Ford Invests in Collision Team of America-Marks First Direct Investment by an OE in a Collision Repair Consolidator
Collision Team of America (CTA), based in Indianapolis, IN, announced June 2 that Ford Motor Company’s Customer Service Division, formerly Parts and Service, has made a significant minority investment in the company. Saugatuck Capital and CTA’s current management retain operating control of the company. Terms of the deal were not disclosed by CTA or Ford.
This announcement marks the first investment by an automotive OE in a collision repair provider.
According to CTA, the investment by Ford will provide additional resources in operations, finance, and human resource development. In addition, Ford will occupy two of the nine seats on the CTA board of directors. CTA currently operates fifteen collision repair facilities in Texas, Indiana, and Illinois. Two Ford employees will be on staff at CTA, one in finance and one in operations.
According to Jerry Gnazzo, chief executive officer of CTA, the company can be expected to increase the pace of acquisition with this investment. "I believe Ford’s investment goes far to legitimize the consolidation that is occurring in the industry. Ford spent considerable time analyzing the potential to invest in the industry. I am proud they chose us as a partner," stated Gnazzo.
The investment in CTA, however, is not related to the Ford Retail Networks. According to Gnazzo, "That is a misconception that naturally arose due to our being in Indianapolis where Ford first pursued the retail network concept. The investment in CTA is not related to the retail networks."
Last year, Ford announced their intention to consolidate dealer operations as Ford Retail Networks in several metropolitan markets across the U.S. in response to the growth of national dealer consolidators such as Republic Industries and United Auto Group. Indianapolis was to be one of those markets. Under the announced plans, independent dealers in the market would agree to sell their stores to Ford instead of to another consolidator. Ford would then reduce the number of dealers, consolidating operations into the Ford Retail Networks to gain efficiency.
According to Gnazzo, Ford was looking to participate in consolidation and pursue opportunities to expand their knowledge of collision repair operations.
"Ford is very serious about the total ownership experience of their customers. Collision repair plays a part in the ownership experience. Only a limited number of Ford dealers, however, have collision repair facilities. Partnering with Collision Team gives them an opportunity to become a part of a high-volume, quality repair center that can provide Ford with the experience to benefit the collision repair part of that total ownership experience," stated Gnazzo.
As the chart on this page details, the number of Ford dealers with collision repair facilities numbers approximately 1735 out of over 5,000 dealerships.
Gnazzo believes the benefits to Collision Team, besides the increased equity to pursue expansion, will include Ford’s experience in training and Human Resource development and future synergies that may develop.
Direct parts purchasing is not part of the Ford-CTA deal. According to Gnazzo, "We will continue to purchase parts from dealers as we have in the past. That will not change."
Also, no plans currently exist for any type of formal vehicle referral relationship directed by Ford.
According to Gnazzo, "Our primary goal at Collision Team is to grow our business by providing the highest quality repairs, and exceptional value for both our customer and their insurance company. Our relationship with Ford and the pursuit of synergies between our businesses will enhance our ability to provide that high level of value."
Carlson Named Entrepreneur of the Year for Oregon-Honored by SBA
Laurie Carlson was among the top 53 entrepreneurs honored June 1 by the U.S. Small Business Administration and Vice-President Gore.
Carlson, owner of Lukas Auto Painting and Repair in Portland, OR, was selected as the Entrepreneur of the Year for the state of Oregon.
The national entrepreneur awards are a highlight of SBA’s national Small Business Week celebration. Small Business Week, now in its 35th year, honors the contributions of the nation’s small business owners. Winners are selected on their record of stability, growth in employment and sales, sound financial reports, innovation, and the company’s response to adversity and community service. Involvement with SBA is not a selection criteria, though roughly three-fourths of the winners received financial or management assistance from SBA at some point.
Congratulations Laurie!
Budget Car Sales Acquires Three Retail Car Dealerships-New Entrant in Dealer Consolidation
Budget Car Sales, a subsidiary of the group that owns Budget Rent-a-Car, announced June 4 that it has acquired Paul West Ford, Inc. in Gainesville, FL; Warren Wooten Ford, Inc. in Cocoa, FL; and Carson Chrysler Plymouth Dodge Jeep, Inc. in Plainfield, IN.
In 1997, the three dealerships had combined revenue of $165 million. All three dealerships will continue to operate under their current names as part of Budget Car Sales. Existing management will remain in place.
Budget believes that the long-term benefits of owning retail car dealerships are sharing back office functions, management and marketing programs with its other operations.
"These new additions will also create greater efficiencies in fleet purchasing, given that we already buy so many Ford products, and allow Budget Car Sales customers to access manufacturers’ finance programs, resulting in cost savings and revenue opportunities for the company," said Sandy Miller, chairman and CEO of Budget Group.
"From a maintenance standpoint, our plans to lower costs include utilizing the dealer body shops for servicing Budget Car Sales, Premier and Budget Rent-a-Car vehicles, as well as purchasing auto parts for Budget Rent-a-Car locations nationwide," continued Miller.
Budget Car Sales operates nearly 30 corporate-owned dealerships throughout the country.
NABC Sets October As PRIDE Month
The Board of Directors of the National Auto Body Council (NABC) has declared the month of October PRIDE Month. This will be a nationwide annual event that will serve to mobilize all segments of the collision industry to promote and draw attention to the positive aspects of the industry and its people.
The goal of PRIDE Month is twofold:
- To generate interaction between the different segments of the industry; and
- To establish, in the minds of consumers, the positive image of an essential and professional industry.
"PRIDE Month will be an opportunity to pull the entire industry together to stimulate greater pride and self esteem in its members and celebrate the good things about our chosen professions," says Marco Grossi, PRIDE Month committee chairman. "Events and activities will also focus on increasing consumer awareness and confidence in the collision industry as well as greater respect from the general business community. My hope is that everyone will get behind this effort and support it."
Among the planned activities, the NABC will be issuing press releases to run in the general media regarding such topics as what to look for in selecting a collision repair shop, repair safety issues, and more. The NABC is looking for widespread participation as well as support and sponsorships of activities. To contact the NABC, call: 888-66-PRIDE or fax 734-697-2093.
Larry Curry, Akzo Nobel General Manager, Announces Retirement
Larry E. Curry, Akzo Nobel’s general manager since joining the company in 1988, announced he will be retiring in August. Curry, a 35-year veteran of the automotive industry, joined Akzo Nobel a decade ago and was instrumental in leading the Sikkens launch in the United States, Canada and Mexico.
Curry is working with the company’s car refinish headquarters in Sassenheim, the Netherlands during the transitional period.
No successor has been named as of press time.
Hutton Joins CarQuarters Insurer Relations Team-Two Acquisitions Announced
CarQuarters Collision Repair Centers announced June 6 that Bill Hutton, formerly vice president of claims for USAA and an independent insurance industry consultant, has joined its insurer relations team.
While at USAA, Hutton was part of the team responsible for establishing and managing the USAA STARS network of collision repair shops. In addition, Hutton led USAA’s re-engineering effort that resulted in significant improvements in service delivery cycle times and costs.
CarQuarters also announced in early June that it acquired two additional repair facilities in Detroit and in Pittsburgh.
Terry’s Collision, a twelve year old shop in Wayne, MI, adds to the company’s presence in southeastern Michigan. Terry Leright, founder of Terry’s, will leave the company after providing assistance during the transition. Keith Wenzeland, manager, will continue to run the 12,000 sq.ft. facility.
Marburger’s Auto Body in Crafton, PA was also acquired. Owner Terry Marburger will be retiring from the business, but his sons Keith and Kirk will assume management for the store. Marburger’s was founded thirty years ago, primarily servicing the western section of Pittsburgh.
Mitchell Introduces Open Electronic Commerce Network
Mitchell International announced May 12 a new electronic commerce built on open standards and permitting unrestricted electronic commerce with any business partner of a company’s choosing over a single communications network. Mitchell’s e-ssenti@l service allows businesses in the property and casualty insurance, medical claims, automotive collision repair, and glass replacement industries to select their own business partners and communications network.
"Our goal with this new service is to ensure a truly open e-commerce network as opposed to the closed, proprietary solutions currently on the market," said Jim Lindner, CEO, Mitchell International.
The EC Company, a Palo Alto, CA provider of e-commerce systems will provide the new service’s backbone through their EC Exchange product and will administer the service.
Customers will be able to use e-ssentia@l functionality in future versions of Mitchell’s products that include EC Exchange. A stand-alone version of the service will also be available for use with other companies’ software.
The first Mitchell automotive product to include built-in e-commerce functionality will target the glass repair industry and will be available in July 1998.
Supply and parts ordering capability for collision repair shops will be available in 4th quarter of 1998. Integrated communications functions for collision repair estimating services will be available in 1999.
Ford Updates Approved Refinish Paint Supplier List
Ford Motor Company’s Customer Service Division has updated its list of approved refinish paint systems. After the original announcement of approved systems last fall, Ford began another round of product testing.
(Editor’s Note: See Ford Releases Refinish Paint Approvals in the November 1997 issue of INSIGHT.)
In addition to specific products from BASF, DuPont, ICI, PPG and Spies-Hecker that were included last fall, new entrants include products from Akzo Nobel and Standox. Complete information on the approved systems can be found in Ford’s Technical Service Bulletin 98-6.
Ford recommends that dealers begin using the approved products as early as possible, though no firm deadlines are established. Ford does suggest that mandatory usage may be required in the future. As a result, dealers that have jobber/paint company contractual agreements should only contract with recommended refinish suppliers.
Doug Sulkala to Bicycle Cross-Country for Cancer Research
Chuck Sulkala, owner of ACME Auto Body and Paint in Boston, MA and past chairman of both the Collision Industry Conference and the National Auto Body Council, wrote to tell us that his son, Doug, will be bicycling cross-country to raise funds for Cancer Research. Doug is looking for sponsors and people who can assist him along his intended route.
This year, Doug and four friends plan to ride cross-country, their goal to raise $15,000, for the PMC Jimmy Fund.
Starting in San Francisco, the group will cover approximately 3,700 miles through 12 states. Since all of the funds donated go to the Jimmy Fund, the group is funding the cost of their journey themselves.
Persons along their route who wish to offer assistance can get a schedule for their trek and an email address at the group’s website at: www.inergy.com/xcountry
Copart Acquires Mid Iowa Salvage Pool-Launches Internet Auction Bidding
Copart, Inc., announced the acquisition of Mid Iowa Salvage Pool of Des Moines, IA, on June 11, expanding their network of vehicle auction and storage locations to 59 sites in 30 states.
The new facility includes 15 acres of property and facilities for storage, preparation and sale of salvage and other vehicles. Terms of the transaction were not disclosed.
Copart, in the current fiscal year ending July 31, 1998, has acquired salvage vehicle auction facilities in Avon, MN; Columbia, SC; Mobile, AL, and San Diego, CA. The company has also opened new salvage vehicle auction sites in Orlando, FL; Raleigh, NC; and Las Vegas, NV, while expanding its operations in Oklahoma City and in the Washington, DC area.
On June 5, Copart announced its introduction of Internet bidding for vehicles at any of the company’s auctions, a first for the industry. The service is available through their website (www.copart.com)
INSIGHT Launches Email News Alerts Service for Subscribers
Collision Repair Industry INSIGHT has launched a new Editor’s Desk Email News Alert system for subscribers. The new service, which delivers summaries of the latest news articles posted to the INSIGHT On-Line web site directly to a subscriber’s email account, is FREE to all INSIGHT subscribers.
The Editor’s Desk Email News Alert is delivered regularly as news is posted to INSIGHT’s Private Subscriber-only web site. A link to the full text of the article is provided that users can click on if their email software provides the capability to launch their web browser.
To subscribe to the INSIGHT Editor’s Desk Email News Alert visit the INSIGHT website at: www.collision-insight.com or subscribe via Email by sending an email message directly to: rthrall@postoffice.ptd.net with the subject of your message: SUBSCRIBE EDITOR’S DESK.
Deal Between First Priority Group and BodyShop Video’s Business Development Group Appears Dead
It appears that the deal for First Priority Group to acquire BodyShop Video’s Business Development Group (BDG), will not take place. First reported in the April issue of INSIGHT, First Priority had signed a letter of intent to acquire BDG in March. According to Scott Biggs, owner of BDG, the letter of intent has expired.
According to Biggs, "Officially the letter of intent has expired. Regardless of the outcome of our negotiations with First Priority Group, we will pursue opportunities that enhance the competitiveness of our membership."
Biggs continued, "As far as we are concerned at the Business Development Group, our commitment is to bring our members and the industry to the next level of performance. This commitment has not changed."
First Priority Group manages fleet claims and had announced their intention to enter the market as a shop consolidator.
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