Opus Inspection

The Systech Newsletter: January 2012

Feature Story 

Systech’s parent company acquires ESP. In December (2011), Opus Prodox AB (publ) (Opus Group) announced that its subsidiary Opus US, Inc. has signed an agreement with Environmental Systems Products Holdings, Inc. to acquire 100% of the shares of Environmental Systems Products, Inc. (ESP). The acquisition includes all of ESP’s operations in the U.S., Mexico and Canada. The company expects to close the transaction in January 2012.

Once the transaction is completed, Lothar Geilen, CEO of Systech and Opus US, Inc., will also become CEO of ESP. “In tandem with Systech’s industry-leading technologies, ESP will provide our company with first class equipment manufacturing capabilities, teamed with a top notch sales and service organization that is among the best in the vehicle inspection industry,” stated Lothar Geilen. He added, “We welcome ESP’s employees in joining our organization. We will continue focusing on excellent relationships with customers of both Systech and ESP.”

The acquisition will combine the strengths offered by both Systech and ESP, adding valuable human resources and infrastructure, and providing a clear path for new business and future growth.

“This acquisition further strengthens our focus on the U.S. vehicle inspection market in our global strategy. We are excited to have ESP join us in building one of the leading vehicle inspection companies in the world.” Magnus Greko, CEO of the Opus Group stated. “Together we commit to providing continued outstanding service to Systech’s and ESP’s customers once the acquisition is completed.” Link to full press release

Testing and Regulations

Stats and Results: The EPA presents Annual Enforcement and Compliance Results for Fiscal Year 2011. The report includes results from civil and criminal enforcement activity, including investments, penalties, and tons of pollutants removed along with the health benefits arising from these actions. US Environmental Protection Agency Link to article

Equipment, Tools, and Gear

4G-equipped driving experience on the horizon. Automotive history is full of innovative technologies for enhancing the driving experience, such as electric starters, automatic transmissions, and trunk-mounted CD changers. But soon wireless providers and automakers will figure out how to build and sell a 4G connected car, meaning drivers will have access to a whole new bag of tricks. Imagine connecting with the cloud, without having to climb into one of George Jetson’s flying jetmobiles to get there. The possibilities go far beyond satellite radio: cars may someday have the ability to automatically adjust to upcoming adverse road conditions, or target possible open parking spots based on incoming data from the cloud. And changes are coming fast: indications are that 3G will be obsolete by the time cars now coming off the assembly line reach the end of their normal service life expectancy. PCWorld Link to article

Give the customers what they want, but please don’t distract them. In the 15 years that have passed since GM implemented their OnStar utility, technology has exploded. Carmakers recognize that consumers will not be content to cut themselves off from their digital lives once they enter their cars. Customers want new and better apps that they can use in the car, such as steering wheel touch screens, Internet entertainment options, and maintenance alerts. But manufacturers are mindful of new laws and regulations concerning distracted driving. The trick is to give consumers what they want in their new vehicle purchase, while ensuring safety and compliance with the law. Better connectivity and voice-activated commands are just part of the solutions. UTSanDiego.com (San Diego Union-Tribune) Link to article

40 percent of drivers delay automotive maintenance on their primary vehicle. That number comes from a recent Consumer Reports poll. The culprit is economic: most drivers who make to decision to delay repairs, recommended maintenance, or replacement of worn parts do so because they can’t afford to do otherwise. Younger and lower-income motorists are the most likely to delay maintenance, and polls show that people are keeping their car longer. Some admit that their cars are getting to be “embarrassing,” while others are concerned about the long-term value and serviceability of their vehicles. Delaying maintenance and repair also means rolling the dice on auto safety as well. Autocarepronews.com via Tire Review Link to article

Enforcement 

North Carolina: Mecklenburg County clean-scanners plead guilty. Ronald Eugene Kinard, owner of Autoworks, a Charlotte-area inspection garage, and his employee, Jack Bard Haney, have admitted to faking inspection results for nearly 1,300 cars. Both men pleaded guilty to violating the Clean Air Act, and face a maximum sentence of five years in prison and a $250,000 fine. Prosecutors allege that the men falsified test results through the use of “clean-scanning,” or substituting a passing car’s results in place of one which might have otherwise failed the emissions test.  The case comes amidst a State crackdown on dishonest garages. CharlotteObserver.com Link to article

State News

California: ARB proposes sweeping new rules to reduce greenhouse gas emissions by 2025.  The proposal is part of a larger effort by the State’s Air Resources Board to reduce climate warming emissions by 80 percent by 2050. A key part of the proposal—putting 1.4 million plug-in electric, hybrid, and hydrogen cars on the road by 2025—is estimated to save drivers $22 billion in fuel costs. Though the changes are expected to raise the cost of each car by about $1,900, fuel and other savings are expected to save motorists approximately $6,000 over the life of the car. The rules do allow automakers to comply with their fuel efficiency requirements across their fleet, an acknowledgement of the time it takes to get new vehicles into the marketplace. Eventually, California wants 87 percent of the vehicles on its roads to be pure ZEV by 2050. Reuters Link to article

Utah: Support growing for vehicle emissions testing in Cache County. Leaders in the City of Logan are asking the Cache County Commission to implement a mandatory vehicle emission program in the county. Members from both the Logan Municipal Council and Logan City Schools Board of Education are in the process of drafting resolutions putting pressure on the county. The motivation behind the push by Logan city leaders is concern over the health of students in the area. HJNews.com (The Herald Journal, Logan, UT) Link to article

Systech News 

Banner year for Systech: New business, renewals, and a key acquisition were highlights for 2011:

Wisconsin: In September, Opus Prodox AB (publ) announced that The Wisconsin Department of Transportation (WisDOT) had issued their intention to award the contract for the State’s emissions testing program to Opus subsidiary Systech International, LLC.

In December, Opus announced that Systech signed a contract with the State for five years, with two three-year options to extend, for a total of 11 years. The contract starts on July 1, 2012, and covers the seven most populated counties in Wisconsin. Under the contract, Systech will engage 200 auto service businesses as inspection program subcontractors to test approximately 800,000 vehicles annually. As an added service, Systech will offer registration renewals to Wisconsin motorists at inspection locations.

Systech anticipates that the Wisconsin contract will be the company’s largest to date.  “We are excited to enter into a long term business relationship with the State of Wisconsin” said Lothar Geilen, President and CEO of Systech, “and we are looking forward to offer our innovative emission testing technology for the benefit of the citizens ofWisconsin.” Chuck Supple, Chief Dealer & Agent Section at WisDOT, said, “This agreement with Systech will bring welcome change, greater convenience, and better value for Wisconsin motorists and local businesses, while reinforcing our commitment to cleaner air.”

Oregon: In September 2011, the Oregon Department of Environmental Quality (DEQ) granted a one plus one year contract extension to Systech.  Since the contract began in 2006, Systech has provided numerous services in support of DEQ’s vehicle emission inspection program including: design, manufacturing, delivery and onsite service of Oregon’s Emission Inspection Equipment and Vehicle Inspection Database; the industry’s first 24/7 self-service OBD Kiosk inspection lane; and the innovative wireless remote OBD System. The Oregon DEQ operates seven centralized inspection facilities in the greaterPortland area.  Using Systech equipment and systems, the State inspects 800,000 vehicles each year.

“We are pleased that the Oregon DEQ has chosen to extend our contract,” said Mr. Geilen. “We strive to provide the best quality service and equipment to our customers.  We greatly appreciate DEQ’s confidence in the Systech team as demonstrated by this contract extension.”

Missouri: Also in September, the Missouri Department of Natural Resources (DNR) granted a two year contract extension to Systech.  In 2007, Systech was contracted by DNR to design, build and operate the Gateway Vehicle Inspection Program (GVIP).

“We are pleased that the Missouri DNR has chosen to extend our contract,” said Mr. Geilen. “The Gateway Vehicle Inspection Program represents a successful partnership between Systech and the State of Missouri and we are proud of the convenience and quality of service provided to the motoring public.  We greatly appreciate DNR’s confidence in the Systech team as demonstrated by this contract extension.”

The Gateway Vehicle Inspection Program (GVIP) addresses 1.4 million vehicles that are required to pass safety and emissions inspections in the greater St. Louis area.

ESP now part of the team: Systech’s parent company, Opus USA, announced in December that it has signed an agreement to acquire 100% of the shares of Environmental Systems Products, Inc. (ESP). The acquisition includes all of ESP’s operations in the U.S., Mexico and Canada.  ESP’s dominant position in the decentralized market of emission inspection equipment sales and service is complementary to Systech’s position as the leader in decentralized I/M program management contracts. In addition, ESP’s vehicle emission testing products align superbly with Systech’s innovative equipment and database technology used in program management contracts. (For more, see article under Feature Story above.)

Off The Beaten Track 

Purchase price includes flux capacitor. A mid-80s DeLorean DMC-12 that was used in the film “Back to the Future” was recently auctioned off for $541,200. Of the original seven DeLoreans modified for the film, only three are said to remain, and the car sold at auction in Beverly  Hills was the only one that was privately owned; the other two belong to Universal Studios. Flux capacitors and other time-bending accessories don’t come cheap. An unmodified DeLorean, of which about 9,000 were built in Northern Ireland before the company folded, would only run about $30,000 in good condition. A portion of the profits from the sale are designated for the Michael J. Fox Foundation for Parkinson’s Research. LeftLaneNews.com Link to article