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The HD Repair Forum Secures Date and Location for 2nd Annual Heavy-Duty Collision Repair Conference

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The HD Repair Forum announces it will host its second annual conference for the heavy-duty collision repair industry on April 2-3, 2019 in Fort Worth, Texas at the historic Hilton Fort Worth.

“The inaugural HD Repair Forum was a success. Our goal was to bring the decision makers and influencers of the industry together with the hope of helping drive improvement for all industry stakeholders. As evidenced by the list of attendees and the level of engagement, the Forum clearly fills the need. Attendees were able to share, learn and network with the leadership in the heavy-duty collision repair industry,” explains Brian Nessen, co-founder of the HD Repair Forum.

The 2018 conference featured technical and management training from some of the most well respected companies and trainers in the industry. In addition, executives from Navistar and Peterbilt, discussed their new vehicle technology and the challenges repairers will face in the future. Several co-located meetings, such as AkzoNobel’s 20 group, were held during the week that brought in some of the best repairers in the United States and Canada. The vendor expo brought high visibility to supporting organizations that are committed to serving the industry.

“Our goal is simple,” states Nessen. “Provide heavy-duty collision repairers with an avenue to collaborate with the key influencers in their business. Vehicle manufacturers, insurers, independent appraisers, information providers, tool & equipment suppliers, paint manufacturers, and paint body & equipment suppliers are welcome.”

The HD Repair Forum expects its second conference to bring additional OEM participation, to continue the discussion on industry repair standards, as well as provide relevant training and education for shop owners and managers.

For more information on the HD Repair Forum and its second annual conference check for evolving updates.

To sign up for the monthly newsletter and get event updates straight to your inbox, go to:

For sponsorship opportunities, or inquiries on collaborative development please contact Jennie Lenk at 281-819-2332.


PPG Releases Commercial Training Schedule For Fall 2018

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PPG has announced its Commercial Coatings training schedule for the fourth quarter of 2018. Classes cover a wide variety of subjects and are designed to ensure that paint technicians stay up to date with their commercial refinish certification and knowledge of PPG commercial coatings products, processes and technological advances.

Led by expert PPG trainers, the commercial coatings training classes are held at PPG Business Development Centers and numerous field locations across the U.S. and Canada. The courses take one to two days and provide extensive classroom instruction along with hands-on work in the spray booth. Technicians are given generous opportunities for informal discussions and Q&A sessions with the trainers.

Commercial training courses cover PPG premium brands including the DELFLEET ESSENTIAL®, DELFLEET® Evolution and PPG commercial performance coatings (CPC) product lines, with certification and recertification offered for the Delfleet family of products. Programs encompass a comprehensive range of topics from product selection, equipment and color tools to surface preparation and paint application best practices. Classes are also offered for PPG’s ADJUSTRITE® commercial estimating system. Classes are available in Spanish and French in some locations.

PPG refinish technicians must be certified and then recertified every two years to make certain they stay current with ever-evolving industry developments. When PPG paint technicians and their respective collision centers are certified, the centers may offer the PPG Commercial Vehicle Paint Performance Warranty to their customers, providing a valued edge over the competition. Technicians must maintain their PPG certification in the Delfleet Essential or Delfleet Evolution paint line for the collision repair center to continue participating in the PPG commercial warranty program.

Course descriptions with October, November and December dates, locations and registration instructions can be found at

For more information about PPG refinish products, visit or call
(800) 647-6050.

Road to Green: Is Your Heavy Duty Shop Addressing the Reality That is Now Here?

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There is no doubt about it that changing times are here. That is an obvious statement yet I see many HD shops carrying on their business “as usual” thinking as long as we are busy, life is good.

I wish it was that simple, but unfortunately it is not.

Consider answering these few questions about your own operation and don’t get caught in the trap of saying “that does not apply to us”. In reality they all apply to every HD shop out there. Take the time and really think about the depth of the questions and how they affect your business.

1.         The future is here. We face increased competition and shrinking margins. What will be the long-term effect on the business? What should we measure now to catch our business trend lines and what should we do about the facts we find out about in our business?

2.         We need to understand our target heavy duty commercial clients better. Who are they, and what do they really want?

3.         Finding and retaining top staff is a challenge. What must we do daily in our business to attract and retain the best of the best in our total team development? How can we afford a proper benefit package and what should we cover in benefits to have a positive impact on the team and the business?

4.         We must deliver compelling client value and experiences that attract A-List clients. What should be our game plan to differentiate ourselves from our real competition and build long-lasting relationships?

5.         We need to do more business with our existing clients. Are we measuring billed hours per client accurately? Where should we be with this number as an average per RO? Do we have a strategy to increase our average billed hours per RO?

6.         Some of our current and target clients may not be aware of all the “value” we offer. What do we need to bring to their attention?

7.         We don’t charge as much as we should. Do we lack confidence in the value we bring? Is there some other obstacle that prevents us from charging properly? How are we going to fix that?

8.         We need to develop an effective communication strategy. Are we telling our value story effectively? How can we break through the commercial confusion and apathy in a HD world that is overloaded with communication?

9.          We face regulatory pressures and environmental restrictions that make operating our business a challenge. How do we build additional costs into the business to overcome things we can’t control?

10.         We need to increase bottom-line profitability. What is our target percentage increase? What must become our key focus to achieve that result?

These are just a few questions addressing the new reality that is here.

Are you taking the time to think things through to address the future of the business and properly document a game plan to insure your HD shop is going to move forward?

When was the last time you attended a HD Business Management class that addresses these issues?

Perhaps it is now time to truly learn “how” to become a CEO of your own business. In reality, that is your position in your company and your entire team is looking at you for the solutions to ensure the business remains prosperous and dealing with all the challenges ahead.

The Demystification of M&A – Part 2 – The Urge to Merge

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Part 2

The Urge To Merge

There are myriad reasons why companies acquire other companies. After over 20 years of doing M&A deals, I think I’ve heard them all. Despite significant research that suggests the average acquisition fails to deliver the expected returns, decision makers large and small aren’t letting up on the M&A throttle.

While the underlying motive of deals usually is generalized as “growth”, oftentimes, the strategy behind an acquisition is complex and multifaceted. The motivations may be different for public corporations versus privately-held or private-equity funded companies. Many deals are rationalized in several ways. Let’s examine some of the primary reasons companies succumb to “merger mania”:

  1. Synergy: If you’re an M&A junkie like me, you will have heard this motivation more than any other. Simply put, synergy is described by the nonsensical mathematical equation: 1 + 1 > 2. Synergies may be found by “cross-selling” (e.g., leveraging a marketing team to sell related or complimentary products or services) or via “economies of scale” (e.g., fully utilizing an asset, such as finding additional customers/sales to run factories more hours in a day, or combing two companies in the same industry and reducing redundant overhead costs). Disciplined acquirers know that projected synergies should always be quantified and captured in their valuation models. Decision makers should be concerned when the main cheerleader for an acquisition describes the synergies in qualitative, nebulous terms. If you can’t put numbers to them, don’t use them to justify a deal!
  2. U-PICK-IT”: While synergies may be the most referenced reason deals are justified in press releases and earnings calls, the true motivation behind the plurality of deals by publicly-traded companies is the next quarter. The prices of publicly-traded shares, and the careers of the CEOs of the companies that issued such stock, are highly dependent upon their next quarter’s “numbers” – did they deliver the same percentage increase in earnings as they did for the previous quarter? When companies are small, it’s easy to deliver remarkable growth. Taking a HD repairer from $2 Million in Sales to $3 Million is much easier than growing a paint company such as Axalta from $4 Billion to $6 Billion – yet both would be 50% increases. As companies grow, it gets harder for them to deliver consistent earnings trends. Yet, Wall Street rewards certainty and consistency. As a result, public-company CEOs will use acquisitions to find the earnings growth they need to keep their stock prices moving in the desired northeasterly direction. These CEOs will mention all sorts of motivations to justify these deals and mask their true intentions; so, you get to pick the strategy the next time you read of a public company pursuing an acquisition that doesn’t seem rational.
  3. Diversification: The objective of diversification is to lower risk. Portfolio theory teaches us that a basket (a.k.a. portfolio) of multiple equities usually is less risky than holding just one company’s stock. [Note to Self: Ensure my 401(k) has a balanced, diversified selection of assets.] Similarly, companies large and small are less risky when they are diversified. This could come through having multiple locations or multiple service/product offerings or minimal customer concentration. Acquisitions are used to diversify regularly.
  4. D-Fence!: While often not cited publicly for fear of anti-trust laws, many deals are defensive. Defensive deals usually are meant to keep a competitor out of a market or away from a new opportunity. Occasionally, CEOs that get into bidding wars to keep competitors from winning deals find that they may win the battle but lose the war. If you find yourself considering a defensive deal, be sure you stay honest to your targeted returns and maintain deal discipline. It’s easy to overpay when fear influences strategy.
  5. D-Fence v2.0: Another form of defensive deals is when a company buys a competitor. While it’s challenging to think of many reasons to not acquire a competitor, it is easy to see how the buyer could overpay by believing that if a competitor is taken out, that buyer will have better pricing power. The Hart-Scott-Rodino Antitrust Improvements Act of 1976 is one arrow in the government’s quiver to ensure companies don’t get too much pricing power.
  6. Speed to Market: Deals occasionally are the result of a corporate initiative to pursue a new product, service or process, and management determines that it’s faster to acquire it versus taking the time to develop it internally. Multiple shop operators face this choice regularly when they want to expand their operations to a new zip code. Greenfielding/brownfielding may result a lower overall investment because they’re not having to pay for goodwill (a.k.a. blue sky – a topic we’ll visit in detail in a future article), but the time it takes to get to profitability can wipe out the savings.
  7. Taxes: This shouldn’t be surprising. Business of all sizes make decisions daily in part due to their tax consequences. The deal world is no different. It may be to capture some tax credits or to relocate a business to a different, more tax-efficient jurisdiction. Having been involved in numerous cross-border deals during my career, I can attest to the impact taxes have on the decision-making process when a US-based company buys another in a foreign country.
  8. Excess Cash: As corporations evolve from start-up to cash cows, they tend to reach the stage of generating more cash than is necessary to maintain the status quo. Obviously, shareholders like this stage because they hope to receive dividends; CFOs may advocate using the extra cash to buy their own company’s shares, or to invest in new equipment. While the question of how to deploy excess cash can lead to big battles in the boardroom and premature retirements, all stakeholders agree that the excess cash shouldn’t be simply sitting in a bank account earning next to nothing. Having excess cash on the balance sheet has led to many deals that strategically may have been underdeveloped. A parallel to this reasoning is the low interest rate environment. When corporations can buy a company that cash flows 15%, using money that only costs 3%, it’s easy to see how a lot over the past decade have been justified.
  9. Black Friday Prices: This of course is a reference to the day after Thanksgiving, which traditionally was the cheapest day of the year to shop – everything was on sale! The internet has disrupted this, but the principle still applies. The collective “we”, whether we’re individuals or corporations, tend to buy things when we perceive a good bargain. Put simply, some deals happen simply because the buyer believes the target company is undervalued. Buy low. Sell high.
  10. New Markets: Deals of this nature tend to be made by companies acquiring peers or large players seeking accelerated growth, such as when an East Coast-based operator of mechanical service shops acquires a West Coast operator of mechanical service shops.
    “Consolidators” constantly need to enter new markets in order to maintain their growth trajectories. Consolidators are companies seeking a plurality or majority market share in an industry – think: CVS & Walgreens; Staples & Office Depot; Lowes & Home Depot.
  11. New Customers: As discussed above, a company looking to diversify its customer base may seek to acquire a peer (or a competitor) in its existing market that has different customers (such as a retail repair chain that wants to add fleet accounts so it’s not too dependent upon its advertising success). Similarly, companies will acquire others with a different customer base with the hope that the buyer can subsequently offer its other services or products to the new-acquired customer base.
  12. New Employees: Service-based companies and corporations with valuations weighted heavily on their intangible assets often credit their workforces for their value creation. Thus, deals often are motivated by the opportunity to get access to industry “thought leaders”, high quality / well-trained workers and/or those employees who maintain strong relationships with their employers’ customers. When the target is a very small consulting firm, the deal often is referred to as an “acqui-hire”.
  13. Old Employees: Huh?!? That doesn’t make any sense. Well, not so fast… Not chronologically old, but the current employees of the buyer. Many business owners will acquire peers or competitors with the hope that the larger organization will yield better or more opportunities for their existing employees. Growing companies add layers of management and expand corporate functions – these are opportunities that retain good employees. Employees get to grow professionally as the business grows.
  14. New Products / Services: Companies such as Bloomin’ Brands have acquired multiple restaurant chains (e.g., Outback Steakhouse and Carrabba’s Italian Grill). Despite having numerous locations located next to each other, it works because they know their customers occasionally will want lasagna instead of a steak. Similarly, a dealership knows that its customers occasionally will need collision work, or PDR, or a new windshield, etc. Companies will acquire others to get access to a unique service or patented product. Clearly, they believe it’s easier to buy than to reverse engineer and build; a less obvious consideration is that in certain circumstances, acquisition costs go straight to the balance sheet, which means the all-important earning per share measurement is unaffected (unlike the costs of building a new division that reduce profits / EPS).
  15. “Multiple Arbitrage”: I’ve intentionally saved the most interesting for last. This term seems both technical and sophisticated. In reality, the motivation is easily understood, albeit difficult to implement, and is the reason behind a lot of the deals happening throughout the automotive aftermarket.   Throughout the economy, regardless of industry, there tends to be a “size premium” – an increase in relative valuation that larger companies enjoy over smaller companies. In other words, with all other things being equal, each dollar of sales usually is worth more if it is earned by a large corporation than if it’s earned by a small business. This is true for both publicly held and private companies, and is due to the notion that larger companies tend to be less risky and more likely to continue to grow than small companies. [NOTE: I have not found credible research to support the widely-held belief that 90% of small companies fail. However, there is limited academic research that shows the failure rate for small businesses exceeds that of larger businesses.] Portfolio theory can explain this belief best: if I hold in my 401(k) shares in 10 different businesses, I have a lower chance of losing all of my money than had I invested the same money into only one business. Similarly, if I own and operate 10 tire installation shops that collectively generate $10 Million of sales, those sales are less likely to all disappear than if I owned one tire installation shop that has $10 Million of sales.

Thus, Multiple Arbitrage has led to hundreds of deals in the automotive industry over the years as companies borrow money to acquire other companies in the same industry at relatively lower valuations. These acquired companies are then integrated into the buyer and eventually the shareholders of this large, acquisitive company sell it. A common term used to describe this investment strategy is Buy & Build: buy multiple companies at 3x-7x EBITDA, build a corporate infrastructure and meld the companies together, and then sell the amalgamation for 12x-15x EBITDA. If they are able to use borrowed money to fund the acquisitions, then the return on their invested capital is significantly enhanced. This is a page out of many private equity playbooks.

Comments / questions / criticisms? Are you contemplating a deal that might fit into one of these categories and you want to ensure you’re making a sound decision? Feel free to e-mail me: Our next article will examine the buying process from the seller’s perspective, along with breaking down the stages of a deal. Until then, happy dealing!

Road to Green: HD Shops Must “RE & RE” Their Business

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Studies of the HD sector are confirming that Independent HD shops are losing the struggle to retain the clients’ on-going business versus the growth in bay service business that New HD Dealerships are experiencing.  In close examination as to why this is happening, the main reason is due to a lack of business focus by Management of the Independent HD shop.  Too many business owners and managers are “too busy” not making money instead of slowing down and preparing their business to meet the client’s real needs and wants for their commercial vehicles.

Consider that weak shop owners focus on “cost’ to save money, whereas the most successful shops focus on “value” to make money.

Consider that new business standards are required for this new heavy duty aftermarket sector that most shop Owners/Managers have not addressed within their business operation.

It is time to “re & re” the Independent Heavy Duty shop.

Review each of these items within your own operation to ensure your business is heading in the right direction to retain all your clients business.  If you ignore these items, there is a real possibility that you are already, or soon will, lose your clients to the dealership(s) within your area.

1. Re-New the Business Format:   The “same old, same old” does not work anymore.  Shops cannot “bang them in and bang them out” ONLY doing what the client asked for.  The math does not work anymore with that format.  In fact, Independent HD shops that concentrate mainly on “volume” to keep “the boys busy” do not know that, on average, 60% of the work that they do does NOT create $1 of NET profit for their business.  It only creates sales and gross profit. They do not know how to measure this.  They are working very hard to stand still and in many cases actually move backwards in their business. Today, your business must be very focused on each individual client, one client at a time and deliver value.  Management’s number one job is to build relationships; therefore Management must slow down at the front counter and take the proper time to meet, understand, and council individual clients as to what the manufacturer recommends to ensure safe, reliable and efficient driving with their vehicle.  Service maintenance and service intervals must be discussed with the client. That is YOUR professional responsibility to the client. Client vehicle technology and maintenance education is more critical today than ever before.  The average rig owner today is not “stupid”; but they are uninformed! Slow down!!! and define the value you are prepared to deliver to each client.

2. Re-Learn the Business: Continuous technical and business training and development is mandatory today.  Professionally operating an Independent heavy duty repair shop is the most complex business in this new aftermarket, requiring not only a great deal of capital, but also higher in-depth skills than ever before. Consider technical development of the vehicle now requires highly skilled technicians who embrace vehicle knowledge with a tremendous amount of personal pride.  These technicians are highly skilled professionals. The depth of knowledge they must completely understand, and stay on top of, is mind boggling, and it is the shop’s Management’s responsibility to ensure these professionals have all the right training and tools to execute their skill.

Management (shop owners) must also continuously visit “classrooms” to stay on top of all business issues, and there are many.  It is a new world order today and this new order affects the very profitability, and potential future viability, of an Independent HD shop. Management must learn and measure the business in a totally different format today.  Just measuring parts and labor sales and following the shops bank account up and down, doesn’t work.  Management must stay on top of the business numbers to ensure they are measuring NET PROFIT on each repair order before the invoice is closed off, one R/O at a time.  Businesses that are only interested in sales and price of commodities don’t get it yet.  The question that must be asked is “do these shop owners have any desire to get it?

4. Re-Certify the Business: Management must establish “standards of execution” throughout the shop.  Define your standards in print.  Each staff member from the front counter, to the back office, to the back shop must completely understand and “believe-in” to “how” to execute their function that in turn exceeds the clients expectations. Certification today is just not a piece of paper or experience.  Certification is an Attitude!  “We will not let the client down”. “We care!”. We will take the “responsibility” to make sure your vehicle maintenance and your experience within the walls of our shop, exceeds your expectations. “We will be second to none.”

5. Re-Professionalize the Business: Management must establish on-going reviews with each staff member to ensure they are continuously aware of the importance of their personal day-to-day execution of their particular function within the shop and how it affects the clients perception of the shops professionalism.  Management must also continuously review the systems within the shop.  The systems are not only the software systems but also includes the “processes” in “how” the shop delivers its services to the commercial client.  

To “Re & Re” your shop today is simply not “knowing what to do”.  You must become proactive.  Consider this statement; “It’s not what you know, it is what you do with what you know”.

Too many HD shop owners today are very apathetic and act like “deer staring into the headlights”.  Their actions seem to be advertising “I don’t care about that stuff (above) and I have no desire to get it.” It is very unfortunate that these shop owners insist on hanging around in our industry as they are definitely affecting the image of the Independent sector which in turn hurts the best Independent HD shops within the country.  Consider also that these weak shops work to the benefit of the new HD Dealers in that individual commercial clients do not enjoy the experience at the weak shops and too many are assuming all Independents must be the same.

The challenge in front of the HD Independent sector is not an easy one; however, it is possible to turn things around when all HD Independent shops start to communicate with each other about the importance of raising the shop operation bar. Consider discussing the above issues with your parts supplier who sells to these weak shops and all of your HD shop peers to see if your market area is interested in “taking the market back”.

Total Solutions and Standard Operating Procedures for Heavy Duty Truck Repair Now Available from 3M Automotive Aftermarket Division

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Heavy duty truck repairs present a tremendous opportunity for today’s collision repair industry. However, many repair professionals who focus on heavy duty trucks are challenged to find the standard operating procedures and specialized products needed to deliver high-quality, durable and cost-effective repairs.

To help heavy duty truck repair shops service these big rigs more efficiently, 3M Automotive Aftermarket Division has created an online Heavy Duty Truck Repair Center to offer all of the solutions, SOPs and repair processes – in one convenient location. Whether repairing fiberglass (FRP), sheet molded compound (SMC), METTON® (Liquid Molding Resin) or traditional metals, 3M offers step-by-step guidance to make the repair, protect it from corrosion and keep the overall vehicle looking great.

 Panel Repair Is Faster With the Correct Adhesives

When it comes to repairing damaged SMC, FRP, TPO or METTON®, understanding which adhesive to use and where to use it is critical for a sound repair. 3M offers a range of solutions to fit every repair need. Many, including 3M™ SMC/Fiberglass Repair Adhesive, come in 400ml cartridges so technicians can stay on the job much longer without having to unload and reload empty cartridges.

3M adhesives are used primarily for bonding and filling repair areas such as frontside, backside and cosmetic panel repair for heavy duty trucks. Depending on which substrate is used it may require a flexible or a rigid adhesive or an adhesive that helps build strength and rigidity. When working overhead or on a vertical surface with traditional fiberglass matting and resin, a technician may require an adhesive with more vertical hold. Searching for a composite and/or metal bonder with rust inhibitors? The bigger question now becomes: what products and standard operating procedures are technicians using today to complete the repair with safety and productivity in mind?

Regardless of the repair – composite, rivet bonding, panel replacement or adding an isolator between panels to protect from galvanic corrosion – 3M has a solution. 3M supports its products with easy-to-read SOPs to help technicians get the job done right the first time.

 Controlling Dust Is a Must for a Cleaner, more Productive Shop

Constantly battling to keep the shop clean? There are many sources of dirt, dust and debris in a collision shop. Managing dust in a shop can reduce rework, increase production efficiency, provide a better environment for technicians, and leave a more professional impression with existing and potential customers.

Grinding, welding, sanding, painting and polishing can all create that layer of dust that collects everywhere. Dust from fiberglass, SMC, body filler and primer has a way of spreading around and makes an enormous impact on cleanliness.

A growing trend is the use of dust extraction systems and new developments in this technology are making them even more efficient and easier to use.

The traditional full central vac systems weren’t popular because of the large, bulky hoses that typically need to be attached to technicians’ tools. One option that has gained popularity is mobile dust extraction units like the Total Automotive Sanding System from 3M and Festool. This system uses a small, mobile dust extractor that can be moved around the shop from job to job and can be used by two technicians at a time. This versatile mobile option addresses a great deal of the technician’s previous resistance and can be very practical for facilities of any size.

The system combines 3M best-in-class abrasives with Festool premium power tools and dust extraction solutions. Customers can easily configure the best systems for their specific shops and dust extraction needs. The Total Automotive Sanding System mobile dust extraction units and multiple dust-free tools and long hose length options (up to 10 meters/32.8 ft) are effective solutions for the large vehicle sizes typical in heavy duty truck and commercial shops. Also, the hoses feature rotating adapters that greatly increase freedom of motion when using a power sanding tool connected to the dust extractor. Once an optimized dust extraction system is integrated, the shop will quickly start to see many benefits of a cleaner work environment.

*Note: The Total Automotive Sanding System mobile dust extractor is not approved for use with aluminum dust.

Grinding Is a Laborious Task – Save Time and Effort with 3M™ Cubitron™ II Abrasives

 In the heavy duty truck, bus and commercial vehicle market, it doesn’t matter if the job consists of surface preparation, weld grinding, spot weld removal, sectioning, panel trimming, cutting steel stock or rivet removal — 3M™ Cubitron™ II is the answer.

3M™ Cubitron™ II abrasives feature precision-shaped ceramic abrasive grain technology. These proprietary ceramic grains are precisely shaped into triangular structures – essentially, sharp peaks that slice, not plow, through paint and metal. The result is faster surface prep for paint, cutting of welds, side panel removal and door skin removal.

For the ultimate cut-off wheel for cutting sheet metal, frame rails, clamps or rusted bolts, fiberglass/SMC or very heavy stock, choose the 3M™ Cubitron™ II Cut-Off Wheel. It provides long-lasting life due to the cooler running abrasive during the cutting process.

When removing a spot weld or rivet, rather than the typical process involving a drill bit – which in the case of high strength steel-can be very labor intensive and cost the shop thousands of dollars per year in drill bits alone, an easier and less-expensive solution is the 3M™ Cubitron™ II File Belt and File Belt Sander, which improves control, uses less effort, and costs significantly less. Technicians can grind exactly where they intend, i.e. the head of the rivet or spot weld, without damaging the strength and integrity of the host panel.

Cavity Wax: OEMs Use It for a Reason — Vehicle Preservation

When a truck or commercial vehicle is manufactured, preventive measures are taken to resist corrosion over the life of that vehicle. After a collision repair, these protective materials can be compromised and need to be restored properly. Restoring the corrosion protection and being careful not to create new corrosion hot-spots is the key to a proper repair and safer vehicle.

Corrosion does not simply occur due to road salt and the elements. Common procedures such as grinding, welding and cutting in truck collision repair – anything that compromises the OEM corrosion protection process – can create opportunities for corrosion. Learn more about the causes and prevention of corrosion here.

3M offers a complete solution for preventing corrosion following a repair — cavity wax, seam sealants, coatings and paint systems. To help protect the integrity of the repair when access to the backside is difficult or limited, use 3M™ Cavity Wax Plus. This product will effectively coat and protect from corrosion by sealing out oxygen. This is easy-to-use aerosol product in a convenient can eliminates the need for bulk spray equipment. The 24” and a 34” wands with small 360-degree applicators at the ends are easy to insert into cavities such as cab corners or frame rails. The 360 degree applicators ensure that the coating is applied evenly on all surfaces. An additional 8” wand is great for flooding joints and for easy-to-access areas.

Reduce Solvent and Paint Waste with 3M™ PPS™ Series 2.0 Paint Cup System

For painters challenged with painting large surfaces with large-format paint cups, the 3M™ PPS™ Series 2.0 Spray Cup System offers an excellent solution. The 3M PPS Series 2.0 Spray Cup System dramatically improves the painting process with a revolutionary new spray cup design that delivers advanced performance, efficiency and cleanliness.

The 3M™ PPS™ Disposable Paint Cup System has reduced solvent use by up to 70 percent and decreased prep time by up to 50 percent in shops all over the world.   It quickly became the standard for painters around the world.

Now, 3M has improved this system with a new spray cup design that eliminates the collar, adds a quarter-turn lid locking system and incorporates new features to make painting easier and more efficient.

To learn more about the six key improvements in 3M™ PPS Series 2.0 Spray Cup System and see a demonstration, visit here.

The elimination of the separate collar with the quarter-turn lid locking system improves the cleanliness in the painting process and eliminates potential sources of contamination due to equipment cleaning or maintenance. The easy assembly and refilling process improves the efficiency for high-production painters, while the wider adapter allows them to use a larger cup for consistent, efficient batch painting.

3M Accuspray™ ONE Spray Guns Provide Flexibility, Reduce Clean-Up Time

With the new spray cups and related equipment, 3M also provides a new series of atomizing heads that allow shops to use the 3M PPS™ Series 2.0 with Accuspray™ ONE spray guns without an adapter. The 3M™ Accuspray™ ONE Spray Gun is a lightweight, composite spray gun body that is molded in one piece, eliminating the complexity of cleaning and maintenance of small parts and pieces. 3M™ Accuspray™ atomizing heads for PPS™ Series 2.0 provide the same stable four-point connection to the spray gun. Replaceable atomizing heads can be reused 5-10 times and then removed and replaced – the performance of a brand new spray gun, on-demand and at a fraction of the price.

Painters can quickly choose the correct head according to its color: 2.0 mm (red), 1.8 mm (clear), 1.4 mm (orange), 1.3 mm (green) and 1.2 mm (blue) for a wide range of materials from basecoats to primers to undercoats or industrial coatings. For technician convenience, the millimeter size is presented clearly on each atomizing head for easy identification.

 Buff Efficiently with 3M™ Perfect-It™ EX and Quick Connect Paint Finishing System

The 3M™ Perfect-It™ EX system is designed to deliver optimal performance during paint finishing, every time.

3M™ Purple Finishing Film and 3M™ Trizact™ abrasives are essential tools for the paint defect removal and refinement processes, allowing painters and detailers to complete the defect removal process much more quickly. 3M™ Trizact™ grade 3000 and 5000 is used to further refine previous 1500 or 2000 grade sand scratches, making the buffing process easier and helping shops save time and compound material cost. The Trizact mineral itself consists of precisely-shaped three-dimensional “pyramids” distributed uniformly over the surface of the disc. As the pyramids wear, fresh, sharp mineral is constantly exposed to the workpiece, resulting in faster, more consistent performance throughout the life of the disc.

After all defects have been removed and sand scratches totally refined, the final steps of the paint finishing process are to compound and polish. 3M has added a new assortment of wool and foam pads called 3M™ Quick Connect. 3M Quick Connect Pads are designed to provide optimal performance when used with the Perfect-It™ EX system. The 3M™ Quick Connect Adaptor makes it very easy to quickly switch between compound and polishing pads and center the pads, eliminating wobbling or vibration to help minimize user fatigue and improve technician productivity.

When a shop makes the 3M Paint Finishing System their go-to system, they benefit in both speed and results.

All of these repair processes and more can be found with step-by-step detail at It can also be found on the 3M Collision app for iPhones, which can be downloaded from the Apple app store.

3M Automotive Aftermarket Division Keeps the World Moving

3M automotive products keep the world on the move, with innovative solutions for building, repairing and maintaining vehicles. From the collision repair professional to the individual vehicle enthusiast, people around the world trust 3M products to protect, repair and keep their vehicles looking showroom new. And our commitment to this industry extends beyond product performance to a careful stewardship of the world’s resources and environment. Serving the needs of our customers has made 3M a trusted leader in vehicle care and repair, and we are dedicated to earning that trust each and every day.

For more information, contact 1-877-MMM-CARS, contact your local 3M Distributor or 3M Sales Representative or visit the website at Follow 3M AAD on Facebook at and on twitter @3M_Collision and Instagram @3MCollision.

About 3M

At 3M, we apply science in collaborative ways to improve lives daily. With $32 billion in sales, our 91,000 employees connect with customers all around the world. Learn more about 3M’s creative solutions to the world’s problems at or on Twitter @3M or @3MNews.


What’s New In Heavy Duty Welding, Part 3

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Over the last couple of months, I-CAR has been discussing welding requirements for heavy duty collision repair. Brian Wasson, Welding Program Manager at I-CAR, presented ‘What’s New in Heavy Duty Welding’ at the HD Forum in Fort Worth, Texas. We have already discussed identifying materials, preparing your working environment and the welding process.

As you heard, the materials used to build vehicles have moved from the mild steel we all know to new construction methods such as High-Strength Steel, Ultra-High Strength Steel, Aluminum and more to come. GMA MAG (Metal Active Gas, commonly referred as MIG) welding has become the automotive industry standard for repairs. Thanks to the influx of new materials that require less heat, other attachment methods have been introduced like MIG brazing, spot welding, and rivet bonding.

How can you make sure you and your staff have the skills and knowledge to perform those repairs? I-CAR provides welding training for technicians that includes explanations of how welding has changed and hands-on instruction to develop the skills and methods for quality welds. In addition, I-CAR also provides specific hands-on course to address these other attachment methods too.

Welding background is provided through courses on hazardous materials, welding theory, and panel repair and replacement. Hands-on training includes work on Aluminum and Steel GMA methods, along with Rivet Bonding, MIG Brazing and Squeeze-Type Resistance Spot Welding. I-CAR works with many automotive manufacturers to help develop welding programs appropriate for their models.

Whether you are welding the frame or other parts of the vehicle, proper training will help you gain and apply the knowledge and skills to execute those welds with confidence. That confidence makes your work better and your customers safer.

Road to Green: The Future IS Promising

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The future for the Independent Heavy Duty sector looks very promising, and will prove to be an exceptionally profitable period over the next 5 to 7 years compared to the last 10 years BUT only for the HD shop owners who truly understand their client base, their business, and the HD industry.

The supply / demand economic equation will be clearly understood by most HD shop owners as the supply of competent technicians has dried up, but the demand is forever increasing throughout the industry, which will force wage levels to rise quite dramatically over the next two to three years. Already we have seen in various areas that competent technicians are receiving $28 to $45 per hour with a $1,000 signing bonus, proving this shortage is not confined to one area of North America. These levels of wage rates can add to the “brain-drain” situation that is affecting North America in every industry.

Finding competent technicians is certainly one issue, but what will happen to our industry and the independent heavy duty shop itself, under this financial scenario?

In the long run, this is excellent for our industry, as competent technicians finally become recognized by the industry, that they are working in a “profession” rather than a “trade” and that technicians are highly skilled individuals deserving of a professional income. In the short run, it could cause absolute financial ruin as most shop owners are not aware of all the detailed numbers of their business and how they contribute to the net income of the business, or, properly versed on how to pass on the right labor costs to their clients. They are running their business based mainly on “price”, trying to tell everyone they are the best, and at the same time, the cheapest. They have failed to educate their clients about the level of expertise that is now required to maintain today’s HD vehicles and trailers, and that competent expertise does have a price tag to go along with it. It is also about HD shop efficiencies which is an on-going learning curve the HD sector must learn as “efficiency” affects your true cost per billed hour.

Shop owners must change how they measure their labor revenue component.   Rather than measure by one labor revenue department, labor should be broken down into a minimum of three categories, namely, a maintenance/mechanical labor department, a diagnostic labor department and a re-flash labor department. Each labor department has different skill level of technicians. The maintenance mechanical labor door rate should be set at a minimum of 4.5 times the top mechanical technicians hourly wage, (i.e. $23 X 4.5 = $103.50) or 85% of your true cost per billed hour, the diagnostic labor rate should be set at a minimum of 5.35 times the diagnostic technicians wage, (i.e. $29 X 5.35 = $155.15 per hour) or 115% of your true cost per billed hour and the re-flash rate at 6.0 times the technicians hourly wage, (i.e $32 X 6.0 = $192.00) or 125% of your true cost per billed hour. These additional rates are known as tier rates. The higher multiplier rate factor is necessary not only to cover high tech equipment purchase costs, and their faster replacement costs, but also on-going software upgrades of said equipment, on-going high end HD training, subscription fees and also Management and Service Advisor time that must be spent with the client. Management’s and Service Advisor time is consumed by educating the client as to the diagnostic process to take place, as well as keeping the client informed, and ensuring client confidence in the shop is maintained during and after the process. Until the client

HD vehicle mix of the shop is measured and understood; (“If you can’t measure it, you can’t manage it”) an interim guideline of a minimum of 25% of the labor hours billed through the bays should be going out at the diagnostic rate.

When shop management understands who they are selling to, how to implement the new strategy and measure, document and sell these tier rates with client satisfaction, the contribution to gross profit of the shop can be tremendous. When gross profit is enhanced, net profit is enhanced. Management expertise now drives future growth of the heavy duty business and the future bottom line of the business.

Are you up-to-date in your Management expertise to embrace the new profit potential available in our heavy duty industry?


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 THE RULE OF THREES. Oftentimes, life gives us three choices. When we were kids, it was Rock, Paper, or Scissors on the playground. As we got older, perhaps it was Dribble, Pass or Shoot on the basketball court, or Call, Raise or Fold at the poker table. When owning a heavy duty collision repair company during a time of potential consolidation, the choices are Exit, Expand or Exist.

This article is the first installment of a step-by-step, hands-on guide to the first two choices (we’ll assume that simply existing doesn’t require a lot of coaching). Subsequent articles will explore some of the motivations fueling mergers & acquisitions (“M&A”), the typical M&A process and flow, and the best practices from both a seller’s perspective (i.e., “The Exit”) and the “Buy Side”. If you are contemplating the sale of your business, or are considering an acquisition-based growth strategy, you won’t want to miss this column.

As a passionate student and practitioner of investment banking and corporate finance for over 20 years, getting a platform to share my thoughts on heavy-duty collision repair M&A is both exciting and a big responsibility. The Wall Street Journal has at least one M&A headline in every edition. Numerous academics have studied the effectiveness of M&A. It’s even sexy enough to make movies about it – think Michael Douglas as Gordon Gekko or Richard Gere as Edward Lewis. My goal is to demystify M&A; I hope the following articles help you gain a solid understanding of M&A best practices and prepare you for a deal whether you’re growing your business through acquisitions or you are looking to monetize your retirement by selling your business to a larger operator or private equity group.

As you read through these articles, please feel free to send me feedback, ask questions or suggest future topics. Thank you in advance for your trust.

DEFINITIONS. Before we have a history lesson, let’s agree on some definitions (for the purists and deal attorneys, I acknowledge that some of the following definitions may be oversimplifications – but they are adequate for these columns).

The “A” in M&A – Acquisition – typically refers to one company (the “buyer”) buying substantially all of the assets or stock of another company (the “target”), such that the buyer takes full control and the seller has little or no continuing interest in the business.

Acquisitions of small companies (i.e., US$25M or less in enterprise value) frequently are “asset deals”, which refers to the purchase of a target’s tangible (i.e., equipment, land, computers, fixtures, inventory, receivables, work in process, etc.) and intangible (i.e., brands, patents & trademarks, websites, phone numbers, customer lists, and, as much as possible, the company’s reputation) assets. Because the company/corporation is effectively stripped of its assets, but the legal entity itself is not acquired, the seller will continue to own the legal entity that sold the assets. This is notable because the legal entity will continue to retain any assets that are not purchased, as well as all of the liabilities not assumed by the buyer.

The alternative, a stock deal, is easier to understand because the purchaser is simply buying the shares of the corporation (or in the case of a limited liability company, the member interests). In a stock deal, the buyer gets all of the company’s assets as well as all of its liabilities. It’s just like buying shares in 3M through your online stock broker – except you would need roughly $120 Billion to buy all of the approximately 600 million shares outstanding.

Typically, all of the target’s stock or assets are included in a transaction. It is not uncommon, however, for a buyer to take a partial interest in a target. These partial acquisitions of stock can be “controlling”, wherein the buyer has majority voting rights or influence over key operational and strategic decisions, or “non-controlling”, wherein the buyer does not have enough ownership to make decisions unilaterally. Oftentimes non-controlling acquisitions are made by “financial” buyers that provide capital (i.e., money) to a company to be used to fund growth (i.e., acquisitions), in exchange for a minority share of the company’s future profits. On the other side of the buyer coin are the “strategics”, which are companies that generally are considered competitors or peers of the target company.

Non-controlling deals also occur when a strategic takes a minority ownership stake in a smaller company in the same or adjacent industry. This will occur when the larger company wants to prevent one of its competitors from acquiring the target, while not wanting to acquire the entire target (perhaps due to lack of money, or uncertainty surrounding the target’s business model, or countless other reasons).

The ”M” or merger, on the other hand, refers to a combination of two companies, wherein the owners each contribute the assets and liabilities of their respective companies to a new legal entity (let’s call it “NEWCO”) and then each owner receives an ownership share in NEWCO in proportion to the value that each seller contributes to NEWCO. For example, if one company contributes $6 million of assets to NEWCO, and the other company contributes $4 million, then the first owner will own 60% (6/(6+4)) of NEWCO. In a typical merger, the companies are combined and the management teams meld together to run NEWCO, with the management team from the company with the highest ownership in NEWCO getting ultimate authority.

There are other types of business combinations, including ESOPs (wherein the employees own the company) and Joint Ventures (wherein two or more parties invest into an entity and share in its risks and rewards, but the investors maintain separate identities), as well as trendy terms such as “acquihires” (which occur when an acquired company’s assets are primarily employees).

HISTORY. M&A has been taking place as long as there have been companies. Notable mergers occurred as long ago as the 1700’s in India and Italy. In the United States, the first big merger wave hit during a 10-year period beginning in 1895 when over 1,800 companies were consolidated into others. In 1900, the value of all M&A equated to 20% of the United States’ Gross Domestic Product (compared to 3% in 1990).

Merger activity can be measured broadly (at the “macro” level), such as the above trends, as well as at the “micro” level (e.g., individual industries). At the macro level, M&A activity is influenced by governmental policy, economic trends, interest rates, demographic shifts, etc. At the micro level, it’s primarily strategic reasons that drive significant M&A. For example, industries that exhibit certain characteristics (e.g., profitable, sizeable, easy to understand, etc.) tend to get “consolidated” – wherein a couple of large, dominant players evolve as the result of numerous acquisitions of their smaller rivals or peers.

The next article will examine the motivations fueling M&A activity as well as provide a primer on the typical steps in an M&A deal. Until then, happy dealing!

Road to Green: Culture Change? You Can’t Make Anything Idiot-Proof Because Idiots are so Ingenious

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HD shop owners and managers are starting to realize that the reliability and quality of their products and service processes are vital to a successful business. Everyone is also realizing that today’s world is changing faster than ever before. Technology developments, restructuring and mergers, new ideas about management concepts are all putting pressure on owners to change and be agile. The HD industry is acknowledging that HD shop and parts supplier business owners clinging to same old structures will ultimately lose out.

Everyone is seemingly looking for the perfect solution with the right business processes to secure their future. Well the answer to that task is one single, make it right, solution does not exist.

Many studies have shown that the main causes of performance problems of staff and Management are actually in the business structures, systems and culture within which these people work. Seldom is the culture of the business properly examined by Management. It is a fact that if Management put good people in bad systems you will get poor performance, however, it is also a fact that 20% of the staff works against Management to implement change within their structure and system. They are very uncomfortable with the introduction of new ideas and new processes. They only know and want to remain within their comfort zone environment of “same old, same old”.   They just don’t realize that if we want things to stay as they are, things will have to change. So to tackle the problems of the HD shop or store, Management tries to make things “idiot-proof” hoping to improve the businesses overall performance by reorganizing or introducing new training and development programs. These moves create change, but when this is done without understanding the HD shop or store’s unique culture, owners will in fact solve one problem while without knowing it, create others. The stress level of the business actually increases and then Management in turn says the reorganization and new programs don’t work.

It must be clearly understood that within the HD aftermarket, we operate a very complex business. Management must acknowledge quick fixes don’t work, don’t exist and is totally unrealistic thinking. Business processes and change concepts must be tailored around the culture of the business itself. To achieve this takes time and if Management has ignored the business “change” required for years, or never understood the culture of the business they manage, he/she is going to be disappointed with any training or development programs they participate in. Implementing culture change and fine tuning business processes in the HD aftermarket takes on average 2 to 3 years and it is for this reason many HD aftermarket owners and managers are struggling today with their business. They failed to embrace change. They also failed to involve their staff and understand the Chinese Proverb “Tell me and I’ll forget, show me and I may remember, involve me and I’ll understand.”

The solution is not simple but it must start with ownership undertaking a complete “inventory” study of its personnel and management culture to determine what is going to be required to move their specific business forward. Once this is done, then and only then, the right training and development processes can be sought out. Slow down and really think about your business. What do you have now, what do you want it to be and whom are you going to involve?

Bob offers personal business coaching and on-going business development and training for Heavy Duty mechanical shops focusing in on building NET income. He can be reached toll free at 1-800-267-5497 or email him at