
that they have a big announcement for Chrysler, and that what they have said, product is coming. Now I don't
know if that's a lineup at all, or if it's just one other.
Speaker 4: Via Okay, so let's say, for the second argument, it's one other vehicle. Can an entire brand be predicated on
two vehicles?
Speaker 2: Scout hope?
Speaker 4: So yeah, But I'll tell you about their startup and you know, I mean you could make the airwa.
Speaker 5: Well, I mean, okay, what's the cost of it? Most
quite there are no standalone Chrysler stores, right, And that's the key right there. So I think that the cost
may not be as bad as you think it is.
Speaker 4: Right, right, But there are marketing costs associated that.
Speaker 3: There are marketing costs and all that. But there's going
to be marketing costs whether you roll that Pacific AMENI van into another brand or not. So we're Richard hit
on the key. There almost all stillantas dealerships are Chrysler, Dodge,
Jeep and Ram, you know, So you just have a spot in the showroom and that's the Chrysler minivan. So
you don't need a whole brand structure. And I don't
know internally how they run that or not. I mean,
they did have a CEO of the Chrysler brand who just left the company.
Speaker 4: Maybe, so the May eleventh presentation ahead of two, I think you're.
Speaker 3: Right, by the way. But yeah, look, I think most
brands need three vehicles to be viable, and so I don't know what kind of follow up Chrysler might have, but you know, a minivan and another product next to it.
It's enough to keep the brand alive for now. But
whether that means it's going to thrive.
Speaker 5: Is let's make a prediction. On May eleventh. I'm going
to say they'll get some kind of sedan that would replace the three hundred, because that sold pretty well and it wouldn't compete with anything else in the sea, the Jar and d whatever universe. Right, So I'll go on
the record of saying it'll be some kind of really spiffy sedan, either sports Sadan or real nice luxury Sadan.
What do you think?
Speaker 3: No, I think you're a spot on spot on now whether it'll be electric or not, probably not. Maybe that
was the original plan, but now they're like an electrics aren't selling in the volume when we need so yeah, I think you're I agree with what you said.
Speaker 5: And GM has been talking about bringing back sedans too correct.
What do you think, Ery, What will it be for Chrysler or for different Chrysler.
Speaker 4: Well, I mean I think for in keeping with the brand image, it should be a sedan. I mean it
stris me that a mini van is really not Chrysler territory.
I mean it's it's I mean, I know it's long been associated, but I mean if we go back to Walter P. Chrysler and look back at the history of
that that mark, it's it's had beautiful sedans through its life.
Speaker 2: Have you been in a curial?
Speaker 4: I mean they're great car.
Speaker 5: I think it upholds the Chrysler Luxury banner pretty well.
I mean those things are like little limousines. Were not little,
but they're like limosines.
Speaker 4: Good to your point, I mean the three hundred, I mean that was a great curve. In how many years
did it sell? I mean yeah, even pasts its sell
by date, it kept and it kept.
Speaker 2: It looks good today it does.
Speaker 3: Know and in fact, you know that that's something that Chrysler or Dodgeen has done an incredibly good job of that I think hasn't been recognized enough in the industry.
So the Charger and the Challenger that came out in twenty eleven ran all the way to twenty twenty three, and yet they sold a lot every single year.
Speaker 4: To do a lot with different paint colors, different paint so.
Speaker 3: And they did new models, new variants every single year.
It came out with the hell Cat, they came out with the three ninety two, They came out with a wide body, they came out with jal Break, they came out you know, the list goes on. Every single year
they'll held something special. And so even though the body
design was ancient, there was no tooling. The tooling had
been paid off all long time ago. If you look
at the Dodge Durango, it's the same story. And in fact,
I think Automotive News is the one that pointed this out to be selling pretty good. It's selling better now
than when it first came out. It came out, you know,
fifteen years ago or something, and it's selling better now than it did.
Speaker 2: Bat old enough to vote.
Speaker 3: So I think there's a lesson here in an industry that has burned tens of billions of dollars on ev investments, getting right written off, the tariff costs, the incredible cost explosion and warranty costs. This is an industry that's got
to be very, very frugal with its capital spending. So
why not take a car like the Charger and the Challenger.
Why not do it like with their Durango. But you
got to do refreshes every single year that you know, to the public is visibly different, even though you're spending saving all this money by not retooling it.
Speaker 4: It just brought you when you're talking about the Durango being around for a long time, it brought to mind a Chrysler that no longer exists that could come back.
Maybe this will be a May eleven three turn the Chrysler Aspen full sized SVUV that, oh, by the way, was a hybrid.
Speaker 5: Does the world need any more SUVs? I think they
got to go for white space for that brand. I mean,
if they if they put another SUV in the Chrysler showroom, then it competes with all the other SUVs that are in the Chrysler Jeeps and whatever. Durango's. I think they
don't go there. I think they got to get eyeballs
and to look at that brand. And you know, Ralph Shield,
he's gonna if he's in charge of styling, it's gonna look pretty cool. So I think they may have something
to show us some male Yeah.
Speaker 3: No, I like what you're saying about getting back into pass cars because the Detroit three dropped essentially out of it. Okay,
Cadillac's got the CT five for it's got the Mustang blah blah. But they're not volume players, and so they
have surrendered twenty percent of the US market to the import brand. Twenty percent of the US market is three million.
Speaker 4: Units JO, and everybody knows nobody buys CO.
Speaker 3: But what I'm getting at is with a market, the total US market is not growing. It just is new
car sales are lower than they were a decade ago, and they were two decades ago, and so how do you grow your company in a market that's not growing?
To your point, get into the white space, which for the Detroit three is getting back into passengers. That amps
The key though, is how do you do it and be cost competitive and make a profit. That's why they
dropped out of it. The margins were paper thin, are
none existent?
Speaker 5: Could they do it with an existing Stella platform from overseas that's built here and you save all that product development time?
Speaker 3: And basically that would help, That would definitely help. I mean,
you know, take stuff off the shelf. You know, this
is harkens back to where our manufacturing discussion. You know,
if if stuff's already done and on the shelf and ready to go, just grab it and run with it.
Speaker 5: We all drive press cars, and we have a pretty good line of sight on how they all perform over the years. Don't you think that handling and performance it's
gotten so good that that cars don't need to be replaced every three and four years. I mean, most most
people's capability is not doesn't the car is way beyond what abag driver can do.
Speaker 4: Right, So well, Richard, doesn't I go to the point of what is at twelve points some months that people keep cars?
Speaker 3: I mean twelve point seven years, that's how I yeah, it's almost thirteen for an hour.
Speaker 2: I mean, it's just right.
Speaker 4: So people aren't turning them over that fast?
Speaker 3: Right, And it gets back to why do not do a remanned car? There might be a market for that?
All right?
Speaker 4: So I got to ask you, John, here's question. So
there were four reported as Q one earnings. Okay, and
there's there's something I don't understand, and you mentioned the EV losses, and you can explain this to me that I don't. I don't get this, Okay. So they lost
in Q one twenty twenty six on their evs seven hundred and seventy million dollars, right, Okay. Now, in Q
one twenty twenty five, they lost eight hundred and forty nine million dollars on their evs.
Speaker 2: Okay.
Speaker 4: Now, here's here's the part that I don't completely understand.
In Q one twenty twenty five, they sold twenty two thousand, five hundred and fifty evs, and in Q one twenty twenty six, they sold six thousand, eight hundred and sixty evs.
So if I divide the losses, I come up with In twenty twenty five Q one they lost thirty seven thousand, six hundred and forty dollars per EV, but in Q one twenty twenty six they lost one hundred and thirteen thousand, two hundred and sixty dollars.
Speaker 3: Yeah, so this is real. I'm sure the numbers are right. So, yes,
you're I'm sure your division is accurate. But I think
probably what that reflects I'm guessing I haven't had a chance to really look into the numbers. Your overhead fixed
costs have not changed. Even though you eliminate the F
one fifty lightning from your lineup. The overhead costs are
still there. Even if you sell fewer E transits or
fewer mocks. The sunk investment is still there. You're still
paying on that, and now you're amortizing that cost over less volume. So the loss per unit goes up dramatically.
Speaker 5: And of course the materials to build the cars have gone up too.
Speaker 3: Right, Yes they have. So I mean, I'll cut forward
a little bit of slack. I mean, these are they're
not first gen evs. But they're beyond compliance cars. But
they were not designed with the knowledge that Ford has since learned that it's got to be a software defined vehicle, that it needs zonal centralized electronic architecture, that it should use mega castings or giga castings, whatever you to eliminate one hundred and thirty different stampings and all the welding that goes over. So their next generation will have all
that stuff. And that's when I think you're going to
see Ford flip the switch and start making money on it's ev products. But the ones that they got in
production now they don't stand a chance of ever making a return on.
Speaker 5: I would say that that's not unusual because Rivian hasn't made a dime on anything that they start. But the
next one they take what they've.
Speaker 3: Learned right and apply it and it may get them the volume. Me it just might. Yeah, And that's a
really good point because you know, one of my favorite sayings is you learn by doing, and you learn how to do an electric car by doing it, and then you realize, oh, that wasn't a good idea and this was stupid, and we should have done that over there, and you apply those lessons learned in the next one, and so everybody thinks, oh my god, the Chinese, look at what they've done. They're so brilliant. The Chinese had
been at it for fifteen years. You know, they had
a plan to dominate the EV segment, and they made a bunch of mistakes. And you know, when you have
enough of a learning curve, all of a sudden, you hit that hockey stick inflection where it's like boom, we got most of the problems nailed, we can really start to ramp up. And for the Chinese, that happened just
about the time that COVID was hitting. So you had Europeans, Americans, Japanese,
South Korea not going to China because of COVID. And
when the restrictions finally lifted three years later, they went back and they went, oh my god, look at what happened. Well,
believe me, it was fifteen years in the making. It
wasn't like the Chinese suddenly got smart and did it.
They went through that learning curve.
Speaker 5: I think it's long than fifteen years. I think yeah.
I think the first Chinese jeeps were made in nineteen eighty nine, and Volkswagen came in around that time.
Speaker 3: Yeah, but they've been talking electric so those were all gags.
Speaker 5: But they've gone to school on Western manufacturing for a long time and they've learned and they've applied some of their own prevative thinking to it. Right.
Speaker 4: So yeah, well but we've been looking at we've been working on EV's for longer than fifteen years.
Speaker 3: So yeah, we had we never took it.
Speaker 4: So but I mean, you know, we had the EV one.
Speaker 3: Yeah. EV one was brilliant. Ye, it was a terrible
mistake for GM to kill it.
Speaker 4: And we had the Tesla Roadster.
Speaker 2: It's American, yeah, but.
Speaker 3: That was Tesla's one of Tesla's learning curves.
Speaker 4: They didn't do what I mean, but right, it's an American company sitting out there in California, not sitting in Beijing.
Speaker 3: Yeah, why didn't we learn? I think you could say
that to all the legacies, and I think the legacies this is just me reading the tea leaves. They didn't
know about software to find vehicle, they didn't know about zonal architecture. They didn't really buy the whole giga casting thing. Yeah,
but they knew that Tesla was eating their lunch in this category. Yes, but Tesla didn't really hit volume and
profits until around twenty nineteen. Well, they didn't hit profits,
but yeah, but that's when the C suite at the Legacies stood up and started paying attention.
Speaker 4: I mean, when the Model S comes out and it's the first production vehicle by a company that had existed for a handful of years and becomes Motor Trend Car of the Year like that, and Motor tren couldn't say enough about that car.
Speaker 3: I mean, no, it was a transformational car. It's one
of the most famous cars in history, or it will go down as one of the most famous cars in history.
But I'm telling you, in the C suites, it was like, eh, they're selling but ten thousand a year, we don't have to worry about them. And it was all the Legacies,
you know, pretty much ignored Tesla until, like I said, around twenty nineteen. That's when they got religion. That's when
you saw the Tarasofts and the Monroe's tearing down these vehicles and going, oh my god, this is brilliant.
Speaker 4: That's why I think religion is a little strong.
Speaker 3: I think that they I think they got awareness awareness, okay, and then you say, okay, twenty nineteen and for an all news, complete from scratch program. You're talking four years
on the part of these companies, maybe five. Now they're
just down the verge of getting to have evs that will be competitive with the Chinese from a price in tech. God,
I love your optimism that they can make a profit on I.
Speaker 5: Don't disagree with any of your points, but I would want to add one more. The domestic auto industry doesn't
have the patience to bring out new technology and let it flounder and let people find it until they can build up awareness and it starts getting some traction in the marketplace. How long did it take Toyota to make
a dime off of Pria? Yes, five ten years? But
now but now, look look how that has grown. We
in the US because of our financial system. Look at
the next quarter, the next Yeah, the term is the end of the year, right, and everyone else plays well not everyone, but many others play the long game, right, five year plans, ten year plans, you know, And we don't do that, and I think we pay the price for that.
Speaker 3: Well, uh, look at on Start. Yeah, probably lost a
lot of money on long Start. On on Start, they.
Speaker 2: Stuck with it.
Speaker 3: Well, we'll give you give them for that, But generally, I would agree that American companies are driven by quarterly reports, and unless you're showing an EPs improvement, you're going to get your head cut off.
Speaker 5: It's those darn analyst expectations, as we'd like to joke around Automotive News. Never can please the analyst, right, Why.
Speaker 3: Did they even give them guidance? Why even play the game?
Speaker 4: I don't know.
Speaker 3: Yeah, anyway, got another topic, Cary, I'll leave it there. Okay,
let's wrap it up. Richard Truett from Automotive News, thank
you for coming on the show.
Speaker 5: Thanks thanks for letting us talk about remanufactured products. I really,
as a guy who wrenches on cars, I'm totally on board.
I think that's the best deal going right now.
Speaker 2: That's great.
Speaker 3: That's great, Ary, Let's do another show next.
Speaker 5: Kay.
Speaker 2: Good.
Speaker 3: I want to thank all of you for having tuned in.
Speaker 1: Auto Line. After Hours is brought to you by Alex Partners.
For more than forty years, we have helped companies and their stakeholders around the world harness opportunity, overcome challenges, and achieve outsized outcomes. Alex Partners when it really matters,
About this episode
The conversation centers on remanufacturing as a profitable, standardized industrial process that can cut costs and carbon while extending the life of complex parts. The guests contrast reman with basic rebuilding, explain how core returns and reverse logistics support the business, and argue that designing for remanufacturing should start early in development. The discussion also widens to OEM strategy, with examples from Stellantis, GM, and Ford, plus a warning that Chinese competition and weak long-term planning could reshape the industry.
TOPIC: Remanufacturing PANEL: Jeff Stukenborg, ZF Group; Richard Truett, Automotive News; Gary Vasilash, shinymetalboxes.net; John McElroy, Autoline.tv
