The Independent Glass Association (IGA) opened its Independents' Days and Spring Glass Show today.
Marc Anderson, executive director, opened the meeting with blunt words.
"We're focusing on things that matter most. One of our themes is that you have to pay attention to the big picture in order to survive," he told an enthusiastic audience of independent business owners who had come to Orlando looking for information, answers and contact with peers.
"You can be driven out of business by illegal practices regardless of how good your employees are and how well you run your business," he told the crowd. "We have to pool our efforts and resources. The industry is not going to collapse," he said perhaps in response to the NAGS rebalancing which will take place on Monday.
"We're not well organized as an industry, but pooling our resources is not a burden. Sharing information can make a difference. We positively have to work together," he stated.
For an edited version of Anderson's speech, click here.
In addressing attendees, David Zoldowski, incoming president of IGA, said that when people ask him what the group is about, he says, "One thing-fairness."
He pointed out several accomplishments which have taken place over the last year including development of a short-pay program, starting work on a certification program (that embraces existing programs while raising he level of awareness of the importance of safety) and opening IGA up to architectural glass subjects. (When asked for a show of hands on how many were involved in architectural work, approximately half of the hands in the room went up.)
Tom Goodman, IGA attorney, discussed the lawsuit filed by IGA and others against Safelite. He pointed out that all that had been done so far is the filing of the complaint. This, he stated, is the best time because the case is in the information stage.
"In looking at the industry over the past 35 years," Goodman explained, "it has a very bizarre structure. Year after year Safelite has acquired more of the market and now controls 45 percent and they also decide what you are going to be paid for work. You know what anti-trust is," he said. "It is not talking about price and setting prices. But the network is one big price setter."
He explained that in investigating the possible suit he found that the government doesn't know what is going on and the insurance industry is regulated on a state basis "and the state officials are tired of hearing from you."
Goodman told the crowd, "We also found that glass shops like yourselves have developed a slave mentality. 'Here's what they are going to pay us.' Are of your costs are going up and what you are being paid is going down. There's something wrong here."
The attorney explained that there were "many tempting choices," but that each had its pros and cons: What was the chance of success? What was the cost?
He stated that in structuring the suit and filing it the goal was to get a judge to role on the charges. "There has been a big question of why we didn't ask for damages," he stated. "Safelite would tie us up in court forever over damages because there is a lot involved and it is complicated."
Goodman said that he expects to be buried with motions. "Safelite is not just going to roll over and accept this. They are going to fight it. We are asking the judge to be an umpire and make the call."
Figuring the NAGS Rebalancing
The result: By and large yes, but the figures will change based on the mix of the shop, he said.
He explained that distributors are not switching because there is no common denominator in the pricing. "The differences range from .3092 to .5580 for the top 50 percent of parts sold. You would want to buy the parts that went up at the old price and pay the new multiplier off all the rest," he said. "We (distributors) need to see what the manufacturers do and analyze their data as they carry a national presence and they will be the base. We are regional so it won't carry."
He said that of the manufacturers, PPG is the only one "to step up to the plate. It published 8002 parts; 5283 are list and 2701 are nets (33 percent). That means there are 5000 parts that there is no list for." He said that a lot of the Pilkington parts do not have a list. "The manufacturers have spoken. Now distributors need to come up with a unified effort, but it will not be easy or fast."
Fennell gave this advice to retailers:
He also explained that there was a list of things on the NAGS 'f' page that can be charged for (examples: butyl to urethane conversion; air-bag activation/de-activation), and advised using them.
Is the rebalancing revenue neutral? According to Fennell's figures for the top 50 parts:
In summary Fennell stated, "The addition of labor is the best thing and remember to just say no if you aren't sure or aren't going to make money on it."
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