SPOTLIGHT: EXCLUSIVE NACE AUTOMECHANIKA PREVIEW!
UNCENSORED! George Avery on shop practices
WATCH OUT! How to avoid the victim zone
Rum, Cigars & Classics
The
Classic culture in Cuba is alive & well
Acadian Way
Rose-May Sarkis and the team care for and comfort customers. It works. Read how! Plus
Eric Léveillé of NAPA on long-term shop success, Carrossier ProColor opens new training centre, massmarket carbon fibre and much, much more! Volume 16, Number 2 l April 2017
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$7.95
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Canada Post Canadian Publications Mail Sales Product Agreement No. 40841632 l 86 John Street, Thornhill, ON L3T 1Y2
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CONTENTS
features 28 Shop Longevity Eric Leveille of UAP/NAPA on achieving long-term success with your shop.
Volume 16, Issue 2, April 2017
31 Shop Investment Surveys show repairers plan to invest in equipment and training. 35 Coatings Consolidation PPG bids twice for AkzoNobel; Sherwin-Williams must divest. 41 Greatest Shops You can be among them if you avoid the victim zone.
25
55 Global View India’s expanding middle class means more cars and more repairs.
The team at CSN-Sarkis Collision keep the focus on customer care.
59 Classics Live! Rick Francouer reports on the classic car scene in Cuba.
NEWS 8, 62 COLLISION REPAIR 69 Towing & Recovery 71 RECYCLING news
departments 6 Publisher’s page by Darryl Simmons Show time!
66
Jon McNeill of Tesla says the company will add 300 shops to its collision network.
71
Auto recyclers shine at annual OARA Convention with charity donations.
On the Cover: Allain, Rose-May and Adam Sarkis of CSN-Sarkis Collision & Car Care Center. PHOTOGRAPHY BY WALLY MCLAUGHLIN
20 Who’s driving? by Jay Perry Defined goals. 21 training by Andrew Shepherd Canada’s Gold Class journey. 22 Prairie view by Chelsea Stebner Growing techs.
YOUR ONLINE SOURCE
Canada’s collision repair information resource. New articles and top news stories daily. Visit www.collisionrepairmag.com.
76 Recycling by David Gold Proud and committed. 78 Industry Insight by Jeff Sanford Inside acquisitions.
HAVE YOUR SAY. We welcome your comments on anything you see in Collision Repair magazine. Send your feedback to editor@collisionrepairmag.com.
April 2017 collision Repair 5
publisher’s page
ShowTime! NACE Automechanika focuses on what you need By Darryl Simmons
A
re you as excited as I am? It’s almost time for NACE, and this year’s show is going to be bigger and better than ever. NACE has always been about the essential core of collision repair, focusing on the business and technical aspects of repairing cars. It’s a big show, so there’s no shortage of glitz and glamour. Strip that away, though, and you’re still left with an experience that delivers the information you need to run your business profitably.
PUBLISHING DIRECTOR JAMES KERR (416) 628-8344 james@mediamatters.ca EDITORIAL DIRECTOR MIKE DAVEY (905) 549-0454 editor@collisionrepairmag.com
draws, such as the MSO Symposium, are still going strong for this year. Show management has also added some new features to help keep pace with our constantly evolving industry. Of particular interest, this year will see the introduction of the Advanced Technology & Diagnostic Repair (ATDR) Forum. This is a completely new feature premiering at NACE Automechanika 2017. Our business is changing rapidly, forcing everyone to reevaluate training, equipment, operational and
Make sure to check out Canadian Corner at NACE Automechanika 2017! This year’s show is especially exciting. For the first time ever, NACE is combining with Automechanika Chicago. The result is much more than just a trade show. The combined shows promise to bring you the very best in new equipment and products, top-level training for managers and staff and much more. We’re the exclusive Canadian media partner for NACE Automechanika, and you get can get special deals and access some free training when you register with us. Email me at publisher@collisionrepairmag.com for more information. The combined NACE Automechanika may be the single biggest collision repair event to ever take place in North America. Thanks to our official standing with the show, we’re able to bring you exclusive previews of what you can expect, starting on page 49 of this issue. This preview doesn’t cover everything you’ll see at NACE Automechanika (it couldn’t possibly!) but we’ve sought out some of the most interesting and exciting presentations and locations to help you plan your time. You’ll notice that some of NACE’s biggest
PUBLISHER DARRYL SIMMONS (647) 409-7070 publisher@collisionrepairmag.com
repair best practices, as well as interactions with vehicle owners. The ATDR Forum takes this constant change as a given and puts the focus on the technology that is redefining exactly what it means to complete high-quality, safe repairs. New technology such as sensors, onboard cameras, accident avoidance systems and wireless communications are rapidly propagating throughout Canada’s fleet. Content for the ATDR Forum was designed in consultation with vehicle manufacturers, insurers, repairers and technology companies. The goal is to make sure the program is comprehensive and relevant. Finally, make sure to check out Canadian Corner at NACE Automechanika 2017! Collision Repair magazine is once again pleased and honoured to serve as a meeting place for the Canadian contingent in attendance. See you there!
6 collision Repair collisionrepairmag.com
CREATIVE DEPARTMENT MICHELLE MILLER (905) 370-0101 michelle@mediamatters.ca STAFF WRITERS Barett Poley barett@mediamatters.ca Jeff Sanford jeff@collisionrepairmag.com VP Industry Relations & Advertising GLORIA MANN (647) 998-5677 advertising@collisionrepairmag.com Industry Relations & Advertising Assistants Maria Angela Yanita, Yuhan Pan Managing Director iMM/Director Business Solutions & Marketing ellen Smith (416) 312-7446 ellen@mediamatters.ca CONTRIBUTORS Rick Francouer, David Gold, Dave Luehr, Jay Perry, Andrew Shepherd, Chelsea Stebner SUBSCRIPTION One-year $39.95 / Two-year $64.99 Collision Repair™ magazine is published bi-monthly, and is dedicated to serving the business interests of the collision repair industry. It is published by Media Matters Inc. Material in Collision Repair™ magazine may not be reproduced in any form without written consent from the publisher. The publisher reserves the right to refuse any advertising and disclaims all responsibilities for claims or statements made by its advertisers or independent columnists. All facts, opinions, statements appearing in this publication are those of the writers and editors themselves, and are in no way to be construed as statements, positions or endorsements by the publisher. PRINTED IN CANADA ISSN 1707-6072 CANADA POST CANADIAN PUBLICATIONS MAIL SALES PRODUCT AGREEMENT No. 40841632 RETURN POSTAGE GUARANTEED Send change of address notices and undeliverable copies to: 455 Gilmour St Peterborough, ON K9H 2J8
“We acknowledge the financial support of the Government of Canada.”
Collision Repair magazine is published by Media Matters Inc., publishers of:
NEWS
People on the move Canadian Hail Repair (CHR) is expanding and has added new staff members to the organization. Joining the team are Greg Smith as Director of Operations, Jared Niedzielski as Southern Alberta Appraisal Manager and Doug Riches as Manager of the company’s operation in Red Deer, Alberta. The announcement was made by Bing Wong, Managing Director of CHR. “CHR is building up with new locations and new management to challenge US-based, international PDR companies so that Canada has a homegrown leader in the space,” says Wong. “To maximize our capabilities and help us achieve that goal we have added accomplished and well-known people from the collision industry to improve and scale up the business.” Greg Smith, the company’s new Director of Operations, has 25 years of experience in the auto insurance and collision fields. Prior to joining CHR, Smith spent the last 15 years in management with a large MSO collision operation Greg Smith. in Western Canada. Ja r e d Ni e d z i e l s k i , Southern Alberta Appraisal Manager, joins CHR after 18 years working in the Southern Alberta market. His background is as an Jared Niedzielski. auto appraiser, working with both direct repair program (DRP) bodyshops and independent appraisal companies. Doug Riches, CHR’s new Doug Riches. manager for Red Deer, has extensive experience in the collision repair industry. A licensed body technician and provincial salvage inspector, his experience stretches over 27 years and includes significant experience as the owner/ operator of a collision centre. Greg Gore has recently been named National Business Development Manager for CARSTAR Canada. Gore’s previous position with CARSTAR was as Regional Development Manager for Ontario North. In his new role, Gore Greg Gore. will work with CARSTAR’s field team to generate leads and find the right individuals to convert to the CARSTAR brand. However, he will still 8 collision Repair collisionrepairmag.com
work directly with the stores in his territory. “I’ll still be supporting my stores in Northern Ontario and Central Canada,” he says. “I’ll also be looking after fleet work in regards to rental car companies, as I have a lot of experience on that side of the business.” Gore was employed with Enterprise RentA-Car for 14 years before joining CARSTAR. Fix Automotive Network has announced that Alexandra Zalec has been appointed to the position of Vice President of Marketing. Fix Automotive Network includes the Fix Auto, Minute Muffler & Brake, Speedy Auto Service and Novus Glass brands. The Fix Automotive Network was launched by Fix Auto in September 2016. Zalec brings extensive experience to Fix Automotive Network, as a consultant and most recently in the hospitality industry, where she played a key role as Alexandra Zalec. Director of Marketing for Moxie’s Restaurants. In her role with Fix Automotive Network, Zalec will oversee all national brand marketing, communications and media strategies for Fix Automotive Network’s 375 locations in Canada under the Fix Auto, Speedy Auto Service and Novus Glass brands. The Carrossier ProColor network has announced the appointment of Mélanie Gingras as Director of Operations. A statement from the Mélanie Gingras. company says Gingras will combine efforts with the Carrossier ProColor team members already in place to offer operational support to the network’s collision centres as well as contribute to the development of its business volume. With more than 10 years of experience in the collision repair i n d u s t r y, G i n g r a s has held various key positions throughout her career that have allowed her to develop an expertise in customer service, personnel management and leadership in the automotive aftermarket.
Regional News | British Columbia
False Creek Collision retrofits for energy efficiency
Bernhard Rubbert, owner of False Creek Collision, outside of his shop in Burnaby. The facility has recently completed an energy efficiency retrofit that promises to both reduce costs and diminish the shop’s carbon footprint.
Bernhard Rubbert, owner of BC’s False Creek Collision, says making the decision to move forward with an energy efficiency retrofit was a “no brainer.” The team at False Creek Collision are always looking for new technology and lean business ideas to improve performance and reduce the shop’s carbon footprint. Rubbert and his team have long been on the forefront when it comes to environmental efficiency. The facility was profiled on the cover of Collision Repair magazine in 2006 for its early adoption of waterborne paint. False Creek Collision also won an environmental award in Business Stewardship from the City of Burnaby. The award was primarily in recognition of the facility’s outstanding efforts to invest in new technologies that reduce electricity consumption and the company’s carbon footprint. “Eventually, we intend to become the greenest autobody shop in the whole of Canada, and to encourage other businesses worldwide to adopt more eco-friendly alternatives,” said Rubbert at the time. The latest environmental project undertaken by False Creek Collision shows the shop is still on this road. Rubbert says the energy efficiency project he completed with Vancouver-based energy management company, Kambo, basically took care of the “low hanging fruit.”
“The technology is there and it’s reasonable in price,” he says. “It’s an easy way to lower costs and make a difference.” Overall, the energy efficiency project had a positive impact on False Creek Collision’s cash flow, reduced the shop’s energy consumption and lowered energy bills. In total, the shop expects to save $3,820 annually. The project is expected to pay for itself in less than twoand-a-half years. “Plus, it’s a brighter light, so you get a better product for a lower price,” says Rubbert. “So why wouldn’t you do it?”
10 collision Repair collisionrepairmag.com
Highlights • Changed lights throughout the facility from T8s to LED tubes • Replaced incandescent lightbulbs with LEDs • Installed new awning and outdoor lights to increase light levels, improving site safety and security • Installed a low-flow water aerator in the bathroom to conserve water and energy • Installed a programmable thermostat to improve occupant comfort and reduce energy
Rubbert describes his rationale for financing: Smaller businesses don’t have a lot of extra money and therefore need to look closely at their financial situation. But if you are willing to work with a financial lender, then you can use the project savings to finance the loan. That way you can enjoy lower energy consumption, better products and better light levels. The projected savings from the Kambo project will cover monthly payments on the green business loan Rubbert secured from Vancity (a member-owned financial co-operative headquartered in Vancouver), meaning the project has no negative impact on his business cash flow. The energy-efficiency project at False Creek Collision goes beyond lighting. Faucet aerators conserve water while maintaining water pressure and can also prevent splashing. The aerator now installed on the bathroom faucet at False Creek Collision is projected to save up to 41 litres of water per day. This not only saves water, but also saves electricity that is needed to heat the water. In addition, an aging compressor was replaced with a new compressor that uses around one-third less energy. Rubbert is already investigating his next project. He is looking to switch to electric courtesy vehicles and is also weighing up installing solar panels on his roof. For more information, please visit falsecreekcollision.com.
Alberta | Regional News
CARSTAR and Red Deer Rebels donate van to Youth HQ
Two CARSTAR locations partnered with the Red Deer Rebels hockey team to present a van to Youth HQ.
In the fall of 2016, CARSTAR Red Deer Downtown and CARSTAR Red Deer South purchased a 2016 Dodge Caravan that had considerable collision damage. CARSTAR staff and families in Red Deer volunteered their time to repair and refurbish the van. CARSTAR and the Red Deer Rebels were able to present the van to the Red Deer Youth and Volunteer Centre (Youth HQ) at the Red Deer Rebels’ last home game of the year, with some young hockey fans from
Youth HQ in attendance. Darryl Hemstreet of CARSTAR Red Deer was extremely proud of their accomplishment and all the work leading up to the big giveaway. “My sincerest thanks goes out to all of the staff at both CARSTAR Red Deer locations who helped make this donation possible,” said Hemstreet. “Giving back to the community in Central Alberta is a big part of who we are, and we could not have done this without the support of our amazing CARSTAR staff.”
Fix Auto expands in Sherwood Park Fix Auto Sherwood Park in Alberta is a recent addition t o t h e F i x Au t o Canada network. Owned and operated by Scott, Craig, and Merv Koughan, Fix Auto Sherwood Park has a long-standing history of serving i t s c o m mu n i t y ’s Management at Fix Auto Sherwood Park. From left: Merv, c o l l i s i o n r e p a i r Theresa, Craig and Scott Koughan. needs. Owner and Manager Scott “This newest addition to our network Koughan says, “Our father, Merv, has reflects what our brand is all about – been in the automotive industry for over partnering with the right owner/operators, 40 years. He opened his first shop with his who embrace change, and are dedicated father on Prince Edward Island in 1977, to their customers and their community,” and he and our mother, Theresa, have says Peter Polito, General Manager for Fix owned and operated shops coast-to-coast Auto Western Canada. “As Fix Auto grows ever since. Growing up around bodyshops rapidly in Western Canada, we are thrilled really influenced Craig and I to get into to welcome a shop who believes in the the industry.” proven success of family and community. Koughan also says that training is a We are glad the Koughan family chose our priority, and is actively working at having network as a long-term partner for growth the shop become I-CAR Gold Class and wish their team much success in this Certified. new venture.” April 2017 collision Repair 13
Regional News | Saskatchwan
New Product Showcases bring the latest tech Color Compass recently held New Product Showcase events in Saskatoon and Regina through its Carlson Body Shop Supply and Chase Auto Body Supplies subsidiaries. The New Product Showcases took place at Saskatchewan Polytechnic’s Saskatoon and Regina campuses. There was a concentration on live demonstrations, giving repairers in Saskatchewan the opportunity to get their hands on some of the latest products and services available. The events also served as a good chance to network directly with manufacturers’ representatives. The events differed from previous Color Compass shows in Saskatchewan by expanding the representation of manufacturers. According to a statement from Color Compass, the level of participation from leading manufacturers has continued to grow at a very encouraging rate. Kelly Hackman is a Sales Manager with Carlson Body Shop Supply in Saskatchewan. He helped put together the New Product Showcases in the province. “On behalf of Color Compass Corporation (Carlson Body Shop Supply and Chase Auto Body Supplies), we would like to extend our thanks to everyone who was able to attend our shows in Saskatoon and Regina,” he says. “The well-attended events only go to prove that the collision centres in Saskatchewan are engaged and will continue to grow with the collision industry as change occurs. These events were a unique opportunity for the collision centres of Saskatchewan to network with the industry’s leading manufacturers and representatives without the burden of extensive travel. Color Compass Corporation is focused on the Saskatchewan marketplace,
New Product Showcases held in Regina and Saskatchewan offered repairers the opportunity to interact directly with manufacturers.
and will continue to partner with the leading strategic players that the industry has to offer.” Approximately 75 industry stakeholders attended the event in Saskatoon, with an additional 100 or so repairers attending in Regina. The New Products Showcases featured the latest on 3-D measuring, digital marketing programs, nitrogen welding, small dent repair and more. Exhibiting manufacturers included Pro-Spot, Car-O-Liner, BETAG, Wedge Clamp, 3M, Pure Auto Digital Marketing, Kent Automotive, Prestige Chemical, DuraShield, CPS, Farecla, Booth Brothers and many more. For more information, please visit colorcompass.com.
SAAR annual meeting puts the focus on training The Saskatchewan Association of Automotive Repairers (SAAR) met recently for the association’s annual meeting. The meeting took place in Moose Jaw, Saskatchewan. Approximately 130 stakeholders attended the meeting, with representatives from about 60 shops and 22 suppliers in attendance. Executive Director Bill Ziebart provided updates on the current state of SAAR and negotiations with the province’s insurer, Saskatchewan Government Insurance (SGI). Members also elected three new members to the association’s Executive Committee. The new members are Shane Goller from P.A. Autobody, Brayden Neufeld of Parr Auto Body and Raj Kavia of Kavia Auto Body. The new members replace three people who have recently left the Executive: Neil McGregor, Tom Bissonnette and Pat Quinney. SAAR would like to thank McGregor, Bissonnette and Quinney for their service and hard work. The morning session was rounded out by a presentation from Saskatchewan Polytechnic Program Heads Dale Hawkins and Scott Kucharyshen and Ryan Bast of MSA Safety. Hawkins and Kucharyshen provided an update on the state of programming and apprenticeship in the province. In short, their messages to the association members was to make their voices heard for training requirements and get apprentices into the program. Bast gave an update on what MSA Safety can do for member shops. Specifically, the company can provide safety and OHS training, give toolbox talks, do surveys and provide other kinds of safety related support. The afternoon was devoted to SGI and what will be coming down the pipe in the future. Ciaran Downs was introduced to the 14 collision Repair collisionrepairmag.com
During the SAAR Annual Meeting in Moose Jaw. The meeting was attended by over 130 industry stakeholders from across the province.
membership as the Director of the Appraisal Program at SGI. He, along with Sid Petrisor and Brian Smuk of SGI, provided a general update on the current key performance indicators (KPIs) and the new KPIs that SGI will start tracking, specifically cycle time and customer service indices. The representatives of SGI also shared the 2017 Auto Appraisal Manual that will officially come out in spring of this year. Wrapping up the afternoon, Ann Vincent of Mitchell Canada showed the new Mitchell Connect Platform that will be taking over for Eclaim in the near future for better communication with SGI. For more information, please visit s-a-a-r.com.
Manitoba | Regional News
Manitoba high school scores a new paint booth One Manitoba high school received a big boost to its autobody program recently. Manitoba’s Education Minister, Ian Wishart, has announced a total $1.5 million in funding for skills training in Manitoba schools. The collision repair program at Crocus Plains Regional Secondary School in Brandon will get almost a quarter of the total budget. The $347,453 will be used to install a brand new paint booth in Crocus Plains’ bodyshop. Wishart also noted the funding ensures programming is relevant to current and future labour market needs, and particular emphasis is placed on supporting high school level programs to become accredited by Apprenticeship Manitoba. “The equipment we’re using now is 30 years old. It’s outdated, it’s getting harder to maintain … if the current equipment went down, with that kind of cost I don’t know if the school division would have been able to keep us going,” collision repair instructor Carl DeCosse said. “With this upgrade, it’s a sense of security. The biggest thing here is sustainability for the program as a whole. We’ve seen an increase in enrolment over the last few years and I think this will further that.” The investment is part of the Skills Strategy Equipment Enhancement Fund, which provides targeted funding to ensure Manitoba’s students have access to up-to-date equipment. “This is new technology … the equipment (at Crocus Plains) is really old and we need to train the kids on the new stuff, so this would be a fairly high priority because of that alone,” Wishart said. Wishart also noted that Manitoba’s education system is not just for those living in urban areas. Rural schools also need up-to-date technology to ensure students are receiving an adequate education. A large portion of the funding will go towards trades and skill training. “It’s the first time in Manitoba’s history that we’ve actually had the education system aligned with the trades and training—and we’re already finding examples like this where it works way better,” Wishart said. “I think that there’s great potential to do more of that in the future.”
Manitoba’s Education and Training Minister, Ian Wishart (right) with Chad Cobbe of Crocus Plains.
Crocus Plains Regional Secondary School in Brandon will receive $347,453 to install a new paint booth. April 2017 collision Repair 15
Regional NEWS | Ontario
Top aftermarket scanners detailed at CCIF event
Two of the presents at the event: Ron Olsen of AirPro Diagnostics (left) and Michel Julien, founder of TeamXTremeTech.
The OEM-specific scan tools may deliver the best results, but the cost of lining them all up may be more than most shops would like. According to Michel Julien, founder of TeamXTremeTech, the cost of scan tools for the 16 most common car brands would run approximately $153,150 in the first year, and roughly $66,000 every year thereafter for the subscriptions. Julien was a presenter at a special scanning technology event held at Toronto’s Centennial College. The event was presented by the Canadian Collision Industry Forum (CCIF) and featured presentations on
16 collision Repair collisionrepairmag.com
aftermarket scanning technology from Drew Technologies, Collision Diagnostic Services (CDS), Launch Tech, TeamXTremeTech and AirPro Diagnostics. The day kicked off with opening remarks by Brigitte Pesant, Director of Collision Programs for AIA Canada and Joe Carvalho, Chairman of CCIF. Dan Dominato of Precision Marketing presented first, providing details on the asTech2 scanning tool, manufactured by CDS. Precision Marketing distributes the scanning tool here in Canada. Dominato noted that the asTech2 covers nearly all makes and models, 2008 and newer. It essentially does this by uploading the scanned data to CDS, where it is then run through OEM scanners. The idea is that this gives the shop access to OEM quality scans for a fraction of the price. Glen Eaton of Drew Technologies then discussed the company’s Remote Assist Program (RAP) Kit. According to Eaton, the technology provides pre- and post-repair scan details and vehicle scan reports on demand. Users simply plug in the kit and place a call to Drew Technologies. The company scans the vehicle and sends the user the report. The unit can also be used to reprogram modules. Launch Tech USA’s Harlan Siegel presented details of that company’s X-431 PAD II, an Android-based scan tool tablet. Siegel highlighted the scanner’s functions, and shined a light on how the company improves its databases. He noted that aftermarket scan tools will have gaps in their information compared to an OEMspecific scan tool, but that Launch Tech communicates with users to reduce those gaps. “We’re reducing those gaps by getting you, the end user, involved in the process,” he said. In essence, all scans uploaded to the tool are gathered by Launch Tech USA. In turn, this allows them to build up a greater database of information. Michel Julien of TeamXtremeTech was up next, updating attendees on his company’s scanning solution. Headquartered in Brossard, Québec, the company offers a home-grown aftermarket scanner. Julien also pointed out that training was key when it comes to finding success with scanning, as was solid customer support. “Tech support is the key to success in every shop,” he said, outlining how even a GM dealer, for example, where every technician has received the OEM training, will still call for tech support approximately 42 percent of the time. Chuck Olsen of AirPro Diagnostics presented attendees with information on his company’s scan tool, the AirPro, and the accompanying app, ORION. The AirPro is a remotely controlled scanner that uses both OEM and proprietary software. According to AirPro Diagnostics, this allows the tool to cover roughly 98 percent of makes and models. ORION is a cloud-based diagnostic management system that automatically stores all scan results and recommendations. After a short break for lunch, the event continued with an update from CARSTAR’s Bill Davidge on the status of I-CAR diagnostic scanning and presentations from Michel Gagnon of Mitchell International, Massimo Pecchia of Audatex Canada and Jim Wraight of ALLDATA Canada. Finally, all scan tool manufacturers ran demos of their equipment so repairers and other stakeholders could have a chance to see them in action and ask questions about specific items.
QuebÉc | Regional News
Carrossier ProColor Laval Centre is on the Road to Gold Carrossier ProColor Laval Centre is on the Road to Gold. The facility, located in Laval, Quebec, was officially admitted into I-CAR’s Road to Gold program in November 2016. Ownership and staff have been actively pursuing the I-CAR Gold Class certification ever since. Carrossier ProColor Laval Centre is owned and operated by Nancy Lefebvre and Patrick Charland. They say the operation’s Road to Gold journey began with the idea of offering continued training for the facility’s technicians as well as safeguarding the well-being of its customers. “Customer satisfaction is our top priority,” says Nancy Lefebvre. “We strongly believe that by achieving the I-CAR Gold Class certification we will be able to better meet their needs by improving the quality of our repairs. This will also allow us to stay up-to-date with the latest technologies while ensuring the training of our technicians.” For Lefebvre and Charland, the objective is clear: obtain I-CAR’s prestigious Gold Class designation. It’s with this idea in mind that the collision centre initiated the process with I-CAR. I-CAR’s Road to Gold program includes a 12-month period during which the collision centre must maintain the commitments established with I-CAR and meet the ProLevel training requirements to become Gold Class. A lot of it comes down to having official Role Representatives in four critical areas: Refinish Technician, Steel Structural Technician, Non-Structural Technician and Estimator.
The team from Carrossier ProColor Laval Centre. The facility has dedicated itself to achieving I-CAR Gold Class.
Role Representatives must have obtained their Platinum Individual designation from I-CAR. After obtaining the Gold Class certification, the collision centre must ensure that each technician follows two training sessions per year, with one being mandatory in their respective role, to retain certification. A statement from the Carrossier ProColor network says the actions of Carrossier ProColor Laval Centre are in line with the objectives of the network as a whole and that this demonstrates the strong involvement of the collision centre in regards to its staff ’s development and the will to be proactive in a constantly changing market.
April 2017 collision Repair 17
Regional NEWS | Atlantic
Two CSN shops first in Atlantic to achieve CCIAP accreditation Two members of CSN COLLISION CENTRES have become the first shops in Atlantic Canada to achieve accreditation under the Canadian Collision Industry Accreditation Program (CCIAP). The facilities are CSN-Keizer’s Collision, located in Middle Sackville, Nova Scotia, and CSN-Champlain Auto Body in Dieppe, New Brunswick. CCIAP is a certification program set up by the Automotive Industries Association (AIA) of Canada to give credit where credit is due to repairers, and also to help customers know that their repairers are being held to the highest standard when it comes to returning vehicles to OEM specifications after The team at CSN-Keizer’s Collision. The facility was the first shop in Eastern Canada to receive CCIAP accreditation. a collision. For Dale Keizer, owner of CSN-Keizer’s Collision, this new industry-driven outlook is a positive and welcome one, driven by a changing market. “They have also made the process very seamless and transparent. Your checklist of tools, equipment, proper business documentation, and up-to-date I-CAR Gold training is all checked by an auditor, hands-on at your facility, to ensure consistent industry results,” he says. Keizer also says that his facility is constantly updating their equipment in any case, so becoming accredited was only a natural extension of the steps already taken to remain competitive. “When The customer service team at CSN-Champlain Auto Body. The facility was the you are up on all these things, of course it makes this process a lot first shop to achieve the Advanced CCIAP accreditation in New Brunswick easier and faster,” he says. Overall, Keizer says he’s glad to be part of CCIAP, and that it’s a of certifications, training and tools. In particular, the Advanced great program to be involved with. He says, “Having this platform criteria include demonstrating a significant investment in aluminum built by CCIAP gives collision facilities like ours another option to repair capabilities. According to Mandie Steen, Manager of CSNhave our qualifications recognized by manufacturers, insurers and Champlain Auto Body, early preparation is quite important. consumers. It’s not always possible to be sponsored by an OEM “There are so many people at so many levels and no one shop is to become a direct manufacturer certified repair facility, but that like any other, so of course I can’t make any blanket statements,” says doesn’t mean you’re not qualified!” Steen. “But I’d say the most important element is getting everything CSN-Champlain Auto Body has received the first Advanced in order, from your training to your equipment. Understand that level CCIAP accreditation in New Brunswick, as well as the first there will be a lot of investments. Take it slow and steady if you CCIAP accreditation in the province overall. need to, and do things right!” The CCIAP Advanced Certification requires an additional set For more information on CCIAP, please visit cciap.ca.
New Fix Auto opens in Bridgewater, Nova Scotia Fix Auto has expanded in Nova Scotia with the addition of Fix Auto Bridgewater. The announcement was made by Paul Randles, General Manager for Fix Auto Atlantic Canada. Owner/operator Danny Dorey, who has 32 years of experience in the collision repair industry, says he ventured out as an independent shop owner in 1994. His deciding factor to join Fix Auto was the desire to give his independently-owned shop a voice with insurance companies, and the support of a strong consumer brand. “We already had a great customer base, and joining Fix Auto will enable us to continue to give great customer service with a strong brand recognition to back it up,” he says. Dorey also sees the operational advantage of partnering with Fix Auto, saying that the banner “has a strong selection of office and management tools to complement a profitable business. This will definitely help our shop become much more sustainable going forward.” Dorey partners with his wife Stacey, who says customer focus is at the core of their business. She explains: “We have put our heart and soul into our shop. We take the way we service our customers 18 collision Repair collisionrepairmag.com
Fix Auto Bridgewater is owned and operated by Danny and Stacey Dorey.
very personally. Many times, it’s the little things we offer as a service provider that give our customers convenience and peace of mind.” “As Fix Auto grows in Atlantic Canada, we are pleased to welcome seasoned industry professionals like Danny, Stacey and their team,” says Randles. “The Fix Auto Bridgewater team is forward-thinking and embraces change, which makes them an ideal Fix Auto business partner. We wish the whole team much success in this new venture.”
who’s driving?
DefinedGoals Determine details and build a map to success
By Jay Perry
D
id you know that 1.1 million companies in North America are going to change hands over the next 10 years? That is a shocking number, but what I find even more shocking is how ill-prepared most of them are for the imminent transition. If you are not in one of these businesses yourself, you will absolutely know of one or more that is going to be in that position. Many factors go into this statistic, but the biggest one is the aging of the baby boomer generation. When generational waves mature to the next phase in sync with each other, it helps to create this sort of effect.
profit to buy equipment, train new staff or expand the business? The steps you need to take will likely change depending on why you want more profit. There are other factors you will probably identify as you go through the process of filling in the information on the above for whatever goals you’ve decided to detail and flesh out. As I outlined in my book, Success Manifesto, when I was introduced to this exercise I created a picture book of what my future looked like. I even clipped photos of the lifestyle objects and objectives I had in my mind. Don’t underestimate the value of an exercise like this.
It is easy to say we want more profit. That’s not specific enough. One generation ages out of the business, just as a new generation starts to take the reins. With this wave about to overrun the economy it is frightening to consider the consequences of not having sufficient development of the new wave of leaders. To me this should be the largest concern of the business community, leadership development. It is my concern and why we at Ally Business Coaching have adopted our statement, “On a mission to build great leaders inside great companies.” I would like to cover another item in this issue as we continue with the theme of leadership. I believe that leadership skills can be learned, no one is a “born leader.” I mentioned this in my last column. Now we are going to talk about one of those skills and how you go about executing it successfully. This needed skill will sound like an easy thing to do at first. Don’t be fooled. In reality it takes great discipline to master. This needed skill is being very, very specific in your goals. Sounds easy, doesn’t it? That’s deceptive. It is easy to say we want more profit. That’s not specific enough. It is a conceptual goal. To be specific, it needs to be clearly defined as to quantity, time lines, milestones, strategy and identification of principal roles. More often than not, the specific goal should also include the reason why you want to make more profit. Do you want more 20 collision Repair collisionrepairmag.com
It’s not just for your conscious mind. Your subconscious mind goes to work when it’s armed with this level of specificity. Never underestimate the power of what it can accomplish when given details. Whatever you want to achieve, you need to spell out the details of that goal. In the book I use the example of wanting a new car. “If you have a new car as a goal, what kind of car is it? What options will it have? Where will you park it?” Of course that last one is a bit tongue-incheek, but you get the idea. It also may sound silly if you have a driveway or garage space, but it’s still a question you need to answer. There are a lot of details that need to go into the process of defining your goals. As the old saying goes, the devil is in the details. That’s because success depends on getting the details right. I encourage you to go beyond what you think is reasonable as the end goal. Use the above-mentioned items that get the detail list started, so you can stay the one who’s driving. Jay Perry is co-author of the book “Success Manifesto” with Brian Tracy, and the founder of Ally Business Coaching, a process improvement and leadership development firm. He can be reached at jayperry@a-b-c-inc.com.
Training
GlobalLeader Canada is in the lead when it comes to I-CAR Gold Class
By Andrew Shepherd
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he emergence of collision repair facility standards over the past few years has been striking. Of course fairly basic regulatory norms—covering labour and environmental standards, for example—have been in place for decades. Insurer direct repair programs have applied a wide range of requirements, although perhaps so varied (and unenforced?) as to belie the term “standard.” Canada’s network consolidation, among the highest in the world, has produced a substantial increase in operational and repair output standards among our shops.
In February 2017, there were about 75 shops that had achieved Gold Class. It’s a good result when you consider that training takes time to set up. But it’s the shops nearing Gold Class that show how seriously our Canadian industry takes training and repair quality. There are over 180 shops that have completed three courses for four techs. The numbers go up from there. Nearly 440 have completed five courses for their four role reps. The next category are those shops that have seven courses completed for four techs. They’re nearly there, and this category has over 1,140 shops! Taken all together, almost
This was a dramatic change in the definition of Gold Class.
Perhaps the most significant driver of repair facility standards has been the release of OEM certified repair networks, for several years in the US and more recently here. Although these vary in content, one can argue that most are converging on I-CAR Gold Class recognition as the common measure of shop training levels. This trend has been facilitated by I-CAR’s move in 2011 to the Professional Development Program (PDP) as the foundation of Gold Class recognition. Where previously technicians simply had to take a number of courses per year, the PDP sets out the core skill and knowledge requirements for the four key roles in any collision repair facility. This was a dramatic change in the definition of Gold Class, requiring dramatically more training to achieve. At the same time, there are very few in the industry who would argue that this new level of training—and more—is not justified by the technology of the modern vehicle. So how is Canada faring in this transition to the new Gold Class? Looking at the numbers, we score an A Plus. These numbers are data extrapolations but do provide a very good measure of how close we are to reaching Gold Class recognition. Note that under the PDP, a shop needs one technician in each of four key roles to reach Gold Class, hence the measure of x courses per four technicians.
half of our industry is either Gold Class now or well on their way. That’s a clear signal that Canada, as a whole, takes this very seriously indeed. As an average, a shop needing seven courses per technician to reach Gold Class needs to spend about $3,800 and release their four technicians for 21 hours, certainly achievable within a couple of months. With this commitment, Canada could see over 1,200 Gold Class shops—or 30 percent of all facilities in the country—by August 2017. How does this compare globally? Australia and New Zealand deliver I-CAR training but are just now starting along the path toward adoption of the Gold Class standard. In the US, without the Canadian shop consolidation and without an apprenticeship system, 13.1 percent of shops are Gold Class. For any Canadian OEMs and insurers hesitating about adopting Gold Class as the ideal measure of a shop’s training commitment, the figures above should provide much food for thought. Andrew Shepherd is the Executive Director of I-CAR Canada, a non-profit organization that provides collision repair training and ongoing education. He can be reached via e-mail at andrew.shepherd@aiacanada.com
April 2017 collision Repair 21
PRAIRIE VIEW
RethinkTraining A training program is your key to growing the best techs
By Chelsea Stebner
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uilding good collision repair technicians rests on all our shoulders. Choosing to be a shop owner in this trade comes with the responsibility of ensuring we have properly trained technicians to do the job. We have to be willing to make a difference in the future of the young kids coming into our shops by taking them under our wings and putting a formal plan in place. But it’s not just our responsibility. OEMs, suppliers, insurance companies and trade schools each have a vested interest in growing technicians. These young people are your future sales people, estimators, technicians, shop owners and teachers of our trade. Training dollars, facilities, tools and equipment are the main challenges facing trade schools. Autobody programs have some of the highest costs for training
22 collision Repair collisionrepairmag.com
due to the products and materials required. Here at our shop, we have a plan. A young person starts in the wash bay, but once they’re successful in that department and an opportunity to move up arises, our training plan is put into motion. If you want to be a technician in our shop, you will have a formal training plan, go through trade school and receive great mentoring from our technicians. You’ll also be supported with some training dollars from us. I’ve chatted at length with our team of journeyperson technicians. We have five journeyperson techs who we’ve grown here, three current apprentices (started green) and one journeyperson who took pre-employment before starting at our shop. I asked them “Would you rather have a green technician or a pre-employment student?” This is what I heard:
PRAIRIE VIEW
• Pre-employment students come with the expectation of touching cars right away and demanding a higher wage. • Pre-employment students lack knowledge of tools and lack confidence in working on vehicles. • A pre-employment student may come with some basics such as sheet metal and tool knowledge but curriculum versus real world action differs.
the newest tools and equipment (I hope) and new vehicles. If you don’t have a program, talk to other shops and see what they are doing. Talk to your trade school and help figure out what you can do to improve the training of our industry. Do your part. Send the kids to school. Support them. And the rest of our industry will follow. Our schools are striving to provide pertinent training. Our local training school is a good place. They have good tools and equipment and are working on newer make/
Apprenticeship gives a shop the opportunity to train techs from the ground up. • I wouldn’t take pre-employment if I had to do it again and I’d advise others to work in a shop setting first and see if they even like the trade. I am not trying to antagonize anyone or cause an upset. I’m simply stating what I keep hearing from our team and other shop owners that I’ve spoken with. There’s a discrepancy in understanding and of expectation of preemployment in general. Apprenticeship gives a shop the opportunity to train techs from the ground up, to offer real time, real life repairs. Apprentices work alongside highly skilled technicians, with
model vehicles. They are looking for partnerships in our industry, not handouts. Getting these challenges out in the open, finding out what instructors need to properly educate their students and what the expectations are of both shops and students is a step in the right direction.
Chelsea Stebner is a co-owner/operator of Parr Auto Body, a collision repair facility located in Saskatoon, Saskatchewan. She can be reached at chelsea@parrautobody.com.
April 2017 collision Repair 23
Profiles of Success
Acadian
The
Rose-May Sarkis and her team care and comfort customers. It works.
WAY
By Jeff Sanford
Rose-May Sarkis, matriarch and co-founder of CSN-Sarkis Collision & Car Care Center. Her perseverance and fortitude were central to keeping the business running when her husband passed away from cancer in 1995.
T
his past winter violent ice storms slammed into the east coast of New Brunswick. The effects, still visible along the shore, will be felt for some time. “Closer to the ocean the trees were covered with ice. The pine trees held up, but every other tree limb is broken. There was a lot of ice falling off of everything, off of every power line,” says Allain Sarkis, Manager of CSN-Sarkis Collision & Car Care Center.
A wave of dented cars began rolling into the shop right after the storm. Allain had to triage vehicles in the early days of the disaster, concentrating on the worst cases, and putting off the less serious ones until later. That the business managed to handle the crisis is not a surprise. This is a familyfocused organization that has managed to persevere and survive over four decades. It’s a journey that has, at points, taken a tragic
turn. Keeping the business in family hands hasn’t always been easy, but the Sarkis management team—a group that today includes Allain, his brother Adam and their mother, Rose-May—have always managed to pull through and succeed. It was the matriarch of the family, RoseMay Sarkis, who founded the shop with her husband Nazih back in 1975. Originally from Lebanon, Nazih came to Canada in 1972. He worked in Toronto in his early APRIL 2017 collision Repair 25
Profiles of Success
years in the country after learning his trade in Lebanon. He met Rose-May in Toronto. Eventually she took him home to New Brunswick on a vacation. “He decided, this is where we are living,” says Rose-May. “I took him down on holidays. It was so far to travel. And he said, ‘This is it, we’re going to raise a family here.’” Nazih worked for a year at a dealership. But eventually he and Rose-May went out on their own, opening up in a tiny garage. “We started January 1976. We built the shop. When we first opened it was maybe fortyby-sixty. What is that, 2,400 sq. ft.? No more than that,” says Rose-May. In the early days the entire family spent all their time in the garage. They were kept in the office after school so they didn’t need
a babysitter. As they got older, the boys learned the business from their father. “I was just a baby when he started. I remember being there every weekend, every March Break, watching him paint,” says Allain. What they witnessed was the passion their father put into taking care of customers properly. Says Rose-May, “I remember him teaching them to wash a car, how to wash the tires perfectly. They could barely hold the bucket!” Learning how to wash a car might not seem like the most important skill to young people working in the sophisticated industry of 2017. But the final detailing of a car before it was returned to a customer was always a priority in the shop—it should be a lesson to anyone in the industry who wants
“I should be retired. But this is great for me to be here. This is where I am happy. This is where I should be.” - Rose-May Sarkis.
Allain and Adam Sarkis flank their mother, Rose-May. Rose-May’s sons literally grew up in the business, learning to wash cars before they were even big enough to properly handle the bucket. 26 collision Repair collisionrepairmag.com
customers to leave with the best impression. “Returning the car to the customer perfectly cleaned was always important,” says Rose-May. “Sometimes after an accident people would come in and apologize for how dirty the car was. But that didn’t matter, or how much damage was on the car, what the customer was most impressed with was the cleanliness of the car when it was returned. They would come back and say, ‘I haven’t seen my car so clean since the day I bought it.’ Sure, they had an accident, but they would end up feeling like they got something out of it.” It’s that kind of service that keeps you in business for forty years. Rose-May still comes into the office today. She is the heart of the business, which is a genuine family affair (Adam’s wife works in the office). The family always puts emphasis on making a personal connection. “I’m a people person,” says Rose-May. “My husband was a people person too. We went out of our way to make the customer happy. It’s part of that personal connection. You try to win people over when they come in.” She relayed another secret to keeping clients happy. “In this industry we meet everyone after an accident. And that is a chaotic time for them. They didn’t plan for that accident. They’ve missed their lunch, they haven’t ate. We always have a cold kitchen in the back.
Profiles of Success
The team at CSN-Sarkis Collision & Car Care Center.
We can make them a sandwich and hear about what happened. Everyone has a story. You take care of the customer.” It hasn’t always been easy. In the mid1990s, a tragic series of incidents almost brought the business down. “It’s a long story,” says Rose-May. In 1995 Nazih had gone into the hospital with cancer. Rose-May found herself running the shop, watching over four teenagers and tending to a sick husband. Just three weeks before he passed, a different form of tragedy struck. Rose-May was in a car accident and ended up in a wheelchair. It wasn’t clear if the business was going to survive. “It was not an easy time,” says Rose-May. “Between taking care of him and the kids ... and then after the accident. It was a lot. I could only do a bit of everything. I didn’t understand why we had all of this happening to all of us. There must be a purpose, I said.” She found the will to carry on. Armed with the same passion and level of commitment that her husband applied to the business, she made it work. “The transition was very difficult,” says Rose-May. “I was in customer service before, but becoming the owner of the
business under such difficult circumstances was like starting from day one. And it was one day at a time. But I knew I was born to work. It didn’t take me long to figure it out. I believed God was not going to give me more than I can handle.” She continues to believe this today, even after further tests. Three years after her car accident, a fire swept through the building, burning it to the ground. “It wasn’t as bad as it sounds. You do one piece at one a time. We could always eat,” says Rose-May. After the fire Rose-May realized there were some funny things happening in the business. Some managers had to be let go and the kids had to be brought in. “I said, ‘We’re going to sink or we’re going to fly’,” she says. The sons worked hard, stayed focused and stuck with it. The business pulled through and was kept in the family. It’s officially been passed on to Allain and Adam, who have taken over day-today operations. One runs the office and the other runs the production line. The struggles have shaped the family. Adversity has generated resiliency and that has helped them to get through the chaotic times.
Today, the shop is about 10,000 sq. ft. The staff are treated like family. The company generously supports local sports and charities such as the Miramichi Timberwolves, as well as Big Brothers/Big Sisters. The business remains at the centre of the family. “We say it’s the centre of everything,” says Allain. “We’re not big on advertising. I like to emphasize the work we do on the car and the customer experience.” Of course, there is some nostalgia for the old days. “Now, there is so much paperwork. So many different programs,” says Rose-May. “Technology has changed and the repair process is very different and more complicated. But we’re still basically doing the same thing we did in the ‘70s: fix it properly and make sure the customer is happy.” There are three women working in the office to help out, but Rose-May still comes in. Thankfully, she has recovered from the accident and left the wheelchair behind. “I’m here. I should be retired. But this is great for me to be here. This is where I am happy. This is where I should be,” she says. That’s wisdom for the ages. APRIL 2017 collision Repair 27
Executive Vision
Long-term
Success Eric Léveillé of UAP/NAPA on why shop longevity requires a solid workforce
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ric Léveillé is the Vice President, Paint and Body Equipment, for UAP, the parent company of the NAPA and CMAX chains of stores. He joined UAP in September 2015. His experience in the industry stretches back at least 20 years to when he was employed by 3M as a District Sales Manager for the company’s automotive aftermarket division. Léveillé holds a degree in marketing from Université de Montréal’s business school, HEC Montréal.
Collision Repair magazine:: What do you view as the three most critical challenges for individual shops? Eric Léveillé: The first is the workforce; attracting and retaining highly skilled staff. Many shops struggle with this, and it’s been an ongoing issue for many years.
The second challenge is that of advancing technology. Again, this is not really new, but it is still an issue that shops have to stay on top of.
CRM: What would you suggest to a shop owner who is trying to deal with the workforce challenge?
Third, I would have to say consolidation at all levels, not just shops. We’ve seen more consolidation among distributors and I expect to see even more in the future.
EL: We need to make the industry attractive and appealing for the millennial generation who are tech savvy. We need to put more programs in place to attract students to trade schools, and make sure they’re being trained to repair cars in the new environment. With all the new aluminum trends, and all the high-strength steel we’re seeing, it’s essential that new technicians are being trained to deal with these materials.
The recent news about PPG trying to acquire part of AkzoNobel indicates there may be more consolidation coming in coatings suppliers as well. I think we can also expect a similar consolidation with the insurers.
This is vital so that when they get into the shop they can actually use the equipment. The shop owner’s responsibility is to make sure those new technicians have good mentoring and some sort of job shadowing, so they are
Falling behind onthe technology front probably means collision repair shops will have to play catch-up and find alternative revenue sources due to a reduced workload.
28 collision Repair collisionrepairmag.com
Executive Vision
involved in the repair process from their first day. Not just sweeping or cleaning, but really involved in the repair process from the start. CRM : In your view, what are the most important steps for a shop to take to secure longevity? EL: Frankly I think this comes down to workforce again. It’s essential that a shop has the right people in key positions. Investing in the future means investing in your people and your business and making sure you’re on top of technology trends.
There’s also the certification piece. Having OEM certifications is going to become more important, but it starts with training your people and making sure they have the right equipment and skills. Take, for example, the new construction of the Audi Q8 with lighter aluminum components to make the vehicle lighter, fuel efficient and sustainable. Other car makers are following this trend. CRM: What do you think will be an area of growth for collision repair facilities? EL: Right now, I would take a look at both glass and mechanical services, and broaden the scope of business beyond the traditional DRP. Offering mechanical services means the shop can do more in-house and have fewer subcontractors. Glass is similar, in that bringing it in-house cuts down on outsourcing. I would even take a look at offering tire changes. That could be an additional profit centre. There are a lot of similar ways where shops could leverage the skilled technicians they already have, such as paint protection film that combines with window film, and offers great synergy.
I would also look at adjacent markets, such as refinishing components for other industries. Electrical transformers, containers and other industrial items need finishing work. This could be provided by a collision repair centre without a lot of additional investment. CRM: Thinking solely of how it’s going to change the business, what’s the biggest change we can expect in the next few years? The type of change is wide open. It can be technological change, social change, etc. EL: I think both autonomous vehicles and increasing numbers of electric vehicles are going to be the biggest changes we can expect. The technical aspects of how these cars are built will be a major change. Tesla’s construction, for example, is unique to Tesla and repairing them requires specialized skills. It’s almost getting to the point where you need to be an engineer to repair a car.
EL: The future is really bright. Our staff is highly trained and we have great relationships with key suppliers such as Axalta. We’ve been growing our footprint over the last few years and we have no intention of stopping, especially in the light of the consolidation that is happening in the market as I mentioned earlier. In the past year alone, we’ve opened five new CMAX stores. This gives us 52 CMAX locations across Canada. It’s a fun time to be working at UAP. We’re all very excited about the coming years. Changes in the industry are bringing a new kind of excitement.
Regarding autonomous vehicles, those repairs are going to have to be absolutely flawless. You’ve got no one behind the wheel, and the computer needs the car to function exactly as it should have when it left the factory. CRM: What does the future hold for NAPA Canada and CMAX? Can you give us any hints about what we might see in the near future?
Executive Vision focuses on discussions with key players in the auto claims economy. Eric Léveillé, Vice President of Paint and Body Equipment at UAP, the parent company of NAPA and CMAX, says the best way for shops to achieve longevity in a competitive market is to make the industry more attractive so people will want to work in it for the long run.
Eric Léveillé, Vice President, Paint and Body Equipment at UAP. April 2017 collision Repair 29
FACTS & FIGURES
Shop Spending Surveys show investments needed in equipment, training and more By Mike Davey
Special Materials We’ve seen a wealth of advanced materials in vehicle construction in recent years. Will this trend continue? The results of our opinion poll indicate that collision repairers certainly expect it to. The survey asked repairers to provide their opinions on these special materials. It should be noted that this survey represents only the opinions of its participants. These are the opinions of some members of Canada’s collision repair industry, not that of automotive designers or OEM executives. The first question in the special materials survey asked whether or not respondents expected to see more lightweight materials, such as aluminum, magnesium, etc. Over 96 percent of respondents indicated that they thought this trend would continue. However, a comment left by one respondent illuminates a factor that could easily change this trend. As always, comments are presented anonymously, with only minimal editing: “If the new American government reduces fuel efficiency law, then manufacturing will reduce special material investment. It’s always about the money.” The next question asked respondents to let us know if they’ve seen more of these materials in the vehicles that have come into their shops in the last year. The majority (86 percent) had, but 14 percent had not. When it comes to estimating, about 65 percent of our respondents assign different labour times to different materials. This leaves 35 percent of respondents indicating that they do not do this. It looks like this an area where the industry could get on the same page. The next round of questions asked respondents to indicate whether they thought the use of a particular material would increase, decrease or stay the same. The accompanying chart indicates which percentage of respondents thought the use of a particular material would increase.
“Special materials” in this context includes HSS, AHSS, carbon fibre, aluminum, titanium, magnesium and glass composites.
The vast majority of respondents expect the use of HSS and AHSS to increase. Magnesium is on the low end, possibly due to its high cost, but a signicant number of respondents believe we’ll see more of this material as well. April 2017 collision Repair 31
FACTS & FIGURES
Shop Investment Collision repair requires regular investments in both equipment and training for a facility to remain competitive. But are Canada’s collision shops making those investments? The majority of them are, according to our survey results. The vast majority of respondents to our surveys nearly always identify themselves as owners or managers of collision repair facilities. This particular survey had a surprisingly high number of respondents from facility employees, including
office staff indicated that their workplace had purchased new equipment in 2016, but 65 percent said their employer planned to purchase new equipment this year. Of those, welding equipment seems to be on the top of the shopping list, followed by health and safety equipment and scan tools. Turning back to the owners and manager, the most common types of equipment purchased in 2016 were welding equipment, health and safety equipment and scan tools.
by the responses we received, the area most critically in need of investment is OEM certification (31 percent). Previous surveys we’ve run have indicated that this area is top of mind for many repairers so this isn’t a surprising result. Looking at the rest of the survey responses, 15 percent indicated that equipment was the area most in need of investment. This tied with technical training. Process and procedure improvements was the most critical area for 23 percent of respondents.
OEM Certification tops the list of critical areas for investment. This matches up with the common wisdom regarding the current market landscape.
both office and production staff members. In total, shop owners and managers comprised about 83 percent of responses, with the remaining 17 percent identifying themselves either as technicians, painters or other production staff or as administrative or office staff. Of the owners and managers, 21 percent identify themselves as affiliated with a franchise or network. The remaining 79 percent are independent repairers. We asked the owners and managers if they had purchased any new equipment in 2016 and also if they planned to make any equipment purchases in 2017. When it comes to new equipment, it turns out 78 percent indicated they had made a purchase in 2016, while the remaining 22 percent did not. Oddly enough, these numbers were exactly duplicated when looking forward to 2017: 78 percent indicated they plan to invest in more equipment this year, while 22 percent said they won’t. Responses from staff tell a somewhat different story. Only 25 percent of techs and
Each of these drew responses around the 54 percent mark, with some minor variations. The next most commonly purchased items were centered around the spray booth, with around 27 percent of our respondents indicating they had purchased a new spray booth, other refinish equipment such as spray guns, and compressors. Again, there were very minor variations to these figures, but they were all around the 27 percent mark. We find very different results when repairers are looking ahead to purchases in 2017. Welding equipment and health and safety gear drop down to 9 percent, but scan tools remains robust. In fact, it was the single biggest category for what repairers are planning to buy in 2017, with 64 percent of respondents indicating that they plan to make this investment. We also asked owners and managers to indicate which particular item needed the most investment in their own shops in 2017. This question was less focused on equipment and more on total shop operations. Judging
32 collision Repair collisionrepairmag.com
Additional production space and employee engagement were at the bottom of the priority list, with just 9 and 7 percent respectively. The last two questions in this survey were sort of curve balls. Rather than asking about investment, we asked if administrative costs had risen in the last five years. These costs have indeed risen for 77 percent of our respondents. Those who indicated that the costs had risen were also asked why they thought this was the case. This was another one of those questions were respondents could choose more than one answer. Looking at all the responses, 9 percent said they had previously been understaffed in this area, 41 percent said that wages had gone up in their region so they had to pay more and 38 percent said the business had grown, leading to a need for more staff. However, very close to every shop owner and manager (97 percent) surveyed indicated that these increased costs were due to insurers downloading administration onto shops, leading to an increase in staff to deal with it.
FACTS & FIGURES
The Rental Landscape Collision repair is inextricably linked to the business of car rentals, so much so that average length-of-rental is often considered a proxy for repair times. We asked our readers to let us know how rental cars are handled in their organizations. First, our survey asked “Does your facility provide rental cars to customers outside of what their insurer provides? For example, if their policy only provides a rental car for seven days, but the repair takes nine days, do you provide them with a rental car for those last two days?” A total of 46 percent of respondents indicated that they provided courtesy cars for all customers, free of charge. A further 33 percent that they did this “in some cases.” Finally, 21 percent indicated that they did not provide courtesy cars. The next question asked repairers if they partnered directly with any rental car companies. A small majority of respondents (57 percent) indicated that they did so, with
The majority of survey respondents believe average length-of-rental (LOR) has increased. Average LOR is often used as proxy for repair times, so this may indicate an overall increase in repair times.
the remainder (43 percent) indicating that they did not do this. Repairers that indicated they had one of these partnerships were asked to indicate which company they had partnered with. Enterprise Rent-A-Car was chosen by 74 percent of those respondents, with 26 percent indicating they had partnered with Discount Car and Truck Rentals.
Providing courtesy cars is common, but by no means universal. This may mean offering them in your area could prove to be a competitive advantage.
Next we looked at average length-ofrental. It should be noted that repairers were answering this question on the fly during a web survey, rather than sitting down with a bunch of spreadsheets and actually going over the numbers. However, it does provide a good “horseback estimate” of how long rental times currently are at our respondents’ shops. In total, 57 percent indicated that the average length-of-rental was between four and seven days, with 43 percent indicating that it averaged between eight and 11 days. Finally, we asked repairers to indicate if the average length-of-rental has increased, decreased or stayed the same in the last year. As in the question above, the results come from repairers providing estimated numbers, rather than crunching the figures generated within their facilities. A slim majority (52 percent) of repairers indicated that average length-of-rental had increased in the last year. The next largest group (29 percent) indicated that it had stayed the same. Only 19 percent of respondents believed that average length-of-rental times had decreased in the last year. Watch for more surveys every week at collisionrepairmag.com!
C
ollision Repair magazine regularly runs weekly surveys through our flagship website, collisionrepairmag.com. These surveys will help provide a snapshot of various aspects of the autobody business and the larger automotive claims economy. The survey results are published every Wednesday in the Collision Repair eZine. Not getting our daily eZine? Email us at editor@collisionrepairmag.com and we’ll set you up with a free subscription.
April 2017 collision Repair 33
Coatings Consolidation
Financial Report
Acquisition frenzy continues across the globe By Jeff Sanford
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any of the companies operating within the collision repair sector are truly global in scope, with operations in many far-flung locales. No matter the distance, though, the wheelings and dealings of the biggest players will inevitably impact the Canadian marketplace. We’ve combed through the financial news and reports to bring you some of the most significant recent updates.
AkzoNobel
Ton Buechner, CEO of AkzoNobel, is said to be rallying support within the company to resist takeover efforts by PPG.
Axalta
Steven Markevich, Axalta’s Executive Vice President and President of Transportation Coatings and Greater China, notes that an increase in the price of raw materials has driven an increase in coatings prices in China.
Some of the biggest financial news in recent weeks is technically no news at all. PPG has made two bids for AkzoNobel (the first for about $22 billion and the second for $24 billion) and both have been rejected. It seems top-level management at AkzoNobel really does not want this deal to happen. According to a Reuters report, “A team of executives from U.S. paint maker PPG left the Netherlands on Friday without meeting their counterparts at AkzoNobel during a two-day charm offensive to win support for their proposed takeover of their Dutch rival.”
The CEO of AkzoNobel, Ton Buechner, is said to be, “... rallying support to separate out chemicals business,” as a way of raising money to make acquisitions and fight off PPG, according to the report. That money could then be put toward an attempted tie-up with another company. What target might AkzoNobel consider? One report notes that a company that has “... been on Akzo’s list for years,” is Axalta. The report suggests, “Buechner faced frustration from within the company,” when he didn’t acquire Axalta in 2013. See page 78 for more on this topic.
Axalta, for its part, has made no comment on the speculation that it might be drawn into the consolidation frenzy. However, the company has announced that its board of directors authorized a share repurchase program of up to $675 million. Axalta expects the share repurchases to be made from time to time in the open market. The pace of repurchase activity will be subject to the discretion of Axalta, and will be based upon market conditions. Axalta also hosted a conference for investors in New York recently, a so-called “investor day” event. Companies hold these events as a way to get their story out to Wall Street fund managers. Company executives also rang the opening bell at the New York Stock Exchange to kick off the event. Collision repair centres still represent the
single largest market for Axalta (41 percent of the business) but the company has also expanded into other end markets and completed six acquisitions last year. Looking at the global picture, Axalta recently announced it will increase certain prices in Greater China, primarily due to an increase in the cost of raw materials. “The upward pricing pressure on the cost of our raw materials reflects multiple factors beyond our control including the availability of feedstocks, increased regulatory requirements, and a limited number of suppliers that meet our rigorous quality standards,” said Steven Markevich, Axalta’s Executive Vice President and President of Transportation Coatings and Greater China. April 2017 collision Repair 35
Financial Report
Sherwin-Williams
John Morikis, CEO of Sherwin-Williams, has stated that the company is in discussions with a number of potential buyers for one of its business units.
Boyd Group
Brock Bulbuck, CEO of the Boyd Group, recently said the company is on track to double its business by 2020.
LKQ
Dominick P. Zarcone has been appointed as the new President and CEO of LKQ.
In other consolidation news: SherwinWilliams had to announce recently that its hoped-for deal to acquire Valspar will now be put off until June. The company cited, “regulatory hurdles as reason that the acquisition of a major competitor is running behind schedule.” According to a report, “Cleveland-based Sherwin-Williams now has until June 21 to wrap up its blockbuster, allcash purchase of Valspar Corp. The companies agreed a year ago to an outside closing date of March 21, though Sherwin-Williams more recently expected that the transaction would occur in April.”
Sherwin-Williams execs claim the “hangup” relates to the sale of a single business that regulators want the company to unload before buying Valspar. The company is in discussions with other companies who might be interested in buying the divested division. “We are in discussions with a number of prospective buyers,” John Morikis, SHW’s Chairman, President and CEO, was quoted as saying in a news release. “We remain confident in our ability to complete the divestiture at a fair price, and we look forward to unlocking the value of the combined business when the Valspar acquisition closes.”
Boyd has released its 2016 numbers. According to a press release the company had “another record annual financial result for 2016,” with sales rising 18.1 percent to $1.4 billion and same-store sales increasing 5.3 percent. As well, net earnings increased 32.9 percent to $52.6 million compared with $39.6 million in 2015. The increase in revenue was helped along by the 58 new locations the company added in 2016. This was the “second most” number of stores added in a single year, as consolidation in the collision repair market goes ahead. In an earnings call CEO Brock Bulbuck claimed the results represent “strong progress” towards the company’s lofty goal of doubling the size of the company “between 2015 and 2020.” Said Bulbuck, “This is an important milestone,” referencing the company’s now 404 strong chain
of stores. Boyd has already acquired another seven stores this quarter so far. “Our acquisition success is also a testament to the ability of our corporate development team to achieve our growth goals by ‘hitting singles and doubles’ thereby completing a greater number of smaller transactions,” said Bulbuck. “We are on pace and on the right track to achieve our goal of doubling our business by 2020.” Bulbuck noted the company has $350 million worth of of cash and credit on hand to continue the acquisition streak. The good growth in “same-store sales” shows that Boyd is growing its business in each location, and is not just relying on acquisitions to grow. That’s a good sign of a healthy company. Bulbuck noted that buying only seven stores in the first quarter of 2017 was actually “a little behind last year’s pace.”
The board of directors of LKQ has unanimously selected Dominick P. Zarcone, the current Chief Financial Officer of LKQ, to become the new President and Chief Executive Officer. Robert L. Wagman has announced his intention to step down from the positions due to health considerations. In addition, Joseph M. Holsten, LKQ’s current Chairman of the board and former CEO, was appointed as Executive Chairman. Wagman will remain with the company on a part-time consulting basis. Zarcone joined LKQ in March 2015 after having advised the company on numerous financing and acquisition transactions starting with LKQ’s initial public offering in 2003. “I am extremely pleased with the choice of Nick Zarcone as the new CEO. Nick has been our Chief Financial Officer since March 2015 and has been an integral part of the LKQ story since he led the team at Baird that took us public in 2003,” Holsten was quoted as saying. “We
are profoundly grateful to Rob Wagman for his dedication and commitment during more than 18 years with LKQ. We look forward to Rob’s counsel as a consultant on a part-time basis while he addresses his health considerations.” LKQ also held an investor event recently in New York. Slides from the presentation recount the remarkable success LKQ has had over the last several years, as the company evolved from a wholesale salvage company to its current form that now includes divisions in Europe. Over that time revenue has increased dramatically, rising from $328 million in 2013 to $8.6 billion in 2016. The presentation also included some information on expectations the company holds concerning the increasing use of collision avoidance systems. According to LKQ it expects a 10 percent loss in business to the technology over the next fifteen years. The impact of crash avoidance systems will be lessened as the average age of the vehicle fleet— now about 11 years—continues to lengthen.
36 collision Repair collisionrepairmag.com
RELATIONSHIPS
George Avery,
Uncensored Former State Farm exec offers tips on direct repair programs By Jeff Sanford
G
“It’s like the shop is trying to catch different balls, with a glove on one hand and a tennis racquet in the other.” – George Avery
eorge Avery is well-known for his work representing State Farm to the collision sector, a role he filled starting in 2005. However, Avery retired in June 2016. Now he speaks only for himself. Avery recently appeared as a guest on the Guild 21 Conference Call, presented by Verifacts Automotive. Avery drew on his deep experience to offer insights on the state of the relationship between shops and insurers in his address, “Direct Repair Programs - Cradle to Grave?” He emphasized the need for shops to generate a data record to back up claims if there is a dispute. Avery also talked about the importance of being familiar with the procedures expected by the various DRP programs. “What is insurer A’s position on panel repair? What’s their position on wheels? If there is limited or little access to that information it causes a problem,” he said. “What happens, when, in addition to that limited or no access to that info, exceptions to the rule occur?” According to Avery, there are times when the best thing to do is to veer from a stated procedure. Understanding how and why a job exists as an “exception” is only possible when the shop’s techs understand the requirements of the DRP. “Repairers are really trying to do the right thing. That’s something I understand. Then they get a roof accident. They do the numbers, and they see it’s better for this vehicle to repair and it’s going to take this many hours. But then you get on the phone with the reviewer who says, ‘We don’t spend that much on a panel. We don’t put that many hours on a van.’ But exceptions come along and have to be explained. Delays occur, and it will take extra phone calls [but it happens],” he said. If communication and understanding
between the insurer and the industry have lagged, real problems rapidly emerge. “Another real symptom of lack of information is that the gap a lack of information creates will be filled by rumours,” he said. “When there is a lack of information, someone will fill the gap.” Overall, according to Avery, proper procedures and methodologies have to be adhered to. “The reality is that there is limited or no physical re-inspection after the repair is completed. The insurer has an obligation to check and validate repair costs. And those need to be checked before the vehicle goes out of the door. But insurance companies can’t re-inspect every vehicle, and so that’s why programs are subject to review and the methodologies are in place,” said Avery. “The symptom of not looking at repairs is that, eventually, claims from clients about repairs not being done right begin to rise. The whole idea of looking at vehicles after they are repaired, with no physical inspections after repair, can hurt DRP programs,” said Avery. “This is the grave question in the market ... the potential stall of DRP efficiency.” Avery also noted that it’s his belief that, “... insurers put unintended pressure on repairers simply by having different programs.” That is, each company has its own preferred procedure. “The issue here is that more and more is required of the repairer, both in terms of responsiveness and complexity of repair,” he said. There are consequences to this approach. “It’s like the shop is trying to catch different balls, with a glove on one hand and a tennis racquet in the other. One insurer sends a baseball over, another lobs a tennis ball. And then they volley back and forth, but these differences cause trouble. Something I would like to see to take a couple steps forward on this, is to see some general DRP guidelines adopted across the entire industry,” he said. April 2017 collision Repair 39
MANAGEMENT
TOP Performers Become one by escaping the victim zone
By Dave Luehr
Exposing problems and system failures should be viewed as a positive, not a negative.
“Y
ou would not believe how good it felt to throw that insurance adjuster out into the street!” In utter disbelief, I continued listening to this shop owner describe his recent proclaimed victory. “If they won’t let me put new OEM parts on this lady’s Pontiac, they can take it to one of their damn DRP shops for all I care!” He went on to say, “You know Dave, you just can’t make money in this business any more. There’s no future in it!” There is a part of life that you can control and another you cannot. Some shop leaders don’t seem to know the difference. They worry about problems they have little or no influence over and let these uncontrollable aspects of their lives take charge. They justify their failures, citing reasons such as the insurance industry, consolidation and poor quality parts. They have entered what I call the “victim zone.”
Is this how you’re treating insurance adjusters when you disagree? Then you might be putting yourself in the victim zone.
Victim Zone I understand why it’s easy to drift into the victim zone, but we must overcome this urge. Negativity sets up a vicious cycle that leads to self-fulfilling prophecies where bad things keep happening. When bad things happen, people confirm and strengthen their faulty beliefs (along with an insatiable hunger to be right all the time), which then causes them to stay in their comfortable victim zone. This causes them to avoid making the necessary changes to improve the situation, which then leads back to more bad things happening. The trick to getting out of the victim zone is to take full accountability for yourself and your conditions. Then make a firm decision to quit blaming others for your problems. Fortunately, there are people and companies all over the globe that have figured out how to largely avoid the victim zone, and April 2017 collision Repair 41
MANAGEMENT
instead, build amazing businesses. During my company’s (Elite Body Shop Solutions) business dealings and throughout the process of writing the new book, The Secrets of America’s Greatest Body Shops, I have been blessed to meet some incredible and positive-thinking entrepreneurs. They have figured out how to overcome negative thinking and focus their energies on the things that matter. One may easily conclude that the people operating these super-successful shops have been given an unfair advantage. This is far from the truth! The successful people in the collision repair industry have faced many struggles to get where they are today. What sets them apart is how they view those challenges.
Unsuccessful people blame others for their problems. Successful people collaborate to find solutions and common ground.
42 collision Repair collisionrepairmag.com
Honour the Struggle Life gives us tremendous blessings every day that we refer to as “problems.” How we acknowledge them makes a world of difference to our ability to reach success at the highest levels. The unsuccessful person encounters a problem, and says, “Well I won’t try that again!” The successful one says, “What can I learn from this to do better next time?” Exposing problems and system failures
MANAGEMENT
THE DOOM LOOP
should be viewed as a positive, not a negative. Those that are diligent about continuous improvement know that you cannot improve flawed processes unless the flaws can first be exposed. Minds stuck in the victim zone will rarely be open-minded enough to take such an approach to improvement. Positive Outcome In my new book, The Secrets of America’s Greatest Body Shops, you will hear the stories of people that exude the traits I have mentioned. These people are a testament to the fact that when people have the right mindset, anything becomes possible in life and business. There is no doubt that the collision repair business is not for the faint of heart! It can be a very tough business and requires an amazing level of persistence and grit to be successful. With the challenges we face, we cannot afford to approach our work with a negative mindset and expect a positive outcome. The great news is that everyone can change their mindset if they first become aware of their current thinking habits. As the great Henry Ford famously said, “Whether you think you can, or think you can’t, you’re right!”
Are you stuck in the loop? Break just one part and you’ll find you’re no longer in the victim zone.
Dave Luehr is the co-author of “The Secrets of America’s Greatest Body Shops,” a book written to inspire and provide positive, practical advice to the collision repair industry. He can be reached at dluehr@bodyshopsecrets.com.
April 2017 collision Repair 43
presented by
Trainingmatters.ca
Report on Training
POWERED BY
T H E T RA I N I N G P O RTA L F O R C O L L I S I O N R E PA I R
Carrossier ProColor opens new training centre
T
he Carrossier ProColor network has announced the opening of a dedicated training centre to meet the growing need for training in the collision repair sector. Carrossier ProColor is a member of CSN COLLISION CENTRES. While the new centre will be used primarily for training staff employed with Carrossier ProColor locations, the network says it will also open the doors of its training centre to its insurance partners, thus enabling them to meet the training needs of their staff. “If we want to remain a partner of choice, both for our insurer partners and our collision repair centres, we must actively contribute to their success,” says Sylvain Dufault, General Manager of the Carrossier ProColor network. “The opening of our own training centre will allow us to be proactive as new technologies evolve and provide our collision centres and insurance partners with the tools and guidance required to maintain a service that respects the highest industry standards.” According to a statement from Carrossier ProColor, the new training facility boasts state-of-the-art equipment and a team of
A class in session at the new Carrossier ProColor training centre in Boucherville.
experienced, I-CAR certified trainers. Located in Boucherville, Quebec, the new training centre will offer theoretical and practical courses accredited by I-CAR. The training centre also has a mobile unit that can travel to most major cities in the province of Quebec, thus facilitating access to training for collision centres located in more remote areas.
Polyvance course approved by I-CAR Industry Training Alliance from Polyvance says this two-day training class provides hands-on experience in all of the essential skills required for bumper, headlight and underhood plastic repair. The learning objectives include:
Polyvance’s PR-02 Plastic Repair and Refinishing Course is now approved for I-CAR credit hours.
Polyvance has announced that its PR-02 Plastic Repair and Refinishing Course is now approved for I-CAR credit hours and/or Knowledge Area recognition through the I-CAR Industry Training Alliance program. According to a statement from the company, plastic repair is gaining in importance as more bodyshops are realizing its impact on gross profit margin and cycle time. Further, Polyvance says that shops wanting to improve their plastic repair capabilities have few places to turn to for training on the many facets of the art such as plastic identification, dent removal, repair processes, refinishing and retexturing. The PR-02 Plastic Repair and Refinishing course is offered exclusively at Polyvance’s training centre in Rainsville, Alabama. A statement
· Identification of different plastic types · Removing dents from bumper · Welding tears in bumpers · Repairing torn slot tabs · Repairing torn mounting flanges · Repairing torn flexible hinge tabs · Repairing holes · Repairing thermoset polyurethane (PUR) bumpers · Refinishing and retexturing plastic bumpers · Welding of other plastic bumpers such headlights, bottles, fender liners, etc. “I’ve been doing this for 17 years; I’m I-CAR Platinum and I’ve taken all the courses – structural, welding and so on. This was the best, most informative course I’ve ever taken. Well worth the time and money,” said Donnie Foster, a body technician from Downs Paint & Body of Milton, Florida, who recently took the course. North American shops interested in scheduling this training may register online at polyvance.com/training or call 800-633-3047. The cost of the course is $500 per person. Students completing this course are eligible for 13 credit hours under the I-CAR Industry Training Alliance program. April 2017 collision Repair 45
Report on Training
presented by
Trainingmatters.ca
POWERED BY
T H E T RA I N I N G P O RTA L F O R C O L L I S I O N R E PA I R
AMi introduces new course on scanning for managers It’s become common knowledge by this point that technicians must understand scanning to ensure proper repairs and calibration. However, the Automotive Management Institute (AMi) has introduced a new course designed to make sure managers understand the process and tools as well. AMi’s latest online course is Management’s Guide to Scanning and New Technology. According to AMi, the 108-minute online course covers essential information needed by collision repair managers to make decisions about scanning and other new technologies. Each module offers a management perspective on: • • • • •
What it means to scan Types of scans Types of scan tools OEM positions OEM vs Aftermarket
“This course provides a wealth of information for those needing to make decisions for their repair businesses. It organizes the information in a way that makes it understandable,” says Darrell Amberson, AMi Vice Chairman and President of Operations for LaMettry’s Collision. The course is the result of industry collaboration from industry experts and shop owners from across the country. In the AMi online format it can be paused and revisited at the user’s convenience.
Darrell Amberson is AMi’s Vice Chairman and President of Operations for US-based chain LaMettry’s Collision. He says the new AMi course organizes information in a way that makes it easy to understand.
This course will provide two credit hours toward all AMi professional designations, including Accredited Automotive Office Manager (AAOM), Accredited Automotive Manager (AAM), Accredited Master Automotive Manager (AMAM) and upcoming Accredited Collision-Repair Estimator (ACE) and Accredited Master CollisionRepair Estimator (AMCE). More information about this course is available by visiting amisignup.org. If interested in accessing the course, sign up and then type “scanning” in the search box.
Advance Auto Parts expands training program with new classes for 2017 Advance Auto Parts has announced it is rolling out new courses, leveraging emerging technologies and adding instructors to expand the company’s automotive training programs across North America. The new courses leverage professional training programs through the Advance Professional, WORLDPAC, Carquest Auto Parts and Autopart International brands. Advance has also developed robust online training solutions for automotive professionals, including more than 150 video courses, featuring over 500 hours of training content. “Training is critical to the success of our industry,” said Bob Cushing, Executive Vice President, Professional at Advance. “Advance is deeply invested in providing meaningful programs that help individuals enter, grow and advance through careers in the automotive industry. Today, through Carquest Technical Institute, Worldpac Training Institute, our online programs and the exploration of new technology and teaching methods, Advance is offering the most comprehensive, specialized training available to the aftermarket.” Collision Repair magazine reached out to Advance Auto Parts to determine which of the new courses are of most interest to collision repair professionals. According to the team leads at Carquest Technical Institute and WORLDPAC Training Institute, the courses they would recommend as most applicable to the body repair business fall into two categories: mastering scan tools and programming, and manufacturer-specific training. There are numerous courses available in these areas. At right is a list of some of the most popular. 46 collision Repair collisionrepairmag.com
• Scan Tool Academy (8 Hours) – Practical application, analysis, applied functionality • Domestic Vehicle Programming (8 Hours) – Programming processes (all modules audio-body-engine-etc.); programming or reprogramming procedures and tools required • Vehicle Data Network Diagnosis (8 Hours) – Different types of network protocols from OEMs • Using Wiring Diagrams (8 Hours) • Using Digital Multimeters (8 Hours) • Effective Electrical Troubleshooting (4-8 Hours) – Practical application of OEM wiring schematics • Body Control System Diagnosis (8 Hours) – Lighting systems • Supplemental Restraint System Diagnosis & Repair (8 Hours) To learn more about Carquest Technical Institute, WORLDPAC Training Institute, or customized automotive training solutions available from Advance Auto Parts, please contact your local Advance, Carquest, WORLDPAC or Autopart International delivery store.
SPECIAL PREVIEW
Business First NACE Automechanika goes to the core of shop operations By Mike Davey
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ACE and Automechanika Chicago have combined forces, and it promises to the most exciting and informative collision-focused event to land in North America this year. NACE Automechanika 2017 takes place at McCormick Place, West Hall in Chicago from July 26 to 29. With more than 600 exhibiting companies and 10,000 attendees, NACE Automechanika 2017 is set to lead the industry in a showcase of the latest technology covering the entire spectrum of the automotive aftermarket industry. NACE Automechanika 2017 will be the largest North American trade show for automotive technicians and shop owners focused on high-end technical training and management, while showcasing the newest tools, equipment and products in the market. Messe Frankfurt, producer of Automechanika, the leading international brand of automotive trade shows has joined forces with UBM, the largest US tradeshow organizer, to create this extraordinary event along with NACE show management. “The explosion of new technology in today’s vehicles means technicians must keep pace,” says Jim Savas, GM and VP of the UBM Automotive Group. “NACE Automechanika 2017 will be the venue for shop-level training in North America. We’re extremely pleased to have Collision Repair magazine onboard as our exclusive Canadian media partner.”
Automechanika Chicago in 2015. Now combined with NACE, this year’s show promises to be bigger and better than ever before.
Training topics covered at NACE Automechanika 2017 will range from analysis of fuel trim corrections for drivability to social media for shops. The courses offered reflect current trends as well as showcase new techniques and processes to make business more efficient. Widely recognized industry experts leading these courses include Vin Waterhouse, John Thornton, Bob Greenwood, G. Jerry Truglia, Bernie Thompson, Wayne Colonna and Matt Fanslow, plus experts from leading suppliers. “The best trainers in the industry are on board to lead this event,” said Pete Meier, Technical Editor and Director of Training for Motor Age and the UBM Americas Automotive
Group. “Nowhere will you find a better line up of trainers, or selection of training topics that offer something for everyone in today’s shops and stores. They will be able to hone their current skills and add new ones by attending NACE Automechanika.” NACE Automechanika attendees also will be able to experience the latest technology, test equipment and discover advanced applications with live, interactive demonstrations. For the 2017 event, the show schedule has been adjusted to limit conflicts between exposition hours and training sessions. Turn the page for more on what you can expect at NACE Automechanika 2017!
Free Training! Collision Repair magazine is the exclusive Canadian media partner for NACE Automechanika 2017. This partnership allows us to offer you free mechanical training at the show. “This is a really incredible opportunity for repairers to access training at no cost for their mechanical technicians,” says Darryl Simmons, Publisher of Collision Repair magazine. “By registering for NACE Automechanika through us, you not only get access to what promises to be the biggest and best collision repair event of the year, you will also receive completely free education on some of the hottest topics.” For more information on how you can receive free training, please contact us via email to editor@collisionrepairmag.com.
April 2017 collision Repair 49
SPECIAL PREVIEW
50 collision Repair collisionrepairmag.com
SPECIAL PREVIEW
Hit the Floor! NACE Automechanika 2017 offers so much that you might not be able to see it all. Collision Repair magazine has compiled a list of must-see events and locations at the show. Canadian Corner: Make sure to visit Collision Repair magazine and network with fellow Canadians at booth 1774, a gathering point for the Canadian collision industry in the heart of NACE Automechanika. The Hot-Spot Welding Center: Get a birdseye view of welding techniques all day, every day of the event. Innovation Zone: Catch a glimpse of the industry’s most innovative automotive products and services. Whether it’s a new tool or a piece of equipment, a product advancement, new packaging or technology, this is where to find what’s on the cutting edge!
Collision Repair magazine is honoured to serve as a rallying point for Canadians at NACE Automechanika!
OE Coliseum: Your one-stop-shop for all OEMs: Toyota, Nissan, Fiat/ Chrysler, GM and more. Come see what’s new, get trained on each of their products, expand your knowledge and become more competitive. Scan-A-Palooza: Industry guru Mike Anderson gives real insight into the world of diagnostics. Then get up close with a variety of companies as they demonstrate their products on a range of vehicles, right on the show floor!
Get up close and personal with over 600 exhibitors on the trade show floor.
The Shop of the Future: Powered by AutoVitals, experience each of the many sections of a full-service shop. See how you can make large and small changes to bring your shop into the future. Tool Alley: Take a walk on the wild side and check out the latest, greatest tools and equipment hitting the market. Virtual Stage: Step into the driver’s seat and get hands-on training without getting dirty, or even touching a vehicle. Automechanika Train Station: Exhibitors from around the world will share how to become more efficient using their products and services. Training takes place every hour.
Training sessions will take place every hour at the Automechanika Train Station.
The Collection – Dealer Driveway – The Parking Lot: Don’t miss the hottest cars with the coolest vibes in these special vehicle areas! Commitment-to-Training Lounge: Didn’t get enough time in class? Need to ask more questions? Just looking to talk shop with the experts? Stop by and connect with the industry’s leading trainers in a relaxed environment.
With more than 600 exhibiting companies and 10,000 attendees, NACE Automechanika 2017 is set to lead the industry.
Consultant Mike Anderson will host Scan-A-Palooza, a special event devoted to scanning.
April 2017 collision Repair 51
SPECIAL PREVIEW
Exclusive Information Advanced tech, diagnostics, the MSO Symposium and much, much more! Industry consultant and researcher Vincent Romans at the 2016 MSO Symposium. Romans will provide an industry update during the MSO Symposium at NACE Automechanika 2017.
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ACE Automechanika 2017 puts the emphasis where it belongs: helping you to run your shop more effectively and ensuring your technicians are trained and up-to-date. Here are just a couple of the special events you can expect to see at NACE Automechanika 2017! Advanced Technology & Diagnostic Repair Forum The ATDR Forum will focus on new technology including sensors, cameras, accident avoidance systems, wireless communications and more. This is a brand new event that will shine a light on the advanced automotive technology that is redefining the scope of repairs and the business overall. Car manufacturers, insurers, repairers and technology companies are driving the content, making this the most comprehensive and relevant program of its kind. Attendees will learn about the technology in today’s vehicle with a look towards the next 12 to 36 months. The business is changing rapidly, forcing everyone to re-evaluate training, equipment, operational and repair best practices as well as interactions with vehicle owners. Some of the topics that will be covered in the ATDR Forum include autonomous vehicles, the use of OEM parts vs. aftermarket and salvage parts, government regulation and legislation, cars as mobile computers, a panel discussion with insurers and more. Attendance at the ATDR Forum requires advance registration. Please visit stonefortgroup.com/atdrf-2017/register to register for this event. MSO Symposium The MSO Symposium has been one of the biggest draws at NACE since the event premiered at the 2011 show in Orlando, Florida. This year’s MSO Symposium is scheduled for July 26 from 12 noon to 5:30 p.m., immediately followed by a reception. Show management advises early booking, as the event often sells out quickly. 52 collision Repair collisionrepairmag.com
6th Annual MSO Symposium Agenda 12 noon - 1 p.m.: Luncheon 1 - 1:30 p.m.: Industry Update - Presented by Vincent Romans and Brian Sullivan. 1:30 - 2:15 p.m.: Insurer Panel - Moderated by Marcy Tieger, the panel will address the developing gap between car manufacturers and insurers as recommended repair procedures, vehicle scanning, onboard telematics and repairability take centre stage. 2:15 - 3 p.m.: OEM Panel - Moderated by Marcy Tieger, this panel will provide a perspective from the manufacturer’s standpoint of recommended repair procedures, vehicle scanning and new technology. 3 - 3:30 p.m.: Refreshment Break 3:30 - 4:10 p.m.: MSO Panel - Moderated by John Walcher, this panel will address challenges facing MSOs including technology, scan tools, equipment, supplier consolidation and staffing. 4:10 - 4:50 p.m.: MSO Panel II - Panel regarding OEM certification and training, with leadership representing small, midsize and large MSOs. 4:50 - 5:30 p.m.: Legislation and Regulation - Bob Redding will discuss how the new administration will affect business for the collision repair industry and insurers and what legislation will have the greatest impact on business. 5:30 - 7 p.m.: Private MSO Symposium Reception Please note that pre-registration is required and attendance is limited to qualified members of industry. The MSO Symposium is exclusively attended by high-growth MSOs, owners of large independent repair shops and property and casualty insurance company executives.
GLOBAL VIEW
AUTO
Boom India’s growing middle class means more cars By Barett Poley
T
he International Bodyshop Industry Symposium (IBIS) draws together key influencers and thought leaders from across the globe to discuss the trends and factors impacting the collision repair industry both at home and abroad. Collision Repair magazine is the exclusive Canadian Media Partner for IBIS. In this issue, we present information compiled by IBIS on the current state of the bodyshop market in India, as well as its projected growth as a young and reinvigorated presence on the global stage. The data in this report is provided courtesy of AkzoNobel, Audatex and Business Monitor International (BMI). While vehicle sales in India saw a distinct dip in 2013/2014, the descent was shortlived, and in 2014/2015 the market saw a large growth in sales, as well as a projected growth for 2016. According to BMI, this is because of a “better than expected global
financial recovery, a new government in the lower house elections and a young market driving up demand. Wage increases are also driving a demand for more material goods, which inturn fuels the insurance industr y, which should benefit the collision repair market even further.” The collision repair market is, overall, expanding, thanks to the increases in automotive sales alongside the expansion of India’s middle class. The last point is important especially to the collision repair industry. In India, the average hourly labour rate for a collision repairer is about $5 to 7 USD. This is low on the global scale
for collision repairers and technicians, but high for India, a country where the average hourly wage is only $0.40. According to a report by McKinsey & Company, in 1985, 93 percent of Indian citizens lived on under $1 USD a day. By 2005, that number was reduced to just 54 percent. Today the percentage of Indians estimated to be living on under a dollar a day is less than half of the population. This emerging middle class, which was essentially non-existent prior to India’s boom, is a good sign that vehicle sales will increase. Another demographic who would beforehand never have bought a vehicle, but are now more likely to, are the rural citizens of India. Contrary to what one might expect, the quick growth in the country has actually been incredibly beneficial to India’s rural populations.
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GLOBAL VIEW
Heavy traffic near Delhi, India. An emerging middle class in India is leading to increased vehicle sales. In turn, this is leading to growth for the country’s collision repair industry.
INDIA FACTS & FIGURES Licensed Drivers
173,707,407
Number of Motor Claims
5,700,000
Domestic Vehicle Sales (April 2015 to March 2016)
Between 1985 and 2005, rural extreme poverty went from 94 percent to just 61 percent, and is projected to be at only 25 percent by 2025, according to the McKinsey report. Rural Indians have far greater distances to travel than those living in urban centres. City-dwellers can also make use of ride-sharing programs, something not available to rural populations. It seems likely that the only major obstacle to India’s rural population acquiring vehicles is cost. Due to the extreme poverty that much of the country lived in for such a long period of time, India has a proportionately low number of cars on the road, just 13 per 1,000 people in the country. When it comes to two-wheeled vehicles, like motorcycles, the market is a lot bigger, at about 76 motorcycles per 1,000 people. What is contributing to these booms? Rising labour costs in China are a large factor. According to BMI, “With Chinese labour costs rising aggressively, India may well enjoy a manufacturing boom in the coming years as multi-nationals look to take advantage of
20.47 million
The assembly line at Maruti Suzuki’s plant in Manesar. The company, headquartered in India’s capital of New Delhi, is the top seller in the country.
a young, competitive workforce and major transport network improvements.” The transportation network, as a result of the economic upturn, is being vastly improved. The widespread development of roads is making it easier for citizens and corporations to get around. The advantages of this infrastructure are threefold. The first advantage is that vehicle manufacturers and OEM parts companies will have an easier time getting parts and vehicles into India to support what is a now-burgeoning aftermarket and collision repair industry. The second is that as the roads and networks of transportation grow, more people will be buying cars, which further grows the industry. The third advantage is the disappearance of an advantage that China held over India as an opportunity for investment by OEM companies. According to BMI, “China still remains a major competitor for Foreign Direct Investment (FDI) flows into India. India has excessive bureaucracy and poor infrastructure in comparison with China.” With the notable growth in infrastructure, however,
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this is poised to change. When it comes to the passenger car market, Maruti Suzuki and Hyundai had a projected combined share of 56 percent in 2015; Maruti accounted for 36 percent and Hyundai for 20 percent. According to data collected by Audatex, the projected statistics for 2019 have Maruti’s share staying at about 36 percent, with Hyundai’s dropping to around 5 percent. The smaller manufacturers will generally remain unchanged. The biggest “wild card” in the country is the abolition of the pool from which compulsory motorists’ third-party liability (CMTPL) claims are paid. BMI claims, “this has required insurers to take significant write-offs to recognise the increase in claims liability, but in the long-term insurers will benefit from efficiency in claims management. This will improve costs and is an indicator towards the rising motor premiums.” In conclusion, India is seeing fantastic growth at the moment, which bodes well for the country’s collision repair industry.
CLASSIC CORNER
Rum, Cigars, & Classics
Alain Galvez and Juan Carlos Rodriguez took the Francouers on a tour of Havana in this beautiful red and white 1957 Buick Century Riviera.
Roving reporter Rick Francouer discovers 1950s cars thriving in Cuba, thanks to repair ingenuity
By Rick Francouer
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Rick Francouer and the President of the A Lo Cubano Classic Car Club, Alberto Gutierrez Alonso.
uba. It’s Mecca for vintage car lovers, a rolling museum featuring what many believe is the golden age of the automobile. The brightly painted tapestry of mainly 1950s nameplates such as Chevy, Buick, Oldsmobile, Pontiac, Dodge and Ford make the streets of Cuba appear frozen in time. For the majority of the last 50-plus years, Cubans have only had access to cars purchased before the country’s 1959 revolution. Newer Russian-made Ladas, Czechoslovakian Skodas and the odd newer European nameplates are seen here and there, but the vast majority of the autos in Cuba are beauties straight from the mid-50s. The reason for this is a trade embargo the US placed on Cuba in the early 60s. It’s been modified a bit since, but it’s still basically in place today. That means that no US cars have legally entered the country since. Parts stopped with the embargo as well, and as a result drivers have gotten creative, trading and repurposing vintage car parts to make existing vehicles last for some 50 years despite burning sunny skies and salty ocean air. April 2017 collision Repair 59
CLASSIC CORNER
It’s not too unusual a scene for a classic club cruise, but this is just a Havana street scene!
On our recent trip to Cuba, on a sunny day in old Havana, my wife and I stumbled upon a car park teeming with vintage vehicles. Mostly 1950s era, they were painted with pride in backyards with paintbrushes and
language and borders. While we were there we met with two fixtures of the local car culture, Alain Galvez and his family friend Juan Carlos Rodriguez. They took us on a spectacular site-seeing trip
On a sunny day in old Havana, my wife and I stumbled upon a car park teeming with vintage vehicles. paint smuggled in from the United States. These iconic, beautiful, historic vehicles may contain more spare parts than our local British Columbia landfills. The Cuban love affair with the automobile transcends politics,
Some cars are kept pristine by their owners. There’s a lot of pride evident.
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of Havana, the real one you don’t read about in the guidebooks. Alain’s family is the proud owner of a red and white 1957 Buick Century Riviera. By Canadian standards it’s a 6 out of 10, but in Cuba it’s easy to overlook missing door jambs and rubbers. For Cuban families, owning a classic from the 1950s can bring in much-needed income when used as a private taxi. The average salary for a state job in Cuba is around $30 per month, while a taxi driver in the high tourist season can expect to earn $30 a day. For the owner of a classic car, $30 to $50 an hour is not uncommon for a ride through the historic areas of Havana. Alain is a member of the A Lo Cubano Classic Car Club, the vintage auto enthusiasts made famous around the world thanks to a Discovery Channel program called Cuban Chrome. The show chronicles the members of the club and their struggles in maintaining their cars despite the embargoes that make obtaining factory parts impossible. As guests of A Lo Cubano, we were invited to a private show in the parking lot of Havana’s legendary Tropicana Club where A Lo
CLASSIC CORNER
Cubano members brought their cars for me to see, review and discuss. President Alberto Gutierrez Alonso welcomed me on behalf of “Canada’s legendary 360 Fabrication custom car builders” to the event. It was an honour to be a part of such a special event, and to review the cars and give tips to the owners. The level of pride the club owners had for these mobile museums was fantastic. What quickly became evident is that the drivers are as fascinating as the cars themselves. As someone with 30 years in the automotive industry in British Columbia, seeing
suspension from a tractor. Those put-together vehicles are commonly called Cuba’s Frankenstein cars, but it’s important to note that we also saw some spectacular 1955 Chevys, a gorgeous 1957 Rocket 88, and a ’59 pink Cadillac. Any one of these would stop traffic on the streets of Vancouver. There are enough 1950s classic cars to cover the streets of Havana in a nostalgic glow, and spending a week there makes it truly feels as though you’ve crossed through a time warp. Over 50 years may have passed since these machines were shiny and new, but to see
As someone with 30 years in the automotive industry in British Columbia, seeing and talking to these self-taught mechanics was inspiring. and talking to these self-taught mechanics was inspiring. Their creativity and resourcefulness have kept their cars running for decades. It’s a true example of automotive ingenuity. Let’s face it, five plus decades is a long time to keep any old car running, and I saw resourceful Cubans utilizing parts from Russian-made Ladas, an engine from a Peugeot, a
them rolling through the streets today can still make a Canadian car buff drool. Rick Francoeur is the owner of 360 Fabrication in Abbotsford, British Columbia. 360 Fabrication is Canada’s largest custom car shop. For more information please visit 360Fabrication.com.
The tailfin era of automotive styling peaked by 1961, but it’s vividly on display in Cuba.
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NEWS
Certified Collision Care to manage Nissan’s collision program Nissan Canada has selected Certified Collision Care as the company’s exclusive strategic partner to administer and manage its new collision repair certification program and national network. The Nissan Certified Collision Repair Network program will identify, certify and promote dealership and independent collision repair providers across all of Canada. “We are very excited to partner with Nissan Canada to add the Nissan Certified Collision Repair Network to our cer tif ied shop’s credentials,” says Leanne Jefferies, VP of Canadian Operations for Certified Collision Care. “Our jointeffort certification program provides top performing collision repairers an effective means to dif ferentiate Leanne Jefferies, VP of Canadian Operations for Certified Collision Care. themselves in their market
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by aligning with the most powerful brands in the automotive industry.” Certified shops will receive special Nissan Certified Collision Repair Network signage and listing on the consumer-facing online shop locators as part of the integrated Certified Collision Care program. Participation in the Nissan Certified Collision Repair Network will be limited, and there will be a market lock-out restricting the number of Nissan certified facilities in each market area. Nissan program enrollment began April 19, 2017. For Certified Collision Care Providers that gain Nissan Dealer sponsorship and are not in a locked-out market, there is no additional fee to add Nissan Certification to their Certified Collision Care credentials. A statement from Certified Collision Care says that by l e ve r a g i ng t h e e x i s t i ng certification process, Nissan is able to eliminate redundant costs, making certification more affordable for dealerships and independently owned repair businesses that can meet the program’s requirements. For more information, please visit certifiedcollisioncare.ca.
NEWS
NEWS
Collision 360 donates scholarship By Barett Poley
Anthony Iaboni of Collision 360 (left), about to present the scholarship at Centennial College’s Student Awards Night.
Jaskirat Kelsi, a Centennial College autobody student, has received a scholarship, thanks to a generous donation from Anthony Iaboni and his company Collision 360. The scholarship was awarded to Kelsi in recognition of his hard work and determination. According to Centennial College, the scholarship is awarded to a student enrolled full-time in the school’s Auto Body Repair Techniques program. The student must have a passion for the automotive industry and must have shown how the Auto Body Repair Techniques program will prepare them for a career. Iaboni says that the scholarship is a great first step, and that more initiatives like it are on the horizon. “I’d like to make it a goal to support at least two more students annually,” says Iaboni. “I believe with reinforced partnerships and initiatives this goal could become a reality.” Iaboni is passionate about giving young people a strong start in collision repair. After starting Collision 360 just over four years ago, Iaboni knew he needed to help younger people find careers in the trade. “We’ve made a bold commitment to support those willing to learn our skilled trade,” says Iaboni. “I’m often asked why a company relatively in its infancy would make such a commitment to youth. Thanks to the efforts of individuals like Mike Rowe I’ve become a stringent proponent of reducing the skills gap. I believe North America has a dysfunctional relationship with work, directly affecting a widening skills gap.” Iaboni doesn’t think that this is a permanent problem, though, and he says that the collision repair industry can help turn things around. “As an industry we must nourish those with a passion for pursuing our trade. As an individual all I can do is build awareness within my circle of industry colleagues, and hope that individuals like Jaskirat Kalsi succeed within our trade and help secure its future,” he says. For more information, please visit collision360.ca. April 2017 collision Repair 63
NEWS
Magna creates carbon fibre subframe for Ford By Mike Davey
Magna has developed a prototype carbon fibre composite subframe for Ford that reduces mass by 34 percent.
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The use of carbon fibre has grown significantly in recent years, but it’s still not considered a mass-market material. That might change soon, judging by news coming out of the JEC World 2017 event that recently concluded in France. The news revolves around the results of a new project Magna undertook in cooperation with Ford. This is not a hood, grille or trim. The project actually uses carbon fibre structurally. In short, Magna has developed a prototype carbon fibre composite subframe, which the company says reduces mass by 34 percent compared to making a stamped steel equivalent. By replacing 45 steel parts with two molded and four metallic parts, the prototype subframe achieves a dramatic 87 percent reduction in the number of parts. The moldings are joined by adhesive bonding and structural rivets. The carbon fibre subframe is the result of a research and development project between Magna and Ford to investigate potential mass-reduction benefits and technical challenges of using carbon fibre reinforced composites in chassis applications. “When we are able to work in close partnership with a customer at the beginning of their design and engineering processes, it’s an opportunity to bring our full Magna capabilities to bear,” said Grahame Burrow, President of Magna Exteriors, speaking at JEC World 2017 in Paris. “We are able to take a clean-sheet approach with design, materials and processing, collaborate with the customer and within our product groups, and deliver a solution with the potential to really move the needle in terms of aggressive lightweighting without sacrificing styling or performance.” A statement from Magna says the design has passed all performance requirements based on computer-aided engineering (CAE) analyses. The prototype subframes are now being produced by Magna for component and vehicle-level testing at Ford. “Collaboration is the key to success in designing lightweight components that can give our customers fuel economy improvements without compromising ride and handling, durability or safety. We must continue to work hard to achieve these lightweight solutions at the most affordable costs. Magna and Ford working together on this carbon fibre composite subframe is a great example of collaboration on advanced materials,” said Mike Whitens, Director of Vehicle Enterprise Systems with Ford Research and Advanced Engineering. The testing phase will evaluate corrosion, stone chipping and bolt load retention, which aren’t currently measured by CAE. The project team will also develop a recommended design, manufacturing and assembly process with the experience gained during the prototype build and subsequent testing. “We’ve been a pioneer in the use of lightweight materials for many years now,” added Burrow. “First we launched the CF hood for the Cadillac CTS/ATS-V series, followed by a carbon fibre grille opening reinforcement for the Mustang Shelby Cobra GT500. Applying our expertise now to a structural component like the subframe is another step forward as we continue to help our OEM partners meet their goals.”
NEWS
CCS hosts Spring Performance Meeting Consolidated Collision Services (CCS) recently held its Spring Performance Group Meeting at Spring Hill Suites in Vaughan, Ontario with a theme of Motorsport Design. The bi-annual event was attended by over 50 new car dealer collision centre, fixed operations and general managers representing 35 new car dealership collision centres throughout the Ontario market. CCS is operated by Consolidated Dealers. The network is a new car dealer-only collision repair organization, with 50 new car dealer member collision centres representing over 140 new car dealerships in the Ontario, Alberta and Manitoba markets. Mike Beier, General Manager of CCS, welcomed the attendees and then provided the group with an update on the growth of the CCS Network. Beier also shared recent updates regarding the network’s insurance strategy. John Niechwiadowicz of QLC was up next, hosting a lively session discussing insurance KPIs, CSI data and other timely collision industry topics, tying all discussions back to actual performance numbers. Later in the afternoon, CCS was proud to introduce their guest speaker for the event: Chip Foose, automotive stylist extraordinaire and founder of Foose Design. Foose had the group’s undivided attention as he related the path he took to become one of the industry’s leading automotive stylists and designers, followed by a question-and-answer session. Mike Beier, Sandy Liguori, President of CCS and Woodchester Auto Group, Tom Langton, President of Consolidated Dealers, and Craig Kirby, Business Improvement Manager at CCS, presented Sam Piercey Jr. with a donation for the Sam Piercey Foundation. The Sam Piercey Foundation was formed to assist with introducing and training young people in the collision repair industry. The meeting continued into the second day with far-ranging discussions and a presentation by Wendy Hillier of Hillier Consulting. Hillier has many years of experience in senior claims roles for two large insurers in the Canadian market. Her presentation to the group was suitably titled “After the deal is signed.” The rest of the second day was filled with more industry related discussions around cycle time and improving the culture of individual organizations, as well as attendees revealing their answers to their assigned case studies and a negotiation role-play exercise that involved all attendees. The CCS Fall Performance Group meeting is scheduled for October 2017. For more information on Consolidated Collision Services, contact Mike Beier via email to mbeier@consolidateddealers.com or call 289-795-9955.
Chip Foose, Steve Goegan of Consolidated Dealers and Kelly Gomes of Serpa Chrysler Collision Centre at the CCS Spring Performance Group Meeting. Foose was one of the guest speakers for the event.
Tom Langton of Consolidated Dealers and Shawn Ashford of Color Compass Corporation.
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NEWS
Tesla to expand network, ditch poor performers By Mike Davey
Tesla has vowed to add 300 shops to its repair network and to remove “poor performing shops,” according to a statement by Tesla’s President of Global Sales and Service, Jon McNeill. McNeill made the statement in response to the story of a Tesla owner who had to wait eight months for repairs to their vehicle damaged in a relatively minor accident. The story originally appeared on the Motley Fool but was widely circulated by various media outlets. The shop handling the repair claimed that a long wait for parts was responsible. McNeill said that the long wait was mostly due to the shop. “The bodyshop … did not begin repairs on the car for three months and then ordered more than 90 parts and took over seven months to repair the car,” wrote McNeill in a post on the Tesla Motors Club forum. McNeill also said that they had found similar issues at other facilities in the Tesla network and that the company would add 300 shops to the network and dump shops that weren’t performing. Collision Repair magazine reached out to Tesla to determine the current size of the Canadian repair network and to see if the company plans to add any of those 300 shops in this country. Tesla had not responded at the time of publication. “Most of the customer complaints about bodyshops mentioned parts, so we focused on this issue. To date, we’ve reduced backlog by over 80 percent,” wrote McNeill. “Even though we reduced part wait times, we continued to dig into the bodyshop complaints.
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Jon McNeill, Tesla’s President of Global Sales and Service, has publicly stated the company will add 300 shops to its collision network.
What we found was astounding – cars sat at bodyshops for weeks and sometimes months before the bodyshops took action and, more often than not, the bodyshops blaming Tesla for parts delays were the very shops that hadn’t even ordered parts or started the repair.”
NEWS
Tropicana to enlarge tech talent pool with new program By Mike Davey
Another 20 students are on their way into the collision repair industry, thanks to Tropicana Employment Centre’s Pre-Apprenticeship Program. Mitzie Hunter, Ontario’s Minister of Education, was on hand to congratulate the successful candidates for joining the program. The event also featured guest speakers Bill Dawe of Max Auto Supply and Key Colour, Peter Wrong of 3M, Collin Welsh of CARSTAR and John Norris of CIIA. Tropicana has also announced an upcoming program that is designed to help even more people find careers in the autobody field. The new program will focus on prospective students that don’t have a high school diploma. “We’ve had to turn away a lot of potential candidates over the years because they didn’t have that high school diploma,” says Marc Tremblay of Tropicana. “The new program will see students work on the basic academic skills needed for college, while part of each week will be devoted to showing them the collision repair industry.” Tropicana’s 2017 sponsorship partners include CSN-427 Auto Collision, I-CAR, Eugene Collision, CARSTAR Canada, 3M Canada, Auto World Imports, Collision Industry Information Assistance (CIIA), CSN COLLISION CENTRES, CSN-Brimell Paint and Collision Center, Key Colour, Auto Max and Collision Repair magazine. The Tropicana program has done great work in helping to fill the technician roles of the future. However, the program only operates in the Greater Toronto Area. If you’d like to see a similar program in
Two of the guest speakers at the Tropicana kick-off: Collin Welsh of CARSTAR Canada (left) and Bill Dawe of Max Auto Supply and Key Colour.
your area, then get in contact with your local community employment organizations. Tremblay has indicated to Collision Repair magazine that he will help them and pass along how he’s run the program so they can start something similar in their communities. For more information, please contact Marc Tremblay at 416-4917000 Ext. 203, or via email to mtremblay@tropicanaemployment.ca.
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Saskatchewan procession honours fallen operator The community of Pense, Saskatchewan recently saw a mass gathering of tow operators and emergency personnel on Highway 1. The message was simple, and literally spelled out in lights: “Please slow to sixty. Our families depend on it,” read a sign by the side of the road. The gathering included dozens of tow trucks, as well as fire, police and ambulance personnel. The goal was to raise awareness about the dangers of working on the side of the highway. This is something that tow truck drivers deal with on a daily basis, as do other emergency personnel. On this day, towers had the full support of others who find themselves in this situation. Grand Coulee Fire Chief James Pratt said he wanted to show support for tow truck drivers because their work clearing up accident scenes is critical. “They do a fantastic job clearing the scene and securing it after we’ve left and dealt with the emergency,” he said, as reported by Global News. “It’s very important for life safety because when we’re on the road, we depend on each other.” Professional towers know just how dangerous their work can be. The beginning of March saw tow operator Courtney Schaefer killed in a crash on Highway 22 near Gerald, Saskatchewan that involved a semi-tractor trailer, two other vehicles and his tow truck. Schaefer’s death prompted a procession of nearly 100 tow trucks from the Saskatchewan communities of Yorkton to Esterhazy, as well as the showing of lights near Pense. Tow truck drivers are pushing the government to change their lights from amber to red and amber. Joe Hargrave is the Minister in charge of Saskatchewan Government Insurance (SGI), the province’s official insurer. He has said the government is considering the change, but notes that all stakeholders must be consulted when it comes changing the colour of vehicle lights. It would require legislation to bring about. Drivers in Saskatchewan are required by law to slow to 60 km/h when passing a tow truck with its lights on. This is similar to “Slow Down, Move Over” laws in other Canadian jurisdictions.
A procession of tow trucks honour the memory of tower Courtney Schaefer, killed on the job in early March.
A blinking sign near the community of Pense, Saskatchewan reminded motorists to slow down when passing emergency vehicles such as tow trucks.
Drivers charged for attending crash scene Two Ontario tow truck drivers in Kitchener-Waterloo were recently charged under a new bylaw that prohibits tow trucks from being within 200 metres of an accident unless someone involved in the crash has called them. The new Region of Waterloo bylaw 16-023 came into effect February 21, 2017. In brief, it prohibits tow truck drivers from arriving at an accident scene if no one has called them. Drivers can be fined $320 plus an $80 victim surcharge if they don’t comply with the regulation. In addition to the municipal laws, Ontario has new regulations regarding towing that came into effect on January 1, 2017. The Ontario-wide laws say motorists are required to sign authorization before towing commences, receive an estimate for the costs and the final costs cannot be more than 10 percent beyond what was initially quoted. Local police responded to a collision involving two vehicles in the area
of Block Line Road and Homer Watson Boulevard in Kitchener to find two tow trucks at the scene, but inquiries showed the drivers involved in the accident had not called them. A statement from police says both of the tow truck drivers were changed. The company that employs them has been charged as well. “Police would like to remind all tow truck drivers to respect the bylaw and the drivers involved in collisions,” according to an official statement from Kitchener police. “Police would also like to remind members of the public to not enter into any contract with tow truck operators if involved in a collision but to call police.” One of the tow trucks was also found to have a defective braking system after a commercial vehicle inspection was performed. The tow truck had its licence plates removed and was towed from the scene. august April 2013 2017 collision Repair 69
Contents
Recycling News....................71 - 75
Cardinal Couriers rolls out process improvements
Recyclers shine at annual OARA Convention By Mike Davey
Princess Elsa cuts the Sunshine Foundation cake with Nethalyu, a future Dreamlift recipient. OARA has donated over $1 million to the Sunshine Foundation over the last seven years. The money is used to provide terminally ill children with wonderful adventures.
Automotive recyclers would be wise to line up their tactics with broader governmental policy. That was one of the messages delivered by Steve Fletcher, Executive Director of the Ontario Automotive Recyclers Association (OARA). He made the remarks at the 2017 OARA Convention and Trade Show, following a presentation by Peter Hargreave of the Ontario Waste Management Association. The convention took place at the Hilton Toronto/Markham Suites Conference Centre in Markham, Ontario. Hargreave’s presentation, Auto Recyclers and the Circular Economy, led off the conference and outlined how new and upcoming legislation and higher demands from government would impact recyclers.
Hargreave pointed out that the future will require investment, but this is not necessarily a bad thing. “There’s an opportunity to invest in infrastructure that will drive value up,” he said. In other words, an investment by a recycler today will make the business more profitable and more valuable in the future. Joe Ferrazo and Jordan Schware of Hollander followed, looking at the barriers for Canadian recyclers who want to sell into the US. At roughly 10 times the population of Canada, the US has a lot of opportunities for parts sales. Ferrazo and Schware outlined how to remove the obstacles to reaching this market, and how digital technology is helping to pave the way. Continued on page 72
Cardinal Couriers is well-known to many automotive recycling professionals, especially those in Ontario and Quebec. The company operates the Night Network pick-up and delivery solution. The unique methodology provides a competitive advantage through a “First to Market” approach, allowing businesses to maximize their business day, improving sales, customer service and profitability. Cardinal’s Night Network provides before 8 a.m. delivery, including Saturdays, to major urban centres as well as the majority of the smaller cities, towns and villages throughout Ontario and Quebec. Cardinal operates the network through 18 strategically located terminals in Ontario and Quebec. Recent improvements rolled out by the company have led to a faster process that also provides recyclers and customers with more up-to-date information. Joe Ariganello is Director of Sales and Marketing for Cardinal Couriers. In a recent interview with Canadian Auto Recyclers , Ariganello noted that in addition to the processes Cardinal is rolling out, the company will soon move into a new building that will provide even greater capacity. “We’re operating out of two facilities right now. The new building will combine the operational and office sides. Doing so will increase efficiency and capacity,” he says. Ariganello also discussed some of the new processes during the interview. “We’ve been rolling it out over the last 18 months and more is coming,” he says. “The big improvements come in regards to tracking and automating the process, such as automatic shipping notification. We’re going to continue to expand and improve on that.” Continued on page 75.
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“Selling on eBay isn’t the easiest thing in the world,” said Schware. “Selling anywhere isn’t the easiest thing in the world.” Andrew Horsman of Ontario Tire Stewardship (OTS) was next to the podium. Many may remember that OTS has come under fire in the last year and criticized for mismanagement. Horsman himself referenced this, introducing his presentation by saying, “You may remember me from such Toronto Star articles as ‘Booster Juice Boilerroom’ and ‘Dude, Where Are My Gold Bars?’” Horsman was quick to point out that none of the issues that have plagued the program can be laid at the door of auto recyclers, who are simply collecting the tires. As for the program itself, Horsman also noted that diversion targets had not only been met, but exceeded. He also made it clear that tire collection in Ontario would continue, but not under OTS. The shape of the future program is still under debate. “What will replace OTS? The unsatisfying answer I can give you today is ‘I don’t know,’” said Horsman. The tire collection program in Ontario has certainly succeeded on many levels. The next presentation served as a powerful reminder of its human impact. OARA has been running a special program called Tire Take Back for a number of years, with all funds collected during certain days donated to the Sunshine Foundation, a charitable organization that helps extremely ill children. The help often takes the form of a “Dreamlift,” a whirlwind trip with many children and volunteers to an exciting location, such as Disneyland. To date, Ontario’s auto recyclers have donated over $1 million to this program.
This year’s convention featured a special presentation of gifts to one little girl, Nethalyu, and her family, as well as the official donation to the Sunshine Foundation. The presentation was made by special guest Princess Elsa, well-known for her role in the movie Frozen. Eagle-eyed attendees may have noticed a resemblance between Princess Elsa and Lisa Sticca of Thunder Bay Auto Parts, but we have been assured that this is entirely coincidental. This year’s keynote speaker was Paul D’Adamo of Recycling Growth. D’Adamo entered the recycling business to help his father-in-law run a recycling yard he had purchased as a retirement project. The project soon turned out to be much bigger than either of them had anticipated. D’Adamo had never run a business before, much less a recycling yard, but he attacked the project with gusto. Over the following 15 years they improved the business significantly. D’Adamo decided to take what he learned on the road, working as a consultant and speaker. D’Adamo’s first presentation at the conference focused on how managers could take stock in themselves and identify what they needed to deal with, and what should be left by the wayside. He’s a high-energy speaker who is very strong on visuals. He even brought out some fruit to illustrate his points. “You might think we’re selling auto parts. Wrong! We’re in the produce business,” he said, pointing out that the shelf-life of a part may be very limited, just like produce. If it won’t sell within a certain time frame, it likely won’t sell at all: “You’re buying produce. What happens if you let it stay on the vine?” Further presentations on the first day included Scott Sterling and Jimena Caicedo of Ontario’s Ministry of the Environment and Climate Change on new endof-life vehicle regulations and Eric Marello of
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Peter Hutley of Retire Your Tire near the entrance to the OARA Convention.
Paul D’Adamo served as the keynote speaker and panel moderator. Two high-energy presentations by D’Adamo kept the crowd engaged.
Jimena Caicedo of Ontario’s Ministry of the Environment and Climate Change and her colleague Scott Sterling spoke on new end-of-life vehicle regulations.
Andrew Horsman of Ontario Tire Stewardship outlined the future of tire collection in Ontario.
APU Solutions on automated procurement solutions. The Trade Show portion of the event opened immediately following the morning’s presentations. This year’s event featured over 60 exhibitors. The first day of the 2017 Convention concluded with a Charity Casino and live auction in support of the OARA Employee Scholarship Program.
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The second day of the conference followed a split schedule, with the Hollander Training Summit running concurrently with presentations in the main hall. The Summit included personalized training on many Hollander systems, including Hollander Powerlink, Production Management and EDEN. In the main hall, Paul D’Adamo returned for his second presentation, this time focusing on how recyclers can give their inventory the Heimlich Maneuver. It’s an apt metaphor, according to D’Adamo. Excessive inventory that isn’t selling can choke a recycling business. To clear it, you first have to identify what’s causing the blockage. “We found the blockage, folks. It’s us,” he said. D’Adamo noted that automotive recyclers often have something of an emotional attachment to their inventory, and this must fall by the wayside to make the business as efficient as possible. Marty Hollingshead of North Lake Auto Recyclers followed, discussing the importance of data to the modern world and recycling operations in particular. Holllingshead
summed up just how important data is by pointing out that Google and Facebook have a combined value that is nearly as high as that of 10 major industrial companies combined. Hollingshead ran over some of the biggest threats and noted how recyclers can limit their exposure by taking some very basic steps. “How many of you changed your passwords in the last month,” he asked. “How many people have it as ‘password?’” The second day concluded with a panel discussion moderated by Paul D’Adamo and consisting of panelists Bruce Woodbeck of Woodbeck Auto Parts, Dom Vetere of Dom’s Auto Parts, Dalbert Livingstone of Island Auto Supply and Andrew MacDonald of Maritime Auto Parts. At the conclusion of the panel, Steve Fletcher of OARA presented D’Adamo with a bottle of maple syrup, naming him an Honourary Canadian. For more information, please visit oara.com.
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Mike Carcone of Carcone’s Auto Parts and Brandon Suckow of Valley Automotive.
Don Fraser and Rob Smith of Erin Auto Recyclers.
features
Continued from page 71.
Says Ariganello, “More efficient scanning technology means we can speed up the process and be able to provide more up-todate information.” Cardinal Couriers already enjoyed a number of competitive advantages when it came to the delivery of high anxiety, time critical parts. These include a shared network that reduces overall transportation costs, while allowing for a flexible, variable rate versus a fixed rate. In addition, consolidation of small package courier freight and LTL shipments provides far greater savings through reduced shipping costs, while maximizing efficiencies. Through the unattended delivery solution, businesses do not have to schedule employees to receive and unload deliveries from the delivery vehicle, thereby improving efficiencies while reducing soft costs. Early morning delivery means the service hours are maximized, increasing capacity and business opportunities, while minimizing inventory requirements and costs. Saturday delivery allows the option of extending service hours, maximizing profitability while providing enhanced sales and customer service. The new and improved processes Cardinal Couriers are putting in place will likely cause the company’s reputation to rise even higher. It’s a reputation that has been built on providing specialized solutions to several business segments, including OEM and automotive aftermarket, and of course, auto recycling.
This dedication to the markets it serves has led many customers to think of Cardinal Couriers as more of a partner than a simple supplier. “Cardinal Couriers has been our preferred courier service for many years now,” says Nelson Estrela, Director of Operations and Logistics for Vast Auto Distribution. “They have always been accommodating and reliable
with excellent service and allow us to be able to reach out to our customers like no other courier can. We at Vast Auto Distribution believe Cardinal Courier is not a supplier to us but a business partner and look forward to continuing and growing our relationship.” For more information, please visit cardinalcouriers.com.
A few team members from Cardinal Couriers: Martha McGregor, Account Manager; Adrian Pavone, President, and Joe Ariganello, Director of Sales and Marketing. The company will soon move into a new building that will increase efficiency and capacity.
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April 2017 collision Repair 75
Recycling
Proud&Committed Recycling’s new generation is ready for future opportunities
By David Gold
I
would like to pay tribute to all of the auto recyclers who have a passion to carry their own businesses forward and further the industry. I’ve just finished reading the latest Canadian Auto Recyclers magazine and I am optimistic and proud of my colleagues throughout North America. It’s clear that the next generation of recyclers have made it their business to educate themselves on the industry and its changing dynamics as well as important business principles that will allow their facilities to continue for future generations.
As our business and the products we sell becomes more technical, auto recyclers are seeking ways to utilize every bit of knowledge available to help us serve the collision repair industry more seamlessly. Some of these technological advancements are proprietary to the management systems we use. There are also third-party systems that tap into our management systems and extrapolate data that we need to know on a daily basis to keep tabs on progress. Recyclers are sharing these key industry benchmarks between ourselves so we can more quickly learn what
The recycling industry is flush with talented young entrepreneurs. We’ve seen a shrinking number of traditional auto recyclers, but this slight decline is offset by the committed group who are still involved. They’re smarter and more focused than ever before. Second and third generation recyclers are taking on new business initiatives, allowing them to do more by understanding key business metrics. They’re instituting robust internal practices, giving them the opportunity to be more profitable. It seems as though the recycling industry is flush with talented young entrepreneurs, eager to share their experience and to listen and learn at the same time. The days of big egos and old boys’ clubs appear to be gone. The auto recyclers who are in the know are making a concerted effort to connect to their peers in the industry. To be fair to those who have gone before, many people in the auto recycling industry have always seemed to have the right attitude. There are no real trade secrets and we all rely on each other as business partners. We share resources, logistics systems, distribution hubs and customers–including each other! When a recycler needs help and guidance, you can be sure that there will be willing colleagues who will make themselves available. You can also be sure that they will help come up with ideas. It is for that reason that so many of us love this industry. 76 collision Repair collisionrepairmag.com
areas of the business are lagging behind. This is one of the benefits of having real data collated and shared between business networking groups. The net results of this proactive measure are to inspire auto recyclers to leave our comfort zones and provide opportunities for others in our companies to grow and move up in the organization. This has proven itself to be a very beneficial initiative. I can personally attest to what these groups accomplish and what this overall sentiment of information sharing meant to my business. It’s a game changer and the businesses that get involved will be rewarded for it. Recyclers are teaching each other, and those in their respective operations, what they have learned over the years from their experiences. This allows for leaders to grow and focus on the real issues of profitability, because they have trust in their teams to take care of business. It’s very rewarding to see the industry led by a new generation of smart recyclers, professionals who are ready to take on any challenge that comes their way. David Gold of Standard Auto Wreckers is a founding member of Fenix Parts and holds the title of President for Canadian Operations. Locations in Canada include Toronto, Port Hope and Ottawa. He can be reached at 416-286-8686.
Industry insight
Coatings Showdown PPG may make a hostile bid to acquire AkzoNobel Advertiser Index
Company
Page
3M....................................................4 AADCO Auto.................................. 72 AkzoNobel.......................................7 ARSLAN ........................................40 Assured Automotive...................... 67 Auto Quip Canada...........................8 Automotive Recyclers.................... 75 Axalta.............................................80 Canadian Hail Repair.....................30 Car-O-Liner.................................... 24 Car-Part.com................................. 73 Carcone’s Auto Recycling.............43 Cardinal Couriers...........................65 CARSTAR Canada.........................48 Collision 360.................................. 57 Collision Solutions Network..........53 Color Compass..............................23 Dominion Sure Seal....................... 19 Eurovac..........................................64 FBS Distribution.............................42 Finish Master.................................34 Finixa................................................9 Fix Auto Canada............................38 Formula Honda..............................54 Garmat........................................... 15 Impact Auto...................................77 Kia Canada.................................... 11 Martech.......................................... 13 Monidex.........................................68 Ontario College of Trades.............62 Pffaf Automotive............................ 12 Polyvance...................................... 37 PPG.............................................. 2,3 Pro Spot International...................44 SATA Canada.................................58 Spanesi Americas.......................... 57 Stark Auto Sales............................ 70 Steck Manufacturing..................... 16 Symatch.........................................22 Thorold Auto Parts........................ 74 Tiger Auto Parts.............................63 Toyota............................................. 47 Valspar Refinish.............................79 Wurth Canada................................ 17
By Jeff Sanford
T
he world’s largest paintmaker, PPG, has now made two unsolicited bids for the world’s second largest, AkzoNobel. Executives at the Dutch paint maker rejected both bids as too low. Now it seems the plan to consolidate the world’s major paint producers moves into a more contentious phase. Who ends up with who in this high-gloss, high stakes game is anyone’s guess. But the action is shaking up the world of the global coatings conglomerates. The current bit of drama kicked off over a cup of coffee in Amsterdam. The CEO of PPG, Michael McGarry, surprised an unsuspecting Buechner when he pulled out a six-page document outlining the proposal and laid it on the table. Two unsolicited bids later the AkzoNobel execs continue to steer clear of the PPG team. A group of executives from PPG recently spent a couple days on the ground in the Netherlands, drumming up support for the bid while meeting with investors and government officials. Their counterparts at AkzoNobel made a point of not meeting with the PPG execs during the two-day charm offensive. At a press conference McGarry said he found it “shocking” that the second “enhanced” proposal was turned down “in basically a day.” He went on to say he was “surprised and disappointed” that AkzoNobel hasn’t engaged in talks. He has a point. PPG is offering a price higher than the current stock price. It would seem to be in the interests of AkzoNobel’s owners (the shareholders) for management to consider the deal. What gives them the confidence to ignore the wishes of the shareholders? It seems a unique centuries-old legal structure that exists under Dutch law can be used as a takeover defence. Basically, the legal creation known as a “stichting” (“foundation” in Dutch) allows different classes of shares, including one class held by a group of executives that could help them avoid being taken over. The structure seems similar to the manner in which dualclass shares here in Canada can allow some owners to entrench as controllers of a company that trades on a stock exchange. Without getting into the mundane details, the structure
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allows management to act “against activist shareholders or an outside offer that fails to consider sufficiently the various interests of AkzoNobel,” according to reports. One of AkzoNobel’s largest shareholders emerged with a legal brief that suggested the stichting that applies in the case of AkzoNobel is not as powerful a weapon as many think, and that PPG could make a hostile bid if they can get enough shareholders together to vote out various board members supporting management. That is, this potential takeover could end up in court. For his part, the CEO of AkzoNobel, Buechner, is said to be, “rallying support” among shareholders for a plan that would separate out the existing AkzoNobel chemicals business. If that division were sold for 10 billion euros, then AkzoNobel stock could be valued at as much as 91.20 euros, which would make PPG’s offer of 88.72 euros look undervalued. This might be the end result managers are targeting. And they have insisted all along that the amounts offered by PPG to this point are inadequate. No wonder event-driven hedge fund managers (funds that bet on the direction of company deals) continue to accumulate AkzoNobel shares. A bid price of 92 euros a share might be the goal here, but a current share price of around 77 euros suggests investors don’t think that deal is guaranteed. There has also been speculation that AkzoNobel could put the money raised from a divestment of its chemicals business toward an attempted tie-up with another company. What target might AkzoNobel consider? One report notes that Axalta has been on AkzoNobel’s target list for years. Apparently Buechner “faced frustration from within the company” when he wasn’t more aggressive in trying to acquire Axalta in 2013 (when it was sold to Carlyle). Could such a tie-up be possible now? We’re about to find out. Jeff Sanford is the Staff Writer for Collision Repair magazine. He can be reached at 905-370-0101 or at jeff@ collisionrepairmag.com.