Volume 9, Issue 6 - November/December 2007

AGR Reports
breaking news powered by glassBYTEs.com™

COMPANY NEWS
Platinum Discusses PPG Buy
Pittsburgh-based PPG Industries announced on September 13 that it has signed an agreement with Platinum Equity in Beverly Hills, Calif., to sell its automotive original equipment manufacture (OEM) glass and automotive replacement glass (ARG) and services businesses (which includes GTS Services and LYNX Services) for approximately $500 million. 

Platinum Equity says it focuses on “business continuity as one of the most critical measures of a successful transition,” according to its website. It also says it aims to provide uninterrupted customer service, minimal employee uncertainty and preservation of the seller’s brand reputation. “Our ability to maintain business continuity through transition is what allows us to pursue deals that pure financial buyers might forego,” the company says. 

Platinum owns a number of companies from a variety of industries including the automotive aftermarket industry (American Racing Equipment), chemical manufacturing, communications equipment and services and telecommunication services (which comprises the largest part of its portfolio), industrials, logistics services, pharmaceutical marketing services, professional turf care, software, steel services, supply chain management solutions and transportation services. The company was founded in 1995 by chairman and chief executive officer Tom Gores. 

Company spokesperson Mark Barnhill told AGRR magazine that it is too early to discuss the details of the acquisition by Platinum Equity. 

“We’ve signed a definitive agreement to buy the business … the transaction is not complete yet,” he says. “It’s premature for us to talk about the business and what we’re going to do with it.” 

He adds that Platinum cannot disclose much since PPG is a publicly owned company. “It is a publicly owned company and we must follow the rules of disclosure that accompany the nature of a publicly owned business,” Barnhill adds. Barnhill does not expect the completion of the sale to take long, though. 

“I think we’ll be in a position to talk … when the sale is final,” he says. 

PPG spokesperson Betsy Bialosky told AGRR magazine that at press time she expected the sale to be completed in the fourth quarter of this year, and until then it’s impossible to tell what the future may hold. As for personnel changes and possible plans for the company once the sale is complete, Bialosky says the future is up to Platinum Equity.

“Platinum will make that decision [regarding personnel] when it takes over when the final transaction is completed,” she says. “That’s down the road for Platinum.” 

She adds, “We don’t know how many people will be affected, but in all of those businesses we have 4,400 people.” 

“I can’t get into that either,” she says. 

A source familiar with PPG who wished to remain anonymous says he suspects the alleged Guardian deal may have fallen through due to union issues—though he notes this is pure speculation. 

“Assuming they were talking to Guardian and that fell through, I’m going to guess, and this is strictly speculation, that maybe it had something to do with the union contracts,” he says. 

Ian Graham of Windshield Solutions in Cloverdale, Va., says that news of the sale didn’t come as much of a shock to him.

“I wasn’t a bit surprised. It’s exactly what I expected,” he says. “I think it would have been a bit more exciting had it been sold to an industry player, but the private equity firm is exactly what I expected.” 

Dave Hackett of Premier Auto Glass in Waukesha, Wis., agrees.

“I was surprised earlier when the news first came out that PPG was looking for a buyer, but now that they have sold I am not at all surprised an equity firm purchased them,” Hackett says. 

“The question now is, how long will Platinum Equity hang on before selling PPG again?” The question Hackett asks is one on the minds of many industry professionals. If the company does sell off the business, or portions of the business, it could have more of an effect than the current situation. 

“As far as what effect it will have on my business I don’t expect it to have much of an effect at all at the moment because nothing will change right away,” says Graham. “The private equity firm will begin to trim whatever fat it can find and then most likely split the company up into pieces and sell it off. That’s what private equity firms do after all.” 

Hackett says an inside source told him he doesn’t have anything to worry about—at least in his area.

“I feel at this juncture it will have no effect on our business unless PPG moved out of our market,” he says. “After speaking with one of their regional reps (whom I have known for almost 20 years), there is no anxiety or feeling that they will move out or close here. Other markets? That’s anybody’s guess.” 

No matter what, most agree the story’s not complete yet.

“There is no doubt changes are ahead,” says Neil Duffy of Auto Glass Menders in San Jose, Calif. “Platinum may have a buyer for one or more segments in the wings waiting. Platinum may wait, reduce expenses and sell off much later.”  www.platinumequity.com 

LEGAL
Former ABRA Employees File Class Action Suit Against Company

Two former employees of ABRA Auto Body & Glass have filed a class-action suit against the company alleging that it required customer service managers (CSMs) and customer service representatives (CSRs) to work overtime without pay and that it did so by misclassifying these employees as “managerial,” which exempted them from overtime pay. The suit was filed on July 17, 2007, in the United States District Court in Minnesota.

The plaintiffs, Thomas Hale and Justin Schreckenstein, claim that as CSMs, they were required to carry a workload that could not be completed without working more than 40 hours per week and that 50 percent of their jobs were comprised of non-managerial duties. They allege that this occurs with CSRs as well. In addition, the plaintiffs claim that the company failed to pay overtime compensation to CSMs and CSRs in violation of the federal Fair Labor Standards Act (FLSA) and applicable state laws, according to the complaint.

Hale, a Georgia resident, was employed by ABRA as a CSM from around February 2005 through February 2006, and once again from July 2006 through November 2006. The complaint alleges that Hale consistently worked more than 50 hours per week. Schreckenstein, also a Georgia resident, claims he was employed by ABRA as a CSM from June 2004 up until July 2005, and again in October or November 2005, according to the complaint, and that he also regularly worked more than 50 hours per week without compensation for the hours in excess of 40.

The plaintiffs claim that ABRA CSMs and CSRs do not perform managerial duties, such as “significant judgement or independent decision-making,” and that their main duties involve sales, estimates and customer service. However, the claim notes that “ABRA takes the position that these store managers are exempt from legal requirements to pay them overtime because they are ‘managers’ or ‘representatives.’”

The complaint also alleges that ABRA classified employees this way in an effort to increase its profits.

“Plaintiffs allege that Defendant, in order to generate millions of dollars of net profits, has intentionally and improperly designated ABRA CSMs and CSRs, including Plaintiffs and members of the Class, as ‘exempt’ employees in order to avoid payment of overtime wages in violation of applicable federal, state and common laws,” says the complaint.

The plaintiffs claim that they and others who qualify to participate in the class-action suit “are entitled to compensation for unpaid overtime together with pre-judgment interest and liquidated damages.”

The complaint notes that CSMs and CSRs at ABRA, its subsidiaries and affiliates at any time within the three years prior to the filing of the complaint “through the date of the final disposition of this action (the ‘Federal FLSA Period’) or limitations periods as provided for in the applicable state wage and hour laws and/or regulations (the ‘State Periods’) that exceed the federal FLSA Period” are eligible to participate in the class-action suit.

Joseph M. Sokolowski and Lindsay J. Zamzow of Fredrikson & Byron P.A. in Minneapolis, who are defending ABRA in the case, filed a request on August 20 for an extension to respond to the complaint. Extensions have been been granted through October 17.

The plaintiffs are represented by Clayton D. Halunen of Halunen & Associates in Minneapolis.

ABRA representatives, including both spokesperson Victoria Reinart and Sokolowski, declined to comment on the case.

Halunen could not be reached for comment.

Suspect Pleads Guilty in Chance’s Murder
Stripper Robert Lemke has pleaded guilty to first-degree murder for the death of auto glass mogul Rick Chance, according to reports from a variety of news outlets, including KPHO.com, Phoenix’s CBS station (see related story in September/October 2002 AGRR). Chance, whose body was found in a hotel room in Tempe, Ariz., in August 2002, was the former owner of Empire Glass Cos., an auto glass repair and replacement chain in the Phoenix area. 

Chance had left the auto glass industry to enter the jewelry business prior to his death.

Lemke and Brandi Hungerford, a fellow stripper, were arrested approximately two weeks after the murder, according to reports from KPHO.com.

Glass Just a Click Away for Shops and the ‘Do-It-Yourself’ Market
Windshieldstogo.com, a website that sells automotive glass directly to consumers and/or shops, was launched in 1999 and continues to grow, according to company president Beau Turner. Using the website, glass can be ordered online and either shipped to a shop (or to a customer’s home), or picked up at one of the company’s warehouses. 

While Turner says the company does not advocate “do-it-yourself” windshield installations, it does offer links to its windshield tool supply division, which the website says offers “tools for do-it-yourself auto glass installation and repair,” and links to windshield installation guides. The windshield supply division was launched about a year and a half ago, according to Turner.

“Our disclaimer is that we discourage [consumers] from installing their own glass and to only used trained certified installers,” Turner tells glassBYTEs.com™/AGRR magazine. “It’s not something you really want people doing themselves. But some windshields you could—on some of the older cars.”

As for the installation guides available via a link on windshieldstogo.com, Turner says these are meant to serve only as a reference.

“We give that just as a reference. We don’t back it up,” he says. “That’s just a link that has some information that we know of about installing glass. Again, when we send someone information about picking up their glass, we do tell them that we don’t really recommend that they install—at least on windshields.”

Turner says the company does not discourage customers from installing other glass parts, though.

“Of course there are all the tempered [parts] and door [glass]—most people can do those themselves,” he says.

Windshieldstogo.com does offer to provide installation as well, through a network of shops—who can be considered for addition to the site’s list by entering their info on the website, under a link called “Add Shop.” Turner says there’s no fee for this service.

“If we’re selling the glass installed, we contract with another shop to do the labor part of it,” he says.

Turner could not disclose how many jobs a day it normally contracts—nor how many windshields it sells directly to consumers.

For its glass sales, Turner, who owned his own auto glass shop in central California prior to the launch of the website, says the company has a wide range of distributors it subcontracts throughout the country.

In addition, windshieldstogo.com offers a range of windshield repair systems for the do-it-yourself market. However, if a customer needs a windshield repair and would like to have it done professionally, Turner says the company refers the customer to a shop, but doesn’t get involved in the payment process.

The company’s latest venture is a site called autoglasshosting.net, which allows shops to pay to have a website created automatically.

“[Shop owners] can actually go online and sign up and it immediately creates a website for them,” Turner says. “We haven’t really been pushing it but we’ve signed up quite a few shops and we’re really going to push it in the next few weeks.”

RESEARCH
Hydrophobic Coatings Reduce Driver Response Times, According to Report

Hydrophobic coatings may reduce driver response times, according to a study conducted by the University of Michigan Transportation Research Institute, cited in a later study conducted by Rob Cirincione of the Center for the Study of Responsive Law in Washington, D.C., “Innovation and Stagnation.” The Center for the Study of Responsive Law is a nonprofit organization that conducts research and educational products to promote awareness of the needs of consumers. It was founded by consumer advocate Ralph Nader. 

According to Cirincione, “hydrophobic coatings bond to glass at the molecular level and force water to bead up and roll off the surface.” The University of Michigan study concluded that the coatings “decreased the minimum visual resolved by 50 percent.” By treating glass with hydrophobic coatings, the study says that nighttime visual performance can be made equal to that of untreated daytime performance. 

Circincione adds that hydrophobic coating development has improved, and the latest hydrophobic coatings can be effective for up to five years and 30,000 miles (as opposed to their predecessors, which lasted for only a few weeks or months at a time). 

In addition, Circincione notes that heads-up display systems can increase safety as well. He refers to a system called Siemens VDO, which allows “speed, navigation and vehicle status indicators to be projected directly onto the windshield” and provides “50-percent reduction in the ‘time needed to absorb information.’” 

COMPANY NEWS
Safelite Launches Ad Program

Columbus, Ohio-base Safelite Glass Corp./Belron US has launched a radio advertising campaign throughout the country to build its brand. While AGRR magazine/ glassBYTEs.com™ has received reports that there has been an upswing in advertising, particularly in the Orlando, Charlotte, N.C., and St. Louis areas, Safelite/Belron US spokesperson Jenny Cain says this program is part of its ongoing effort to build its brand. 

“Even prior to the Belron acquisition of Safelite, we had advertising strategies in place to build our brand,” she says. “So, this campaign is part of our ongoing brand-building efforts. Belron has always been a proponent of building strong brands and has built the strongest auto glass brands across the world. So, this strategy is also in alignment with our parent company’s philosophy of leveraging the strength of our brands to profitably grow our business.” 

Cain notes that the current program has a focus on radio and is running in various markets across the country. 

“It is part of our regular, ongoing brand-building efforts,” she says. “We do not want to disclose specifics because of the competitive nature of our business.” 

She also notes that so far, there has been a positive response. 

“We are very pleased with the results,” Cain says.

According to Tee Cambre of Lloyd’s Auto Glass in Orlando, the program started in his area September 24 and was very apparent to both shops and consumers in the area.

“The frequency is unbelievable,” Cambre says. “Radio spots are 30 seconds and they are hitting every radio station. They are stressing repair as the focal point of the ads but refer to the fact that they replace 2 million windshields a year.” 

He adds that he has also seen ads on television, both on regular networks and cable television.

“I have heard from several customers and friends asking, ‘what’s up?’“ he says. “Competitors are also calling. I would think with them spending this much money it’s got to influence every glass shop in the market.” 

KUDOS
AGRR Columnist Publishes Sales and Marketing Book for Auto Glass Shops
Bob Theriot Jr., author of “Sidelites,” an AGRR column (see page 18), and the marketing/sales manager for Southwest Auto Glass, has published “Pounding the Pavement—Tools, Techniques and Inspiration for Succeeding in Sales.” The book is designed for those in the auto glass industry.

“This is a really tough industry, and I wanted to help my fellow colleagues any way I could,” Theriot says. “I felt the best way was to write a book about selling and marketing.”

Theriot adds that he tries to clear up misconceptions about the industry in the book, too. “There are lot misconceptions about the industry and how to market your business. This book can definitely help anyone selling and installing auto glass and related services,” says Theriot.

The current book is the first in a series of four and is available for purchase worldwide through Xlibris.com. At press time, Theriot expected the book to be available on Amazon.com, BarnesandNoble.com and 200 other online retailers by October. 

WEBSITES
glassBYTEs.com™ Launches Blogs

glassBYTEs.com™ recently launched two brand-new web-based logs (“blogs”), “View from the Trenches,” written by Neil Duffy, owner of Auto Glass Menders in San Jose, Calif., and “For the Record,” written by Penny Stacey, editor of glassBYTEs.com/AGRR magazine. Other blogs will be added in the future.

Each blogger will update his or her blog on a specific day and discuss very specific topics relating to the auto glass industry, ranging from industry practices and procedures to weekly recaps.  http://nduffy.blogspot.com or http://editorpenny.blogspot.com 

AGRR
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