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Letter to the Editor
This article originally appeared in the July 2003 Issue of INSIGHT
©2003 Collision Repair Industry INSIGHT All Rights Reserved
NACE Organizers Address Insurer-Only Sessions
Akzo Nobel Launches Nobilas Repair Cycle Management Business
Texas Insurer-Owned Repair Shop Bill Passes Senate
Keystone Automotive Industries Reports Record Q4 and Full Year
BASF Introduces New Automotive Refinish Website
3M, DuPont, and PPG Named to Automotive Industries' Top Ten Supplier List
GTS Services and Harmon AutoGlass Sign National Agreement
CARSTAR Awards 21 Franchises in Florida
Kelly Auto Body Named Hamilton Environmentalist of the Year
Colorado Governor Signs Steering Prohibition Legislation
ANC Rental to Sell Alamo and National Rental Car
Mitchell Releases ABS Body Shop Management System Upgrade
ADESA Opens Florida Reconditioning Facility
Ford Celebrates 100 Years with June 16 Festivities
INDUSTRY UPDATE
NACE organizers have made it official. Starting in 2004, the collision repair convention will be held in November each year in Las Vegas, Nevada during the annual Automotive Aftermarket Industry Week when two other automotive industry trade shows are held there.
"We think one of the benefits that accrues from this is that the entire industry will now be in Las Vegas during one week," said Ron Pyle, president of the Automotive Service Association (ASA), sponsor of the International Autobody Congress and Exposition (NACE). "For NACE to be part of that is very significant."
During a mid-June press conference announcing the change, event organizers also fielded questions about this year's NACE, being held December 4-7 in Orlando, Fla. In particular, they were asked about an "insurers only" educational track announced in May. Some shop owners have expressed concern that an educational program at the autobody industry event will be closed to repairers, whereas all programs in the past have been open to shops, insurers and vendors. Pyle said the goal is to attract more insurers to the event.
"We believe that NACE is inclusive of the entire industry and has to have representation from the entire industry to be considered an industry show," Pyle said. "But some exhibitors, in particular the information service companies, felt the lack of insurer activity at NACE did not give them the opportunity to interface with insurers."
Galen Poss, president of Hanley-Wood Exhibitions, which manages the NACE show, also credited the estimating and information system providers as the source of the idea for insurer program. He said some speakers at NACE in recent years have led insurers to feel unwelcome at the event.
"There's been some fairly strong positions that have been taken from the podium during NACE and those positions have left the insurance folks feeling somewhat alienated at NACE," Poss said. "And that's not in anyone's best interest."
Poss appeared to believe the insurer sessions would be open to all NACE attendees.
"I don't think we're padlocking the door and you've got to have a badge to get in that says 'insurer' on it," Poss said at the press conference. "I don't think that's the intent. Again, the whole purpose here is to allow the insurance companies an opportunity to get together and talk about the issues they want to talk about in a forum that they create, as opposed to going into a session with collision repair professionals and talking about joint issues. Just as shop owners can get together at various sessions and talk about issues that are important to them. It's a matter of providing an open opportunity and forum for the industry as a whole."
But Pyle confirmed that a May 29 NACE press release said a lunch and education program on Thursday, December 4, is "only available to credentialed insurance personnel." He said the session, however would be monitored - perhaps even by himself.
"We don't perceive anything at NACE really being closed in terms of not having people there who will at least have some kind of oversight and governance," Pyle said.
Both Poss and Pyle said the insurer sessions should be open to the trade press.
"I can't imagine that they'd object to the press being there," Poss said.
But NACE organizers are clearly looking forward to the 2004 show in Las Vegas, which they hope will result in a rebound in the numbers of show exhibitors and attendees, which have slumped in recent years.
"Since Automotive Industry Week began some years ago, there probably hasn't been a year go by where someone hasn't said, 'Why doesn't NACE co-locate with Automotive Week?'" Poss said. "There was a stumbling block with that concept for a long time: You've got to have a place. There was no place. With the opening of the Mandalay Bay Convention Center this past January, that no longer is the case."
That new convention space, one of the five largest in the country, offers a location for the NACE trade show and educational program, while the Las Vegas Convention Center and other local venues are home to the Specialty Equipment Market Association (SEMA) show and the Automotive Aftermarket Products Expo (AAPEX).
The other shows will run November 2-5, 2004, while NACE will run November 3-6. CARS, the Congress of Automotive Repair, an ASA-sponsored event for the mechanical industry, will also continue to be held that week.
Poss said holding all the shows in one week should increase international attendance because those coming from overseas can get one visa in order to come one week to attend all the shows. He said some companies will have to staff booths at more than one show, but that overall response from vendors has been very positive.
"We felt the decision to move to Las Vegas holds many advantages for exhibitors and attendees alike," said Larry Carter, president of Car-O-Liner Company and chairman of the 2003 NACE Exhibitor Advisory Council.
The paint manufacturers, five of which have declined to buy exhibit space at NACE in 2002 and 2003, also are pleased with the move, Poss said.
"DuPont is enthusiastically supporting ASA's decision to permanently move the NACE show to Las Vegas," Rich Morecz, marketing manager for DuPont Performance Coatings, said.
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Akzo Nobel NV has launched a new business which manages the repair cycle of a car from the moment it is damaged until it is ready to be returned to the owner.
Called Nobilas, the company provides repair, accident and claim management services while enabling partnerships between Akzo Nobel and international motor insurance and leasing companies, as well as fleet owners worldwide.
The new business, headquartered in the Netherlands and active in most countries in Europe and North America, intends to bring benefits to all parties involved in the repair cycle by removing unnecessary costs from the total value chain.
Rudy van der Meer, member of Akzo Nobel's Board of Management responsible for Coatings, explained, "The establishment of Nobilas is clear proof of the importance we have always given to developing innovative services that enable our partners to do their work more efficiently and profitably. Nobilas has the potential to become the leading provider of effective solutions in all areas of accident management services."
Cor de Grauw, General Manager of Akzo Nobel Car Refinishes added, "Because of Akzo Nobel's extensive knowledge in the car repair and automotive industry, as well as some very successful accident management businesses we have initiated in the past, we saw an opportunity to connect all parties involved in the accident management process. In order to operate as a separate company which has its core focus on generating an efficient value chain, we decided to establish Nobilas."
The Texas Senate Business and Commerce Committee has passed House Bill 1131, the insurer-owned repair shop legislation, by a vote of 8 to 0. The Automotive Service Association (ASA) has been working with a coalition of repair professionals in Texas on this legislation.
Bill Haas, ASA's vice president of service repair markets, presented petitions signed by thousands of Texas vehicle owners supporting the legislation. Collision repairers from across the state spent months collecting the signatures.
On April 8, the Texas House of Representatives passed H.R. 1131 by a voice vote. The House bill prohibits insurance companies from owning repair facilities in Texas. The bill passed by the Senate committee also prohibits insurance companies from owning repair facilities, but allows for those insurer-owned shops already in place to remain in business if they meet certain criteria detailed in the legislation.
"We owe a debt of gratitude to Sen. John Carona and his fellow senators. We ask that Texas collision repairers continue to let their state senators know of their support for this legislation as it moves to the senate floor for consideration," said Bob Redding, the ASA's Washington, D.C., representative.
Keystone Automotive Industries, Inc. has reported record revenues and improved operating results for its fourth quarter and fiscal year ended March 28, 2003.
For the 2003 fiscal fourth quarter, net sales increased 14 percent to $122.5 million from $107.9 million in the same quarter a year ago. Net income grew 20 percent to $4.9 million, or $0.33 per diluted share, from $4.1 million, or $0.28 per diluted share, in the fiscal 2002 fourth quarter.
For the fifty-two week period ended March 28, 2003, net sales increased 15 percent to $438.9 million from $382.3 million in fiscal 2002. Net income totaled $14.8 million, or $0.99 per diluted share, compared with a net loss of $22.0 million, or $1.48 per diluted share, in fiscal 2002.
The net loss in fiscal 2002 included a $28.7 million charge (net of tax) related to the cumulative effect of a change in accounting principle as a result of the early adoption of Statement of Financial Accounting Standards (SFAS No.142) "Goodwill and Other Intangible Assets"' and a $6.8 million non-recurring charge related to a write down of the company's investment in an enterprise-wide software conversion.
"Fiscal 2003 is our second consecutive year of strong revenue and operating income growth," said Charles J. Hogarty, president and chief executive officer of Keystone Automotive Industries, Inc. "As we look forward, we remain very optimistic. We believe the insurance industry's willingness to use competitive parts will continue to increase, buoyed by generally favorable decisions coming out of the courts around the country.
"Keystone is uniquely positioned to benefit from that trend," Hogarty continued. "Our quality initiatives such as ISO 9001 and Platinum Plus have set us apart from our competition. In addition, our growing distribution network offers unequaled service to the insurance and collision repair industries."
Hogarty said the Company's IT rollout is progressing well and upon completion of the rollout anticipates improved inventory utilization and lower administrative costs.
Results for the 2003 fiscal fourth quarter include $610,000 of income related to the settlement of litigation regarding Keystone's previous software installation, and a charge of $940,000 for severance costs and future lease costs on an abandoned master warehouse.
Keystone distributes its products in the United States primarily to collision repair shops through its 117 distribution facilities, of which 21 serve as regional hubs, located in 38 states, Vancouver, Canada and Tijuana, Mexico.
BASF's Automotive Refinish business has announced the launch of basfrefinish.com. Designed for collision repair shops and distributors, the new site is a one-stop, password-enabled resource aimed at greatly simplifying customer access to information and tools, most of which were previously available only in BASF mailings, by special order, or through company sales representatives.
The new BASF website includes a wide range of information, most of it in PDF form for viewing, downloading or printing, including:
- Product, application and safety information about Glas-urit, R-M and Limco products.
- Technical manuals, technical data sheets, product wall charts, bulletins, MSDS data.
- Color management formula look-up and SmartTools
- Training course descriptions, schedules and training sites.
- VisionPLUS On-Line link and course information including online registration.
- Fleet and OEM Connection information
- News, press releases, and product announcements
- Saleen Racing Team schedule.
Full use of the website is membership-based, with access to certain information restricted to either body shops or to jobbers. Unregistered guests, however, can view most of the information on the site.
The basfrefinish.com site is designed for ease of use, enabling customers to find information quickly and efficiently, and to reduce their dependence on BASF sales representatives, who can then focus on helping customers resolve more challenging problems, noted Darlene Eilenberger, Brand Marketing Manager, Automotive Refinish.
"Basfrefinish.com is the latest advancement in BASF's strategy to harness the power and potential of the Internet to help our customers," she said.
Eilenberger pointed out that the site is not only easy to find on the Internet, but easy to remember, too. "If you're looking for information about BASF's automotive refinish business, what can be simpler and more intuitive than the words 'BASF refinish'? The website's name says it all."
The June issue of Automotive Industries has posted the results of the sixth annual Quest for Excellence, a survey of thousands of OEM readers to determine what companies are regarded as the top suppliers in the industry.
The Collision Repair Industry's 3M, DuPont, and PPG were named to the list of the Fab Fifty Suppliers, and all three companies were in the Top Ten.
Readers were asked to rate the performance of nearly 300 companies with respect to quality, innovation, price, delivery and service/support. Over 1,000 responses were received and tabulated to determine the AI Fab Fifty Suppliers, and within that group the Top Ten.
According to Rob Wilson, publisher of Automotive Industries, "It is the fierce competition in auto building that drives the need for continual improvement in quality and price and that aspect only becomes more acute with time. By working smarter and applying lean efficient systems to every direct and indirect business activity involved, higher levels of quality must be achieved while lowering costs. Though it taxes normal logic, the best suppliers know how to drive these factors in opposite directions."
The survey was conducted only among OEM readers to prevent suppliers from voting for themselves. Readers were asked to rate suppliers on a scale of 0 to 5; 0 = poor and 5 = excellent.
"There is no question that the larger multi-product, systems and system integrators have an advantage in the polling," continued Wilson, "but many suppliers with a fairly narrow product line also bubble to the top. Their Quest for Excellence is unimpeded by size or scope. They have a particularly well-honed core competency coupled with good execution that cannot be denied. They are obviously known and respected for what they do so well. And they received high marks accordingly. Our readers have spoken."
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GTS Services, LLC, and Harmon AutoGlass, an auto glass repair and replacement company with over 400 retail locations nationwide, have announced an agreement under which GTS Services’ family of enterprise-wide software solutions will be installed throughout Harmon’s retail network.
GTS will provide its GlasPacLX and eXpress e-commerce solutions as well as additional related software and services, and will provide training for Harmon operating, IT, and business associates.
“We are fully committed to helping Harmon achieve its business goals,” said Fahmy Mechael, president of GTS Services. “This is more to us than simply a sale – we are moving forward together to assure successful implementation. To have one of the largest retail auto glass networks in the business choose GTS solutions to help them manage and grow their business is a significant vote of confidence in the products and services we offer, and confirmation of the leadership we have worked hard to achieve.”
“We were looking for a commercial software provider that offered the greatest current functionality and showed a commitment to future enhancements to achieve best practices in the industry,” said Bob Bishop, Harmon’s CFO/CIO. “And their offerings had to be compatible with Harmon’s overall IT strategy. What we found through our evaluation of offerings in the marketplace was that GTS has the most functionally rich software and their commitment was evident.”
Bishop said he expects to improve the efficiency of Harmon’s current operations, as well as prepare for future growth.
The agreement between GTS and Harmon includes content and functionality upgrades on a continuing basis.
Harmon AutoGlass has been in business for more than 50 years. The company employs NGA- and SmarTech-certified technicians who average more than 15 years of experience. Harmon uses only DOT-certified glass, adhesives that meet or exceed auto manufacturers' standards for safety and integrity, and offers a nationwide warranty. The company also owns Cherrydale Glass Shops in the greater Washington, D.C., area and Portland Glass in the Northeast.
GTS Services has provided software and services to the glass repair, replacement, and insurance auto glass claims industry since 1982, and has more than 3,000 customer locations in North America. GTS is a member of the National Glass Association and a Microsoft Certified Solution Provider.
CARSTAR, North America's largest collision repair network, has added 21 franchise locations in Florida. This addition raises the total number of U.S. stores to 210, representing a ten percent growth of domestic units. The signings are the culmination of an intensive evaluation process during which the company identified and recruited premium stores in key Florida cities over a six-week span in March and April of this year.
"Florida has an excellent mix of independent and dealership locations," said George Hansen, CARSTAR's CEO. "We are committed to growing our franchise base with the best of the best collision repair stores, and our new Florida franchises have solid track records of performing excellent repairs while delivering the highest level of customer care."
CARSTAR anticipates adding a total of 75 new franchises within the year. The extremely aggressive development schedule involves the entry into two new markets and further expansion in existing territories.
"With the addition of these 21 stores, we remain highly optimistic about our expansion plans, " Hansen added. "It is gratifying to see a demand for our product in this challenging business climate. Independent business owners are recognizing the need to aggregate with an organization with true deliverables to provide value to insurance companies and consumers while improving their own financial performance."
The company attributes its growth surge to understanding the driving factors in the Florida marketplace and repackaging their franchise offering, which includes profit management, insurance relationships, marketing and training.
In addition, the company's franchise development team, led by Beryl F. Carlew, has partnered with J. D. Hendler & Associates, to grow their network of repair facilities.
CARSTAR has more than 300 locations across the United States and Canada.
Kelly Auto Body, in Hamilton, Ontario, has been selected as an Award of Merit winner by a team of judges in Hamilton because of owner Larry Kelly's efforts in recovering over 80 percent of solvents used as well as cutting spray emission from painting by more than 45 percent.
"We have been able to show that a body shop can be good for the environment and save money," commented Kelly to the 250-member audience at Hamilton's Environmentalist of the Year Awards dinner.
Kelly was also honored because he actively shares his experiences and provides environmental education to other auto body and auto refinishing facility owners.
Kelly's exploits are featured in two videos that are used in Ontario's new mandatory Profit from Good Environmen-tal Management training program that shop owners and painter are required to successfully complete.
The shop has been an award winner in the past, selected by the Ontario Ministry of Environment for the Small Business award for pollution prevention, and Kelly has won an award from the Recycling Council of Ontario as well as the federal Healthy Canada award. BODYSHOP magazine has awarded him a plaque as has the City of Hamilton and the regional government.
The shop owner has been very active over the years in speaking across Ontario in workshops organized by the local collision repair trade association, and has been featured in a past issue of the local newspaper.
Colorado Republican Governor Bill Owens has signed Colorado House Bill 1253. The law prohibits insurance companies from requiring claimants to receive repair work from a particular repair facility.
Introduced by Rep. Joe Stengel, R-Littleton, the legislation:
- Encourages competition by prohibiting unfair and discriminatory insurance practices that impede fair and honest competition. The legislation prohibits an insurer from directly or indirectly requiring appraisals or repairs to motor vehicles be made by a specific repair facility.
- The use or failure to use a particular repair facility shall not result in a non-payment of claims by the insurer. The new law assures that an insurer cannot intimidate, coerce, threaten or induce by incentive a claimant to use a particular repair facility.
- An insurance company cannot use disincentives to discourage a claimant from using a particular repair facility of his or her choice.
- The insurance company or agent my not accept a referral fee or compensation for referring a claimant to a particular repair shop.
- The insurer cannot require the insured to travel unreasonable distances to obtain repairs or an estimate for work.
"The Automotive Service Association (ASA) supported this legislation and we are very pleased to see Governor Owens sign it. The new law will foster competition and free trade within Colorado's automotive aftermarket industry," said Bob Redding, ASA's Washington D.C. representative.
ANC Rental Corp., which filed for bankruptcy protection soon after the Sept. 11 attacks, has agreed to sell the Alamo and National rental car companies to Cerberus Capital Management LP, an investment fund, for $230 million, the Wall Street Journal reported.
Mitchell International has announced the release of its ABS Body Shop Management System, Version 7.3. This update has new interfaces to commonly used software plus other enhancements.
"We've improved the leading body shop management system by creating new interfaces to other accounting and estimating software and increasing the number and value of management reports," said Andrea Letzring, Mitchell's ABS product manager. "For example we have a new production summary report that gives a quick overview of where each vehicle is in the repair process."
ABS 7.3 provides new interfaces to Best Software’s BusinessWorks Gold, QuickBooks Pro, MAS 90, and Lawson.
Long-time ABS user Kevin Breen, owner of SouthWest Body Shop in Grand Rapids, Michigan, was one of the first to test ABS 7.3 and said, "This is an awesome program made even better," he said. "Being able to import truck repair estimates (using TruckEst) directly into ABS will save me a lot of time and money."
ADESA Orlando-Sanford is now equipped with a state-of-the-art reconditioning facility housed on the auction’s current location in Sanford, Fla. The new facility is able to handle both light and commercial vehicle reconditioning. “It’s a known fact that reconditioned vehicles will reap a higher profit for the dealer at auction,” said Don Davis, director of reconditioning operations for ADESA Corp. “We’ve implemented the latest reconditioning options into our shops to better serve customers nationally. When we can offer value-added services to our customers, it’s a winning opportunity.”
The fully automated reconditioning shop is housed in a 110 by 175 square-foot building with three lanes for detailing vehicles. Catering to the specific reconditioning needs of commercial vehicle dealers, the building also features a lane designed to recondition heavy-duty trucks and equipment as well as one of only three EPA-certified heavy-duty truck de-grease pads in the Orlando market. In addition to its weekly consignment sale, the auction hosts a monthly heavy-duty truck sale.
“The new facility gives us a chance to recondition vehicles that will raise retention levels for our customers,” said Jason Brinkley, general manager for ADESA Orlando-Sanford. “When we can provide convenient, cost-effective services under one roof for our customers, we know that they will be able to pass the savings onto their retail customers. We’re excited with that possibility.”
In other ADESA news, the latest index from ADESA on auction inventories for the automobile manufacturers and their captive finance companies at the company's 40 U.S. wholesale used vehicle auctions, which reflects a ratio of current inventory levels to those in place at ADESA auctions during the week ending June 1 of 2001, was down at May month-end by more than 75 points (38 percent) from the peak this year during the week ending January 24. Moreover, for the first time since its inception, the index is down slightly from year-ago levels, by one point (2 percent).
The decline in inventory levels reflects two major trends, in ADESA's analysis:
- Dealers are beginning to purchase vehicles at auction in modestly higher quantities to meet current or future retail market demands.
- Sellers are aware that, with high new-car incentives, used car prices are not likely to get better in the near term, and are unloading more vehicles at "Today's Dollar" rather than "No-Sale-ing" vehicles in hopes of better future prices.
ADESA operates 53 wholesale vehicle auctions and six heavy-duty commercial vehicle auctions in North America.
Ford Motor Company's Centennial celebration culminated on June 16, the actual anniversary date, with more than 225,000 people attending its five-day anniversary event. THE ROAD IS OURS 100th Anniversary Celebration, June 12-16, was held on the 152 acres surrounding the company's world headquarters in Michigan.
"Attendance at the event was far beyond our expectations, said Gary Nielsen, executive director, Centennial Operations, Ford Motor Company "We anticipated about 100,000 guests over the five days and we are thrilled by the huge turnout. Including today's visitors, our total numbers topped 225,000."
According to helicopter photo estimates, approximately 41,000 guests attended the Saturday night concert, Beyonce Knowles, Friends and Family, and 55,000 stayed for Sunday night's Toby Keith concert and fireworks display.
"On behalf of Ford Motor Company, please accept my personal thank you to our guests for sharing in our celebration," said Nielsen. "And a special thanks to the 3,200 owners of classic vehicles who brought their Ford cars and trucks for display at their own expense. These products from throughout our 100-year history helped bring the company's heritage to life and the display would not have been possible without them."
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