View From The Trenches

After listening to the gloom and doom both across this country and in the world, our problems in the auto glass industry seem very small. Yet what I wonder is: after we climb out of this current mess (and we will someday) what sort of condition will our sector of commerce be in? How will economic hard times alter the landscape? It is almost a given that changes will be seen from the international and national scope along with Joe Glazier plying his trade on Main Street USA.

I don’t possess any sort of crystal ball. However, we all have to be blind if we aren’t seeing wholesale change taking place before our eyes; changes in how business is conducted, who is distributing, selling and installing glass and even the most basic act of how that product is being installed. What is a concern to me is how we as retailers and installers are being perceived and how that role is being altered by auto designers and by economic forces.

Is auto glass installation a craft or is it merely a skill that requires special tools? Should auto glaziers be awarded respect or should be lumped with tire installers as a group of auto technicians that require little training and possess a narrow scope of knowledge? I will concede that a DW 847 or a FW 173 does not tax almost anyone’s intellectual or physical talents but I am highly doubtful that a guy from Goodyear has a parallel skill set that would equal our stress level when it comes to raw-edge glass removals and installs. Over the past 15 years, we in the industry have allowed what I still consider a craft to have its standards dragged down through its easy entry and price pressures brought from all quarters—including our own.

Consumers have little ability to assess quality throughout our industry. For some of our less conscientious corporations or shops, they are able to survive and thrive on that kind of ignorance. Tire retailers can sell and install a bias belt or radial product that has a price tag that reflects speed and mileage ratings. On the product side, nothing really exists in auto glass that can assure the customer he is getting value for his dollars.

You can point to a comparison of original-equipment manufacturers versus foreign-made aftermarket parts, but in the long run, a piece of gravel propelled at a speed of 50 mph will crack most windshields—whether priced at $75 or $750 wholesale. I certainly won’t argue fit, finish and visual acuity issues between brands, but there has been no effort made by anyone in our industry to promote directly to the American public any sort of manufacturing quality branding. Then again, why bother if all anyone markets is price, price and, did I forget to mention, price?

The weaknesses in current standards or certification programs are so widespread and vulnerable that they are practically rendered moot. Unless cameras are installed in work bays or are surgically attached to mobile technicians, there is very little reason to believe that the majority of installers are following all related practices. With the economic slowdown, there is increased pressure for fewer installers to produce more with increased workloads in some cases. There is already a fear of layoffs or dismissal so it seems, and for many the primary directive is to shut up and to make quota. Last week, I observed a Safetech graduate installing a windshield in the rain with minimal cover. While I’m sure he was drug-free, he had to have started the job under the same wet conditions under which I saw him. I wonder whose fault this is—his or his manager’s?

On Main Street, what’s ahead for us? There are so many variables that exist that trying to read the tealeaves is virtually impossible. We are in a worldwide recession. The unabated flood of imported glass products with their lower profit margins has weakened both domestic manufacturing sectors along with the wholesale distribution market. With the demand for replacement glass flat if not slightly declining, this is causing a domino effect of retrenchment. We are seeing here a common effect that is also coming home to roost in the retail market. Basic economic laws apply just like scientific ones do. If you ignore making a reasonable profit during good times, you will pay for that. Market share is practically meaningless if you can’t pay your bills. The chickens came home to roost in 2008 for Diamond Triumph through bankruptcy; PPG is still trying to rid itself of its auto glass division and is now in a creative partnership with an asset management company. How many of us know of distributors that have left markets and shops that have simply closed?

Our retail market is so very fragmented. With the rise of insurance deductibles, the lack of state inspections and simply the growth of cultural pockets of poverty, there has been a seismic shift in the role of the glass shop. Where once one pandered to insurance agents, to garner maximum profitability, that ship sailed with the fiscal pressure brought on by our greed and the desire of insurers to control claims, which brought on the popularity of third-party administrators. Secondary markets like rental and corporate fleets became even more tight-fisted and the American public became aware of the true cost of glass replacement as they had to bear the entire cost of a windshield or sidelite.

The only savior the consumer actually had was the unregulated flood of imported glass, which certainly dropped prices but in most cases sacrificed quality for that benefit.

On the installation side, price seems to almost the only promoted value to the customer. The quality of installation has dropped precipitously and that can be almost directly attributed to the easy-entry issue, exacerbated due to our volume hungry-distributors, that it is virtually impossible to predict or control. That fact, my friends, is where much of the dislocation and even more of the problem is rooted.

At the present time, in many urban areas, there exists such an underground market of mobiles and locales that will install glass at insanely low prices just to get the business. First of all, there are too many people that call themselves auto glass installers or technicians that can’t even come close to that craft distinction. Even more distressing, I expect an influx of small start-ups precipitated by layoffs or furloughed by acquisitions or closures that will try to reenter the auto glass business. From district managers to technicians, that would be an understandable and logical choice to which to apply their skill sets. However to do so, it appears the only tried and true method to gain attention and to crash into a market is by lowering pricing even more to a value-hunting public.

You can go on Craig’s List and see all sorts of “installers” plying their wares. From under-employed to once employed, there sure seem to be a lot of people that claim they can install auto glass. Our craft and our profitability in plying that craft is being trashed by those who pander prices, and unless that is stopped and entry regulated by some definitive method, we will risk losing hard-fought and wrought reputations. It is a huge boon to a company like Belron that can claim and advertise their competency over most local companies. It’s a known fact that branding brings reassurance; just ask McDonald’s. You can find far better (or worse) food at other establishments but Mickey D’s is a known quantity.

So as I see it when it comes to the future of my beloved industry and craft, it’s time to make tea or to consider drinking the Kool-Aid. As our numbers dwindle through attrition and economics, let’s try to use this time of retrenchment to make some positive changes. There is nothing wrong with making a profit. To the manufacturers and distributors I say, raise your prices but give me a better product to install. Limit your production like the oil companies do to maintain your margins. We simply need to regulate installation practices and seriously penalize those who choose to ignore them. Make quality and value synonymous. There’s a concept that needs acceptance.

One deadline that is coming up is that in which AGRSS will be conducting third-party validations on registered shops. In short, AGRSS is trying to add some teeth to being a registered shop and one supposes that in the long run, having such accreditation, will lead to both consumers and insurers taking note and feeling confident about using an AGRSS-registered shop.

To me, the auto glass industry is in the Wild West mode and until hard restrictive codes of conduct are imposed on it, the industry will continue to wallow in discourse and actually do little to clean itself up. That means making traceable parts and punishing those companies and individuals who sell and install said parts in an unsafe or inferior manner. AGRSS is an honorable step in that direction, a merit badge of sorts yet in my mind, but it lacks public acceptance and, most importantly, regulatory back-up, making registration or even expulsion a fairly inconsequential event.

First of all, the public has to have some idea of how good or how bad something is to want change. The auto glass industry does very little to promote knowledge. I’m quite aware that certain websites have videos of installs or philosophical statements of positive intentions. What about a public service ad during “American Idol” or an NFL game? Let’s reach the “real” public” and not just the literate ones.

On a consumer website called Yelp, I see positive critiques of shops, such as “I drove in, had my windshield installed and drove out 40 minutes later.” That’s a good thing?? I’m waiting next to read where you can do the same with heart surgery. I’m not of the opinion that bad “hack” shops will ever go away, but I do believe that if you alert the public of certain negative repercussions, the message does get across somewhat. Take cigarettes and cancer, for one; even that has taken at least 30 years to gain acceptance. Wearing seatbelts has increased over the years as well. I truly believe that AGRSS has to market itself to the American public at the same time as it tries to tighten registration compliance because without it becoming a “seal of approval” of sorts, it becomes just another acronym like TARP or NSC. That lack of effort and desire to brand itself directly to the American public is a matter that has be addressed by the Council or its efforts to increase registration and compliance may very well fail as the economy declines. I can say this; I have never ever been asked by a customer if I was AGRSS-registered.

I applaud the AGRSS Council for instituting validation procedures. It needs them, but how can any voluntary organization actually guarantee that its provisions are always being implemented? It simply can’t and never really can. I simply do not trust the inspection procedure. The inspection procedure fails immediately when prior notice is given to the party being examined. Let’s ask the prisoners of the Hanoi Hilton how conditions changed when there was to be a Red Cross inspection, shall we? Does anyone really believe factories are actually following child labor laws in Asia when those companies are alerted months in advance to the days that those plants were to be visited by inspectors? I can report to you that I was always on my best behavior when my elementary school teachers hovered over my shoulder. I can’t validate what my comportment was like when she left my side—which is, of course, the second part of the problem. Who is to say that any company will comply with the AGRSS Standard when left alone?

I operate in the San Jose area of California and I have personally viewed or came behind installations made by a very large statewide chain that is AGRSS-registered. I have witnessed their techs installing windshield in cars while on they are on lifts. I have had to repair significant amounts of first-stage rust on vehicles that no primer of any kind had been applied after this shop had substantially scratched the pinchweld while performing the previous replacement. I have seen post-mouldings with more urethane applied on them than the windshield underneath. I’ve heard more horror stories coming from other techs about the same shop, which leads me to believe that poor workmanship is somewhat endemic at that location. My point is, who is to blame here? Corporate? Regional? Or do you just ask everyone connected to that store to put down their tools and go back to their old jobs as butchers? How can any third-party validation uncover that sort of mischief? I don’t think it ever can. If, in the case of a multi-point locales, how can one fairly differentiate between good and not-so-good shops? Obviously, if you have an uneven quality of glass installation throughout your corporate network, will an entire chain merit certification with such diversity? The other real factoid that no association can alter is that when it gets down to the nitty-gritty, it all depends upon the installer’s integrity and the materials and time that are given to him to install said auto glass properly by those who sign his checks.

One other burr under my saddle is, what economic incentive do AGRSS-registered shops gain when fully listed? The company name is listed geographically on the AGRSS Honor Roll. I can have my wife write a review on Yelp for me that would garner more sales on that site just by writing the phrase: “cheap and fast.” I know State Farm generously donated a substantial sum of money to the AGRSS Council. Rumors abound that AGRSS registration may be mandated to become an “approved vendor” of theirs. Here is an insurer, while a bit less demanding of NAGS list discounts, that still only pays a flat rate for labor for network installs. Are they willing to pay more for a safer one? I suppose not since they still maintain that corrosion after a windshield replacement is “normal wear and tear.”

What about a competing network that promotes its own in-house glass installation company that has its own separate certification program? It does not seem likely that an AGRSS-registered shop will be allowed to charge more for its purported professionalism when billing through that network. I can assure you that my dealership clientele will not reimburse me one dollar more for my AGRSS registration. AGRSS rhymes with duress and that is what most service departments are under these days (not to say the value-seeking American public is any more worse off).

So why join? I’m Irish, therefore genetically thick-headed. I have filed paperwork and, since I’m speaking at the IGA convention in May, plan to take advantage of the word “free” (as in cost to register with AGRSS by attending said gathering). I view AGRSS as a sort of merit badge. I believe we have to have and to meet standards in our industry. I can’t climb on this soapbox every week or so and proclaim quality if I am unwilling to put my own actions under the microscope. The higher cost to me will be to my documentation costs since I still use pre-printed forms. I need to substantially revise them or find a new source.

I will have issues if registration rates climb exorbitantly because the more registered shops AGRSS has, the greater the chance the American public will have in making a proper choice in their selection of a competent auto glass shop. More registered shops also mean more revenue. I understand that having third-party validation does not come cheap, but I also submit that it is in all party’s interests to keep dues fairly low. To help offset the cost of validation, impose a stiff financial penalty on a shop if it fails to comply with the AGRSS Standard after an audit.

It’s too bad one can’t levy an assessment on glass at the wholesale level to pay for this sort of endeavor. There’s a concept. Making everyone pay to encourage a basic minimal expectation of professionalism. Only in America.

When Tom Feeney got up to speak at the NGA Auto Glass Conference, he was introduced as being “one of the elite” of the auto glass industry. Well, as the recently installed CEO of Belron US, no doubt he should be given polite respect. However, it seems a wee bit of hyperbole was used when making that introduction. While size matters perhaps to the NGA, I humbly submit that due to its practices and the tactics of the company Mr. Feeney leads, if I were presenting him to an audience I perhaps would have chosen my words differently. While only 75 NGA members attended the show, I wonder if they had the same feelings toward him as American retailers privately thought about Sam Walton and his corporate behemoth if the creator of Wal-Mart was speaking at a meeting of his “peers.” Perhaps the maxim that Abraham Lincoln invoked about “fooling all of the people some of the time” could be applied at what happened in Orlando.

So when I heard that Tom Feeney is considered one of an elite crowd, in a way he was correctly introduced. The Random House Dictionary states, as its third usage, the word “elite” means “a group of persons exercising the major share of authority or influence within a larger group.” Mr. Feeney certainly qualifies under that criterion. The primary definition cites—“the choice or best of anything considered collectively.” It’s my humble opinion that neither he nor his company is close to that particular status.

I was not in attendance at the famous Independent Glass Association (IGA) conference where Mr. Feeney also spoke. At that time, elite status had not yet been conferred upon him. That meant I was not able to observe firsthand any reports of a “Pinocchio Syndrome” in which a person’s nose tends to elongate when speaking. This is why, as I understand it, the audience did not exactly shower him with roses or adulation. I guess that is what bothers me the most when the CEO of the largest glass installation company is invited to speak to any industry group. It is not so much the recitation of company propaganda; it’s more the everyday actions of the Columbus company that makes one tend to disregard the message. Why should any sort of coronation be given to the head of the international corporation that is making every effort to dominate the auto glass industry by the use of Belron’s Golden Spigot? Perhaps his reception at the NGA was warmer just because more CEOs of smaller regional corporate chains were in attendance. hoping to keep the wolf from the door or the industry’s 800-lb. gorilla pacified. Either that, or is it just a more rowdy group of owners that attends IGA conventions?

While there are many valid issues with which competitors could assail Safelite, the greatest threat is the ownership and operation of its third-party claims company, Safelite Solutions. Here lies the true Trojan Horse, which Belron has used to gain entrance and success into the American auto glass market. Instead of fighting established chains and shops head-to-head throughout the United States, Belron realized that claims management was the most judicious use of resources to capture market share. Instead of dealing with the myriad number of companies, districts and agents, Belron, through Solutions, could bypass the jungle of sales contacts and deal directly with an insurer’s corporate headquarters. By offering a service that streamlines an insurer’s human resources needs along with a fairly stable glass claim cost, the business model certainly appealed to the financial interests of its clients. Once installed as an insurer’s TPA, it correctly ascertained that by becoming the claimant’s first contact, Belron virtually could be guaranteed the lion’s share of the work. To me the strategy is brilliant. Instead of fighting for market share throughout a geographically large and culturally diverse nation, it was able to bypass almost every competitor and install itself as the majority gatekeeper to the insurance market. I truly believe that without Safelite Solutions acting as its funnel, Belron US would not be in the position it is in today in the United States—especially since their two main acquisitions were devalued assets acquired through bankruptcy that were noted as much for production quality installs as they were their penchant for discounting. I commend Belron for applying the proper fertilizer for growth. Tom Feeney who previously held the CEO position at Solutions presided over the application of much of that guano and his reward for that Augean effort was his promotion to his elite position within Belron.

By the way, speaking of “true” elites, Corey Hemperly of Windshield Doctor Inc. and I have been invited to speak in a joint seminar at the IGA’s Independents’ Days in mid-May. I know times are tough, but I urge you to attend. We are an industry in transition and independents have to find and maintain solidarity. It is at these kinds of functions that relationships form and renew. New ideas are transmitted and shared. I hope to see a number of you there.