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Bad Sensors Rebuilding Cylinder Heads

Everybody wants to get ahead in the cylinder head rebuilding business ó in more ways than one. Until January of this year, the relatively mild fall and early winter did little to stimulate demand for reman cylinder heads. Some rebuilders reported sales were down as much as 20% compared to the previous year. But recent snowfalls and cold weather in the Midwest, East and South have helped revive a sluggish aftermarket.

In 1999, the vehicle manufacturers sold more new cars and trucks than ever before: more than 17 million vehicles. The record sales, combined with better-built, longer lasting engines, extended powertrain warranties, and growing competition from new car dealers for service and repair work, have also been blamed for the downturn in engine work, including rebuilt cylinder heads.

Some say weíre in the middle of a "technology trough" because many passenger car and light truck engines today are running 100,000 to 150,000 miles before they require major repairs. This includes the majority of engines built in the 1990s.

"Acura and Lexus cylinder heads are so well built that thereís almost no demand for these heads," said one rebuilder we interviewed. The same holds true for many other high end import luxury cars.

On the other hand, many late model castings are so thin that a high percentage of cores canít be rebuilt easily or economically. According to some rebuilders, as many as 50% to 60% of some late model heads are so badly cracked they cannot be rebuilt cost effectively.

Another question that is paramount for the aftermarket is whether or not some of these late model engines will even be rebuilt by the time a vehicle is eight to 12 years old. The consensus is that owners of trucks and SUVs will spend money on major engine repairs but many passenger car owners will not.

Yet in spite of these factors, the reman cylinder head business remains relatively good for the established players, though competition is tough. As a result, many rebuilders are searching for ways to open up new markets for their cylinder heads. Others are expanding their product lines by offering new castings in addition to their reman heads.

Hugh Baskin, owner of Alabama Cylinder Head Exchange, Rainbow City, AL, said heís using several new approaches to grow his business. His company employs 20 people and sells about 750 cylinder heads per month.

"We think the demand for remanufactured cylinder heads has reached a plateau," said Baskin. "Sales have leveled off. So weíre moving on to the next step, and are now selling brand new heads in addition to our reman heads. We have over 50 different new castings in stock, and over a million dollars in inventory. This includes bare heads and complete heads. Weíve found that seven out of 10 customers would rather pay $30 to $35 more for a new casting than to go with a reconditioned or repaired head.

"Our most popular new castings are the Isuzu Trooper 2.6L and 2.3L, the GM 2.3L Quad Four, the Chrysler/Mitsubishi 2.6L, and the Ford 2.9L and 4.0L." Baskin said his company has also created a website ( to reach a broader audience, which he said is mostly "small town USA." He calls it the "Walmart approach."

Most small towns do not have a local machine shop, so they have to go elsewhere if they need a replacement head or head work performed. Baskinís strategy is to provide small town customers with the heads they need, and with next day delivery whenever possible. "We inventory daily, and keep it wide but not deep," said Baskin. "We may only stock three to five heads for a particular engine, but we have heads for most domestic and import cars and light trucks. Currently, we do not stock any heads for agricultural or heavy-duty applications, nor do we handle any performance heads."

Changing directions
"We originally started out in this business doing Japanese cylinder heads," said Dick Shaffner, president of Aluminum Head Service, Belton, MO, "but now 50% of our work is domestic heads. Thatís where the volume is, so thatís where weíre going."

Shaffner is a small rebuilder who does 40 to 60 heads a month. He said he doesnít have much competition in his area because a couple of nearby machine shops have gone out of business. "I donít see anybody new getting into this business, and I keep getting auction notices in the mail from other machine shops that are going out of business and are selling off their equipment."

Shaffner said finding good rebuildable heads is sometimes a major problem. He said Isuzu 2.3L and 2.6L engines are one of the worst. Out of 15 cores he bought recently, only four were rebuildable. Itís the same story with Mitsubishi 2.6L heads. "I had to scrap about 50 heads because they had already been rebuilt once and had been milled below specifications. Iíve tried using shims with milled heads, but most customers wonít accept them or donít know how to install them properly. So now Iím buying new castings for these applications and also the GM Quad Four, and Ford 2.9L and 406."

Using new castings has solved his bad core problem and reduced comebacks, but Shaffner said new castings are also hurting his machine shop business because installers are buying new castings instead of coming to him to have their head work done.

Another problem he has had is finding replacement cams for late model Honda and Toyota heads. An OEM replacement cam costs $400 and thereís no aftermarket source he can go to for an affordable alternative. His solution? Buy a second core and use the cam out of it. Reclaiming as many parts as possible also helps keep costs down.

"Itís getting harder and harder for the small shop to survive in this market," said Shaffner. "New equipment is very expensive, but you have to have it to work on todayís heads. Labor and cleaning costs are also high, so the challenge is to find ways to reduce costs and be more profitable without any sacrifice in quality. Weíre doing time studies on all our shop operations, and are concentrating on ways to improve our cleaning process because itís the most time-consuming."

Reading the market
"Business for us has been down ó a lot! Even so, this past year we did 10,600 heads and 37,000 labor hours," said Ron Schmitt of Tri-State Cylinder Head Repair, Evansville, IN.

"It used to be when a car was four or five years old, weíd start to get some head work. But now itís more like seven or eight years before we see the heads. I think itís because the OEMs are building better engines."

Schmitt said most of the head work Tri-State does is on domestic passenger car and light truck heads, and some intermediate diesels. "We donít see much demand for Japanese heads around here because weíre in the heartland." Tri-State furnace welds cracks in cast iron heads, and TIG welds cracks in aluminum heads.

"Weíre actually seeing fewer cracks in the newer heads, but some are really bad. The demand for Ford 2.9L heads has peaked and sales are dropping, but the demand for Ford 4.0L V6 heads is going up." Schmitt said his company markets nationwide and sells direct to installers. "People want price, availability and quality. Our focus is on quality because what good is a low price if a head has no quality? Nobody can afford comebacks today."

Schmitt said the truck market has the best long term prospects for head rebuilders because it has a much longer demand curve than cars.

Going direct
Greg Gordon, president of Four Star Engines and Parts, Hutchinson, KS, said his company employs 42 people in the head department (including cleaning and welding). They are currently rebuilding 150 to 160 heads a day for passenger cars and light trucks, plus some 6.2L, 6.5L and 7.3L diesel heads.

"Our biggest change is that we now sell direct to jobbers and installers. Only 35 to 40% of our reman head sales are to traditional warehouse distributors.

"We used to sell in 46 states and supply NAPA. But we dropped out of the East Coast market and are now concentrating our sales efforts in 26 states. Itís paying off because our sales of head kits were up 20% in 1996, up 10% in 1997, and up another 8% to 10% in both 1998 and 1999."

One of the challenges head rebuilders face today, said Gordon, is identifying the correct engine application for a cylinder head. There are so many different casting variations that itís difficult to know which engine a head fits unless you have the year, make, model and VIN number. Unfortunately, many core suppliers canít supply the needed information with their heads so itís up to the rebuilder to figure out what they fit.

Core availability is another challenge. Late model cores have always been in short supply, but today itís even worse because of the proliferation of engines in recent years. Whatís more, many late model heads are extremely thin and vulnerable to cracking. If a head is cracked and cannot be welded or pinned, it must be replaced.

Gordon said his overall attrition rate on head cores is running 18 to 20%! Some heads are much higher than this, such as Ford 2.9L heads that are almost always cracked. On some OHC Toyota heads, 50% of the cams are bad and canít be salvaged.

High attrition rates and the need for extensive crack repair means rebuilders today are faced with higher remanufacturing costs. Consequently, the price of the finished product must be higher, too. For late model "high tech" OHC heads, jobber prices of $350 to $450 are not unusual.

Gordon said the complexity of many late model OHC heads is more than some shops can handle. Tolerances are critical and thereís no margin for error. If a shop doesnít have the right equipment and know-how to rebuild these heads, they canít complete in todayís market.

"Many shops who once made their living rebuilding Chevy 350 heads either donít want to do, or canít do, late model high tech heads. Thatís good news for us because we do have the equipment and know-how to handle the late model heads," said Gordon.

Bare heads
Rey DíAngelo of Marnal Corp, La Habra, CA, said the demand for new castings has really grown in recent years. Marnal sells bare castings that require no additional machining and are ready to assemble. He said his customers include traditional warehouse distributors, production engine rebuilders, custom engine builders, small machine shops, installers, and Ford authorized rebuilders.

About 80 to 90% of the companyís sales are import heads, but they have recently added Ford 2.9L heads to their inventory. They are also considering adding the GM 2.3L Quad Four to their product line, too. DíAngelo said some vehicle manufacturers have lowered the price of their new head castings in recent years to be more competitive with aftermarket castings. Even so, DíAngelo said his heads still cost 20% to 60% less than most new OEM castings. All heads are sold with a six month, 6,000 mile warranty.

One trend that has not helped the sale of new castings is the growing use of TIG welding, furnace welding and spray welding to salvage cracked heads. Improvements in welding techniques and equipment now allow many rebuilders to salvage a much higher percentage of heads that would previously been scrapped. The same holds true for technological advances in cast iron and aluminum pins designed to cost effectively and efficiently repair cracks. But in many instances the damage is too extensive for any cost and/or time effective repair process. The alternative is to find another good core (which isnít always possible) or to buy a new casting.

When an aftermarket casting is created for a "problem" application, said DíAngelo, the OEM casting is carefully analyzed to find where the weaknesses are in the original design. The thickness is then increased in critical areas that are prone to cracking to improve strength and make the aftermarket casting better than new.

Having it both ways
Paul Plebanek, sales manager at TopLine in Chicago, IL, said his company sells reman heads as well as new castings and parts. Itís a marketing approach that has been very successful for the company. TopLine originally got into the casting business in 1984 because it was hard to find good usable cores for some engines. Over the years, the company has developed the in-house expertise to make its own dies. This reduces the development costs considerably for making new castings, which can run as high as $500,000 to $600,000 or more. Paul Trencan, foreman of the head department at TopLine, said he sees a lot of demand for the Isuzu 2.3L and 2.6L, Toyota 2.4L, Nissan KA24DE DOHC 2.4L, Toyota Forerunner 3VZE 3.0L, Honda 1.5L, Mazda B22 pickup 2.2L, and Suzuki 1.3L and 1.6L.

"The OEM Isuzu head has some thin areas. If the cooling system runs low and air pockets form in the head, it causes cracking. Weíve beefed up the thickness of our casting in the critical areas to prevent cracking.

"Another problem head is the Isuzu 6VD1 3.2L. The intermediate rocker arm on the intake side blows out if the vehicleís owner doesnít change the oil regularly. Weíve seen a lot of failures after only 30,000 to 40,000 miles of service.

"On the Nissan 2.4L KA24DE engine in the Nissan 240SX, the head is almost always warped and the exhaust valves burned. We used to straighten this head, but we found that straightening often caused the head to crack. So now we leave it in a relaxed state and mill it flat.

"For the Toyota 3VZE 3.0L Forerunner application, we convert the early core so it will fit the later engine by drilling a hole for the pulley bolt. The trick is getting the hole properly located so the pulley lines up correctly.

"On Honda 1.5L heads, the main problem we see here is poor lubrication to the overhead cam. Poor maintenance wears out the oil pump and that starves the cam for oil. In most cases we throw the head away and replace it with another core or a new casting.

"The Suzuki 1.3L and 1.6L heads in the Sidekick and Samauri trucks are almost always warped, and the rocker arms break," said Trencan.

Looking ahead
So where is the head rebuilding business headed? Industry experts are forecasting slightly lower new car and truck sales in 2000 due to rising interest rates, though sales should still be 14 to 16 million vehicles. This wonít do much to help the aftermarket, or to shorten the technology trough that is delaying major engine repairs on most late model vehicles.

Record high sales of trucks and SUVs, on the other hand, means a growing market of longer-lived vehicles that will likely be candidates for major engine work at some point in the future. Assuming these vehicles continue to be popular and retain a reasonable percentage of their original value eight to 10 years down the road, rebuilders can count on truck owners spending money on head work when engine repairs eventually become necessary.

Sourcing good usable cores for late model engines will continue to be a challenge, so itís likely the sale of new castings will continue to grow.

As for equipment, rebuilders will have to invest in head disassembly/assembly benches to reduce labor costs as well as automated cleaning equipment. Versatility will be the key with guide and seat machines due to the growing number of different cylinder head configurations that have to be rebuilt. Long production runs of similar heads are rapidly fading into history, so successful head rebuilders must have the flexibility to process individual heads as the need arises.

Resurfacing equipment must also be upgraded to deliver the ultra-smooth surface finishes required for multi-layer steel (MLS) head gaskets on late model engines.

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