Cat reman buys engine, transmission rebuilders: adding Wealdstone, Williams Technologies, Caterpillar Remanufacturing stakes out automotive territory

Diesel Progress North American Edition, Oct, 2004 by Mike Osenga

After announcing in April it would offer its corporate remanufacturing capabilities to other OEMs and other industries, Caterpillar Remanufacturing Services (CRS), has moved swiftly to fill in portions of that strategy.

Caterpillar Remanufacturing Services made two aggressive moves in mid-August with the Aug. 16 acquisition of Wealdstone Engineering Ltd., Rushden, U.K., a remanufacturer of gasoline and diesel engines. Two days later it purchased Williams Technologies, Inc., Summerville, S.C., a remanufacturer of automatic transmissions, torque converters and engines.

With these two moves, Caterpillar made its intentions in remanufacturing very clear--it's automotive and it's the flail powertrain.

"We looked closely at the worldwide remanufacturing industries," said Steve Fisher, general manager, Caterpillar Remanufacturing Services. "It's about a $100 billion industry and over half of that is automotive. There's a large opportunity for Caterpillar and we think we're well positioned to be a supplier to that industry."

"We think remanufacturing is a core competency that we have in the company," Fisher said, "and we were looking for opportunities to expand that competency to third parties, similar to what we've done with the Cat Logistics business."

The verdict is obviously that automotive engines, including automotive diesels, along with transmissions offer excellent possibilities for growth for this newly invigorated side of Caterpillar Inc.

"Along with gasoline engines, we certainly see automotive diesel as an opportunity in Europe today," Fisher said. "We also think there is going to be a growing opportunity in North America as well. We're well positioned now, with these two acquisitions, to take advantage of all that."

Toward that end, Caterpillar Remanufacturing Services has created a Commercial Services business for external clients that Fisher said encompasses Cat's Shrewsbury, U.K., facility as well as Wealdstone and Williams. These facilities are largely separate from Caterpillar's own heavy-duty remanufacturing infrastructure (see September 2004, Diesel Progress).

The Shrewsbury facility was actually the first move CRS made after announcing its intentions to move into other markets. In mid-April, Cat said the former Perkins engine plant would become a remanufacturing facility for engines, engine components, transmissions and hydraulic components. The Shrewsbury operation includes existing reman operations producing Perkins products for the British Ministry of Defence and the British rail industry.

Wealdstone Engineering employs over 100 people at its 118,000 sq.ft. facility in Rushden. A "specialist OEM remanufacturer" since 1965, Wealdstone's largest long-term customers are Ford Europe and the British Ministry of Defence. The company said it rebuilds over 15,000 engines annually, is a Ford Q1 supplier with third party accreditation to QS-9000, ISO9000 and ISO14001.

In terms of its capabilities, Wealdstone lists gasoline and diesel engines, transmissions, axles and related subassemblies, conversions for motorsports, alternative fuels or other niche applications, as well as post-production modifications. The company said its engineering services include investigation and analysis of durability and failure modes, warranty investigation and analysis and establishing service and remanufacturing viability and specifications.

In acquiring Williams, a business Fisher estimates is about two-thirds automotive with the rest industrial, Caterpillar also gets one of the major transmission remanufacturers in North America.

Williams said it employs approximately 500 people and remanufactures automatic transmissions, torque converters and rotary engines. It is a major remanufacturer of transmissions for Allison along with transmissions for the major North American automotive companies. Williams was part of Remy International (formerly Delco Remy).

Thus, in a single, two-pronged move with Wealdstone and Williams, Caterpillar has staked out major positions in the automotive gasoline and diesel engine and transmission rebuild markets.

And these are probably not the last moves CRS will make in continuing to establish a major presence in the global remanufacturing business.

"Our approach was rather than try to build things organically, over a number of years and start small and grow, that we would look for leading players in engines and transmissions," Fisher said. "And we have.

"What we will do now is use our new knowledge and intellectual property to pursue growth in both North America and Europe. We probably won't import from Wealdstone, but we have a solid base now, and will be able to expand our facilities footprint to serve OE customers at the right time."

Fisher added that while nothing was imminent, Caterpillar Remanufacturing Services was looking at other possibilities as it continues its expansion. "We're looking at all opportunities--alliances, acquisitions, ventures or organic opportunities."

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