The highly skilled Local 56 members at OEM Remanufacturing Company work long hours to keep the big equipment running for the oil and gas, mining, and rail industries
By Lisa Helder and Cathy Miehm
WHEN MATT SHARUGA WAS MIXING it up on Texas ice rinks as a pro hockey player in the now-defunct Central Hockey League, he had no idea he was laying the groundwork for a future career outside of sports.
But everything he learned about teamwork as an athlete came in handy when, 16 years ago, Matt hung up his skates and began working at OEM Remanufacturing Company Inc. in his hometown of Edmonton.
OEM, a division of Finning Canada, is one of North America’s top engine and powertrain component remanufacturing companies. Its primary customers are the oil and gas, mining, construction, forestry, and rail industries. Its 310,000-square-foot facility employs more than 800 people, including about 650 Local 56 members.
Matt arrived at OEM with virtually no work experience outside of his playing days. From an entry-level position that had him disassembling components, he moved to assembly and then into an OEM-sponsored apprenticeship program to become a journeyman heavy-duty technician.
His leadership skills were spotted early on, and in 2009, he became a full-time chief steward. He was recently elected president of Local 56. His ability to stickhandle and communicate problems to ensure the operation runs smoothly is a big help during regular meetings with members and OEM management.
In such a large facility, communication can be a challenge. Matt’s top priority is making sure everyone across three shifts stays informed and that all voices are heard.
“On any team, there’s always a captain,” he says. “But on a good team, everyone can be a leader. I always try to stay positive and keep things moving in the right direction. We are all working to better the workplace every day.”
THAT COLLABORATIVE APPROACH IS EVIDENT from the shop floor to the executive suite, including the company president, Chris Goodwin.
“When OEM was established, we were looking to operate this business differently,” he says.
Collaboration, opportunity, flexibility, and nimbleness are all part of OEM’s creation story. It was born in 2004 from parent company Finning Canada, which is one of the world’s largest dealers of Caterpillar heavy equipment.
“Caterpillar introduced its 400-ton ultra class mining truck—the 797,” says Chris, who was working for Finning at the time. “That’s the truck that you see in most stock photos of oilsands operations. It’s huge.
“When it was introduced, Finning needed new facilities to be able to handle the components. That was the start of OEM. Given the huge investment in the facility that Finning was making, we wanted to be able to operate with a reasonable amount of flexibility around shifts and around the whole manufacturing process.”
That flexibility created plenty of opportunities for skilled tradespeople, but also for women and men who came in with little experience.
“We have many people specialized in what they do,” says Chris. “But we also offer paths for people who enter the organization in less skilled roles and want to advance.”
OEM’s approach has created a more diverse, inclusive workforce that is unusual for heavy industrial manufacturing. Chris says that women in particular have found a hospitable work environment at OEM.
“The work is indoors, it’s temperature-controlled, and workers don’t have to go out into the field or on the road.”
OEM also puts time and attention into diversity awareness training, which sets clear standards for a respectful workplace.
DEAN HAMDON HAS BEEN WITH OEM since the beginning, and now works as a powertrain test technician.
“I’ve done pretty much every job, starting in teardown, and worked my way up,” he says. “So, when we are in down time, it makes it easier for me to hop around.”
He enjoys both the mechanical and technical challenges of his current role. All the powertrain components OEM works on have to be tested before they leave the building.
“I put them on a bench, fill them with hydraulics and electrical, and run them through their gears to make sure everything works,” says Dean.
Ever-improving technology means a constant learning curve in the powertrain department, but Dean appreciates its value.
“Our first Caterpillar test bench was almost 50 years old when I started working with it, so it was very manual,” he says. “I was reading the gauges and writing down all the information. Now, we have data acquisition on our benches, so we can just click a button and capture all the pressures, parameters, and flows. That saves a lot of time and has been a huge upgrade.”
Still, Dean enjoys the challenge of fixing unanticipated issues.
“My favourite thing is when we have a problem transmission and we have to diagnose the issue and help direct the technicians,” he says. “We don’t get a lot of those anymore but, when they come up, we get to use all our knowledge and be creative.”
JASON HUFFMAN IS A TEAM LEAD in OEM’s production welding department, where the biggest challenge is simply keeping up with the volume of work.
“We have components coming from all over,” he says. “It’s all about logistics. We do about 15 jobs a day on average, so knowing what it takes to put that job through is part of what makes the shop work.”
One of the joys of being a welder at OEM is the variety of work.
“I don’t have one particular job like I might in an outside welding shop,” says Jason. “In my shop, I’m able to jump around. One day is never the same as the next.”
Since welding deals with so many other departments, Jason has learned how to prioritize demands and manage expectations.
“Communication is pretty much paramount for us to get everything flowing through here,” he says. “Every area is a team, but we have to work together and be intertwined.”
New technology is a fact of life throughout OEM, and one of the keys to its continued success.
“I like to get better and smarter every day, no matter what I’m doing,” says Jason. “In industrial welding work, you have to be evolving at all times. My team knows never to get too comfortable.”
Implementing new technology is not only great for the bottom line. Along with the company’s emphasis on communication, it’s a big factor in employee satisfaction. Chris Goodwin points to OEM’s results in recent employee engagement surveys conducted across Finning.
“Our score was 86 percent in 2019,” he says. “That was pretty consistent among our newest employees as well as our more experienced people. There are always some concerns, but the vast majority of people are proud to work here.”
TOPPING THE LIST OF CONCERNS across OEM is health and safety. In a massive plant dealing with massive equipment, no one can afford to become complacent.
Chris acknowledges that the work can be dangerous but is proud that it has been several years since the plant has seen a serious injury.
“We’ve been on a real journey for years now from a safety standpoint,” he says. “We’re proud of the safety culture we’ve put in place. It goes beyond just recognizing the hazards to taking appropriate measures to mitigate risk.”
For example, 40 percent of OEM’s workplace injuries are hand related.
“Our training is really focussed on ensuring our employees recognize hazards and mitigate risk by, for example, not putting their hands in the line of fire,” says Chris.
Jason confirms that safety is top of mind throughout the plant. Tight protection protocols are in place for every process.
“We are always safety-first here, and they push that in meeting after meeting,” he says. “On a 1-10 ranking, I would say OEM is 9.9 on safety. They spend a lot of money on training.”
Chief steward Matt Sharuga agrees that “safety is definitely number one in everyone’s mind” and that OEM’s safety culture is never sacrificed, even as OEM expands and demands on workers are increased.
“We have grown almost 50 percent in the last four to five years,” says Chris. “We have continued to make investments in our facility, and we’ve added a couple of supporting warehouses recently. We’ve seen lots of change in 15 years.”
GROWTH FOR OEM HAS MEANT growth in membership for CLAC. But that success can be a double-edged sword for members, who often work 60 hours per week during busy times and struggle to maintain a work-life balance.
“There is very heavy demand for the products and services our membership offers at OEM,” says Mathew Clarke, one of the CLAC representatives for members employed by OEM. “Subsequently, the demands on our members—in the amount of time they are asked to give and the quality they are required to put out—presents a very real challenge.”
The CLAC-OEM relationship provides a sturdy system of checks and balances as issues arise across the plant.
“Good fences make good neighbours,” says Matt Sharuga. “We try to be collaborative as much as we can, although sometimes we would like to see that collaboration before a decision is made instead of after. But we try to keep things moving in the right direction and try to better the working conditions for everybody as best we can.”
Chris says OEM shares CLAC’s founding principles of cooperation and mutual respect.
“It’s important that we maintain a great relationship with our workforce and that they remain engaged,” he says. “Our senior managers sit down on a weekly basis with our stewards and reps, and we maintain a good working relationship.”
As chief steward, the inner workings of that relationship are Matt’s full-time job.
“Some days, I’m not always bringing good news to the employees,” he says. “But we are always dialled in to their concerns, and information is relayed quickly.”
Although Matt no longer mixes it up in professional hockey, he brings the same high degree of skill and professionalism to his job at OEM as he did on the ice. Despite the long hours, he finds time to get out on the ice with his eight-year-old son and as a coach. He also plays every year in a hockey tournament Finning holds for all branches. Unfortunately, due to COVID, this year’s tournament was cancelled.
While the pandemic slowed down some of OEM’s operations, it hasn’t stopped the highly skilled crews of Local 56 members. They’ve continued to keep the mighty machines of heavy industry running.
“I am super proud of what we’ve created here with OEM and CLAC,” says Matt. “It’s been very successful.”
COVID and OEM
COVID prevention has been top of mind for everyone at OEM Remanufacturing since the pandemic started. No one in the Edmonton facility is taking their health for granted.
“We are genuinely leveraging our safety culture,” says Chris Goodwin, company president. “Our employees are trained to perform safety interventions in a positive way, so we just applied that to COVID. People know how to politely and positively intervene if, for example, someone comes closer than two metres.”
Chief steward Matt Sharuga agrees. “We have hundreds of employees, but we have protocols in place here and everyone is following the rules.”
But between the drop in oil prices and the pandemic’s economic effects in Alberta, everyone at OEM has made sacrifices. There have been cuts, but no layoffs.
“We did do an hour reduction for the hourly wage employees,” says Matt. “This is a very large facility with many different departments. The plan we set in place allowed the employer the flexibility to have one area working full hours, but in another area where there isn’t much demand, the workers were on hour reduction.”
The company and Local 56 agreed to two 90-day terms when hourly reductions were in place. The first ended in July; the second in October. At some point over those six months, almost everybody took one for the team. The best scenario was no change: an 80-hour pay period (two weeks) with full opportunity to do overtime. The most impact was felt by workers who saw their pay-period hours reduced by 25 percent.
Chris says those reduced-hour agreements—which ended in early October—allowed OEM to prevent painful cuts.
“CLAC has been an outstanding partner through some of the most challenging times we’ve ever experienced,” he says. “With the exception of some early retirements, which were the employees’ options, we have been successful in retaining all of our employees. That was important to us and continues to be important to us. We want to retain the capacity and capability we’ve built up here over the years.”
The company also took advantage of a federal workshare program and encouraged employees to use their vacation and other banked time.
As 2021 approaches, Chris is cautiously optimistic about the immediate future. “We will see what the new year brings,” he says. “We remain optimistic that we will see a steady recovery in our workloads. We still have some pockets in our business where our workloads have not returned. But we expect they may recover rather dramatically so we need to be ready for that.”
To preserve the workforce, OEM continues to shift some employees to busier departments. Workers are also being encouraged to take vacation during the holidays.
“In years past, we have really challenged our employees to work extra hours during the holiday period,” says Chris. “This year, we have an opportunity to encourage them to take that time off.”
CLAC members are also less anxious than when the pandemic began.
“There was a lot of fear initially,” Matt says. “There’s no real playbook for any of this. There’s been a lot of stress and uncertainty, but in the end most of us are happy to have our jobs and our benefits.”
The OEM Process
OEM Remanufacturing Company’s state-of-the-art facility in Edmonton boasts a lean manufacturing process, ensuring little down time for clients.
“Equipment costs our clients hundreds of thousands of dollars when its down, so they want our product available on the shelf when they need it,” says Chris Goodwin, OEM president. “They take an engine off the shelf and put it into their truck, and then send us back the used engine, which we call a core, to be rebuilt.”
When these engine and powertrain components come into OEM, they flow through in a straight line with little unnecessary handling, which ensures timely and efficient service. At 880 feet long and 440 feet wide at its widest point, engineers designed the OEM facility for flexibility. Work cells can be created to accommodate exacting work on the smallest components and the largest engines.
You can take a virtual tour of the OEM plant by visiting their website, oemreman.com/tour.
· All components coming in for remanufacturing have a standard bill of materials for each part.
· Any necessary technical documents are included to ensure all components contain the latest updates for parts and salvage operations.
· Disassembly technicians maintain efficient workflow while adhering to all of OEM’s quality standard and safety protocols.
· All parts are inspected to determine if they should be reused, salvaged, or replaced, based on the manufacturer’s reusability guidelines.
· OEM’s quality assurance program supports nondestructive testing using techniques such as liquid dye penetrant, wet and dry magnetic particle testing, ultrasonic testing, and air and water pressure testing.
· OEM’s 70,000-square-foot machine shop handles all machining work required for the remanufacture of a component.
· Equipment includes
o Vertical and horizontal lathes
o A crankshaft grinder that can accommodate shafts of up to 22 feet
o Computer-controlled Rottler machines for repairing connecting rods
o Milling equipment that can handle wheel groups to eight feet in diameter, up to six feet in height, and 33,000 pounds
· OEM also does shot peening to increase the fatigue strength in metal for parts up to 20 feet long, HVOF (high- velocity oxygen fuel) spraying, and general welding.
Assembly and Testing
· All components are assembled by product-specific technicians organized into specialized employee teams ensuring top-quality components.
· OEM’s world-class engine and powertrain testing facilities include
o Two computer-controlled engine dynamometers for measuring force, torque, and power—the larger bench is designed to fully test the 797 Caterpillar 3524 engine module.
o Two computer-controlled powertrain test benches with the larger specifically designed to test the Caterpillar 797 transmission and torque converter.
· In the engine and powertrain testing process, technicians run all engines at full horsepower to reflect actual operating conditions.
· All benches are computer-controlled so technicians are unable to intervene and provide manual passes.
Painting and Shipping
· Once a component is remanufactured and ready, it is sent to paint and packaging for completion and shipment.
The Four Rs: Reduce, Reuse, Recycle, Remanufacture
Remanufacturing is a rigorous industrial process by which a worn or broken product or component is returned to a like-new or better-than-new condition. Remanufacturing means
· Conservation of materials
· Reduced energy consumption during manufacturing
· Reduced waste (and associated disposal costs)
· Lower price for comparable quality
Caterpillar, a major client of OEM Remanufacturing, lauds the process as good for both business and the environment. It reduces waste and minimizes the need for raw material to produce new parts.
“Through remanufacturing, we make one of the greatest contributions to sustainable development—keeping non-renewable resources in circulation for multiple lifetimes,” Caterpillar’s website says.
It has been a winning business model for OEM. Remanufactured components are expected to perform the same as a new component would.
“But we sell them at 40-80 percent of the cost of a new product, so it’s a big savings for our customers,” says Chris Goodwin, OEM president. “In the process, we employ a whole lot of people, and we’re able to reuse a whole lot of metal. Anything we can’t use, we recycle. We earn a significant amount of revenue just on the metal that we recycle.”
Sources: Remanufacturing Industries Council, caterpillar.com
OEM was created on January 1, 2004, from an amalgamation of two established companies with 86 years of combined experience in the industrial engine remanufacturing field.
Headhunters Diesel Ltd. was founded in 1956 and developed a reputation for quality and service in the remanufacture and repair of engine components including heads, blocks, crankshafts, camshafts, and connecting rods for natural gas and diesel engines.
Reliable Engine Company was established in 1966 and developed specialized expertise in the remanufacture and repair of engine components with emphasis on large crankshafts.
Both companies served a large industrial customer base in western Canada. Reliable, with expertise in remanufacturing railroad locomotive engine components, also developed markets in the United States and Mexico.
In June 2004, Finning International Inc. announced that it was investing $65 million in a new world-class component remanufacturing centre. OEM has merged the specialized technical skills, product knowledge, and market presence of the two previous companies into an integrated remanufacturing platform. It has also expanded both the product line and services.
CLAC’s involvement predates OEM’s inception, with Local 56 having represented workers at both Headhunters Diesel and Reliable Engine.
He Shoots, He Scores!
Prior to his career with OEM Remanufacturing Company Inc., Matt Sharuga, chief steward for Local 56 members employed by OEM, played right wing with 10 different teams in six minor professional hockey leagues over 14 years. His best year was the 1998-99 season when he scored 29 goals and had 53 assists for a total of 82 points in 59 games played with the Lebret Eagles.
Some of Matt’s teams included the Sherwood Park Crusaders, Calgary Hitmen, Nanaimo Clippers, and Edmonton Ice. He finished his professional hockey career with the Austin Ice Bats.