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December 2008 Issue

The Wheel Goes Round

After a year of discussion and debate, there is some movement in the battle over remanufactured wheels.

About a year ago, Fox News affiliates in several markets ran a segment on remanufactured wheels, quoting repairer and automaker concerns about such wheels, as well as insurer convictions that such wheels are safe and have never been linked to any subsequent accidents.

It is a subject that has continued to be discussed within the industry this past year, with suppliers of remanufactured wheels working to build assurances of quality, with opponents continuing to point out potential problems, and with some regulators looking to see if there is a need for further consumer protection actions.

Like so many issues within the industry, the battle over remanufactured wheels does not appear to be one that will be resolved any time soon. But this month INSIGHT has tried to compile information that will help all segments of the industry understand the issue to help keep the debate on a factual rather than emotional basis.

The background

Both opponents and proponents of the use of remanufactured wheels found things to cheer about in the November 2007 Fox News story (which still is posted at the station’s website: http://www.myfoxaustin. com/myfox/pages/ContentDetail?contentId=5034599). A shop owner discussed insurer pressure to use remanufactured despite her liability concerns, and a post-repair appraiser cited his concerns about the structural integrity of such wheels and the fact that customers are often not told by their shop or insurer that they are being used. The story cited service bulletins from a half dozen automakers and Alcoa Aluminum urging shops not to use remanufactured wheels.

But “an insurance company has no incentive to go for a lower costing repair with an unsafe repair part,” Carolyn Gorman of the Insurance Information Institute told Fox News in the segment. “That makes absolutely no sense.”

The station went on to have three remanufactured wheels specified by an insurer for the repair of a Honda minivan tested by Independent Testing Services. Despite clearly visible repaired cracks or other damage to the wheels – including one with damage that prevented the tire from holding air – all three passed structural integrity guidelines for fatigue testing established by the Society of Automotive Engineers, the station reported. (What it did not mention is that each of the three SAE tests is destructive, so all three tests were conducted but only one each per wheel.) Even the testing service spokesperson acknowledged the irony that a wheel damaged to the point of not being functional in terms of enabling the tire to hold air passed structural integrity testing.

Gorman said the testing shows such wheels are safe and that opponents are pushing new wheels for financial gain. Without pointing out the insurance industries financial stake in the issue, an automaker quoted in the segment said the limited testing does not prove that all repaired wheels “will perform as designed.”

All of which leaves consumers, the news segment concluded, with the choice of either pushing for new wheels – and likely having to pay for the difference to do so – or counting on the fact that no one can point to a subsequent accident caused by a remanufactured wheel failure.

But there were a number of elements to the story that the news segment did not include. Dan Risley, speaking earlier this year when he was the executive director of the Society of Collision Repair Specialists (SCRS), said all three wheels tested by the news station previously had been ordered (one at a time) and returned to the supplier by a shop that used a marker to indicate problems with the wheels. When the shop owner learned through SCRS that a news crew was looking into the subject, he had another of his shop locations order three wheels from the supplier for the same type of vehicle. The three wheels that arrived were the same ones his other shop had earlier returned, still with the markings indicating the damaged found.

“The place where these wheels came from, one of the top distributors in the country of remanufactured wheels, has a policy that states they will not repair a structurally damaged wheel,” Risley said earlier this year. “In this instance, two of the three were structurally damaged but made it back into the marketplace.”

It is an issue SCRS has continued to press. As recently as September, SCRS Chairman Gary Wano told the association’s state affiliates that a way was needed to be able to trace back what company remanufactured a wheel.

“One of the things we’re working on now is to try to put together some type of stamping identification process,” Wano said. “Anyone remanufacturing a wheel will have to put a stamp within that wheel so that in the event of a failure, we have information on who should be held liable.”

Two sides square off

During a panel discussion on the topic in November, mandated identification of remanufactured wheels was something that at least some remanufacturers also support, and at least two major wheel manufacturers said identification labeling is already part of their process. Roger McClellan, chief operating officer for Saturn Wheel, an Indiana-based company that remanufactures 300 wheels per day, said every wheel it sells includes a permanent label listing a serial number and the company’s contact number.

A similar label is included on wheels remanufactured by LKQ Corp, according to Jim Devlin, vice president of manufacturing for the company, which now has 12 wheel plants after its purchase of Transwheel (in 2006) and Keystone (in 2007).

McClellan and Devlin outlined the processes their companies use to determine which wheels can be repaired (McClellan said it is only about ten percent of the “cores” his company reviews) and the steps and testing they conduct to ensure those repairs meet quality guidelines.

McClellan said of more than 45,000 wheels it had shipped year-to-date earlier this year, only 318 (or about seven-tenths of one percent) had been returned; about half of those were returned for finish defects.

Speaking at the Collision Industry Conference in November, the two each offered a list of questions that they suggest should be asked of any remanufactured wheel supplier, including:

  • Do you have specified tolerances and parameters in place, and are they recorded by serial number?
  • Do you have permanent traceability affixed to the part?
  • What is your criteria for eliminating wheels that should not be repaired?
  • Do you have liability insurance?

Such questions are important, McClellan said, because while he is confident the processes his company uses result in a good product, “There are people out there that are possibly repairing things that they should not be.”

It is that uncertainty and lack of standards that make many shops nervous, particularly when coupled with automaker statements about the use of remanufactured wheels, which were also outlined at CIC.

Honda, Ford, Toyota and GM, for example, do not approve of any repairs to steel or aluminum wheels that involve welding, bending, straightening, re-machining or adding any new material other than cosmetic coating. Chrysler’s statement takes it a step further, warning that remanufactured wheels “can result in a sudden catastrophic wheel failure which could cause loss of control and result in injury or death.”

The problem, Ford’s Steve Nantau said, is that even the SAE tests are designed to see if wheels have been manufactured to durability standards, and since they are destructive tests, they are not designed to check to see if a wheel has been repaired adequately.

LKQ’s Devlin disagreed.

“We do durability testing quarterly,” he said, saying the company randomly selects wheels for testing from all of its factories. “We started the testing nine years ago. We have never experienced a failure in any test.”

Government or self- regulation

The debate is likely to continue. It is clear, however, that the Fox News story and concerns raised by repairers are forcing remanufactured wheels to seek some identification labeling requirements or establish other guidelines. The Automotive Recyclers Association, for example, has recently completed a wheel inspection and grading system (see the “Standards and Codes” section of the ARA website, at www.a-r-a.org, for details).

Others would like to see more state regulators follow the lead of the Vermont Department of Motors Vehicles. This past spring, that agency issued a bulletin warning of potential safety issues with the use of reconditioned or remanufactured wheels. The bulletin states that any such wheel should be thoroughly inspected, and perhaps more importantly, that vehicle owners should be notified of “the potential safety risk of placing such a wheel on their vehicle.”   o

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