March/April 2000

AGRReports     breaking news

 

Third-Party Billing Administrator
for AIG has Financial Troubles

Cornerstone Claims Management of Phoenix, Ariz., a third party administrator (TPA) of New York City- based American Inter-national Group Inc. (AIG), has ceased payment on work contracted and completed by glass companies in the AIG network, according to AIG and glass industry sources.

In an example cited by Neal Golding of Keystone Auto Glass, of Toledo, Ohio, Cornerstone received a bill for services Keystone completed on November 11. However, AIG (not Corner-stone) ended up paying the bill on April 25—five months after service was completed. Golding went on to say that while AIG claims do not comprise a large portion of his shop revenue, a five-month wait for reimbursement on repairs done within 24 hours of initial contact is excessive. Glass shops have little recourse other than jamming the claim “down the insurance company’s throat” or waiting for that third party to pay the bill, Golding said.

In the instance cited above, AIG says payment was made to Cornerstone. Cornerstone faxed a confirmation of receipt to Keystone, but still did not pay the amount in question.

When asked for comment, one AIG spokesman declined, saying that in light of Cornerstone’s legal difficulties he could not make a statement. He did say that while third party billing is a common practice with large auto companies, and even medical insurance companies, it is unfortunate when things don’t work out and smaller independent companies suffer. Glass companies call insurers to say they have not received payment by the TPA, only to be told that the insurer paid the bill to the TPA and that the TPA has not completed the reimbursement process. While waiting months for payment, smaller mom-and-pop glass operations, in particular, miss the capital needed for day-to-day business operations.

Joe Motes, AIG National Manager for Material Damage, concurred in a later conversation. “There are a lot of good vendors out there, and when something like this happens it hurts us all.” Motes went on to say that three years ago, when AIG first started using Cornerstone as a TPA, all parties stood to benefit. AIG was looking for a company who could service claims quickly, particularly with the quick turn around necessary in glass claims, and in return Cornerstone would have an opportunity to grow with AIG. AIG was careful to introduce Cornerstone slowly by bringing them in on a regional basis rather than nationwide.

Unfortunately, it did not work out and customer service suffered often resulting in AIG receiving the complaint calls for non-payment by Corner-stone. Motes remarked on the frequently long periods of time that non-payment was allowed to stay on the books without action by the individual glass companies. When AIG learned of customer complaints, Motes said they took action by severing their relationship with Cornerstone. “This vendor has been removed and replaced by Harmon,” Motes said.

Attempts to obtain clarification of financial status from Cornerstone were unsuccessful at press time.

AIG ranks first in net profits among U.S.-based insurance organizations and 17th among all U.S. public corporations in net income for 1999. AIG offers both personal and business insurance covering automobiles, property, life and health in 40 states.

 

LITIGATION

Down, Not Out—Texas Glass Shops Try Again

After five years in Texas courts, nine Texas glass shops suing four former networks (Safelite, Harmon, USA Glas/ Globe Group and Windshields America) for violations of the Sherman AntiTrust and Clayton Acts were denied an appeal in February (see Jan-Feb AGRR, page 14). The defendants decided, however, to file a Petition for Rehearing, asking the judges to re-examine the evidence. This time, the defense cited specific antitrust issues relevant to the case and where the documents could be found. The Petition for Rehearing was denied the same day it was received, according to the case docket. As of press time, the appeal has been returned to U.S. District Court.

COMPANIES

Safelite Announces Bank Agreement; Says Business as Usual

Safelite of Columbus, Ohio, announced that it has entered into a waiver agreement with its senior bank lenders, which it says will enable the company to continue business as usual. By continuing access to bank credit and operating cash flow, Safelite says it is reasonably assured adequate liquidity to operate its business. The waiver agreement did not include payment terms, but rather dealt with profits vs. debt level.

“Our subcontractors may have some concerns regarding our ability to pay, but Safelite has the fastest network pay record among the networks (five days), and we would take money out of our corporate pockets if it was necessary to make our payments on time,” said Dee Uttermohlen, Safelite marketing manager.

“We are pleased to have taken this important step. This waiver provides both time and financial support necessary to assess our capital structure and implement changes that will substantially deleverage our balance sheet,” said CEO John Barlow.

Safelite also announced that it has begun talks with major stockholders about a possible capital structure change.

 

Visteon Strikes
Out on Its Own

Visteon Corporation of Dearborn, Mich., has announced that it will separate from Ford Motor Company and become independent this year. Visteon, which owns Carlite Glass, is a leading manufacturer of automotive components and systems. The company had sales in 1999 of $19.4 billion and is projected to rank as a Fortune 100 company upon its separation from Ford.

Paula Winkler Doman, Visteon vice president and general manager of glass systems, openly discussed the looming spin-off in February during Glass Week in Orlando. “We’re looking at achieving a greater level of independence,” she said.

In another statement, Peter J. Pestillo, Visteon chairman and CEO was quoted as saying, “The decision by Ford Motor Company is one that we have been prepared for since Visteon was launched. Visteon has a proven track record of consumer-driven systems solutions. We also have a dedicated leadership team ready to increase shareholder value as we become an independent company.”

 

Klein-Dickert Opens Customer Service Center

Klein-Dickert (KD) Auto Glass of Madison, Wis., has opened a new customer service center which brings its total number of auto glass service centers to ten. Richard Karbon, executive vice-president of KD Co. Inc., said the center will provide “greater convenience and faster mobile service to our KD Auto Glass customers in Northeastern Illinois.”

 

Coach Glass to Open Third Master Warehouse

Coach Glass of Eugene, Ore., opened its third master warehouse—this one in Elkhart, Ind.—on March 15. The new facility is stocked with a complete line of RV and bus windshields, earning it the title “master warehouse” and bringing Coach’s total inventory to over 25,000 windshields.

“Opening in Elkhart increases our service level to our Midwest and Northeast customers and allows us to build closer relationships with the RV manufacturing industry,” said Todd Lowary, sales and service manager.

 

FINANCIAL

Donnelley Tops
Off the Year with Record Earnings

Fourth-quarter financial results for the Donnelly Corp.’s 1999 calendar year included the highest ever for the October-December period with total sales of $213 million.

Net earnings for the fourth quarter were $8.1 million, or $.80 per share, which included a $2.9 million, $.29 per share, deferred gain from the sale of Donnelly’s stake in Lear Donnelly Overhead Systems. That gain resulted from the conclusion of negotiations on a specific piece of business that was not completed when the sale went forward in the third quarter. Without the one-time gain, net earnings for the period were $5.2 million, or $0.51 per share, which represents the company’s highest-ever fourth quarter earnings on operations.

PRICING

NAGS™ Releases New Canadian Pricing Standard

A long-awaited Canadian pricing update was released by the National Auto Glass Specifications (NAGS) of San Diego, in March. NAGS says it has searched for ways to synchronize the U.S. and Canadian data elements within the NAGS database for years, while maintaining the Canadian NAGS List Price™ as the industry standard. Feedback from industry groups such as the NAGS Canadian Advisory Board and Reference Standard Subcommittee was considered in making this decision. The pricing update was effective April 3.

Based on feedback from all market segments, NAGS decided to continue to provide a list price that is tied to published dealer pricing.

 

ASSOCIATIONS

IGA Introduces New Buying Program

The Ameriglass Buying Program is the latest launch from the Indepen-dent Glass Association (IGA). The program, developed in response to a 1999 survey, was based on findings that 85 percent of IGA members were in favor of a group-buying program. Combining purchase volume with efforts to improve market conditions, Ameriglass is designed to strengthen independents. Ameriglass suppliers also have an opportunity to increase market share and reduce the cost of doing business with independents.

The program provides the financial basis needed to develop insurance billing services as well as programs on national warranty, safety and quality training, installation and marketing.

 

CONSUMER SAFETY

Federal Government Inspects GM Wipers
and Ford Airbags

The National Highway Traffic Safety Administration (NHTSA) is investigating consumer complaints that windshield wipers are failing on some cars built by General Motors and Ford, according to the Associated Press (AP). More than 300 consumers have complained of windshield wiper failure on the Pontiac Grand Prix, Buick Century, Buick Regal and Oldsmobile Intrigue cars from 1997 and 1998. In addition, motorists have also complained about wiper failure on the 1993 Ford Taurus and Mercury Sable.

The AP also reports that NHTSA is studying the engineering of air bag systems in GM cars. The study is in response to 38 motorist complaints of injuries resulting from air bags bursting open on the Oldsmobile Cutlass Supreme, Buick Regal and Pontiac Grand Prix cars from 1995 and 1996 model years.

 

Fifth Wheel Trailer
Owners Asked to
Check for Glass

The California Highway Patrol (CHP) has asked Californians who own trailers with five wheels to make sure the trailers are fitted with safety glass. The CHP and California Recreational Vehicle Dealers Association have learned that some fifth wheel travel trailers were mistakenly shipped to California without the required safety glass.

The state allows passengers to ride in fifth wheel trailers provided they have safety glass and meet other conditions. Ernie Friesen, president of the California Recreational Vehicle Dealers Association, said California might have received some trailers without safety glass because other states do not require it.

 

KUDOS

AP Technoglass Earns
ISO 14001 Certification

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BSI Inc. vice president, Melvin Greer (center) presents the ISO 14001 Certificate of Registration to AP Technologies president Jay Strong (right) and AP’s Kentucky plant manager, Joe Hargrove (left) during the auto glass supplier’s recent celebration ceremonies.

Elizabethtown, Ky.’s, AP Tech-noglass Company says it is the United States’ first auto glass company, and only the 711th manufacturing company in the U.S., to receive ISO 14001 Certification.

“Our associates understand what it takes to be a successful automotive supplier, to compete successfully in a highly-competitive, global marketplace,” said AP Technoglass President, Jay Strong. “…Our associates also demonstrated their ‘beyond compliance’ dedication to the BSI examiner by recording total nonconformances of zero. That solid commitment continues to earn AP Technoglass a clear, sustainable quality advantage as we move forward.”

Joe Hargrove, AP plant manager was presented the certification by BSI Inc. vice president, Melvin Greer.

 

Schilke Named
President of SAE

Neil A. Schilke, general director of engineering and product planning for GM of Canada Ltd., has been named president of the Society of Automotive Engineers (SAE) International for 2001.

Elected by SAE’s 66-member annual nominating committee in early March, Schilke will serve as president-nominee until the general membership balloting concludes in late October. Schilke will take over as president of the nearly 80,000 member-SAE in March of 2001.

 

DCM Celebrates
15 Years of Service

DCM, a distributor of van conversion windows and motor home windshields to nationwide glass shops, said “Cheers!” on its 15-year anniversary, February 19.

Company innovations include boxing and crating designed for easy customer return shipping, and SOLUTIONS™ windows, created as replacements for obsolete van windows. The company is located in Elkhart, Ind.

 

Indianapolis Glass Depot:
A Cut Above Winner

The Indiana Glass Association (IGA) named the Indianapolis Glass Depot the 1999 recipient of the “A Cut Above” award. Glass Depot provides windshields and other automotive glass accessories to the auto glass replacement market.

“Glass Depot’s long-term commitment, dedication and ongoing support continue to make a difference for our association as well as the glass industry in general,” said Jim Swartzenruber, IGA president. “We have all benefited through Glass Depot’s involvement and contributions in this diverse and ever-changing industry.”

 

Web Marketing Association Honors Equalizer Industries

The Web Marketing Association has announced that Equalizer Industries Inc. of Round Rock, Texas, is the winner of a Standard of Excellence Award in the 1999 WebAward competition for corporate websites. More than 700 sites were entered from around the world during last year’s competition. Entries were judged based on design, innovation, content, interactivity, navigation, ease of use and use of technology.

“Winners of the 1999 WebAwards represent some of the best websites on the Internet today,” said William Rice, president of the Web Marketing Association.

 

OBITUARY

Herman Lazar Passes Away at 83

Herman Lazar, a career employee of Old Globe Glass and Mirror of Chicago, Ill., passed away on Thursday, May 4, 2000, at the age of 83. Lazar was born May 25, 1916. He is survived by his wife of 35 years, Gladys Lazar, who first met Herman when she worked for him many years ago. He is also survived by three children and five grandchildren. In lieu of flowers, contributions may be made to Hospice of the North Shore, Palliative Care, 2821 Central Street, Evanston, Ill. 60201.

 

ALLIANCES

CRL Forms Alliance
with SFC Sunroofs

wpeD.jpg (2328 bytes)Ascherl joins CRL.

New operations have recently been added to C.R. Laur-ence Co. Inc.’s (CRL) to-do-list thanks to a recent alliance with Stretch Forming Corp. (SFC). CRL has become the exclusive sales, marketing and distribution point of SFC’s sunroof operations, but SFC will continue manufacturing the product. In addition, CRL purchased SFC’s slider business, allowing them to introduce ‘stretch form’ bending to the slider industry.

“We now have the opportunity to present our customers with the highest quality sunroof products in the industry and an expanded slider line,” stated Donald E. Friese, president and CEO of CRL.

Friese added that Mario Beltran, CRL’s automotive products manager and former director of sales for SFC, will head up the new SFC sunroof division, and SFC’s director of sales and services, Peter Ascherl, will join CRL to work with Beltran.

 

Dow Automotive and Essex Commence
Merging Ventures

The OEM and aftermarket automotive industry have a broader product portfolio due to Dow Automotive’s recent union with Essex Specialty Products, including Essex ARG, forming the first industry-focused business unit. According to the companies, the integration will render an extensive product offering to include plastics, adhesives, sealants and more.

 

AGRR

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