VOLUME 6 - ISSUE 6  
NOVEMBER/DECEMBER 2004

Under the State Licensing Umbrella
Neither a Clear Nor Easy Choice

Bob Steben, president of Ed Steben Glass in South Windsor, Conn., and a director on the board of the Connecticut Glass Dealers Association (CGDA) had always been a proponent of requiring auto glass technicians to be licensed in his state. His rationale: the state’s emphasis on safe installations would also focus insurance companies on safety and guide them toward using quality installers. 
    
    But more than two years after Connecticut mandated that auto glass installers be licensed (in January 2002), Steben is slightly disappointed with how things have gone. 

    “I was disappointed because auto glass is a precise field,” he said. “It’s not installing a wood beam in house. There’s a lot more to it than that. It can affect a person’s safety. I was hoping that insurance companies would see this and maybe make allowances in what they reimburse. But they’ve actually gotten worse instead of better.”

    A number of other states across the country, fueled by a National Glass Association (NGA) push, are beginning to clamor for licensing of auto glass installers and/or glass businesses. On the surface, the benefits are obvious: by requiring a license to do windshield replacements, states could assure that glass work is only done by properly licensed and trained technicians. Look a little deeper, however, and issues appear more confusing. Outside of merely tackling the basics of training and testing for licensure (see page 32), there are other, bigger issues each state must address before running to the Capitol to lobby the government to get involved in their business. 

Standardizing the Process
    While Steben may be slightly disappointed with the way the Connecticut licensing effort turned out, his colleague, John Wisniewski, a CGDA board member and owner of Payless Auto Glass in Hartford, Conn., takes a slightly different view. Originally, Wisniewski wasn’t for licensing, thinking it was designed more towards solving the industry’s pricing problems, but he’s come around. 

    “It’s not hurting the industry,” he said. “I think it keeps some people from opening up a business that shouldn’t be.”
That’s the argument a number of other shop owners around the country are using to justify licensing in their states. Basically, they want to create a larger barrier for entry into the business. 

    “We’re trying to create a better standard and more professionalism in this trade,” said David Duron, vice president with Freddy’s Auto Glass and Mirror in Waco, Texas. “Licensing can get rid of phantom people who aren’t educated in safe auto glass replacement. 

    Many shops owners have hoped the associations, networks, insurance companies and suppliers would clean up the industry, but that hasn’t happened. So now they’re going to the government. They hope the government weeds out the fly-by-night companies and motivates suppliers to get in line. 

    “Our suppliers tell us they will sell to a company only if it has a legitimate address and is a legitimate business,” said Bob Ray, owner of Ray Glass Company in Rosenberg, Texas. “But, we have one wholesaler that will sell to anyone that walks in with money in his hand. [Licensing] will put a stop to that and I’m all for it. One supplier can mess up the whole market.”

    Others are just looking for something to clean up the industry. 
“If licensing is what it takes, then that’s what we need to do,” said Tom Lee, owner of Lee & Cates Auto Glass in Jacksonville, Fla. “It can make the entry process harder.”

Consumer Protection
    
The idea of licensing has other advantages, as well. While nothing is ever 100 percent, licensing should greatly increase the probability that installers know what they’re doing, which has often been in question. The theory: by going through state-mandated training and testing, auto glass installers will know their jobs. 
    “The advantages are that you have an industry that is well versed in primers, urethanes and cure times and driveaway times,” Duron said. “Installers will know how to extract the windshield without damaging the vehicle. Overall it’s better for the consumer.”

    This element of consumer protection is something advocates must emphasize when lobbying state governments for licensure. The argument goes like this: many industries that have less relevance to a person’s safety require licensure, so why shouldn’t auto glass? 

    “In California, the consumer advocates are very strong,” said Steve Mort, a partner in Don’s Mobile Glass in Modesto, Calif. “This is a consumer-advocate type bill. Hairdressers and barbers have to have licenses. If you let a guy put a windshield in and he doesn’t use the right adhesive, your windshield could fall out and you’re dead.”

    Steve Sen, owner of Unipro Auto Glass and Accessories in Stratford, Ontario, has been working for five years to get a licensing bill passed in his province. If auto glass is declared a restricted trade, only licensed shops can perform installations. Once this happens, Sen hopes distributors and insurers will educate their customers about the importance of going to a licensed shop. 

    “If it’s marketed through distributors or insurance companies, everyone will be wary of who they are doing business with,” he said. “It’s no different than for mechanics. How many people look for a backyard mechanic?”

    With consumer awareness, comes a better understanding of what goes into auto glass replacement. 

    “This industry is so confused on what to charge for glass replacement that consumers are put at risk,” Karl Anderson, owner of Anderson’s Autoglass LLC in Williston, Vt., said. “State licensing could help with consumer knowledge towards what is really required to do a safe, professional replacement. This should also bring back a little credibility to our industry.”

Insurers and Networks Ride the Licensing Fence
   
While auto glass shop owners are very open about their opinions on licensing, insurers aren’t quite following suit. A representative from Farmer’s Insurance wouldn’t return calls about licensing, while Liam McTeague from The Hartford issued a “no comment.” Bob Bischoff, national glass manager for State Farm Insurance Companies says his company doesn’t want to see licensing inhibit competition.

    “State Farm does not support or oppose the regulation of automobile repair facilities and their employees,” he said. 

    “State Farm would not be supportive of state requirements that prohibit or restrict us as an insurer from conducting our business and maintaining our relationships with our policyholders under the terms of our contractual agreement. We oppose any requirement which would create significant barriers to market entry or in any way inhibit competition in the auto repair marketplace.”

    Tom Maziarz, director of sales for LYNX Services is taking a wait-and-see approach. 

    “LYNX Services is supportive of appropriate steps to recognize and enhance professionalism, quality, customer service, and safety in the auto glass industry,” he said. “At this time, we would want to continue to gather additional information to better assess the strengths and weaknesses of any proposed licensing legislation.”

    As both a network and a retailer, Safelite Group in Columbus, Ohio, has concerns. 

    “From a network viewpoint, we are not in favor of licensing,” said Bret Baird marketing manager for Safelite Group. “We believe it is in the best interest of our industry for automotive glass shop owners to agree, through established and recognized industry supported forums, to police themselves and to adopt installation and repair standards that serve the best interest of the customer. Our industry has a very strong track record for customer satisfaction and safety and the AGRSS Standard was designed to further improve consistency and quality. We believe the cost to network members, and all auto glass retailers, will far outweigh any potential benefit.”

    The costs for state licensing and renewal fees, potentially increased recruiting and labor costs, and administrative costs to track and administer licensing, particularly for businesses that operate in more than one state, are concerns for the company.

    “We do not believe state-mandated licensing is an appropriate means of addressing the challenges of any industry,” Baird said. “We believe it is in the best interest of our industry for automotive glass shop owners to agree, through established and recognized industry forums, to police themselves and to adopt installation and repair standards that serve the best interest of the customer. We also believe the cost to the industry will far outweigh any potential benefit.”

Opening Pandora’s Box
   
Not everyone sees licensing through such rose-colored glasses, though. A large number of industry professionals question whether licensing will bring credibility or higher quality installations to the industry. As one industry expert noted, barbers and hairstylists have long been licensed, but that doesn’t mean you don’t get bad haircuts.

    Without the guarantee that licensing will clean up the industry, they see no reason to bring the government into an industry where many shop owners already feel outside entities—such as National Auto Glass Specifications (NAGS) and the networks—control their fate. Some fear licensing will only add more costs to a business that doesn’t need more overhead.

    “I think there are better ways to achieve what I think people are trying to get to than by licensing,” said Bob Birkhauser, president and chairperson of Auto Glass Specialist in Madison, Wis., who prefers to use a CEU system and continue to push the Auto Glass Replacement Safety Standards (AGRSS). “There’s a great deal of concern with the low barriers to entry in our industry and that anyone can get in and do auto glass. What were trying to do through licensing is to create a competitive hurdle that those who are care about the industry would be willing to climb over and those who are in it for the quick buck are less likely to strive to achieve.”

    The problem: barriers can be so low everyone gets in. This is one of the things happening in Connecticut. The state decided to institute a grandfathering clause. Anyone who had been in the business for two years automatically received a license. Because of this, there are really no barriers to entry in the state, despite the fact that it has licensing. 
    “The fly-by-nights just got licensed as well,” Steben said. “Anyone can be licensed under [this] grandfather clause. So people who I don’t think did quality work were able to get licensed.”
Even if the state requires everyone be tested, there’s still no guarantee that the examinations will keep those less committed auto glass installers out. 

Training Hurdles
 
Getting to the point where licensing brings credibility to the industry won’t be easy and the steps to getting there aren’t guaranteed. To start with, each state has to weigh questions about what shape the training would take. States like Connecticut and Texas (which is pursuing installer licensing) are dealing with those issues right now. 
While Connecticut has required licensing for two years, the state still hasn’t come to a firm conclusion on what shape testing will take. With all of the people that the state grandfathered into licensure and the limited number of people trying to get licenses (because many shops are seeking experienced installers), this hasn’t been as issue yet. 

    “There hasn’t been a flood of people applying for new licenses,” said Bob Steben, president of Ed Steben Glass in South Windsor, Conn., and a director on the board of the Connecticut Glass Dealers Association.

    But that doesn’t mean the industry and the state haven’t been at odds. Originally, auto glass licensing was added on to flat glass licensing, which meant many of the same training requirements were applied across the board. The original requirements were onerous to say the least: Three years of on-the-job training and then 432 hours of class time. The industry eventually lobbied the government down to one year of training and 144 hours of classes.
    
    The state entertained the idea of using National Glass Association (NGA) classes for training, but eventually decided against it. So far Connecticut is considering having the classes taught at trade union school. 

    “People with knowledge of the industry would teach the courses,” said Steben said.

    The Texas Glass Association (TGA) is seeking a $3 million grant from the Texas Workforce Commission to train and certify the state’s auto glass installers. It’s made contact with a state legislator to do this, but it needs to have other things in place before it can go forward. One component is a facility to teach the course from, which would probably be the Texas State Technical College in Waco. 

    The state of Texas demands that the association have this in place before it mandates licensing. 

    “You have to start with laying the ground floor: Getting things set up as far as having a facility, having instructors and things in place,” said David Duron, vice president with Freddy’s Auto Glass and Mirror in Waco, Texas. “The state has its guidelines. We have to use their guidelines that they set forth. There are certain things that need to be in place before we have licensing for auto glass installers.”

    Duron hopes that licensing could become a reality in the Lone Star state in the next 18-24 months. 

    “It depends on how interested the legislators and senators are in promoting safe auto glass replacement,” he said.

    In Ontario, Canada, the province’s glass group is much closer to requiring anyone who installs glass to have a license. Right now, it’s just trying to get auto glass to be declared a restricted trade, which means a person couldn’t install glass without a license. The group needs to get letters from 50 to 60 percent of the province’s glass shops to get the legislature to agree. It will then take them to the Ontario colleges to give to the legislature. 

    “They’re the ones doing the legwork,” said Steve Sen, owner of Eagle Auto Glass in Stratford, Ontario.

    The colleges are important because they will be the ones holding the testing and classes. The glass group created a curriculum. Right now, it requires two years of classes and two years of schooling to get a license. Everyone will have to take a refresher course every two years. There won’t be a grandfather clause, but a technician can take the test without courses if he has been in the industry for two years. 

    While the colleges control the training, shops will also have a key role, Sen said. 

    “Every shop will be given a sign off book for each month when the apprentice learns,” Sen said. “Shops will sign off and say apprentice has learned enough in a category. They’ll send it directly to the colleges.”
    

Ignoring the Law
   
And, then there will always be those people who just don’t care. In California, there is a Bureau of Automotive Repair (BAR), which is designed to keep a tight rein of how automotive repair shops (including auto glass shops) operate. The BAR requires shops to take a number of steps in the name of consumer protection, including getting a customer to sign an invoice before the shop begins work on a vehicle, returning any replaced parts to consumer, not doing additional work without a customer’s authorization and providing a detailed final invoice. 

    The agency reserves the right to audit a shop at any time to make sure it’s in compliance. 

    “They’ll look for copies of an invoice that has a customer’s signature before starting work and after work,” said James Horrox, chief operating officer of Stockton Auto Glass in Stockton, Calif. “We must put the license number, VIN number, mileage, make and model on the invoice. We can’t just draw up a receipt with no information. They can audit for all of those occurrences. You have to follow these rules or the BAR can shut you down.”

    The problem: The BAR only seems to enforce these regulations with big companies (including a case involving Safelite Glass Corp.), according to Horrox. While it may go after a Safelite, it will not go after a small shop, Horrox suggests. 

    “The BAR is self-funded,” Horrox said. “It won’t go after a fly-by-night, one-guy operation. In the case of Safelite, [the BAR] realizes it has deep pockets and there would be a return if it did go after Safelite.”

    So despite all of the BAR’s regulations, many glass shops in California think it really does nothing to raise the barrier for entry. This is what Chris Johns, owner of Mafsu Windshield Repair in Quinton, Va., fears could happen if his state started licensing. 
“The concept of licensing has merit in that it should weed out inferior or unscrupulous companies or technicians,” he said in a written statement. “In reality, the worst of these companies would continue to operate by skirting licensing one way or another, leaving licensing as just another way for government to get its hands into the pockets of hard working businessmen.” 

Inviting Big Brother In
   
Johns is not alone is his fear of letting the government too far into the glass business. When the government comes in, many shop owners fear it will force them to spend more money, cut through more bureaucracy and even add staff. 
With any licensing program there will be costs. A shop will have to pay a fee if it’s getting a business license or, more likely, it will have to pay a fee for each installer licensed. This is why Mort thinks his home state, California, will be in favor of licensing. 
    
    “They would be supportive of licensure because they look at it as a potential revenue source,” he said. 
Ray thinks auto glass would be an inviting target when state legislators start looking for more revenue. 
    
    “They’re always needing more money and they are always taxing cigarette use and those things,” Ray said. “They won’t raise residential tax because that hurts the people who vote, but they may look at [licensing] on auto glass and raise the fees on that if they need money. Who would argue with that? If they start raising fees, it could really get out of hand.”
   
    Then there are the paper work issues. Horrox figures that the additional paperwork the BAR requires costs him anywhere from five to 15 percent of the labor on each job his company does. 
Ray envisions a scenario where he may have to add another person to his staff to keep up with the paperwork. 

    “We do a lot of documentation now,” he said. “My help up front already spends more time on paperwork than we do on glass. If licensing created [more paperwork], it would be a big negative.”

Charting A Course

   
Despite his rather serious reservations, Ray admits that, at this time, he’s an advocate of installers being licensed in his home state of Texas. Despite the problems with the BAR (which also has a host of antiquated regulations that make mobile service difficult), Horrox thinks a state law requiring installers to have auto glass licenses is a good idea. His rationale is the same as many others: It has the potential to create a barrier to entry into the business. But on the other side are people who oppose initiatives to licenses auto glass installers. 

    To Birkhauser, the industry needs to fix itself before it looks outside. 

    “The whole concept of licensing is bad timing right now,” Birkhauser said. “And, even if it were good timing, I’m not a big fan of licensing unless we had people who had every opportunity to conform to proper professional behavior and we had pulled every trick out of the bag in our trade association and industry to police ourselves. I don’t even think we’ve given it a reasonable shot yet. We should try that before we go outside the industry and rely on government to fix our woes.”

    The key for state and national glass associations as they decide whether to push for licensing is not to just dictate a course and move forward without an open discussion. Whether for or against licensing, most glass shops owners are well aware that once it’s instituted, it could change the way their way run their businesses forever. 

    “It can be a genie that’s let out of the bottle quite easily,” Birkhauser said. “When you hand a program over to the government to administer, you’re never quite sure what the end result will be.” 

Les Shaver is a contributing editor to AGRR.