Henry Hippert is the executive sales director at Eastern Catalytic. He has held that title since he joined the company in 2003 and has been a major contributor to the dramatic and consistent growth Eastern Catalytic has enjoyed over the past several years. As executive sales director, Hippert is responsible for managing the sales, marketing and customer service departments. Prior to his appointment with Eastern Catalytic, Hippert served as account manager for Johnson Matthey Catalytic Systems Division, where he was in charge of the aftermarket and Japanese OEM accounts. Hippert holds a BS in business from Villanova University. In this exclusive AMN Executive Interview, Hippert talks about the changes taking place in the catalytic converter market, Eastern’s new product lineup, and where this product category is headed in the future.
Eastern Manufacturing is one the industry’s leading manufacturers and suppliers of catalytic converters to both carmakers and the aftermarket, worldwide. Eastern’s world-class quality and innovation have helped the company to establish strong catalytic converter sales in more than 58 countries. The company attributes its fast growth in the North American market to its continual improvements in converter design, production and product delivery systems. Today, Eastern says it can meet its customers’ catalytic converter needs with a full range of catalytic converters for universal, direct-fit, manifold, diesel, and heavy-duty applications. From its flexible and efficient manufacturing facilities, and partner facilities in the US, Canada, Mexico, and the UK, Eastern now provides more than 4,000 different catalytic converter part numbers with ‘best-in-the-industry’ coverage for more than 90,000 applications on cars, light trucks, vans and SUVs.
In May, Eastern unveiled the new ECO CARB Series of aftermarket converters. These three-way catalytic converters (TWC) have received a California Air Resources Board (CARB) exemption for use as aftermarket replacements, and are available for direct-fit and universal applications. Tell us about the process of earning a CARB Executive Order for these products. What was involved?
We have been working toward earning CARB Executive Orders (EOs) for various products for more than two years now, and while we had few applications available during that time, it didn’t constitute a complete offering. Now, through continuous investment in R&D for California products, we are able to offer a comprehensive line of coverage for many cars and trucks both pre- and post-OBDII. The process for earning a CARB EO for a catalytic converter requires substantial work both before and after actual vehicle testing. First, we have to compile a list of vehicles that we, as a manufacturer, would like to apply for coverage. CARB will review the list for accuracy, and upon approval, they will select a vehicle from the list for testing.
The test converters must then be “aged” on an engine dynamometer, which consist of running the converters continuously through a series of rich and lean cycles to simulate, in some cases, 100,000 miles in use. Those aged converters are then tested on a vehicle dynamometer to meet the target OE emission type of ULEV, LEV, etc. After successfully passing the tests, more work is required. Now, we have to demonstrate that the catalyst will trigger the check engine or MIL on the test vehicle when it’s at a level that is below the legal emission limits.
The purpose of this is to ensure the catalyst isn’t prepared in such a way that too much oxygen storage material will trick the OBDII system into thinking the catalyst is performing up to code when in reality the emissions from the exhaust do not meet the standard. Once all testing is satisfied, a complete data report and catalog example must be sent to CARB for final approval. Start to finish, the average time to complete this EO process is about eight months for each EO.
Between legislative efforts to reduce vehicle emissions and consumer interest in buying more fuel-efficient and environmentally friendly vehicles, where do you see the aftermarket emission control industry five years from now?
The aftermarket emission control industry will continue to grow from all sides over the next five years. We will need to make more R&D investments in order to keep new EOs coming in light of tougher emission legislation and increased market demand. Catalyst designs are getting more sophisticated and more complex, and we have to meet the challenge. A good example of this is the trend on many new vehicles toward incorporating the catalytic converter within the exhaust manifold.
Sales growth is also expected to continue. On-board diagnostics and engine management complexity continues to evolve to meet tighter fuel economy standards, but that complexity sometimes comes at a price. Because the fuel system is looking at so many parameters for control, one glitch or failure in those parameters or components can cause an improper air fuel mixture and lead to catalyst damage, sometimes immediately. Replacing that failed catalytic converter without proper diagnosis and repairs will lead to another failed catalytic converter in short time and a voided warranty on the original replacement.
Growth is also expected to come over the next five years from the eventual adoption of CARB aftermarket emission standards by the rest of the country. Currently, there are too many gaps in approved application coverage and product availability to effectively adopt the CARB standard nationwide, but it is expected that the EPA will, at some point, look for some additional areas for emission reductions and the aftermarket is a prime candidate.
Eastern Catalytic straddles a very unique position in the marketplace. Most of the company’s products are manufactured in the U.S., and in addition to strong U.S. sales, the company has seen success in the export market as well. To what do you contribute the company’s continual growth pattern over the past several years?
Our tremendous growth over the past few years is attributed to several factors: our continued investment in R&D as well as our product quality and customer service. While we are large enough to be ranked at 76 in the AASA’s ranking of the Top 100 North American Aftermarket Suppliers, we are still 100 percent family owned with direct daily involvement from George, Ken and Bill Schafer, the brothers who own Eastern Catalytic. While the drive in any business is always to get bigger and better, the focus and intention at Eastern is to keep the customers happy by always being available to make a quick decision or go the extra mile to satisfy the customer.
Our president and founder, George Schafer, has always said that we will never get to be so big where someone with an issue, good or bad, can’t just call and speak to him directly. He has even been known to finish packing or welding a part himself at 6 p.m. on a Friday evening, just to meet a customer’s need. That dedication to customer service is the core value of our company.
In general, on the R&D side of the business, the key is to stay ahead of the curve and look at newer OE designs and make sure we can duplicate fit and function as an aftermarket manufacturer. One of our keys to success has been our ability to provide integrated manifold converters that look and fit like OE. Also our new Executive Orders in the U.S. and EURO certifications for Europe give us the ability to offer the latest aftermarket products to the market.
When so many companies today are focusing on going global today, where is Eastern’s primary focus?
Most recently, our focus has been on increasing plant capacity in the U.S. Our sales growth over the past few years has outpaced our investment in adding capacity, so over the past year we have been re-tooling our headquarters by adding major pieces of equipment, office space and more employees. We have become one of the major employers in our part of Pennsylvania and continue to hire people even in this tough economy.
We expect to substantially increase our plant throughput this year, double that of just three years ago. We continue to ship our major warehouse customers with a 99 percent fill rate on a weekly basis; fulfilling daily drop shipment requirements remains our immediate focus and we have been successful in meeting these short-term goals.
What do you think are the keys to maintaining a position of strength in the U.S. supplier industry today?
Technology is key for success today, and keeping up-to-date with new technology in all facets of our business remains a major focus for successful growth. Just this past month we signed on with our catalog systems supplier, Vertical Development, to be able to offer a mobile version of our ShowMeTheParts.com product catalog. We will be offering a QR code with all new materials to allow quick and easy access to the mobile application listing for all available products.
New technology within manufacturing has also allowed us to cut down cycle times to produce some high-volume products while the new technology in components keeps us on the leading edge of what an aftermarket manufacturer can offer. This month, we will be supplying the first 100 percent REACH compliant aftermarket catalytic converter to the U.K. Meeting the new REACH compliance required a great deal of research and testing into new materials in order to be able to claim success in reaching the tough goal of zero SVHC (Substance of Very High Concern) materials.
