Lockout Technology Secures Replacement Parts, and Profits, for Vehicle Manufacturers and Tier-One Parts Suppliers

Over the past decade, we have seen a major trend in vehicle manufacturers to include Lock-Out Technology in high-value components. These computer chip-based systems require parts to have factory-issued security codes to correspond to vehicle parts, or they will not function.  Increasingly, high-value replacement parts must be Vehicle Manufacturer (VM) approved, or they are useless.

The relative cost to implement this technology into existing chips is fairly small relative to the gain in market share it may realize. Thus, business is booming in this area.  In one high-end manufacturer that we are aware of, the security technology appears in all the following parts:

• Key/Lock Alarm System
• Steering Lock
• Shifter Lock
• Pushbutton Start System
• Engine PCM
• Instrument Cluster
• Transmission Shift Actuator
• Transmission TCU

Typical Vehicle Network

How this Impacts the Auto Industry

In many cases this prevents that part from being remanufactured or even re-used in the aftermarket. This drives parts business away from independent aftermarket suppliers and toward the vehicle OEM-authorized distribution network, where both the OEM and the Tier-One suppliers can capture more market.

Obviously, many in the aftermarket see this as a major threat. Salvage shops and parts repair shops, that make their livelihoods off high-value parts like transmissions seem the most threatened at the moment. But even major parts distributors must wonder how long before starter motors, alternators and other parts need a specially coded computer chip to function properly. However worrying it may be to them, though, the practice is perfectly legal. And for profit-motivated OEM’s looking to both horizontally and vertically integrate, it’s inevitable.

This of course does not mean that the OEM can simply charge whatever it wants for replacement parts. The aftermarket is adaptable so some levels of reverse engineering are going to be inevitable. More importantly, though, in today’s competitive auto industry Total Cost of Ownership is more than a buzzword. Consumers want vehicles that are affordable to maintain, and no Vehicle Manufacturer can afford to be known for outrageous repair prices. These codes are a path to replacement parts market share, not a license to print money without regard to the vehicle brand. Driving down costs for the OEM and the consumer is a major focus at ISS. As is the drive to improve quality.

Scott Haugen, President at ISS, puts it best: “ISS sees the rise of this technology as an opportunity. We operate as both a Tier-One/service parts supplier, and as a Factory Authorized Remanufacturing Center. On the Tier-One side, it opens us up to a larger customer base, as we are the ones working with the Manufacturer to supply specially coded replacement parts. On the remanufacturing side, we work with the OEM to ensure parts are properly coded during the remanufacturing and exchange process.

“For both, we offer the highest quality of parts manufacturing and remanufacturing processes available anywhere, ensuring TS-level quality for both the Vehicle Manufacturer and the end consumer.”

For more than 60 years, our clients have often found us to be the shortest, easiest, most high-quality path for the VM and our Tier-One colleagues to capture aftermarket parts market share. We view this lockout technology to be an excellent means to that end.

For more information on how we can help you in the future contact us today!
Source: APRA

Fuel Efficiency Hot Topic for Manufacturers & Fleets at Work Truck Show

The NTEA Work Truck Show kicked off last week in Indianapolis with the Green Truck Summit. Discussions were based around factors affecting the commercial truck industry such as rising fuel prices, alternative fuel sources, and the role government is playing in the changing landscape. It was evident that the industry is focused on increased fuel efficiency and innovation.

While attending the Work Truck Show, I spoke with Carla Anglin, Director of Business Development for BrandFX Body Company. BrandFX has been producing lightweight composite truck bodies for decades. The BrandFX truck body line has provided fleets a highly effective means of fuel and maintenance savings since their beginning in 1984; before U.S. dependency on foreign oil was a political talking point and before government subsidies provided thousands of dollars for alternative fuel systems. BrandFX Body owner, Lee Finley said, “We were green before green was cool”.

When asked about the NTEA Work Truck Show Carla mentioned, “The NTEA is a valuable resource for BrandFX, we look to them for everything from representing the interests of our industry to congress, market information, even for training resources”. BrandFX is a MVP verified member of the NTEA, and is involved in the Green Truck Summit. The Work Truck Show is a convenient way for them to meet with distributors, announce new products and raise awareness of their product offerings.

As the focus to reduce oil consumption continues, BrandFX believes their product is “An idea whose time has come”, as today’s market is motivated to seek out lightweight solutions. This wasn’t always the case. In the early days, BrandFX composite truck bodies were valued for being rust free and allowing fleets to reduce their total GVW to avoid Frost Law restrictions. While alternative fuels and support infrastructure are being developed, lightweight composite offers immediate sustainable solutions in fuel efficiency and maintenance that business and government fleets can incorporate for profitable, sustainable fleet operations. Lighter truck bodies allow for smaller chassis, and a compounding effect in light-weighting that yields tremendous budget efficiencies over heavier trucks. This is a proven cost benefit, no matter what changes come in the form of alternative fuels.

The Department of Energy’s current efforts to help boost fuel economy and reduce greenhouse gas emissions is taking shape in a number of markets and applications. Most efforts are focused on passenger vehicles, but efficiency demands are coming for heavy-duty commercial trucks and trailers. Some of these initiatives include light-weighting, aerodynamics, alternative fuels, and new power train technologies.

The landscape will be changing in the next decade. Fleet managers are concerned about large investments into new technology, when perhaps other technologies will prove to become the mainstream. In other words, you would hate to have a fleet of Betamax, only to be up-staged by VHS, then DVDs and now streaming video…

Matt Koehmstedt is the Aftermarket Business Unit Manager for ISS. For more information about manufacturing fuel gauges and sensors, visit Instrumentsales.com. Truck fuel sensors and truck gauges can be found at PartDeal.com.

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Visteon Names Robert Krakowiak Vice President and Treasurer

VAN BUREN TOWNSHIP, Mich. — Visteon Corp. announced the appointment of Robert R. Krakowiak as vice president and treasurer, effective immediately. Krakowiak will be responsible for all activities related to corporate treasury at Visteon, a global automotive supplier based in Van Buren Township, Mich. He replaces Michael Lewis, who left the company to pursue other opportunities.

Krakowiak has 20 years of senior financial, operating and engineering leadership experience at global companies in automotive and other industries. He joins Visteon after approximately seven years at Owens Corning, where most recently he was vice president of finance for the composite solutions business. His previous roles at Owens Corning included vice president, corporate financial planning and analysis; divisional vice president and controller; and assistant treasurer.

From 2002-2005, Krakowiak was vice president and treasurer at Oxford Automotive. Before that, he spent six years at Kmart Corp. in roles of increasing responsibility, including divisional vice president, real estate finance and planning. He began his career at Ford Motor Co. as a product design engineer and senior financial analyst.

“Bob Krakowiak brings a broad range of financial experience in operational and treasury assignments, across a variety of industries, which is well-aligned with Visteon’s global profile and ongoing transformation,” said Martin E. Welch, Visteon’s executive vice president and chief financial officer.

Krakowiak has an MBA from the University of Chicago as well as master’s and bachelor’s degrees in electrical engineering from the University of Michigan.

In Victory for the West, WTO Orders China to Stop Export Taxes on Minerals

MEMA Industry News Editor’s Note – This WTO decision is good news for motor vehicle parts manufacturers who rely on access to rare earth minerals to manufacture a number of parts. Access to these minerals has diminished in recent years, but this decision should allow access to a more stable supply of rare earth minerals. For more information, contact Dan Houton.

HONG KONG — The appeals panel of the World Trade Organization ruled on Monday that China must dismantle its system of export taxes and quotas for nine widely used industrial materials.

The legal setback for Beijing could set a precedent for the West to challenge China’s export restrictions on other natural resources, including rare earth metals that are crucial to many modern technologies, trade experts said.

In the closely watched case, the trade organization’s Appellate Body, its highest tribunal, ruled that China distorted international trade through dozens of export policies it maintains for bauxite, zinc, yellow phosphorus and six other industrial minerals.

The Appellate Body, reviewing an earlier decision by a WTO dispute settlement panel, said the panel had gone too far in defining why more than three dozen Chinese policies violated free trade rules. But the appeals group said on Monday that the overall effect of China’s export restrictions was harming international trade and the policies would have to be scrapped.

The case was filed in 2009 against China by the United States, the European Union and Mexico.

“This is a major win for the United States,” said James Bacchus, a former chairman and longtime member of the Appellate Body, who now helps lead the global trade practice in the Washington office of the law firm Greenberg Traurig.

Bacchus predicted that China would comply with the World Trade Organization ruling. Beijing has a strong record of adhering to adverse WTO decisions, recognizing that it needs the access to foreign markets that the trade organization provides.

China’s commerce ministry said in a statement on its Web site that it regretted the ruling but appeared to indicate it would accept it, saying that it would act in accordance with WTO rules to “achieve sustainable development.”

Ron Kirk, the United States trade representative, said in a statement that the ruling was “a tremendous victory” for the United States. “Today’s decision,” he said, “ensures that core manufacturing industries in this country can get the materials they need to produce and compete on a level playing field.”

The case has been one of the most widely watched trade disputes in many years because of the precedents it could set for other, even more crucial natural resources. Those will almost certainly include China’s export quotas on rare earth metals, for which Chinese policies appear to have raised similar legal concerns.

Rare earths, however, were not part of the trade case on which the trade organization ruled Monday. Besides bauxite, zinc and yellow phosphorus, the other six industrial minerals are coke, fluorspar, magnesium, manganese, silicon carbide and silicon metal.

China is the largest or among the largest producers of each of these. The United States, European Union and Mexico accused China of using export taxes and quotas to force international chemical companies and other businesses to move their factories to China to tap these resources.

Those sorts of forced migrations are the reason international trade rules bar export quotas in many cases. Many non-Chinese companies have already been setting up factories in China, for example, to gain access to the crucial rare earth metals used in a wide range of modern technologies, since China began clamping down on rare earth exports in recent years.

China produces over 90 percent of the world’s rare earths, which are used in products including computers, cellphones, hybrid cars and wind turbines.

In defense of those rare earth quotas, China had cited a decades-old legal exception to the WTO’s predecessor, the General Agreement on Tariffs and Trade, known as GATT. That exception let countries levy export taxes and restrict exports if the limits were aimed at conserving a scarce natural resource or protecting the environment.

But when China joined the World Trade Organization in 2001, it agreed to dismantle virtually all export restrictions, including on industrial raw materials. That agreement superseded the GATT provisions, the appeals group ruled on Monday.

China’s agreement to join the WTO also bars it from imposing export restrictions on rare earths. Yet China has done so anyway for the last five years, invoking the same GATT exception.

While Appellate Body rulings do not form legally binding precedents under international trade law, Bacchus said it was very unlikely that the trade organization would let China use the environmental argument on rare earths after disallowing the same argument for industrial raw materials.

Indeed, a European Union trade official signaled that Europe might apply Monday’s ruling to pressure China to lift its export restrictions on rare earth metals.

“China now must comply by removing these export restrictions swiftly, and furthermore I expect China to bring its overall export regime — including for rare earths — in line with WTO rules,” said Karel De Gucht, the European Union’s trade commissioner.
International trade officials have said little on the record about why rare earth metals were not included when the United States and European Union filed the original trade case in June 2009. Mexico joined the case on the American and European side in August of that year.

Some of the explanations offered on background included the view that the United States was not worried because it had plans to reopen a rare earth mine in the Southern California desert, and that the European Union was not worried because its companies planned to depend on a mine under construction in Australia. There was also a Western perception in mid-2009 that rare earths were not controversial because they were relatively cheap.

But rare earth prices began climbing sharply less than two months after the filing of the WTO case, after word began to spread in August 2009 that China’s commerce ministry had considered a plan to halt exports entirely for some of the rarest of the rare earths — the so-called heavy rare earths — and to curtail exports for other rare earth metals.

Rare earth prices spiked in the autumn of 2010, after China suspended exports of the metals to Japan for two months as part of a territorial dispute over an uninhabited island. And China’s commerce ministry ended up sharply reducing its annual export quotas for 2010 and 2011.

Western governments have periodically considered filing an international trade case against nations in the Organization of the Petroleum Exporting Countries for limiting oil exports. But they have refrained from filing, having concluded that even an adverse ruling would be unlikely to prompt heavily oil-dependent countries to change their policies.

Source – New York Times / Motor & Equipment Manufacturers Association

GM to Build $200 Million Stamping Plant in Texas

General Motors said today that it will start construction next week on a $200 million stamping plant in Arlington, Texas, creating about 180 jobs.

The plant will be part of the company’s Arlington manufacturing complex and is scheduled to start production in 2013. It will produce large stamping components for the next generation of Chevrolet Tahoes, Suburbans, GMC Yukons and Cadillac Escalades.

Arlington currently receives stamped components from several GM plants. The new plant will save GM about $40 million a year in logistics cost, the company said in a statement. Last May, GM said it would invest $331 million in the Texas assembly plant for expansion and to purchase tooling and equipment.

Joe Ashton, vice president of the UAW representing the GM department, said in a statement that today’s announcement was further evidence that the U.S. auto industry is recovering.

“An important goal for the UAW is to increase the number of manufacturing jobs in the United States, and we are pleased that General Motors has decided to make this investment in Arlington,” he said in the statement. GM says it has committed more than $6.9 billion of investments to upgrade or expand operation in 12 states since June 2009, creating or retaining more than 17,600 jobs.

ISS Expands Availability to Millions by Opening PartDeal.com

Over the past 60 years, ISS has had the broadest selection of specialty instrument, switch, air conditioning and cable products in the industry. With premium brands ranging from Red Dot to Stewart Warner to Cole Hersee, their jobber, fleet, OEM and installer customers have greatly benefited from a massive selection of high-quality parts.

With the introduction of the overhauled PartDeal.com, thousands of parts will be available to a far broader market. “We’re still supporting our fantastic commercial customer network,” notes ISS General Manager Matt Koehmstedt. “We just see this as a great opportunity to make it easier for the guy with the toolbox and a tractor to find what he needs online.” Partdeal.com primarily focuses on heavy-duty applications. “We support tractors, construction, off-road equipment…if it’s got a diesel engine, we can probably help you,” notes Matt. “And we’ve invested in taking literally thousands of photographs of our parts, so a lot of the time people will be able to see exactly what they are getting before they order. But we’ve also got stuff for guys that are into performance and other things.”

Grand Opening starts today and will feature special items and free T-shirt with a $75 order on partdeal.com

Happy New Year 2012

Tips for 2012

- Awareness of what behavior or trait you want to eliminate and/or create.

- Let Go of past mistakes – don’t beat yourself up, rather focus on positive results.

- Inspire yourself with an exciting and creative goal that will guide you.

- Visualize what it will take to achieve your goal.

- Energize for the journey to your goal with: physical, mental, emotional.

- How will I engage with Instrument Sales this coming year.

Dealerships around the county are unaware that ISS is one of the largest west coast remanufacturing facilities that can help with with their instrument clusters & radios. Our process is simple. Our shipping is fast. Our customer service is superior. Change is good.

We have built a reputation that exceeds our competitors by carrying electro-mechanical parts that others just don’t stock. ISS has had the broadest selection of specialty instrument, switch, air conditioning and cable products in the industry. With premium brands ranging from Red Dot to Stewart Warner to Cole Hersee, their jobber, fleet, OEM and installer customers have greatly benefited from a massive selection of high-quality parts.

Don’t forget about our most recent overhaul we just did on Partdeal.com which primarily focuses on heavy-duty applications. “We support tractors, construction, off-road equipment…if it’s got a diesel engine, we can probably help you!” Widely regarded as the national expert in this areas, their site will host the largest selection of pyrometers, lead wires thermocouples on the internet. We are improving the site daily by offering features that our customers have been asking for.

Social media…. We Tweet, We Post, We Poke, We want you to “LIKE US”. Make 2012 a year to remember.
“Go ahead, make our day”

Ahhhh – The Price of Silver and Gold

No, I’m not talking about the commodities silver and gold. Though we probably all wish we had copious amounts of these now very precious metals.

What I am talking about is known good and bad articles in a manufacturing or re-manufacturing business used to verify the calibration status of our testing equipment. These parts are usually finished assemblies or sub-assemblies used to verify testing to validate that testing equipment is passing and rejecting the units that you want it to.

In electronic manufacturing most often the final manufactured piece is tested on a piece of test equipment that has been verified using a known GOOD component. This is typically called the GOLD component. In our re-manufacturing facility ISS also uses a known bad component or SILVER component to ensure that our test equipment is rejecting units that should not pass. Since we re-manufacture it is important that our test equipment be able to test all clusters and radios for faults so we use both types of tests for verification. Through this process ISS establishes a calibration schedule to ensure quality control, and therefore the final product, is defect free.

To learn more about Instrument Sales & Service capabilities or to get started with your project Contact Us today!

NOW, Where did I put that Darn Catalog?

You may need to look no further than your mail box, as ISS customers around the world are receiving their copies of the new ISS product catalog.

Take a blast through the past with featured cartoons created by the legendary automotive artist Pete Millar. You won’t want to skip a single page of quality parts, information such as how to order a cable and car humor that sparks memories of the good old days.

Our catalog has a few of your favorite products with several brands including Cole Hersee, RedDOT, Cablecraft, VDO, Hella Lights and Webasto just to name a few. So, regardless if you’re looking for gauges, HVAC, custom cables, lighting, switches we have much more to offer.

ISS knows that customers have different needs and with that in mind has designed specialty catalogs that focus on different segments of the industry.

The Air conditioning Specialist Catalog features information on hose sizes, provides a maintenance check list that you can provide to your customers or use to track your own fleet. Want to make repairs in the field, the new Aeroquip E-Z clip system will show you how.

The catalog for OEM’s outlines the total package that ISS provides, from engineering, sourcing, sub-assembly, warehousing and exchange. ISS is the first and only choice of many OEMS for instrumentation, sensors, controls and much more.

The Special Edition Fleet catalog offers products that provide operator information, comfort, control and safety for both for on road and off road fleets of any type and size.

If you haven’t received your copy yet, would like to request another for a friend or would like to become an ISS customer, don’t be bashful call at 800-333-7976 or online by clicking here

Follow @instrumentsales

Iss launches top notch HVAC Production Line

This past month, ISS launched its newest production line.  The output is an OEM in-dash HVAC control head (all of the knobs, buttons, and lights for the heat and AC in your car). Lance Bergfalk and Walt Barrer have established one of the most technologically advanced lines ever utilized at our Portland facility, the work cell is equipped with ESD safe conveyor belts triggered by optic sensors, calibrated electronic hand tools, and a fully automated end of line test unit that not only verifies all functions of the final product, but even “looks” at the face to make sure it is cosmetically correct.

The latest and greatest process engineering philosophies went into developing the production flow of this new line, allowing the production of over two hundred units a day with minimal manual labor.  In addition to these techniques saving time, we were also able to save space.  While this line will have one of the largest volume capacities of any of our production lines, it also takes up the smallest amount of space of any our work cells.  The entire operation would fit easily in the average American living room.

This project was made possible by the hard work and collaboration of several ISS entities, including:  Terry Watson and Brian Clark (Quality), Corey Pischel (Production), Seth Thoebes and Brian Kincaid (Procurement/Logistics), Lawrance Griffiths (Business Development).

We are excited to get the line into high gear, and to apply everything we have learned to past, present, and future production lines.