Ilco Ready For The Next Generation of Transponders

Jan. 3, 2012

I recently had the opportunity to visit Rocky Mount, N.C., to be part of an automotive lock and key training. I’ve been selling to the locksmith community for 18 years now and have always been a little frustrated about not knowing as much as I should when it came to automotive lock technology. From the late 70s to the early 90s, I worked as a locksmith and did lots of car work but none of it involved anything electronic.

Working for suppliers since then, I haven’t had much hands on experience and keeping up with transponder technology has proven a little challenging. That’s why going down to Ilco for two days of training was time well spent.

We started off with a tour of the factory which was both interesting and enlightening. I got to see how much precision goes into everything Ilco manufactures, including keys, cylinders, collars, etc. We were amazed to learn that much of the brass used comes from spent shell casings acquired from the military. Also, you can feel good about the level of recycling that goes on at Ilco. Not only are the shavings collected and reused but the brass dust is as well!

We received instruction on many of their key machines including the new HD057 high security key duplicator. Each student had a turn at working it and some of us even got our first key to work. We used a late model Honda ignition for this. I haven’t cut a sidewinder key in many years and my first one worked!

The session on keys was very interesting. They seem to have every niche served. As a matter of fact, you can now order key blanks from Ilco with a name and phone number on them. I believe they are calling this their Biz Line of blanks.

Learning the history behind transponders and high security blanks is both interesting and necessary now that most automotive keys are offered this way.

Q & A: Ilco Rep Jerry Buckley

My local Ilco rep, Jerry Buckley, has been my go-to guy for quite some time when it comes to Ilco keys, machines and locks. I recently had an opportunity to sit down with Jerry to talk a bit about what’s happened and what to expect in the near future. Here is some of what we spoke about.

Thanks for taking the time to chat with me, Jerry. How long have you been repping Ilco products?

I started with Ilco in 1976. I stayed with them as a direct salesman until 1980. That’s when I became the sales manager for a company out of Florida where I stayed until 1984. I left that job and contacted Ilco after hearing they were looking for a Rep in the Philly to DC market. They hired me back as a Rep and I’ve been in the Rep business since then.

From what I remember as a locksmith back then, all the automotive locks and keys were mechanical and there wasn’t much variety. Do you remember the first advancement? Was it VATS?

VATS was going to be the high security. A locksmith figured out how to bypass that in about 15 seconds and it quickly became passé. They still used it in a couple of GM and an upscale Pontiac models. In 1996 Ford came out with the first transponders, the old H72PT. That was PATS1. By 2000 the scale had tipped and more cars used transponders than didn’t. Now I can’t think of any car maker who doesn’t use a transponder.

I understand transponders were first used by the military in the 1940’s, true?

They were used during WWII tracking planes. The most common use today is EZ pass etc. The word comes from the fact that it transmits and responds, TRANS-PONDER.

So then there was just one transponder with a fixed code?

It’s an inactive code until you put it into the antenna and the antenna ring activates it. Then it sends the signal to the electronic control module. The ECM says, “Yeah, I recognize you” and sends it back. In a matter of seconds it’s either working or not working.

Why did we even start using this technology with cars?

This is how it began: in Italy alone there were more than 50,000 cars stolen in one year. In Europe, there’s one major insurance company, obviously with a monopoly. They insisted that automotive companies came up with something or they weren’t going to keep insuring them. That was in the early 90s. There was an immediate impact; many less cars were being stolen.

Just like Vats, hasn’t someone figured out how to beat the transponder technology?

The original transponders were very basic. It evolved to the point where you needed two keys and had to beat the challenge code. German cars used a rolling code and that hasn’t been beaten yet.

The Phillips transponder is a step beyond the Texas Instruments; you have two challenge codes to get from the car. That’s the reason we came up with the RW4 Plus. With this, you capture the challenge codes from the ECM on what we call the Snoop. You then bring it back to the RW4 Plus and it stores and confirms with original key that you have captured the challenge codes. Then you write it on the electronic key. Before this, all you did was read and write.

Are the different transponders similar to CD’s, in that some you can read only and others will read and write?

What we call a PT5 is a read and write. These you could read and write over as many times as you want to. This is a read and write transponder.

A cloneable key is an electronic key; it has a little transmitter board in it with a battery. They take the transponder code and write it onto the transmitter board so the car thinks it’s the same key, hence the term clone.

The technology can be confusing. Is that why some locksmiths hesitate to get into this?

When you’re cloning, you need an electronic key to do it. With the RW4 Plus you can clone PT5 keys and the electronic keys, both the EH3 for Texas Instruments and the EH3P, which is for the Phillips. Many of the blades are interchangeable. Y160PT and Y164PT is the same blade, one for Texas Instruments and the other for Phillips; same blade but different heads. Fortunately the RW4 Plus tells you whether or not to use the Snoop. The RW4 Plus walks you through the whole process. You just put in the customer’s key and it tells you what to do.

When do you need to use the TKO?

When you have no keys. Now that we can do the Phillips keys with the Snoop. The RW4 Plus can be used for most keys. Anyone who has a store with walk-in traffic should have an RW4 Plus.

Why are there still locksmiths with shops who aren’t making the keys we’re talking about here if it’s so easy?

A lot of it has to do with the investment involved, my opinion. An RW4 Plus is around $2200-2300 and they’re in the business already. These folks are turning away business and sending them to the competition. I have a guy in Virginia who had Verizon bring all their trucks in one day and he was able to clone keys for $3,000 in one day and pay for his machine!

So without a machine like the RW4 Plus, they can’t make any high security keys?

He still can do a lot of those keys through on-board programming. Using a transponder key, not an electronic one, you can use this method. Now some of them are very difficult and includes opening and closing the windows, hitting the door button, hitting the brake pedal. If you lose your sequence you have to start all over again. It’s a heck of a lot easier dropping a key in to be read and a few seconds later you’re putting the other one in. The money they make is as much and more than selling a lockset.

What are most locksmiths charging to make these keys?

They’re getting $75-$85 and it cost them about $30. If they buy a lock for that much, they aren’t selling it for $75. The margin is phenomenal for not a lot of effort. When people complain that it’s a lot of money for a key, then let them go to the dealer and see how much it cost there.

So with the RW4 Plus you don’t even have to go to the car?

With the Phillips transponder, you do but it only takes a couple of minutes. You put it on the head of the key, turn it on, you have two LED’s; one captures it. Turn it off and on again and it captures the second challenge code then you bring it in and drop it in. It takes you and extra five minutes but if you amortize it out to an hourly wage, you’re making about $2,000 an hour. You’re spending $30, charging about $85 in less than five minutes.

Since my automotive training at the ILCO plant, I’ve been speaking to my customers more often about how they are servicing these customers. There are locksmiths with an RW2 sitting in their shop collecting dust. What were they able to do with the RW2?

Pretty much nothing. They could do GM, the old Hondas and the Mazda 626, that’s it. All others required on-board programming. With the RW3, they could do the older versions of the Texas Instruments transponders, the H72PT’s, which was very popular. Then came the RW4 which could do the Jewel key.

Why is it called the Jewel key?

That’s the H84PT, the next generation of challenge codes. That’s the one with the single challenge code, the next generation, and that required two keys to make another one. That’s when the read machines became most useful; they could do about 185 different models. Shortly thereafter we were able to crack the Phillips. Other companies now have that technology but ours is a self contained unit, just plug it in and it’s ready to go. The competition all uses a central computer somewhere in Italy so they have to access that information through the Internet. It could get pretty crowded since they’re all using the same source. In my opinion ours is a better technology.

What about the folks with an RW2 or RW3; what should they do?

He could now trade it in for an RW4 Plus, ten free key heads, an EKC1 assortment and an EKP2 assortment. The cost of what he’s getting is around $3,000 but currently we have a great trade-in deal. If you have an RW4, it can be updated with a Plus Box that hooks right into the RW4. (This interview was conducted in October so current promotions could be different than what was discussed here)

Recently I was visiting with a successful long-time locksmith who still isn’t making high security keys for his customers. He sends them to the dealer because he thinks technology is changing so quickly that he’ll be sitting with equipment that’s become obsolete. Is this a legitimate concern?

With what we have now you can do almost every vehicle, as much as 95 percent of today’s vehicles. I think that’s a pretty good return on his investment. If we do manage to crack the other 5 percent, then we’ll be able to upload it into the existing machine.

What changes are in store for the next few years?

Ford has come out with what they call an 80 bit key and they’ll have a laser cut key and so will GM. To cut these keys you’ll need and 057HS. It’s a great machine at a very competitive price. It features 11,000 revolutions per minute; the Matrix machine we’ve had out there is only 6,000 RPM.

Lots of people still have The Club machine. Can they use it to make the high security keys we’re talking about?

Yes they can. The only thing they may need would be two sets of adapters for the older Mercedes and BMW keys and VW 2 track keys. Once you cut one side, there’s too much taken off to be held properly to cut the other side because of how much of the blank is removed. If they have no laser key cutting machine, then I recommend the new 057. For the money, it’s the best value.

What important changes do you see in the future when it comes to automotive locksmithing?

I’m afraid we’ll be eliminating keys altogether but continue to use transponders. Fortunately every one of those has key override so inside each one of those is an actual key. We’ll be able to read the remotes with the diagnostic machines we have now so I’m not concerned that the locksmiths will be bypassed completely.

For more information on Kaba Ilco Corp. keys and key machines, contact your local locksmith distributor or visit