The expense associated with Tier 4 Final emissions compliance compounded with fluctuating economic conditions might have you scratching your head when it comes time to turn over your fleet. Many rental business owners today are giving serious consideration to the used equipment market. But there’s also another viable option in addition to new or used — remanufactured.
Most major heavy equipment manufacturers offer some type of remanufacturing program. Some, like Bobcat and CNH, for example, center on the engine and related components primarily. Others, such as John Deere, broaden the scope to cover major power train parts. All programs aim to do the same thing: significantly extend the useful life of the machine at a cost that’s typically less than half the price of buying new.
Remanufactured parts minimize the total cost of ownership, including minimizing repair time. “Rebuilding an engine or driveline can put larger equipment out of service for a week or more,” says Jerry Hutkowski, product marketing manager for CNH Reman, which provides remanufactured components and assemblies for Case Construction and New Holland Construction machinery, as well as Case IH agriculture and New Holland agriculture. “CNH Reman components come as drop-in assemblies, reducing the time it takes to remove, rebuild and reinstall major components. That’s an important consideration, especialy during busy seasons.
“A recent study by CNH Reman showed the average long-block rebuild overhaul takes 40 hours — while an average CNH Reman drop-in block takes only 14 hours,” Hutkowski says.
Jeffrey Lambeth, aftermarket remanufacturing manager at Bobcat, agrees that remanufacturing is efficient, adding, “Remanufactured components will assist a rental business in keeping their cost down compared to replacing with new, and they have a reliable resource in the remanufactured product. Downtime is reduced when purchasing a remanufactured product and the value of the equipment is maintained when it’s time to sell the equipment.”
But is it as good?
Typically, remanufactured engines and components can offer a substantial cost advantage vs. new, while offering performance and reliability on par with new components. “CNH Reman parts function as well as or better than an original part, yet cost 20 to 40 percent less than new parts — with a full warranty,” says Hutkowski. “What’s more, equipment owners get money back for the worn parts through the core return process of the CNH Reman program.”
Unlike regular “rebuilt” parts, each CNH Reman 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 CNH Reman parts are tested to meet or exceed the original OEM specifications.
The cost factor
“The cost can obviously vary significantly, depending on what additional work a customer chooses to do to the machine,” says Mark Wagner, reman product marketing manager, John Deere Construction & Forestry. “Our customers feel the [Deere] Reman Reload program should cost less than 50 percent of the price of a new replacement machine. Most of the Reman Reload programs we sell are in the range of 35 to 45 percent of the cost of a new machine. Generally, the larger the machine, the more financially attractive the Reman Reload program becomes, compared to replacing the unit with a new machine.”
It’s true that for smaller equipment, such as skid steers and compact excavators, the cost of remanufactured parts is higher in comparison to the initial capital outlay for a new model. Bobcat, for instance, notes that its remanufactured parts are typically 70 percent the price of new, but with a warranty that’s comparable to new or better than new.