Lycoming 0-360 factory overhaul core charges - Does Air Powertell the truth ?

On 11-Dec-2004, Mike Spera wrote:

First rule: GET IT IN WRITING BEFORE YOU START THE WORK!!!!!!!!
Second rule: If they won't put the deal in writing, or you don't like
the deal... move on.

For those of us that have bought new, Lycoming factory rebuilt, or Lycoming
factory overhauled engines through Air Power, we DID get it in writing, in
the form of a purchase agreement. That agreement specifies the core deposit
(assuming the buyer wishes to exchange his/her old engine for the new one).
It also states that the core deposit will be refunded assuming that hte
crank and case are reusable. Lycoming (and who can argue that they are not
best equipped to make this determination?) decides whether the old crank and
case are, in fact, reusable. I suspect that Lycoming will reuse other
components from the old engine if they meet standards, but they really only
expect to recover the case and crank.

So, you won't get a zero time logbook if you don't use the Manufacturer.
The FAA makes that rule. If you would like, petition the FAA and your
congress critter to get this changed. Let us know how you do.

The zero time logbook only applies to the more expensive factory rebuilt
engines, which use many new components and only reused components that meet
new part tolerances. But the "zero time" designation is only part of the
story. Lycoming provides a good warranty, and a lot of peace of mind with
its factory engines.



Why is this happening? Do Lycoming and other vendors take great delight
in screwing people? Not likely. It may be a matter of survival. They are
getting persnickety about cases because they are getting burned and can
no longer afford to absorb it.

I think that the core deposit system works in general when it is in both the
buyer's and seller's interests that the old parts be reused. In other
words, if Lycoming can recover a usable case for less money than it costs to
build a new one, and if there is demand for products (i.e. overhauled or
rebuilt engines) that can use a refurbished, used case, then they would have
no incentive to reject one that really is usable. What may be happening
here is that Lycoming has found that it costs less to build a new IO-360
case than the sum of the core deposit and refurbishment costs. Another
(less likely) possibility is that Lycoming has more used, servicable cases
in inventory than it needs to meet anticipated demand. In either case it
would be more honest if Lycoming were to raise the base price of the engine
and lower the exchange allowance.

Face it, these engines are getting OLD.
They are failing because they were not made to last 40 years. Lycoming
has probably also concluded they cannot be Divco's insurance company and
take in every repaired case and put their seal (and legal butt) on the
line.

The designs of the engines may be that old, but I doubt that there are all
that many 40 year old engines flying around. Lycoming always builds more
new engines than it provides to airframe manufacturers for use in new
airplanes. New engines are often installed in old airplanes when the old
engine cannot be overhauled cost-effectively.

Regarding Lycoming accepting cases that have been reworked by others, all I
know is that they told us they judge on condition. This was important to us
because our old engine had incomplete logbooks

Ask yourself what life will be like if Lycoming goes out of
business. Will owning an airplane get less expensive or more expensive?
Want to place a bet? There is a big difference between gouging just
because you can and altering your business practices to survive. This
appears to be the latter. If anyone has evidence that Lycoming is doing
this solely to increase profits at the expense of customer satisfaction,
please fill us in.

Lycoming may simply be getting more fussy about case integrity in an
appropriate concern over safety and product reputation. I don't think
anybody would object to this. After all, when we gave them our old engine
we got a rebuilt one that most likely has a recycled case, and we hope they
were VERY fussy in deciding that it was OK. My concern isn't that they
rejected our old case but rather that they did not provide complete and
documented reasons for the rejection, and that they scrapped the rejected
case before they gave us the option to retake possession of it.


We have choices. We can gripe and steer business to independents. But,
believe me, there are PLENTY of risks in that route. We can fight with
Lycoming and try to work out every disconnect. Or, we might get in
writing up front what the deal is and, if we accept the terms, go along
with the agreement. As hard as it is for some people to accept, there is
a cost to owning an airplane. This may be an inevitable part of that
cost. If this is unacceptable (or unaffordable) to you, you might
consider whether owning is right for you.

Can't argue with any of that. However, one of the supposed advantages of
getting a Lycoming factory engine is that you know up front exactly what the
cost will be. No unpleasant surprises like you might get in a field
overhaul. If your old engine is running well, has had benign oil analysis
results, and has not been mistreated, it is reasonable to expect that you
will get your core deposit back.

--
-Elliott Drucker