The Heavy Duty OEM Unit

In 2003, the Heavy Duty OEM Unit made substantial progress advancing the operational improvements implemented in 2002. Transpro’s strength in design and engineering has also been a key factor in sustaining the turnaround of this unit, which began in 2002. In particular, our innovative Ultra-SealTM Charge Air Cooler (CAC) product line has been a critical factor in differentiating our products in the marketplace. With a high temperature silicone grommeted seal that allows it to withstand the more demanding operating conditions of the new EPA-compliant Class 8 truck engines, the patented Ultra-Seal CAC provides higher reliability than competitive products, and was key to our success in retaining and growing our Kenworth business, as well as generating new business opportunities with Cummins Power Generation and Monaco Coach.

Today, Transpro’s strategy for this unit is focused on expanding the targeted customer base for its products; ramping up production of its current product offerings, including the Ultra-Seal CAC and complete radiators; introducing new and innovative heat exchange products into our markets; continuing to reduce costs; and leveraging our international manufacturing and supply capabilities in Asia and other parts of the world.

Specific initiatives in 2003 included:

• Introducing a new complete cooling package for Monaco Coach, allowing Transpro to act as a “one-stop shop” for this customer. The package includes the radiator, charge air cooler, condenser, oil cooler, and shroud. This program also illustrates the dramatic progress Transpro has made in leveraging international manufacturing and sourcing capabilities. For example, the aluminum radiator and condensers are made by Transpro in Mexico. The aluminum charge air coolers are manufactured at our facility in Jackson, Mississippi. Finally, the complete package is assembled in Jackson. For us, this represents an opportunity to reduce costs, while maintaining excellent quality control.
• Focusing on enhancing operational efficiencies enabled us to significantly improve throughputs
  and productivity.

The Heavy Duty OEM Unit earned a profit in 2003 for the second year in a row.