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The State of the Converter Industry

With all things considered; I think we had more business problems in the market crash of 2008, but we overcame that situation, and I believe we will all survive this ordeal.

Converter shops and remanufacturers have been remarkably busy. This comes as a little surprise as expectations were that the shelter-in-place mandates would have led to a decrease in business. We could assume a couple of reasons for the upturn is that no one wanted a vehicle that was not 100% dependable in these uncertain times, and not many were willing to invest in a new car with an uncertain financial future; that is, if the dealerships were even open.  

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While one of the greatest concerns for our industry has been the availability of parts, most have experienced very few problems; however, some are expecting problems in the future. Reports are that most vendors have done an exceptional job planning and adjusting to the situation, and they have helped to minimize the inconvenience, while the converter industry has adhered to the keep-calm and carry-on attitude.  Some vendors have stated that very few customers are hoarding parts, and there were instances when a sales rep would use the sales history of the customer to carefully ration if someone placed an order for an unusually high quantity of a specific item. 

One aspect that was overlooked at our shop was the outside sales group, whose duties include delivering parts and picking up cores from the warehouse. With no one picking up cores; it did lead to some problems until a system was established where we could deliver parts and pickup cores with minimal personal contact. 

With all things considered; I think we had more business problems in the market crash of 2008, but we overcame that situation, and I believe we will all survive this ordeal.  

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These observations come from the Intermountain Northwest, and the reality is things may be far different in other parts of the country or world. 

Looking Ahead People  

It looks like one of the biggest concerns coming our way is the lack of young, reliable employees who are willing to step up and get into the trade. This seems to be a trend in the whole of the blue-collar industries. In addition, there seems be a trend emerging where some non-transmission specific shops are rebuilding transmissions without the essential knowledge of how they function, or even installing transmissions without the proper diagnostic tools and equipment. This looks like a great opportunity for the training groups to reach out and help guide them. 

Parts 

30 years ago, it took my shop only three sets of shelves to hold a two month supply of parts with 20 part numbers covering 80% of our shop’s sales, but now we are up to 10 shelves with a separate room for covers, pistons, and clutch plates for that two month supply. How times have changed.  

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With the number of transmissions on the market rapidly increasing, and each transmission having multiple converter options depending on application and powertrain; it takes more time, space, and financial resources to keep up with the changes. The number of converters that we build only one or two of per year has increased substantially making inventory control more difficult. We could be heading into an era where we need both a larger core base. We’re seeing more converters built to order, rather than putting a converter into inventory that might take six to 18 months to move. As a result, the industry will also need a broader base of converter parts for the quick turnarounds. 

Most vendors do a great job of keeping up with the changes in the industry, but as a rebuilder we always wish that they could offer more. On the other hand; it’s easy to see that they face the same problems we do. Do they really want to build parts for a converter that was only used for two or three years in a single vehicle model? 

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Procedures 

As the new converters are hitting our shops; we can see they are becoming more complex, and we must be more creative and innovative than ever before. We will need to develop the skills to fabricate our own parts for some of these converters that parts vendors cannot provide. 

Some of the most challenging problems coming our way are in the area of the converter clutch, including the development of efficient procedures for replacing captured clutches to bonding facings and preparing reaction surfaces on the conical clutches in the new 10-speed torque converters. 

As we face these challenges, the importance of having a good support network to exchange ideas and develop solutions to these problems will be more important than ever. Whether this network is a few friends in the business, a knowledgeable trade association like TCRA, or a parts vendor, as our problems become more complicated we would be wise to expand these contacts gathering as much information as possible to develop efficient solutions to the problems we will face. 

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Brad Gilbert is a TCRA Board Member 

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