Extending Vehicle Life: Refurbishment, Remanufacturing, and Outsourced Collision Repair

BUSRide Maintenance convened a panel of experts in collision repair, vehicle refurbishment and remanufacturing. In a fascinating discussion, they consider damage thresholds for outsourcing collision work; the relative benefits of refurbishing a bus; and major industry developments affecting bus owners and operators.

Ed Harmon National Director of Operations, Southeast Region – ABC Companies

Steve WaltherCollision Manager – CoachCrafters, Inc.

Brad CarsonDirector of Sales and Marketing – Complete Coach Works

Daniel MorrillPresident – Midwest Bus Corporation

Tom GloverSenior Vice President, Sales & Marketing – MTB Transit Solutions

Brian KaminskeyPresident / CEO – NEBR Fleet Management & Service

What is the “damage threshold” for outsourcing collision repair work versus conducting it in-house?

Ed Harmon: The damage threshold really depends upon the training levels and experience of the technicians and the equipment in the individual shop. Unless you are operating a large company with need for a full-time collision, body and paint technician, along with enough work to support purchasing all the welders, paint booth and pulling equipment. For the majority of operators, the threshold should be when a repair requires more than just replacing a part. If the repair requires replacing a piece of the tube frame or if it requires finish painting and matching to be performed.

Have they performed major body repairs before? Estimated time for repairs should also be considered. Revenue loss should also be taken in the equation.

Steve Walther: Normally, the damage threshold would be the extent of the collision damage. Transit agencies will typically outsource severe collision repairs, while the fender benders are repaired in house. An example of severe collision repairs usually involves frame damage/replacement, engine damage and heavy body repair. A good base is if at least 20 percent of the vehicle has been impacted.

Large collision jobs can drastically slow down your shop. Most agencies need their bays and technicians available to perform quick and simple repairs to get buses back in route. Another important factors to consider in large collision jobs are expertise equipment and other resources. Major collision work requires highly experienced and specialized technicians. For example, if a compressed natural gas (CNG) bus is involved in a collision it is required by law that a CNG inspection is performed by a certified CNG technician. If the repair requires paint work, then you will need a good painter on board. The lack of equipment can also become an issue. Many major collisions require special lifts, tools and frame straightening machines.

Brad Carson: Any damage outside of standard routine maintenance and inspection should be considered for outsourcing, as in-house repairs are disruptive to an agency’s core business. Time and resources spent on repairs result in a loss of staff by taking them away from their daily operations. In addition, agencies may not have the proper equipment or parts inventory to handle the repair. Outsourcing can relieve agencies from the burden of a collision repair as collision repair shops are certified and properly equipped to offer timely and efficient repairs.

Daniel Morrill: There is no “set amount.” It is typical for transit customers to keep routine, minor damage in-house. This keeps out of service time to a minimum. Typical requests for quotation involve structural repair or replacement and typically run into the tens of thousands of dollars. Agencies, particularly smaller agencies, do not want to divert scarce resources away from keeping buses looking cosmetically sharp in order to take on repairs that can take months to finish. 

Tom Glover: There are a few factors: firstly, time frame; does the authority have the space to surrender for a large period of time? Parts investment and procurement; does the authority have the manpower to manage the parts and labor, with ample time to review the work on an ongoing basis? Most large collision shops have the experience to manage this in a time and cost-efficient manner. It means putting the technicians on the job when warranted rather than repairing small processes one by one.

Brian Kaminskey: The damage threshold would depend on the capabilities of the facility and the extent of the damage. Operators need to be mindful and avoid undertaking a repair that might exceed their area of expertise and attempt to perform the repair without the proper training and tooling. This can result in extended downtime which then leads to loss of revenue. Repairs requiring paint work should be performed by a certified paint technician in a facility that meets required safety and cleanliness standards. It is also recommended that all structural work be performed in a manufacturer certified shop as this will guarantee that all repairs will meet or exceed OEM standards. This will ensure that the standard manufacturer warranty of 12 years will not be impacted by the repair and will remain intact. Too often we see warranties voided by in house repairs made by operators that are not up to standards.

How can outsourcing collision repair save operators money?

Walther: Most operators have quality repair technicians but cannot effectively and efficiently perform larger collision repairs due to workflow. A large collision repair could take up a lot of available labor that would be necessary for day to day operations. Also, money can be saved because they do not have to invest additional money in hiring, training and certifying technicians for specialized collision work. Operators will also earn cost savings because they will not have to purchase additional equipment or materials.

Morrill: Operators that choose to outsource can avoid costs in both manpower and equipment. Staffing to cover collision repair will result in some level of surplus labor when demand is low. Equipment for full collision repair to comply with today’s environmental regulations is expensive, and rarely used to capacity. 

Harmon: Outsourcing collision repairs can save money by keeping your full-time resources focused on their daily duties, like preventative maintenance (PM) inspections and managing the spare parts. Most shops hire to just keep up with the day to day operations. When a collision happens, the work is added to the daily duties and the daily duties suffer, which leads to higher risk and less dependable equipment. Can conducting in-house repairs drive up costs? Definitely, if the wrong parts are ordered, sometimes they are special order and cannot be returned. Also, if not getting it right the first time, when gluing on a rear or front cap or other body panel or even breaking a windshield upon installation. The added cost of the multiple and incorrect part is the repairing shop’s responsibility.

Outsourcing to a qualified facility is most important! Outsourcing to a truck or automotive shop would drive up cost and may not have a quality repair. They may also not have resources or expertise to purchase necessary parts.

In addition, when performing a major repair that the organization is not familiar with, incorrect parts can be ordered which are often special order and cannot be returned. Just the handling of these often-large parts can cause additional damage to the coach which becomes the repair shops responsibility. Addressing a collision repair with qualified and experienced technicians, in facilities with the infrastructure and parts inventory to completely, quickly and correctly perform the repairs should be the first priority.

Glover: While other minor accidents are ongoing, there is no time to react to larger time-consuming accidents. Dismantled buses take up far too much valuable floor space as well as supply chain management. A credited repair facility has all the necessary certified equipment and trained personnel safety trained by laws enforced by state and federal rules. The shop also possesses the experience and expertise that some authorities may not have. Skilled body repair technicians are a significant threshold and should be considered a prioritized requirement. This enables a quicker turnaround time for the repairs.

Kaminskey: Performing in-house repairs requires manpower and dedicated space for the repairs to be performed as the repair process is much more involved than the day to day maintenance of the equipment. Depending of severity of the repairs, equipment can sometimes be out of service for several months, occupying valuable shop space and tying up experienced technicians, taking them away from their day to day activity. Quality assurance/safety is also a concern with heavy collision repair as multiple systems can be compromised requiring technicians with specific skill sets to address repairs in these areas. By utilizing technicians certified in their respective skill we can insure that all repairs will be made to OEM standards and will guarantee that the warranty of the bus not be affected.

Carson: Outsourcing collision repairs helps operators achieve significant cost savings. Collision repair shops have trained specialists with proper tooling and equipment to effectively handle repairs. With streamlined processes, parts inventory immediately available, and physical capacity, collision repair shops can accommodate multiple bus repairs, significantly reducing bus downtime.

In-house repairs drive up costs as staff are pulled away from their standard maintenance work to conduct a collision repair. It takes a lot of administrative resources to order specialized parts that are not normally housed in inventory. A loss of valuable bay space will also drive up costs depending upon the amount of time the repair takes.

Outsourcing can reduce road safety risks as certified experts are properly equipped to handle unforeseen damages that may be uncovered during a repair. Outsourcing is the most economical approach for optimum efficiency and safety.

What do operators need to understand about insurance companies, costs, and major collision work?

Carson: When collision work is needed, agencies must make several important decisions. The first step is locating a collision repair expert to assess the severity of the damage and to provide a quote. The process of choosing a collision repair expert can be challenging; agencies should be mindful of insurance company recommendations, projected costs, and quality of past work. Insurance companies are sometimes unequipped to accurately assess repairs for transit bus damage. While quick and inexpensive repairs may appear desirable, they may not always result in the best outcome. In fact, those types of repairs can result in flaws and defects that may lead to costly rework, causing headaches and frustration in the future. An agency should consider a shop’s reputation in the marketplace and make sure that it can perform all the necessary repairs using the proper equipment.

Morrill: Very few insurance adjusters have staff with experience repairing transit vehicles. Our experience is that most all adjuster reviews underestimate the time required to repair extensive bus damage. In virtually all cases, additional parts replacement, beyond the original estimate, is required after disassembly is complete.

Walther: Collisions are the least thing that transit agencies want to hear about. However, it is of utmost importance to work with a reliable insurance company and have a good coverage plan. Most of the time, insurance companies will dictate cost of a collision repair. This is sometimes tricky because there is no standard repair manual like in the automobile industry. Estimates can differ because of the lack of experience and/or hidden damage. This can affect the scope of work involved in completing the collision work. Transit agencies must also remember that having all maintenance records up to date is important when dealing with insurance companies.

Glover: Insurance can have issues with the appraisers collecting the appropriate repair time needed as well as the parts and products needed. Most transit authorities don’t have the time or manpower for this. Large collision shops schedule the floor space appropriately in timeline with the product and parts availability. Larger collisions and thermal events can occupy space for months until completion. Once again, the credited repair facilities always have the experienced and expertise staff on-hand.

Kaminskey: Transit buses are unique in many ways which can make it difficult for an insurance adjuster to estimate. Like the automotive industry, the assembly process keep evolving with every new model produced. As new technology becomes available we are seeing the use of new composite materials used throughout the assembly process. Chassis are now offered in mild, stainless steel, and fiberglass composites. Transit buses are also equipped with systems and electronics not offered in other industries making it a challenge for adjusters to properly estimate without training and knowledge of the equipment. Adjusters working outside of the busing industry are able to utilize estimating programs in order create parts lists and establish standard repair times. These programs are not offered in our industry and all estimating is done by working with adjusters to help educate them on new technologies and procedures. Adjusters often are not aware of some of the intricacies of the industry such as lead times with parts required to make the repair. They are accustomed to having two to three days turnaround, as is such in the automotive industry It is important to be involved every step of the process and have an open line of communication with the adjuster to ensure that the repair process is as efficient as possible.

Harmon: Insurance companies like to do business with reputable repair facilities. They understand that reputable repair facilities have fully trained technicians with the correct credentials like welding certificates, alignment certificates along with the equipment that technicians need to complete the repairs. They also want to work with facilities that conduct ongoing model specific training to ensure that the coach will operate and perform properly when it’s back in operation. The insurance companies focus is that the vehicle will perform safely and be less likely to be involved in another collision due to mishandling or faulty repair work.

What advantages can bus refurbishment and remanufacturing offer over purchasing new vehicles — beyond cost savings?

Glover: Refurbishing allows the transit authority supply chain to deal with common parts. Technicians are also experienced with the product, meaning better productivity and procurement flow.

A transit bus can be remanufactured for approximately one-third the cost of a new vehicle. This enables the bus to be back in service in eight to 10 weeks and lasting another eight-plus years, extending the authorities use of capital funds.

Morrill: Bus refurbishing or remanufacturing is a part of almost all major transit agencies, including: New York, Boston, Washington, D.C., Los Angeles and San Francisco. The primary driver of these programs is economic, and the value of these programs have been documented by many FTA studies conducted over the years, with the most thorough report titled, “Useful Life of Transit Buses and Vans,” completed in 2007. Beyond the impact of reducing the annualized cost of ownership, there are other benefits derived from a well-planned and executed remanufacturing program.

Reliability has been documented as a key driver of customer satisfaction in the transit industry. Records of “mean distance between failure” maintained by one major operator show significant improvement in this key metric following refurbishing projects. Another important aspect of successful remanufacturing projects is the ability to upgrade HVAC, ADA, security, passenger counting and driver comfort. 

Harmon: There are some basic advantages such as drivers and technicians continuing to drive and service coaches they have a strong familiarity with. This can sometimes reduce additional time required for training resources versus new equipment. Many operators have coaches in a replacement cycle keeping the average age of their fleet in line with customer expectations, so refurbishment offers a way to keep an older coach in a fleet as newer models are added. This then allows operators to align their fleets replacement schedule as older coaches eventually turn into trades for new coaches. With increasing advancements in technology, new body designs, electronics and other amenities inside the coach, ABC has developed “Upgrade Kits.” These kits can renew the look and feel of your fleet with many of the amenities and features of a new coach. We have developed a new look to the front clip and, in some cases, rear caps for most major brands. These kits are designed to update the look and curb appeal of the coaches. Upgrades, from 360-degree camera systems, LED lighting, and USB outlets, to tire pressure monitoring systems and a host of other upgrades can be incorporated into your fleet of existing coaches. With the competitiveness of the end-user markets, having new, updated, clean coaches, with the latest tech features is often required to stay competitive.

Walther: One of the most obvious advantages of choosing to do a bus refurbishment (rehab) or remanufacturing over purchasing a new bus is the cost savings. The cost of a bus refurbishment is a quarter to a half of what you would spend on purchasing a new bus. Rehabs also offer improved vehicle reliability, decrease service hassles and enhance safety. A refurbishment extends the life of a transit vehicle while allowing for modern upgrades to be installed on an older model bus. Like seating, audio/video equipment, lighting and Wi-Fi. Another advantage that many do not think about is time. Transit agencies are usually in need of more buses. New bus orders may take multiple years to arrive, where a refurbishment can be done in 6 to 8 weeks.

Refurbishments and remanufacturing are ideal candidates for federal grants. Why pay for an overhaul out of your operating funds when you can bid a multi-advantage solution, using federally funded grants?

Carson: A bus refurbishment provides value beyond just extending the life of a bus. Monetary savings are substantial as refurbishing a bus costs a fraction of purchasing a new one. Bus purchases often require training to understand and operate new bus configurations. By refurbishing a bus that is currently operating in an agency’s fleet, maintenance costs are reduced as drivers will not require extensive training due to their familiarity of the vehicle. Additionally, refurbished bus platforms do not change, therefore an agency’s parts department is already stocked with parts used for routine maintenance.

The time needed for a remanufacture varies, depending on the scope of work involved; however, remanufacturers can begin work on refurbished buses immediately after the contract agreement is finalized. This prompt start enables remanufacturers to deliver the bus back to the customer in a matter of months rather than years, as opposed to the purchase of a new bus because the order may not be fulfilled until inventory is available.

Kaminskey: By completing a half-life overhaul at the six-year mark, operators can take advantage of extended warranties in order for them to set appropriate maintenance budgets moving forward and minimize future downtime. Beyond cost savings, which is a major advantage, operators can extend the life of their vehicles by more than 50 percent, leveraging their asset for upwards of 12 years.

In your estimation, what is the biggest development of the past few years regarding (either) collision repair, bus refurbishment or vehicle remanufacturing? How did it specifically impact end-users?

Kaminskey: As an Authorized BAE Dealer, we have seen first-hand the advancement and improvement of hybrid, electric, and battery technology and the benefits experienced by operators that incorporate these advancements into their refurbishment programs.

With innovations in technology achieved by BAE, component reliability continues to improve, minimizing any downtime due to failure.

Morrill: As the initial cost of transit vehicles has increased with enhancements such as stainless-steel frames, diesel electric propulsion, electric propulsion and other expensive options; the long-held misconception that buses should be retired after 12 years is being set aside. Midwest can point to numerous customers that are operating buses over 20 years of age after remanufacturing. 

Glover: OEM products have been more consolidated under fewer parent groups. This has advantages and disadvantages on product availability. Timelines for uncommon products are greater. This can prolong the repair and completion of larger accidents and programs. With larger or common refurbishment programs, they are set up in a production schedule. Times and parts costs are streamlined, adding better cost value to the customer.

MTB will schedule all program items with the OEMs with monthly/weekly release points and blanket purchase orders with the supply chain. The purchase cost of a new bus is rising constantly as well as the delivery lead times to the authorities.

Harmon: Although there are a number of individual developments that are impacting collision repairs and refurbishment, the single development with the broadest impact is the increasing introduction of onboard electronics. This move towards increased onboard electronics, from passenger features to telematics and drivers’ aids, has and will, dramatically impact how coaches are maintained, repaired and upgraded. Having access to an expert technician with a strong electrical and programming background is critical to ensure that features like lane departure systems, electronic logging devices, tire pressure management systems, telematics and other onboard electronics are operating together and as designed after a coach undergoes repairs. It requires technicians who continually train on the latest releases from the factories and aftermarket suppliers. It also means that those who can most effectively monitor and diagnose coach performance, can potentially detect and address repairs before they impact the coach, driver or passengers. This continued integration of onboard electronics can work together to lower operating costs while improving the passenger experience.

Carson: Our biggest development over the past few years in vehicle remanufacturing has been our ability to take previously used, internal combustion engine buses and remanufacture them into like-new vehicles containing Zero Emission Propulsion System (ZEPS) all-electric drivetrain systems.

The process entails dismantling the bus down to the chassis to replace the former diesel engine and transmission with a permanent magnet synchronous motor. This provides maximum torque at the start and a smooth acceleration profile. Other steps include installing all-new mechanical parts, new composite floorboards, lightweight seating, electric air compressors and power steering pumps, an electric HVAC system, all LED interior and exterior lighting, paint and graphics, suspension, steering components, and brakes.

ZEPS started as a clean, cost-effective, and viable alternative to fossil fuel for customers. Agencies can opt to purchase newly refurbished buses from Complete Coach Works’ sister company Transit Sales International or have their existing fleet converted to all electric.

ZEPS is revolutionizing the transportation industry by using advanced lithium ion batteries and liquid-cooled, all-electric drive systems. For transit agencies, the unmatched performance of ZEPS provides the extended range their vehicles need on a single charge.

Walther: The biggest development of the past few years is the electric bus market. We are all aware of the dramatic increase of the electric bus market and there is no sign of it slowing down. Electric buses and all new buses are heavily computer dependent. This means more sophisticated computer diagnostics are required for more precise estimates. Advanced repair machinery is also critically important for accurate results. For example, laser measuring equipment can provide more accurate repair work in regards to frame pulling and body alignment. This specifically impacts end-users because the industry is seeing a shift from needing mechanical expertise to electrical and computer expertise.