September/October  2000

AGRReports     breaking news

 

FINANCIAL

Safelite Auto Glass Completes Financial Restructuring

Safelite Glass Corp. of Columbus, Ohio, recently announced that the U.S. Bankruptcy judge in Wilmington, Del., has approved its financial restructuring plan and that it has emerged from Chapter 11 bankruptcy protection.

According to the company, business continued as usual during the court-protected restructuring, and the company exceeded expected profit levels for the first quarter ended June 30, 2000. “We are extremely gratified to have received strong support from our associates, our clients and our vendors during this challenging period,” said John Barlow, Safelite president and chief executive officer. “That we were able to maintain customer satisfaction ratings of better than 98 percent is a testament to the dedication of our associates.”

According to a news release prepared by the company, its financial restructuring includes the conversion of $317 million on long term debt to equity. The converted debt was held by the company’s banks and bondholders. The company says more than 95 percent of these creditors supported the restructuring plan.

With the plan approved, Safelite says it hopes to further expand its auto glass business. According to the company, the conversion of one half of the company’s long-term debt to equity has dramatically improved its financial position. In addition, Safelite says it expects interest and principal payments on the long term debt to decrease significantly and cash flow to also increase.

The company also announced a new board of directors (see page 44).

 

Advancements

Solutia Markets EPG

St. Louis based Solutia Inc. is marketing its Enhanced Protective Glass (EPG) as a deterrent to smash-and-grab thieves. The new EPG is an option on the new Volvo S60 sedan, and is made with polyvinyl butyral.

According to Solutia, EPG provides a package of protection benefits for buses and trucks.

According to the company, EPG deters smash-and-grab thefts by increasing the amount of time it takes to break through a vehicle window. Although the glass will crack after repeated impacts, it maintains its adherence to its tough plastic interlayer, providing a barrier, says Solutia.

 

Donnelly Makes Cross Country Trek with New Mirror Program

The Donnelly Corp. of Holland, Mich., recently took its largest order ever for complete outside mirrors, when it agreed to supply mirrors for an unnamed North American light truck program. The program is expected to generate annual sales of about $32 million per year over its lifespan, which will begin in early 2003. From Newaygo, Mich., Donnelly will manufacture the mirrors which, depending on the trim level, will include electrochromic dimming, supplemental turn signals, heat and memory, according to the company.

“This is an important step for Donnelly as the world’s largest automotive mirror supplier,” said Dwane Baumgardner, chairman and chief executive officer. “The size, scope and technological complexity of this program will help us expand our leadership role for complete outside mirrors that offer best-in-class design, price and advanced technology.”

Complete outside mirrors are ready-for-installation units that include the mirror glass, mirror housing, mounting hardware and many added features such as the actuators and wiring harnesses for power adjustment, according to Donnelly.

 

Government Encourages Installation of Advanced Windshields

The federal government is encouraging the auto glass industry to increase the amount of technology provided on vehicles. While much of this windshield technology is already available on high-end cars, the government hopes its use might expand to at least 10 percent of all passenger vehicles and 25 percent of commercial vehicles sold in the United States, according to a report by the Associated Press (AP).

Some of the technology it hopes might increase in use is General Motors Corp.’s night vision system. The system, which is available on DeVille Cadillacs, utilizes infrared technology to detect people or animals in dark areas or behind the glare of an oncoming car’s headlights. Any detected images are then displayed in black and white on a small screen projected onto the windshield.

Similarly, the Intelligent Driver Support system, which Honda is working to develop, will help the driver see the road through a tiny camera on the windshield. Using a computer, the system will detect the lines on the highway surface and will then nudge the car’s steering wheel in the appropriate direction. Within ten years, the U.S. Department of Transportation hopes to increase the use of these safety devices within windshields, sidelites and backlites, according to the AP.

 

IPS Will Supply AGI Systems to European Company

In a deal worth more than $560,000, Image Processing Systems Inc. (IPS) will supply two automated glass inspection (AGI) 9800 auto glass systems to one of the world’s largest auto glass manufacturers. According to IPS, the systems will be used for inspection in one of the company’s European plants to inspect automotive glass. IPS’s turnkey AGI 9800 auto glass systems provide fully automated, online inspection of windshields, sidelites, backlites and sunroofs during various stages of the manufacturing process.

In addition to detecting and measuring defects such as scratches, pits, bubbles, stones and inclusions, these systems can also provide hole, paint band and trade logo inspections. According to the company, the systems are designed to incorporate specialized lasers for enhanced edge inspection and bright field
illumination.

In addition, IPS says that by replacing human inspection with its online, computer-based, e-Vision technology, customers will reduce their part-per-million (PPM) defect rates, while improving yields and speeding up the production process.

Insurance

UAGCA Fights Nine-Point Agreement

The United Auto Glass & Collision Association of British Columbia (UAGCA) is working to inform its members, along with the public, of the amended “Nine-Point Agreement,” signed by the Insurance Corp. of BC (ICBC) and the Collision Repair Division of the Automotive Retailers Association (ARA). According to the document, the ICBC will channel collision repairs directly to a few selected shops to ensure that those chosen few can operate efficiently 24 hours a day, seven days a week. According to the association, the ARA and ICBC use the requirement of “accreditation” to regulate such programs and can thus eliminate competition for a select number of shops.

The UAGCA says it feels that the ARA has negotiated this amendment to help itself and to direct all business to its own accredited shops; in turn, according to the UAGCA, all other collision shops would be put out of business. The 24-hour, seven-day-a-week shops would need employees and customers, and members of the UAGCA fear losing all its business and staffs to these select few shops.

The Nine-Point Agreement outlines numerous aspects of the collision repair industry, including compensation rates for collision repair shops, both accredited and non-accredited. Likewise, the agreement explicitly outlines the ICBC’s ability to direct customers seeking assistance to its own accredited “c.a.r.” shops. The agreement states, “…the Corporation will develop an Express Repair Service Program that allows telephone claims to direct our customers to qualified Express Repair Service c.a.r. shops.” In addition, the agreement sets the following qualifications for participating in this program: accredited car shop in good standing, alternative transportation program supplier, meet basic technology requirements enabling the use of Internet-based business systems and a contractual arrangement with ICBC specific to Express Repair Terms and Conditions. In the seventh of the nine points, the document between the ICBC and the ARA agrees “to direct the repair of vehicles from our Centralized Estimating facility to c.a.r. shops.”

The UAGCA, led by chair of the collision division, Doug Parmenter, hopes to end this program and ward off any others that might end competition in Canada’s auto glass repair and replacement and collision repair industry. “The UAGCA is opposed to any program or initiative that does not support free enterprise, states a release from the UAGCA.

 

Consumers Ask for Deductible Reductions

eAutoclaims.com™, a Palm Harbor, Fla.-based company which offers Internet-based auto glass claim services, has released the results of a nationwide survey of auto collision repair shops. The survey reveals consumers request that shops absorb insurance deductibles more than 21 percent of the time.

More than 500 shops were sent eSurveys, and all questionnaires were tabulated online, according to eAutoclaims.com.

“Unbelievably, 17 percent of those collision repair shops surveyed stated that they were asked to absorb the consumer’s deductible more than 40 percent of the time,” said Eric Seidel, eAutoclaims.com president and chief executive officer. “The end result is inflated physical damage losses for insurance companies and higher insurance premiums for all consumers.”

In addition to these changes at eAutoclaims.com, the company is working to integrate its services with Premier Express Claims, with whom it merged in 1998. Previously, one of Premier Express Claims principals owned several retail auto glass stores, but sold them when Premier Express claims was begun in 1998.

eAutoclaims.com says that it has 4,000-5,000 shops in its network and thus gives its customers a choice in where to take their vehicles for auto glass repair or replacement. And, according to eAutoclaims.com, it always asks the customer first if he or she has an auto glass shop in mind. If the customer selects a shop not in the current network, the company will call that shop and ask if they would like to join the network. If the shop does not wish to join, eAutoclaims.com tells the customer he can still have his windshield fixed there, but at a higher cost.

Currently, it is testing more than 4,100 auto glass shops, which previously worked with Premier Express Claims. Each shop must meet certain requirements provided by the insurance companies, including status as a full-time business, to have been in business at least one year, preferably, and to be able to compete within the market.

Financial

Diamond Triumph Announces Increase in Net Sales

Diamond Triumph Auto Glass Inc. of Kingston, Pa., announced that its net sales for the six months ending June 30, 2000 increased $9.0 million, or 10.6 percent to $93.8 million, compared to $84.8 million, for the period last year.

In addition, net sales for the second quarter also ending June 30, 2000, increased 13.6 percent to $49.2 million compared to $43.3 million for the 1999 second quarter.

The company says its expenses before interest, taxes and amortization (EBITA) for the first six months of 2000 increased by $1.4 million, or 13.0 percent, to $12.2 million from $10.8 million for the first six months of 1999. Likewise, its EBITA for the second quarter of 2000 increased $1.3 million, 24.1 percent, to $6.7 million from $5.4 million for the second quarter of 1999.

“We are very pleased with our operating results for the first half of 2000,” said president Norm Harris. “We experienced a record sales volume for the six months ending June 30, 2000.”

In addition, the company says that as of the first half of 2000, the company has repaid $6 million of its $7.5 million outstanding bank debt and has continued to repay additional bank debt subsequent to June 30, 2000.

Companies

Carlex Glass Company Gains New Facility and New Capabilities

Carlex Glass Company of Vonore, Tenn., has a new automotive antenna development facility. Construction was completed in May on the facility, which has the capability of testing and developing antennae that are manufactured as part of the windshields for use in automobile applications such as AM/FM radios, GPS units, cell phones and security systems.

The company hopes to keep up with antenna technology through the facility by creating antennas on glass, rather than the traditional whip antennas. The new Carlex facility is a duplicate of one owned by the company’s parent company, Central Glass Company, located in Japan.

 

PPG Aims High with New Aerospace Products Division

Pittsburgh’s PPG Industries recently combined its aircraft transparency and aeropsace coatings and sealants businesses into a new unit, aerospace products.

“We believe a unified strategy is the best method for creating greater value for the commercial, military and general aviation industries we serve,” said Charles E. Bunch, executive vice president for coatings. Dennis Kovalsky, former vice president of aerospace coatings and sealants, will lead the new venture, based in Glendale, Calif., as vice president of aerospace products.

 

Minneapolis AGR&R Company Keeps Growing

Minneapolis-based ABRA Auto Body & Glass, a damaged vehicle repair company, has acquired another repair center in West Allis, Wis., previously owned by Cara Collision and Glass. The company hopes the acquisition will help it to better serve Wisconsin by expanding its efforts throughout the state.

“ABRA has been dedicated to offering the best in customer service in the Wisconsin market since we entered it in 1994,” said Rollie Benjamin, president and CEO. “Adding another repair center in metro Milwaukee will allow our customers to receive a high-quality, timely repair at a location convenient to their home or office.”

The company currently has repair centers in Brookfield, Kenosha, Oconomowoc, and franchise locations in Eau Claire and on North 76th Street in Milwaukee. n

Acquisitions

PPG Industries Acquires GTS

Pittsburgh’s PPG Industries recently announced that it plans to acquire GlasPac Total Solutions (GTS) of Portland, Ore., in an effort it increase its aftermarket service. It says that GTS, which will be renamed GTS Services LLC by PPG, has installed its business management software in more than 3,200 glass installation and replacement shops in the United States and Canada, according to a news release issued by PPG. GTS Services will operate as a separate company, providing computer software, hardware, support and electronic exchange services, the news release explained.

Utilizing GTS’ expertise, PPG hopes to increase its own customers’ satisfaction by giving them access to the business management tool. “Offering e-business services will help installers capitalize on new technology without making huge capital investments,” said Dan Czekalski, newly appointed vice president of sales and marketing for GTS Services.

LYNX general manager Jim Latch agreed. “GTS Services will build upon and expand the most successful business management system in this industry,” he said. (See related story page 20.)

AGRR

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