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The Greensheet Issue #14-19 (Full)

Quick Hits …
(A few short items to get us started this week)

• The Automotive Parts Services Group has honored KYB as its “Co-Man Vendor of the Year” and Autolite as its “Co-Man Vendor of the Year for Order Fill.” The awards recognize supplier partners for their dedication and support of The Group’s co-man operation and programs.

Old World Industries, the maker of Peak coolant and antifreeze and BlueDEF, has opened a 350,000-square-foot distribution center in Bolingbrook, IL. The facility will house 50 employees and host an enhanced fleet of commercial trucks.

Peter MacGillivray, former vice president of events and communications at SEMA, is now the vice president of off-road and motorsports vertical leader at Bonnier Corp. MacGillivray has been with SEMA since 2001. He now oversees the Off-Road ExpoSand Sports Super Show4Wheel JamboreeStreet Machine Nationals and Jeep Invasion.

• Voodoo Ride products will be hitting the shelves at O’Reilly Auto Parts.

• Goodson Tools & Supplies is now authorized to ship Sunnen products to all of Canada.

 

DIY Trends Have Improved

After a slow start to January — as well as headwinds from delayed tax refunds and inclement weather in February — recent channel commentary suggests March saw improved DIY trends, according to the latest Monthly Tune-Up report from Jefferies’ automotive aftermarket equity research team.

“While we believe DIFM has significantly outperformed DIY year-to-date, we expect optimism around the cadence of DIY improvement on Q1 earnings calls,” analysts Bret Jordan, Mark Jordan and Ethan Huntley wrote in their April 9 report.

 

The Greensheet Q4 2018 Financial Reports Chart

Each quarter, Auto Care Week/The Greensheet tracks key financial data from a number of companies publicly traded in the United States and Canada, and doing business in the North American auto care industry. We compile those top-line and bottom-line results for you to see, at a glance, how these companies fared. The listing is organized by increase/decrease in net sales.

Click here to view The Greensheet Fourth Quarter 2018 Financial Reports Chart.

 

 

Perspective: Your Industry Needs Your Voice To Be Heard

I had a lot of time to think on my drive home from last week’s AASA Vision Conference. One thing kept coming up: We really, REALLY need to get involved in our industry’s advocacy efforts. “It’s never been more important” can be a worn-out expression, but it seems appropriate today.

Just about every speaker — in one way or another — noted legislative and regulatory matters that are either impacting the aftermarket today or likely to influence how we do business in the future. A few examples …
• MEMA President and CEO Bill Long, Auto Care Association President and CEO Bill Hanvey, and Sarah Bruno of Arent Fox discussed motorists’ freedom of choice for vehicle maintenance and repairs. Their talk touched on new “Right to Repair” efforts in Massachusetts and the Secure Vehicle Interface, to name a few hot-button issues.
Ann Wilson, senior vice president of government affairs at MEMA, addressed tariffs and what else might be coming down the pike.
Jay Burkhart of the Trico Group and Frank Oliveto of the Util Group discussed how tariffs are impacting their businesses and their market segments.
Bret Jordan of Jefferies LLC, Nathan Shipley of The NPD Group and Natalie Soroka of the U.S. Department of Commerce offered some thoughts on where the U.S. economy — and the automotive aftermarket specifically — might be headed, with an emphasis on challenges and opportunities.

In one way or another, all of the presentations at Vision 2019 touched on either a level/unlevel playing field or the role government is playing (or will be playing) in how we do business. Often, the talks were accompanied by appeals to the audience to get involved.

There are so many reasons to either get active or step up your current efforts. Will President Trump eventually shut down the border to Mexico (bringing trade to a halt) or seek to force Mexico’s hand on various immigration issues by implementing tariffs on cars and parts? Who owns vehicle data? Will automakers be able to stall “Right to Repair” initiatives on cybersecurity grounds? Will local governments be willing to adapt their laws to permit mobile vehicle repair services?

We need to mobilize. We have to educate elected officials about our industry and what we do. (In some ways, I’m amazed that we still have to do this. At times, it seems like nobody understands us). The encouraging part is that — when told the aftermarket story and informed about the implications of locking us out of the repair process — politicians typically respond by saying “That’s absurd! What do you need me to do?,” according to Hanvey.

To me, it seems that politicians are already partially on our side because we present a strong pro-consumer message. And, they respond when told that drivers (their voters) could be saddled with fewer choices to get their cars serviced if their local shops are shut out of the repair process or, worse yet, left with vehicles idled because necessary repair parts are unavailable in the wake of a prolonged border shutdown. We have politicians, in a manner of speaking, right where we want them. Now, we all have to do our part. Get active.

Get active by attending either — or, better yet, both — the MEMA Legislative Summit taking place April 30 to May 1 or the Auto Care Association Legislative Summit in September. Both events present opportunities to get in-depth on issues important to the industry as well as chances to meet with your elected officials.

Also, sign up for the associations’ government affairs newsletters, such as the Auto Care Association’s Capital Report, the MEMA Washington Insider, the SEMA Action Network’s Driving Force or the Automotive Service Association’s Legislative News, to name a few. They’re wonderful sources of up-to-date and relevant information, and they’re on top of government and regulatory news better than any other industry publication, The Greensheet included!

Or, just place a call to the government affairs team from any of our industry’s associations. They are more than willing to talk and offer advice.

Marc Vincent,
Editor

 

MEMA Briefing Addresses Auto Parts, Threat To National Security

Participants at an April 9 MEMA policy breakfast on potential auto and auto parts tariffs considered how a recent landmark decision by the World Trade Organization (WTO) might affect the United States.

The U.S. Department of Commerce has completed its Section 232 national security investigation of imports of automobiles and automotive parts, but it hasn’t publicly released the findings. In the meantime, MEMA members are struggling with uncertainty and worried about jobs, investment and customer prices, said Ann Wilson, MEMA’s senior vice president of government affairs.

Wilson and Chad Bown, Reginald Jones senior fellow at the Peterson Institute for International Economics, discussed the WTO’s April 5 decision on Russia’s trade restrictions with Ukraine for possible insight.

The WTO ruled that Russia couldn’t unilaterally impose trade restrictions based on perceived national security threats. But, then, after its own review, it said the tariffs really were being driven by a national security interest.

The United States acted as a third party in that case, supporting Russia and saying that the WTO didn’t have the power to rule on the matter.

The decision could affect a similar U.S. national security argument, Bown said.

“This makes it look like the WTO will say, ‘No, we do have a right to look at this issue,’” Bown said. “Then, the big question would be: Are any tariffs or trade restrictions on steel, aluminum or autos really being driven by an international emergency and legitimate national security interest? It’s hard to see that out there.”

Wilson said she’s heard that the WTO isn’t very interested in getting in a tit-for-tat with the Trump administration.

Time will tell, but as the 2020 elections approach, Republicans will likely be less and less willing to challenge President Trump’s proposals, Bown said.

For more information on the tariff debate and the upcoming national security report, click here.

 

 

Mighty Adds Marketing Director

Mighty Auto Parts (Norcross, GA) has named Gabrielle Young as its director of marketing, responsible for working with its franchise advertising board and council, supporting the product team, and working with outside agencies to build Mighty’s brand awareness and grow sales. Young comes to Mighty from the Southwire Co., where she was director of marketing.

Mighty also has hired Mike Sugawara as an operations analyst and Jordan Taylor as a field support specialist.

Sugawara supports franchise development, inventory management, initial set-ups, changeovers and margin analysis. He was an inventory coordinator for Veritiv Corp. and a logistics account executive with Total Quality Logistics.

Taylor, a recent college graduate, is responsible for supporting Mighty’s Autopart users and its electronic data interchange (EDI) initiatives.

 

Transtar Launches E-Commerce Platform

Transtar Industries (Walton Hills, OH) has launched Transend, a proprietary e-commerce platform that allows users to look up transmission and driveline parts applications by license plate number, VIN or year/make/model/engine type. Users also can filter and purchase items by transmission type, product type, brand, price and availability, as well as search by any industry part number and then customize shipping options.

 

Mahle Service Solutions Relocating Production

Mahle Service Solutions, in partnership with Mahle Engine Components, plans to relocate production from York, PA to a shared facility in St. Johns, MI. The move is expected to take place by the end of 2019. Mahle Service Solutions will assemble its “PRO” series of shop tools and equipment, including ArcticPRO A/C service units, FluidPRO fluid exchange systems and NitroPRO nitrogen tire inflation systems, at the St. Johns facility. Production is expected to begin by the end of 2019.

 

Denso Opens Technical Center

Denso has opened its Connected Services Pennsylvania Technical Center in Scranton. The facility operates under Denso Products & Services Americas. According to management, the center enhances Denso’s ability to deliver aftermarket products and services — particularly as they relate to automotive inspection software and telematics systems — to customers across North America. The facility also bolsters offerings within its OES and non-automotive businesses.

“Advanced diagnostics technology continues to take on increasing importance, as vehicles rapidly become more connected and complex,” said Kenichiro Ito, executive director for Denso and CEO of its North American headquarters. “Through the technical center, Denso looks to make it easier for fleet managers and technicians to access data in vehicles that will empower them to make cars safer and more fuel efficient.”

The technical center was a part of Ease Simulation, an automotive diagnostics developer that Denso acquired in 2018. Ease and its products primarily focus on inspection, diagnostics, telematics and emissions. One of its leading products is VehicleMRI, a tool used to inspect and analyze automotive electronic systems and pinpoint hidden problems past typical “Check Engine” light issues.

 

LTA Adds Marketing Director

LTA Manufacturing (Ottawa, KS) has announced marketing and communications professional Jeff Lacina as its new director of marketing. Lacina is responsible for determining and implementing the company’s marketing strategies, including producing literature, overseeing the website and its development, coordinating advertising, attending trade shows, maintaining industry relations, and brand management for all LTA brands. Lacina also manages social media for all of the brands, as well as direct dealer communications and support programs.

Lacina began his career in 1988 working in public relations, eventually holding positions as an editor, senior writer, account manager, public relations manager, advertising copywriter, and marketing director and manager for various companies. Most recently, he was race director for the Great Lakes region of the World Racing League and also led his own firm, Lacina Group Marketing & Communications.

 

 

Horizon Global Restructures Board Of Directors

Horizon Global Corp. — a manufacturer of branded towing and trailering equipment, including Draw-Tite, Reese and Bulldog products — has announced major changes to its board of directors. According to the company, the moves fulfill obligations related to its recently completed $51-million second-lien term loan.

The board has six new independent directors …
John Kennedy. (Kennedy has been appointed chair).
Fritz Henderson.
Ryan Langdon.
Brett Milgrim.
Mark Weber.
Harry Wilson.

Kennedy is the president and CEO of Autocam Medical, a privately held contract manufacturer of precision-machined implants and instruments for surgical applications, which he founded in 2005. He previously was the president and CEO of Autocam Corp., which he founded in 1988.

Henderson is chair of the board of directors at Adient PLC, an automotive parts manufacturer focused on seating and interiors. He previously was Adient’s interim chief executive. He also is a principal with The Hawksbill Group, which provides advisory services to clients in public policy, manufacturing, global operations and strategy. Henderson’s background includes time as the president and CEO of General Motors and as a senior vice president of Sunoco.

Langdon is the senior managing director and co-founder of Newport Global Advisors, an alternative investment firm specializing in turnaround and special situation investments. Prior to that, he was a managing director and portfolio manager in the high yield group at AIG Global Investment. Langdon also serves on the board at Autocam Medical.

Milgrim is co-chair of the board at the Loar Group, a privately held aerospace components manufacturer. Milgrim is a former managing director of JLL Partners, a private equity firm focused on leveraged buyout transactions and leveraged recapitalizations of mid-market companies. He also was an associate at Donaldson, Lufkin & Jenrette Securities Corp., a firm that provides investment banking and security brokerage services.

Weber is the senior vice president and chief operating officer of Federal Signal Corp., a global manufacturer of environment cleaning equipment, emergency signaling systems and industrial warning equipment. He is a former president and CEO of Supreme Industries.

Wilson is the founder and CEO of the MAEVA Group, a turnaround and restructuring firm. He also was a senior advisor to President Obama’s Automotive Task Force, where he had lead responsibility for the restructuring of GM. Wilson also has been a partner at Silver Point Capital and worked in the private equity group at Blackstone. He currently serves on the board of directors of Visteon Corp.

Four of Horizon Global’s directors have retired, effective immediately. They are …
Richard DeVore.
Scott Kunselman.
Richard Siebert.
Maximiliane Straub.

Carl Bizon, Denise Ilitch and David Roberts will continue to serve as directors of Horizon Global.

The moves expand the board’s membership to nine directors, eight of whom are deemed to be independent. It’s worth noting that several of the new board members are shareholders of Horizon Global.

 

Brembo Inaugurates Aluminum Brake Caliper Production Hub

The Brembo Group has inaugurated a new aluminum brake caliper production hub in China. The roughly 430,500-square-foot facility in Nanjing, which is located in the eastern province of Jiangsu, is next to an existing plant where brake discs are manufactured.

According to Brembo, all of the production stages in the value chain have been integrated into the new site, from delivery of raw material to shipping the finished product. The facility’s production capacity is more than 2 million pieces per year. The goal is to better service plants belonging to European, Asian and American customers operating in China.

 

Groupe PSA Grows Its China Spare Parts Network

In an attempt to expand its spare parts business in the Chinese automotive market, the automaker Groupe PSA — which is comprised of the Peugeot, Citroën, DS, Opel and Vauxhall brands — is acquiring a controlling interest in Longstar, a regional auto parts wholesaler based in the southeast China province of Fujian. With two master warehouses and 40 hubs, Longstar carries parts from 18 international suppliers and services roughly 4,000 independent repairers.

The move expands Groupe PSA’s geographical coverage, with the auto parts distributors Jian Xin based in the Shanghai area (acquired in 2018) and UAP in the eastern China providence of Shandong (acquired in late 2018).

Through its existing customer base, Longstar is expected to contribute to the expansion of the Euro Repar Car Service network in China, which currently has 480 locations.

 

 

John Force Racing Hires Director Of Corporate Partnerships

John Force Racing has hired Justin Kamm as its director of corporate partnerships. Kamm will manage John Force Racing’s corporate sponsorships, and will work with Director of Marketing Kelly Antonelli at the racing headquarters in Brownsburg, IN and Director of Public Relations Sara Slaughter at the Yorba Linda, CA corporate headquarters. He is tasked with bringing in new partners and strengthening relationships with current sponsors. Kamm will attend all race events.

He was director of corporate partnerships for IRG Sports + Entertainment, where he handled event sponsorship, facility sponsorship, advertising agreements, as well as contract negotiation, execution and deliverables. He also is a former director of marketing, events and sales for the New Jersey Motorsports Park.

 

Castrol Announces New Supplier Partners For Northeast

Castrol has announced that Pilot Thomas Logistics and Northeast Lubricants will service Castrol’s customers in the Northeast region, including southern New Jersey, Pennsylvania, Delaware, Maryland, Virginia and the District of Columbia. The two will provide Castrol customers with access to the full line of the company’s automotive products and will have sales reps throughout the region to promote Castrol’s products and address customer needs.

Northeast Lubricants and Castrol have been partners since 1997, providing a variety of products and services to commercial, industrial, agricultural, automotive and marine customers. Northeast has six distribution facilities, delivering to 12 states across the Midwest, Northeast and Southeast.

Pilot Thomas Logistics operates out of several warehouses in the Northeast, providing fuel, lubricants and chemicals to the energy, marine, mining and industrial markets.

 

XPEL Submits NASDAQ Application

San Antonio-based XPEL Inc., a supplier of automotive paint protection and window films, has filed paperwork with the SEC to register its existing shares without offering any additional shares for sale. In conjunction with this filing, the company has submitted an application to NASDAQ seeking to list its common stock under the ticker symbol “XPEL.” Its stock is currently traded on the Toronto Stock Exchange.

President and CEO Ryan Pape said a U.S. listing has been on the radar for a while now. “As a U.S.-based company, it’s logical for us to move our primary reporting jurisdiction to the U.S.,” Pape explained. “We think this move will be beneficial, both to our shareholders and the company, by exposing XPEL to a larger audience of investors, ultimately increasing liquidity, simplifying compliance and increasing our access to capital in the future should the business need it.”

In 2018, XPEL’s revenue increased 63.3% to $109.92 million, and its gross margin expanded from 24.8% to 30.4%. Net income rose from $994,330 to $8.71 million.

 

Stanadyne Buys Pure Power Technologies

Stanadyne LLC (Windsor, CT) has acquired Pure Power Technologies, a Columbia, SC-based company that engineers and manufactures diesel fuel injectors and turbochargers. Stanadyne is a supplier of fuel management systems and components — with an emphasis on diesel and high-pressure gasoline pumping technology — serving the light-vehicle and off-road sectors, as well as various industrial markets.

Combined, the companies will offer a range of fuel and air management systems directly to OEMs, as well as the OES and aftermarket channels. “Pure Power’s experience and expertise in high-precision engineering, testing and manufacturing of diesel fuel injectors and turbos is a perfect fit for our business,” Stanadyne CEO David Galuska said in an announcement dated April 9.

Financial terms of the transaction were not disclosed. The sellers were Kensington Capital Partners and the Smithfield Group Ltd.

Pure Power was created in 2016 when Kensington and Smithfield led the negotiations and structuring of the carve-out acquisition from Navistar. They also arranged asset-based debt financing for the acquisition that was later replaced with cash flow-based facilities.

 

Sea Foam Sales Company: Regional Sales Manager

Sea Foam Sales Company is looking for a knowledgeable, enthusiastic person to assume responsibility for our Wisconsin territory. Candidates must be a self-motivated, sales driven person with a good working knowledge of gas and diesel engines in a variety of industries and applications. … (more) … Click here to find out more.

 

Alexa, Google Assistant Make Inroads In-Vehicle, Seeking Access To Data

An increasing number of OEMs plan to integrate Amazon Alexa and Google Assistant in-vehicle, according to ABI Research. The firm expects 20 million vehicles shipping in 2023 to allow one or more of these assistants, without consumers requiring a handset to use the technology.

“OEMs have realized that an increasing number of consumers may see value in being able to control their smart home devices in-vehicle and tap into their Apple, Amazon or Google ecosystem while on the move,” said Shiv Patel, a smart mobility and automotive analyst at ABI. “At the same time, these technology companies are looking to the automotive market as a new business vertical to expand their brand and extract valuable consumer data.”

Historically, OEMs have worked to develop their own branded assistants — typically in conjunction with voice technology suppliers — that can compete with tech-branded assistants. However, some OEMs (such as BMW and Audi) have opted to develop intermodal, multiple-assistant systems in which their own OEM-branded assistants sit alongside technology from Amazon or Google.

For BMW, the BMW Open Mobility Cloud will allow compatibility with both Amazon Alexa and Google Assistant. And, tier-one supplier Harman is enabling OEMs to support both assistants simultaneously through its cloud platform, Harman Ignite. According to ABI, these approaches allow OEMs to meet consumers’ requirements of tapping into their growing ecosystems outside of automotive, while still maintaining some control over data and branding.

Other OEMs, the firm reports, have given up on voice control altogether and are providing a single-assistant system developed by Google.

Meanwhile, both Amazon and Google have announced partnerships that will see their voice assistants incorporated in vehicles, without the need for a handset.

Google has struck deals with Volvo and Nissan-Renault for a deep in-vehicle integration of Google Maps, the Google Play Store, Google Auto and Google Assistant. And, Amazon has announced a partnership with Audi that will see Amazon Alexa work alongside the OEM-branded Audi Assistant in 2019 production vehicles.

According to ABI, these embedded apps provide Amazon and Google with the opportunity to expand their brand in the automotive market as well as gain increased access to vehicle data. Amazon could use this in-vehicle opportunity for its e-commerce business, ABI points out, while Google could use the data to feed into new location-based advertising opportunities.

“Overall, these partnerships represent a significant step forward for Amazon and Google, as they could pave the way for them to eventually displace OEM-branded assistants in-vehicle altogether and be the sole voice assistant in the vehicle, extending their brand and providing access to new in-vehicle data,” Patel said. “Much will be dependent on what the OEMs and market incumbents, such as Nuance, can offer. However, over the short- to medium-term at least, consumers are likely to see an increasing number of vehicles that feature Amazon Alexa or Google Assistant, even if it is sitting alongside an OEM-branded assistant.”

These findings are from ABI’s Next-Generation Infotainment report.

 

People Watching 4/11/19

Fuse5 Automotive Software has added Andrew Rosen as its director of strategic growth and development. Rosen’s background includes time as the director of marketing for Smyth Automotive Parts Plus and inventory manager with Parts Authority.

• P.O.R. Products (New Rochelle, NY) has established a new business unit focusing on the auto refinish market and added Craig Robatzek to lead this new endeavor as vice president of sales – refinish division. Robatzek was business director – custom paint for House of Kolor and FX at Sherwin Williams.

• Red Dot Corp. , a manufacturer of mobile HVAC units and components for heavy-duty commercial and military vehicles, has promoted Nick Janus to CEO. Janus has served as CFO and, later, president of the company. He has been with Red Dot since 2015.

 

News Briefs 4/11/19

Keystone Automotive Operations has added products from Fury Off-Road to its wheel and tire category, as well as products from Tough Guard (formerly Tough FormFit Guards) to its truck and off-road category.

• Turn 14 Distribution has added filtration products from BMC Air Filters to its line card.

• Raybestos has added virtual kits to its online catalog, giving distributors the flexibility to go to market to their installer customers with a pad and rotor kit for popular applications. The virtual kits are cataloged in both the Element3 and R-Line families.

CRC Brakleen aerosol brake parts cleaner is now available in both chlorinated and non-chlorinated formulas, according to CRC Industries, in order to comply with regulations in all 50 states. The company also has revamped Brakleen’s packaging to make it easier to identify which formulas to choose. (The original, chlorinated formula is sold in red-label packaging, while all non-chlorinated formulas are sold in green-label packaging).

Design Engineering Inc. (DEI) has launched the DEI Garage Video Series to answer questions about how to control heat and sound for vehicle and powersport applications. The company’s YouTube channel currently has more than 100 videos with playlists like the DEI Garage Series and more.

Denso has donated $125,000 to extend and expand its partnership with the teen defensive driving program “Be Responsible And Keep Everyone Safe” (B.R.A.K.E.S.), which offers young drivers and their parents free behind-the-wheel training designed to reduce auto crashes.

• As a component of a multi-faceted rebranding strategy, Automotive Parts Associates (APA) has launched a new website, APA.parts. In addition to providing information about ASA, the new site also serves as a portal with resources for shareholders to connect with each other and with suppliers.

 

Event & Trade Show Briefs 4/11/19

• Over 150 attendees, including 80 suppliers, took part in the launch of NAPA XPO Sale 2019 on April 4 in Montreal, according to UAP Inc.

• HDA Truck Pride expects over 900 distributors and suppliers to attend its 2019 Annual Shareholders Meeting taking place April 10-14 at the Marriott World Center in Orlando. Additionally, 175 suppliers are participating in a combination of three booth shows and taking part in one-on-one meetings.

• The “Your Car. Your Data. Your Choice.” advocacy group hosted a panel discussion April 4 in Washington, DC to address issues related to connected cars and consumer choice. The presentation took place during the policy and media days of the Washington Auto Show. The panelists were Sally Greenberg of the National Consumers League, Joe Jerome from the Center for Democracy & Technology and ETI Chief Technology Officer Greg Potter. Click here to view a recording of the panel discussion.

• The Auto Care Association’s Manufacturers’ Reps. Council will host a one-hour teleforum at 1:00 pm (EDT), April 25 on maintaining positive customer relationships, aftermarket sales and service. Click here to register.

Keystone Automotive Operations will host the Big Show 2020, its annual customer event, March 27-28 at the Gaylord Texan in Grapevine, TX.

 

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