SPECIAL ANNIVERSARY FEATURE
Back in 1982, when the transverse engine, FWD hot hatch was still a new idea and even among import nameplates, RWD was still holding the line, the world of the independent engine builder was at a crossroads.
“Forty years ago, there were double the number of production engine rebuilders in Ontario, three of which were in the Metropolitan Toronto area,” recalls Rick Miller, CEO, The E.R.I. Group. “And these people had a huge advantage over all the small- to medium-sized machine shops and their ability to provide products, and the price they paid for the parts that they used to put in the product.”
That imbalance meant that smaller shops, like the one that Miller owned and operated just outside of Toronto in Scarborough, Ontario, weren’t able to go toe to toe with the production engine rebuilders on price. Instead they looked to industrial, agricultural, marine and high-performance jobs for their bread and butter, and did passenger car and light truck work at cost, just to appease customers.
Miller started to call on a few shops he knew and asked them a question. “If you could buy at or very close to what the PERs do – within three, four, five points – what would that do for you?”
It was, he says, a real eye-opener for engine shops. The next step was to get enough shops to band together to meet the criteria to qualify for factory pricing, taking a cautious approach even when that target was met.
“Well, it ran for a year and a half with the charter members, just to make sure it was going to work and function properly, and iron out any wrinkles that would come up along the way. Then we started to expand, and I started soliciting other shops and it grew fairly quickly.”
That is an understatement.
Over the ensuing years, the market shifted dramatically. Engine parts specialty warehouses fell by the wayside; engine builders came on board with E.R.I., and other factors in the market came home to roost. All the while, production engine rebuilders continued to battle with each other.
In this environment, many engine builders found that E.R.I. was a place that they could pull together to serve customers. E.R.I. added its 50th member in 1985, its 100th member in 1992, and its 200th member two years later in 1994.
Today, The E.R.I. Group has more than 270 members and is one of the largest engine builder organizations in North America.
And as the needs of its members have evolved, it has also kept pace. A key element in this is the creation and development of the Independent Parts Warehouse network.
Starting with a single warehouse in Toronto in 1997, IPW now boasts locations across the country, with warehouses in Edmonton, Alberta; Delta, B.C.; and the newly opened Moncton, N.B. location, joining the IPW distribution centre in Stouffville, Ont. – which provided a much-expanded footprint for E.R.I.’s headquarters and warehousing when it moved from Toronto in 2009.
Together, the IPW distribution capabilities facilitate both availability of parts, and expedited delivery.
“This is very important, because the factories long ago decided that Canada was not a place to be,” observes Miller. “There used to be quite a large number of fee warehouses that stock engine parts for the factories. And they’re pretty well all gone.”
It all helps bind together E.R.I. members across Canada in ways much deeper than just parts pricing. Through E.R.I., shops enjoy access to technical bulletins from the Production Engine Rebuilders Association and the Automotive Engine Rebuilders Association (the two key organizations in the field), plus supplier support.
“Beyond that would be our own chat rooms that we have for the members, to discuss things amongst themselves, pass on little hints, pass on little tips, tell about problems, how to solve a problem. ‘I’ve got a problem I can’t solve. Can anybody help me?’ They do a lot of that,” says Miller.
Together, these resources, combined with the parts supply advantages offered by E.R.I., mean members are well positioned to address coming changes.
“We work with automotive, industrial, marine, agricultural, and high-performance. When I talk about industrial, I also include off-road highway equipment. The light-duty automotive initially was our strong suit and we became very prominent in that. But that has tailed off somewhat, with better-made product that we have on the road today. So performance has improved, agricultural and industrial have improved dramatically, marine is sort of flat. And the light-duty automotive has diminished somewhat and will continue to diminish.”
Miller says that even with significant shifts in the technology under the hood, E.R.I. and its members are still very tied to the internal combustion engine. But even with the growing profile of electric vehicles, hybrid technologies will continue to provide a market.
“In the long term, internal combustion engines are still going to be around because they’re going to be running on hydrogen fuel. And unless there are some refinements – which of course we don’t know about yet, and may not know about for some time – those hydrogen-powered internal combustion engines are going to need repair and we’ll be there.
“The light trucks used by fleets and industry and construction and people like that, that’s not going to change. They’re still going to drive just as much and beat them up just as badly. And that business will always be there. It’s the grocery-getter business that is going to diminish, and it’s going to diminish because of the longevity of life and the hybrid vehicles.
“But a lot of the cabs now are hybrids, and those little engines are going to run, but they’re going to wear out a lot quicker than your next-door neighbour’s car. It’s got a two-litre engine in it with a big battery in the back.
“Those commercial vehicles are going to be used extensively. They’re going to wear and we’ll be there to fix them.”
This Special Anniversary Feature appeared first in the 2021 Aftermarket Intelligence issue, a special combined issue of Indie Garage and Jobber Nation. READ THE DIGITAL FLIPBOOK EDITION HERE