VOLUME 6 - ISSUE 6  
NOVEMBER/DECEMBER 2004

AGRReports
breaking news


INDUSTRY

CAGG Calls for NAGS Delay

The Chicago Auto Glass Group (CAGG) is calling on industry members to request a delay of the National Auto Glass Specification (NAGS) rebalancing that is expected to take effect in January 2005. The CAGG is a not-for-profit organization formed by independently-owned auto glass replacement companies to develop a new pricing system for the industry.

The push comes on the heels of the National Auto Glass Conference, during which NAGS representatives Jesse Herrera and Bud Oliver gave a presentation outlining the upcoming rebalancing and what can be expected when it takes effect. During the presentation, Herrera indicated that if customers felt they needed more time to prepare for the change, there was a chance the rebalancing could be delayed.

CAGG has urged glass shops and concerned parties to send an e-mail to NAGS requesting a delay of the rebalancing, and to copy the CAGG on the e-mail. CAGG, which is testing its proposed formula before the end of the calendar year, hopes to have the rebalancing delayed to allow the its results to be made public and compared to the rebalancing.

Jesse Herrera, general manager of NAGS, maintains that nothing is definite.

“We’ve gotten about 100 emails from retail shops asking us to delay the rebalancing effort. We’ve read all the e-mails and made note of who has contacted us and how to get in touch with them in the future if it is warranted. We will continue to speak with industry constituents through the remainder of the month in order to gauge the industry’s readiness for the change. We’ve not made any decision to delay the January rebalancing, but we intend to reconfirm our plans to the entire market in early November,” he said. 

NAGS has made two preview packages available to the industry in preparation for the rebalancing. The first review, based on the May 2004 publication, was distributed during the summer, while the second, based on the September 2004 release was scheduled for a fall distribution. 

According to representatives of NAGS, the January adjustment will result in a significant overall reduction in the benchmark retail list prices currently published in the NAGS print and electronic database products. For more information on the rebalancing, see Balancing Act on page 22.
According to a press release issued by NAGS, the preview packages are designed to give industry constituents information to help them understand the changes as they relate to their organization. As a result of its rebalancing, NAGS says buyers and sellers will need to review the terms of their trading agreements and make such adjustments as they deem necessary.

IGA Presents List to Safelite
The Independent Glass Association (IGA) has developed a list of shops that it says do not bill consumers for the difference between an insurance reimbursement and their original invoice. The IGA has presented this list to Safelite and demanded that it no longer tell prospective customers of listed shops they may have out-of-pocket expenses. 

The list is a central component and first step in a litigation campaign to stop illegal steering in the industry. 

“If a third party administrator knows that a specific auto glass company does not seek the difference between their invoices and the reimbursements that they receive from insurance companies from their customers, yet continues to tell potential customers that they may have out-of-pocket expenses, that may constitute fraud and is an actionable offense,” said Marc Anderson, IGA executive director.

Listed shops are urged to record instances where their prospective customers are led to believe that they will have out-of-pocket expenses. Anderson said that the IGA will continue to update it and send it to Safelite on a regular basis.

“The matter will be addressed between the two organizations and any communication on this issue will be handled directly with the IGA leadership,” Safelite marketing manager Bret Baird told AGRR in a written statement.

LEGAL
Chance Heirs File Suit; Company Files Chapter 11
Heirs of auto-glass chain founder Rick Chance have filed a wrongful death lawsuit against the Best Western hotel in Tempe, Ariz. where he was murdered two years ago.

The 44-year-old Chance, owner of Empire Glass, was shot and killed at the hotel in August 2002 after checking-in. The lawsuit alleges the Best Western hotel was negligent by failing to secure the exterior door through which the gunman entered the hotel and for not monitoring the door on a security camera.

Empire Glass has filed for Chapter 11 bankruptcy protection. The murder, along with economic conditions, played a part in the decision, a company lawyer told The Arizona Republic.

Empire reports that it does not expect to lay off any of its employees and says it will continue to its free dinner promotions for customers who do business with the company.

Diamond Triumph Facing Discrimination Suit
Diamond Triumph is facing more legal issues as former employee Michelle Gilbert has filed suit against the auto glass giant alleging discrimination and improper termination, as well as accusing two employees of harassment and defamation. 

Named in the lawsuit are regional manager David Taylor and sales representative Michael Mazelon. Gilbert alleges, among other things, that both men subjected her “to acts and activities designed to harass, degrade, embarrass and discriminate.” 

Gilbert, who contacted AGRR magazine with regard to the complaints she filed during the summer of 2004, alleged in a telephone interview that she was dismissed from her job as a district manager, in part because she is a woman. At the time of her dismissal, Gilbert said she had been out on medical leave and when authorized to return to work part-time was told the company had nothing part-time to offer her. Before she was able to obtain a release to full-time work, Gilbert said she received paperwork terminating her job. Gilbert is seeking $1 million for each of the eight counts she is bringing in her lawsuit, as well as attorney fees, punitive damages, costs and interest.

“A matter such as this is something we take very seriously; we’re very actively and proactively taking measures to prevent that here,” said Kim Courtois, director of human resources at Diamond-Triumph.

Gilbert’s case is not the first discrimination suit brought against Diamond-Triumph. In 2001, former employee James Spriggs filed a suit against the company alleging racial discrimination. That case was dismissed from district court twice before being reversed by the Maryland Court of Appeals and remanded for trial.

ANNOUNCEMENTS
AGRR Magazine Announces Management Cruise

AGRR magazine and its sister publications will embark on the first ever Industry Management Cruise to Alaska, scheduled for June 4-11, 2005. Royal Caribbean’s Radiance of the Seas® Cruise will feature educational seminars and industry social networking opportunities.

The cruise will depart on June 4 from Vancouver, British Columbia, and stop in the ports of Juneau, Skagway and Ketchikan, Alaska, as well as at Hubbard Glacier. Between ports there will be three days of sessions geared for those managing the industry.

The cruise ship is comprised of twelve decks, complete with a casino, rock-climbing wall, solarium, fitness center, basketball/volleyball courts, multiple restaurants, lounges and clubs.

Staterooms start at $849 per person.

For more information contact Holly Biller at 540/720-5584 ext. 123 or by e-mailing hbiller@glass.com.

MERGERS & ACQUISITIONS
Founders Equity Buys Glass America

The 60-shop auto glass chain Glass America, headquartered in Chicago, has been sold to Founders Equity Inc., which is backing a management group led by David Rolfing. Rolfing previously had run the successful Windshields America company, which was owned by Belron. 

The purchase makes Glass America the first portfolio company for Founders. The company, along with co-investors Main Street Resources and affiliates of JO Hambro Capital management, invested a total of $13.6 million into the equity of Glass America.

Glass America was sold by B.P. Capital of Oak Brook, Ill. The Glass America flat glass operations in Illinois and Florida were not owned by B.P. and are not effected by the sale.

Sample Requests made to NAGS to Delay Rebalancing
CAGG has urged auto glass shop owners to e-mail requests for a delay of the rebalancing to NAGS. CAGG has shared some of those requests with AGRR magazine:

“My company has repeatedly requested that you delay your proposed revaluation. We have not received any response from you as to your intentions. Remember, we are a paying customer of your services. Please respond.”
— Donovan Trana
Express! Auto Glass

“As an Independent Wholesale Auto Glass Distributor with 40 locations in 15 States, Mygrant Glass Company is asking that you consider delaying the introduction of the proposed January 2005 NAGS Benchmark price reduction.
Please test and model the information that the Chicago Group presents before making a decision that affects the entire industry. The Chicago Group has put forth a lot of time and energy to find a solution for the entire industry that we depend on to make a living.
I believe they should be listened to and given the time to prove their model.” 
— Tom Higginbottom 
Mygrant Glass Company, Inc.

“As the owner of Harmon Glass with 23 stores in Minnesota and 1 in Iowa I would ask NAGS to postpone their revaluation pending testing and comparison of the Chicago Auto Glass Groups pricing method. Every industry has a voice let CAGG and the auto glass industry be heard - we don’t set the pricing of any publications or other industries and we would please ask that you don’t set ours - we would ask that you simply publish them. Thanks for your consideration in this vital matter to our industry!”
— Scott Leiferman
Harmon AutoGlass in Minneapolis

AGRSS Makes Decision on Phasing in Auditing Program
by Les Shaver

The Auditing Subcommittee of the AGRSS Credentialing Committee has moved into Phase two of its auditing program. 

In the first phase, companies signed an affirmation that they had agreed to become AGRSS compliant. In Phase Two of the process, program participants engage in a self-auditing process to show they are following the standards. 

“They go from ‘I will be compliant to ‘I am compliant and here’s my proof,’” said Carl Tompkins, chairperson of the AGRSS accreditation committee. “They will internally assess their company and their compliance to every element in the standard.”

Initially, another phase was supposed to follow this in which third party auditors would verify that select shops were following the standards, but that is off the table for the time being, according to Tompkins. 

“What AGRSS is doing now is the next logical step,” said Tompkins. 

To help in this process, the committee has prepared a checklist for shop owners of registered companies. As shop owners go down the list, they will answer yes or no questions about their compliance to AGRSS. In many cases, they will have to ask their installers and administrative staff questions, such as whether or not an owner is notified if there’s a substandard installation. This feature, or “coaching tool,” allows shop owners to gauge their employee’s compliance level in a non-threatening and non-complicated manner. 

At press time, a beta test with 12 companies had just begun.

“They are being coached how to assess each aspect of their compliance,” Tompkins said.

After they complete the checklist, glass shops are required to return it to Tompkins or to the AGRSS Auditing Subcommittee chair, Bob Beranek.

“These are the type of records that can be submitted as proof of performance,” Tompkins says. “The shops are saying they do this and they are providing internal assessment to be able to declare their compliance.”

Those shops will not only be required to complete the checklist and provide the back up documentation, but also provide comment about how the process went for them. Beranek and Tompkins will tabulate these responses and comments and summarize them to the board in November. The group will use the responses to tweak the packet in November and December. By January, Tompkins is hopeful the Phase Two packet will be ready to go to all AGRSS registered companies.


Les Shaver is a contributing editor to AGRR magazine.