Rebuilt Loaders Cut Production Costs

The current economy, coupled with the increased price of Tier 4 technology, has many considering the feasibility of refurbishing their wheel loaders rather than replacing them.

“Rebuilding a wheel loader vs. buying a new unit may well be the best answer at this time,” says Bill Metzgar, service trainer, Hyundai Construction Equipment. “As more manufacturers develop stronger reman programs, along with offering warranty on the products, contractors tend to look more closely at rebuilding wheel loaders vs. replacing due to the savings re-building a unit may afford them.”

Chad Ellis, Doosan, agrees, adding, “You have a lower investment cost in refurbishing with remanufactured parts into a wheel loader that you already own vs. the price of a new machine.”

“Remanufacturing is about lowering customers’ owning and operating costs and increasing uptime,” says Eric Metzger, product marketing manager, parts & service, Case Construction Equipment. “Case remanufactured components provide a drop-in replacement option that meets the OEM specifications. That’s because some parts may have been updated to reflect the latest engineering enhancements or new testing procedures.”

The savings can be substantial. “You can normally refurbish a large wheel loader for about 50% of the cost of a new machine,” says Kevin Stock, product manager, Volvo Construction Equipment. “That is going through it from top to bottom.”

But the decision to refurbish can get complicated. “When deciding to rebuild a wheel loader vs. purchase new, the decision has to be made on how far the rebuild will go and what remanufactured parts are available,” says Hyundai’s Metzgar. “In some cases, a new machine purchase would be the best choice due to the severity of wear. Also, warranty has to be taken into consideration according to the contractor’s needs.”

Benefits of Reman Components

The process of rebuilding can be quite extensive, and you can either have your own components rebuilt or you can use factory reman components. “Reman components can be very cost effective when rebuilding a wheel loader if the parts are available,” says Metzgar. “In most cases, warranty is available on major components such as engines, hydraulic pumps, transmissions, etc.” Hyundai suggests that reman parts be used when available.

“Remanufactured parts cost 20% to 40% less than new parts, offering excellent value while ensuring proper machine performance,” Metzger notes. “And when it’s time to sell the machine, the presence of OEM parts helps sustain strong resale values.”

CNH REMAN is a joint venture between the Springfield Remanufacturing Corp. and CNH Parts and Service that began in 2009. It offers a full line of remanufactured parts.

“Case remanufactured parts are remanufactured to original like-new condition,” says Metzger. “Unlike rebuilt parts, each Case remanufactured part is disassembled, cleaned and inspected. All cores are updated to the latest specifications, and components are checked, refurbished and replaced where necessary. Finally, the remanufactured parts are tested to meet original OEM specifications. We inspect and remanufacture critical machine assemblies in facilities that are solely dedicated to remanufacturing, using sophisticated processes to assure consistent quality from all components that carry the CNH REMAN designation and warranty.

“The CNH REMAN joint venture allows Case to offer its customers an expanded mix of remanufactured products that can help equipment owners lower their operating costs,” he adds.

The reman parts often perform better than the parts they replace. “Most Case reman parts are engineered to meet the latest OEM specs, and can be used to substantially improve the performance of refurbished equipment,” says Metzger.

According to Volvo Construction Equipment, factory supplied reman parts ensure quality. “It is done in a factory environment so there is repeatability,” says Stock. Volvo performs all remanufacturing in an ISO 9001-certified facility and provides a warranty.

Size up the decision

Whayne Supply claims to be the world leader in certified rebuilds for Caterpillar, approaching 400 complete certified rebuilds. “You can save somewhere close to 40% to 50% depending upon the size of the machine,” says Dan Frailly, who has headed up the certified rebuild business since 1989. “It just depends on the model.”

Of course a complete rebuild only makes sense for larger machines. The Cat 980 is probably the smallest loader feasible for the customer. “When you get below that, the parts and labor that go into it approaches 90% of what a new machine costs. Then you add in the core value and it makes no sense. But definitely in the larger machines it is a viable option.”

Size makes a big difference because you pay for iron when you buy a piece of equipment. “The larger the machine, the more iron you already paid for,” notes Stock. “So if you watch the percentage of new for a refurbish, the larger the machine, the lower that percentage becomes.”

Gary Bell, vice president-general manager, KCMA Corp., explains, “The labor to do a full rebuild is roughly the same for a small machine as for a larger machine. So as a percentage of the value, labor is too high for machines under 5 to 6 yds. It also depends on the usage before and after rebuilding. We rebuild hot slag machines because they have very low resale value, even at low hours. So it is often more economical to rebuild a machine with 10,000+ hours for a second or even third life than it is to try and trade it in for a low value and buy new.”

Quarries often rebuild machines, as well. “This has to do with how they depreciate their equipment,” says Bell. “Once they get through the initial depreciation period, they can operate at a lower internal cost. So they often want to continue to operate a machine that has been fully depreciated. Also, capital budgets often are harder to get than maintenance budgets and rebuilds are often handled by maintenance budgets, not capital.”

As good as new

“Generally, the properly rebuilt unit will be as productive as it was originally,” says Bell. “Most rebuilds happen when the machine is over five years old, which is the normal spread between new models. Often, new models have performance, reliability or operational features that may make them more desirable than a rebuild on that basis.”

“A well-built refurbished wheel loader can provide the same performance and uptime as a new unit,” Metzgar asserts. “The remanufactured parts and warranty that are available now lend to a very good product after a rebuild.”

Caterpillar has a carefully designed and audited certified rebuild program. The machine is completely disassembled. “Every last bolt and nut is taken off,” Frailly points out. “There is nothing left intact. All of the glass is taken out. The complete machine is sandblasted. Any cracks are fixed and repaired. Every bore in that frame or anywhere else is brought back to new standards. It is very close to a new machine running off the assembly line.”

Machine availability vs. scheduled hours is a common measurement. “You may get a new machine and the availability could be 95%,” says Frailly. “When you remanufacture one of these certified machines, we see availability jump to 98% or 99%.”

The reason for the increase is the product updates incorporated into the rebuild. Cat mandates that any certified rebuilds incorporate all of the product updates that have been made to that particular model. “So it has very high reliability says Frailly. “Because it is a Caterpillar program, it will carry a standard machine warranty, just like new. And there are extended service programs available.”

The machine even gets a new serial number. But an important consideration is that you cannot perform a certified rebuild more than once in the machine’s life cycle.

A certified rebuild is a rather involved process. “It could take a week to do an inspection and put together the quote,” says Frailly. “I will have two mechanics on that machine at least a whole day. Then they will go through the customer maintenance records and we will look in our history. We pull oil samples. It is a very intense process.” The quote for the rebuild largely depends on the overall machine condition.

Once the rebuild starts, it can take from 12 to 14 weeks. “If you are a small branch and you are trying to do it all in house, it will take longer,” says Frailly. Whayne Supply rebuilds the majority of the components in-house. “We like to keep the same iron that came with that original machine. Owners like to have their own iron.”

But what if you need the lower emissions levels offered by Tier 3 engines? “We are repowering some machines,” says Frailly. “We incorporate that into the rebuild at the same time. We work closely with Caterpillar engineering on that, especially if it is the first one that is going to be done. They will make pieces to make it fit.”

Consider partial rebuilds

Various levels of rebuilding are possible. “Normally, the powertrain components are rebuilt, but also the hydraulic system can be refurbished. The electrical system can be redone and even the structures can be reinforced or repaired,” says Bell. “These are all issues that are determined based on budget and application.”

Volvo Construction advocates matching the level of rebuild to your unique circumstances. “We have found over a period of time, every machine is different when it hits the dealership,” says Stock.

The climate, application and operator all play a part in which components wear and at what rate. “If you are driving into a wall of stone or moving mulch, it is a different wear and tear on the machine,” says Stock. Similarly, a machine in the desert Southwest is subjected to a different type of wear than one operated in severe cold.

“Rather than taking a one-size-fits-all approach, we have tried to customize it so the machine and owner have a little more input to what the end result is going to be,” says Stock. “They are not paying for something that is not needed.”

This approach starts with a very thorough inspection. “We go through a machine top to bottom,” says Stock. “Then we sit down with the customer and make recommendations.” The owner can decide whether to follow all of the recommendations or assume some of the risk and skip certain components or repairs.

Volvo starts out with a driveline-specific refurbish — replacing the existing engine and transmission with reman components. Then it moves to the final drives, differentials and trunnions, changing out seals and bearings and inspecting the rest. Usually, changing out gears in the driveline or brake components isn’t necessary. “They are just in such good condition after 12,000, 14,000 or 16,000 hours,” says Stock.

Caterpillar also offers certified powertrains. According to Frailly, it often makes more sense for the owner to extend the life of the machine with the certified powertrain, then move on to a certified rebuild once that powertrain is used up.

“If he has done great maintenance and kept it up, he can get by with a certified powertrain,” says Frailly. “But I always caution the customer because a certified powertrain is just the powertrain.”

Electrical and other components will be the originals and can be more likely to fail. The cost per hour will be the same whether downtime is cause by a major powertrain component or an electrical switch. “You have to weigh that factor,” says Frailly.

Determining the rebuild interval

Assessing when to rebuild can be tricky. “You would normally use a combination of operating hours and oil sampling results to determine the rebuild timing,” says Bell. “More sophisticated customers track overall operational costs closely and make a decision when they see operational costs increasing. This is more of an art than a science.”

Hydraulics typically need to be rebuilt before most powertrain components. “Transmissions then engines and axles would be the normal progression for the powertrain, but the customer may rebuild everything at once if that is more efficient,” says Bell.

Ellis notes that while most major components (engine, transmission, axles) are on a similar life cycle that can vary by the application. “Some applications may be harder on the axle or transmission. Really take a look at where your application gives the most wear and tear,” he advises. “There has to be some homework done on the contractor’s side to answer those questions.”

Swapping critical components with reman components can also provide an alternative to repairs and overhauls. Consider the example of a reman engine.

“Compared to an out-of-frame overhaul, installation time can be reduced by up to 70% for a replacement level engine and 50% for a long block engine,” says Metzger. “Because many of our remanufactured parts come ready to install, technicians can spend less time completing repairs or shop installs. The result is quicker turnaround and a higher level of equipment uptime for the customer.” ET