What’s in a Name?

| December 12, 2008

Engineering niceties such as micron level precision can be “a hard sell to truck drivers trying to make ends meet,” concedes Don Mahrt, manager of on-highway engine parts support for Caterpillar. “But they need to educate themselves to find out exactly what they’re buying. A part isn’t just a part. It’s not just a single rod, bearing or piston. It’s a system. It’s all calibrated to work together as a single unit.”

Reverse engineering, on the other hand, is imprecise, slow and inefficient, Mahrt says. Even if the non-OEM eventually comes up with an exact duplicate, Caterpillar already has done two or three upgrades by then, because Caterpillar continuously improves its parts, Mahrt says.

Among non-OEM parts, even high efficiency can be a problem. “There are filters on the market that actually work too well,” says Richards. “They can trap particles that are not harmful to the transmission, yet reach capacity too quickly, causing lubrication failures.”

DeFeo says his non-OEM products can compete with anyone’s. “In terms of quality, our parts are identical,” he says. Indeed, he says, some authorized Allison remanufacturers buy DeFeo parts, which are good enough to run a lot of government fleets, including transit fleets in New York and New Jersey, “and those are top-of-the-line standards,” DeFeo says. Sales overall – to distributors, fleets, even OEM dealers – are so good the company is scouting locations for a factory expansion, DeFeo says. “We reverse-engineer anything we feel we can save the customer money on.”

The OEM/non-OEM question isn’t as clear-cut as many think, industry experts say. In some cases, for example, the off-brand part really is the same as the branded one, Kraus says. “The non-OEMs didn’t win the bid to build the original design, but they have the original specs and can duplicate them for the aftermarket.”

Often, the OEM designs the equipment, “but the parts are contracted out to companies like us,” DeFeo says. “In return, the OEM demands exclusivity for a certain number of years, depending on the part – as little as five years, as much as 30 years. Once that period is over, the contractor is free to sell its own version on the aftermarket.”

Many OEM parts makers sell under their own brands to the aftermarket as well. For example, aftermarket sales are about 50 percent of Dana’s business and 70 percent of Stemco’s. “Our aftermarket parts are made to the same standard as OEM parts,” Andrews says.

Dana’s aftermarket sales force is always happy to woo drivers away from rival brands, even ones that are standard OEM equipment, Black says.

In addition, some OEM parts makers sell to more than one OEM. “A Stemco in a Volvo box is the same as a Stemco in a Freightliner box,” Williams says. “If they fit, they fit.”

To further confuse the issue, OEMs sell parts to customers of rival OEMs. Volvo’s website, for example, says: “No matter what make of truck you drive, we’ve got your parts!”

The trend toward interchangeable parts is unsurprising, given federal emissions regulations that are pushing the OEMs into a “vanilla sameness of design,” Williams says.

Another sign of this trend is the Motor Vehicle Owner’s Right To Repair Act, which would require OEMs to release to the aftermarket the same technical information they provide their own dealerships. Strongly opposed by OEMs, the legislation has more than 100 sponsors in both houses of Congress and the support of many powerful lobbies, including AAA, Consumers Union, Public Citizen and the National Federation of Independent Business, plus the heavy-duty Service Specialists Association.

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