Auto Glass Retailers Endure Price Increases; Report
At least four industry manufacturers and suppliers have
reported in recent months that they are instituting price increases on
their auto glass parts. Pittsburgh Glass Works (PGW) was the first to
announce an increase in mid-May, saying that it was re-evaluating its
pricing on a part-by-part basis “in response to [a] broad-based increase
in costs.” The announcement was made to customers by a letter from PGW
director of strategic development Bill Marshall, who attributed the increases
to the “cost and availability of supply inputs,” along with an increased
demand coming from a rebound in OEM vehicle production.
Pilkington North America issued a similar announcement on May 19, saying
it had instituted an immediate increase on “all automotive glass parts.”
Director of marketing William George, who made the announcement via letter,
also attributed the increase to rising costs.
“We have been unable to offset the escalating material, commodity and
energy costs with our aggressive cost reduction measures,” writes George.
A similar declaration came from Vitro Automotive AGR business director
Jesus Zubiria Luque in early June, citing “dramatic increases which severely
impact [its] cost and which can no longer be absorbed.”
“Fuel and energy prices have driven raw materials related to automotive
glass manufacturing to unprecedented heights as well as impacted our manufacturing
process and logistics costs incurred in order to deliver our products,”
says Luque. “Even though we have implemented internal cost reduction efforts,
the current price levels are no longer sustainable under current industry
Vitro pointed out that its pricing adjustments are being “applied selectively
based on different variables.”
And the increases aren’t just limited to the North American market. China-based
based Xinyi Automobile Glass (Shenzhen) Co. Ltd. announced recently that
it would increase its prices by 10 percent for orders received after August
1. The Xinyi announcement came from general manager Charles Cha, who also
attributed the escalation to rising energy, labor and material costs.
“You may be aware that the labor cost in China will be 20 percent increasing
[sic] from July 1, 2010, and it will be still on the rise,” writes Cha.
“The energy costs, which is one of the major cost factors in [the] glass
business, have been increasing; the cost of raw materials has already
increased by 40 percent so far this year and it is still on a high level.”
Is There a Shortage?
As these price increases have come about, many in the industry also have
reported a shortage of available auto glass parts.
Allan Gurecki, owner of Atlanta-based Glass-2-U Systems, says the problem
began for him early this year and the supply has “deteriorated since.”
“What is frustrating is that some of the most common part numbers for
the most common, middle-of-the-road, working-class type vehicles often
come into short supply,” he says.
And Gurecki’s not the only one seeing this issue. Rich Lutton, owner of
Metro Glass in Omaha, Neb., says he’s being seeing a shortage in parts
for the last couple of months, particularly for newer vehicles.
“We’re definitely affected by [a shortage], though not so far with the
basic stock items, but particularly with the new windshields, especially
foreign windshields,” he says. “We do work for Kia and we’ve had to get
glass for Korea from Kia, because no one’s come out with it.”
Lutton also adds that normally he can find the windshield
he is looking for—but choices are more limited.
“It’s not crisis proportion, but instead of the four distributors we look
at on a daily basis all having the piece of glass we need, often just
one of them has it,” he says.
Suppliers cite several causes for a possible shortage, including increased
“We have been seeing an increase in demand not only for OE [glass,] but
[for] aftermarket, too,” says Juan Carlos Rivas, who handles logistics,
purchasing and exports for Vitro Automotive. “This is causing us some
problems in order to get glass enough to cover our customers’ demand.”
Some of the delays are coming from afar, says Ramon Gonzalez Jr., vice
president of sales and operations for Import Glass Corp.
“We have been experiencing shortages due to the Chinese extending their
delivery time to almost 14 weeks,” says Gonzalez. “This change came suddenly
and most distributors I’m assuming were not prepared.”
And Gonzalez says he’s seeing this from a variety of Chinese suppliers.
“It’s across the board,” he says. “They say that they’re really busy and
Boyd Group Reports 13.6 Percent Decrease in First-Quarter
The Boyd Group, which owns Boyd Autobody and Glass, Gerber National Glass
Services and Gerber Collision and Glass, saw a 13.6 percent drop in sales
for the first quarter of 2010, when compared with the same period of 2009,
according to its first-quarter report, released recently. Sales for the
first quarter of 2010 were $54.7 million, compared with $63.3 million
in the same period of 2009.
The company reported an adjusted EBITDA of $3.4 million for the quarter,
down from last year’s $3.5 million—a decrease of 2.9 percent.
Net earnings were $1.9 million, down 5 percent from $2.0 million in 2009.
“We are pleased to report stable net earnings and EBITDA, as well as increased
cash available for distribution to begin 2010, despite the negative impact
of the weakening U.S. dollar on our U.S. operations and the continuing
negative impact of the economy combined with extremely mild and dry winter
weather in many of our northern markets during the quarter,” says Brock
Bulbuck, president and chief executive officer of the Boyd Group.
In addition, Boyd recently announced it has signed an agreement to acquire
True2Form Collision Repair Centers for $18 million. The sale was expected
to close by the end of August at press time. Boyd also recently acquired
M&D Auto Body in Evanston, Ill., and the Collision Center of Owasso
Inc. in Owasso, Okla. Both have been re-opened under the Gerber name.
Boyd Group’s First-Quarter Results
Door-to-Door Auto Glass Solicitation
The practice of soliciting auto glass repair and replacement work by going
door-to-door has come under the microscopes of police departments in both
the Florida and South Carolina markets in recent months for local concerns
about the required peddler permits and possible door-to-door sales in
Police officers in Charleston, S.C., issued a warning to consumers in
June that they have recently been receiving complaints about Coast to
Coast Auto Glass soliciting door-to-door in the area, according to Sgt.
In Charleston, those soliciting door-to-door are required to have “City
of Charleston Peddlers Permits,” and these have not been issued to Coast
to Coast, Shelor says.
Likewise, in April, two males working for
Tag Promotions in Fort Myers, Fla., were arrested for “peddling” windshield
replacement services without a license. Edward Albert Grano and Justin
T. Herrero, were officially reported to be working for Tag, but Grano
told AGRR magazine that he was working for Coast to Coast at the time
of the arrest.
According to the police report, the two are charged with violating the
county’s law addressing “hawkers” and “peddlers.”
“Edward [Grano] and Justin [Herrero] were going door-to-door peddling
the service of a new windshield through a third-party company, Tag Promotion,
without the proper permits, therefore violating a county ordinance,” reads
Tag representative Matthew Grunske advised AGRR magazine that, on the
day of the arrests, Grano and Herrero had gone out to a customer’s home
to do a pre-inspection and then had checked with some other local residents
to see if they needed work.
Grunske added that the company does not usually send its representatives
door-to-door, and, hadn’t thought the “peddler” permit was necessary.
“We’ve got all of our licenses to be doing business,” he said, “and we
don’t typically do door-to-door [work].”
Grunske could not confirm that the company for which Grano and Herrero
were booking the work was for Coast to Coast, and said that Tag books
work for “several different companies.”
AGRR magazine spoke with Rhonda Jacobson, who is listed as the public
relations contact Coast to Coast on the company’s website, shortly after
“Tag Promotions does not work for Coast to Coast,” she said.
Company spokesperson Jigna Patel declined to comment.
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