Volume 9, Issue 1 - January/February 2007

AGRReports

The PPG-GM Agreement 
by Les Shaver

General Motors has a new distribution agreement with PPG Industries of Pittsburgh that will allow it to push further into the auto glass business and install branded GM windshields at its dealerships.

“I don’t think we have been as competitive as we plan to be now,” said Pamela Reynolds, a spokesperson for the vehicle maker. “With the new agreement for PPG to distribute GM branded glass, I think that puts us in a better position to serve our customers. We want to offer this to all of our dealers so that we can be competitive, serve our customers effectively and provide quality replacement parts.”

GM is hoping this new distribution agreement encourages its dealerships to do more auto glass replacement work. Whether this happens remains to be seen. But, auto glass shops see pitfalls for the auto manufacturer if it wants to move further into their sphere.

In some ways, the PPG-GM distribution agreement is nothing new. For years, PPG and other manufacturers and wholesalers have been distributing single piece, lower volume parts to GM dealerships. The vehicle manufacturer would then buy large volume parts in full pallet quantities for its parts distribution warehouses. These were delivered to the dealerships. 
“We have been distributing glass to GM dealers for years,” explained David Freeman, director of national account sales for PPG. “Now we have taken over the distribution of all GM-branded glass.”

“GM is improving how quickly our dealers receive GM branded ‘genuine’ OE windshields [i.e. same/next day] from GM’s ship-direct distributor [PPG],” Reynolds said in a written statement. 

GM thinks things will move more quickly because there will be more distribution points.

“Windshield orders were formerly processed through one windshield distribution center, but now all GM-branded windshields will be distributed through 140 PPG nationwide distribution centers,” Reynolds said. “Often this means same-day or next-day delivery for faster replacement turnaround.”

Freeman tempers those expectations a bit. “It may get there quicker,” he said. “In some cases they were shipping out over night. In rural areas, we’re still going to be shipping on common carriers, so it may not get there any quicker. Typically it was overnight and within 24 hours. That’s the same level of service we’re committed to.”

Speed of distribution is one thing, but judging from Reynolds’ comments, it sounds as if the real goal is for GM dealers to capture more of the auto glass replacement market. The company is certainly gearing up for that task.

“Installation and business training classes will be available to assist GM dealers that want to be active in the windshield installation business,” Reynolds said. The company has spoken with groups that offer industry training programs as part of its research to determine how the program is going to be structured and implemented. GM representatives were at the NACE show in November, and spoke with some industry training groups and associations there. “They’re looking at a comprehensive program,” said one person familiar with the discussions at NACE.

But the vehicle manufacturer isn’t decreeing that its dealers install glass. GM dealerships will continue to have the choice of either subcontracting windshield installations or dealer windshield installations, according to Reynolds. 
Catching On?

While GM seems to want its dealers to start doing auto glass replacements, that doesn’t mean they’ll follow suit. If they don’t, auto glass retailers probably won’t be affected that much, said a former PPG executive. 
So the question remains: Will the dealerships decide to do this en masse? “I wouldn’t rule it out,” the former PPG executive said. 

“Certainly the dealerships have the facilities and experience to make this work since most already have both service departments and body shops,” said Hal Hare, corporate claim manager for State Auto, a regional insurer based in Columbus, Ohio. “Consumers may not be familiar with Bud’s Glass, but they have heard of their local GM dealer. This name recognition could give them an advantage. A program of this sort could create a drop in business for the local glass shops on late model cars.” 

Hare also notes there might be a domino effect with other vehicle manufacturers. “If it works for GM, you can expect Ford and Chrysler to follow suit,” he said. “Should this become a trend, it will create new challenges for the smaller operators.”
Others in the industry aren’t so sure they’ll see GM vehicle owners go to their dealership for windshield replacement work. Scott Owens, owner of Excel Auto Glass in Lake Katrine, N.Y., doesn’t think there is anything to worry about in the new announcement.

“PPG will be distributing parts with the GM logo,” Owens said. “If the car is under warranty or the customer is requiring a part with the GM logo, this will come into play. Only time will tell, but I don’t believe GM’s getting involved in the industry is a long-term thing.”

The main issue: Dealerships hiring specialty trained glass installers.

“I don’t see a class A technician who is doing piece work and making $25 an hour wanting to install windshields at what insurance companies will pay,” Owens stated. “If GM is paying a warranty price of $72 or $80 an hour, that won’t be as proficient to the dealerships for auto glass as it is for engine work. I don’t believe they will have enough volume to have one person specializing in windshields at a dealership. 

“I do not believe that the service manager or owner of any dealership would hire additional staff to repair or replace windshields,” said Henry Grady Bernreuter, owner of Crystal Clear Glass in Inverness, Fla. “I seriously doubt that they would ever have the amount of work to justify the expense of a glass technician, nor do I think a glass technician would work for a dealership where they might put in a windshield once a week and then sweep the floors or change oil the rest of the time.”

The main problem with GM bringing in someone to do auto glass replacement is that if the shop does more than just warranty work, the insurance companies won’t pay enough to make it worthwhile, agrees one AGRR shop owner in Boston. In addition, he wonders how dealerships will keep their components for installing windshields fresh with infrequent installations.

Business as Usual
In the long run, Bernreuter thinks he will continue to get work from GM dealers.
“I believe it is more likely they will still call us to do the work ‘behind the shop’ while they get the credit for the job, which is business as usual,” he said. 

If retail glass shops want GM-branded glass, they must go through the dealer though.
“If a dealer chooses to sublet glass, the price the dealer pays is strictly between the dealer and his vendor,” GM’s Reynolds. “For warranty work, GM only reimburses GM dealers for warranty glass replacements. The subletting dealer pays his chosen vendor.” 

And, starting this year, there will be little choice in the type of windshield GM car owners can get when they go to get their warranties fulfilled.

“Beginning in 2007, GM branded OE windshields will be required for warranty replacements,” Reynolds said. “GM OE windshields are optional for customer pay/insurance sales.” 

Les Shaver is the editorial director of AGRR magazine.

INDUSTRY MEETING
Glass Expo Midwest Set for October 9-10

Glass Expo Midwest™, the only event dedicated to the Midwestern auto and flat glass industry, will be held October 9-10, 2007 at the Amway Grand Plaza Hotel, in Grand Rapids, Mich. 

This event will feature two days of exhibition, educational seminars, a local plant tour and cocktail party, sponsored by Gunther Mirror Mastics, on the trade show floor on Tuesday, October 9. 

Glass Expo Midwest is co-sponsored by the Michigan, Ohio, Minnesota, Indiana, Iowa and Wisconsin Glass Associations, Detroit Glass Dealers, Illinois Glazing Association, the Association of Glazing Contractors and AGRR magazine. The event typically attracts between 800-1,200 attendees depending on its location. This is the second time in its history the event will be held in Grand Rapids.

On the Web
Bob Beranek Expert Advisor for AGRR Technical Forum
Noted industry installation expert Bob Beranek is serving as an expert advisor to the AGRR Technical 
Forum (http://www.glassbytes.com/techforum/).

Started last fall, the AGRR Technical Forum has become the place technicians go to compare notes and trade techniques on difficult installation. “We have been extremely pleased and gratified by the high usage on the board in just a few months,” said Holly Biller, vice president of Key Communications which publishes the tech forum along with AGRR magazine and glassbytes.com™. “Having a noted expert like Bob to answer tough questions, dispel myths or point our viewers in the right direction will only add to their experience. In addition to sharing their techniques with each other, Bob will also share his vast years of experience as well.”

Beranek has been a master installer for ten years and a technical trainer for 18 years. He is president of Automotive Glass Consultants in Sun Prairie, Wis., and has led installation demonstrations at numerous industry events. He is a member of the Auto Glass Replacement Safety Standard (AGRSS) Standards Committee and has served as a judge in the Auto Glass Technician Olympics (AGTO) for two consecutive years. He is also the founder of AutoGlassUniversity.com (AGU). 

AGRR
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