Volume 34, Number 5, May 1999

NAGS Pricing Examined 
During Recent Seminar

by Leslie Shaver

With the new National Auto Glass Specifications (NAGS®) Benchmark Prices™ and the decision by some AG manufacturers to publish alternative price lists, the auto glass industry has been in turmoil during the early months of 1999. That turmoil and confusion was best expressed in a recent seminar on the new NAGS pricing at the NGA Convention. This discussion opened the floodgates for dialogue on insurance companies, subpar glass shops, safety issues and many of the other problems plaguing the industry.

The seminar began with panelists Wayne Turner of Glass Technology; Joe Mesko of Mesko Glass & Mirror Company; Tom Lee III of Lee & Cates Glass; John Morris of Jack Morris Auto Glass; Vivek Vasuveda of NAGS; and moderator Cindy Minnion of JC’s Glass in Phoenix, AZ, offering opening statements. Morris focused on the importance of alerting customers to the pricing changes beforehand. "I don’t like talking price with a customer," he said. "But most of my customers thought this was a good thing. They felt the deep discounts tarnished the entire auto glass industry."

The next speaker, Lee, was the first to move past NAGS pricing and point the discussion toward the other problems in the industry. "One of my competitors is trying to give a 52-percent discount and another is giving flat rates," he said. "In a desire to get more business we are tarnishing our industry. Why do we do this to ourselves?"

Mesko offered a plea for installers who have ignored labor in the new pricing. "Labor is quite a problem," he said. "NAGS has adjusted for labor, but we missed the boat. We need to look at this again and put a value on our people."

Turner focused on his belief that the auto glass industry is shooting itself in the proverbial foot. He admonished glass installers for not holding the line of quality and pricing, yet blaming their problems on NAGS. "NAGS is not the problem. We are the problem," he said.

Finally, Minnion wrapped up the panel discussion with a summary of each panelist’s presentation and additional commentary, including a look at how the glass manufacturers’ reaction to NAGS pricing has made it difficult for glass shops to know when they are making a profit. "The manufacturer’s reaction to NAGS pricing has made it difficult to find the best value," she said. "If I buy from one manufacturer I lose money, but if I buy from another I make money."

The end of the panelist discussion brought reaction from a number of audience members. One pertinent question came from a installer who asked about the large gap in prices between two similar windshields. Russell Corsi of PPG Industries bravely stepped to the podium and answered the installer’s concerns, saying that speed, complexity, yield, labor, material and profit all figure into pricing decisions.

Vasuveda, a former employee for glass manufacturer Pilkington LOF, followed by giving a specific example of how glass pricing can be inconsistent for prices that seem similar. He told of a story where a simple piece of glass the company manufactured became very expensive because it is difficult to find proper packaging. "Manufacturing is not as simple as it looks," he said.

After further discussion about glass prices, the dialogue abruptly turned to installation safety as Frank Levesque of Fein Power Tools of Pittsburgh took the podium. "Out of all of these complaints, I have not heard quality being a primary concern," he said. He went on to condemn the fly-by-night glass installer who simply puts a magnet on a truck and starts replacing glass. "We need certification for these people," he said.

Morris agreed certification was important, but stressed that customers need to recognize its value. "There are always going to be people who do substandard work," he said. "We need to educate the fleets and insurance companies about proper installation."

The discussion soon shifted back to insurance companies, as David Mitchell of Glass Master Group of Baton Rogue, LA, spoke about the importance of proper installation and the possibility of a two-tiered payment system from insurance companies that would reward certified auto glas replacement shops. "Insurance companies need to recognize there is a premium on proper installations with the right adhesives." Finally, Mitchell addressed NAGS saying the pricing formula was no longer in sync with truckload pricing.

On that note Minnion wrapped up the wide-ranging seminar by re-emphasizing the importance of NAGS and the need for installers to continue to pursue educational opportunities. "NAGS is the glue of the industry now," she said. "NAGS is an information source and information is power."

Leslie Shaver is an assistant editor of USGlass magazine.


USG

© Copyright 1999 Key Communications, Inc. All rights reserved. No reproduction of any type without expressed written permission.