Other Articles - December - 2018

How a Car Accident Sparked A Transmission Legacy

When you walk onto the production floor at ETE REMAN, it isn’t quite what you’d expect of a typical manufacturing site. The facility is brightly lit with natural light pouring through skylights. Inspiring signs in bold colors with Vince Lombardi quotes or attitude statements like “this is a bullshit free zone” adorn the walls. On one side are rows of racked transmissions awaiting service. On the other side, not a single square inch of the floor is still as technicians and machines hum along harmoniously.

Founder Sam Loshak walks the perimeter, talking briefly with several employees working on transmissions. Beyond the floor, ETE REMAN employees are juggling a number of big changes such as integrating a new freight and transportation management software company into the business or implementing the new cloud-based customer-support platform for installers to have complete visibility to technical questions, warranty claims and ways to reduce delays.

Additionally, the team developed a better infrastructure to production with their newest facilities and constantly seeking even more industry-experienced builders, sub assemblers, supervisors, managers and customer service specialists who meet ETE REMAN’s standard of skill and service.

But before the bustling floor, funny signs, strong culture and rapid growth ever came to be, a young man in the Soviet Union contemplated an irrevocable change that would alter his route.

RISKING IT ALL FOR THE HOPE OF OPPORTUNITY

Growing up in the Soviet Union, Loshak never envisioned working with auto transmissions, but he always had a curiosity for understanding exactly how machines work. He attended Moscow University to study electrical and mechanical engineering, graduating with degrees in both before earning a master’s degree in electrical engineering. By his early 30s, he grew concerned about the limited opportunity for professional development and for building a satisfying personal life.

“The Soviet Union had a great education system, but there was always a ceiling for what you could do there. It was hard to keep growing, and the quality of life was low, no matter what job you had,” said Loshak. “But in the United States, you are free to take a chance.”

He left home in 1975 to live in Rome for a year while waiting for visa approval for the United States. Shortly after, he arrived in Milwaukee, Wis, with his family. He had no choice but to thrive.

“It was a one-way ticket back then,” he said. “There was no going back.”

Loshak quickly learned that you have to be able to sell yourself in the U.S, and it would be difficult to do that without knowing English. In Milwaukee, he focused on finding any job that allowed him to provide for his family, even delivering pizzas, until finding opportunities where he could apply some skills from his engineering education. He started at General Split working maintenance, went to Krause Milling Company and then landed at Switchboard. Over time, Loshak both learned English and found better work opportunities, ultimately becoming an electrical engineer at Rexnord.

“THE REST OF IT WAS AN ACCIDENT”

While heading to the doctor for his son’s check-up, Loshak’s path of hard-working immigrant survival suddenly skipped to one of insightful entrepreneurialism.

“The rest [of my story] was an accident,” recalled Loshak. A literal car accident. The front of his car was completely smashed, prompting him to head to the junkyard in search of replacement parts for the families only means of transportation. It was there that he met a Polish man named Larry.

Loshak couldn’t afford to pay Larry the full price for the parts and offered to work in the junkyard to pay it off. He discovered not only that he liked working with the parts, especially engines and transmissions, but that this could be a lucrative business, too.

“People didn’t know what they’re buying or selling at the junkyard from a quality standpoint. To overcome this, I started to take engines apart to see what was wrong with them. I could figure out what was needed and improve it,” said Loshak. “If the part was good, I could sell it. If not, I couldn’t. This is what set me apart from everyone else; I could rebuild and knew exactly what to rebuild.”

“Just like in life,” he said, “if you find the problem, it’s not a problem anymore.”

Loshak told Larry that if the owner wanted to sell or rent the junkyard that he would be interested. Larry directed him to a man who was trying to open a junkyard nearby but ran into health issues and couldn’t do it alone. That’s where Loshak found his first business partner, and they opened a new yard together. After a few years, they split and sold the business. Loshak took his earnings and opened ABC Auto Parts, the predecessor to Engine & Transmission Exchange, in 1985.

BUILDING ON TECHNICAL TALENT AND A CUSTOMER SERVICE PHILOSOPHY

After initially subletting work to machine shops, Loshak decided to rebuild engines in house when he had enough clients at ABC Auto Parts. He remodeled the facilities, leased machinery and hired skilled employees to keep all remanufacturing work within his walls. At the time, 75 percent of the business was engines and 25 percent was transmissions.

Retail automobile service centers, Engine & Transmission Exchange, opened with an emphasis on powertrain, but did, and continue to do today, jobs as small as oil changes. Loshak’s understanding of what it takes to make a transmission shop successful allowed ETE REMAN to support its customers in unique ways. “We still have our shops, so we know what our customers are going through. Our installation centers are also a great place to conduct research and development on the latest vehicles,” Loshak said proudly of the original iterations of the business.

Engine & Transmission Exchange earned a reputation for high quality work and continued to grow.

“I’ve always surrounded myself with the best people I could hire. Many of my first employees from 30, 35 years ago still work here today,” said Loshak.

Loshak knew success would hinge on the strength of their customer relationships. And building trust with B2B wholesale customers and retaining them for as long as possible was critical. He worked closely with his sales staff to instill a “talk to the customer like a friend” philosophy that is still evident today.

“If you can fix this car for $30, do it for $30. We need business not only today but business tomorrow,” said Loshak. “The customer knows if you’re trying to take advantage. Bring what you know, and let the customer make the decision. You cannot lie – not one word – because you can hurt your reputation and lose the sale.”

Engine & Transmission Exchange boasted this service mentality with a no-hassle warranty, an offering plastered on local billboards and running on TV spots as well.

“We consider our wholesale customers to be partnerships. Car repair and diagnosis is difficult. So when something goes wrong, we try to help anyway we can. If my customer is losing money, then I have to lose money, too,” said Loshak. “To have good business, business should be good for two people.”

PIVOTING TO TRANSMISSIONS

Eventually, Loshak decided to centralize his operations for better profitability and efficiency. He bought a 36,000 sq. ft. facility and moved all operations to one location. For the next 10 years, Loshak remanufactured engines and transmissions from this facility and began to supply to wholesale customers regionally.

In the early 2000s, Loshak’s son and son-in-law, who were involved in the business, proposed a change in strategy to shift away from engines and to focus, instead, on transmissions. The engine market was already mature with many centralized competitors, but it was scattered and smaller for transmission work. There were only two or three centralized transmission competitors. The family decided to adjust the strategy to push their technical advantage.

By 2005, transmissions were 75 percent of the business and engines were 25 percent, so Loshak shut down the engine factory and went all-in on transmissions, shortly thereafter rebranded the name to ETE REMAN, “ETE” signifying “Engine Transmission Exchange,” the original name and history.

EXPANSION ROOTED IN VALUES

Fourteen years later, having grown to be the largest aftermarket transmission remanufacturer in the nation, the never-wavering caliber of quality talent and purposeful sales philosophy still fuels ETE REMAN today. The company remanufactures more than 4,000 different transmissions for over 16,000 vehicle applications and has six regional warehouses throughout the United States. The marketplace is also very different as transmissions are more complicated than ever.

“It’s not just mechanicals today. It’s more complicated assemblies, hydraulic systems, and now electronics. Complicated CAN bus and control systems are all very integrated with the transmission function. Diagnosing the problem is harder and so are the repairs,” said Loshak.

This complexity necessitates focus and investment. Recently, ETE REMAN purchased the Automatic Transmission Service Group (ATSG), which has a stellar reputation for industry knowledge, customer service, and a wide network.

“We want to help prevent problems before they happen,” said Loshak. “ETE provides ATSG with the resources it needs to continue serving transmission specialists and rebuilders, and ATSG will provide ETE with its vast technical knowledge, helping to improve the quality of both the transmissions we remanufacture and the phone support we offer.”

FUTURE-PROOFING THE FAMILY BUSINESS

Being a family company is intrinsically linked with the company’s reputation and relationships. His son, Lawrence, his son-in-law, Noah, and his business partner’s daughter, Deanna, have been integral players in the business for over 15 years. Loshak acknowledges working with family can be challenging, but “we’re on the same side” and “we always remember we have the same common goal.”

The family involvement, investments in customer service and established training processes for employees are what Loshak believes will keep ETE REMAN successful in the future marketplace – no matter how unclear and unexpected it could be.

“We have everything we need to win any challenge. We’ve built something that’s adaptable; we can convert as things change,” he said. “Every day a new transmission comes in and we train people for it. That’s the nice thing when there is a system and documented procedures. We can pivot to the next new thing. We did it before and we’ll do it again.”

Loshak doesn’t foresee retiring anytime soon: “As long as I can think and walk, I will work.” But he confirms the company will remain with the next generation when he is no longer there. They will shepherd the next big evolutions in the business and ensure the systems in place remain adaptable and relevant.

With a slow smile, thinking of what he will leave behind as his legacy, he concludes, “I hope people will always say that I was fair.”


For more information on ETE REMAN, visit etereman.com.