Quick Hits …
(A few short items to get us started this week)
• The Auto Care Association has honored Bo Fisher, CEO of Fisher Auto Parts, with the 2020 Mort Schwartz Excellence in Education Award. He is the third-generation owner, chairman and CEO of the company. He also has been chairman of the board of Federated Auto Parts since 1998 and is co-chairman of the Automotive Parts Services Group. Click here to read more about Fisher.
• Companies affiliated with the Aftermarket Auto Parts Alliance swept the 2020 Auto Care Association Auto Care Career & Education (ACE) Awards competition. Auto Value and Bumper to Bumper won the award for large businesses, while Auto Value shareholder owner the Arnold Group of Companies/Arnold Motor Supply of Spencer, IA received the award for mid-sized businesses, and Auto Value Certified Service Center Dykstra’s Auto in Kentwood, MI took home the prize for small businesses. The program recognizes auto care companies dedicated to excellence in education. Click here to read more about the ACE Award winners.
• Engine & Performance Warehouse Inc. (EPWI) has recognized Maxima Racing Oils as its Vendor of the Year. The award recognizes suppliers and manufacturers for their distribution and sales policies, pricing policies, inventory, returns, labor claims, office support, and shipping and packaging.
• EPWI has recognized Gary Gray, an associate at Aspen Sales, as its Representative of the Year. The lines he reps include Pioneer, Dura Bond and ITM. The award recognizes sales support, distribution philosophies, and timely and accurate follow-through.
• The five SEMA Launch Pad finalists have been announced via SEMA eNews. They are scheduled to pitch their products and ideas to a panel of industry experts during SEMA360. Click here to read more about the finalists and the competition.
Women In Auto Care Announces Women Of The Year
Women in Auto Care has announced this year’s “Women of the Year” award winners. They are …
• “Auto Care Woman of the Year” – Lauren Beaulieu, vice president of professional marketing at Advance Auto Parts.
• “Auto Care Woman of Excellence” – Danielle Sonnefeld, vice president of business development at the N.A. Williams Company.
• “Female Shop Owner of the Year” – Kim Auernheimer, owner and business manager of Cool Springs Automotive/CS Automotive.
Auto Care Association Unveils Impact Award Winners
The Auto Care Association has presented its 2020 “The Impact Award: Four for the Future” honors to the following auto care industry professionals, age 40 or younger, for their extraordinary leadership and remarkable strides within the industry:
• Megan Dineff of Ervine’s Auto Repair & Grand Rapids Hybrid.
• Elisabeth Eisleben of Advance Auto Parts.
• Dave Shapiro of SRS Sales & Marketing.
• Arnoldo Ventura of Frontera Radiators & Parts.
AutoZone Reports Record 21.8% Same-Store Sales
For the fiscal fourth quarter ended Aug. 29, 2020, AutoZone Inc. reported $740.46 million in net income — an increase of 31% compared to a year ago (up 41.2% excluding an additional week in last year’s quarter). The company’s gross profit grew 13.3% to $2.41 billion. However, its gross margin slipped from 53.4% to 53.1% on a year-over-year basis due, in part, to damage incurred from civil unrest and lower merchandise margins attributable to a shift in mix.
Net sales rose 14% to $4.55 billion (up 21.1% excluding the extra week last year). AutoZone’s quarterly same-store sales growth came in at a record 21.8%.
SALES GROWTH … During the company’s Sept. 22 fiscal fourth-quarter earnings call, Chairman, President and CEO Bill Rhodes reviewed AutoZone’s sales performance for the three-month period ended May 9, 2020 (its fiscal third quarter), reminding analysts that same-store sales were up about 6% pre-pandemic. Then, in the midst of the stay-at-home orders, same-store sales were down more than 20%. Yet over the final four weeks of the fiscal third quarter, same-store sales grew in the low teens, which he attributed to the rollout of stimulus checks and enhanced unemployment benefits.
“We shared last quarter that our retail sales increased an incredible 50% one week, from a Monday to a Wednesday. This quarter’s sales story was very different. It was quite consistent and consistently very, very strong,” Rhodes said. “While last quarter was the most remarkable quarter I have ever experienced, this quarter marked another milestone: AutoZone enjoyed its largest quarterly same-store sales performance since going public in 1991.”
However, that record same-store sales growth introduced new challenges. “Our supply chain — specifically our distribution centers, our vendor partners and their operations — were and continued to be under immense pressure to keep up with the surge in demand we experienced over the last five months,” he explained. “Our in-stock positions today aren’t up to our usual high standards. We’re working diligently to recover, but our supply chain wasn’t built for 25% excess capacity.”
Rhodes told analysts that AutoZone’s fiscal fourth-quarter sales were much higher than management could have forecast at the beginning of the fiscal year and sustained higher levels than they would have predicted on the company’s last earnings call in May.
He noted that while the company’s retail business was stronger than the commercial business, both had consistent week-to-week sales. “Our DIY same-store sales were up approximately 24%,” Rhodes said. “Our share growth in retail over the last four months on the detailed information we have available for our broadest set of competitors shows that we have been gaining much, much more share than at any time before in both units and dollars.
“Our commercial business’ total sales were up approximately 17% on a 16-week basis. In commercial, we averaged over $60 million in weekly sales, which was over $12,200 in sales per program per week — both new records for us.”
NOTABLE TRENDS … Rhodes also pointed out that while geographic differences weren’t significant, there were interesting trends across AutoZone’s merchandise categories, specifically on the retail side. “We continued to see some surprisingly strong categories that I will call project categories. These are categories for hobbyists or people who want to upgrade something,” he said. “We believe that — with people having more time on their hands and many having more discretionary money due to the enhanced unemployment benefits, often making more than they were making before, or a lack of spending on entertainment-type categories — customers are working on their ‘project car’ or doing that enhancement job they have been constantly putting off.
“At the same time, we noted that certain product lines grew at a slower rate compared to the chain average. Merchandise categories like brakes, rotors and even motor oil while up from pre-COVID levels aren’t growing at the same rate as the overall store. We believe these categories may be impacted by a decrease in miles driven and, in the brake categories specifically, the lack of severe winter weather.”
Rhodes told analysts that a lot of the miles that are being driven today are not the same. “Our core customer, their habits haven’t changed; they are still going to work every day,” he explained. “When you think about the miles driven that have declined, it’s generally higher socioeconomic groups that are working from home. Our core customers, they haven’t worked at home a day.”
It’s also worth noting that, in terms of the pandemic’s impact, while there was a notable delineation between hardest-hit regions like the Northeast and other geographies in the spring, there was little differentiation in the summer when it came to outbreaks across the Sunbelt region. “I would say that the COVID impact in the summertime was unremarkable,” Rhodes said on the call.
LOOKING AHEAD … Rhodes stated that AutoZone’s fiscal fourth-quarter sales in both retail and commercial were high and very consistent from the beginning of the quarter in early May through July. “We were anxious to see what would happen to our sales performance in August after the enhanced unemployment benefits subsided. We’re very happy to report that our domestic same-store sales in August while down some from May through July were still up a remarkable 16.5%,” he said.
“Based on our performance post enhanced unemployment, we feel our sales will remain elevated for some time. And typically in recessionary environments, we perform well,” Rhodes said. “But nothing, nothing about this global pandemic is typical. There are simply too many remaining unknowns.”
Analysts with Jefferies LLC wrote in a Sept. 22 report that, given recovery in driving trends, bias to personal vehicle use and favorable weather trends, they expect AutoZone’s same-store sales to remain strong near-term. However, the analysts expect a slowing from current levels, as the benefits of record government stimulus moderate and some pull-forward of demand likely occurred during the fiscal fourth quarter.
Jefferies is calling for AutoZone to report same-store sales growth of 8.0% in the first quarter of the new fiscal year.
STORES …. During the quarter ended Aug. 29, AutoZone opened 49 new stores in the United States, 11 stores in Mexico and five stores in Brazil, giving the company a total of 6,549 stores: 5,885 in the United States, 621 in Mexico and 43 in Brazil.
Full-year U.S. network growth was 113 new stores, which was down from 154 stores last year. For 2021, management expects AutoZone to get back to its usual cadence of roughly 150 new U.S. stores and roughly 50 international stores. Only 25 new international stores were added in the recently completed fiscal year.
MISCELLANEOUS … A few other items of interest from AutoZone’s fiscal fourth-quarter earnings report and related conference call …
• The company’s debt increased a bit, while its cash and cash equivalents rose dramatically. AutoZone now has more than $1.70 billion in cash on its balance sheet — $1.60 billion of which Rhodes called “excess cash.” He told analysts: “Increasing our debt levels, adding a new 364-day line of credit, and increasing excess cash was purposeful, as we wanted to maximize our liquidity position due to significant uncertainty. We also felt we managed our inventory well, as our inventory-per-store growth increased 1.3% versus the fourth quarter of last year. We feel our strong liquidity position heading into the fall months allows us immense flexibility when it comes to thoughtfully reinstituting our share repurchase program.”
• As you may recall, AutoZone paused its stock buyback program in March. Now management wants to gradually restart the buyback program. “We intend to utilize our ongoing free cash flow to buy back stock and, based on our view of the future, begin methodically utilizing some of the excess cash we currently have on our balance sheet,” Rhodes said. “As we did in March, if we have concerns about the near term, we can and will temporarily suspend repurchases again, which is one of the significant benefits of a share repurchase program versus a dividend approach of returning capital to shareholders. We expect to maintain an elevated level of cash and cash equivalents throughout most of this new fiscal year.”
• Rhodes told analysts that AutoZone saw strong growth during the quarter in its online shopping channels, which are buy online/pick-up in-store, next-day delivery and ship-to-home. “In particular, our buy online/pick-up in-store offering grew rapidly at four times the growth rate of the ship-to-home option,” he said.
• Rhodes said one lesson AutoZone learned from the pandemic is to not be dependent on any particular geographic area of the world in terms of sourcing. “[The company’s foreign sourcing team] is going to be continuing to find other opportunities throughout the world in order for us to be able to source product,” he stated. “That will actually reduce our risk on a long-term basis and should also find other opportunities for us to lower our acquisition cost. [Incoming Senior Vice President of Merchandising Seong Ohm] will come to us with a significant amount of experience in this area, and we are excited about her joining the organization and helping the great team that we’ve already built overseas.” — Marc Vincent
Garrett Motion Files For Chapter 11; $2.10-Billion Sale Contemplated; Company Would Go Private
Garrett Motion on Sept. 20 filed for Chapter-11 bankruptcy protection in an attempt to restructure its balance sheet and sell the company to KPS Capital Partners. The global private equity firm is offering roughly $2.10 billion in cash for substantially all of the assets of Garrett.
The deal, if it goes through, would take the publicly traded Garrett private.
KPS is a stalking-horse suitor, meaning that the purchase agreement it entered into with Garrett is subject to other better bids via an auction to be held later this year.
In connection with the Ch.-11 filing, Garrett has entered into a restructuring support agreement (RSA) with holders of approximately 61% of its outstanding senior secured debt and is seeking court approval on $250 million of debtor-in-possession (DIP) financing, arranged by Citigroup. Proceeds from the new financing would supplement cash flow from ongoing operations and bolster Garrett’s liquidity position during the Ch.-11 process.
KPS, through an affiliate, has agreed to participate in Garrett’s DIP financing to support the company’s operations. Throughout the process, Garrett expects to operate without interruption.
“Although the fundamentals of our business are strong, and we have continued to try to develop our business strategy, the financial strains of the heavy debt load and liabilities we inherited in the spin-off from Honeywell — all exacerbated by COVID-19 — have created a significant long-term burden on our business,” President and CEO Olivier Rabiller said in an announcement dated Sept. 20.
“This proposed transaction will provide a capital structure and institutional support to ensure our long-term viability and set the foundation for the next phase of Garrett’s growth. Our goal is to emerge from this process in early 2021 with a strengthened financial position, new and supportive ownership, and renewed energy and resources … .”
THE BUSINESS … According to a Sept. 20 declaration in support of the company’s Ch.-11 proceedings, Garrett CFO Sean Deason stated that the company had roughly $2.07 billion in total assets on its consolidated balance sheet as of June 30, 2020. And as of Sept. 20, the company had $280 million in cash on hand.
Deason also noted that, as of Sept. 20, Garrett had roughly $1.86 billion in aggregate outstanding funded indebtedness, excluding accrued and unpaid interest. The company’s market capitalization as of Sept. 18 was approximately $152 million.
Garrett is a supplier to various OEMs as well as the global aftermarket. For the six months ended Sept. 30, 2020, OEM sales accounted for roughly 85% of the company’s revenue, with sales of aftermarket and other products accounting for the remaining 15%.
THE SPIN-OFF … Garrett spun off from its prior owner, Honeywell International, in October 2018. According to Deason, the spin-off created a highly leveraged capital structure. Additionally, he noted that the spin-off caused a subsidiary of the company, ASASCO, to enter into a “financially extraordinary” indemnity contract with a term of 30 years and maximum payments of $5.25 billion to reimburse Honeywell for legacy asbestos exposure.
“The inherited capital structure is not sustainable,” Deason stated.
According to Deason’s declaration, Garrett attempted throughout 2019 to negotiate with Honeywell regarding the terms of the indemnity agreement. “The company attempted to mediate its dispute with Honeywell in September 2019, but that mediation was unsuccessful,” the declaration stated.
HONEYWELL OBJECTS …On Sept. 21, Honeywell contacted the court to reserve all rights to assert its claims and defenses, including seeking dismissal of Garrett’s bankruptcy proceedings “on the grounds that it was filed in bad faith.”
According to a Statement & Reservation of Rights dated Sept. 21, Honeywell noted that it is Garrett’s single largest creditor. The company asserted that Garrett’s Ch.-11 filing — along with the architecture embedded in its proposed sale and plan transactions — “is part of a continuing, imprudent strategy to evade Garrett’s obligations to Honeywell, undertaken by a management team that is uninformed or ill-advised of its fiduciary duties to creditors and shareholders.”
According to this Sept. 21 filing, when the pandemic hit and Garrett experienced a downturn in its business, the company sought to eliminate Honeywell’s claims outside of bankruptcy by attempting an amendment to its credit agreement that “would have effectively deferred payments to Honeywell in perpetuity.” Honeywell stated that it worked with Garrett and its senior lenders, allowing Garrett to pause its payments to Honeywell and its lenders for as much as two years to help Garrett weather any economic disruptions caused by the virus.
Honeywell asserted that Garrett commenced its Ch.11 process without engaging in a good-faith effort to work with Honeywell to resolve Garrett’s alleged financial distress. Further, Honeywell claimed that Garrett’s proposed bankruptcy process is “way too much, way too fast and unnecessarily complex” and that “there is no reason to set these cases on a timeline that Garrett unilaterally established and that bears no relation to Garrett’s actual financial and operational circumstances.”
THE BALANCE SHEET … Garrett’s current balance sheet constrains its ability to make investments in technology necessary to preserve its business for the future, Deason asserted in his declaration, adding that the company has no access to incremental debt to fund R&D or capital expenditures given its high leverage. He contended in his filing with the court that Garett cannot realistically sell equity to raise funds because of various uncertainties and that its ability to use internally generated cash flow for R&D or capital expenditures is severely limited by debt service costs and the specter of massive payments on ASASCO’s indemnity obligations.
“The company has maintained its business and financial relationships with OEMs and suppliers during its short existence since the spin-off with considerable success, but the balance sheet problems created by the spin-off have made doing so more difficult,” the declaration stated. “And, if those balance sheet problems are not addressed, concerns among OEMs and suppliers will grow as the company’s technological advantages decline with underinvestment. The company is substantially overleveraged versus every one of its primary competitors, even before considering the effects of the ASASCO indemnity agreement.”
Deason’s declaration also pointed out that Garrett’s ability to participate in various consolidation transactions is precluded by its capital structure. He added that no merger partner would be expected to assume the negative covenants in the ASASCO indemnity agreement for 30 years. “The result is a ‘poison pill’ in the hands of Honeywell that precludes any future combination unless Honeywell provides its discretionary consent,” the court filing stated.
This is compounded by the fact that Garrett has no access to equity capital if it wanted to grow as an independent company, according to Deason.
WHAT HAPPENED … Deason wrote that, in late 2019 and early 2020 prior to the pandemic, Garrett evaluated a range of potential merger partners; however, the company was unable to generate significant traction with any of these parties because of a variety of factors, including Garrett’s over-leveraged capital structure.
“While no potential strategic buyers expressed interest in exploring a potential transaction, multiple financial sponsors expressed interest,” Deason’s court filing stated. “All financial sponsors insisted on potential transaction structures in which the balance sheet of the company — including its excessive funded debt leverage, the ASASO indemnity agreement and other legacy liabilities — could be left behind or discharged and the business of the company acquired free and clear of those burdens.”
Then the pandemic began disrupting Garrett’s business, first in Asia, then in Mexico and India, and eventually in Europe. The company’s production volume reduced significantly, with at least some production disruptions likely to continue to negatively impact revenues throughout 2020, according to Deason. This led management to accelerate its strategic review.
In time, the company launched a formal process with six entities signing non-disclosure agreements. They were suitors that had expressed interest during previous discussions. Eventually, three financial sponsors emerged from the pack, each indicating that they would not purchase Garrett except in a Ch.-11 proceeding or another process that could deliver the company free and clear of its current balance sheet.
By mid-August, Garrett was dealing exclusively with KPS. The stalking-horse agreement was reached Sept. 20.
According to Deason’s declaration, Garrett anticipates a balance sheet restructuring only. “Subject to court approval, substantially all trade and other ordinary-course obligations are expected to be paid in full in the Ch.-11 cases and/or assumed and performed by the stalking-horse purchaser under the stalking-horse purchase agreement.”
A syndicate of banks — including Citi, UBS Investment Bank, Credit Suisse and BNP PARIBAS — have committed to providing exit financing to the KPS stalking-horse acquisition. Exit financing is subject to completion of the acquisition and customary closing conditions.
“We look forward to working with the company’s leadership team and employees to accelerate its many attractive growth opportunities, as well as increase its already substantial investment in research and development, technology, and new product development,” Raquel Vargas Palmer, managing partner of KPS, said in the aforementioned announcement.
“KPS has invested an enormous amount of effort, resources and capital to acquire Garrett. We are committed to the expeditious acquisition of Garrett to provide certainty of outcome and confidence in the new company’s future for all of its stakeholders, including customers, employees and suppliers,” Palmer said, adding that the new Garrett will be conservatively capitalized and not encumbered by its predecessor’s significant liabilities.
KPS makes controlling equity investments in manufacturing and industrial companies across a variety of markets. The private equity group is no stranger to the transportation industry. Among its current holdings is DexKo Global, a global supplier of running gear technology, chassis assemblies and related components; and the Autokiniton Global Group/L&W Inc., a Tier-1 supplier to the automotive industry, specializing in hot and cold metal stampings and welded assemblies.
Among its prior holdings are Chassis Brakes International, a large manufacturer of automotive foundation brakes and foundation brake components; and HHI Group Holdings, which included the Impact Forge Group and Cloyes Gear & Products.
FURTHER DEVELOPMENTS ... According to a Sept. 24 Bloomberg news report, a group of Garrett’s bondholders is working to hire an investment bank to organize a rival proposal. Additionally, Bloomberg wrote that the investment firms Oaktree and Centerbridge are trying to strike a deal with Honeywell to resolve Garrett’s asbestos liabilities and get Honeywell’s blessing for their bid to acquire Garrett.
It would appear that Honeywell — one way or another — will have a key role in how Garrett’s Ch.-11 proceedings are resolved.
In its statement to the court dated Sept. 21, Honeywell wrote: “Honeywell is not some insignificant contractual counterparty whose rejection damages claims can be estimated or determined later.” — Marc Vincent
Cloyes Gear Hires New CEO
John Hanighen has joined Cloyes Gear & Products as its CEO. Hanighen, a longtime auto care industry veteran, most recently was the global aftermarket director for the Ford Motor Company, as well as the CEO of Ford’s Quick Lane Tire & Auto Centers business.
Hanighen’s background includes time as the vice president of professional programs at Advance Auto Parts and Carquest, vice president of commercial marketing for NAPA Auto Parts, and president and CEO of Rostra Precision Controls.
TECH Appoints Director Of Marketing, Key Accounts – Americas
Brent Klomparens has been appointed director of marketing and key accounts – Americas for the Technical Rubber Company. Klomparens has been with the company since 2015, most recently as a key account director. Prior to 2015, he worked for the Affinia Group/Wix Filtration as a district manager.
“Brent has a proven track record of success in leading interdisciplinary teams to support major accounts,” said TECH Americas General Manager Chris Intihar. “That, coupled with his desire to expand his role into other facets of marketing, made him the natural choice to assume this important role.”
Klomparens’ responsibilities include continuing to lead the direct accounts sales team, as well as the Americas product, digital marketing and creative design teams. In his role, he will drive the TECH Tire & Wheel brand across the United States, Canada, Mexico, and Central and South America.
Pioneer – ATP Expands Operations
Pioneer Automotive Industries – ATP has expanded its Meridian, MS operations with an additional 100,000 square feet of warehousing space adjacent to its existing distribution facility and headquarters. Pioneer previously operated out of a company-owned, 200,000-square-foot facility. The new, connected addition gives it a total of 300,000 square feet, along with 18 shipping and receiving docks for inventory and order processing.
“The new building will allow Pioneer Automotive Industries to service customers of the Pioneer and ATP brands with streamlined order fulfillment while increasing inventory capacity for growing product lines,” said President Jorge Frias. “With recent new-item growth in key areas — including engine and transmission mounts from Pioneer; transmission filtration from ATP; and flex plates and control cables, which are currently available in either brand — the increased inventory capacity is our commitment to support our customer’s growth on these categories with the latest model coverage.”
Lumileds Names New CEO
Matt Roney will take over as Lumileds’ CEO on Oct. 1, succeeding Jon Rich, who will continue with the company as executive chairman of the board. Roney has been the president of Lumileds’ automotive business unit.
Prior to joining Lumileds, Roney was the COO of the Stanley Infrastructure division of Stanley Black & Decker. He also spent eight years with TRW Automotive (now ZF TRW), including time as a vice president and general manager of its global steering business.
Veteran Marketer Jim Savas Launches Digital Venture
Longtime marketing executive Jim Savas has launched his own company, drawing on his more than 40 years of experience in sales and strategy to offer precision digital marketing solutions to the automotive aftermarket.
Before branching out on his own, Savas was a vice president and general manager at Endeavor Business Media, handling market analysis and strategy and leveraging digital media for the aftermarket.
“I’ve been a corporate guy for a long time, and I am kind of rounding third, if you will, on my career,” Savas said. “I started to think to myself ‘what do you want to do?’ What I didn’t want to do is traditional media because that is a downward slope. I wanted to get into an area that would give me satisfaction and would be progressive. And, I wanted to stay in the digital market space.”
Savas Communications launched in early September. Savas said he plans to offer unique digital tactics and strategies to help his clients grow revenue. One such strategy is what he calls “YouTube-managed marketing solutions.”
Through a partnership with Giant Media, Savas offers his clients precision content marketing on YouTube, which he said is a vastly underused and potentially profitable platform for the aftermarket. Proprietary technology called VuePlanner allows clients to segment a finely honed audience and place contextually relevant ads adjacent to relevant aftermarket YouTube content. VuePlanner, Savas explained, is one of six global YouTube measurement tool that has indexed virtually every video on YouTube.
“Digital marketing solutions have been a big emphasis in the last five or six years, “ Savas said. “It’s all about the customer path and touching the customer at the right time in the right environment. More and more companies are doing highly targeted programs to influence their customers.”
The way the strategy works is that Savas’ platform searches all keywords or ad words relevant to a client’s product or service and, as he puts it, “tells you what your video universe is.” Indexes are run for every video on YouTube that is relevant to those keywords. Results of that search create a targeted list or index that shows which YouTube users would be most interested in your product. Clients would then place their ads alongside videos these users are most likely to watch.
“We will be able to forecast video views for the next 30 days based on the last 30 days,” Savas explained. “Our tool helps you hone in on exactly what you need; there is no waste.”
The advantage to using YouTube is that buying keywords is cheaper than on Google Ads because the site is not as frequently used in the automotive category, according to Savas.
“By working with me, you are going to get granular audience” he said. “It will be contextually relevant to your product. You will put your ad in front of individuals. You’re not buying a demographic; you’re buying someone who is going through the buying process. You are placing your product right next to videos that are showing how to install your product.”
The ROI with this approach, according to Savas, is a 20% improvement over a Google Ad purchase.
Savas also is eyeing the coming fourth quarter as an opportunity for advertisers to use precision marketing tactics since almost all aftermarket trade shows are going virtual.
“Each of those trade organizations is going to offer an online event solution,” he said. “There are going to be an unprecedented number of buyers using the Internet, looking at companies’ products and services. Marketers have the luxury in 2020 to broaden their digital net so to speak and have the resources from their show expense savings. And, these ads can be placed at a fraction of the cost that it would have cost these advertisers to actually go to the shows. This is one of those years where it will really pay off to advertise online.”
Savas can be reached at Savasjim1@gmail.com or at (310) 428-3941. — Susan Pappas
Vontier Stock Trading Begins
When-issued trading of Vontier Corp. common stock started Thursday, Sept. 24 on the New York Stock Exchange (NYSE) under the symbol “VNT WI.” Vontier is a company to be spun off from Fortive Corp. that will focus on the transportation and mobility markets. It will be comprised mainly of Matco Tools, Hennessy Industries, Gilbarco Veeder-Root and Teletrac Navman.
Regular-way trading of Vontier common stock is expected to begin Oct. 9 on the NYSE under the symbol “VNT.”
In related news, Vontier will host a virtual investor conference Oct. 5.
Fred Clark To Retire From Thule
Fred Clark, the Thule Group’s business area president for the Americas region, will retire in early 2021 once a new business area president has been recruited. Clark has worked for Thule in North America and Latin America for nearly 30 years. The company expects to select Clark’s successor at the beginning of 2021. The role will continue to be based out of Seymour, CT.
“Fred’s business drive, product and industry knowledge, and energy has contributed greatly to the success of Thule Group in the highly competitive American market,” said CEO Magnus Welander. “With a strong commercial and operational team in place, he will now hand over the baton to a new person as we strive for future profitable growth in traditional as well as newer categories.”
In conjunction with this change, Thule plans to implement the following corporate senior management structure for the group, effective Oct. 1, 2020 …
• Karl-Johan Magnusson, currently vice president of product development, will be promoted to senior vice president of product development.
• Rickard Andersson, currently vice president of supply chain – Europe and rest of the world, will be promoted to senior vice president of supply chain.
Magnusson and Andersson will both become members of the company’s group management.
Additionally, Vice President of Global Purchasing Nis Gjendal will report to Andersson and not be a part of the group management team.
LSI Promotes Kyle Fischer To Director Of Branding & Promotions
Lubrication Specialties Inc. (LSI) has promoted Kyle Fischer from director of sales to director of branding and promotions. In this newly created position, Fischer is responsible for working with LSI’s director of marketing and director of sales to develop positioning for Hot Shot’s Secret-branded products for each market. He also coordinates and implements promotional activities to select targeted audiences, ensuring a consistent brand image.
Fischer has input on all advertising buys, content, social media, race events, brand ambassadors, product content, promotions and trade show activity. Additionally, he works with the company’s key leadership to increase brand awareness and product sales in the United States and abroad.
He joined LSI in 2017 as director of marketing.
Liqui Moly, Noelle Performance Form Technical Partnership
Liqui Moly USA/Canada has entered into a technical partnership with Noelle Performance, a company that offers high-performance software for new BMWs. The alliance allows the companies to collaboratively test their products in order to prove quality.
“We know Liqui Moly oils have BMW approvals, and we also have seen these same products perform at peak levels in our high-performance development vehicles, some with well over 100,000 miles,” said Dewey Thomas, co-founder of Noelle Performance. “This technical partnership with Liqui Moly will enable Noelle to continue advancing our performance software solutions with the confidence that optimum performance will be supported while maintaining the reliability we and our clients expect.”
“We appreciate testing our products in the most rigorous environments to demonstrate how effective our products can be in all situations automotive, powersports, and marine owners and shops encounter,” said Sebastian Zelger, Liqui Moly’s North America CEO. “It is also a significant advantage for Liqui Moly to partner with and support a company like Noelle that develops products specifically for maximum performing, daily-driven BMWs.
“The Noelle Performance dealer network is constantly growing. We are proud to partner with such a thriving, high-end performance car company, and are committed to sharing technology and knowledge we will develop around oils and additives for each of the Noelle dealer locations.”
SEMA360 Educational Seminar Schedule Announced
The SEMA360 education program will feature more than 30 professional development seminars along with conversations with celebrities and personalities. Each session will take place during SEMA360, an online industry event taking place Nov. 2-6. Attendees can sign up for an unlimited number of seminars at no additional cost when registering to participate in SEMA360.
“While circumstances have refrained us from meeting in person this year, SEMA remains committed to helping our industry members succeed and prosper,” said Gary Vigil, senior manager of professional development. “Each educational session in SEMA360 was carefully crafted to help attendees make smarter business decisions, and offers the exciting opportunity to hear stories and advice from a diverse collection of highly successful, entrepreneurial leaders.”
The lineup includes sessions on inline marketing and business management, vehicle accessorization, aftermarket trends and research, advanced vehicle technology, and more. Visit sema360.com for additional information or to register.
AACF Plans Virtual Golf Tournament
The Automotive Aftermarket Charitable Foundation (AACF) on Nov. 5 will host its first Topgolf Top Contender National Championship tournament to raise funds for aftermarket employees in need.
Teams can participate at more than 60 Topgolf locations across North America, simultaneously competing for top scores. Teams from all locations will compete in real time in the same event. Live leaderboards will be displayed, and a national champion will be crowned at the end of the tournament.
The event replaces AACF’s annual Las Vegas event, which was canceled along with the in-person AAPEX and SEMA shows.
“When the SEMA and AAPEX trade shows were cancelled in the interest of public safety, AACF made the decision to cancel its largest annual fundraising event, the Bob Schoeberl Memorial Golf Tournament. While this was the right thing to do, we needed to find a way for aftermarket industry employees to connect and have fun as an industry family and raise funds to assist those in need during this challenging time,” explained AACF Board President Lynn Parker.
Click here for more information about the Top Contender event. The deadline to register is Nov. 3.
Virtual AAPEX Announces Technical, Management Training Lineup
The Virtual AAPEX Experience will include technical and management training on various issues, challenges and opportunities facing automotive service and repair professionals. Classes are identified as beginner, intermediate and advanced, and many are accredited toward Automotive Aftermarket Professional (AAP) and Master Automotive Aftermarket Professional (MAAP) designations. The free training will be provided from 10 a.m. to 6 p.m. (Eastern Standard Time), Nov. 3-5. Registration is required.
The instructor-led technical training will cover such topics as ADAS diagnostics and calibrations, European diagnostics, labscope usage and controller area networks (CANs). On the management side, topics will include attracting talent, creating a business culture, effective leadership, communication skills, business continuity and valuation, and social media concepts and engagement. Trainers will include …
• Jim Wilson and Tony Salas of The Group Training Academy.
• Richard Cregar of the Automotive Training Authority (ATA).
• Bill Haas and Sara Fraser of Haas Performance Consulting.
• Cecil Bullard of the Institute for Automotive Business Excellence.
• Mike Reynolds of Mobile Automotive Service Solutions (MASS).
• Eric Ziegler of EZ Diagnostic Solutions Inc.
• Murray Voth of RPM Training.
• Jeremy O’Neal of Advisorfix.
• Greg Bunch of Aspen Auto Clinic.
• John Thornton of Autotrain Inc.
• Rick White of 180BIZ.
• Maylan Newton of the Educational Seminars Institute.
• Bob Ward of Perpetual Business.
Exhibitor-led training also will be offered at no cost to attendees. For class descriptions, speaker information, and dates and times, visit the Training Schedule at aapexshow.com/schedule.
Shop-Ware Is Now A Pronto Preferred Supplier
Shop-Ware is now a preferred supplier to the National Pronto Association. Shop-Ware’s shop management technology includes digital, cloud-based repair orders with native vehicle inspections and customer live chat; real-time shop workflow and “expeditor” dispatch; and parts allocation tracking for jobs in progress.
The partnership allows Pronto Auto Care Experts, Pronto Smart Choice and other Pronto-affiliated shops to receive exclusive subscription offerings and package pricing. Additionally, shop management training will be available in combination with Shop-Ware’s Analytics platform to educate owners and managers on shop profitability and sustainability.
1:5 U.S. Vehicles Has An Open Recall
The number of U.S. vehicles on the road with open safety recalls is rising after two consecutive years of declines, according to Carfax. Annual Carfax recall data shows there are over 55.70 million recalled vehicles on the road today that have not been repaired — up 5% from 2019. Open recalls peaked in 2017 at 63 million vehicles.
In 2020, pickup trucks and cars are the vehicles most likely to have unfixed recalls, according to Carfax. The states with the highest number of recalled vehicles are …
• California at 6.80 million.
• Texas at 5.90 million.
• Florida at 3.50 million.
• Pennsylvania at 2.30 million.
• New York at 2.20 million.
• Ohio at 1.90 million.
• Georgia at 1.80 million.
• Illinois at 1.80 million.
• North Carolina at 1.80 million.
• Michigan at 1.50 million.
YourMechanic Partners With Motus On Mobile Maintenance Program
The mobile vehicle maintenance and repair service provider YourMechanic has announced a partnership with Motus, a company that handles reimbursement and management of mileage, mobile devices and remote work for mobile workforces.
The alliance allows Motus customers who work in a wide variety of industries, including food and beverage, construction, life sciences, retail and business services to access YourMechanic’s offerings from within Motus’ cloud-based platform and app.
Motus users in more than 2,500 U.S. cities can use YourMechanic to schedule a range of mobile vehicle services, including oil changes, brake work and battery replacement, in their fleet lots or home driveways.
“For mobile workers, their vehicle is an essential part of their livelihood. When it needs maintenance, it’s vital that they have access to the services they need quickly and conveniently,” explained Craig Powell, CEO of Motus. “Unlike with traditional fleets, where work vehicles are maintained by the business, the market shift toward reimbursing for personally owned vehicles has increased the need for access to vehicle services on the driver side.”
Ford Donates Over $1 Million In Vehicles To U.S. Tech Training Programs
The Ford Motor Company is donating more than $1 million worth of new F-150s and Fusions to 37 U.S. Automotive Student Service Educational Training (ASSET) programs to help students apply new diagnostic testing procedures and methods from Ford’s training curriculum.
ASSET is one of three post-secondary, Ford-sponsored automotive training programs through New Ford Tech, an initiative designed to support and grow a pool of qualified vehicle repair technicians to meet increasing demand. The program rotates students between eight weeks in the classroom for in-depth training and eight weeks in a dealership to apply their skills under the guidance of mentors.
Over a two-year period, ASSET students can earn as much as 100% of Ford’s Service Technician Specialty Training (STST) credentials, earn an associate degree in automotive technology and get one year of work experience at a Ford or Lincoln dealership.
New Ford Tech’s other two post-secondary programs are Maintenance & Light Repair (MLR) and Ford-Accelerated Credential Training (FACT).
MLR is offered at 26 community colleges across the United States. MLR students earn auto tech certificates and as much as 25% of Ford’s STST credentials.
FACT is a capstone program focusing on Ford curriculum offered through Universal Technical Institute (UTI). FACT students can earn as many as eight certifications and as much as 70% of Ford’s STST credentials.
TIA Elects Five Board Members
The Tire Industry Association (TIA) has elected five members to its board of directors. Four will serve three-year terms, and the fifth will serve a two-year term, filling a vacancy created when Jim Pangle of Fountain Tire was elected secretary of the board earlier this year. The new directors will take office Oct. 27, rounding out the association’s 18-member board.
Directors elected to three-year terms are …
• Scott Weeden, acting vice president of sales at Barnwell House of Tires (Central Islip, NY).
• Brad Feeney, director of commercial programs for TBC Corp. (Palm Beach Gardens, FL).
• Brandy Sielaff, director of human resources and safety at Commercial Tire (Meridian, ID).
• Tim BeVier, national account business development manager for the Technical Rubber Company (Johnstown, OH).
Travis Glidden, a regional sales manager for Stellar Industries (Garner, IA), was elected to a two-year term.
HDA Truck Pride Announces Two Hires, One Promotion
HDA Truck Pride has added Tim Shaw as director of product management responsible for supplier relationships, as well as Clint Carter as chief commercial officer.
Shaw comes to HDA Truck Pride after a nearly 30-year career with Haldex in roles ranging from technical adviser to managing the entire remanufacturing process and life cycle. Carter joins after six years with Jim Hawk Truck Trailer in Omaha, NE and 11 years with Northeast Great Dane.
Additionally, HDA Truck Pride has promoted John Lurz from director of IT to vice president of technology. Lurz has spent the last three years at HDA Truck Pride upgrading technology systems and implementing processes to streamline areas like finance and inventory control.
Rush Enterprises Announces 3-For-1 Stock Split
Rush Enterprises, which is billed as the largest network of commercial vehicle dealerships in North America, has declared a three-for-two stock split with respect to both the company’s Class A and Class B common stock. The split will take place in the form of a stock dividend payable Oct. 12 to stockholders of record as of Sept. 28.
Holders of the company’s common stock will receive an additional one-half share for each share of common stock held as of the record date. The split will increase the number of outstanding shares of Class A common stock from approximately 28.14 million to roughly 42.20 million and will increase the number of outstanding shares of Class B common stock from approximately 8.37 million to roughly 12,56 million.
Chairman, President and CEO W.M. “Rusty” Rush said the split should increase the trading activity, or float, in the company’s common stock, particularly with respect to the Class B common stock.
“In addition, in recognition of our strong cash position and continued belief in our business outlook, we plan to recommend to the board of directors that we maintain our current quarterly cash dividend of $0.14 per share, which would effectively increase the cash dividend to our stockholders by 50%,” he said.
We are looking for an accomplished Vice President of National Sales to join our growing team to expand distribution and sales of Sea Foam products throughout various channels to include aftermarket retailers, heavy-duty truck, marine, farm, hardware, C-store, motor sports and small engine. … (more) … Click here to find out more.
As a leading North America Manufacturer & Brake Product Supplier, we are seeking an experienced individual to become a valuable addition to our growing and expanding team. … (more) … Click here to find out more.
Primary responsibilities: Lead nationwide sales team members to achieve sales targets. Communication and team management skills are essential for this position. Should be able to … (more) … Click here to find out more.
People Watching 9/28/20
• Meyer Distributing (Jasper, IN) has expanded its inside sales team with the addition of a sales office in Olyphant, PA, adding a combined 146 years of automotive experience: Margaret Edwards (44 years), Rich Mackonis (33 years), Jason Williams (26 years), Jack Marchetti (22 years), Randy Bowers (13 years) and Frank Arvonio (eight years).
• Judy Love has left Schaeffler, where she was marketing manager – automotive aftermarket, Americas, to become the director of marketing at Rico Manufacturing, a material-handling equipment company based in Medina, OH. Love was one of the inaugural “Women at the Wheel” honorees by AMN, Counterman and Babcox Media. She also has been a YANG mentor.
• Belden Inc. Executive Chairman John Stroup has joined the Tenneco Inc. board of directors. Before assuming the role of executive chairman of Belden this year, Stroup was the company’s chairman, president and CEO. His background also includes time as a group executive – motion group at Danaher Corp. According to Tenneco, there is no arrangement or understanding between Stroup and any other person pursuant to which he was selected as a director. Additionally, Stroup has no family relationships with any of the directors or executive officers of Tenneco.
• Paul Barrett, a 20-plus-year veteran of LoJack Corp., is now the vice president of marketing and product for EV Transportation Services, which designs, develops and manufactures all-electric, lightweight commercial utility vehicles and fleet management solutions. Barrett’s tenure with LoJack included time as vice president of international operations.
News Briefs 9/28/20
• U.S. new-vehicle retail sales in September are expected to approach 1.16 million units — an increase of 12.4% from a year ago (up 3.4% adjusting for two additional selling days in 2020 compared to 2019). This comes from a joint forecast developed by J.D. Power and LMC Automotive. Notably, retail sales in September are poised to post the first year-over-year gain since February, which J.D. Power described as a milestone in the recovery from the disruption that coronavirus has had on U.S. new vehicle sales.
• The TechForce Foundation has announced the receipt of a $140,000 grant from the General Motors Foundation and a $15,000 donation from Enterprise Holdings Foundation. Enterprise’s donation will support technical students in need through TechForce’s emergency grants.
• Mitchell 1 has announced that MessageCenter, the texting app integrated with its Manager SE Truck Edition truck shop management software, is now available for commercial vehicle repair facilities in the United States and Canada. With MessageCenter, shops can reach their customers via text messaging directly from inside the shop management system. The feature is an optional add-on to the Manager SE Truck Edition system.
• Verizon’s connect-car platform, Hum, now highlights RepairPal-certified repair shops.
• Lumileds has launched an updated version of its online Philips Automotive Bulb Look Up. Designed to help consumers and technicians identify the correct bulb, the updated guide features separate lookups for the United States and Canada, new Philips lighting product lines, and applications dating back to 1946.
• John Bean has launched a new app, EZ-COLLETS, to help technicians identify collets, flanges or quick plates for wheel-balancing jobs.
• A series of 11 instructional videos have been added to DanaAftermarket.com to guide users through the process of searching for parts, placing and tracking orders, and maximizing use of the site.
• Sea Foam International has debuted its Spanish-language website, SeaFoam.mx.
• Alignment Simple Solutions has launched a new website.
Event & Trade Show Briefs 9/28/20
• According to Bestbuy Distributors, 1,945 one-on-one sessions between shareholders and vendors took place during its 2020 Buy & Sell meeting, which this year was an online event.
• Earlier this month, the Auto Care Association, Michelin and Enterprise Holdings produced a demonstration of the Secure Vehicle Interface (SVI) for the European Commission and other interested constituents around the world. The webinar included a demonstration of the capabilities of SVI, examples of potential applications and new opportunities presented by the technology. A recording of the event can be found here.
• Mitchell 1 and Elite will host a free webinar series Oct. 6, 13 and 20 to address what customers think about the auto repair experience. Topics will include what customers like and don’t like about their auto repair shop’s advertising and what prospective customers look for in reviews. To register or learn more, visit https://mitchell1.com/event.
• The North American International Auto Show (NAIAS) has been rescheduled for Sept. 28 to Oct. 9, 2021. NAIAS will remain a fall show after the 2021 event. Show dates have been secured with the TCF Center for the next three years, according to NAIAS organizers.