By Mike Davey and Jeff Sanford
Toronto, Ontario -- March 23, 2016 -- The Ontario Automotive Recyclers Association (OARA) has concluded its 2016 Conference and Trade Show. The OARA Conference is the single largest auto recycling event in Canada, drawing attendees and presenters from well outside of Ontario. The conference took place March 18 to 20 at the Markham Suites Conference Centre, just outside of Toronto.
The event was a great success with recyclers taking in a series of informative seminars that provided attendees with a map of current issues in the industry and a wealth of tips on how to improve profits.
Steve Fletcher, Executive Director of OARA, delivered the opening remarks before welcoming Glen Murray to the podium. Murray is Ontario’s Minister of Environment and Climate Change. Automotive recycling is both a vital part of the economy and an environmental necessity. It’s relatively rare that these facts are acknowledged, but that is precisely what Minister Murray did. He noted that the Ontario government is moving ahead with legislation designed to encourage the creation of a circular, sustainable economy, and how recyclers are a huge part of that.
Jennifer Court of Scout Environmental was next to the stage, discussing various projects involving automotive recyclers and Scout Environmental. Court updated the attendees on Switch Out, Tundra Take-Back and the Grants in Gear program.
Switch Out is dedicated to removing and managing mercury-containing switches and ABS sensor modules from end-of-life vehicles (ELVs). The program started in 2001. Since that time, participating recyclers have collected and properly disposed of over 475,000 mercury switches.
Tundra Takeback depollutes and recycles ELVs found in Canada’s North. The program has run in several communities since 2014, with automotive recyclers volunteering time and energy to train local people in proper disposal methods.
Grants in Gear is a program run by Scout Environmental and the Auto Recyclers of Canada (ARC). OARA participates in the program as a member of ARC. In a nutshell, the program actively solicits non-profit organizations to submit proposals for funding. The proposals typically have an environmental focus, such as emission reduction, pollution prevention in transportation or excellence in auto recycling techniques.
Next up was Mark Gamble, Executive Director of Team PRP, the largest group of independent automotive recyclers in North America. Gamble discussed Team PRP was founded in 1998 by a group of recyclers who wanted to improve parts sales.
"Their goal was to improve their ability to market recycled parts to insurers and repairers, by pooling high-quality, late-model inventory, and improving the efficiency of parts shipment to allow them to cover a wider distribution area," said Gamble.
By 2010, word had spread throughout the industry about the success of the Team PRP initiatives, resulting in a growth spurt for the organization that brought membership to over 75 recyclers. Today the organization has facilities all over the US, including Alaska.
After a short coffee break, attending recyclers were treated to a presentation by Carolynne Champagne & Taylor Lindsay-Noel, speaking on behalf of the Sunshine Foundation. The Sunshine Foundation is a charitable organization supported by OARA fundraising efforts and volunteers.
The next presentation, “Survival in a Down Market,” was delivered by Robert Counts of Counts Business Consulting. Counts is a well-respected speaker in the automotive recycling industry. He took the opportunity at the 2016 OARA Conference to point out the benefits of failure, noting that "All trails that lead to success are littered with failure." and "... most failures will not kill you."
According to Counts, failure can be valuable if you are adaptable. He said that adaptability implies an awareness that things change, and the willingness to make course corrections when needed.
"You can dance around that pile of vehicles and pray to the sky, but $400 a ton steel is not coming back any time soon," he said.
Chris Budion of Hollander followed, presenting on "Taking the Hollander Interchange to the next level." Budion's presentation focused on improvements and changes Hollander is currently making to its system. Many of these improvements are actually consumer-facing, but it is hoped will have a positive impact on professional recyclers by improving parts sales.
Amber Kendrick, the conference’s keynote speaker, gave the final presentation before lunch. Kendrick is the President of Pete's Auto & Truck Parts in Sheldon, Michigan. This is her family's business and she grew up working there. In the interim, however, she has served as the general manager of several other yards. A 3rd-generation automotive recycler, her presentation largely focused on recruiting, hiring, motivation and retention.
“Now, more than ever, our business depends on our people,” she said. Kendrick provided numerous tips and strategies recyclers could use in their own businesses when it comes to recruiting top-flight employees and motivating the staff already in the organization.
Kendrick ended her presentation with a look at the next five to 10 years. Summing up, “Big yards are getting bigger,” she said. “Small yards are either going to get bigger or close.”
Doors to the trade show opened after Kendrick’s presentation and stayed open until 8 p.m. that night. The trade show was followed by a charity casino and live auction in support of the OARA Scholarship Fund.
Kicking off the event on Saturday morning was the keynote address from Mike Swift, President of the Automotive Recyclers Association (ARA).
Swift also runs a company of his own, Swift's Trails End Auto Recycling in Des Moines, Iowa, that was started by his grandfather in the 1940s and remains a family-run operation. In his address Swift talked about the amazing changes in the industry since the days when his grandfather, if, “he made $100 for the day, he closed up and went home.”
Things have changed since then, certainly. Auto recycling is a deeply more complex business than it was for previous generations.
Today Swift is heavily engaged in Washington helping to keep the industry from being “mowed over” by larger industrial forces on the legislative front. A perfect example is ARA's ongoing push to have OEMs provide full VIN numbers to the recycling industry as a way of dealing with recalled parts.
It is the last few numbers in the VIN system that give particulars about parts on a car. The first part of a VIN is public, but not the last few. “We should have those numbers made public and the data in our systems,” said Swift. “How else are we going to know if a part on that car is involved in a recall? Without that info how can we know what parts to keep off the shelf?”
The issue seems an obvious one. But to this point OEMs have refused to give up that data, the innate corporate stance being to give up as little data as possible. According to Swift, however, this is no longer tenable. “OEs look at that data as something they should keep private. But we need this, the customers need this,” said Swift.
The ARA has also been in court on the Takata air bag issue. Swift noted the organization recently had a legal setback when courts ruled against the ARA. “We did have a setback recently. But we're not out of the game yet,” he said.
Swift went on to acknowledge the challenge many recyclers are having in this current environment in which commodity prices are low. The price of scrap steel has plunged over the past year and a half, and that is squeezing the profits of many. “A lot of people are frustrated in this world. You're wondering how you are going to make payroll,” says Swift. “I know how it is. We had to close one of our shops.” But he ended the address on a positive note. “I know how we're treated so badly sometimes. But I believe in this industry. I fight for it every day,” he said.
Following Swift on the podium was Amber Kendrick, the conference’s keynote. Her address Saturday morning was about the importance of adding alternative revenue streams to a recycler’s business plan. “You want to grow,” said Kendrick.
Kendrick said one thing recyclers can do to make that happen is to include charges for delivery.
“Charge for delivery. It's already wrapped up on the price. You can separate that out with your existing yard management software, which is something we do” she said. “For customers who refuse, add it back into the final price.” Kendrick went on to suggest that warranty sales are another great way to provide new revenue sources. “These are things that provide higher profit margins,” said Kendrick.
Next on stage was Bill Cline from ACE/MCI Commodities. His presentation, “More for Your Cores with a Managed Core Program,” provided an important tip for recyclers: Don't leave your cores sitting in a bin for six months. Move them. Get them into the distribution chain as soon as possible. Cline explained that one of the major re-manufacturing companies in the US now has a massive factory in China that they will sometimes use to fill orders for parts that are not on hand at the re-manufacturing facility.
“It's not like it used to be, the quality of these Chinese parts is actually kind of okay. It's better than it was just a few years ago,” said Cline. The basic message was that recyclers want to get their parts to the re-manufacturer as soon as possible, before they commission a brand new part from China. “Move your cores as fast as possible,” said Cline. “If they don't have your part to re-manufacture, they'll just make it. Whether it's us, or a competitor, just pick a partner and turn over your parts.”
Becky Berube of United Catalyst Corporation was next to the stage, updating attendees on how to realize more profits from catalytic converters. Andrew MacDonald of Maritime Auto Parts closed out the Saturday morning session with a look at “Next Generation Auto Recycling.”
The afternoon session was dedicated to the OARA Annual General Meeting and election of board members. An employee training session ran concurrently, presented by Amber Kendrick, with a focus on inventory control.
Kendrick also ran a special “Sales School”session on Sunday, the final day of the 2016 OARA Conference.
For more information, please visit oara.com.