Cooler in Orlando, Day 2 of the National Auto Glass Conference

There was no snow in Orlando today and no one was cleaning up ice and slush, but it was colder (in the 40s) than most people in the industry who are here anticipated.

John Brandt, CEO of the MPI Group, highlighted day two of the National Auto Glass Conference in Orlando with highlights of an industry study he conducted.

He intermingled the specific auto glass results of the study with general trends his company has found through other industry surveys in the presentation.

Among the general trends he focused on were the return of revenue growth but the lack of profitable orders. "It has become hard to make margin," he told attendees.

He said that the business landscape is changing, there are new competitors, more consolidations, and increased customer expectation based on the raised customer service levels which have come about with the Internet.

All of this, of course, mirrored what is happening in our own industry. Brandt said that operational challenges grow more difficult as firms are enjoying the best economic climate in years, but they are trapped by a current profit squeeze and slashing the investments that could 'ease the squeeze.'

Continuing his focus on general trends, he said more businesses are falling into the commodity trap, and customers have been trained that they will get more value and they don't care how a company does it, whether by cutting prices or adding more features. "If you are number one and have economies of scale, then cutting price is a good strategy but if you're not, then it isn't," he told attendees.

He provided a profile of survey respondents, which consisted of NGA members. Most respondents had under $5 million in sales, 98 percent are privately held, most of their revenues are in replacement, and the median age of the company is 18 years.

Brandt reported that respondents said they expect strong employment growth this year. He said the median wage is $16.50 an hour. (This compares with $16.75 on the flat glass side, which he also surveyed but did not report on.) Respondents said they give a median of 16hours per employee of training per year and 1 percent of revenue is spent on training.

In what Brandt called one of the most important aspects of the survey, respondents were asked how many employees have he ability to make decisions. "Having 50 percent and above is a key benchmark. We wanted to identify the top performers and see what they did differently," he explained. "We found that training and empowerment were the keys in this survey."

He told attendees that a company has to give employees close to customers the ability to make decisions and this means they have to be well trained.

The one statistic that seemed to interest attendees most was the median profit margin: 5.5 percent. Brandt was asked how this compared with other industries, and he said it was comparable but that there were big differences from industry to industry.

While everyone is always interested in benchmarks so that they can compare their own situation to others, there was some disappointment with Brandt's presentation because so little of it focused on the auto glass survey specifically, and that information was often passed through quickly. All the specific examples he used in the presentation were non-industry companies.

As one attendee put it, "I would have liked more focus on the industry and service industries rather than manufacturing industries. If he didn't have more specific auto glass information, then it would have been more interesting to see how the results of our survey compare to that of other service industries not manufacturing companies.