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Chiron America, Inc.

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Paying for Parts, Not the Machine (per se)

What do you do when you need to produce parts on a new VMC but don't want to invest in the equipment?

What do you do when you need to produce parts on a new VMC but don't want to invest in the equipment? Chiron America (Charlotte, NC; www.chironamerica.com), a specialist in CNC vertical machining centers, has launched a program wherein parts suppliers that don't want to carry big capital investments on their books agree to pay a per-part fee based on their unit production rather than paying upfront for a machining center. Chiron installs the machine in a supplier's plant but actually sells it to a third-party lender who charges the supplier a per-part fee. A portion of the fee goes toward what is essentially a service contract in which Chiron guarantees an agreed-upon percentage of uptime and set throughput numbers in exchange for a five-year commitment from the supplier. At the end of the five years, the supplier can buy the fully-depreciated machine for a nominal sum (the end value is determined when setting the per-part fee). Chiron is targeting tier one automotive suppliers with very high production outputs who are looking for creative ways to shift some of the investment burden that has been placed on them by OEMs.