Volume 33, Number 8, August 1998

FEATURE:

USGAuto NEWS

Rhode Island Considers Auto Glass Regulations

For the first time, the state of Rhode Island is considering regulating auto glass installation companies under its auto body repair regulations. An early proposal to regulate auto glass shops included provisions for minimum size requirements, an established business location as a base for all mobile operations, and a mandatory requirement for all cars 30 or fewer months in age to be serviced with OE parts without a signed waiver from the owner. Exemptions exist for the provisions.

The regulations also included a requirement that glass installation done as a result of a collision—defined as collision with another vehicle or object—be performed under an auto body shop in conjunction with repair of the vehicle. However, sources have told USGlass that the Rhode Island Glass Dealers Association and independent auto glass shops have succeeded in their push to change the proposed regulations to make auto glass shops independent of auto body shops in collision regulation.

The director of the Department of Business Regulation, Licensing and Consumer Protection Division, in the state has appointed an advisory board to draft a body of regulations governing auto body repair and glass installation there.

 

New Round of Consolidations Begins in Northeast

A number of vocal independent shop owners have recently sold their businesses to larger chains; yet another round of industry consolidation has begun.

Though the reasons for selling differ with each independent shop owner, the issues of size and resources are cited as a common theme. Ed Brill, former owner of Maine Glass in Biddeford, ME, says that consumers are patronizing the bigger chains because they offer the cheapest prices. "There is an attitude in the buying public to look for the lowest possible price," he said. "Obviously, the bigger chains will have more buying power and lower prices."

Brill, who recently sold the shop that he owned for 12 years to what he describes as "a local chain in Maine," has become the operations manager for Oakes and Parkhust in Winslow, ME. Champion Glass of Lewiston, MN, has confirmed that it purchased Brill’s operation.

Though Oakes and Parkhust is larger than Maine Glass, Brill still considers himself part of an independent operation. "I consider it [Oakes and Parkhust] an independent because it is a small chain—in comparison to Harmon and Safelite it is very small," he said. "A guy could say Ed just cashed it in and gave up, but everybody has got to do what they think is the right thing."

One of Brill’s former colleagues in Maine, John Lafreniere, also recently sold his business, Lafreniere Glass Specialists of Lewiston, ME, to Sunrise Glass of Hampden, ME. Like Brill, Lafreniere says that size is a major factor in the consolidation trend. "There is more power in numbers," he said. "If two companies have similar philosophies and interests, but one’s forte is contract glazing and the other’s forte is in auto glass, the consolidation of these companies will make it better for all concerned."

Lafreniere also considers Sunrise an independent. "I feel that on the grand scale of things, Sunrise Glass is a small operation," he said. "It is privately-owned by a husband and wife."

Lafreniere cited family concerns as his major reason to sell. "I wanted to enjoy life a little bit more and spend more time with my family," he said. "I also did not want to have to worry about all the trials and tribulations of running a small business."

Brill said there were a number of factors that led him to sell his business, yet competition was his foremost concern. "I think for mid-sized companies like mine it is getting harder and harder to compete," he said. "Chains want to grow in the state of Maine and they are looking to acquire these kinds of companies."

Brill believes that the added cost in overhead and employees to run a mid-sized business makes them more vulnerable to the larger chains. However, he says smaller shops with an owner and one or two employees will survive because of low overhead costs.

In spite of the current acquisition trend, Lafreniere says that the independents will survive. "I think there is still going to be a role for independents," he said. "I think there is always going to be a role for meeting the customer’s needs."

 

Allstate Begins Alliance With LYNX Services from PPG Industries

Glass shops that do repair and replacement work for insureds of Allstate Insurance of Northbrook, IL, through LYNX Services from PPG Industries should expect a reimbursement schedule consistent with their market area, according to the insurance company.

"It is based on prevailing market rates. In a rural area the rates are different than they are in a major metropolitan area," said Darrell Ebert, senior manager of Allstate. "It [the schedule] is nothing crazy and we are not going to give the store away." (See USGlass, July 1998, Industry News).

Allstate began to phase in electronic processing of invoices for auto glass claims through LYNX, its secondary claims processor, in Florida, North Carolina and South Carolina on July 29. The remainder of the states will be added from August through September.

The alliance between Allstate and LYNX is a result of Allstate’s desire to extend electronic processing capabilities to those shops not covered by its preferred provider, Safelite of Columbus, OH. In the past, Allstate was forced to use paper bills for those shops not in the Safelite chain of stores.

"Safelite is our preferred provider; however there are a certain number of people that choose a shop that cannot be serviced by Safelite," Ebert said. "It’s just that we cannot trade electronically with Apex Glass, for instance, because they are not a Safelite customer."

Safelite remains silent on the move, referring all questions to Ebert.

LYNX, on the other hand, is very excited to be aligned with Allstate. "You can be sure that we are pleased that they decided to work with LYNX," said Chris Umble, director of national sales and marketing at LYNX. However, Umble does not have a clear idea of how much Allstate business will increase its volume. "Time will tell if it will bring a major increase in business," he said.

 

Essex ARG Discontinues Butyl Distribution

Essex ARG of Dayton, OH, has announced that it is discontinuing a series of butyl tape products and a line of liquid butyl sealants. David Frey, commercial manager for Essex, attributes the decision to discontinue the lines to declining demand for butyl products and the misuse of butyl products.

"The last OEM butyl installations were completed in the early 1990s. As a result, demand continues to decline each year," Frey said.

Frey also said that frequent misuse of the butyl products was another reason for taking them off the market. "We see the product being misused and we feel that we have a responsibility to take it off the market," he said.


USG

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