Inside View: Michael Macaluso and Jose Costa on the new CARSTAR North America

Jose Costa of Driven Brands and Michael Macaluso, newly-minted President of CARSTAR North America.

By Jeff Sanford

Hamilton, Ontario — March 2, 2016 — A massive merger, two cultures coming together and a remarkably swift series of moves at the parent company have resulted in Canadian executive, Michael Macaluso, heading up the CARSTAR organization across North America.

Dan Young, President of CARSTAR US, stepped down recently and left the company. Jose Costa, who heads up the paint and collision segment at CARSTAR’s parent company, Driven Brands, swiftly called on Macaluso to take the reins of the combined operation. The appointment will be on a six-month “trial basis,” though it is assumed that Macaluso will continue as head of the merged CARSTAR units after that time period.

Some have speculated that the merger between CARSTAR Canada and the US is happening at a faster pace than had been planned. Driven Brands had planned to formally combine its two recent acquisition within 12 to 24 months. Now the merger moves to its next level. CARSTAR US was purchased by Driven Brands in October and CARSTAR Canada was acquired in December. This means a total of more than 450 CARSTAR locations across North America and a combined revenue of $800 million in sales.

It seems that Driven Brand execs felt the CARSTAR Canada field structure for insurance, development and operations could be useful down south. As well, CARSTAR Canada has a field structure for its insurance-facing operations that allows a CARSTAR representative to work with an insurer counterpart at the local, middle-management and corporate level—this organizational structure is said to have been appealing to the Driven Brand execs. It is also thought that US shops might also benefit from CARSTAR Canada’s advanced insurer-, franchisee-, customer-facing IT platforms, and appraisal-only satellite facilities. These facilities, the so-called “CARSTAR Express” model, have extended the reach of the brand to locations that would otherwise be off-limits to a full-scale, industrial-zoned collision and helped to attract coveted affluent female consumers.

“The Canadian industry is much more advanced than the US,” says Costa. “CARSTAR’s Canadian business is frequently much as five to 10 years ahead of America’s. There’s many, many things we’ll bring over from Canada into the US and vice versa.”

So perhaps recent events are not so mysterious. It was a natural fit for Costa to bring Macaluso into the top spot at CARSTAR. The posting is another feather in the hat for the young but impressively accomplished executive. Macaluso has received the 2015 Canadian Italian Business Professionals Young Executive of the Year Award in 2015; as well as the AIA Young Executive of the Year and is a Top 40 under 40 business award recipient for the city of Hamilton. But Macaluso is quick to point out that nothing is ever accomplished by one individual and it takes an entire team to achieve greatness–and the Canadian and US CARSTAR teams are world class, according to Macaluso. Costa was glad to enthuse about Macaluso in a phone call with Collision Repair magazine.

“When we bought the two CARSTAR businesses we analyzed both management teams for quite some time. We originally identified Mike as the top leader in both CARSTAR Canada and the US. Our plan was to give him some time to understand the companies,” says Costa. “Our plan was never to have Young go away. He is a fabulous leader and someone really experienced in the auto industry. But when he left, this accelerated the plan that was already in place. Driven Brands is a company that likes to promote based on performance and Mike has that. He has a record of permanence and experience running CARSTAR Canada. He has a vast range of experience in different areas, including insurance. He is very well-respected. And last but not least, here at Driven Brands, we like smart, young aggressive executives. That what we like to promote.”

The Canadian CARSTAR team is no doubt excited to see their leader advancing to the top spot. Now he gets to run one of the biggest North American collision repair chains. Macaluso says he’s looking forward to the new challenge.

“I am absolutely excited, energized and ready to roll,” says Macaluso. “We’re already working on ways to make these two teams into the best outfit in the industry, with the clear mandate of helping our franchise partners succeed and delivering an impeccable customer experience to our insurance partners. It’s already happening. What we’ll be doing is really a continuation of what we’ve already been doing. We’ve been working with CARSTAR US and CARSTAR Canada to bring them together. What we’re going to be doing is a continuation of that.”

Macaluso is going to have his hands full in the months ahead. Costa explained he’d like to see the new CARSTAR North America double in size in the next five years to over 1,000 locations. He’d also like to see increased profitability.

“We must increase franchise profitability, which is a challenge across the globe for all of us in this business. We have clear strategies to help our franchise partners, and of course striking the balance with our insurance partners. With better procurement we can bring value,” says Costa.

Macaluso is going to be busy over the next five years, clearly. Nevertheless the hometown hero of Hamilton, Ontario, sounds on-point, focused and excited.

“There are some things to do in terms of understanding the nuances of the differences in the markets. We have to pay close attention to the unique nature of the US market. We’ll be engaged and make a business out of the US and Canadian operations. Where it’s possible to merge operations, in vendor partners and insurance, we’ll do that and where it makes sense to keep things separate, we will. It’s already happening and it’s exciting,” says Macaluso.

The merger will consolidate some executive roles but leave three areas with their separate leaders, as detailed below:

– Operations: Chief Operations Officer Dean Fisher and Vice President Colson Cole will keep their posts in America and Canada, respectively.

– Insurance: Vice Presidents Arlo Johnson (US) and John Harvey (Canada).

– Marketing: Marketing Directors Hannah Ross (US) and Chris Moore (Canada).

For more information on CARSTAR, please visit carstar.ca. For more information on Driven Brands, please visit drivenbrands.com.


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