Necessity is mother of reinvention
Kent, Wash.—Nick Staub has been in the electrical remanufacturing market for 36 years, and as president and CEO of Romaine Electric he said he has witnessed major changes in the electrical products industry over the years.
With 12 locations in five states, Romaine is one of a handful of medium to large electrical marketers that remain in the U.S. His company dates back to 1921 when it was located in downtown Seattle. It was purchased by his father, the late John Staub, in 1969.
Today the company has 95 employees and a 110,000-square-foot corporate headquarters in Kent, Wash., that houses offices, rebuilding stations, and warehouse space with $4 million of product, he said, adding that Romaine has survived because it reinvented itself hundreds of times as a result of competition and changes in the industry.
“The rebuilding industry probably peaked in the mid-1990s into 2000,” Staub said. “At one point there were some 10,000 mom-and-pop electrical rebuilders in the country, plus maybe 250 medium and mega remanufacturers. Today there are maybe 1,500 small rebuilders, virtually no medium shops, and three mega operations all located in Mexico.”
Much of the change is due to the actual number of starters, alternators, and generators that are remanufactured today, Staub said. While 85 percent of Romaine’s business involves those products, most of their sales are new, no-core products, much of it manufactured in China. Other sales involve Deka batteries, LED lighting products, inverters, and related electrical products.
“We assemble new units in the U.S. and perform custom rebuilding at nine of our outlets as well as here in Kent, plus we do rebuild units for transit buses and other specialized vehicles,” Staub said.
The advent of new/no-core product being offered to the market changed much of the rebuilding industry, he added. For many, cores were a costly nuisance to handle so new starters and alternators have become the industry norm except for specialty units. “There is still a market for cores and core suppliers are still in business. Some cores remain in the U.S., while others head to China by the container load.”
Staub said to date, President Trump’s Section 301 trade tariffs on Chinese products have involved about a 10 percent increase in costs. Most of that has been passed along, he said, but there is concern about the proposed 25 percent tariffs set to begin in January. “If it moves to 25 percent there could be serious problems.”
Besides possible tariff issues, Staub said one of Romaine’s most pressing challenges is parts proliferation. “In today’s market, there are thousands of part numbers for electrical and related products, and that has broadened our inventories substantially.”
Another challenge is securing qualified rebuilders.
“Years ago there was a plentiful amount of people who could perform quality rebuilding, but that tree has been picked dry.”
Romaine customers include parts jobbers, other electrical rebuilders, auto and truck dealers, repair facilities, agricultural outlets, transit operations, and others. Part of the reinventing process has involved online sales via Romaine’s site, but mainly with Amazon and e-Bay online stores.
“The online business is fascinating and somewhat complicated, but it also represents significant business,” Staub said, adding that over the years his company has spent hundreds of thousands of dollars on software systems to handle large volumes of online sales efficiently.
“All of our products are available online, but at times niche products like lawn mower starters can create sales of 1,000 units a month through various online platforms.”
Long involved in industry affairs, Staub followed in his father’s footsteps as a board member and chairman of the Automotive Parts Remanufacturers Association (APRA).
As APRA chairman in 2013, part of his seven years on the board of directors, Staub was responsible for partnering with the ReMaTec show held annually in Amsterdam, Netherlands, as well as later moving away from the partnership, noting that ReMaTec is a positive venue for Europe.
While Staub is proud of his service to APRA, he was disappointed in the attendance at the recent Big R Show that was held in conjunction with NACE Automechanika in Atlanta.
Also a member of the Electrical Rebuilders Association (ERA), Staub said this group is geared toward smaller rebuilders but supports all elements of electrical rebuilding, offers high quality forums, has an engaged board, and an effective staff.
Looking back through the years at Romaine, Staub said one of the most rewarding aspects of the business has been helping people, not only the small rebuilder customers that have become friends, but the staff at the company.
“I’ve watched so many employees remain with us through their careers and retire after years of service.”