Posts Tagged federal govt

An Encounter with Jack Welch

This past Friday, while attending an automotive aftermarket conference (Auto Glass Week 2015); the keynote speaker was business icon Jack Welch. Instead of giving a speech, he answered questions from the audience for almost an hour and a half. Jack Welch in person is what I expected him to be. He’s certainly not afraid to answer any question asked and I found myself nodding and/or clapping to each of his answers. In a world of political correctness it was refreshing to know exactly what Jack’s position was on any question that he was asked.

Jack and Deb 10-2-2015

Photo Courtesy Auto Glass Week™ 2015

It didn’t matter whether the question was related to business, education or politics; he answered every question without hesitation. Jack’s view on business is all about winning. All about transparency. All about honesty. Telling those that worked for him when he was the CEO of General Electric for 84 consecutive quarters that the business they worked at needed to be either number one or number two in the world or figure out quickly how to become number one or two or the consequence would be that the business wouldn’t be a part of GE.

Jack isn’t big on tenure in education either. He believes that the customer should determine whether a professor or teacher is good or bad and whether they should stay or go. With the cost of education so high there is no room for mediocrity at Jack Welch Management Institute.

In politics Jack is a Republican.

After he took questions from the audience I had the opportunity to sit on an industry panel consisting of him, along with panelists from the automotive industry:

     Paul Heinauer, President of Glasspro Inc.

     Troy Mason, President of Technaglass

     Michael Schuch, president of XLNT Window Film Tinting

     Donna Wells, Vice President of Signature Shutters

     Ed Golda, president of Michigan Glass Coatings

Suzy Welch, renowned bestselling author, television commentator, Harvard Business School graduate and who also is Jack’s wife, was the moderator of the panel. It was an amazing experience where the panel answered questions posed by Suzy and the audience. Everyone answered questions including Jack and then he provided further commentary on the answers that were given.

Suzy Jack and panel

Photo Courtesy Auto Glass Week™ 2015

There isn’t much you can say about Jack Welch and Suzy Welch that hasn’t already been written so I won’t try. I can only say that the two of them make one heck of a team and are about as down to earth as you can be. In this day it was refreshing to see two people who didn’t hold back in answering questions.

It was an honor meeting them both and sitting on a panel with them was certainly an experience that I will never forget. Thanks to them both for the chance to spend a few hours with them last Friday. And thanks to Deb Levy for inviting me to join the panel.

Jack David and Suzy 10-2-2015

Just sayin’.

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What’s Your Formula for Success?

Is there a formula that you use to measure success in your career or to measure the performance of employees of your company that determines the success you achieve? What are the metrics or goals that you follow to measure success (or failure) that drives (inhibits) sales and profits for you company? Having metrics is obviously critical to ensure that employees know what is required of them allowing companies to be successful.

Sports are another example of the importance of metrics and formulas managers and coaches use to ensure success. If you like basketball you’ll know who Rick Majerus was (he passed away in 2012). He attempted to be a walk-on college basketball player for the Marquette Golden Eagles in 1967, but didn’t get a chance to play. Instead he became a student assistant at Marquette. After being an assistant coach to Al McGuire for 11 years; Majerus went on to become a head coach at Marquette, then to Ball State, Utah State and ending his coaching career at Saint Louis. Majerus had a short stint as an assistant coach with the Milwaukee Bucks in the late 1980’s.

During his coaching career he developed a statistics formula he believed a college basketball team needed to achieve in order to be successful. Majerus developed a metric he called the “165 Formula”. It combined three key game statistics that were added together for each individual player on the team. He totaled each player’s shooting percentage during the season for field goals, 3 pointers and free throws; believing that a successful team needed at least one of his players have these three stats add up to a total of 165. Over his coaching career Majerus won over 70% of his games, so he must have found players that he felt could hit his magical 165.

There are a lot of ways to achieve success on the basketball court. Just take a look at men’s college basketball’s current AP number one ranked team the University of Kentucky Wildcat’s. How many players does Coach John Calipari (Coach Cal) have that meet Majerus’ formula? Take a look at the graph below and you’ll see how many.

Now let’s take a look at the team that I follow, the University of Illinois Fighting Illini men’s basketball team to see how they compare against The 165 Formula. As you will see in the picture below (from the game versus the Hampton University Pirates  on 12/17/2014), the Illini have four players that beat the formula. Great!

165 Formula

After last Saturday’s game versus the Ohio State Buckeye’s, the season statistics for the Fighting Illini’s six leading players show that Rice, Hill, Eguw and Nunn continue to exceed the formula target of 165.

Fighting Illini
Name FG % FT % 3-PT % Total
Rayvonte Rice 49.7 79.7 45.5 174.9
Malcolm Hill 53.2 73.3 41.7 168.2
Nnanna Egwu 50.0 87.5 36.8 174.3
Kendrick Nunn 44.2 90.9 42.9 178.0
Ahmad Starks 36.1 88.9 32.2 157.2
Aaron Crosby 30.1 84.0 33.3 147.4
Average as of 1/3/2015 166.7

U of I Fighting Illini Statistics for 104-2015 Season

So the Fighting Illini has a record of 10 wins versus 4 losses for the year and they are not currently ranked in the AP Top 25 and they’ve lost their first two Big 10 Conference games. You’d think they’d either be ranked or winning conference games with four starters with numbers that exceed 165 as per The 165 Formula Rick Majerus felt was needed for success. Perhaps Illini Head Coach John Groce thinks that they are successful? I’m guessing not as much as he’d like.

Now let’s compare the Fighting Illini to the number one ranked team in men’s college basketball, the Kentucky Wildcats. How many players do the Wildcat’s have that meet the Majerus 165 Formula? Well…..just one.

Kentucky Wildcats
Name FG % FT % 3-PT % Total
Aaron Harrison 37.0 66.7 27.3 131.0
Andrew Harrison 36.7 77.8 32.1 146.6
Karl-Anthony Towns 51.9 74.3 20.0 146.2
Willie Cauley-Stein 60.7 60.5 0.0 121.2
Tyler Ulis 51.1 80.0 52.2 183.3
Dakari Johnson 60.5 56.7 0.0 117.2
Average of 1/3/2015 140.9

University of Kentucky Wildcats Statistics for 2014-2015

As you can see the one player on the Wildcats that scored a 165 using the Majerus formula is Tyler Ulis. He became a starter after Alex Poythress was injured after the 10th game of the season so his stats may be an outlier. The Wildcat’s had already found phenomenal success prior to Ulis getting more playing time. With the Wildcat’s averaging 140.9 points (110.4 if you take out Ulis) to the formula and the Illini averaging 166.7 points there must be more to achieving success. Besides the entire team of players performing at a level it also takes the head coach, assistant coaches, trainers and doctors to achieve success. You can add to the mix scouts, recruiters, training facilities, athletic director, along with support from students and alumni. So Coach Cal has obviously found his formula to achieve success at the University of Kentucky. He’s surrounded himself with the best players, along with the all the best people and resources needed to support the team.

So John Calipari (along with Rick Majerus) obviously found a formula that he has used to find success in his career. It’s the same in business isn’t it? Don’t we all want to be Coach Cal? To achieve a consistent level of success you need to develop your own formula. But a key ingredient is the need to surround yourself with the best people, the best team you can find to help you find great success for your organization. It doesn’t really matter what your business is, if you don’t have great people it’s going to be more challenging for you to find success against those you compete with in the marketplace.

Just sayin’.

Previous blogs on the importance of assembling a great team:

                What’s Your Line-up? – December 26, 2012

                What’s Your Line-up? – “Updated” – January 17, 2014

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The Future in the Automotive Aftermarket Industry

For me, listening to keynote speaker Tony Aquila, CEO of Solera Holdings, Inc. at Auto Glass Week in Baltimore was most interesting. He led Solera’s purchase of LYNX Services, GTS and GLAXIS from owners Pittsburgh Glass Works LLC and PPG Industries, Inc. earlier this year. Tony’s accomplishments are considerable, especially considering that he grew up sweeping floors working in his uncle’s body shop and he has a 9th grade education. You have to be incredibly impressed by the guy.

The “Strategic Focus” web page for the company states, “Solera is the world’s leading provider of software and services to the automobile insurance claims processing industry.” (Link to corporate history) Solera will certainly be changing the world of auto glass repair and replacement (AGRR) with innovative software solutions that will simplify the claims handling process surrounding glass repair and replacement. The organization has the potential to affect the way all consumers and influencers ultimately buy AGRR products and services dramatically. Depending upon the vision and direction Solera heads automotive aftermarket parts and service providers, including the auto glass repair and replacement industry (along with the collision repair industry and parts distribution industry) could be in for some big changes. It’s all about taking out market inefficiencies and reducing costs associated with those inefficiencies.

Just look at the AGRR industry. To ensure that service level expectations of the consumer is ultimately met, any software program would need to have access to the real-time inventory level of any supplier or distributor warehouses in the area, the inventory levels of any AGRR shop or technician in the vicinity vying for repairs or replacements, along with the schedules of all technicians available to properly repair or replace the part.

Imagine when an auto glass replacement is required, if it would be possible for the software program to instantly search for the part determining which supplier(s), distributor(s) or AGRR shop(s) has (have) the part in stock; perhaps ranked by cost for the part while finding the best auto glass replacement technician suited to properly install the part; when and where the consumer wants it installed. With that capability you then have to start asking some questions like:

Once the software program has all of the information required to start processing an auto glass replacement, who or what company is directly buying and paying for the part(s) required?

It could be:

  1. The AGRR shop or technician facilitating the replacement or
  2. Maybe the customer’s insurance company or
  3. If it’s a cash job the consumer could pay.

Which of the three above pays for any part required is important to determine the all-in price to be paid for replacement parts, along with the price paid for required installation supplies and labor.

So which organization determines the pricing level for the various scenarios outlined above?

Who is buying and paying for the part and installation supplies required?

Who is paying for the technician to install the part?

Answers to these and many other questions will give you an idea as to where the industry could be heading. There will be changes coming and margins are probably going to change in the AGRR industry in the near future. And probably not for the better.

What is it you’re doing to be prepared for the future?

Just sayin’.

140707.safeisrisky

Courtesy of TomFishburne.com – Marketoonist.com©

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Just Sayin’ Blog – Hopes for the New Year (Summer Update)

Image courtesy of Digital Cosmonaut

Is your glass half empty or half full in 2012? It depends upon your point of view.

Last January I wrote a blog titled ‘Hopes for the New Year’ and in March I updated the blog with how events were influencing that blog posting. In the original blog I offered the hope that 2012:

“turns out to be a great year for those in the automotive glass repair and replacement (AGRR) industry (or if great is too high a bar to set at the very least better than 2011)”.

I’ve talked to a number of people across the country and, by virtually every measurement, the first two quarters of 2012 certainly have not been seen as very favorable to the AGRR industry, especially when compared to 2011. So far this year it has been a bust for the vast majority for most in the industry.

There are a few exceptions of course. With one of the warmest winters on record, 2012 has started out with little help from one of the three key driver’s effects the AGRR industry – weather. During the second quarter a few markets have had some favorable bad weather. If you happen to have a store(s) in markets that have had hail storms this year such as the greater Dallas metropolitan area that was battered by big storms earlier this month business has probably been GREAT. The storms in Dallas could cost insurers up to $ 2 billion in automotive body and glass damage as suggested by the Southwestern Insurance Information Service and reported by www.propertycasualty360.com. Those hail storms in Dallas, along with large storms in the greater Saint Louis, Louisville, Denver and Indianapolis metropolitan areas, as well as those in a few other marketplaces scattered across the United States have certainly provided a welcome benefit for some in the industry.

The second key driver for the AGRR industry is the economy and by most reports that’s not working to our advantage either. A number of United States economic metrics as reported by CNNMoney shows that:

  1. consumer confidence is at a five month low
  2. home prices are at the lowest level since 2002
  3. the annual Gross Domestic Product in the first quarter of 2012 is down versus the fourth quarter of 2011
  4. in May the U.S. manufacturing growth has slowed, the May jobs report shows that hiring has slowed and unemployment rose for the month
  5. after taking out the lowering cost of gasoline, retail sales grew by 0.1% overall in May and
  6. inflation was down .3% in May, but after taking out the impact of gasoline and food inflation was up .2% for the month trending at an annual rate of 2.3% year-on-year.

None of these economic metrics provide very much good news for how the rest of 2012 will fare.

Additionally, as reported by Bloomberg.com the Federal Reserve Chairman Ben S. Bernanke announced last Wednesday that if the job outlook didn’t improve in the near term that the Federal Reserve would move to further stimulate the U.S. economy and then last Thursday the U.S. Labor department announced that unemployment claims were trending up over the past four weeks versus falling during last fall and winter. The nonpartisan Congressional Budget Office reports that the United States could slide back into a recession based on economic performance. The Federal Reserve Bank of Philadelphia announced last Thursday that “manufacturing conditions, the diffusion index of current activity, fell from a reading of -5.8% in May to -16.6% (in June), its second consecutive negative reading”. None of these reports point to an overabundance of positivity looking forward for the U.S. economy.

The U.S. isn’t alone in the world as the difficulties that we face on the economic front pale to the issues faced in Europe and if they don’t resolve their problems they could ultimately affect our economy. The European powerhouse Germany reported that manufacturing output was at its lowest level in three years, certainly not a good sign for the rest of Europe and anyone in the AGRR industry that compete in the European markets (i.e. Belron). And to add to the economic woes of the world, in June China hit a seven month low in manufacturing activity as reported by HSBC Group.

One key driver – miles driven – has been showing improvement. Earlier this year the price of gasoline was predicted to hit $ 5 per gallon with the rising price of oil, but with oil prices continuing to drop due to the poor world economy the national average price of a gallon of regular gasoline on June 18, 2012 was $ 3.533 as reported by the U.S. Energy Information Administration (AAA Daily Fuel Gauge Reports shows the national average price of a gallon of regular gasoline at $ 3.411), consumers have been given welcome relieve. There was more good news for continued increases in miles driven as reported in an article titled ‘Gas prices could hit $ 3 a gallon by autumn’ that was published last Friday in USAToday. In a blog post in mid-March I included the picture below left of a sign at a service station at the corner of LaSalle and Ontario in downtown Chicago, Illinois. The picture below right was taken yesterday at the same station and as you can see the price is well above the nation average.

March 19, 2012                                                                                                                   June 25, 2012

The U.S. Department of Transportation – Federal Highway Administration had reported that the cumulative miles driven year-on-year through March 2012 are up 1.4% or 9.7 billion more miles driven. The graph below shows how miles driven historically have grown since 1987 until the downward trend that started in early 2006.

Increased miles driven obviously turn into more opportunities for auto glass to be repaired or replaced, but only if the “do nothings” actually do something. Sadly, figures on miles driven out yesterday for April 2012 versus April 2011 point to a reversal in the trend that we had been seeing in miles driven with the month of April being down .4% year-on-year. Not a good sign.

While taking with someone in the industry recently I suggested that you could add another key driver that affects the AGRR industry besides weather, the economy and miles driven. That fourth driver would be Safelite Auto Glass. With Safelite’s capture of the second largest insurer earlier this year, the majority of the U.S. AGRR retailers found a dramatic fall-off in repair and replacement opportunities for Allstate Insurance Company insured’s.

Safelite’s continued dominance in AGRR markets across the country and its constant advertising campaigns that are seen and heard via its television and radio commercials is proof that Safelite is working hard to continue to grow market share. Many AGRR retailers have been curtailing their own sales and marketing spend because of the slowdown in repairs and replacements. You can be sure that Safelite’s non-stop advertising during this slowdown will certainly pay big dividends when economic conditions do begin improve in the future.

I left Safelite in late 1989 and my boss at the time used to talk a lot about “the pendulum swing”. He was referring to a business adage – when sales are good the sales departments of a company rules and has the most influence so the pendulum swings to their side, but if sales are bad the accountants rule and the influence of sales departments wane. I’m not sure how that adage is playing out at Safelite today with my former boss at the helm of the company, but I’m pretty sure that accountants are certainly influencing the decisions being made in many companies today and that’s not good for the people who work at those companies or for the long-term success of those companies.

How’s business where you work? Are you seeing sales improving or are sales falling behind? How are sales affecting you?

In a previous post I wrote:

People are the ultimate key driver to any successful business. Companies that don’t recognize the incredible value that attracting and then keeping the most talented people undoubtedly will suffer when weather, the economy and miles driven have a negative impact on the business. Recognizing that employees are the key driver that helps every organization find ways to innovate, increase customer service levels and create value for all stakeholders will allow it to flourish and remain competitive in the marketplace.”

With all that’s happening and effecting in our industry today, “Be Smart in 2012” and take special care of the ultimate key driver in your business – your people……

Just sayin’……….

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Just Sayin’ Blog – March Madness (and the AGRR Industry)

It’s my favorite time of year for sports!!

March Madness!!!

The 2012 National Collegiate Athletic Association (NCAA) Men’s Basketball Tournament known as ‘The Big Dance’ offers 68 Division 1 basketball teams (27 teams are automatic qualifiers for the tournament by winning their individual conference tournaments and an additional 37 teams that are selected by getting the nod of the tournament ‘Selection Committee’ based on the teams “body of work” during the 2011 – 2012 basketball season), along with 4 additional teams that get a chance to play enduring an elimination round at the University of Dayton Arena the opportunity to lift the Championship Trophy and be crowned the NCAA Men’s Basketball National Champion. To become the Championship team, they will have to win all 6 games they play in the tournament. The teams that will be playing this year will be announced beginning at 6 p.m. Eastern on CBS television this Sunday, March 11, 2012.

March Madness takes us to and from various arenas around the country ending up in New Orleans from March 30th-April 1st for the Final Four. The teams are ‘seeded’ ranked from 1st to 68th in 4 regional brackets with 16 teams in each bracket (1 plays 16, 2 plays 15, 3 plays 14,…….8 plays 9, I think you get the idea), along with the 4 play-in teams.

 It’s a fairly complicated process that pits the best teams in Men’s NCAA Division 1 Basketball against each other in competition for the title of National Champion. If you’re not fully engrossed in March Madness you can follow this link to learn more (2012 NCAA Men’s Basketball Principles and Procedures).

‘The Big Dance’ is the culmination of an endurance test that starts in the fall of each year.  NCAA Division 1 Men’s Basketball is composed of 346 teams in 32 conferences plus 4 independent schools all starting the season working to get there’. The chances of reaching the tournament are 1 in 5. Those really don’t sound like bad odds. What makes March Madness a great sports event is the opportunity for an ‘underdog’ to reach the Sweet Sixteen, the Elite Eight, The Final Four or even make it to the Championship Game Final.

 It happens. In 1983 the North Carolina State (NC State) Wolfpack, coached by the legendary Jimmy Valvano (nicknamed Jimmy V), won what is considered to be one of the best Championship Final Games in the history of the sport on a last second tip-in by Lorenzo Charles after a miss by Derrick Whittenburg beating the favored University of Houston Cougars. NC State’s team was a ‘Cinderella Story’.

Last year the number 11 seed Virginia Commonwealth University (VCU) Rams made it into the Final Four by beating the number 1 seed Kansas in an Elite Eight game. The Butler University Bulldogs, a number 8 seed, made it into the Championship Game (two years in a row – in 2010 they were a number 5 seed) where the team played the number 3 seed University of Connecticut (UConn) Huskies. UConn was the highest seed making it to the Final Four. What happened to all the number 1 and 2 seeds? They were all obviously beaten by lower seeded teams. UConn ended up beating Butler in the Championship Game 53 – 41.

I think that there are similarities between the March Madness process and the auto glass repair and replacement (AGRR) industry. Perhaps a stretch to compare the two, but it’s my blog so here it goes…..

Imagine if the AGRR industry had a Division 1 Tournament (there are 3 NCAA men’s basketball divisions, but Division 1 is made up of the top colleges). Would the company that you work for be invited to the tournament based on how you rank in the market or markets you serve? If your answer to that question is yes, then what ‘seed’ do you think your company would receive giving you a chance to get to the Championship Game? Does the level of work and the service you provide match up to those you compete with in your markets? Yes? Great! You’re invited to ‘The Big Dance’!!

Another prerequisite for participating in the tournament is one that the NCAA tournament has too. You can only play one team from your company. If you happen to be one of those companies that operate under multiple company names in the same market you can’t expect to get them all into the AGRR tournament as that wouldn’t really be fair, so pick the one that you think can take you all the way to the end and quit trying to manipulate your odds.

Now that you’ve done all that work to make it into the big dance, is your company a highly seeded contender or are you a lowly seeded ‘underdog’? In ‘The Big Dance’ the underdog has a fighting chance. Not a great chance, but look at how the Butler Bulldogs and VCU Rams did in last year’s tournament. It happens.

Oh yeah….I forgot to also mention that the big difference with games played during March Madness versus the regular season is the tournament rule that there is never any home court advantage. Home teams often get more fouls called against the visiting teams by officials who have a tendency to do so to keep the hometown fans off their backs. All games are held on neutral courts so there is no home team advantage. Sadly that rule is suspended in the AGRR tournament to give one team an advantage. Safelite® Auto Glass gets to play all its games on a home court.

When you look at the 4 different brackets of my imaginary AGRR tournament who do you think will be the number 1 seeded company? How will it do versus the number 68 team do you think? Obviously the number 1 seed in the AGRR tourney is Safelite® Auto Glass. One of their star players is a gentleman named Ryan. You see him on television all the time (someone told me that they were going to cut those TV ads way back starting January 2nd…..guess not).

A potential problem for all of you who’ve made it into the AGRR tournament is that Safelite® Auto Glass decided to take the number 1 seed in all four brackets. Remember I mentioned earlier that no company could play under different names, but I didn’t say that there weren’t advantages to being the big guy and they have so many players that they get into all 4 brackets as the number 1 seed. And Safelite® owns most of the basketball courts (markets) and it has cornered the basketball market (insurers, fleets and cash customers, even suppliers) so they get to make most of the rules in the tournament. Now who do you think has better odds to win? The chances for a ‘Cinderella Team’ getting into the Final Four are tough as the odds are Safelite® is going to make it in with all 4 of its teams. You can imagine the odds for my hopeful Cinderella making it into the Championship Game. Sadly non-existent.

It seems to me that it’s a foregone conclusion that Safelite® has achieved the ‘dynasty’ status that the University of California, Los Angeles (UCLA) Bruins achieved from 1964-1975 (except for 1966 when the University of Texas, El Paso – UTEP Miners won and 1974 when the NC State Wolfpack won). The Bruins were coached by the legendary Coach John Wooden. But I’m still holding out hopes that someone, somewhere will be up to the challenge of taking on Safelite®. After all, since that 17-year run where the Bruins won 15 NCAA Division 1 Men’s Basketball Championships….they’ve only won one Championship Game since and that was in 1995.

One of President Ronald Reagan’s favorite jokes was,

Worried that their son was too optimistic, the parents of a little boy took him to a psychiatrist. Trying to dampen the boy’s spirits, the psychiatrist showed him into a room piled high with nothing but horse manure. Yet instead of displaying distaste, the little boy clambered to the top of the pile, dropped to all fours, and began digging.

“What do you think you’re doing?” the psychiatrist asked.

“With all this manure,” the little boy replied, beaming, “there must be a pony in here somewhere.”

So I am optimistic that something will happen to level the playing field and give others a fair chance to realize their dreams of winning an AGRR Championship Game.

Just sayin’.

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Just Sayin Blog – Be Smart In 2012

There have certainly been a number of events happening since the first of the year that are effecting or may affect the auto glass repair and replacement (AGRR) industry in 2012. Where to start? Well let’s see:

 

1.    First the earth shook on January 2, 2012, when Safelite® Solutions officially took over the responsibilities for administrating Allstate® Insurance auto glass claims from PGW Lynxservices®. By all accounts Safelite® Solutions must be doing a masterful job in this new role administering claims for Allstate® as I’ve heard from a number of you that your auto glass claims from the second largest insurer in the United States are dramatically lower since the administrator change took place. Mild weather could also be a contributing factor. Adding to the pain of lost units, the pricing for those Allstate® replacements are also lower.

 

Have you seen your auto glass claims with Allstate decline since January 2, 2012?

 

2.    On January 6, 2012, glassBYTEs.com™ reported that Grey Mountain Partners Acquires Binswanger. Binswanger is a truly amazing full-service glass company with its roots going back to 1872 with its first location in Richmond, Virginia. It is certainly great news to hear for all of the Binswanger employees that they have a new owner who is interested in working with them to help build the company. I think that a strong Binswanger is healthy for the glass industry in the United States.

 

How about you?

 

3.    Neil Duffy recently announced in his very well written blog View From The Trenches that he’s considering a new career by starting a ‘new third-party glass claims administrator’. It sounds as though he’s thought it out pretty thoroughly by looking at all the pros of this new venture and I for one think he should go for it. I don’t see any cons.

 

What do you think?

 

4.    Then there is that anonymous letter from a ‘Concerned Citizen’ that surfaced yet again last week titled “New Anti-Trust Concerns”. This letter had a postmark from Bloomington, Illinois, and its resurfacing at this time might have some relationship to #1 above.

 

It does seem pretty obvious that the letter was written by someone in the auto glass industry as no one else would really care about the issue. The letter does raise a number of interesting points, but the conclusion of the ‘Concerned Citizen’ is that:

 

‘While the relationship between a TPA and its insurance company clients may not be illegal, the abuse of that position could be unfairly excluding independent competitors.’

 

There are a number AGRR initiatives taking place in various states where attempts are being made to try to restrict the big guy from taking your lunch money day in and day out. If one of them was successful it would certainly be good for independents in the industry.

 

Are there any legislative initiatives happening in your state that will be of any help to you in your business?

 

5.    For those of you who happen to follow @Safelite on Twitter you may have seen them sending out ‘Tweets’ asking for your input. One ‘Tweet’ poses a question to its followers and directs you to a web page survey question asking ‘How likely are you to recommend Safelite?’ Safelite® gives you the opportunity to answer with a ‘Not Likely’ – 0 score to an ‘Extremely Likely’ – 10 score.

 

I’m not sure to whom exactly Safelite® is targeting the question, but you’ve got to provide an email address in order to answer the question which is somewhat problematical. If you’d like to offer your view anonymously I guess you could use a fake email address.

 

I know what my number is in answer to the question. What number would you mark as your answer?

 

6.    And finally there was an article in the Chicago Tribune on January 18, 2012, reporting that the average age of vehicles in the United States has climbed to 10.8 years. The article stated that in 2010 the average age of vehicles was 10.6 years with the average age of vehicles having climbed steadily since 1995 when it was at 8.5 years. Over the past several years low new vehicle sales has certainly been a major factor in the increase in the average age, but with new car sales picking up new car manufacturers are expecting a great year in 2012. That will help to slow the growth in average age and hopefully bring it down. What does average age have to do with the AGRR industry?

 

One byproduct of an aging vehicle fleet is that you see an increasing number of the ‘do nothings’ (consumers that delay replacements) when auto glass breaks. Consumers obviously will be more accepting of a repair over replacement if the vehicle is older. New vehicles typically provide a higher average invoice value since the only replacement glass initially available to consumers will be auto glass manufactured for the vehicle by the Original Equipment Manufactured (OEM) glass company (i.e. Pilkington-NSG, PGW, Saint-Gobain Sekurit, etc.). The cost for non-OEM manufactures to reverse-engineer a replacement part for new vehicles is initially too expensive due to the low volume of parts needed in the aftermarket. The older the age of the vehicle fleet the more opportunities for non-OEM suppliers to sell reverse engineered replacement parts that are typically cheaper than the OEM’s. Ultimately that can mean less profit for the AGRR industry as a whole. New vehicle sales should mean more profit opportunities for those in the AGRR industry.

 

What do you think?

 

 

I hesitate to mention other things going on so far this year that may have an effect on your business like the lack of a severe winter in the East, the predictions for much higher gasoline prices later this year, a sputtering economy, the price changes that have taken place in the State Farm® Insurance Company auto glass program and various people coming and going from here to there. How you’re dealing with the variety of issues that you’ll face in 2012 will determine how you survive the year. Someone I’ve known for a long time in the industry commented to me last week that, ‘2012 is shaping up to be a watershed year for many in the industry. Survive this year and hope that next year will be a better one.’ That outlook makes sense to me. We’ll see if he’s right.

 

In closing, a former Princeton University men’s basketball coach by the name of Pete Carril wrote a book titled “The Smart Take from the Strong”. It’s a great book. Pete Carril was 5’6” tall, he was an All-State Pennsylvania high school basketball player, an Associated Press Little All-American in college and he coached at Princeton for 29 years before going on to the NBA to become an assistant coach for the Sacramento Kings. Coach Carril is also a member of the Naismith Memorial Basketball Hall of Fame. When he was young man his father told him:

 

            ‘The strong take from the weak, but the smart take from the strong.’

 

So be smart in 2012!

 

Just sayin’…….

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