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July/August  2003

Cover pie 
Invasion of the Body Shops
A Whole New Group Wants a Piece of the Pie

by Leslie Shaver

In 1984, when the original owners of ABRA Auto Body in Fridley, Minn., opened their company, it was doubtful that glass replacement was one of the primary things on their minds. But as the body shop grew, the company’s executives began to notice that they were paying out more and more money to glass shops who came in to replace the glass on cars in their shop. So, in 1989, ABRA began doing its own auto glass work. 

“We began to see an opportunity to do glass replacement ourselves,” said Dave Doherty, director of auto glass operations for the company. “First, we just serviced the collision vehicles in our shops. Then, we began to service the retail and insured glass customer.”

In its Midwestern markets, it has noticed a rise of other body shops entering the glass business. A number of other shop owners and suppliers from around the country, specifically in the Midwest, have also noticed this trend. They say body shops, squeezed by the insurance industry much the same way the auto glass industry is, are looking to their industry for extra profit.

“We are seeing body shops get into auto glass in some of the metro areas,” said Daryl Anderson, owner of Dakotaland Auto Glass, a supplier and retailer in Lake Norden, S.D. “They are just looking at it as a profit center.”

Are They On Their Way?
Yet, for every shop owner who claimed that auto body shops were starting to enter into his market, there was at least another one who said they noticed no influx of their auto body brethren. And, without any solid statistics from the auto body or glass industries, it is hard to tell exactly how many body shops are jumping into the glass business. AGRR contacted two big auto body shop organizations—the Inter-Industry Conference on Auto Collision Repair (I-CAR) and Automotive Service Association (ASA), and one major auto glass association—the Independent Glass Association (IGA), but none of these organizations had solid statistics for the number of body shops entering the glass business. 
Without any empirical evidence to show whether body shops are entering the industry, the only other way to determine the validity of this trend is by talking with suppliers and shops. While shops seemed split, a number 

of urethane, tool and glass suppliers have recognized the invasion of body shops. Frank Levesque, technical/regional sales manager of Fein Power Tools in Pittsburgh and an instructor for the Auto Glass Technical Institute (AGTI), has noticed body shops becoming active in certain areas of the country. Gilbert Gutierrez, vice president of sales for Equalizer Industries in Round Rock, Texas, sees many of the same trends as he travels the country.

“We have a lot more people from the body shop industry inquire about our tools,” Gutierrez said. “More people from body shops are coming in and asking about the glass 
business.”

As an example, Gutierrez cites the recent National Autobody/Collision Expo (NACE) in Dallas, where he performed a demonstration of an auto glass installation (see sidebar). 
“There was a lot of interest in auto glass by the body shop guys,” he said. “They want to know how to put a windshield in correctly.”

This trend is noted by more than just tool manufacturers. Tim Conklin, owner and president of Wholesale Glass Distributors in Greenville, S.C., noticed that one of his competitors began selling glass at low prices to body shops in his region by providing auto body suppliers with glass. This, he said, has brought a number of body shops into the glass industry.

“In the old days, wholesalers would only sell glass to glass shops, but that changed things,” he said. “Still, if it does not look or act like a glass shop, we would not sell it glass.” 

Howard Dunnegan, national sales representative for Northstar, a windshield wholesaler in Wichita, Kan., said he has seen quite a few body shops get into the business. Catherine Howard, vice president and general manager of National Auto Glass Specifications (NAGS) in San Diego, and John Kellman of Globe Amerada Glass, a network based in Chicago, agree.

“I have seen a number of auto body shops move into the glass industry,” Kellman said.

There are a few dissenters, however. John Baltzer, international account manager for AEGIS Windshield Repair in Madison, Wis., said most of the inquiries he received at the recent NACE show were from people who were looking for glass removal tools, not installation equipment. He said he has actually seen fewer inquiries during the past two years, which he attributes to less show traffic after 9/11.

“We do that show every year and we have noticed no increase in people interested in auto glass replacement,” he said.

On the Web: Body Shops Versus Glass Shops
The DCM Co., which is based in Elkhardt, Ind., runs a website for auto body shops, www.v-sales.com, and a website for auto glass shops, www.dcmco.com. The chart below shows comparisons of how many hits each receives a month, along with a combined line of how many total web-browsers the company receives each month.
"As you can see, it seems like in general auto body shops are a little more keyed in to the web," said Bob Vogelzang, president of DCM.

The company could not release exact numbers on how many of each visit the website monthly, but as the graph shows, it finds that www.dmcco.com always gets fewer visitors than www.vsales.com.

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Do They Know What They Are Getting Into?
If body shops are moving into auto glass, most veteran auto glass shop owners would probably have only one question—why? With continuing price pressures, networks and liability and safety issues, there have to be a lot of industries out there more appealing than auto glass.
“Body shops have been dealing with low labor rates for years,” Baltzer said. “I don’t know why they would want to come into another industry like that.”


The simple reason is that body shops are not doing that much better than auto glass shops.
“With the downturn that a lot of body shops are facing, they are looking for other ways to utilize their labor,” Kellman said.

Since the body shops already have the labor and equipment on hand, it makes the decision to go into the glass business even easier.

“They already have the necessary resources to add auto glass services to their business,” Howard said.

In some cases, Howard said, body shops may be able to make more money on a replacement than a glass shop can. For this to happen, the replacement must be done as part of a collision repair job. Then the company may be able to do the markup on the glass and get an hourly labor rate from Mitchell that glass shops don’t get. 

In the past, body shops could make a profit by buying the glass and hiring an outside glass installer to put it in. But Gutierrez said some insurance companies are getting wise to this scheme and not paying them as much to subcontract.

“Body shops used to be able to make money having someone come in and replace glass, but not anymore,” he said.

On top of this, Gutierrez has heard a number of body shops say they are not a priority for glass shops, who will often put them on the back burner to focus on insurance and off-the-street jobs.

“A lot of body shops are asking, ‘Why have these people do it, when I can just put it in myself?’” he said. “Some of these people are just frustrated with the service they are receiving.”

Finally, Doherty said glass replacement services, combined with collision and paintless dent offerings, can make body shops a one-stop shopping spot for any customer needing work done on the outside of his car.

“We do a lot of upselling, offering additional services to customers,” Doherty said. “We are delivering a car in better shape than it was prior to the accident.”

The demographic most hurt by the entry of auto body shops would probably be those glass shops that rely on body shops for business. Obviously, more shops taking the already limited amount of work out there won’t be welcome news to established auto glass replacement companies.

“It’s already a very difficult business to be in,” said Tim Smale, chief executive officer of the IGA. “There are more entries all the time and more and more reports of shops going out of business.”
While auto glass shops have the advantage of offering mobile service, body shops can offer a one-stop shopping advantage.
Mary Birkl, who owns Ossi’s Auto Glass in Cockeysville, Md., with her husband, sees much of the same thing.

“We are already being killed by networks,” she said. “If the body shops come in and the insurance companies push work toward them, it could hurt us even more.”

One glass shop owner in Nebraska also thinks their existence could allow insurance companies to lower the price for glass replacement even further.

“As you increase the number of shops competing for auto glass business and bring more people into the network, it gives them a reason to cut prices even further,” he said. 
 
What About Safety?
The other question a number of people in the glass industry have is how the arrival of body shops will affect the safety standards in 

the industry. Many of those interviewed think body shops are well-equipped to handle any safety challenges they encounter in the auto glass industry. Auto body shops already have strong training and certification programs from groups such as I-CAR.

“The body shop industry is already focused on safety,” Gutierrez said. “It should push the envelope up for safety in the industry.”

Levesque takes it one step further, saying that the increasing importance of glass to the car’s structural integrity makes it important that the person replacing the glass has knowledge of how glass functions overall in the car.

“Body shop people have a better idea of the structural integrity of the car,” he said.
Body shops also have the practical knowledge of how to handle bodywork that glass shops may lack. In today’s automotive world, paint jobs have become much more complicated processes. Because of this, scratching the car’s body in the process of doing a glass replacement may require more than just sanding a four-inch by four-inch spot on the car and repainting it. It means repainting the whole car for everything to blend in. A body shop is not only much better equipped to handle this mistake, it is also much less likely to make the mistake in the first place, Levesque said.

The auto glass shop owner in Nebraska, while not happy about the entrance of body shops into his business, admits that he has seen some that do good work.

“A lot of them have been doing it for a long time. But some of them have learned how to do it [well] the hard way after making some big mistakes,” he said.

Anderson thinks a number of the body shops he has seen do “very good glass work.” This is one reason why he thinks there is nothing the industry can do about the arrival of body shops.

“I think it’s just change,” he said. “I don’t have any control over it. It’s happening and it’s going to continue to happen.” 

NACE Serves as Hot Spot for Glass Industry
by Penny Beverage

In early December, as it cooled down throughout most of the United States, Dallas remained warm at a ripe 70 degrees Fahrenheit. It also served as a hot spot for the annual National Autobody/Collision Expo (NACE), sponsored by the Automotive Service Association. NACE drew hundreds of exhibitors, among which were several auto glass repair and replacement companies, attracting the population of autobody shops that have literally broken into the area of doing auto glass replacement.

Among exhibitors were Bend, Ore.-based Glas-Weld Systems, Madison, Wis.-based AEGIS Tools LLC, Round Rock, Texas-based Equalizer, Dayton, Ohio-based Essex ARG/Dow Automotive and Wichita, Kan.-based Northstar.

AEGIS’s John Baltzer said the 2002 NACE Expo was one of the best he’d attended, though the company has been participating in the collision expo for the last several years.
He added that the company’s scratch removal system was also a popular item at the event.

Glas-Weld’s vice president of sales and marketing Dave Shores agreed. With a packed booth, the company spent much of its time demonstrating its scratch removal system to many outside the industry who’d never even heard of the concept.

Essex ARG’s Joel Timmons said the company also saw steady traffic and generated a lot of interest in its bare metal primer, 5201. In addition, the company found body shops were interested in the crash testing it has done on its urethanes, and many attended an auto glass installation demonstration the company completed during the event.

“It was a good demonstration; there were a lot of people there,” said marketing manager Phil Jentoft.

Gilbert Gutierrez of Equalizer also participated in the installation.

Northstar Auto Glass of Wichita, Kan., also made it out for the show, and said it sometimes has even better traffic at a non-glass-industry-specific event such as this one because it is less known by collision repair shops than those already replacing glass.

“A lot of the body shops replace glass and they are interested,” said Gary Dunnegan of Northstar.

 


Leslie Shaver is a contributing editor for AGRR magazine.

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