Your ARA Here to Save the Day!
By Marty Hollingshead
There has been a lot of discussion about all the challenges this industry is facing, as well as the adversity that we need to overcome.
We have a lot of the smaller yards that feel overwhelmed with how the business has changed and now are either looking to sell or simply going out of business. It seems that lately, all the news is “doom and gloom.”
So, what can we do about this? One thing is for sure, we cannot solve any of these problems ourselves. Our only solution is to come together, all recyclers large and small, and have one loud, unified voice. This is the importance of organization and where there is strength in numbers.
ARA is your association. It is the eyes, ears and voice of all auto recyclers
So, let’s look at some of these problems and their possible solutions one by one:
1 - OEM position statements on how vehicles should be repaired: This, in my opinion, is unfairly targeting auto recyclers, and is just plain “backwards” logic in saying that the parts that came off of the very vehicles that they manufacture are unsafe to use for repairs.
The solution is: communicating this to the insurers as well as the consumers.
2 - Auction problems: Non-disclosure of the sellers, sale status (is it on reserve?), not allowing enough time to get vehicles picked up, excessive storage charges, as well as long wait times to be loaded and handling damage.
The solution to this is: More transparency.
Open communication and better relationships with the auctions and getting to a solution that will benefit all concerned.
3 - The challenges of dismantling and reselling parts off these new and evolving vehicles: Salvage vehicles have two main sources of revenue: mechanical and sheet metal/crash parts.
The solution for mechanical part types is: The need to qualify your customer on major mechanical driveline purchases, using proper install as well as programming procedures to minimize failure on these expensive part types due to improper installation.
The solution for crash parts is: Doing a better job as an industry to consistently put forth a quality product, delivered on time and as promised. Develop better working relationships, as well as open lines of communication with the Insurance and the Collision industries to show the value in using quality recycled parts in collision repairs.
4 - Information denial by the OEMs: Not having access to Build info that is available to the insurers and the repairers, but not us recyclers. This is a big problem with recalled parts. As well as all of the new software to reprogram/reflash components to be used in other vehicles.
The solution is: bringing the OEMs to the table and erasing some of the negative preconceived notions that they have about our industry; showing them that we are a viable partner and not their competition.
5- Regaining control of our data: We can no longer continue to blindly supply our data without knowing what is done with it after we provide it to others.
The solution is: we need to have agreements in place that state in simple terms that our data can only be used for the vendor that we are supplying it to for the use of their product. Our data cannot be passed on or sold to any third-parties without our knowledge and consent.
6 - Unfair competition from unlicensed buyers as well as recyclers.
The solution is: work with legislators, regulators, as well as law enforcement to identify and either bring unli-censed buyers into compliance or shut them down.
7 - Insurance issues and the higher cost and limited markets.
The solution is: To improve our processes as an industry through training and education, working with insurers to be a better risk, which will result in lower premiums and make our industry more attractive to insurers.
8 - Safety and Environmental Compliance issues.
The solution is: Improving our processes through training and education with the goal to be more responsible operators as well as good stewards of the environment and the communities we serve.
Marty Hollingshead has been in the business since 1973 and the owner of Northlake Auto Recyclers, Inc., Hammond, Indiana, since 1984. Marty is the current Secretary of ARA, and is a board member of the Indiana Automotive Recyclers Association. Both Marty and Northlake have received numerous awards and recognition for excellence in the industry and the community. You can reach Marty by phone: 219-937-3960, or visit his website: www.narparts.com.