Volume 8, Issue 3        May/June  2006

AGRReports
breathtaking news

Precision Replacement Acquired

In a twist that caught many in the industry by surprise, Iowa Glass Depot acquired Precision Replacement Parts. The announcement was made at the beginning of April and caught some members of the industry by surprise.

“Where is it all going to end?” was the initial reaction of Nathan Hemperly, a shop owner in Idaho. “Will the insurance companies and TPA’s now realize that with this merger and the major glass manufacturers and distributors raising prices that a price increase is the only direction any new O&A should go?” he queried.

“I see these measures as a further step into persuading the industry away from NAGS benchmarking and, ironically as PPG has been the one leading in the price increases and fuel fees, I also think it is forcing glass shops to look more and more into dropping networks,” said Corey Hemperly, also with Windshield Doctor in Idaho.

Not everyone views the move as a bad one.

“We think it is a smart move. It fits well with Iowa Glass. We are surprised they did not do this earlier,” said Henri Goudsmit, division manager at AEGIS Tools International.

Pilkington Buys Three Wholesale Locations in South Carolina
Pilkington North America has bought the three South Carolina wholesale distribution operations of Old Dominion Glass.

The businesses are located in Charleston, Columbia and Myrtle Beach.

Old Dominion Glass, headquartered in Richmond, Va., continues to operate its wholesale network in that state. It is the family-owned operation of the Tates, who have been prominent in industry activities.

LEGAL
What’s Next in the Diamond-Triumph Investigation? 
The Federal Bureau of Investigation (FBI) began an investigation of Diamond-Triumph Auto Glass headquarters in Kingston, Pa., for alleged insurance fraud on December 13, 2005, that included the seizure of computer equipment and certain records. Since then, both the Bureau and D-T have been quiet about the progress of the investigation.

In an effort to update our readers, AGRR/glassBYTES.com™ spoke with a number of experts in the glass industry who have been through similar investigations, including one familiar with this case. None of those with whom we spoke would comment on this particular case, but provided a general overview of how such cases usually evolve.

“For the first week or so, you really feel blind,” said one of how D-T officials might be feeling. “You don’t know what they [the FBI] is looking for, you don’t know what information they have and you don’t even know what the charges are. Your instinct is to issue a blanket denial, but that’s really the worst thing you can do,” he added, “because you don’t even know what you are accused of.”

“The investigators are not terribly forthcoming. They don’t want you to see the big picture,” adds another. “They talk to people individually and ask questions that sometimes seem like minutiae. It takes awhile to get the picture of what they think is going on.”

“It’s a very trying time,” said another. “Kids at school were asking my kids if their daddy was a crook. It affects your whole family and your whole life. There’s a hidden cost to this that people seldom see.”

What advice would those with whom we spoke give to D-T officials? Though each had his or her spin, the all offered the same common themes:

1. Do not issue a blanket denial until or unless you know exactly what the charges are and can counter them;
2. Form a group of senior management to work with investigators. Keep the group very small. It should be composed of top management;
3. Do not lie, do not give the FBI false information, do not remove or destroy documents. “Remember Martha Stewart didn’t go to jail for insider training, she went to jail for lying about it,” said one commenter;
4. Determine if there is any truth to the accusations. If so, then determined how such a breach could occur. Was it the result of a management practice, a rouge employee acting against policy, or what? Take steps to fix the problem;
5. Keep rumors to a minimum. Encourage employees to ask questions as they have them and give them a clear channel of communication. Communicate with customers as well so they have a clear understanding of your perspective; and
6. Keep business as usual as much as possible.

INDUSTRY 
Price Increases Implemented 
The auto glass industry is paying more for its glass after a number of industry suppliers instituted a 3 percent price increase in March. The first to hit the market was PPG Industries, which announced a prince increase of 3 percent effective March 15; this announcement was followed in quick succession by announcements from Guardian, Pilkington, ACI Distributing and Mygrant Glass, each implementing a 3 percent price increase.

In letters sent to customers, some of which bear striking resemblance to one another, the companies cited “increased operating costs” including those of labor and energy as the cause of the need for the price increase.

LEGISLATION
New York Legislative Effort Heats Up

The effort to pass legislation in New York state that would eliminate the exclusion for auto glass coverage in the insurance laws is coming to a critical point. It appears the legislation is likely to come up for a vote soon. Scott Owens, owner of Excel Auto Glass Corp., has led the effort and is calling on all concerned parties to take action to alert their representatives to the legislation and the importance of it being passed.

Hopefully, said Owens, “We can get the legislation out of committee this year.”

“There’s a buzz going around in Albany, the state capital,” he told AGRR. “One shop owner I spoke with said his assemblyman had called and asked what was going on about this bill, so it showed that he had heard about it and wanted to find out what the story was.”

Last year Owens met with Senate and Assembly representatives to get two bills introduced (S3429 and A07199) to remove the exclusion in 2610b. “I have been attempting to rally support and have traveled from Long Island to Buffalo talking to glass shop owners. Many of them are afraid of the networks or the insurance companies black listing them,” he explained.

He urged all glass and body repair shops in the state to send letters of support to their elected officials. The bill is called to come out of committee, but, “if the legislators aren’t made aware that this is an issue, they have no reason to support it,” he explained.

COMPANIES
Diamond-Triumph Makes Closures, Reorganizes 
Several Diamond-Triumph shops have closed recently, including some in Michigan. When asked about the closures, Diamond-Triumph released the following statement:

“Diamond-Triumph Auto Glass has recently closed 15 branches. The company’s decision to close these branches was primarily due to overlapping servicing of market areas and due to change in industry demand.

“The markets for 11 of the branches will continue to be serviced by adjacent Diamond-Triumph Auto Glass branches. The company will no longer service the Chattanooga, Tenn., Corpus Christi, Texas, Springfield, Mo., and De Moines, Iowa markets. The key customers that were previously serviced in these four market areas have been contacted so they can seek other options for glass service.

“The company does not anticipate any additional closures at this time and looks forward to our expanding growth, which is in line with our corporate strategy. Diamond-Triumph Auto Glass currently services over 250 markets in the United States.”

Glass Doctor Franchise Changes Hands
Marv Degerness, who owns Glass Doctor franchises in Fargo, N.D., and Moorhead, Minn., has purchased the Glass Doctor of Grand Forks, N.D., from Tom Kuchera and added it to his franchise. The franchise now has three service location and six vans. The purchase was completed at the end of February.

Glaxis Awards Two Gold Partner Status
Glaxis has named retail auto glass software providers Mainstreet Computers and GTS Services as Gold Partners, a recognition given to software companies that fully implement Glaxis technology capabilities in their systems for auto glass retailers.

Fahmy Mechael, business manager for the Pittsburgh-based company, a division of PPG Industries, praised the “progress that all our point-of-sale software partners have made to build Glaxis into their products.” 

“Glass shops that take advantage of Glaxis technology for transactions improve productivity at every step in the sales process,” stated David Carnahan, president of Mainstreet Computers, which is headquartered in Belleville, Mich. In addition, he said Mainstreet’s Gold Partner certification adds credibility and gives shops using its software another way to “stand out from the crowd” when marketing to the insurance community.

Mike Jones, president of GTS Services, which is located in Portland, Ore., added, “By enabling our GlasPacLX software with Glaxis, GTS is delivering the highest EDI success rate in the industry. Our customers’ shops are improving their cash flow and eliminating administrative tasks, enabling them to focus on providing superior customer service and putting them ahead of their competition.”

According to the company, more than 2,000 U.S. glass shops, parts suppliers and insurance and fleet companies use Glaxis products. To achieve Gold Partner status, software companies must develop products internally according to Glaxis trading partner specifications and conduct testing to ensure proper implementation. Gold Partner status must be recertified annually. In addition to the two Gold Partner companies, IBS Software, Digital Business Controls, GlassMate, Quest, and eDirectGlass are Glaxis enabled software providers. Glaxis was introduced in the market in early 2002.

Kryger Glass Opens St. Louis Distribution Center
Bucking the recent trend of independent glass businesses being acquired by national organizations, Kryger Glass, a family owned, Midwest auto glass distributor has opened its tenth distribution center, in St. Charles, Mo. 

“Regardless of the direction the industry seems to be taking, we feel that there is a huge opportunity for independent distribution in the St. Louis area. Since 1947, our business has grown by building lasting relationships based on exceptional service, selection and competitive prices,” said Bill Kryger Jr., company president, explaining the decision. “We intend to continue this practice in the St. Louis area. Feedback from independents in the market has indicated that they would like an alternative to the national guys, we will be that alternative”.

The St. Charles Distribution Center will be led by Joe Stevenson, formerly of Independent Glass Distributors. “Joe brings a long history of industry experience and customer satisfaction to our company. He came highly recommended and we are pleased that he joined our team,” added Kryger. 


AGRR
© Copyright 2006 Key Communications Inc. All rights reserved. No reproduction of any type without expressed written permission.