Volume 8,  Issue 4                         July/August  2006

Straight Talk in Tucson
Auto Glass Conference Highlight is Keynote Address by Belron's Gary Lubner
by Charles Cumpston and Brigid O'Leary

When Gary Lubner, chief executive officer of Belron, the world’s largest auto glass replacement and repair company, speaks, people want to know what he has to say. That’s why they filled a room at the JW Marriott Starr Pass Resort in Tucson, Ariz., for the keynote session of the National Auto Glass Conference and Expo the middle of May.

What did he tell them? That the company plans to grow profitably in the U.S. through more acquisitions, to build on its relationships with insurance companies and its suppliers, and to build on the strength of the regional brands which the company has acquired in the U.S. rather than combining them into one brand.

Lubner, whose company had been in the U.S. market in the 1990s as minority owner of Safelite, called the U.S. the toughest market in the world. “There’s very little consistency on the supply side, there’s too much focus from the insurance industry on price, and there is going to be price pressure until the cash market is the same as the insurance market,” he said.

Then there are the challenges. Lubner made the point that 80 percent of consumers want same day service when they need their windshield replaced. He said that the Web is becoming more important all the time in terms of marketing and communication and that there would be increased pressure from the insurance industry because it is more important to them that their policyholders get good service.

Lubner called branding a big issue. The lack of it in the U.S., he said, is the reason that the industry competes on price. He said there are three very big differences between the AGRR industry in the U.S. and the rest of the world: Volume buyers get the best discounts, repair and replacement are both done by companies not one or the other exclusively, and branding is a factor in the market.

In discussing the AGRR market, Ludner told attendees, “It’s not reasonable to provide the top quality service this industry does without being paid for it.” In Lubner’s opinion, NAGS has lost the industry’s confidence in terms of pricing.

From his global perspective, Lubner said that customer expectations are higher than ever while the supply chains are become more complex and he sees it getting even more complex. He gave the example of a Mercedes model introduced in Europe last year which has over 80 different glass options. “Imagine what that does for a call center,” he stated.

Lubner’s comments were the buzz for the rest of the three-day event. Not that there was a lot of competition. The educational program consisted of five seminars, two installation demonstrations and an industry exchange in which National Glass Association (NGA) officials discussed its auto glass activities.

With a number of NGA committee meetings taking place as well as meetings of the joint NWRA-NGA Repair of Laminated Auto Glass Standard (ROLAGS) and individual companies, the pre-registration list had over 400 people, down significantly from the previous year’s more than 500. NGA reported that the event drew 678 industry participants.

Diversification
One other much discussed session was on diversification.

The 7 a.m. Friday morning seminar featured three speakers who explained how they had diversified their companies.

Steve Mort, Don’s Mobile Glass, Modesto, Calif., has taken the route of purchasing businesses in other areas and adding auto glass to them. One of those moves by the company, which was founded as a strictly auto glass operation, was the acquisition of Wardrobe and Bath Specialties, which makes shower doors for small shops that don’t specialize in shower doors. This has now become 50 percent of the company’s business, Mort reported. He added, however, that the amount of capital required for fabrication is “enormous.”

While the company has had success in adding residential operations to its AGRR acquisitions, he explained to the 30 or so attendees at the session that Don’s Mobile acquired three auto glass operations in the Bay Area in 2005 and has had trouble adding flat glass operations to them. “It’s hard to find technicians for that area,” he stated. 

Mort said that the company likes the residential replacement market. “It’s a wide market and we see growth there,” he said.

Paul Heinauer, Glasspro Inc., Mount Pleasant, S.C., has gone into the car wash business to enhance his AGRR operations. “It was all about capitalizing on the brand,” he told attendees. Heinauer felt that a car wash would drive people to the AGRR service, and that there were “excellent cross marketing opportunities.”

He emphasized that the facility, a self service car wash, should be clean because that’s something consumers want and remember. He reported that survey cards have proven that customers come to the auto glass service because of the car wash, proving his point that branding is key.

A Rainy Saturday
Heinauer explained that several things have to be taken into considerations before starting up a car wash. One is the amount of space available; there has to be enough room for traffic of both businesses. Then there are zoning issues, the competition (you have to be a destination location), street traffic flow (it has to be easy for drivers to pull into the car wash) and week-end traffic (bad weather on a Saturday can undermine the whole week).

Heinauer estimated that the initial investment for starting a car wash at $1 million. He also pointed out that you have to depend on the car wash distributor for help in getting started and for ongoing help. For companies interested in adding a car wash, he suggested attending a trade show in this market to become familiar with the companies serving it.

The South Carolina businessman, who owns a half dozen AGRR locations, said he is also thinking of starting a coffee shop, a la Starbucks, to drive traffic to the AGRR business and the brand which he is looking to protect.

The third speaker, Jerry Wright, AAA Glass & Mirror Co., Fort Worth, Tex., advised attendees to know their own abilities and not to over promise and under perform. “The best customer to have is one you already have because they trust you and like you,” he stated.

He suggested the companies diversify into residential glazing with insulating glass window replacement. “The average home has 14 to 48 opportunities, and they already know you from the auto glass work,” he said. He added most manufacturers in this market have adequate training to help a company get started.

“Open your eyes to the natural income streams,” he urged. “You want people to remember you when they have glass needs.”

Other seminars at the Tucson meeting included a discussion of how to increase sales on the phone with Carl Tompkins, Sika Corp., an update on AGRSS by Cindy Kitcherside, chairperson, and Tompkins, new vehicle technology with Glen Moses, Safelite Glass Corp., airbags with Mitch Becker, Abra Auto Body & Glass, and management techniques by Kraig Kramers, a management consultant.

Bob and Jay Beranek, Automotive Glass Consultants, conducted the installations.
Next year’s Auto Glass Conference & Expo will be held February 14-16 in Orlando, Fla.

Charles Cumpston is editor of AGRR and Brigid O’Leary is a contributing editor.


AGRR
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