At the recent 80th ARA Convention & Expo, industry professionals came from near and far to collaborate and learn from one another, while ushering in a new president.
By Maura Keller
Coming together to share insights, learn about innovations facing the robust auto recycling industry, and celebrate ARA’s 80-year-history were the highlights of this year’s Annual ARA Convention & Expo in Kansas City, MO.
“We were excited to see the culmination of many phone calls, discussions, and decisions come together, resulting in a wonderful event celebrating our industry and our association,” says Natalie Miller, chair of the Annual Convention Educational Planning Committee for the 80th ARA Convention & Expo. “We were also excited to see the increasing international presence of attendees. We encourage people to reach out and send in ideas as we begin to plan for next year’s event.”
Technology Reigns
One thing’s for sure, the automotive industry is experiencing an unprecedented explosion of technology over the past decade. Opening keynote speaker, Ryan Mandell, director, claims performance, auto physical damage solutions at Mitchell, pointed out that today’s vehicle complexity is keeping the industry on its toes. Namely, what’s happening in the way manufacturers are designing vehicles, what’s happening with the way those vehicles are getting repaired, and the way that we’re seeing consolidation taking place in the repair space, is affecting auto recyclers’ businesses and the success of their organizations.
“Auto recyclers also can’t ignore the growing trend towards greater electrification in the automotive space,” Mandell says. “In addition, the way claims are being processed from a collision standpoint is also evolving. We are seeing an evolution in the way that insurance companies handle collision claims – transitioning to processing them more virtually and remotely. Today’s insurance companies and body shops are moving away from writing estimates next to the car and going towards writing estimates from photos and even processing estimates through artificial intelligence for straight through processing. The industry is going to see more of this in the future – more of a focus on digital processes, and less on the legacy systems that we've been so accustomed to.”
Today in the United States, more than 30% of collision repair estimates that are done on vehicles are prepared virtually, meaning that no one ever sets foot near to the car to write that initial estimate. And that number is increasing. So when auto recyclers think about the path forward, Mandell says they have to remember that the future of claims, including warranty claims, is going digital.
“This means that when you have more things that are being done electronically, your inventory accuracy becomes so critical to your business’s success as more of these systems are relying on what is in the inventory system, what is actually showing up digitally, as opposed to what they’re finding via a phone call,” Mandell say. “That means that the accuracy and visibility of your data is critical. You have to have your data out there in as many places as possible so that these systems are picking up on it.”
Mandell suggests auto recyclers implement a robust process around inventory audits to help accomplish this goal.
“If you want the best success and you want that part to actually show up and be put on that vehicle when it gets repaired, drafting your inventory needs to be 100 percent accurate,” Mandell says.
In addition to streamlining the parts procurement process within the realm of collision repairs, innovations such as autonomous vehicles, advanced safety features, and electronic vehicle technology continue to grab the attention of the industry. That said, Mandell points out that there are 285 million vehicles on the road in the U.S. today and that number is going to continue to grow to about 350 million by about 2035.
“While we are getting more and more vehicles, the average age of vehicles are older so there’s quite a long runway for us to have older vehicles that don’t have all of these advanced safety systems equipped,” Mandell says. “So accident volume – and replacement parts – is alive.”
I believe parts are going to become more and more integral to the overall process.”
OEMs also are going to continue to play a larger role in the overall auto recycling parts ecosystem. OEMs look to control the brand experience, which is critical for OEMs as they know that if they don’t have a good brand experience for one of their vehicles that is in an accident, the odds are that customer is going to go buy a different brand.
“Research has been shown about 60% of consumers who have a negative collision repair experience will switch brands and vehicle after that,” Mandell says. “So OEMs are going to represent a larger opportunity for recycling in the future.”
The Evolution of Change
In addition to advancements in technology, the consolidation of industry players continues to change the landscape of the auto recycling industry landscape. During his recycler keynote speech, Mark Brown of Brown’s Auto Salvage, discussed the large number of independent, mom-and-pop small businesses dotting the auto recycling industry landscape and the overall impact that these small businesses continue to have on the industry today.
Brown shared the story of Brown’s Auto Salvage, which was founded in 1976 when Brown was age 18, and the myriad of trials, tribulations, and challenges that plagued the company through the early years.
“It seemed that no matter how hard I worked, and I worked really hard seven days a week, I couldn’t ever get ahead. It was always one step forward, two steps back, getting bad checks, writing bad checks, having my electricity turned off by the power company. Every day felt like a punch in the face. And that's pretty much how I lived my life for the first few years,” Brown says. Upon meeting and marrying his wife Joanie, the two worked as business partners to grow Brown’s Salvage into one of the most successful auto recycling companies in the industry.
“We eventually joined ARA and met some really amazing folks. We met people that had been in this industry for decades. They were really smart. They were really progressive, and they were really, really successful. But the amazing thing about these folks was they shared all of their ideas with us,” Brown says. “They invited us on tours of their facilities. They told us things that had not worked well for them. They told us things that had helped them to be really successful. They gave us the tools and the opportunity to be successful beyond our wildest dreams. And that’s what I love so much about this industry – that recyclers care about each other. And they help each other to grow and be more successful.”
Brown stresses that the family values that are pulsing through many auto recycling facilities have created that “earn and learn” atmosphere that we have in this industry. They represent the core fabric of what makes our country thrive, supporting the social fabric of American life.
“Small businesses contributed 42% to the gross domestic product to the United States. Let that sink in – family-owned, independent, small business, contributed 42% of all the money made in the U.S. last year. You same folks employed 46% of the American workforce – 61.5 million people. And the majority of those people work for companies that employ fewer than 100. And when interviewed about why they work for small business, the most common answer was because they feel valued, as people and their ideas and contributions are treated as important,” Brown says.
Last year, family-owned independent small businesses, such as those found within the automotive recycling industry, have created 12.5 million new jobs, 20 percent more than public corporations and private equity. And do you know what all those employees of small business did? Well, a lot of them went out and bought houses and started paying local taxes. And those local taxes funded our infrastructure paved our roads, funded our police departments, our education systems, our fire departments and ambulance services. It funded our libraries and essential human health services.
“Small business owners want to build robust communities where families can live and work and play and thrive and feel safe,” Brown says. “Small business is the backbone of America and the life blood of America. And small business makes life and American communities great every day.”
Leveraging Your Most Important Assets
While Mark Brown’s motivating story of starting his own company at a very young age, helps attendees celebrate of the impact small businesses have on the U.S. economy and the fabric of our nation, recycler keynote speaker, Shannon Nordstrom, vice president and general manager of Nordstrom’s Salvage, continued to explain the vital role focusing on parts, processes and, more importantly, people, can have on a business.
Throughout his tenure at the company, Nordstrom has helped grow his family’s business, which is situated on the family farm, to now include numerous divisions, full-service auto recycling, installation, diagnostic service centers, as well as a nationally syndicated radio show, “Under the Hood,” which is broadcast to more than 250 stations across the country.
When looking back on the history of his family’s company, Nordstrom shared the need for each family business to celebrate their own individual successes along the way.
“You have to carry pride from where you’re at, because you don't know when that next step is actually going to happen. So own what you have at the moment and not feel like you're falling short because maybe that’s just where you’re at right then,” Nordstrom says. “And you see what other people are doing. And you get yourself confused because you don't understand their business unless you actually take a tour and go get inside and really get behind their numbers. Sometimes things that make them click, they’re not going to work for you. They don't fit your model.”
Nordstrom explained that auto recyclers should not get caught up in “the gap.” To Nordstrom, the gap is when you look at something else, or somebody else, and that’s what you’re going to measure your expectations against.
“But you just set yourself up to be let down,” Nordstrom says. “That's life. If you live in the gap, it’s a dangerous place and you’re constantly measuring yourself against what others and society says you shouldn’t be. You're going to be constantly let down and you're going to really be in a tough spot in your mind because you can never find satisfaction. So I always thought it was important as we grew up that we were always prideful where we were at and happy with what we had accomplished. And so remember to measure your success from looking backwards because you don’t look at your own journey to be able to say here’s where we were. Now I'm here. Wow, we came a long way. And you can find encouragement in that. It’s hard to find encouragement when you’re when you’re constantly looking at somebody else.”
Throughout the company history, Nordstrom’s has ventured into a lot of things, but at the end of the day, the team knew that their core was going to be in automotive car parts.
“We have a pedigree of hard work and our faith is what really kept us going. What I will tell you to do – if you’re not quite sure what to work on in your business. You have to work on sales, you have to work on things to be able to get things done, you have to build your team. And so when I tell my story, the Certified Auto Recycling program is part of it. That's why I have the passion that I do for that program, because it was a game changer for our company,” Nordstrom says.
He also pointed to other various processes and procedures that Nordstrom’s has put into place, including:
• Investing in people: “If your building starts breaking down, what do you do? You fix the building. If your people start getting broken down, shouldn’t you fix them to help them? You have to be able to support them and stay in touch. Highlight anniversaries of employment. Show people what they can do better. Build people up. Listen to them and make it important to you. It goes a long way because if you can do that, guess what?
Those folks will make themselves important to the company because you’re paying attention and giving respect to them.
• Use color-coded pylons to indicate that status of the parts as they proceed through your systems.
• Use a commodity control system, allowing employees with security numbers to get the supplies they need. Monthly electronic reports track the usage of supplies by employees.
• Keep track of our safe workdays and for every 120 days of no safety issues that warrant a work comp claim, provide a meal for the staff for hitting the safety goal.
• Get ready for the high voltage vehicles. In addition to extensive training, invest in the key safety products such as lithium ion fire extinguishers, fire blanket, protective gloves, high voltage stickers. If you don't handle these right that they can be dangerous, but if you put just a little care into it, they’re pretty stable environments.
Award Winners
Member of the Year Award
Shan Latham presented Slater Shroyer, Shroyer Auto Parts, in Lansing MI, with this award. Her comments included, “It is my pleasure and honor to present the Member of the Year Award. This is an award that is given to the person that receives the most nominations from the general membership. Someone that has made an impact on the Association, really furthered the work and goals of ARA, as well as positively representing the industry.
This year’s recipient is someone who has been a leader both at the state level in his home state of Michigan, as well as an active volunteer leader for ARA for several years. Most recently as Chair of our Government Affairs Committee, Slater Shroyer demonstrates attentiveness and passion for public policy matters impacting every single one of us.
Perhaps in another life Slater was a lawyer, because his ruthless attention to detail, pointed questions and sharp intellect have not gone unnoticed.
He leads ARA’s government affairs activities with an eye always on the greater good for this industry. And is always looking for ways to encourage more engagement and grassroots activity from his peers.
Slater does all this while running a business, serving as President of the Automotive Recyclers of Michigan – the first person to have two, non-consecutive terms as President for that state, and raising four young children. He is someone whose opinion I value, and I am proud that his peers have voted to recognize him with this 2023 Member of the Year award.”
President’s Award
Shan Lathem’s comments for Mike Kunkel, Profit Team Consulting were heartfelt. “I’m not sure that I’d still be doing this work if it wasn’t for Mike’s coaching, counseling, consulting and friendship. He has overcome so many challenges in his path and always bounces back, stronger than ever and ready to conquer. And that is what he does. That is who he is. He comes out swinging and he makes it happen.
I know how fortunate I’ve been to have Mike in my corner. Not just me, but hundreds of recyclers like me have similar stories and we want you to know and understand the impact you’ve had on us personally, in our businesses as well as this great industry we all love. You are an industry champion and there is no one more deserving of this award than you Mike.
You are the champion of the independent automotive recycler.
On behalf of myself and recyclers all over this world, thank you.”
Lifetime Achievement Award
“Lifetime Achievement Awards are given to special individuals in recognition of their significant contributions to the Association and the industry,” says Shan Lathem. “Today I would like to announce a new inductee, who will also become a lifetime honorary member of ARA, and in a moment, I would like to invite him to join me on stage.
From 1980 until his retirement in 2021 of Mike French, Inc., he served this industry as a resource for automotive recyclers across the country through the publication of Auto Recyclers Toolbox magazine.
His work was paramount in helping us connect with each other, to succeed and grow. Toolbox has a wide reach into the mailboxes of many smaller operations, who may not be able to attend an event like this, and Mike and his team are beloved by the industry.
ARA was extremely honored when we were approached by Mike to carry on the Toolbox magazine when he retired. We have worked to maintain and continue his legacy, providing recycler to recycler articles and advice in Toolbox pages.
Mike is an accomplished author having published two books, How to Advertise Your Automotive Recycling Yard, and More How to Advertise Your Automotive Recycling Yard: …Or Any Business (Volume 2).
As many of you know, his passion is for the Lord. Mike was a pastor and in full-time ministry years before he stepped into the auto recycling world.
Upon his retirement, Mike founded CARVA – the Christian Auto Recyclers & Vendor’s Association – and is dedicated to extending faith-based principles into the industry. He plans prayer breakfasts at industry events and supports members with support through prayer and connections.”
Based in Minneapolis, Minnesota, Maura Keller is a seasoned writer, editor, and published author, with more than 20 years of experience. She frequently writes for various regional and national publications.
