Engine Redux

Under the 1990 Clean Air Act, the EPA has the authority to regulate nonroad emissions in an attempt to reduce emissions of lead, nitrogen oxides, nonmethane hydrocarbons, carbon monoxide, and other pollutants. To achieve this goal, the agency has implemented the first federal standards for off-road diesel engines over 37 kW (50 horsepower), emulating the regulations for highway heavy-duty engines.

The nonroad standard applies to mobile nonroad diesel engines of all sizes used in a wide range of construction, industrial, and agricultural equipment. This includes engines installed on self-propelled equipment, equipment that is propelled while performing its function, and portable or transportable equipment as indicated by the presence of wheels, skids, carrying handles, etc.—in other words, all internal combustion engines except motor vehicle engines, engines used solely for competition, aircraft engines, and stationary engines. (Stationary engines sold in California are included, however.)

The first step to improve air quality by reducing nonroad emissions is known as Tier 1, with the primary goal of immediately reducing nitrogen oxides while imposing minimal impact on the machine. According to the EPA, diesel engines contribute 12% of all nitrogen-oxide emissions. Off-road diesel engines are responsible for 44% of diesel particulate emissions and also emit volatile organic compounds and carbon monoxide. Tier 1 was phased in from 1996 to 2000, reducing allowable nitrogen oxide emissions by 30%.

Even before Tier 1 was fully implemented, the EPA began developing the next stages. Tier 2, 2001–2006, and Tier 3, 2006–2008, reduce nitrogen oxide by another 70% and particulate matter by an additional 40% from uncontrolled emission levels. Tier 4, scheduled to go into effect in 2010, requires a further 90% reduction in nitrogen-oxide and particulate-matter emissions beyond the Tier 3 requirements, as well as a reduction of allowable sulfur in nonroad diesel fuel from 5,000 parts per million to 500 parts per million in 2007—and to 15 parts per million in 2010. The low sulfur levels are deemed necessary to achieve the Tier 4 nitrogen-oxide standards because sulfur fouls catalytic systems that are needed for low nitrogen-oxide emissions.

Engine remanufacturing is a complex operation requiring a variety of skills.

Once the inventory of older nonroad engines has been replaced by Tier 4–compliant engines, annual emissions are expected to be reduced to 738,000 tons of nitrogen oxide and 129,000 tons of particulate matter. By 2030, approximately 12,000 premature deaths would be prevented annually, thanks to the implementation of these emissions standards.

Bus Bryant, manager of product engineering for Region Technologies, which remanufactures engines for John Deere, says graphics comparing emissions before Tier 1 and now were impressive. “It’s unbelievable how much lower it is now. It went from 100 units at Tier 1 to 1 unit at Tier 2 to 0.10 at Tier 3. It’s been hard to meet, but you do it with timing, turbos, and computers.”

Clean Air Is Not Free
According to the EPA, the estimated costs of meeting the new emissions standards are expected to add 1%–3% to the purchase price of new nonroad diesel equipment. As an example, for a 175-horsepower bulldozer that costs $230,000, the cost would increase by $6,900 to add the emissions controls and design the bulldozer to accommodate a modified engine.

The EPA states, “Increases on this order are not expected to reduce the demand for new machines or to result in measurable impacts on ultimate cost indicators, such as construction costs and farm product prices.”  However, according to a December 2006 USA Today article, on-the-road big-rig truck sales soared in 2006 as fleet owners rushed to beat the expected $12,000 additional charge for the new engines, which they also worried would incur higher maintenance costs but produce lower fuel mileage. Companies that had delayed purchases hurried to rotate their fleets with new equipment that remained outside the reaches of the regulations. Some manufacturers doubled production to meet the demand.

The same scenario was seen in the non-road division. “People pre-bought on a big scale,” states Zach Bawel, vice president of sales for Jasper Engines. He believes the used truck market will remain strong for quite a while, as well, because the vehicles are holding their value, especially in the face of the new regulations.

Part of the concern involves the low-sulfur diesel fuel mandated by the Highway Diesel and Nonroad Diesel Rules for use in nonroad diesel engines in 2007. “We lost fuel economy when the 2004 emissions came,” Bawel recalls. “There was a problem with the engine.” The EPA estimated an average 7-cents-per-gallon increase for the 15-parts-per-million fuel. In addition, the increased weight of the engines reduces fuel mileage, further adding to costs.

It costs money to reduce pollution. Therein lies the cause for the renewed interest in remanufactured engines. “Engines only have to be rebuilt to the era they’re certified for,” explains Bryant. Because the new standards regulate only equipment with engines built after the implementation dates, keeping the engines from previous eras running longer is thought to be more economical than investing in new equipment.

“Remanufactured products traditionally cost a fraction of new,” Caterpillar says in a prepared statement. Caterpillar is one of the world’s largest remanufacturers, processing more than 2 million units and recycling more than 100 million pounds of used products annually. Cat Remanufactured Products include on- and off-highway engines, engine components, transmissions, and hydraulic and electronic components. Because of the wide range of product types and technologies included in the products, Cat Reman can’t provide a definitive cost. However, as a rule of thumb, “customers can generally expect a reman part to cost somewhere between 40% to 75% of a similar new part.” Other manufacturers were more willing to put a price tag on it. Bryant estimated $30,000 for the most expensive 550-horsepower engine.

Bawel’s figures are slightly different. He estimates remanufactured products at typically 60% the cost of new, noting that $4,000–$10,000 is typical. Josh Stahl, vice president of Reviva, says it depends on the size of the engine but calculates a dyno-tested remanufactured engine at $5,000–$10,000—“versus $130,000 for a new truck. It’s definitely a more affordable alternative to buying new equipment.” Reviva, a family business founded in 1946, remanufactures diesel and gas engines and components for national fleets, original equipment manufacturers, and aftermarket distributors, specializing in medium-duty engines for both on- and off-road applications.

Recycling the Supply
“It depends on the customer and the usage—the duty cycle,” Stahl says about making the decision when to have an engine remanufactured. “UPS is our best customer. It has an oil consumption issue; consequently, it does them more frequently.”

Bryant agrees that determining when to remanufacture an engine depends on many variables, but suggests consulting the component technical manual guidelines and keeping an eye on oil and fuel consumption and exhaust smoke. In the end, he says the “service people at the dealership help determine if that’s what you need.”

The issue becomes even more complicated when all the options are weighed. Jim Morrow, president of Detroit Diesel Remanufacturing Corp., told a Utah newspaper that the decision to install an remanufactured engine supplied by the original equipment manufacturer (OEM) versus having an independent shop perform a rebuild is key. Detroit Diesel Remanufacturing Corp. is a subsidiary of Detroit Diesel Corp. (DDC), the leading manufacturer of on-highway diesel engines for the commercial truck market. The remanufacturing division remanufactures and markets a complete line of diesel engines and related products for on- and off-highway power systems.

Morrow describes a remanufactured engine as one that is totally remanufactured, having been returned to the latest blueprint specifications and tested to original equipment standards. A rebuilt engine, he says, is repaired only to the level of failure, with components beyond that level left intact.

Many engine builders agree with his definition, contending that “rebuilt” does not equal “remanufactured.” Remanufactured engines are fitted with the latest innovations; they are not merely a re-created, possibly obsolete, engine. The difference could result in greater overall performance, better fuel efficiency, and better quality. With new engines continually coming out with more torque, horsepower, and complicated electronic components, it is becoming increasingly difficult to retrofit an engine.

For Morrow, it’s an issue of quality. Many manufacturers consider anything other than an OEM rebuild to include less than top-tier performance without the same level of sophistication or warranty. They criticize independent shops for not investing in state-of-the-art equipment and diagnostic tools. DDC’s remanufactured engines feature components remanufactured to meet original specs or replacement of original equipment components. He considers engines rebuilt by non-OEMs as carrying a risk of unpredictable service life and less durability, and requiring more downtime.

Similarly, “Caterpillar is a firm believer that customers can achieve the best value from using original Caterpillar parts, including Cat Reman Products,” the company states. “As the OEM, we know the original design specifications and all product improvements that have occurred since the product was originally produced. We remanufacture all Caterpillar parts so they perform the same as the corresponding new Caterpillar part. This, along with our focus on ‘design for remanufacture,’ insures that we can continue to provide cost-effective remanufactured products for existing and future engine designs.”

Region Technologies has invested several million dollars in tooling, which enables them to “do things,” Bryant says. “The tooling required to work on these engines is expensive.” In addition to having access to the capital to purchase expensive equipment, he says OEMs are “the only ones with full access to specs, blueprints, and engine standards. Aftermarket brands may or may not be made to spec, especially some of the gray market parts from South America. They may or may not fit John Deere spec.”

Bryant lists another benefit of an OEM rebuild: better warranties. Region Technologies offers a 12-month warranty on construction engines, 24 months for agricultural engines, and 12 months on fuel-injected pumps. “John Deere follows other manufacturers on warranties,” he says. “Shops seldom give you a year.” Jasper, however, offers a two-year unlimited parts and labor warranty.

In addition to the “same-as-new warranty” offered on all remanufactured Cat products, an added benefit of an OEM reman job, according to Caterpillar, is the ability to use “repeatable quality processes. We remanufacture so they have the same quality, reliability, durability, and warranty as a similar new product.”

In response, Stahl contends that Reviva invests “a lot of time and effort in engineering, so we’re able to build to the latest specs” and adds, “Everything is readily available: parts, specs, et cetera. We can get whatever’s necessary from the OEM. Our technology is known.” In fact, he says, companies like his can better serve the customer because they have to be flexible enough to meet client demand by being able to work on all equipment. “Big fleets don’t have just one brand.”

No matter what the brand, engines are more complicated, and there are often issues with the electronics that require special diagnostic equipment. In addition, electronic fuel injection requires specialized, expensive equipment, Bawel notes. “The engines are more complicated, more difficult today. Years ago, a lot of fleets rebuilt their own engines. Today, few do it because it takes a lot of specialized equipment and knowledge. We don’t even do it all any more; we can’t justify buying some of the equipment because of the volume.” He says Jasper focuses on 10–12 different mid-range diesel engine platforms. “If we tried to do every application, we couldn’t be competitive. There are hundreds of engine platforms.”

Bawel speculates that as engines become more complex, there are more complications involved in rebuilding and remanufacturing them. “The electronics affect us,” he says. “We dyno every engine, but to properly dyno an engine, you need the diagnostic codes specific to that engine.” Morrow told a Utah newspaper that DDC uses factory-specified dynamometers and new engine performance parameters that aren’t available to any other remanufacturer or rebuilder. He cites it as an example of an OEM’s advantage in incorporating the latest engineering advancements and technology, including performance upgrades as yet another benefit accompanying an OEM rebuild.

Bawel recognizes Jasper’s limitations, but maintains, “It also limits our competitors’ capabilities of doing things. A lot of machine shops can’t afford the equipment and labor to do a rebuild. It’s more cost-effective for them to come to us for a remanufacture. It’s going to be tough for the small guys with little volume.”

Full Service
Most of what he sees is routine maintenance—wear issues. For those, he says, “we completely disassemble the engine and rebuild it to original equipment spec in compliance with the regulations for the year in which it was manufactured.”

To reduce downtime, most manufacturers and reman shops implement an exchange program whereby the customer pays a deposit (a $2,000 “core charge” at Reviva, refunded upon receipt of the failed engine) to have a newly remanufactured engine shipped. Bawel says 99% of his business operates on such an exchange basis, with Stahl adding that only very unusual engines are sent in before a replacement is shipped.

“Our turnaround time is quick,” Stahl indicates. “Typically, we get an engine to them in two days, and they can usually install it in eight hours. Downtime is costly.”

Bryant estimates that it takes 30–40 hours to rebuild an engine, which involves taking it apart, cleaning it, remachining it, and dyno testing. A “complete runner” can be changed in a day by two technicians. A complete runner, which Bryant says is most frequently requested by companies in the construction industry or for larger tractors in the agricultural sector, entails less downtime.

Bawel estimates that 15%–20% of his requests are for complete runners or long blocks. Around 85% of his jobs are for drop-ins. That, he says, entails a complete fuel system minus the electric starter and alternator, as well as tearing down and cleaning; machining the block (pulling liners on the bigger diesels or boring the block on smaller diesels); replacing pistons, springs, and valves; remanufacturing the turbo and pump and all external lines; and replacing bearings, gaskets, pistons, rings, and seals. Because engines are better these days, he says he can often reuse some parts, such as pistons and valves.

Caterpillar details the closed-loop process of remanufacturing an engine. The basic steps include:

• reverse logistics to bring end-of-life products (cores) back;
• disassembling, cleaning, inspection, salvage, assembly, testing, painting, and packaging;
• outbound logistics; and
• distribution through authorized dealers.

Benefits and Challenges
According to a survey conducted by California’s Air Resources Board (ARB) in 1987, proper rebuilding usually returns engines to an as-new condition, meaning they will emit at levels close to those of new engines. However, improper rebuilding can increase heavy-duty diesel emission of hydrocarbons by 11.86 tons per day and nitrogen oxide by 11.42 tons per day.

Improper rebuilding practices were identified as improper equipment replacement, accounting for 20% increases in HC and 33% increases in nitrogen-oxide emissions, and improper equipment calibration, which could also occur during routine maintenance. The ARB estimated that 80% of the 11.86 tons of hydrocarbons and 67% of the 11.42 tons of nitrogen oxide is not due to rebuilding but instead is due to improper field maintenance practices. In other words, “the primary conclusion of the study is that improper rebuilding practices are not estimated to have a significant impact on emissions.”

Stahl says there aren’t really any risks involved. “It cleans things up,” he summarizes. “After a remanufacture, it burns cleaner.” However, the work is getting more complicated, Bryant suggests, because, “to burn cleaner, there are more subsystems to be rebuilt that weren’t on Tier 1 and 2. Tier 3 is different. You have to look at exhaust-gas recirculation and variable geometry turbos, which are very expensive. Everything is computer-controlled; it raises the cost of the engines.”

Among the benefits Bryant lists are upgraded parts. “The construction market in particular is very sensitive to downtime and fuel costs. They have to upgrade. Materials and technology change. For example, we used to use asbestos gaskets.” Design or engineering changes also may affect the situation by extending life or improving power and durability. “Crankshafts used to have one design: a tangential fillet. Then they developed a rolled fillet, which produces more horsepower. We incorporate methods and materials changes when we can; not everything can be retrofitted. Five to 10 years ago there were few machines with computer controls. Control systems are vastly different and don’t interface with the newer technology. Sometimes you can’t mix and match.”

Despite the challenges, business for remanufacturers is on the upswing. Stahl attributes the growth of the medium- and heavy-duty engine business to the costs of new equipment. “With the complexity of the engines and the emissions issues, there’s more acceptance of the process.” There are also fewer fleet owners performing the work themselves, which is why Reviva has positioned itself to target small fleets. “Fleet owners used to do their own work, but the lack of techs and the complexity of the engines mitigated that. Now they’re outsourcing the work. We’re here to give them a competitive edge by helping with their cost of asset utilization.”

Bryant admits it’s difficult even for OEMs to keep trained mechanics who can work on the more complicated engines. “It’s hard to keep good techs.” He recognizes that ex–John Deere mechanics sometimes end up at independent repair shops, where lower labor rates attract “second- and third-tier” equipment owners and shop owners rely on aftermarket parts.

From a dealer’s perspective, Bryant says, remanufacturing is “part of the scheme for product support. There are some 50-year-old tractors still running. They run forever. Our oldest engine is a 1965.” Engines are “very rebuildable,” he adds. “It’s designed into the engine. Customers expect it to be rebuilt.”

Caterpillar is “very optimistic” about the customer and environmental benefits that remanufactured products are capable of providing. “Remanufacturing is a key part of Cat’s product support and corporate sustainable development strategies.”

The Future
Emission standards must be met over the entire useful life of an engine. The EPA requires the application of deterioration factors (DFs) to all engines covered by the rule. The DF is applied to the certification emission test data to represent emissions at the end of the useful life of the engine. While remanufacturers may be busy now breathing life into pre–Tier 4 engines, eventually even the Tier 4 engines will age and will need overhauling to stay compliant with regulations.

Jasper, founded in 1942, has worked on diesel engines since the 1950s. Currently, Bawel says the company works on 6,500 diesel engines a year and continues to see an increase in business. “Up to now, it was not driven by emissions,” he reflects. “There’s been a lot of talk in the industry whether it will help the remanufacturers and how it will effect fuel economy and durability. There are still a lot of bugs. But going forward, due to emissions regulations and fuel prices, we expect to see people hang on to their equipment.” That means more remanufactured engines … with one caveat.

Bawel says “very seldom” can a diesel engine be remanufactured more than once. However, he adds, such engines typically last longer today—logging 1 million miles or more. “Engines are better … the materials used, the heart of the engine. Synthetic oils have also dramatically improved the life of an engine and transmission. The typical midrange truck lasts 400,000 to 500,000 miles. That has to figure into the decision to reman an engine. Is your vehicle worth a new engine?”