Volume 10, Issue 4 - July/August 2008

Taking the Reign

AGRR: Who will replace Mr. Feeney in his current role?
TF: We have announced that Pete Pearson, an associate who’s been with us for about 19 years, will take on the responsibility of our key client sales and support team. He has many years of experience. You may remember the company AFG. AFG had acquired the business he was running in Salt Lake City called A1 Quality Glass. Pete was president and general manager, so when we acquired AFG, Pete came with that acquisition, and for the last 20 years or so with us, he’s held a variety of positions including regional vice president of operations, vice president of field sales, vice president of training and development and, most recently, vice president of sales and support.

AGRR: Are there any other personnel changes to come?
TF: We’ve promoted Mark Placenti to vice president of branding and marketing, and we’ve promoted Dino Lanno to vice president of enterprise-wide procurement and manufacturing and distribution. We’ve created a new senior leadership team that includes Doug Herron, Mark Smolik, Rich Harrison, Dino Lanno, Mark Placenti and Pete Pearson.

AGRR: What are the challenges of taking on this role? Is there anything you’re particularly concerned about?
TF: Any time you take on new responsibly, of course, you have those inner concerns. I have a couple—one is replacing a very successful CEO in Dan Wilson, who had many, many achievements and accomplishments over the past 10 years with Safelite and Belron and, more importantly, in the last five years as our CEO. He really guided the organization very well, so taking over the responsibility from him weighs on me. The organization loves him very, very much and will miss him. So I’ve got my own growing to do. Obviously the challenges of our industry and the challenges of the economy concern me a little bit, but frankly I think our strategy—Belron US’s strategy—supported by the extension of Belron itself worldwide, gives me great confidence that we have a sound strategy. That strategy includes a growth initiative, and we’re going to grow significantly over the next several years.

AGRR: Mr. Lubner, I suspect that there was quite a bit of deliberation in terms of how to structure the position after Mr. Wilson’s departure. Would you mind sharing a little bit about some of the factors that went into your choice of Tom as the new CEO?
GL: Fortunately, we had the benefit of time because Dan and I have been talking about this for a long time, and because we had time we decided very early on that the appointment of the new CEO was going to be done as thoroughly as possible. The process started last year, and we had probably the most vigorous process we’ve ever had at Belron to get to where we are, for the simple reason that the U.S. is Belron’s biggest business and, quite frankly, Belron’s biggest potential. 

Finding the right candidate was absolutely critical and so we looked externally and we looked internally within the Belron worldwide organization including Belron US, and we came up with a short list of candidates who were then put through a process, which included testing in a number of different areas from psychometrics to verbal and numerical reasoning. 

We received feedback about the way all the candidates managed their current roles from their teams, from their peers, from their colleagues, and then finally they went through a testing center, which was held in the United Kingdom. It was attended by six of my senior colleagues including myself. And then, they went through further interviewing, testing, role-playing, case studies and in all of that Tom Feeney came out not only as the best candidate, but actually came out with exceptional results. This really gave all of us a huge amount of confidence that we had chosen the right person. 

You know, this is a process we use for all of our senior hiring so it’s a well-proven process and Tom did so well relatively against the other candidates that … really makes me feel extremely comfortable and confident in his abilities to succeed in this job. It’s a long, long process.
TF: It was very comprehensive—we’ll leave it that. 

AGRR: I know that typically when you have a number of candidates from the same company, occasionally it leaves those that did not get it in a state of anomie. I was just wondering, Mr. Feeney, if you’ve thought about those other candidates and how they might react now.
TF: One of the nice things that Gary did for all of us is that there was an awareness among all of us that we were candidates for the promotion. So we had an opportunity without Gary necessarily knowing about it, to pledge our support to one another if Gary chose another one or other of the several candidates internally, especially those in the Belron US business. And I know that personally my pledge of support was sincere and that if I did not get the job I was going to remain an associate of Belron US with the same level of excitement and commitment to the success of the business if I hadn’t succeeded in the promotion. I can tell you that the other candidates have renewed their pledge to me and I that pledge to them. We were fortunate in the way we approached this, and, frankly, we kidded one other about this, and used the GE example—the people that didn’t get the job left in like six hours, but we did not want to do that. We made a confident decision that we wanted the team to stay intact.

AGRR: Do you foresee any other immediate changes, other than those related to personnel?
TF: We’ve had a two-day management meeting this week where Gary made the announcement yesterday and I can say that the energy level has been very, very high in the organization, with respect to celebrating Dan’s achievements and sending him off the in the proper way. It gave us an opportunity to review where we stood and what all of our initiatives are. I would say my take is that there was a lot of excitement in the room for the future of Belron US.
GL: I’ve never seen so many standing ovations in the space of one day … People really were very, very thankful and gracious about Dan’s contributions.

AGRR: Mr. Feeney, you had made a comment about the fact that Belron US doesn’t intend to register with AGRSS at the recent Independent Glass Association (IGA) Conference in Las Vegas. Did you ever anticipate the reaction you received?
TF: It was difficult to get that foot out of my mouth, wasn’t it? You certainly didn’t misquote me, but, you know, that’s one of those things you’d like to pull back, because I left everyone with an impression that wasn’t necessarily totally true. We have supported AGRSS in the past and will continue to support AGRSS in the future. Glen Moses is on the board [sic Standards Committee], I believe, and I know we want Rich Harrison on the board. 

We’re going to continue to provide human resource talent to AGRSS and we want to help in any way we can to see that quality initiatives are enacted for the benefit of all the industry and the ultimate consumer. That said, at this time we still remain committed to not registering with AGRSS, only because the training standards and practices that we have here exceed those that AGRSS has and we want to continue going down our path of preparing our technicians in the way we believe is absolutely required to be in the Belron family.

AGRR: How would you say it exceeds AGRSS registration?
TF: To get hired here, we put employees through a drug test, a DMV check and a background check, so that’s a condition of employment here. I think Dan Wilson was open about that at the IGA show that he attended, and that’s an important one for us, and one we would highly encourage AGRSS to adopt, and I know Rich, more so than Glen as Glen really is a technical expert, is going to be promoting that if and when he gets elected to the board.

AGRR: Switching gears, what are your thoughts on NAGS? Do you believe it’s relevant to the U.S. market?
GL: I think I went on record a few years ago with my views on NAGS and all I can say is, since then, my views have hardened, especially being in the U.S. market more so than a few years ago. I see NAGS as having no relationship to the reality of the industry in terms of inflationary pressures that are coming from every single direction and I think that NAGS quite frankly is irrelevant. Having said that, it does exist in this market and certainly we’ve got to use it when necessary. But it’s not something that we believe in; it’s certainly not something that is used anywhere else in the world either. This is an unusual situation. In a couple of other markets in the world we are moving away from [standardized] industry pricing. It [NAGS] is nothing that we understand and therefore cannot give it support.
TF: I’d like to add to Gary’s comments. He obviously has a broader perspective than I do, but one of the values of NAGS is the part numbering system. It does give us—the entire industry and the customer base—a commonality. That is the aspect of NAGS that is important to the industry—at least in the near term, I’d say.
GL: I would agree with that. Part numbering is a very complex area. We know that from our businesses around the world. 
TF: And I also think Jesse [Herrera] and [his] team out there have done a better job in the last five years than certainly NAGS has done in years before—they seem to be more open to collaboration on some issues. There are some things we’d like them to pay more attention to that could hurt the industry financially. If they would deal with those things, it could benefit the entire industry.

AGRR: I know when you, Mr. Lubner, made your first speech in the states you made a very impassioned indictment of cash pricing. When I heard you speak again about it a year later, it seemed that tone had softened a bit and you mentioned that cash pricing was necessary in some areas. Would you say your thinking on cash pricing has evolved?
TF: You should have been in our management meeting today ... [laughter]

AGRR: We would have loved that.
TF: Trust me, the first speech was more accurate.
GL: I fundamentally stick with my position, which is that the biggest customer should be getting the best prices. And cash pricing being so much lower than insurance prices makes no sense to me. I’ve said this before, but we don’t see this in any other country except in some parts of Canada and the United States … My belief is we should be getting a fair price for the service we provide.

AGRR: We touched on drug testing earlier. We know you require drug testing for your technicians, but is there a possibility you might require it in the future for network shops?
TF: We actually did a survey last November and we were pleasantly surprised that there were a fair amount of glass shops already doing drug testing for their technicians, and I can say that there are several insurance companies that are bringing that question up, along with criminal background checks, in the interest of protecting their insureds. It’s a very important issue for our industry, and we know that when we don’t hire a technician because of the drug test or background check, they’re often hired in the industry.

AGRR: You guys could really just say “We’re going to require this” and then it would be a requirement.
TF: You mean of the networks?
AGRR: Yes.
TF: I don’t know, do you think we have that much influence?

AGRR: I think that the people you’d be requiring it of think you do.
TF: That makes me feel good [chuckles].

AGRR: When you acquire a company, do you typically require drug testing?
TF: In every situation, we actually start over and think about it. When Belron acquired us, and we integrated Belron Inc. and Safelite, we took a position that everyone was okay, but everyone knew we’d do random drug testing. And indeed we have done random drug tests. We do drug tests after every vehicle accident or safety accident to make sure that there weren’t drugs involved. And it’s not just the technicians, by the way—it’s every employee that comes to work at the company, people in the call center, office workers, management. It’s not just geared at the techs.

AGRR: It’s a little unusual for someone to have such a heavy background in sales to rise to this level. I would imagine with Mr. Feeney’s background, including his accounting degree, that that was particularly attractive as well.
GL: One of the things that we looked heavily into was background. Tom’s done it all. He’s strongly enumerate and knows financials extremely well because of his education. And, very importantly, he understands the operations. For me, the icing on the cake really is that he has built Safelite Solutions into the business that it is and his relationship with all of our key accounts is second to none. He’s well-known, he’s well-respected, he’s well-regarded. His understanding of field sales from the biggest insurance company down to the to the smallest is second to none. If you put all of those things together with his intellectual ability and emotional intelligence, you’ve got a pretty strong candidate.
TF: I should have negotiated harder [laughs]. Honestly, when people say that about me, I don’t think of myself as a salesperson. I don’t know where it came from, but we’ve allowed cross-functional involvement irrespective of the piece of the business you’re personally responsible for. Doug Herron, our [chief financial officer], will be as communicative about operational issues as anyone else. Rich Harrison, who heads up operations today—we want him as involved with key client areas as we can. We allow this cross-functional thing—we’ve never put up fences. I’ve never felt like a sales guy—I’ve always felt like a businessperson who has a responsibility for and accountability to Safelite. 

AGRR
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