The auto aftermarket, however, is not exactly a headline-making industry, and despite its growth there, remanufacturing remained largely invisible elsewhere. In 1976, Lund, who was then teaching at the Massachusetts Institute of Technology, had never even heard the term. Then, in one of those rare juxtapositions of people and interests that make for revelation, remanufacturing found its principal theoretician and champion. Robert A. Holzwasser, Harry's son, enrolled in one of Lund's mechanical engineering courses, and did a case study on his father's company.
Lund, who had spent 10 years each with Raytheon Co. and Polaroid Corp. before joining academia, was fascinated. "I have a natural inclination to want to keep things going," he explains. "I do it myself in my own shop at home." He had already written a paper on recycling -- a process that, unlike remanufacturing, involves a net dollar loss -- and, astounded by the impressive savings promised by remanufacturing, sought U.S. Department of Energy funding for the first comprehensive examination of the subject. That thick study, released in 1980, and subsequent volumes (one prepared for The World Bank), as well as two national conferences on remanufacturing, now constitute the bible and catechism of the new faith.
In the view of its proponents, remanufacturing is simply the next natural step in the evolution of the manufacturing process -- coming, in effect, right after quality control. When the door of a Plymouth fits as well as a Toyota's, and when its engine purrs as predictably, what does Chrysler Corp. do for an encore? Lund's answer is that the company should produce parts -- even, conceivably, entire cars -- that are easily remanufactured. Negligible increases in cost and weight, he argues, would be more than offset by gains in vehicle longevity and customer satisfaction. Automotive Import Recycling Inc., of Belvidere, N.J. (see INC., November 1983, page 41), is already remanufacturing BMWs and Volvos at an average cost to the consumer of from $8,000 to $9,000.
Holzwasser agrees. "What do you think will happen," he asks rhetorically, "when some automobile manufacturer announces that they have a car that will run for 20 years because it was designed to be remanufactured?"
Lund's most recent study, "Start-up Guidelines for the Independent Remanufacturer," details the requirements and opportunities for remanufacturing in general. The ideal remanufactured product, he argues, is a durable good, with a high percentage of recoverable material and a true economic value considerably higher than its scrap value. A remanufacturer of power lawnmowers would not, for instance, target $99 plastic throwaways, but might successfully rework top-of-the-line John Deeres. Core units -- the used parts with which remanufacturers begin -- should be readily available, inexpensive, easily disassembled, and capable of being restored to like-new condition. Finally, a relatively stable technology and knowledgeable customer base help.
Among the products that fit these criteria are major household appliances, including washers, dryers, dishwashing machines, and air conditioners; power tools, from drills to grass trimmers, motorcycles, snowmobiles, outboard engines. . . Lund's list goes on and on. "The applications are endless," he says. "It's an area where there's plenty of room for the imaginative person to do something." One of his studies evaluated the prospect for remanufactured saw chain, not high on most brainstormers' lists, and found that even that lackluster item showed promise.
Lund envisions a day when remanufactured products will not only work as well as they once did, but may look and function like brand-new. Flexible Corp. of Delaware, Ohio, is already dropping new bus shells onto remanufactured engines, chassis, and drive trains, and Lund sees no reason why the same couldn't be done with Maytags. "The basic technology of washing machines hasn't changed in 20 years," he explains. "All that changes is the shroud and the controls. Maytag could remanufacture the guts, update the controls, and slip on a new shroud." That might lead to the final demise of the Maytag repairman, but it would give the consumer a high-quality, like-new product at a fraction of the cost.
Remanufacturing, Lund notes, not only saves most of the energy and raw materials involved in the production of the original item, it also creates jobs for both unskilled and skilled technical workers, and it results in substantially lower prices for the consumer (an Arrow alternator, for instance, retails for $131.05, as opposed to $256.70 for new, while an Arrow starter costs only $69.30, versus $193.85 for new). Remanufacturing also reduces solid waste and air pollution, and tends, in many cases, to be more profitable an opeation than OEM manufacturing. "Not only are the profit margins generally higher," he explains, "they're frequently high enough to survive recessionary periods."
Lund recalls a truck manufacturer who told him, "During the recession, the remanufacturing part of our business was the only part in the black."
Most of these benefits can be seen quite tangibly in auto-parts remanufacturing, particularly at Arrow Automotive. Because of high new-car prices, Americans are holding onto their cars longer (an average of 7.5 years), fueling the demand for parts. Today's smaller autos, moreover, run faster and hotter, and break more easily when they encounter potholes. And vehicles are becoming more complex, increasing the number of replacement parts required. All these factors have fed Arrow's business. The company recently embarked on the remanufacturing of carburetors, crankshafts, rack-and-pinion steering units, and master brake cylinders ("we can sell as many of those as we can produce," Holzwasser observes), and eventually intends to be handling computerized controls for engines. It takes an unusual combination of adverse factors to make an impact on Arrow's sales: "We had a rough time in 1979-80," says Holzwasser, "during the recession and fuel embargo. People were driving less and taking their second and third cars off the road. That reduced the wear-and-tear factor."
