"We Lost Half Our Business Overnight," Says Speedy Glass Executive

"I've had better weeks," said Stephen Schober wryly during an exclusive interview with AGRR magazine/GlassBYTEs just three days after the Insurance Corporation of British Columbia (ICBC) filed suit against Speedy Glass, alleging fraud practices. Schober is the president and chief operating officer of Autostock International, which is owned by TCG International (TCGI) of British Columbia. Autostock is a division of TCGI emcompassing all of TCGI's glass businesses, including Speedy. It is estimated that Speedy did more than $22 million worth of business with ICBC during the last two years. Excerpts from the March 8 interview with AGRR publisher Debra Levy follow:

Q-First would you explain what ICBC is?
A-ICBC is a provincial insurance company. It is owned by the [Canadian] Province of British Columbia (BC). It is an insurance company owned and managed by the government. If you live in BC, you must have basic insurance through ICBC but you can choose your comprehensive through other carriers. Ninety-five percent of all auto glass business that is insurance work in BC is done through ICBC.

Q-This isn't the first time that Speedy has been sanctioned by ICBC is it?
A-That would be true. We have had small isolated cases before and we have been able to deal with them on a shop-by-shop basis. We have had shops sanctioned, but in each case we've understood it to be because of a renegade manager or a unique problem.

Q-So are these current allegations true?
A-Right now, I don't know what's true and what's not true. It's actually a complicated question. It involves contracts and civil laws. The main allegation, from what I understand, centers around the payment of finder's fees, rebates, etc. to the trade. We all know these types of payments are common in the auto glass industry and 95 percent of the auto glass industry would say 'what's wrong with that?' but I now understand that our contracts with ICBC say 'don't do it.' Their rules say 'Don't do it.'
I don't know yet if we did or we didn't. I do know that the Skidmore's [the Skidmore family owns TCGI] are honest people and have always wanted their businesses run ethically and honestly, so these allegations are a great disappointment to everyone.

Q-So how is Allan [Skidmore] holding up?
A-Oh, he's okay [laughs], me, I'm not so sure.

Q-I know this has been an extremely difficult time for you. It must be very hard on you …
A-Operationally, it's been incredibly difficult. We lost about half of our business overnight. We are having to compete now, overnight, on whole different level in a whole different way. We have to change our pricing to survive.

Q-What are you doing to help rectify the situation?
A-A number of things. We have started a full internal review. We are also using an outside auditing company, Ernst and Young, to review all our policies and procedures. We have placed the two employees named in the lawsuit on paid leave until we can get to facts. We are also setting up an "Ethics Position" in the company--a person who will have a clear avenue for review and oversight …. we do have a strict employee code conduct policy and we have reviewed it again with all our employees. We have also brought our general manager from Ontario over to BC to run this area for awhile.

Q-Let me ask you this then: how would you respond to people who say that in order for something of this magnitude to happen either upper management needed to be involved or turn or blind-eye to it, or at very least have a corporate culture that encouraged it?
A- [long pause] Well, until two weeks ago, I would have agreed with the statement myself--much more than I do today. It's easy to say 'we should have had this, we should have done that.' But it's really hard, especially with the margins in the auto glass industry today, to monitor everything … and there's a limit to how much you can audit.
Anyone who runs more than 2 or 3 retail shops in any business knows that there are many opportunities for funny business to happen and that you can't catch them all, even when you are trying.

Q-So any company is only as good as its weakest manager?
A-If you have 2-3 branches you can know all the employees. Beyond 4-5 branches, you could have problems. Oh, you can get people to read policies, but you need to get them to believe them. The reality is that the Skidmore's are honest people. They don't ask people to do things that are wrong. The company has been built on three watchwords-'Quality, Service, Integrity' so these allegations are especially distressing.

Q-Is there anything else you'd like our readers to know?
A-That we are committed to ascertaining the facts. That's our first goal, we want the facts. Once we know the facts, we will go from there. We have been pleased, however, that lots and lots of customers have let us know of their support.

Q-Thank you for your time.
A-Thank you.