Those are the last words you want to hear as an auto recycler. Here are lessons from recyclers who have experienced the worst.
By Michelle Keadle-Taylor
There are moments in history that we’ll never forget, like the assassination of JFK or Sept. 11.
They are etched in our memories forever, even after the shock and sadness we experienced has faded. For Dan Snyder, Snyder’s Certified Auto and Truck Parts, the day he walked into his building and saw his employee catch fire, isn’t one he is likely to forget either. Nor are the memories that other recyclers share, such as Benny Cunningham, Shannon Nordstrom, Rick and Bob Wilbert, Greg Weaver and more, all whom experienced fires that destroyed or damaged property.
Little did Dan Snyder, Partner and General Manager of Snyders, know when he went to work that day over ten years ago that he would save a life and lose a building. The fire started when a dismantler was using a cutting torch around a Dodge Van fuel tank. The dismantler cut the fuel tank strap without incident, but when the strap gave way the fuel tank fell to the floor and the dismantler became a victim of fuel on the floor and the torch in his hand. He caught fire.
Snyder happened to be walking in the building a few seconds before and saw the incident. He grabbed the dismantler and took him outside and rolled him on the ground, quickly extinguishing the flames and preventing major burns or further injuries. Once he saw the dismantler was safe, Snyder rushed back inside where he and another employee used fire extinguishers to fight the rapidly spreading flames.
They expelled the extinguishers and the fire overtook their efforts in the metal and A-wooden frame building. In the end it was a complete loss – they had lost their three-bay dismantling building.
Nordstrom’s Automotive Inc. experienced a fire on July 25, 2012. “Almost exactly at 4:00 p.m., I had one of our staff members briskly interrupt a meeting our leadership team was having with visiting business partners from out of town with the words you never want to hear; “We got a fire! It’s bad!” said Shannon Nordstrom, Vice President/General Manager and Owner. “I will never forget the look on our team member’s face, and he was not even involved, he was just asked to run and break the news.
“The fact that we had a fire in one of our dismantling areas is horrible. Team member’s lives were at stake and the very heartbeat of any recycling business surrounds your dismantling efforts. This is the event you think will never happen to your company, it will be someone else I will read about. This time it was me, who is it next time?”
Nordstrom’s fire started in their TD-08 Dismantling bay, two of their eight dismantling stations, where two dismantlers worked on a variety of vehicles. The day of the fire there was a ‘90 Ranger on one hoist being prepped for the Ewe-Pullet self-service operation and on the other hoist there was a 2011 Crown Victoria squad car. It was being dissected to remove many low mileage high quality parts. The dismantler of the squad car had just gotten assistance from another co-worker to negotiate the fuel tank away from the filler neck and lowered it onto the rubber lined transport cart that is used to bring the tanks to the pneumatic transfer station.
This is the safe process that takes the fuel out of the building to outside storage that is in secondary containment under roof. According to Nordstrom, in the process of lowering the almost full tank to the cart and working to suck the tank dry, some gas was spilled.
While a small gas spill is not uncommon in the process of dismantling, this spill was a bit more than the occasional splash that will come out when removing a line or pump. As the dismantler was draining the tank, he decided to multi-task and work on removing the fuel pump from the tank. He was using an 18v brand name re-chargeable ¼ inch impact tool, not unlike a tool you will find in the hands of dismantlers across the country.
Nordstrom says disaster struck when the dismantler triggered the device for what they believe to be the eighth time.
“His arm could feel the rush of the fire as it grew from the back of his tool and felt as if it was crawling up his arm,” said Nordstrom. “In reaction he threw his arm back and dropped the tool. As he did this, fire instantaneously traveled from his tool to the spill of gas on the floor and quickly the tank engulfed in a huge ball of fire in the corner of the shop. He was able to get away from the fire with only some singed hair on his arm. The other dismantler reacted quickly and got away from the fire ball also. No one was injured.
“When we heard about the fire we quickly departed the meeting and our Assistant Manager grabbed the extinguisher from the wall of my office. We stopped by the maintenance shed to grab extras from the reserve units just in case. As we approached on foot, we could see the smoke and flames already making their way out of TD-08. We found our team members from different departments rallying together in extremely brave fashion, relaying fire extinguishers and taking turns approaching the fire to knock down the fire and work the side wall of the adjoining buildings.
“We had a gathering point and assured ourselves that no one else was in the blazing area. Our staff expelled over 50 fire extinguishers to contain the blaze. The staff member who had the blaze start in his hand, was fresh off of employee orientation so he had known to call 911 and help was on the way.
“We worked feverishly to save what we could. The fire department arrived in 14 minutes from the time of the call and was able to drive through clear and open pathways to a very good spot to set up. With the help of five volunteer fire departments with 68 firefighters logged into the scene available and an aerial ladder truck the blaze was contained to the shop area.
“There was only minor damage to the connected warehouses D and E that house countless dollars of ready-to-sell inventory. The building’s firewalls designed to seal the shop from other buildings in case of a fire held up long enough for containment of the blaze.
“Our staff knew how to use the extinguishers which were all current, inspected, and operational. They knew where they were at because they are strategically placed around our facility, over 100 of them!” noted Nordstrom.
In addition to the fires at Synder’s and Nordstrom’s there have been several even more recent fires. The Wilbert’s, Inc. fire occurred on November 26, 2013. It was unusual because the cause was a faulty electrical cord. Most fires in recycling facilities involve gas.
“We never expected to have a fire because we had taken precautions against it,” said Rick Wilbert, Owner. “For example, we never handled gas inside our buildings and we used fire retarded materials to build our facility. So when our U-Pull-It building that was only four years old caught fire and burned to the ground we were shocked.”
The building, which housed their processing inventory and U-Pull-It operations, became “an oven with temperatures exceeding 3000 degrees Fahrenheit.”
Just a couple of weeks before that, All Metal and Auto Recycling (AMA Recycling) in Danville, Virginia had a fire that was caused by arson. Greg Weaver, President of AMA Recycling, had just returned from the ARA 2013 Annual Convention in Phoenix.
“I left the ARA Convention a day early and had just arrived back home the evening before it happened,” said Weaver. “The fire started at 5:00 a.m. on Saturday when someone threw some type flammable liquid on a bay door in a part of our parking lot that is not fenced in. The fire department was on the scene within ten minutes or so – fortunately for us or the damage would have been much greater.”
The fire burned down one wall of the warehouse, but was put out within 15 to 20 feet of their main business office. Weaver says there was smoke damage, loss of power, and a major mess to clean up; including installing a new roof, insulation, and some cleaning of some tools and equipment that were affected. Despite this, they opened for business the same day.
“Fortunately the fire did not really reach anything that would affect our business that much,” said Weaver. “When I arrived at the scene, there was a lot of smoke and water damage and we had no power. I fully planned to close the business that day but around 8:15 a.m. or so a customer dealing scrap pulled up. I explained the situation and we ended up sending him to the Pilot Truck Stop two miles down the road to use their scales, and then come back with the ticket because we didn’t have power to operate ours.
“Both our customers and the people at Pilot Truck Stop were understanding and we worked together to get scrap weighed until we had enough generators going to use our own scales which was a few hours later.”
Perhaps the most recent fire among ARA members occurred on November 3, 2014 at Cunningham Brothers in Virginia. The fire started at 4:00 a.m. on a Sunday morning (the cause still not determined) so fortunately they weren’t open for business and no one was hurt. However, Cunningham Brothers lost their main location that housed engine warehousing, processing, quality control, shipping, and loading docks.
“It was a devastating blow to our business because 85% of total production capacity on full service cars was done at the main yard and lost in the fire,” said Benny Cunningham, Vice President.
Picking up the Pieces
While AMA Recycling felt the most minimal impact, all the facilities suffered loss and felt the impact in different ways based on their location and business.
For Wilbert’s, it majorly disrupted their daily operations. Rick Wilbert says that while they’ve completely rebuilt and been adequately compensated for the fire, it still impacts them today.
“Although we have a new facility and operations are going well, I think that we lost a lot of momentum in the start of the rebuilding process,” said Wilbert. “It took us ninety days to set up a temporary trailer where we could take some retail. We had nowhere to process vehicles for the U-Pull-It, so our operations kind of came to a stop. We ended up trying to process cars here and there. Fortunately, we had two other full-service yards so we could deploy our employees to those sites and continue to pay their salaries.
“I think that our sales are way behind where they would have been had we not had the fire.”
Bob Wilbert, Senior Project Manager, Wilbert’s Inc., came on board to help after the fire and became the point person for dealing with the insurance and the public adjustor. The day after the fires they had a meeting with around 12 authorities that were involved with the fire investigation and they realized very quickly that this process was bigger than they wanted to take on alone.
He worked with Adjustors International to make the appropriate insurance claims.
“It was a huge expense to re-open and given the size of the loss, our case got bumped up in its urgency level,” said Wilbert. To add to the stress, “The first check didn’t come in for about six months and the insurance policy was about 90 two-sided pages so we really did need to know what was covered. We created a painstaking list of items for each room – such as wire nuts, washers, wall and light fixtures, concrete, paint – anything and everything that would help the adjustors to accurately estimate the cost of rebuilding.”
For Cunningham Brothers, they are still in the process of rebuilding and the fire caused a major blow to their daily operations. Cunningham says that they had to split their processing over to the dedicated cores building and it took 30 days to get that ready.
“Six months after the fire, our production was down 33% but we didn’t lose sales,” said Cunningham. “Thanks to our multiple locations, we weathered better than I can understand. It’s nothing short of a miracle that I’ve experienced. Comparing the six months before the fire and the six months after, we are only $200,000 dollars off. We made some significant changes to make that happen, and we did experience a major blow and disruption to our service, but really I am in awe that we are where we are in sales.”
Snyder’s impact was shorter-lived. Now with four locations, they only had one at the time of the fire. The fire destroyed their dismantling building but not their main office building or new inventory.
“The fire cut down on our processing time and had some impact on our sales,” said Snyder. “The night after the fire, my brothers and father who were in the business with me sat down at the dinner table to devise a temporary plan for the business while we rebuilt.
“We decided to use an active body shop that we had. In that building, we had one bay where we could process cars. We relocated all three dismantlers to that one bay. We would partially dismantle the vehicle outside the building, then bring it inside to finish the dismantling while we were partially dismantling the next vehicle and so on. We ran it kind of like a disassembly line, so to speak. We did this for the three months that it took to rebuild our new dismantling facility.”
While it took Wilberts, Inc. about 16 months to rebuild and open to the public, Snyder’s was able to reopen in just three months. Snyder credits his rural location in a state and county where they do not have overbearing regulatory requirements for that.
“We are fortunate to be in the country where it doesn’t take long to rebuild and you don’t have so much red tape to go through, and waiting time for permits and inspectors, etc.,” said Snyder.
“The biggest issue for us was that we didn’t have insurance so we had to spend our own money to rebuild.”
All of the auto recyclers say the fire has changed the way they do things.
“The first thing we changed is that we no longer use cutting torches in any of the buildings,” said Snyder. “We replaced them with reciprocating sawzalls which are safer because there are no flames or sparks like you see with cutting torches.
“The second thing we changed is that when we built our new dismantling building we made sure that the fluid recovery storage was not connected to the dismantling building but instead
located in a separate building. In the previous set-up there was only a wall separating the two. Fuel tanks are now set on a cart and the cart is rolled to one of the two pumps at either end of the eight-bay facility. The pump syphons the gas out and moves it to a separate tank away from the dismantling building.
“We also beefed up our safety and fire training and now, of course, we have ARA University which we take full advantage of the safety and fire courses,” notes Snyder. “Now we have fire extinguisher training for employees and have more fire extinguishers in the building. The extinguishers are inspected internally on a monthly basis as well as every year by an outside inspector.”
For Wilbert’s Inc. the most crucial thing that they learned and have since changed is to have a business continuity plan in place.
“Having a business continuity plan in place in the event of a fire or other disruption to your operations is crucial,” said Bob Wilbert. “If we had not had any other locations to place the employees and continue payroll and other functions, we would have gone out of business. The fact that we had multiple locations helped us to weather it.”
Prevention is Critical
Unpreventable accidents happen, but from Snyder’s perspective, auto recyclers should take the necessary precautions to avoid a fire.
“The most important thing in my opinion is for recyclers to realize that torches have come and gone in our industry,” said Snyder. “I understand that if you operate in the rust belt you may need a torch, but I would advise you to really look at your business and other businesses around you to see how you can run your dismantling business without using torches. I would also advise that you put in place all safety protocols in order to prevent not only a fire but other possible hazards that could affect the safety of your employees or your business.”
Nordstrom is in agreement. He says he learned two important things from the fire – the first and what he considers the most important is that they should only use hand tools in the dismantling area anytime you are working with the fuel system. This is a policy that was put in effect immediately after the fire. The second was understanding his insurance policy.
Ensure Your Insurance is Correct
Rick Wilbert says that making sure you insure your building for fair value is extremely important. Carrying the correct amount of insurance, even if it costs more in premiums, is important if the desired end is to rebuild effectively without high out of pocket costs.
“It’s very critical that you have your building fairly insured, within a 20% margin,” said Wilbert. We now have two insurance companies; one to insure the building and one to insure the equipment and tools. We estimated our loss at $1.6 million dollars and the actual loss was $1.4 million.
He also suggests having a visual record of your facility is a valuable and time-saving tool in the claims process.
“I would suggest that auto recyclers have both video and photo record of your building. We learned this the hard way. You’d be surprised, but it’s very difficult to remember all the tools, details, and such that is contained in each room. Yet, that is necessary in submitting the correct claims and rebuilding your facility.”
For Cunningham, he now has an expert handle his insurance policies in order to make sure he really is adequately insured for business interruption.
“The most important thing I learned is that the auto recycler owner needs to get out of the way,” said Cunningham. “We are not the experts so we need to let someone who understands the policies and someone who can keep up with the changes in business and how it applies to insuring properly handle it. We learned that even though you think you are properly insured for business interruption you may not be so. Confirming that with an expert is crucial.”
Nordstrom agrees. He learned that the insurance company has the right to hold back 20% of his claims money because he chose not to rebuild right away.
“I got eighty percent of my money, which I used part of it to do the temporary repairs, but now insurance will not pay out until the repairs have been made,” said Nordstrom. “Once they see I’m committed to rebuilding they’ll give me the rest. This has become the normal way of operating today. So it is very important to have annual insurance reviews to make sure you are properly insured for your current business (taking into consideration values of property going up and down, etc.) and that you understand the terms of their payment structure.”
Consider Your Data
For AMA Recycling, Weaver learned from the close call, “Even though the fire wasn’t caused by anything we did wrong and we could not have really prevented it, I think we dodged a bullet because the fire did not reach our office. If the fire department would have been there ten minutes later we would have been in real trouble because I don’t feel we had our files adequately backed up. After the fire, we worked with our IT consultant to make sure we have our files backed up and stored off-site. I also increased the number of security cameras we had and changed some of the angles to help capture better images.”
Ultimately, through a disaster, you can grow and become stronger. Nordstrom says even when faced with something so tough, he is proud of his employees and the CAR standards that “gave our facility in rural South Dakota the roadmap for being prepared for the worst.” He echoes the thoughts of others who saw their own employees implement the training and certifications they had in their facilities. While a disaster may or may not come, we can always be better prepared by learning from the experiences of others. n
Michelle Keadle-Taylor is a freelance writer based in Pennsylvania.
When Disaster Strikes: The Importance of Crisis Management and Business Continuity Plans
If you’re like many companies, you may have a 24-hour disaster recovery plan for securing your facilities, employees, and other assets immediately after a crisis. But for some prolonged disasters, you could be in trouble if you don’t have preparedness plans to get you past the first day.
For example, in the fall of 2011, thousands of residents and businesses in the Northeast experienced nearly two weeks without power due to an October snowstorm that caused a massive outage throughout the region.
That’s why, in addition to developing an initial response plan, it is advisable to implement both crisis management and business continuity planning.
A crisis management plan governs the overall response to an event, including crisis communications. A business continuity plan, which is the process of identifying and protecting critical business functions, helps organizations sustain operations during crises such as natural disasters, fires and explosions, widespread recalls, acts of terrorism, and supply-chain breakdowns. In developing a business continuity plan, consider how different kinds of crises could impact your facilities , technology, and human capital. And keep in mind that some crises – such as a power outage – may affect all three.
Here are four quick steps for getting started on developing crisis management and business continuity plans:
1. Assemble a crisis management team. Who will be in charge when a disaster strikes? Who will declare the crisis, activate the business continuity plan, and announce when the crisis is over? Crisis management teams typically include representatives from senior management, general counsel, risk management, human resources, employee communications, information technology, and media relations. Importantly, if your company doesn’t have a dedicated department for media relations, identify a point person and consider sending him or her to media training.
During a disaster, your company will be evaluated – by customers, investors, and the general public – on how well you manage the crisis and communicate your efforts. To protect your reputation, you need to know what to say to the media, what not to say, and how to manage communications such as press releases, press conferences, and interviews.
2. Make sure you can contact key stakeholders. Determine how you will communicate with employees, customers, and suppliers during a crisis. For example, how will you tell employees whether or not to come to work? How will you advise customers about the disaster, the damage, and whether it will impact delivery of goods and services? How will you communicate with your supply chain and other business partners? Determine these protocols before a disaster, and document them in the plan. If you use an old-fashioned call tree, make sure it’s accessible during a crisis – and not in a drawer in an unreachable office.
3. Identify your critical processes and functions. Identify which processes and functions are most critical to the business, and determine how you will manage them during a crisis that affects your facilities, technology, or staff? What resources are needed to get those tasks done? Who are the employees performing the critical functions, or which employees have the special skills needed to get the job done? Do they need to work on-site or can they telecommute? Will they have the necessary equipment to work remotely? If the office is inaccessible, can work be performed at a secondary location?
4. Develop processes for non-critical functions. In addition to identifying critical business functions, decide what to do with non-critical functions in the event of a disaster. Should employees who perform non-critical functions stay at home? If so, will they be paid? Should they be cross-trained to support the critical functions? Your business continuity plan should anticipate these kinds of scenarios and document the policies and processes.
Ultimately, the combination of incident response, crisis management, and business continuity is essential for keeping your business functioning during a crisis, securing your assets, protecting your reputation, and minimizing the impact of the crisis.