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Rising to the Occasion

The “Big D” for Dallas, host city of the 74th Annual ARA Convention & Expo in November, took on new meaning, standing for the Drive and Determination of an industry to move forward more united than ever.

While the industry remains in a state of rapid change, attendees of the latest annual meeting of the Automotive Recyclers Association received meaningful and motivating ideas to carry back to their businesses to strategically implement. Nearly 1,000 recyclers, along with consultants and businesses that serve the industry, gathered early November in Dallas, Texas for one of the largest annual events of the year – the 74th Annual ARA Convention & Expo – to learn, debate, ponder and plan for a future that is both rich with profitable opportunity and full of uncertainty. What they left with was drive.

“The atmosphere at this year’s ARA’s Convention and Exposition was one of opportunities amongst challenges,” says Michael E. Wilson, ARA CEO. “The automotive supply chain is maturing with stakeholders now considering how to best integrate the valuable asset of used original equipment (OE) components. The path to future utilization of used parts may not be processed the same way as in the past, but the marketplace appears to be ready to pro-actively embrace steps that will lead to a larger variety of parts and components reentering commerce.”

Driven by technological change, the car is rapidly changing; OEMs are interfering with business; and the needs of insurers are demanding. Caught in the middle to maintain market share is the industry providing genuine recycled auto parts – original make, fit and function parts that the OEMs continue to try to disassociate as their own to woo repair shops, insurance adjusters and consumers into unnecessarily buying the more expensive new parts directly from them.

To tackle these industry challenges, sessions geared to provide insight left attendees deciding between many subject choices. In fact, most sessions had generous seating, yet crowds spilled into the hallway – a sign that attendees were here to learn, more than anything else. The 2nd Recycler’s Roundtable drew a standing-room only crowd filling a ballroom to discuss and debate (see our upcoming article on this in March-April 2018 ).

Recyclers in Session
After opening festivities and dinner hosted by Copart at their sport vehicle auction house, Crashed Toys, attendees got down to business. It all starts with getting your organization in order from top to bottom, from processes and structure to training, which seemed to be an underlying convention theme. Raising the level of professionalism was also a clear goal that was continually voiced.

In the panel discussion on “U Pull It or Full Service,” the consensus from the panel was that “U Pull Its are much easier to make a living,” and a more streamlined business choice, yet all the recyclers on the panel had both full- and self-service in their operations.

The panel suggested keys to a successful self-service business, which included ideas for marketing, customer service, security and insurance. To market, text blasting weekly specials seemed the most effective way to bring in customers. As for customer service, while different from a full-service yard, it was suggested that you still need competent help. Providing tools for sale for customers who need them in harvesting parts was also a must.

To manage theft losses, they suggested layering fences to make it very hard to steal. “You are going to have theft, you just have to minimize it,” said Dan Snyder of Snyder’s Recycled Auto and Truck Parts. “Also, customers will tell on other customers if they see issues.” Finally, the panel all agreed that having comprehensive insurance in our litigious society is wise to protect your business.

Another session introduced a new ARA initiative, “Join the Movement,” which is a marketing campaign complete with customizable print- and web-ready ads, billboards, radio spots, website and more (see page 38 for full story). The target market – the millennial generation – approved the campaign messaging through focus groups. Both consumer groups’ buying habits and belief systems align with recycled parts usage. A session attendee stated that the awareness campaign is “one of the best things ARA has ever done for my business.”

In “Managing the Sale After the Sale,” Benny Cunningham suggested the only thing to do it right is “listen to the customer. It got me to GM Supplier of the Year. I listened to their needs.” (His business, Cunningham Brothers Used Auto Parts, earned the distinctive title in 2017.) “Understand the customers’ processes and principles,” says Peter Bishop of CCC. “Understand also their problems and deliver on the solutions.” Both suggested to “lean in and take some training” to achieve highest levels of quality control and to have a dedicated commodity person, who is not the owner, in your facility to attain a low return rate (.4 percent is what Cunningham maintains).

When it comes to education, “Online Training in Your Face” was full of great content. The panelists discussed how they keep their staff tuned to correct processes, and keep their regulatory inspections as stress-free as possible with systematic training programs.

“Once a year, I take the ARA University test as a refresher course,” said Dan Snyder, Snyder’s Recycled Auto and Truck Parts. “Training helps limit risk exposures to customers and employees. I assign the relevant ARA U modules to each division that must be done. We hold employees and department managers accountable. They all have to report training progress up the managerial chain,” said Snyder.

The panel agreed that having a viable educational plan saves you money. As well as minimizing accident risk, it also helps save on insurance. “We show insurance companies who quote our policy start to finish all our training plans and the agendas used to track training,” says Snyder. “Because of this, our liability insurance premiums went down; it makes a huge difference.”

While all agreed it takes time to implement and could mean money spent, in the end, once a training program is running, it actually saves you on both in the end.

“Another benefit,” said Amanda Rawls, Environmental Consultant at Clayton Group Services, “is you can go onto ARA University and print out all the certifications you and your employees have achieved. You can document the courses you run at your facility. This all helps when regulators visit.

The Environmental Compliance session provided tips and practices that enhance this mandatory requirement of the industry. To let your team know you are serious about compliance, “Reward excellence and don’t tolerate mediocrity,” noted Sara Hamidovic of VET Environmental Compliance. “Conduct walk-throughs, implement small rewards programs making it public when someone is recognized, and address poor performance immediately.”

Environmental experts Cheryl Horn, Sue Schauls and Mike James agreed that it is important to understand the regulations to see if they apply to your facility.

Horn explained that SPCC Plans are triggered by capacity. “Above ground oil storage capacity at facilities above 1320 gallons and above will need this plan. If you don’t have it, it’s time to get it.” Monitoring this and other regulations that have capacity attached could save you time and money. “If you don’t fill it, you don’t need it. You can save a lot of time and money in the future by eliminating an entire regulation area all together by paying attention to these details.”

What is the biggest environmental compliance offender? Oil and water separator systems; “If it isn’t big enough or to where it drains are the biggest concerns for inspectors,” Horn said.

Taking Care of Business
The annual ARA Membership Meeting kicked off the time for committees to report on their activities.

With the restructuring of the Regional Directors to seven regions (four for the U.S., one for Canada, and one for Europe and one for Asia/Pacific), Scott Robertson, outgoing chair, encouraged that as the “eyes and ears of the association” members should create a dialogue with their regional director. The role as a director is to communicate grass roots issues to the Executive Committee in order for leadership to understand the issues in each region. To know the concerns of auto recyclers, recyclers must take the time to reach out to their representative.

Two new directors were introduced; Casey Cornell, owner of Cornell’s Used Auto Parts, LLC in NY, East Region, replacing Robertson, who is now ARA’s Executive Secretary, and Andy Latham, Managing Director, Salvage Wire, Ltd., for Europe replacing Allen Prebble.

CAR Committee Chair Shannon Nordstrom shared the need for everyone to become CAR Certified … now. “There are lots of looming issues in our industry. One thing you don’t want to be doing is playing catch up when they come knocking on our doors.” Nordstrom noted that being CAR Certified, at a minimum, would keep most recyclers ahead of a significant amount of what is coming.

With automakers using recalls against the use of genuine recycled auto parts, and the data issue still largely unresolved, this is a significant issue to watch, warned Michael E. Wilson, ARA CEO. “From 2014-2016, there were 154.5 million automotive recalls in the United States. It’s overwhelming.” Wilson committed that ARA continues to create relationships with lawmakers to champion efforts on behalf of auto recyclers.

Delanne Bernier, Vice President of ARA Government Relations, emphasized that site visits are a way to create conversations and influence lawmakers and have a seat at the table when important issues are debated. She shared that Billy Roberts, President of Roberts Salvage, Inc., hosted Senator Mark Allen (R-OK) at his facility and Allen ultimately co-sponsored a bill because of that visit. In fact, Allen has appointed Roberts, who was nominated by Governor Mary Fallin, to a six-year term that began in July 2016, as an at-large member of the Oklahoma Used Motor Vehicle and Parts Commission.
The ARA Scholarship Foundation noted that they awarded 34 financial awards to deserving student-children of employees at recycling facilities. The ARA Educational Foundation reported that they are launching a Career Center in 2018 to help attract talent to the industry.

It was also announced that next year’s big event, the 75th Annual ARA Convention & Expo, is slated for November 1-3, 2018, in the magical host city of Orlando, Florida.

High Note
Keynote speaker David Lucsko, author of Junkyards, Gearheads, and Rust: Salvaging the Automotive Past treated attendees to a walk down car enthusiast memory lane. Dr. Lucsko’s research focuses on the history of the automobile (manufacturers and users, particularly enthusiasts) in his role as Chair and Associate Professor of Liberal Arts at Auburn University.

While he emphasized that, from the beginning, the public has typically wanted automotive recycling facilities “out of sight, out of mind,” they serve a valuable part in society. “We have to remind people and ask them, ‘Is a throw-away society sustainable and viable?”

As Lucsko went through the history of the car enthusiast and do-it-yourself car repairer, it was evident how automotive recyclers played a large part in that era of car ownership. With the future of the passionate car owner questionable, he noted that millennials – who are currently at the age where car enthusiasm was born in prior generations – are getting their driver’s license later in life, have a lack of enthusiasm for cars, and view them more as a way to get from point A to B.

Energetic Exposition
Dedicated industry vendors descended upon Dallas to talk to the leaders and learners of the industry. From attendee to vendor, the energy was high with both groups seemingly ready for a positive year.

Right off the bat at the opening Past Presidents Reception held in the Expo Hall, with dinner and drinks, Rob Bari of Peddle said, “I’ve already gotten several industry leaders to sign up; my registration is paid.”

“At United Catalyst Corporation, we exist to serve recyclers,” says Becky Berube, President. “We spend every day of every year assessing their needs and working hard to meet them. The ARA Convention is an opportunity for us to spend time with key recyclers all at once. We get to learn about the issues affecting the industry and their businesses. It is also why I volunteered to co-chair the ARA Events Advisory Committee that plans the annual convention and works so hard to make the educational sessions relevant.”

“TexnRewards is new to the ARA show environment,” says Paul Mitchell, Owner, “but we have been working with many U-Pull-It yards since 2015. Since we help these yards get new and repeat business through mobile marketing strategies, it was very nice to talk to the general managers and owners to get their valuable perspective of how our system can be tweaked and enhanced to deliver meaningful repeat and new traffic to their yards. We collected many new requirements and are already working to implement usable solutions for our customers and prospects based on the feedback.”

“We feel truly lucky to participate at ARA Conventions,” notes Chrysten Newton, Marketing Director of PMR Inc. “The overwhelming friendliness and support of all fellow members and attendees creates an energetic and fun atmosphere of which to be a part. Dallas marked my third year of attendance and each year I have been able to strengthen connections and partnerships within our industry.”

“Exhibiting at the ARA annual convention means not only do I get to spend valuable time with customers, I always learn something by attending the educational sessions too,” says Amanda Zmolek, Industry Relations Analyst, Copart. “The ARA Convention is a great networking event for people in all facets of automotive recycling, and the business relationships and friendships made there can last a lifetime.”

The Scholarship Foundation held their bi-annual fundraiser during the Convention – with the grand prize of a 2018 Street Glide Harley Davidson or $20,000 – and some exhibitors generously supported the effort. The Foundation sincerely appreciates the generous vendor donors – Brock Supply, Buddy Automotive, Car-Part.com, Dorman Products, James Environmental, Mike French & Co, Rebuilders Automotive Supply and Supershear – for in-kind donations of door prizes. The winning ticket was won by Past President, Kennie Andersen of Andersen’s Sales & Salvage, Inc. in Greeley, CO. He opted for the $20,000 prize and then promptly and very graciously donated the money back to the Scholarship Foundation.
Dinner with Friends

A wonderful awards dinner was enjoyed with conversation buzzing among the large ballroom of attendees. As the chocolate dessert was served, the speeches and Star Awards (see sidebar) began recognizing the industry’s finest leaders, volunteers and businesses.

Last year’s CAR Member of the Year Award recipient Martin “Marty” Hollingshead of Northlake Auto Recyclers (see story on page 55), with permission, enhanced the trophy originally designed by the team at Reitman Auto Parts & Sales, Inc., in honor of late ARA Past President Randy Reitman. Hollingshead applied his woodworking skills to create a “Stanley Cup of auto recycling, where past and future recipients are recorded,” he says. “As a recycler is awarded the CAR Award, their name is added and they host the trophy at their business for one year. Now their team and customers will see the past recipients and will have a greater appreciation that the recycler is among an elite group.”

Hollingshead passed the trophy to American Auto Recycling of Gilbert, AZ, who are this year’s CAR Member of the Year, but not before unveiling the new design at the ceremony with the Reitman family.

The prestigious Gold Seal Member of the Year was bestowed to Donna Schuette (center), Vice President of Johannes Auto Sales, Jackson, MO, who was found “most deserving of this honor above others this year,” says Amanda Matlock (right), the Gold Seal Committee Chair, along with R.D. Hopper (left).

As the Star Awards concluded, ARA President R.D. Hopper shared his highlights as President. “There are some amazing stories that I witnessed as I went state to state,” he says. “We are a special people who lift each other up in hard times and spend time mentoring others. Indiana’s impressive mentorship program especially inspired me. They get ‘graded’ for meeting certain standards by their program manager and truly get excited to receive their reports each year at their annual gathering to see how they have improved or where they need improvement.

“The President’s trip to Russia was another highlight where we visited a recycler with four facilities and 150 employees,” noted Hopper. “It is interesting that entrepreneurship was only available there since 1992, so they are doing an amazing job in Russia. “In general, it is exciting to see so many working to improve their business.”

Hopper then bestowed the President’s gavel to incoming ARA President David Gold, and the executive committee welcomed Scott Robertson, Robertson’s Auto Salvage, Inc., as Secretary as he evening ended.

Breakfast of Champions
The Ladies of the Automotive Recyclers (LARA) met for their annual breakfast, where they networked and shared stories in the industry. The speaker, Fran Reitman, bravely shared, for the first time to a group, her experience during the illness of husband Randy Reitman with whom she built a legacy family business, Reitman Auto Parts & Sales, Inc., and her challenges after his passing. Randy was 20 years old when his father died and he began running the business with his mother, Helen, and Fran. Ultimately, Helen sold her share to Randy and Fran.

Randy, an ARA Past President, was a highly regarded leader in the Association, and together they weathered much, including his Executive Committee service during his illness, which included chemotherapy and open heart surgery. “Randy’s illness was no secret to our staff, customers or the executive committee of ARA,” noted Reitman. “Our family, friends, business associates and customers were a constant support to us.” She emphasized that Randy would go to chemo with a laptop, continuing to do business, because keeping his commitments and leading in the industry was very important to him.

Upon Randy’s passing she shared that not only her family, but their team, many whom had been with them for over 20 years, experienced a time of grieving. “They have stuck with me, and our yard manager, Donny, said ‘We are not going to fail,’” says Reitman. During this time, Reitman also lost Helen to cancer, and her company’s General Manager, Dennis, who has been at Reitman’s for 25 years, fought and won his own battle with cancer (he is currently cancer free).

“No one ever wants to face or think about these things. But we don’t have a choice how things turn out,” said Reitman. Her main message was, “Take time to review documents and your business plan; get things in order for the future. I had five years – some people don’t get that. They get an instant. YOU be in control,” she urged. “Our 5th generation is in line to take over,” said Reitman who is still primarily running the business today, with her sons, “and a 6th generation is possible with my grandson. Ask yourself where are you now, where are you going, and how will you get there. Live everyday like there is no tomorrow,” she urged.

Looking at the Future
The future of the industry was on most everyone’s mind and the overall residing question. Presenter Chris Daglis summed much of it up in his session “Beyond 2020 – the Future of Recycled Parts.”

“Speed of change is really quick,” he says. “New technology will affect all the industry – insurers, supply chains, repairers. We need to start looking further ahead, now. Recyclers need to react differently, with ‘What can we do to make things possible,’ instead of thinking, ‘it’s not fair.’ We need to ask, why SHOULD insurers authorize OUR parts? What can we do to minimize the risks? What can we do in the certification process to make it comfortable to use recycled parts?”

“We know that insurance companies want to use our parts, that vehicle technology is changing vehicle repair, and accidents are lessening in size and severity,” he says. “This brings us to a crossroads. We must learn from experience and train our teams for change. We must provide a compelling value proposition to insurers. It is a super opportunity, in my view, for ARA to be well-positioned to represent all recyclers in future training and certification programs.”

The ARA leadership agrees. “There are more opportunities to reach more people and more businesses than ever before,” says R.D. Hopper, immediate ARA Past President. “And there are more changes and challenges than ever before. There is a significant opportunity for our Association to be the leaders through the changes. People need to be involved. We’ve got opportunity and we’ve got challenges. We need to mentor people to come on board.”

Caryn Smith is the editor of Automotive Recycling magazine and a writer covering the industry for over 20 years.