Volume 15, Issue 5- September/October 2013

AGR Reports
breaking news

National News
Reaction to New NAGS Pricing Mixed

The Spring 2013 National Auto Glass Specifications (NAGS) International Benchmark Calculator, which recently went into effect, showed 13 of 20 of the top parts have decreased from the Spring 2012. Reaction has been mixed.

Linda Rollinson of Superior Auto Glass of Tampa Bay, says the recent drop in pricing on some windshields is cutting into her profit margins.

“I am not thrilled with the NAGS changes,” says Rollinson. “Our economy has not improved to the point where prices should or could be dropping. One of my most popular windshields, FW03239GBN was listed for $819.35 in August 20011. In March 2012, the list was $691. In August 2012 it was down to $593.45. And in November 2012, it went down to $534.90. In February 2013, it dropped again to $529.75. And in June 2013, it saw another drop to $529.75.

“In the meantime, my purchasing costs of this part have not dropped in half. Another one, FW03371GBN, has become disappointing for me and has drastically reduced my profits. I wouldn’t mind so much if the cost went down also, but in most cases, the cost stays the same or only gets a dollar or two shaved off,” she continues.

“This means there are not nearly the profit margins we used to see. The kicker is that our insurance, taxes and general operating costs keep increasing, while NAGS and the insurance companies keep going lower and lower. One can barely survive on auto glass repair and replacement along anymore,” Rollinson adds.

Mark Liston, president of Glass Doctor, takes a more positive tone.

“It is always positive when we can save a few dollars for the consumer. I hope, however, that companies continue to focus on AGSC™ Technician Certification for their technicians instead of worrying if NAGS saves a dollar here or there,” he says.

“We continue to need more professionalism in our industry by providing the safety that a quality installation offers,” he adds.

Bob Beranek of Auto Glass Consultants in Sun Prairie, Wis., says auto glass pricing is based mostly on popularity and inventory. “I think that the shift in pricing was due to a miscalculation in inventory the year before,” he explains.

“I think that the manufacturers had more inventory than they wanted and lowered the price to increase turnover and lower inventory for the new model year coming up.

“It seems to me that the only parts that are consistently going down in price are the parts that fit older vehicles. This is a common business practice to reduce the inventory of continually slower moving parts,” Beranek adds.

“No one knows how they arrive at their pricing since the formula is a secret, but the biggest issue the glass warehouses are not using the NAGS Calculator in their pricing. They arrive at their own list prices and their own discounted pricing to sell us glass,” says Kerry Soat of Fas-Break in Chandler, Ariz. “We, in turn, use another list price to re-sell the glass to the insurance industry. We hopefully make a profit,” Soat says.

“As installers, we do the best we can with what we have to work with,” he adds.

How do you feel about the new NAGS pricing? Please share your thoughts by emailing jreed@glass.com.

NHTSA Closes First Round of Public Comments on Updates to NCAP
The National Highway Traffic Safety Administration (NHTSA) is looking to update its U.S. New Car Assessment Program (NCAP), which determines how well new vehicles protect drivers and passengers in crashes and resist rollovers.

As a part of this update, NHTSA just closed its first public comment period where it solicited feedback on pedestrian protection, crash avoidance technologies, such as blind spot detection and advanced lighting, as well as changes to crash dummies and more, according to The Federal Register.

To share your thoughts on the changes proposed to the NCAP and how they could impact the auto glass repair and replacement industry, email jreed@glass.com

Mygrant Glass Acquires Bartelstone and Wholesale Glass Distributors
Mygrant Glass Co. of Hayward, Calif., has acquired the assets of Bartelstone Glass Distributors and Wholesale Glass Distributors (WGD), marking Mygrant’s entry into the New York and New Jersey markets with four new locations.

The existing Bartelstone locations in Brooklyn, N.Y., and Belleville, N.J., will now operate under the Mygrant name. The Wholesale locations in Corona, N.Y. and Lakewood, N.J., will be maintained, according to company officials.

The Vineland, N.J., location will be consolidated with Mygrant’s operations in Warminster, Pa. WGD’s Brooklyn warehouse will be consolidated with the new Mygrant location in Brooklyn (formerly operated by Bartelstone).

“We’re excited at the opportunity to serve customers in the New York and New Jersey markets,” says Paul Anaya, Mygrant’s national accounts and marketing manager. “It has been a long term goal for the company, and we’re proud of our employees and grateful for the hard work they’ve put toward reaching this goal.”

Bartelstone has served New York and New Jersey for more than 100 years and many of the key employees will be retained, according to officials. Many of WGD’s employees are also being retained, including Tom Barsh, outgoing owner, who will stay on as the regional sales manager for New York and New Jersey.

“Tom Barsh brings a lot of experience and knowledge to the company and we’re happy to have him,” says Anaya.

ABRA Continues Auto Glass Expansion with New Acquisition
Minneapolis-based ABRA Auto Body and Glass has acquired Royal Auto Glass of Indianapolis, Ind.

Royal Auto Glass serves Indianapolis, Broad, Ripple, Carmel, Castleton, Fishers, Geist, Oaklandon, Greenwood, Speedway, Noblesville, Pendleton, Avon, Nora, Westfield and Zionville in Indiana. It provides both repair and replacement services.

Founder Steve Hoyt will take on a leadership role with ABRA and will maintain and manage the auto glass operations for the Indianapolis market, ABRA officials said in a statement.

“This is a great cultural fit and an exceptional opportunity for our employees,” Hoyt says.

The terms of the acquisition were not disclosed.

In May, ABRA Auto Body & Glass added a new franchisee in Holland, Mich., which is the company’s second since entering the state nine months ago. Nate Yonker, owner of the new franchise, says he plans to add auto glass repair and replacement soon.

ABRA also announced the acquisition of 23 Precision Collision Auto Body repair centers in the state of Washington in May. The deal marked the company’s entry into the Northwest region.

Gerber Collision and Glass Acquires Georgia Repair Center
The Boyd Group has acquired the assets of Shenandoah Collision Center, in Newnan, Ga. The center is now operating under the Gerber Collision & Glass name and offers auto glass repair and replacement.

“We are not set up to do Gerber auto glass work yet, but we will be soon,” says a representative who answered the phone at the location.

Another representative said the location is just getting set up and does not yet have a manager.

The new center is located about 30 miles Southwest of Atlanta and is approximately 12,500 square feet. Winnipeg, Manitoba-based Boyd Group is the parent company of Geber Collision & Glass.

With this addition, the Boyd Group owns and operates 14 centers in Georgia, bringing the number of U.S. locations to 187.

The terms of the acquisition were not disclosed.

“This new addition to the Boyd Group is indicative of our commitment to our strategy to achieve 6 to 10 percent growth in the number of centers through single-location additions,” says Tim O’Day, president and chief operating officer of the Boyd Group’s U.S. operations. “We continue to look for opportunities to expand within our current markets and will continue to capitalize on accretive opportunities.”

The Boyd Group also announced it has merged two of its existing locations in Schaumburg, Ill., into one facility to improve efficiencies.

Legal News
Volvo Asks Court for Reconsideration of Six-State Class Action
Citing a recent U.S. Supreme Court decision, Volvo has filed a motion requesting that a judge for the U.S. New Jersey District Court, Newark division, reconsider certification of a six-state class action over an alleged sunroof defect.

In March, Judge Dennis Cavanaugh granted plaintiffs’ motion for certification of statewide classes in Massachusetts, Florida, Hawaii, New Jersey, California and Maryland.

“In doing so, the court rejected Volvo’s argument that certification of plaintiffs’ statewide classes was improper because, among other reason, plaintiffs had offered no proof that class-wide damaged could be proved with common evidence,” Volvo’s attorneys argue in the motion.

“Rather, the court relied on the allegations of the second-amended complaint to conclude that the relief sought by the plaintiffs applies to all members of the certified classes. The day after this court granted certification, the United States Supreme Court issued its opinion in Comcast Corp. versus Behrend. Comcast makes clear that the court’s decision to certify a class without any showing that damages can be proved on a class-wide basis was error. The court should reconsider and reverse its decision because it is directly contrary to Comcast,” the attorneys write.

“… The Supreme Court reversed and held that Rule 23(b)(3)’s predominance requirement is not satisfied where the plaintiff fails to establish with admissible evidence that damages can be measured on a class-wide basis,” attorneys continue.

In response to the motion, plaintiffs’ attorneys argue, “Both the majority and dissenting opinions in Comcast agreed that the decision turned ‘on the straightforward application of class-certification principles and breaks no new ground on the standard for certifying a class under Federal Rule of Civil Procedure (23(b)(3).’

“The straightforward holdings from Comcast are that (a) the antitrust damages model advanced by the plaintiffs’ expert was flawed because it purported to calculate damages based on four antitrust impact theories in a case where only one such theory was viable, and (b) it was erroneous to prevent the defendant from challenging this model at the class certification stage on the basis that these arguments could overlap with the merits,” attorneys wrote.

“This unremarkable decision hardly supports Volvo here. … And, of course, the damages in this straightforward defective consumer product case are fundamentally different from the complicated antitrust injuries that the Comcast plaintiffs’ expert attempted to calculate using a flawed methodology,” the plaintiffs’ attorneys continued.

At press time, the court has yet to issue a decision on Volvo’s motion for reconsideration.

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