Your Source for Up-To-Date News and Research on the Collision Repair Industry
click here to subscribe to the FREE INSIGHT Editor's Desk News Alert Email
SUBSCRIBERS-ONLY
Today's News
Industry Stocks
INSIGHT This Month
INSIGHT Archives
Survey Center
Letter to the Editor
Business Tools
Subscription Information
CSI Reporting
Financial Analysis
IRS Audit Guide
Management/
Technical Info
Market Watch Rates
INSIGHT Inside this month's issue...
Feedback
Letter to the Editor
This article originally appeared in the October 2007 Issue of INSIGHT
©2007 Collision Repair Industry INSIGHT All Rights Reserved
PPG to Sell Auto Glass Businesses to Platinum Equity for About $500 Million
EPA Releases Proposed Refinish Paint Regulation
Summit Software to Launch Digital Documentation System at NACE
Automechanika Canada to Premier This Month
LKQ Receives HSR Clearance for Keystone Acquisition and Announces Proposed Common Stock Offering
Allstate Donates $100,000 to Texas Advocacy Project to Prevent Domestic Violence
NABC Teams Up with Marine Corps Reserves for Next Leave Something Behind Campaign
CAPA Elects Technical Committee
Mitchell Glass Launches New GlassMate Website
Crawford & Company Acquires ClaimStar.net
SCRS State Affiliate Groups Meet to Discuss Local and National Efforts
INDUSTRY UPDATE
PPG Industries has signed an agreement with Platinum Equity of Beverly Hills, California, under which the company would divest its automotive original equipment manufacture (OEM) glass and automotive replacement glass (ARG) and services businesses. The total sales price for the businesses being divested is approximately $500 million before minority interest. The transaction is expected to result in a slight book gain upon closing and charges to income totaling $0.20 to $0.25 per share to be recorded over the next few quarters.
Under the terms of the agreement, an affiliate of Platinum Equity will acquire the businesses' assets. Completion of the transaction is expected in the fourth quarter and is subject to customary closing conditions, including receipt of required regulatory approvals.
"This transaction is a significant milestone in PPG's continued transformation to focus on coatings and specialty products, and it will significantly reduce PPG's exposure to the U.S. automotive market," said Charles E. Bunch, PPG chairman and chief executive officer. "This sale will also provide us with more resources to pursue profitable growth in coatings, aerospace, optical products and opportunities in Asia."
Bunch added that the divestiture puts the auto glass businesses in a better position to compete by providing a strong platform from which they can maximize profitable growth.
"Moving ahead," Bunch noted, "we will continue the strategic review our portfolio of businesses with the ongoing objectives of maximizing profitable growth, cash generation, and shareholder value."
The automotive OEM glass business unit supplies windshields, rear and side windows, sunroofs and assemblies for auto and truck manufacturers. The ARG and services business unit supplies and distributes replacement automotive glass products for use in the aftermarket. It also provides insurance claim services through its LYNX Services subsidiary, glass management software through its GTS subsidiary, and e-business solutions through its GLAXIS subsidiary.
The automotive glass businesses manufacture and fabricate automotive glass products in nine North American plants. In addition, there are nine satellite parts assembly plants, and there are LYNX Services claims management centers in Fort Myers, Fla., and Paducah, Ky. Combined, the businesses employ approximately 4,400 people.
o
The U.S. Environmental Protection Agency (EPA) has released a new proposed auto refinishing regulation. This regulation proposes national emission standards for area sources engaged in paint stripping and various surface coating operations.
Specifically included in the regulation are stricter requirements regarding toxic standards for smaller emitting sources in three industry sectors: paint stripping operations that use methylene chloride (MeCl)-containing paint stripping formulation, surface coating that involves paints containing metal HAP compounds, and auto body refinishing.
The new rule would require existing area sources affected by the rule to implement these standards. Area sources are defined as those that have the potential to emit less than 10 tons per year of a single toxic air pollutant or less than 25 tons per year of any combination of toxic air pollutants. Through compliance, these practices are designed to reduce overall toxic material consumption, which generally result in savings for the facility involved.
This proposed regulation is a result of the Clean Air Act of 1990, which requires the U.S. EPA to identify sources that emit one or more of the 188 listed toxic air pollutants. The air toxics involved in these source categories include MeCl, and metal compounds containing cadmium, chromium, lead, manganese and nickel.
Bob Redding, the Automotive Service Association’s (ASA) Washington, D.C., representative said: “ASA leaders are reviewing the regulation and will submit comments within the formal comment period.”
The full text of the proposed rule and the fact sheet are posted at ASA’s legislative website: www.TakingTheHill.com.
Summit Software Solutions, Inc. will officially launch the collision industry’s first Digital Documentation System(TM) at this year’s NACE show, scheduled for November in Las Vegas. According to Summit Software, this new solution, which is available as part of Summit’s Digital Performance System(TM), will help collision repairers dramatically reduce administrative costs and improve repair and claims process documentation, while automating and improving internal and external communications.
Frank Terlep, Summit president and co-founder stated, “Ever since DRP programs were launched repairers have had to manage an ever-growing amount of data and information, assume more of the process responsibility, more of the liability, and, as a result of all this, are being overwhelmed by paperwork, documentation, forms, communications, and more. We believe the Digital Documentation System is going to radically change and dramatically improve the way collision repairers manage information and documentation in their businesses by allowing them to move from a costly paper based system to a completely digital file, documentation, and communications system.”
Terlep continued, “Shops that have implemented the Digital Documentation System have reduced or eliminated expenses associated with printing, copying, and filing. We estimate that it costs repairers more the $50 to create, manage, distribute, and then file paper based documents for every vehicle they repair. In a shop with $2 million in yearly sales, this equates to more than $43,000 per year in unnecessary administrative costs. These are expenses that, when eliminated, go straight to a repairers bottom line.”
Summit Software Solutions claims that the Digital Documentation System reduces or eliminates unnecessary incoming and outgoing telephone calls through an automated communications system, while improving customer approvals, appraiser and insurer negotiations, and other verbal-based documentation by storing audio files recorded from telephone calls or office conversations.
The Digital Documentation System also includes an integrated digital video recording and storage management system that, when combined with DamageCam(TM), an eye-level portable video camera, will dramatically improve a repairer’s vehicle check-in process, vehicle damage and repair documentation, and allow collision repairers to store and share the videos of each vehicle with the customer and insurance company.”
Summit Software Solutions, Inc. is an information technology provider that delivers information and communication management solutions to auto and truck collision repair businesses and repair networks.
Anticipation is building for Automechanika Canada, to be held September 26 – 28, 2007 at the International Centre in Toronto, Ontario. With more than 200 exhibitors from 16 countries across the globe, Automechanika Canada expects thousands of qualified buyers to be in attendance for the upcoming event.
In addition to the wide range of exhibitors and products to be displayed, Automechanika Canada will provide attendees with an informative Seminar and Workshop Program and an exciting lineup of onsite events. Together with association partners and strong industry support, Automechanika Canada will be the only show in the Canadian market dedicated to all facets of the automotive aftermarket.
With international participation from 16 countries, Automechanika Canada will provide a platform for international suppliers to enter the Canadian marketplace and grow existing business in Canada. Manufacturers will be displaying products from around the world with representation from Brazil, China, Germany, India, Iran, Israel, Italy, Malaysia, Mexico, Portugal, South Korea, Taiwan, Turkey, the United Kingdom, and the USA. Automechanika Canada is bringing an international mix of new product lines and innovations to the Canadian marketplace.
Thousands of service and repair owners, technicians, retailers, distributors, installers, jobbers, media, and industry professionals are anticipated to attend this year’s event. Pre-registered companies include large retailers and distributors such as Canadian Tire, NAPA and UAP, Inc., Carquest Canada, Midas Canada Inc., Bestbuy Distributors, Vast Auto Distribution, and more.
In addition to sourcing the latest products, attendees will be provided with engaging educational and networking opportunities to enhance their business. Special events and feature highlights will inform and entertain.
Investing in the future of the industry, Automechanika Canada and the National Automotive Trades Association (NATA) will present Career Day on Friday, September 28th. Students and apprentices will be welcomed at the event to connect with colleges, agencies, and apprentice search firms and participate in informative education and technical training.
NASCAR’s Hall of Fame Historian, Buz McKim will be the feature guest speaker on Career Day. Author of the “NASCAR Vault” and a former racer and automotive artist, he has been involved with NASCAR most of his life. With racing cars, speakers and special presentations, employer interview areas and hourly airbag detonations, Career Day is expected to be a remarkable opportunity for young people to advance their careers in the automotive aftermarket.
Further information and a full seminar program schedulecan be found at: www.AutomechanikaCanada.ca.
LKQ Corporation has received clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR), in connection with its pending acquisition of Keystone Automotive Industries, Inc. The waiting period under HSR expired at 11:59 p.m. (Eastern Time) on September 4, 2007. Expiration of the HSR waiting period was a condition to completion of the acquisition.
The consummation of the acquisition remains subject to other customary conditions, including approval by Keystone's shareholders. LKQ Corporation continues to expect that the Keystone acquisition will close early in the fourth calendar quarter of 2007, as previously announced.
LKQ Corporation has also made a public offering of 10,000,000 shares of its common stock. The common stock to be offered will consist of 8,500,000 shares to be issued and sold by LKQ and 1,500,000 shares to be sold by certain selling stockholders of LKQ.
LKQ will not receive any of the proceeds from the sale of shares by the selling stockholders. LKQ expects to grant the underwriters an option to purchase up to 1,500,000 additional shares of common stock solely to cover over-allotments, if any.
LKQ's proceeds from the offering will be used to repay existing indebtedness and to fund a portion of the purchase price for the Keystone acquisition. LKQ previously received a $1.09 billion senior secured financing commitment from Deutsche Bank and Lehman Brothers Inc., subject to customary conditions, to fund the Keystone acquisition and to refinance existing debt. LKQ expects to reduce its financing from Deutsche Bank and Lehman Brothers Inc. to approximately $850 million.
The offering is being made through an underwriting group led by Robert W. Baird & Co., Deutsche Bank Securities Inc., BB&T Capital Markets, and Raymond James.
The common stock will be offered pursuant to an effective registration statement filed with the Securities and Exchange Commission.
The Texas Advocacy Project serves as a last resort for women trying to escape the dangerous daily dilemma of domestic violence -- helping more than 8,000 people across the state. The Project has closed more than 6,000 legal cases, often taking on precedent-setting issues that are setting the tone in survivors' legal battles for years to come.
A $100,000 grant awarded in September from The Allstate Foundation will enable the Project to expand its reach into areas of the state that are in greater need of precedent-setting legal representation.
The Allstate Texas Field Vice President presented the Texas Advocacy Project with a $100,000 check during the Second Annual Austin Professional Women's Luncheon. This marks the largest grant the Project has received year-to-date and is the second largest private foundation contribution the organization has been given in its 25 year history.
"Allstate is a natural partner for Texas Advocacy Project," said Andrea Sloan, the Project's Executive Director. "We are both in the business of providing safety, peace of mind and security. Allstate's investment in the Project will help us do just that, over the long term, for thousands of Texans in need."
The Project's roots originated with its desire to provide a legal hotline for victims in need and it began with only three volunteer lawyers. Today, that hotline serves more than 10,000 Texans each year and the Project provides a full range of legal services to help survivors. While the Project works closely with domestic violence shelters, those facilities only house two percent of all victims, creating a need to extend the group's reach. The urgency to build a stronger support system for victims in rural parts of the state and for Spanish speaking residents is one that the group has long recognized and can now undertake with a helping hand from The Allstate Foundation.
"The Allstate Foundation is taking a stand against domestic violence," said Richard Crist, Allstate Texas Field Vice President. "This grant is an extension of the Allstate Good Hands Promise to help all members of society feel better protected today and better prepared for the future. Together, we are empowering survivors with the opportunity to enjoy economic autonomy and personal freedom."
Texas Advocacy Project is a statewide non-profit organization providing legal solutions to victims of domestic violence and sexual assault. For more about its programs visit the website at http://www.women-law.org.
The Allstate Corporation is the nation's largest publicly held personal lines insurer.
o
For the second installment of its "Leave Something Behind" campaign in 2007, the National Auto Body Council (NABC) is teaming up with the United States Marine Corps Reserves in support of its renowned Toys for Tots program.
The mission of the Toys for Tots Foundation is to collect new, unwrapped toys during October, November and Decem-ber each year, and distribute them as Christmas gifts to children in local communities. Its goals, scope and timing fall squarely in line with "Leave Something Behind," which strives to exhibit - through a specific, charitable activity - the caring sprit of the collision industry in a locality hosting one of its events.
The spotlighted community this time is Las Vegas, Nevada, home to NACE 2007 from October 31 through November 3. NABC will be working with the Marine Reservists in that city to deliver hope to needy youngsters through the gift of shiny new toys at Christmas.
To raise funds for the donated toys and provide a mechanism through which individual collision industry professionals can contribute, NABC will be selling Christmas ornaments at NACE-related events this year. They may be purchased at the NABC and Society of Collision Repair Specialists (SCRS) board meetings as well as Collision Industry Conference (CIC). In addition, the ornaments will be made available at the NABC booth. A cash contribution not specifically related to an ornament purchase can also be made at that time for the toys.
The idea to pair up with Toys for Tots came from Charles Dillard, chairman of the Leave Something Behind committee. "I've always had a soft spot for children. My volunteer work with our local Children's Hospital has helped make me that way, and that led me to research charities that made young people their focus," Dillard explained. "Toys for Tots has a solid reputation and is very active in the Las Vegas area. The Leave Something Behind committee and NABC felt confident they would be a good partner and we moved forward with the program."
The tree decorations are being sold for $20 each, $15 of which will go toward the purchasing of toys. NABC hopes to raise a total of $3,750 in all. The gifts it purchases will be presented to the Toys for Tots Foundation at a special NACE celebration.
"As a former Sergeant in the Marine Corps Reserve myself, I am especially pleased that Charles and the committee has decided to work with Toys for Tots," commented NABC Executive Director Chuck Sulkala. "It's a great way to build on the spirit of giving that lies at the core of the Leave Something Behind program. There are few things as wondrous as seeing a child's face light up in surprise when presented an unexpected Christmas gift. This NACE is certain to be special. Semper Fi."
Although this installment of the Leave Something Behind program is being marketed exclusively to those who attend the NACE events in Las Vegas, those not attending who wish to contribute may contact NABC by phone or e-mail. For additional information on the Toys for Tots partnership, contact Charles Dillard at (503) 641-5634 or e-mail him at charlesd@precisionfirst.com.
The Certified Automotive Parts Association (CAPA) has announced the election of Mike Chiu of Pro Fortune, Jim Cochran of Action Crash Parts, Tom Holmes of KSI, David McCreight of Collision Resources, Inc, Mike Schoonover of Schoonover Bodyworks, Inc, and Jeanne Silver of CARSTAR to CAPA’s Technical Committee.
The CAPA Technical Com-mittee is comprised of a cross-section of industries that are relevant to aftermarket parts, including manufacturers, distributors, insurers, collision repairers, consumer and general interest groups. This body develops, reviews, and maintains the CAPA Quality Standards in order to set the quality requirements that CAPA manufacturers must achieve in order to certify their parts.
“CAPA is fortunate to have such a broad range of industry expertise represented on our Technical Committee,” stated Jack Gillis, Executive Director of the non-profit association. “Their insight into issues facing the aftermarket parts industry and guidance with the program are extremely important to CAPA’s continuing success.”
CAPA’s Technical Committee members include:
- Bill Brower, Liberty Mutual Insurance
- Alan Bush, USAA
- Jeff Chen, T.Y.G. Products
- Ed Eaton, Keystone
- Rod Enlow, RENLOW Auto Technical Consulting, Inc.
- Donald Feeley, Jr., City Body & Frame
- Don Hill, State Farm Mutual Insurance Co.
- Charlie Hogarty, Superior Collision Parts
- Mel Hunke, CARS
- Jackson Kwok, Genera/TYC Brother
- Nick Scheid, API/Cornerstone
- Bob Smith, Storm Appraisal & Management Service, Inc.
- Ben Steinman, Ben's Auto Body (Chairman)
- Mark Woirol, Allstate (Vice-Chair).
Mitchell Glass, a division of Mitchell International, has released GlassMate(R) Version 5.5 to the Auto Glass Repair and Replacement (AGRR) industry. GlassMate, a leading point-of-sale system for the AGRR industry, will allow direct order placements of auto glass parts from Pilkington, a leading automotive glass manufacturer.
Along with the new release of GlassMate, Mitchell Glass launched its new website tailored to the needs of the AGRR user community. The new website,http://Glass.Mitchell.com, provides a destination offering comprehensive information and support about Mitchell Glass products.
“This release of GlassMate v5.5 offers our customers another leap forward in streamlining glass repairs and enhanced productivity. With integrated parts ordering through GLAXIS(TM), and through Pilkington, retailers can quote, invoice, order parts, and schedule without ever leaving the GlassMate software environment," said James Patterson, Director of Glass Product Management. “We are excited about this new GlassMate release and will continue to add robust functionality and integration with other glass vendors in upcoming releases.”
Crawford & Company has acquired the assets of BCK, Inc., d/b/a ClaimStar.net, which specializes in producing distance learning and providing Learning Management Systems (LMS) hosting services.
ClaimStar.net has provided the property and casualty industry with online training and technical references through their relationship with the Property Loss Research Bureau (PLRB). Crawford and PLRB have reached agreement on the acquisition, and ClaimStar.net has been rebranded Crawford Online(SM).
"ClaimStar.net has had a long relationship with PLRB, and we are pleased that both Crawford clients and PLRB members will continue to benefit from such innovative learning tools," said Bill Beach, senior vice president of Training & Development for Crawford.
Crawford Online will be offered as a stand-alone Internet learning solution, as well as a blended learning solution, incorporating classroom and online learning. It also will provide online continuing education units for the industry.
Based in Atlanta, Georgia, Crawford & Company is the world's largest independent provider of claims management solutions to insurance companies from more than 700 offices in 63 countries.
Steering of work, suppressed labor rates, and abuse of the estimating databases and systems were chosen as three key issues that Society of Collision Repair Specialists (SCRS) state affiliate associations would most like the national group to help them address.
A fourth issue, consumer education, was seen as a key component of any effort to address the other issues, according to those representing about 16 SCRS state affiliates at a gathering in the Chicago area in mid-September.
“I don’t think we’ll ever get done with all of these issues, ever,” Dan Risley, executive director of SCRS told the representatives of the state associations following the group’s review of about a dozen issues in all. “But I think we can move the needle. The bottom line is: Something needs to change. We all hear from our members: ‘Someone needs to do something,’ That’s why we’re here. We want to do something to push for and facilitate change, and we wanted you to tell us what the one or two or three things are that your members are most concerned about and that we should begin addressing immediately.”
Risley said the input and ideas gathered at the meeting will be brought to the SCRS board at its next meeting this fall to determine how to best move forward.
Unlike similar SCRS events in past years which generally resulted in a laundry list of issues or resolutions, this year’s affiliate gathering focused in on fewer but key issues, assigning each to a team of attendees who brainstormed on potential ways to address that issue.
Some of the suggestions offered for the various issues included:
- Developing “model legislation” that could be introduced at the state level by affiliate groups.
- Promoting shop use of the Database Enhancement Gateway, a website being developed by three national associations to make it easier for the industry to submit concerns about the estimating databases and to track the providers’ responses.
- Developing training or tools to assist shops in establishing appropriate, sustainable labor rates for their businesses.
- Working with consumer advocacy groups to pressure regulators and lawmakers for needed changes or enforcement of existing regulations.
- Developing brochures, advertising, internet video or other consumer education materials, perhaps backed by automakers and other credible sources of information, regarding safe and complete repairs, consumer rights, and industry trends of concern.
The day-long event also gave the SCRS national board and its affiliate groups a chance to inform each other about recent activities and accomplishments.
Risley, for example, said that in addition to helping create the Database Enhancement Gateway, SCRS is taking an active role in the Collision Industry Conference (CIC) Database Taskforce. The taskforce is addressing such issues as disclosure by the information providers of large-scale changes to the estimating databases, and indication in the databases when a vehicle includes “exotic” metals.
Risley cited one example of the taskforce’s work when an SCRS member reported that labor times for a pick-up bedside had dropped by a third in one database. The taskforce contacted the database provider, which acknowledged the mistake and made the correction.
Risley also said he and SCRS Chairman Farzam Afshar recently made a presentation before the National Association of Insurance Commissioners.
“We got in front of a group of state insurance commissioners and started outlining some of the issues we’ve talked about today, and you could not believe the eyes that were popping our of their heads in shock and disbelief,” Risley said. “When we were done with our presentation, we had six or seven of them come up and say, ‘We want to spend more time with you; we want to understand the issue more.’ After that meeting, I came to realize that is a venue we should have a stronger presence in, because there are a lot of decision-makers there. And we opened some eyes.”
Also at the event, Afshar offered an overview of what has happened to the collision repair industry in the United Kingdom, where he said the number of shops has dropped from about 19,000 to about 4,000 over the past decade, and where average net profits are two percent or less.
He said in order to prevent a similar situation in the United States, the industry needs to avoid some of the mistakes made in the U.K., including ineffective associations, and shop owners’ failure to understand their businesses’ numbers.
Afshar and Risley said after the second annual affiliate event that surveys of attendees were generally very positive, and that the national association will continue to hold similar gatherings for its 34 state and regional affiliates.
Feedback
Have a comment about this article? Send Email to Editor, INSIGHT's Editor
©2007 Collision Repair Industry INSIGHT
All Rights Reserved
FEATURED
LINKS:
INSIGHT Supports the NABC!
Do You?