Retooled Mercon May Prove Costly


Ford Motor Co. says it is seeking greater assurance that automatic transmission fluids bearing its Mercon trademark are worthy to bear its seal of approval.

Lubricant blenders are not happy about the costs they will incur for that peace of mind.

In conjunction with its launch of a specification for low-viscosity fluid, the automaker recently amended its Mercon program to require companies producing any Mercon-licensed ATF at multiple plants to obtain approvals for each plant. Market sources say the changes will increase costs by $20,000 or more per plant.

This is really going to drive up costs for companies that make fluid at several different sites, said one marketer, who spoke on condition that he not be identified. I cant see these changes yielding benefits that are worth the cost. But, of course, Ford doesnt have to bear those costs.

Fords Service Automatic Transmission Fluid Committee announced the changes in a June 1 letter, ahead of last months introduction of the Mercon SP specification for low-viscosity ATF used in new high-torque transmissions. SP is the third spec in the Mercon program, the others being Mercon and Mercon V (Roman numeral 5). The latter two fluids are used in most Ford vehicles with automatic transmissions.

The Mercon program offers licenses to three types of marketers. Original formulators make fluids using formulas that they develop themselves or in cooperation with additive companies. Reblenders produce fluids using formulas for which others have obtained approval. Rebranders typically repackage fluid that others blend. Some 400 to 450 commercial ATF products are covered by the program.

Ford charges $3,000 per original license, $2,500 for reblenders and $2,000 for each rebrander. But thats just the tip of the iceberg. The programs major expenses come from testing required to verify that fluids meet the specs.

Until now, Ford has required original licensees to submit samples from their own labs to third-party testing companies, which determine if the sample meets specification requirements. However, according tothe June 1 letter from the Ford committee to current licensees, the automaker will now require companies to submit two samples – a lab sample and a production sample from the plant designated as the primary blending site. The purpose of the former is to test the fluids formula, the latter to guarantee the plants ability to make a fluid that matches the formula.

The letter says licensees that make fluid at more than one plant will now be required to obtain reblender approvals for all of them. The ATF committee said in its letter that the changes were made to ensure that the quality of Mercon fluids remains constant. Ford officials declined Lube Reports requests for further comment.

Market observers said the changes will indeed give the carmaker tighter control over the quality of products carrying its trademark.

If they want to understand the quality of whats actually on the market, this is a good move, said Katherine Richard, marketing technical service representative for specialty lubricants at Infineum. But it is going to increaselicensingcosts for larger companies that have more than one plant.

Some companies may see their bill for licensing fees increase several-fold. Testing fees will also rise in proportion with the number of plants at which companies blend. Sources said Ford has added new tests that will raise the cost of reblender testing to approximately $20,000 – still significantly less than costs of tests for original formulators. Additive companies have typically covered those costs in the past, but some blenders speculated that they may cease to do so when the bill increases.

The good news for blenders and additive companies is that the changes generally do not take effect for nine months. Companies applying to renew licenses before June 30, 2005 must disclose all plants that blend the licensed fluid but need obtain approvals for just one plant.

Ford officials declined to discuss the SP specification, but market sources said it was developed for high-torque five-speed transmissions built by German manufacturer ZF and used by Ford in some light trucks. The biggest differences between SP and the two older Mercon specs are the viscosity requirements. SP requires a kinematic viscosity of 5.5 to 6 square millimeters per second at 100 degrees C, compared to a minimum of 6.8 for both Mercon and Mercon V. SP also has more stringent requirements for cold-temperature Brookfield viscosity.

Infineums Richard said the viscosity and shear stability requirements of SP will drive formulators to use Group III and partial synthetic base stocks, compared to Mercon and Mercon V, which can be formulated with Group I and Group II base stocks, respectively. She and other observers agreed that demand for SP will be small, at least for the time being.

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