Smitka

Sunday: the drive to Detroit and Al Ameer
Monday am: the drive around Detroit
Monday pm: Keri Westbrooke, Federal-Mogul Plymouth Technical Center
Monday lunch: At Federal-Mogul. Thank you, Keri!
Monday eve: Dinner at Zingerman’s with Scott Preysler, the “factory rep” for 8 Mini stores in the Michigan region (thanks to David for the arrangements).
Tuesday am: Dearborn Rouge self-paced tour
Tuesday lunch: The Henry Ford (museum) on your own
Tuesday pm: Mr. Thai-Tang Hau, Group VP, Global Purchasing, Ford Motor Co.
Tuesday dinner: Alumni meeting, Griffin Claw, Birmingham
Wednesday am: Dr. Paul Traub, Federal Reserve Bank of Chicago Detroit Branch
Wednesday am: Dr. Martin Lavalle, Federal Reserve Bank of Chicago Detroit Branch
Wednesday lunch: At Federal Reserve Cafeteria
Wednesday pm: Mr. Bruce Belzowski, Managing Director, Automotive Futures Group, UMTRI (Univ of Mich Transportation Research Institute)
Wednesday pm: Mr. Brandon Schoettle, Project Manager, Human Factors Group, UMTRI
Wednesday dinner: on your own in Ann Arbor 
Thursday am: Fox Auto Parts, Belleville. Thanks to Barrett for the arrangements!!

I have blogged about a visit to a shredder in Japan as part of the GERPISA conference in which Thomas Klier and Bruce Belzowski are also involved. That operation however was focusing solely on extracting the metal content of the vehicle to put into the metal recycling stream. They did not pull out the motor, but only took out the engine and wires and catalytic converter before compacting the car and putting it into the shredder. Then through a large magnet attached to a crane they pulled out the steel, and used air to blow out the carpet and other light materials, pulled the rubber out by hand, used gravity to get rid of the glass, and were left with aluminum. Part of their process was driven by government mandates to reduce the automotive stream that ends up in landfills, which in any case are expensive in Japan. They didn’t spend a lot of time searching for cars; they took anything and everything that came to them.
Fox Auto Parts is a much more sophisticated business operation because they need to do more than follow scrap metal prices and try to keep on good terms with environmental regulators. At Fox they focus on late model year vehicles (average age ? 2007.06) for which engines and transmissions hold value. Of course that means they need to make sure that the wrecks they buy – some from the adjacent 40+ acres cars waiting for sale by Insurance Auto Auctions – aren’t such as to render these valuable items unsalable. (External inspection is only indicative, so they need to inspect such parts once they have a car in their shop.) To do so they employ a database of sales inquiries that lets them focus on parts / vehicles for which demand in their sales market has been high. They can then use that to gauge whether to buy a particular car at auction. With an average acquisition price of about $1,800 [if you just sell an old car to Jimmy Southers, an honest local towing company, you might get $200 if you’re lucky). Of course they then have to transport the car to their yard, evaluate, inventory and disassemble it, and put it in their yard of 900+ vehicles until they need to pull additional parts. At some point – they manage that cycle – they will send what’s left to a shredder to make way for more inventory. (They crush cars don’t themselves shred them.)
One component of their business is a trucking network run jointly by 80-odd recyclers, ranging from the Snyder family business in Texas at the southern extreme, through the midwest and into the northeast. Depending on locus a recycler gets a truck twice a day that can transport a body panel from Texas (no salt on the roads so no rust!) to Fox to sell to one of their customers. Fox in turn has a copious supply of Fords, including F-150s, and they may be sending a tranmission from Michigan to Texas.
In the background is a business where owners help each other out. Fox, for example, went to the Snyders to learn more about how to run a self-service yard. At bottom they do not view each other as rivals; they are minor players in the overall parts stream that includes OEM channels such as the “official” FordParts system (where orders are funneled to dealerships who choose to bid on them) or aftermarket parts retailers such as Advance Auto Parts or NAPA (both have stores in town). In this they are similar to farmers: they don’t lose sales by helping neighbors, they’re too small in the overall market.

Thursday lunch: Detroit Institute of Arts
Thursday pm: Dr. Tyree Guyton, Heidelberg Project
Thursday pm: Vinsetta Garage with Jim Treece and J Ferron (Automotive News) and Steve Finlay (Wards Automotive)
Friday am: drive towards home
Friday lunch: Jeff Sprague and Amanda Rockhold, Transportation Research Center, East Liberty, OH
Friday dinner: separately en route home

Leave a Reply