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E X H I B I T
A
EXHIBIT A
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Report of Keith A. Beveridge, MBA for Allstate v. Auto Glass America, LLC, and Charles Isaly
I. Qualifications and Background
I have over 30 years’ experience in the Auto Glass Replacement market. I began my career in 1987 at Libbey-Owens-Ford Co. (which later became Pilkington North America Inc.). Over the years, I was responsible for market research into new and existing markets, managing parts pricing and the annual strategic planning process for the Distribution, Wholesale and US and Canadian Retail Business Units. I was later responsible for wholesale purchasing, forecasting, inventory control and customer pricing. I also managed key accounts including General Motors Service Parts Operation’s (GMSPO) dealer glass ship direct program.
In 1993, I joined Essex Specialty Products which had been previously acquired by The Dow Chemical Co. Essex was amalgamated into Dow Automotive and I led the rebranding efforts. In this role, I directed the product portfolio strategy and managed all aftermarket marketing, merchandising, pricing, training and technical programs. I also directed the cross functional product commercialization team that consisted of representatives from Engineering, Manufacturing, R&D, Quality Control, Original Equipment, Sales, Regulatory and Packaging.
In 1997, I joined NOVUS serving as Vice President, General Manager and Senior Vice President during my 20 years with the company. I was responsible for all facets of the NOVUS business including managing the franchise and dealer auto glass retail dealer networks in the USA, Canada, Australia, the UK and the Netherlands. I also managed the NOVUS auto glass retail headquarter facilities in the Twin Cities, MN, Toronto, ON, Brisbane, QLD, and Breda, NL. I worked closely with the NOVUS franchisees to improve their operations and grow both their business and the footprint of the NOVUS network. I also directed NOVUS’s research and development and manufacturing facilities which resulted in multiple patents for windshield repair.
After leaving NOVUS in 2017, I began consulting as an industry expert. I have also held several positions on the Board of Directors of the National Windshield Repair Association, the Auto Glass Safety Council, and the Auto Glass Replacement Safety Standard Technical Committee. I also served as Chairman of the ANSI Repair of Laminated Auto Glass Standard (ROLAGS) until the end of 2018.
A copy of my curriculum vitae is attached to this report as Exhibit 1.
II. Factual Background
As set forth in the pleadings filed in this case, as well as the discovery responses and transcripts reviewed, this lawsuit is based on the following facts:
Auto Glass America, LLC (“AGA”), is an auto glass shop doing business in Florida. Charles Isaly is the sole owner of AGA and controls its operations. All of AGA’s employees are located in Scottsdale, Arizona. AGA retains salespeople in Florida as independent contractors to solicit customers. AGA also retains technicians in Florida as independent contractors to perform the windshield replacements for customers.
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AGA solicits customers by use of a website and radio advertisements. Its salespeople also solicit customers in parking lots, festivals, malls, other places of business, and by going door-to- door in neighborhoods. Upon solicitation of a customer, the salesperson calls AGA’s office in Arizona, who then calls 1-800-ALLSTATE or an Allstate agent to confirm that the customer has comprehensive coverage. Once it is established that comprehensive coverage is available, AGA proceeds with scheduling a windshield replacement with a technician. The technician does the work, and then asks the customer to sign the work order. On the work order there is an assignment of benefits to AGA. The work order does not include any prices, and AGA does not disclose to Allstate’s insureds how much it charges for its work.
AGA does not perform any windshield repairs. Rather, it only performs windshield replacements.
Upon completion of a windshield replacement for one of Allstate’s insureds, AGA submits an invoice to Allstate which includes charges for the windshield based on the National Auto Glass Specifications (“NAGS”) List Price plus an upcharge of 47%, $90 an hour for labor, and $60 flat for kits. Allstate’s policy is to pay AGA an amount that it has determined is fair and reasonable, which includes the NAGS List Price minus a discount of 47% for the windshield, $35 an hour for labor, and $10-12 for kits.
Where there are disputes as to pricing, Allstate invokes appraisal under its automobile policies. Although AGA has participated in the appraisal process in the past, it no longer does so.
AGA has filed over 1,400 lawsuits against Allstate in Florida’s small claims courts for recovery of additional amounts that it claims are due based on its invoiced amounts.
III. Documents Reviewed
In developing my opinions in this case, I reviewed the following documents:
a. Pleadings i. Plaintiffs’ Complaint ii. Defendant Charles Isaly’s Answer and Affirmative Defenses to Plaintiffs’ Complaint iii. Defendant AGA’s Answer, Affirmative Defenses and Counterclaim to Plaintiffs’ Complaint iv. Defendant AGA’s Amended Counterclaim v. Plaintiffs’ Motion to Dismiss Defendant’s Amended Counterclaim b. Discovery i. AGA’s Responses to Plaintiffs’ First Set of Interrogatories ii. AGA's Responses to Plaintiffs’ Second Set of Interrogatories iii. AGA’s Supplemental Response to Interrogatories Nos. 1 and 3 of Allstate Insurance Company’s First Set of Interrogatories c. Deposition Transcripts i. Corporate Representative of Auto Glass America, LLC taken on January 21, 2020 ii. Charles Isaly taken on January 22, 2020
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iii. Incomplete deposition of the Corporate Representative of Plaintiffs, taken on February 12, 2020 d. AGA Website – currently and historically e. AGA’s Radio Advertisements f. American National Standard – Repair of Laminated Automotive Glass Standard (ROLAGS) g. Spreadsheets of all windshield claims in Florida (prepared by Safelite Solutions, LLC) h. Spreadsheet of AGA’s claims since 2014 (prepared by Allstate’s counsel) i. Sampling of AGA’s invoices j. List of technicians used by AGA k. AGA Purchases from Mygrant and PGW l. AGA Price Files from Mygrant, Pilkington and PGW m. Position Statements from Various Vehicle Manufacturers, including Ford, Toyota, Mercedes Benz, Honda, Audi, Nissan, Subaru, Volvo and FCA (Dodge, Chrysler, Jeep, Fiat) n. FYG video regarding its supply of OEE parts
I have also been provided information by Allstate’s counsel regarding AGA’s charges pertaining to windshields replaced for Allstate’s insureds and Allstate’s payments for same.
IV. Summary of Opinions
In this case, I have been retained as a windshield industry expert. Based on my background and experience in the industry, as well as my review of the pleadings, discovery and testimony available in this case, and the other materials identified above, all of which constitute information that windshield industry experts would reasonably rely on in forming relevant opinions, my opinions are as follows:
1. Generally, the options available for a replacement windshield are OEM, also known as “dealer glass;” OEE, also known as “OEM-quality” in the industry; and Aftermarket, which has been fabricated specifically for use in the auto glass replacement market.
2. The term “OEM” means “original equipment manufacturer.” In the auto glass industry, the term “OEM glass” has a defined and well-known meaning: auto glass made for the vehicle manufacturer, to be used in assembly of the vehicle. OEM glass is purchased from one of the vehicle manufacturer’s authorized dealers, which is why it is also known as “dealer glass.” The term “OEM glass” does not include windshield glass not made for the vehicle manufacturer, even if made to the vehicle manufacturer’s specifications, which would be known as “OEM-quality” or “OEE” (“original equipment equivalent”).
3. It is not plausible that AGA and Charles Isaly believe that OEM means something different than described above.
4. Generally, OEM windshields are more expensive than OEE or Aftermarket windshields. If all things are equal, customers generally prefer OEM glass over other types of glass, and
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a promise of OEM glass by an auto glass shop would be material to a customer’s decision to hire that glass shop to replace a damaged windshield.
5. AGA’s advertisements on its website that it uses only OEM glass are false.
6. It is safe and appropriate to repair windshields for recent minor damage. The ROLAGS standards for windshield repairs are authoritative in the auto glass repair and replacement industry.
7. Windshield damage can be properly and safely repaired at least 20-30% of the time, and potentially up to 50-60%. The revenue to an auto glass shop, however, is much less for a repair than for a windshield replacement, and in my opinion, AGA chooses not to conduct any repairs because windshield replacements are more profitable.
8. The rate of warranty claims is higher for windshield replacements than for windshield repairs.
9. An additional cost relating to windshield replacements relates to the need to recalibrate certain windshields. As vehicles become “smarter,” the need for recalibration increases. This additional cost would not be required for a windshield repair.
10. Because a windshield replacement is a structural procedure, the vehicle should not be driven for a period of time while the auto glass adhesive adequately cures. However, there are no driving time restrictions for windshield repair.
11. There is no valid justification for AGA’s refusal to perform any windshield repairs.
12. In the industry, pricing by auto glass shops for windshields used in windshield replacements are calculated as a discount off NAGS of up to 50% or more. The amount that AGA has been charging Allstate – an upcharge of 47% over NAGS – is unreasonable and excessive, and is a shocking price that greatly exceeds what AGA charges to any other insurer. The amounts that Allstate generally pays to out-of-network vendors like AGA – a discount of 47% off NAGS – is entirely reasonable in the industry, consistent with industry practices, and accepted by other auto glass shops.
13. The amount that AGA has been charging Allstate for labor -- $90 an hour – is unreasonable and excessive, and greatly exceeds the competitive rates charged by other auto glass shops in Florida. The amount that Allstate generally pays to glass shops in Florida for labor -- $35 an hour – is entirely reasonable in the industry, is consistent with industry practices, and accepted by other auto glass shops.
14. The amount that AGA has been charging Allstate for adhesive kits – a flat fee of $60 -- is unreasonable and excessive, and greatly exceeds the competitive rates charged by other auto glass shops in Florida. The amounts that Allstate generally pays for kits -- $10-12 for each kit -- are entirely reasonable in the industry, consistent with industry practices, and accepted by other auto glass shops.
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15. AGA’s use of subcontractors as technicians is concerning, and AGA is not sufficiently supervising and auditing its technicians to ensure compliance with the AGRSS standard.
16. AGA’s business practices in Florida are misleading, unnecessary, and not in line with other reputable auto glass companies.
17. AGA’s advertisement that it “works with all major insurance companies” is misleading and inaccurate, because AGA does not “work with” Allstate. AGA refuses to follow Allstate’s procedures and does not accept Allstate’s fair and reasonable pricing.
18. AGA’s interactions with Allstate’s insureds are misleading because AGA does not disclose what Allstate’s procedures are for filing claims for damages windshields, it discourages Allstate’s insureds from properly reporting claims, it does not disclose its pricing for the windshield claims or what Allstate’s policies are for payment of such claims. Also, AGA fails to inform Allstate’s insureds that they are signing an assignment of benefits which allows AGA to file a lawsuit against Allstate for recovery of AGA’s excessive charges.
V. Analysis
A. AGA’s OEM Advertisements
On its website, AGA advertises that it uses only OEM glass. Charles Isaly also testified in his deposition that AGA uses only OEM glass when replacing windshields for customers with comprehensive insurance coverage. As discussed below, these statements are not true and can have a significant effect on customers’ use of AGA to replace windshields.
1. Definitions
a. OEM/Dealer Glass
Vehicle manufacturers contract directly with auto glass manufacturers to supply the auto glass installed in new vehicles. Generally this glass is etched or screened with the logo of the vehicle manufacturer. The auto glass manufacturer collaborates closely with the vehicle manufacturer to perform this work, so that the auto glass can be made to the exact specifications provided by the vehicle manufacturer. The auto glass manufacturer designs and builds the tooling to manufacture the parts and implements required quality systems to test and inspect the parts before shipment to the vehicle manufacturer.
Many vehicle manufacturers, including Ford, Toyota, Mercedes Benz, FCA (Dodge, Chrysler, Jeep, Fiat), Honda, Nissan, Subaru and Volvo have issued position statements or service bulletins regarding the use of “genuine” original equipment parts and applicable installation procedures when replacing damaged windshields. These position statements are reflective of the fact that only such parts are known as OEM glass. In the aftermarket, this is usually called “dealer glass” as it is not available in the aftermarket but must be purchased from one of the vehicle manufacturer’s authorized dealers.
With regard to windshield replacements performed by auto glass shops where there is comprehensive coverage, insurance companies generally reimburse the auto glass shops for the
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amounts that they paid to obtain OEM glass from the vehicle manufacturer or dealer, if there is a justification for OEM and prior approval secured.
OEM glass is more expensive than OEE and Aftermarket glass. With regard to windshields, the price of OEM glass can be double or even triple the prices of OEE and Aftermarket glass.
b. OEE/OEM-Quality
Auto glass manufacturers that supply the original equipment to vehicle manufacturers also manufacture windshields for use in auto glass replacement market. For vehicles currently in production, some of the auto glass replacement windshields may be produced alongside the OEM windshields but not necessarily on the same tooling or with the same equipment used for the OEM windshield. In addition, if manufacturing capacity is tight in the plant that manufactures the OEM parts, the auto glass replacement windshields may be produced on a different manufacturing line or at another auto glass fabrication plant that primarily focuses on the auto glass replacement market.
For vehicles that the auto glass manufacturer formerly supplied but are not currently in production, there is no longer demand from the vehicle manufacturer. Since the auto glass replacement market demand is significantly lower, the auto glass manufacturer will likely move this production to an auto glass fabricating line or plant that focuses on shorter production runs for the auto glass replacement market. These parts will be built based upon the vehicle manufacturer’s design but not on the same tooling or equipment.
In addition, there are five or six major auto glass manufacturers that supply the majority of OEM glass to the vehicle manufacturers. The largest OEM market share by any of these auto glass manufacturers is estimated to be 25%. Most of these auto glass manufacturers supply a full range of both current and non-current parts (which the industry identifies with a NAGS number) for most makes and models to the auto glass replacement market. This means that the vast majority of NAGS numbers manufactured by any auto glass manufacturer were reengineered for the aftermarket since the auto glass manufacturer never supplied that particular OEM glass to the applicable vehicle manufacturer.
All of the auto glass produced for the auto glass replacement market by these auto glass manufacturers that supply OEM glass to the vehicle manufacturers will be properly engineered & manufactured, use equivalent raw materials, be high quality, safe to use and comply with Federal Motor Vehicle Safety Standards.
These parts are known as Original Equipment Equivalent (“OEE”) or “OEM-Quality”. However, these windshields were purposely designed to be used in the auto glass replacement market and not manufactured to be installed by the vehicle manufacturers on new vehicles at the assembly plant. OEE glass is included in the NAGS List Price for windshield glass.
OEE glass is sometimes referred to as “OEM-Quality,” but it is not another term for OEM glass.
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c. Aftermarket Glass
In order for an auto glass manufacturer to sell auto glass into the United States, they must comply with 49 CFR § 571.205 - Standard No. 205, Glazing Materials. This is more commonly known in the Industry as FMVSS 205. The auto glass manufacturer must submit a written request to the National Highway Transportation Administration (NHTSA). Once approved, NHTSA will assign the auto glass manufacturer a DOT Number that needs to be etched or screened on every piece of glass sold in the United States. NHTSA has currently assigned over 1,000 DOT Numbers. Many of these manufacturers are offshore and do not directly supply auto glass to vehicle manufacturers.
Aftermarket windshields, produced by these auto glass manufacturers, are generally low priced and lower quality. These auto glass manufacturers do not have access to the vehicle manufacturers requirements, the same float glass and other raw material suppliers (such as no access to solar control glass), use different product or engineering standards (such as thinner glass), manufacturing processes and have lower quality control standards.
d. Comparison of OEM versus OEE versus Aftermarket Parts
Below is a summary of the primary differences between the various types of auto glass used in the vehicle assembly plants and auto glass replacement market.
Auto Glass Component or OEM Part OEE Part Aftermarket Part System
Manufacturing OE or Aftermarket Plant: Current OE Plant Off-Shore Plant Plant Production Part
Manufacturing Generally Not OE or Aftermarket Plant: Non-Current Off-Shore Plant Applicable Plant Production Part
May be Designed to Vehicle Designed to Vehicle Manufacturer’s Product Engineering Manufacturer’s Specifications if Reverse Engineered Specifications produced originally but otherwise Reverse Engineered
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Auto Glass Component or OEM Part OEE Part Aftermarket Part System
Aftermarket Tooling OE Tooling typically (may use OE Tool Aftermarket Production – Tooling owned by vehicle design if available Tooling manufacturer and/or applicable to plant)
Production – Aftermarket OE Tooling Maybe OE Tooling Encapsulation Tooling
Typically Other Glass Supplier but in many cases the Raw Material – Typically OE OE Specification glass is thinner and Glass Specification may use a coating instead of solar control glass
May be OE Typically OE Supplier but might Raw Material -- PVB OE Specification Specification be different thickness
Raw Material – Typically OE May be Naked or Hardware or OE Specification Specification alternative supplier Moldings
May be OE Raw Material – HUD Typically OE OE Specification Supplier or Not or ADAS Specification Installed
Possibly IATF OE Specification – Usually OE Production Quality 16949:2016 but usually IATF Specification –IATF System may be other 16949:2016) 16949:2016 standard
Generally Very Good Generally Good -- Excellent – Parts – especially if but bad bends and Product Quality – Fit meets or Exceeds OE originally stress cracks are Specification manufactured frequently reported
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Auto Glass Component or OEM Part OEE Part Aftermarket Part System
Generally Very Good Generally Good -- Product Quality – Excellent – Parts – especially if but distortion may Distortion or meets or Exceeds OE originally be frequently Delamination Specification manufactured reported
Required Testing per ANSI/SAE A26.1- ANSI/SAE A26.1- ANSI/SAE A26.1- FMVSS 205 1996 1996 1996
May be original OE plant or a different Dot Number OE Plant Aftermarket Plant OE or Aftermarket Plant
Typically Vehicle Auto Glass Auto Glass Tradename on Glass Manufacturer Manufacturer Manufacturer
2. Industry Use of the Above Terms
In the auto glass industry, the above terms are generally known and used by auto glass manufacturers, auto glass suppliers, and auto glass shops. It is inconceivable that an auto glass shop which has been doing business since 2013, like AGA, could think differently. In particular, it is simply not plausible, as testified to by Mr. Isaly in deposition, that AGA or Mr. Isaly could believe that the term “OEM” encompasses OEE glass.
3. Customer Preference of OEM
Because OEM glass is the exact glass that the vehicle manufacturer installs in new vehicles, customers generally prefer to install OEM windshields if replacements are needed if price is not a factor. Customers generally equate OEM glass to be the best and of the highest quality.
Because OEM windshields are generally much more expensive than OEE windshields, customers who must pay the cost themselves may choose to go with a less expensive option. However, if everything else is equal, customers will typically choose the use of OEM windshields in windshield replacements.
In Florida, when vehicles are insured with comprehensive coverage, automobile insurers are required to repair or replace damaged windshields with no deductible. This means that insureds with comprehensive coverage can repair or replace their windshields with no out of pocket costs. Thus, since cost is not a factor, insureds in Florida with comprehensive coverage will generally prefer OEM windshields over other types of glass when replacing a windshield.
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4. AGA’s False Advertisements regarding OEM Glass
AGA advertises that it uses only OEM glass when replacing windshields, however data proves that this is untrue. I conducted an analysis of AGA’s auto glass purchases by auto glass manufacturer using AGA’s purchasing data from Mygrant Glass from Calendar Years 2014 to 2019 and November 23, 2019 to March 11, 2020, based on an isolation of Mygrant’s 3-digit auto glass manufacturer’s code in the NAGS number on parts sold to AGA. Below is a summary of this analysis.
AGA's Historical Unit Purchases from Mygrant by Auto Glass Manufacturer
2014 2014 2015 2015 2016 2016 Auto Glass Units Manufacturer's Units Manufacturer's Units Manufacturer's Manufacturer Purchased Share Purchased Share Purchased Share
APT 13 1.03% 17 0.61% 14 0.32%
ATI 23 1.82% 18 0.65% 32 0.73%
Carlite 93 7.37% 174 6.24% 287 6.54%
Carlex 1 0.08% 4 0.14% 14 0.32%
Crinamex 76 6.02% 91 3.26% 179 4.08%
FYG 856 67.83% 2,076 74.41% 3,283 74.85%
Guardian 5 0.40% 4 0.14% 21 0.48%
Mopar 9 0.71% 36 1.29% 88 2.01%
Pilkington 89 7.05% 184 6.59% 186 4.24%
PPG 28 2.22% 36 1.29% 20 0.46%
Sekurit 14 1.11% 49 1.76% 40 0.91%
OTHER 5 0.40% 3 0.11% 3 0.07%
XYG 50 3.96% 98 3.51% 219 4.99%
Total Units 1,262 2,790 4,386
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2017 2017 2018 2018 2019 2019 Auto Glass Units Manufacturer's Units Manufacturer's Units Manufacturer's Manufacturer Purchased Share Purchased Share Purchased Share
APT 20 0.22% 32 0.39% 34 0.45%
ATI 43 0.48% 36 0.44% 7 0.09%
Carlite 656 7.35% 583 7.05% 517 6.85%
Carlex 41 0.46% 48 0.58% 65 0.86%
Crinamex 521 5.84% 417 5.04% 332 4.40%
FYG 5,005 56.07% 5,683 68.73% 5,020 66.50%
Guardian 11 0.12% 17 0.21% 30 0.40%
Mopar 181 2.03% 223 2.70% 242 3.21%
Pilkington 358 4.01% 538 6.51% 227 3.01%
PPG 20 0.22% 5 0.06% - 0.00%
Sekurit 57 0.64% 43 0.52% 28 0.37%
OTHER - 0.00% - 0.00% 1 0.01%
XYG 2,014 22.56% 644 7.79% 1,046 13.86%
Total Units 8,927 8,269 7,549
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2014 to 11/23/19 11/23/19 to 2019 2014 to 2019 Auto Glass to 3/11/20 3/11/20 Total Manufacturer's Manufacturer Units Manufacturer's AGA Share Purchased Share Purchases
APT 130 0.39% 48 1.93% ATI 159 0.48% 2 0.08% Carlite 2,310 6.96% 148 5.97% Carlex 173 0.52% 23 0.93% Crinamex 1,616 4.87% 39 1.57% FYG 21,923 66.07% 1,648 66.42% Guardian 88 0.27% 21 0.85% Mopar 779 2.35% 108 4.35% Pilkington 1,582 4.77% 14 0.56% PPG 109 0.33% - 0.00% Sekurit 231 0.70% 3 0.12% OTHER 12 0.04% - 0.00% XYG 4,071 12.27% 427 17.21%
Total Units 33,183 2,481
It is clear from this data, that FYG has historically supplied and continues to supply roughly two-thirds of AGA windshields purchased from Mygrant. While there may be a few exceptions, purchases from FYG would be considered OEE glass.
Carlite has been the second or third largest auto glass manufacturer of parts purchased by AGA since 2014. Although Carlite windshields purchased for Ford applications would be considered OEM parts, Carlite parts purchased for non-Ford applications would be OEE parts. XYG, or Xinyi Glass, grew to AGA’s second largest auto glass manufacturer with over 22.5% of AGA’s unit purchases from Mygrant starting in 2017. XYG’s website says they are one of the world’s largest aftermarket glass supplier. AGA’s purchases of XYG windshields would be considered aftermarket glass.
The remaining auto glass manufacturers are a mix of OEM, OEE and aftermarket suppliers. The major exception to this would be Mopar branded parts when used in Dodge, Chrysler, Jeep and Fiat applications.
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If you look deeper into the individual parts purchased, you will also confirm the purchase of OEE and aftermarket parts. An analysis of parts purchased for Ford vehicle applications from Mygrant in 2019 – 2020 is shown in the table below.
AGA Purchasing Analysis by Auto Glass Manufacturer for Ford / Lincoln vehicle applications -- December 2019 to March 2020 Purchased from Mygrant
Manufacturer Parts Delivered Manufacturer’s Share
AP Tech 3 0.77% Carlite 148 37.95% Crinamex 5 1.28% FYG 191 48.97% Guardian 1 0.26% Sekurit 1 0.26% XYG 41 10.51%
Total all Ford Applications 390
According to Mr. Isaly’s deposition testimony, the AGA website, AGA’s purchases from Mygrant and invoices submitted by AGA to Allstate, AGA does not use only OEM glass. Its advertisements to the contrary, therefore, are false.
B. AGA’s Refusal to Repair Windshields
On behalf of AGA, Mr. Isaly testified at deposition that AGA does not perform any repairs on windshields. This is because “there were too many instances where repairs will frequently crack,” and invoke the need to replace the windshield under the insureds warranty1. This business practice is not supported by the industry. Auto glass shops regularly and safely repair windshields.
1. Advantages to Windshield Repair
There are many advantages to a windshield repair for recent minor damage. These include: 1) Saving money – windshield repair is significantly less expensive for both the consumer on a cash job or to an automotive casualty insurance company if the repairs are covered by the vehicle owner’s insurance; 2) Increased convenience – windshield repairs are quick, do not require waiting for a replacement part, and can be driven more quickly than when a replacement is made; 3) A simpler procedure – maintains the structural integrity of the original windshield installation and the original glass, and eliminates the need for an ADAS system calibration; 4) Environmentally friendly – very little waste from the repair and reduces landfill waste as there are limited options to recycle used windshields; and 5) Reduced warranty claims – in my experience the rate of warranty claims for windshield repairs are much less than for windshield replacements.
1 Deposition of AGA Corporate Representative p. 290, line 4-18.
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2. Procedure for Windshield Repair
A windshield repair is a permanent repair with a structural adhesive. The adhesive is injected into the damaged area of the glass. A second more scratch-resistant adhesive is typically put on top covering the impact point or pit. The adhesives are cured and then the resin used to fill the pit is polished. The finished repair will closely match the refractive index of the glass and have a similar color and clarity to the windshield. A windshield repair may not completely disappear to the naked eye but at worst it should look like a water spot on the windshield.
The windshield repair procedure itself is fairly simple. A rock or other sharp object hits the windshield and creates a chip or impact point and causes some of the glass behind it to break. Depending upon what hit object hit the glass and with what force will determine the type of break and the severity of the break. Air has a refractive index of approximately 1.2 and auto glass has a refractive index of 1.52. What the human eye sees is the refractive difference between the two substrates. To repair the chip or break, the technician will: 1) inspect the damage and determine if the chip is a good candidate for repair; 2) clean the break by removing any contamination (such as water, dirt, loose glass or anything else); 3) warm or cool the windshield to the recommended temperature range by the windshield repair adhesive manufacturer; 4) access the damage and clean up the impact point or pit; 5) remove air from the void and completely fill with resin; 6) add pit resin on top of the pit and cure following the windshield repair adhesive manufacturer’s recommendation; 7) remove any excess resin and polish the pit; 8) inspect the finished repair; 9) ask the customer inspect to the repair; and 10) have the customer sign the invoice. The entire windshield repair process should be completed in approximately 30 minutes.
3. ROLAGS Standard
The ROLAGS standard is authoritative in the auto glass industry for windshield repairs. The ROLAGS standard indicates that these types of damage are repairable: 1) Bullseye or Halfmoon Break with a diameter no larger than one inch; 2) Combination Break with a body diameter less than two inches excluding the legs 3) Star Break with a diameter less than three inches; 4) Surface pit greater than 1/8th of an inch; and 5) Cracks that are no longer than fourteen inches. Since most people have binocular vision, windshield damage can be repaired in the driver’s primary viewing area as long as the damage is repairable, the finished pit is less than 3/16th‘s of an inch and there is not another repair within four inches.
The standard also defines what type of windshield damage is not repairable. This includes: 1) damage that penetrates both lites of glass and the PVB interlayer; 2) damage on the interior of the windshield; 3) windshields where the PVB layer has discolored; 4) damage with three or more long cracks emanating from a single point; 5) cracks that intersect more than one edge; 6) stress cracks; 7) damage where the pit will be larger than 3/8th’s of an inch; and 8) damage where the technician believes the repair will interfere with any value added features or affect proper vehicle operation.
4. Comparison to Windshield Replacement
In comparison to a windshield repair, auto glass replacement is much more technically and operationally challenging. The technician is going to make a major structural repair to a vehicle
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potentially outside in an uncontrolled environment. A typical windshield replacement, following the AGRSS standard, should take 1 to 1 ½ hours to complete. If an ADAS recalibration is required, this could take an additional 1 to 3 hours.
One of the first challenges is determining what is the correct replacement part to install. The vehicle owner may not be helpful to this, as sometimes the differences are subtle depending on the specific make and model of the applicable vehicle. Once the correct part is determined, it must be sourced from a local auto glass wholesaler or dealer. Additional parts, such as moldings, clips, rain sensor gel pads, and trim, must also be obtained, and a determination should be made as to whether the vehicle has any ADAS systems that may need recalibration.
Once the technician is on site, the technician must conduct a thorough inspection, usually with the customer present. The technician needs to check for any technical issues, such as rust on the vehicle, and validate possession of the correct parts for the installation. If rust or any other issues are present, the technician must ascertain if those problems can be rectified or worked around. If not, then the vehicle owner must remediate the issue and reschedule the installation.
Using the required personal safely equipment, the technician will cut out the existing windshield. This requires the technician to disassemble the trim around the vehicle and also disconnect any electronics or other technology, such as antennas, rain sensors or ADAS cameras or housings from the windshield. The technician will protect the paint, headliner and dashboard from damage as the windshield is removed.
Once the windshield is removed, the technician needs to inspect the vehicle for any hidden or unforeseen damage. This damage needs to be rectified before the installation can be completed. Using the safely equipment required for use of chemicals, the technician will cut out the existing bead of urethane adhesive. The technician will then prepare the windshield’s and vehicle body’s bonding surfaces with the applicable primers following the auto glass adhesive manufacturer’s recommended procedures. Once the primers have properly dried based upon the ambient temperature and humidity, the technician will apply the adhesive to either the vehicle body (which is the most common procedure in the United States) or the windshield.
Once again using personal safety equipment, the technician will install the windshield back in the body opening typically using a glass handling and replacement tool to assist in the proper placement. The technician will reassemble the vehicle and reattach any electronic or other devices.
At a minimum, the technician should document the time of the installation, the ambient weather conditions including temperature and humidity, the lot numbers of the adhesive products used and the auto glass manufacturer, and the DOT number of the glass part installed. The technician will calculate the appropriate drive away time per the auto glass adhesive manufacturer’s recommendation. If the vehicle requires ADAS system recalibration and the technician has the equipment and is qualified to perform it, the technician will usually begin this process at this point.
If no calibration is required or when the recalibration is complete then the technician will release the vehicle to the owner, instruct them on when the vehicle can be driven based upon the drive away time calculation, and have them sign the invoice. If a vehicle requires ADAS
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recalibration and the auto glass retailer did not perform it, the vehicle owner must be notified that the vehicle requires ADAS recalibration. The AGSC’s Technical Committee is currently working on ADAS System guidelines to be included in the AGRSS Standard.
5. Rate of Repairs versus Replacements
Windshield damage can be properly and safely repaired at least 20-30% of the time. Indeed, based on my experience with NOVUS, I believe that windshield damage can be properly and safely repaired as much as 50-60% of the time.
While I was at NOVUS, we did several studies to determine what windshield damage was in fact repairable. We found that from a technical perspective, approximately 60% of windshield damage is repairable. NOVUS tracked the repair rates of the NOVUS franchisees and on average it regularly exceeded 50%.
AGA refuses to do any repairs, because, according to Mr. Isaly, they “frequently crack.” See footnote 1. However, where repairs are properly made they do not “frequently crack,” and thus this is not a valid justification for refusing to perform any repairs. In my opinion, the real reason that AGA refuses to do any repairs is because windshield replacements are more profitable. The revenue to an auto glass shop for a windshield repair is approximately $68 per invoice. This is based upon a typical price of $65 for the first repair, plus $10 for a second repair and third repair fixed at the same time. The average windshield repair invoice is for 1.3 repairs. The revenue for a windshield replacement is significantly higher – for a typical auto glass shop it can range from as low as $250 in an older vehicle to over $1,000 in a newer vehicle equipped with ADAS or other technology.
6. Recalibration
An additional cost relating to windshield replacements relates to the need to recalibrate certain windshields. As vehicles become “smarter,” the need for recalibration increases. This additional cost is not required for a windshield repair.
7. Rate of Warranty Claims for Repairs versus Replacements
The failure mode between a windshield repair and a windshield replacement are substantially different. When a windshield repair fails, it is generally a cosmetic issue and not immediately a safety issue. When a windshield replacement fails, it might be a cosmetic issue but it is more likely to be a potential major safety issue.
Most warranty claims for windshield repair consist of the following: 1) the windshield repair resin discolors or becomes cloudy, typically due to UV degradation; 2) the pit resin becomes scratched or falls out from the continued action of the windshield wipers; or 3) the windshield cracks out over time typically due to the resin being stronger that the glass it replaced. The potential failure of windshield repairs can be minimized with the use of UV stabilizers in the resin products and use of pit resin that is hardened to minimize abrasion. The ROLAGS standard, discussed above, also requires product testing for UV stability and abrasion resistant. Based upon my experience at NOVUS, on the board of the National Windshield Repair Association (now
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NWRD), and Chairman of the ROLAGS standard, windshield repair warranty claims on a national basis are substantially less than 1% per year.
Warranty claims on windshield replacements, on the other hand, include the following: 1) Incorrect windshield installed; 2) Incorrect trim or other hardware used; 3) ADAS or other systems not being properly attached, restarted or recalibrated; 4) glass distortion in the new windshield; 5) improper adhesives used; 6) entire adhesive systems not properly used; 7) windshield not properly seated in the aperture; 8) the vehicle not reassembled properly; or 9) damage to the vehicle itself when cutting out the old windshield or reinstalling the new one. The warranty rates of windshield replacements are also fairly low. Based upon my experience at Dow and NOVUS, they are in the 1% to 3% range and is usually correlated to technician skills and training.
Based on the foregoing, the warranty rates for windshield replacements, at 1-3%, is higher than for windshield repairs at less than 1%.
8. AGA’s Policy for Refusing to do Repairs
Based on the foregoing, there is no valid justification for AGA’s refusal to perform windshield repairs.
C. AGA’s Excessive Charges
1. Windshield Replacement Pricing
In the windshield repair and replacement industry, auto glass shops’ charges are generally comprised of (1) an amount for the windshield glass, (2) amounts for adhesive kits, molding, and other parts used in the replacement, and (3) labor.
a. Windshield Charges
National Auto Glass Specifications (NAGS) was founded in the late 1920’s. Prior to World War II, most cars had flat laminated windshields. An auto glass shop would cut a new windshield out of a larger piece of flat laminated glass. NAGS sold patterns to cut out the applicable windshield shape to the auto glass shops along with a catalog of each numbered pattern and a simple price calculator. After World War II, vehicles became more aerodynamic and windshields became curved. NAGS could no longer publish patterns but auto glass shops needed aftermarket part and pricing information. NAGS began to assign a smart alpha numeric NAG Number to every auto glass part in the aftermarket. The NAGS Number was published along with a Year, Make and Model cross reference in the NAGS Catalog. NAGS also assigned a NAGS List Price to every part in their NAGS Price Calculator. This part numbering scheme and pricing methodology was quickly accepted by the auto glass manufacturers, the auto glass shops and the automotive casualty insurance companies. The auto glass shops used the NAGS Number to order and use the appropriate parts, buy the necessary parts and price their products to both the insurance and cash markets. NAGS has recalibrated its pricing methodology several times since its inception but it continues to be used.
Pricing by auto glass shops for windshields used in windshield replacements are calculated as a discount off NAGS of up to 50% or more.
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Based on my 30 years of industry experience and knowledge of charges made by auto glass shops for windshield replacements, the amount that AGA has been charging Allstate – an upcharge of 47% above the NAGS listing price – is unreasonable and excessive, and significantly exceeds the competitive prices in the industry. Indeed, AGA does not charge this shocking amount to any other insurer.
The amounts that Allstate pays to out of network shops like AGA – a 47% discount off NAGS – is entirely reasonable in the industry, is consistent with my knowledge and experience with many shops including both the insurance market and cash market, and is accepted by other auto glass shops.
b. Charges for Kits and other Parts
In addition to the windshield, other parts are required for an installation. These include the auto glass urethane adhesive kits used to bond the windshield to the body of the vehicle, clips to reattach any vehicle trim that was removed for the installation, replacement parts to reattach hardware to the vehicle body, replacement rain sensor gel pads for vehicles equipped with rain sensors and windshield moldings.
Windshield moldings are either black rubber or plastic trip pieces that wrap around the windshield. Moldings are primarily cosmetic but they can channel water down the side of the windshield. Some of the newer vehicles, where there is a tight fit between the glass and the car body, may not use a molding. In many instances, the old molding and plastic trim pieces can be reused as long as they are not damaged when the vehicle was being disassembled. A universal molding may also be used in some instances. Some windshields may also come with a new molding. In general, auto glass shops do not charge anything additional if they reuse the older molding, install a new universal molding or use a new molding that came with the windshield. However, in certain vehicles, none of these options work and a new molding may be required. In this instance, the auto glass shop may charge anywhere from $25 to $100 or more depending upon the cost of each new molding.
For vehicles equipped with Rain Sensors, the auto glass shop will need to replace the gel pads and reinstall the sensor. As long as rain sensor bracket is mounted properly and aftermarket gel pads can be used, the auto glass shop will typically charge from $25 to $75 or more depending upon the vehicle make and model.
Auto glass urethane adhesive kits are used to properly bond the windshield to the body of the vehicle. The kit includes the adhesive, the required primers and any other consumables for the installation. Most auto glass shops use a quick curing adhesive that will allow the vehicle to be driven in approximately one hour depending upon the temperature and humidity. Some high-end typically European vehicles may require a specialty high modulus low conductive urethane adhesive be used. NAGS will specify whether the windshield installation requires additional kits or High Modulus Low Conductive urethane adhesive be used. An auto glass shop will typically charge from $10 to $20 per kit depending upon the customer.
With regard to kits, and based on my 30 years of industry experience and knowledge of amounts charged by auto glass shops for windshield replacements, the amount that AGA has been
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charging Allstate -- $60 regardless of how many kits are used – is unreasonable and excessive, and significantly exceeds competitive prices in the industry.
. The amounts that Allstate pays to auto glass shops for kits -- $10 to $12, depending on the type of kit used – are entirely reasonable in the industry, is consistent with my knowledge and experience with many shops including both the insurance market and cash market, and is accepted by other auto glass shops.
c. Labor
When NAGS converted their price model to a benchmark price in the late 1990’s, auto glass shops and insurance companies were forced to convert as well. NAGS lowered the NAGS List Price on auto glass in order to unbundle the services provided by the auto glass shop. A glass shop would make a smaller gross margin on the windshield but make up for this by charging more for labor and the previously discussed kit. NAGS was to make list pricing more consistent, decrease the discounts on auto glass and recognize the value of the labor and the kit. This approach is more consistent with the automotive collision industry.
Auto glass shops charge NAGS labor hours as one of the components on their invoice. It is based upon the number of labor hours NAGS recommends for each installation. Auto glass shops calculate their labor charges by multiplying the NAGS Labor Hours by their set hourly rate. The local auto glass installation hourly rate varies but it is generally between $25 to $40 per hour depending upon the market dynamics. Overall, the time suggested by NAGS is generous. NAGS Labor Hours include some travel time plus the actual time that it takes for a trained installer to complete a windshield replacement. Insurers generally pay the full NAGS Labor Hours. Allstate, in particular, has paid the full NAGS Labor Hours in calculating amounts to be paid to AGA, though it is my understanding from Mr. Isaly’s deposition testimony that AGA’s actual time spent replacing windshields is less than the NAGS Labor Hours.
Based on my 30 years of experience in the industry and knowledge of rates charged by auto glass shops, the rate that AGA has been charging Allstate for labor -- $90 an hour – is unreasonable and excessive, and significantly exceeds competitive prices in the industry.
The rate that Allstate pays for labor to replace a windshield -- $35 an hour – is entirely reasonable in the industry, is consistent with my knowledge and experience with many shops including both the insurance market and cash market, and is accepted by other auto glass shops.
D. AGA’s Gross Margins
In his testimony, Mr. Isaly would not discuss his financial results citing it was confidential. However, based upon the pricing already discussed and assuming that AGA’s costs are not significantly more than what other local auto glass shops pay for parts and labor, the pricing submitted by AGA to Allstate would result in profit margins that are unusually high in the industry.
In my opinion, auto glass shops that participate in Allstate’s pricing program receive reasonable payments and generate reasonable gross margins. On the other hand, AGA’s prices are unreasonable and excessive.
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E. AGA’s Claim of Certified Technicians
The AGA website states that it is “certified and insurance compliant and…here to help you with all your repair and replacement needs.” In another location on the website, AGA states that its technicians are “experts and certified.” The Auto Glass Safety Council Logo is shown on the website with a hyperlink to http://agsc.org/.
The Auto Glass Safety Council (AGSC) is the Secretariat for the ANSI/AGSC/AGRSS 004-2018 standard (AGRSS). This AGRSS standard currently represents the best practices for auto glass replacement in the aftermarket. Membership in the AGSC is open to any auto glass shop. In order to join, the auto glass shop must agree to meet the requirements of the AGRSS standard and demonstrate the commitment to safety and quality at the highest levels. According to the AGSC website, AGA is not currently and never was a Registered Member of the AGSC. A number of auto glass shops are Registered Members in the state of Florida.
The AGSC also offers technical accreditation to auto glass replacement technicians. A technician can become either an AGSC Qualified Replacement Technician or an AGSC Certified Replacement Technician. The primary difference between the two accreditations is an AGSC Certified Replacement Technician works for an AGSC Registered Member Company and an AGSC Qualified Replacement Technician does not.
I reviewed the list of AGA technicians provided by counsel and compared it to the list of qualified or certified technicians from the AGSC website. Of the 51 AGA auto glass replacement subcontractors used by AGA over the past five years, there were three possible names on the AGSC Technician database – 2 certified and 1 qualified technician. One or possibly two of these names appeared to work for different glass companies not affiliated with AGA.
It is clear from this information that AGA is not a Registered Member of the AGSC and is using their logo to imply that AGA is somehow associated with the AGSC. Furthermore, at most 3 of 51 technicians, or less than 6%, are certified, so the AGA website is misleading consumers to believe that all of AGA’s technicians are certified.
F. AGA’s Use of Subcontractors as Technicians
AGRSS provides best practices and standards for safely replacing auto glass, including windshields. The AGRSS standard is authoritative in the auto glass industry, and industry practice is to follow it.
It is crucial for auto glass shops to ensure that their technicians have the appropriate training and certification in both the adhesive systems and installation best practices including AGRSS. Technicians should be required to do a thorough installation and not take short-cuts to save time. Technicians should calculate the minimum drive-away time following a windshield replacement and inform the customer when the vehicle can be safely driven or if the customer’s vehicle requires the ADAS system to be recalibrated. Based on the deposition testimony of Charles Isaly, it does not appear that AGA’s technicians are doing those things.
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In his deposition, Charles Isaly acknowledged that all of AGA’s installations are performed by sub-contractors with little direction or oversight.2 He was also unable to explain whether AGA’s sub-contractor technicians were certified, despite the fact that AGA’s website indicates that they are.3 This is a concern, as it does not appear that AGA is closely supervising or auditing its technicians to ensure that they are performing the work in accordance with the AGRSS standard. On its website, AGA indicates that a windshield replacement takes as little as 30 minutes, but it is unlikely that a windshield installation following the AGRSS standard could possibly be completed in that timeframe. For starters, the auto glass adhesive primer(s) used on both the windshield and car body take a minimum of 10 minutes each to properly flash.
G. AGA’s Business Practices
AGA employs the following regular business practices, which are misleading and improper for the reasons stated:
1. AGA advertises on its website that it uses only OEM glass. This is not true, as stated above.
2. AGA advertises on its website that its services were the #1 rated windshield repair [in] Orlando. However, this is not true as Mr. Isaly testified in his deposition that AGA does not offer or perform windshield repair.
3. AGA represents on its website that it uses certified technicians with the Auto Glass Safety Council Logo at the bottom of the page. This is not true as stated above.
4. AGA represents on its website that it “works with” and is “approved by” “all major insurance companies.” This is not accurate, at least with regard to Allstate, because AGA refuses to follow Allstate’s procedures and does not accept Allstate’s pricing.
5. AGA advertises that it will “buy back” a chipped or cracked windshield for up to $150 (previously was $100). However, AGA rarely pays $150 (or, previously, $100) and sometimes pays nothing at all. Further, used windshields have no market value and the “cash back” promise is nothing more than a marketing approach to solicit customers.
6. AGA’s website discourages customers from reporting windshield damage to their insurance agents.
7. AGA pays salespeople to solicit customers in public places like parking lots and by going door-to-door in residential neighborhoods. These salespeople fail to disclose important information to Allstate’s insureds, including that AGA will not properly report the insurance claim to Allstate, what AGA will charge for the work, that AGA’s charges for the work will exceed what Allstate is willing to pay, that the insured will be required to sign an assignment of benefits which will allow AGA to recover payment from Allstate, that the assignment of benefits will also allow AGA to file a lawsuit against Allstate to recover any amounts not paid, that AGA will file a lawsuit against
2 Deposition of AGA Corporate Representative pp. 45 and 260-262. 3 Deposition of AGA Corporate Representative pp. 251-253; Deposition of Charles Isaly p. 45.
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E X H I B I T
1
EXHIBIT 1
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Keith Beveridge, MBA 5312 Glengarry Parkway, Minneapolis, MN 55436 www.linkedin.com/in/keith-beveridge +1 952.221.3512 [email protected]
Business Builder and Growth Catalyst | Brand Strategist | Innovator | Driven, Proactive & Energetic Global Leader
Auto Glass, Retail, Dealer Networks, Wholesale, Distribution, Manufacturing Markets
Building stronger brands, products and operations through focused strategy, planning, meaningful innovation and communications excellence.
Accomplished marketing and operations leader who consistently builds brands, new products and collaborative partnerships, drives revenue growth and executes flawlessly to increase profitability. Known as a business innovator who drives positive organizational change that delivers exceptional results. Business strategist who positions people to succeed and organizations to grow. Compelling and passionate storyteller of the brand promise who elevates competitive advantage through the voice of the customer.
Core Skills, Traits, Expertise Global Management and Sales New Business Development Business Strategy Value Chain Analysis Strategic Planning Business Startups Brand Management Multichannel Marketing Strategic Marketing Corporate Strategy Customer Experience Engineering Portfolio Management Channel Management Marketing Communications Brand Stewardship Product Life Cycle Management Global Product Development Product Management Product Marketing Product Innovation Content Marketing Advanced Data Analytics SEO/SEM & Ecommerce Financial Analysis Budgeting and Forecasting Legal / Contract Compliance Logistics and Supply Chain Critical Thinking with Global Mindset Resource Allocation Planning Public Relations Strategic Partnerships & Alliances Entrepreneurial Servant Leader Business Intelligence
Industries and Specialties Experience Well-rounded hands-on global leader with proven track record in strategic planning, corporate marketing, operational analysis, corporate strategy, value chain analysis, new business development, customer centric brand building & brand awareness, defining the customer journey, competitive analysis, global collaborative team building, supply chain operations, logistics, finance, legal compliance and customer experience in the transportation, retail (B2C), wholesale (B2B) and distribution environments. Analytical strategic thinker with proactive and effective verbal and written communication skills and a roll-up your sleeves self-starter attitude willing to deep dive the details and get it done. Thought leader and problem solver that drives vision, collaboration, consensus and teamwork. Always looking for partnerships to create impact, success and value.
Key Career Accomplishments 1) Conceptualized, defined overall business strategy and launched FlannelJax's urban entertainment franchise concept. Developed and led customer experience strategy. Initial prototype was profitable in first 6 months of operation and achieved a significant ROI in the first year. Commenced franchising within 12 months of proof of concept and sold first franchise. 2) Grew NOVUS franchise dealer network to over $150MM, increased EBITDA by 50% and sold over 50 new locations. 3) Negotiated and renewed exclusive North American Distribution Agreement with a division of Total S.A. and developed and implemented SRP business plan to identify customer needs, specify, review, validate, test and launch new brand and new products into the market resulting in significant market share, sales and profitability. 4) Acquired NOVUS Australian Master Franchisors then renewed and integrated Australian NOVUS franchises into global network. 5) Directed agile cross-functional Dow product team that specified, developed, commercialized and launched a new adhesive, dispensing tool, application process and procedure that disrupted the market which resulted in enhancing the relationship with a key customer account and increasing sales 50% year over year. 6) Developed and implemented distribution strategy to replace existing business systems resulting in labor savings of over 50% while significantly improving operational efficiency by over 25%. 7) Conducted M&A due diligence, managed, integrated and rationalized $55MM acquisition consisting of 32 wholesale locations along with divesting 87 retail stores.
Management Experience Beveridge and Associates Minneapolis, MN 1/2017 to Present Critical thinking thought leader with considerable global marketing, national accounts, business development and operational experience in brand development, marketing, product life cycle management, multichannel management, operations, strategic planning, B2B and B2C markets, e-commerce, global retail and distribution operations, information technology, organizational design, customer experience, business innovation, project management, analysis, budgeting, financial modeling and finance.
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FlannelJax's KAM Sharp Franchising and KAM Sharp Enterprises St. Paul, MN 3/2017 to 11/2019 Co-Founder, President and Director
Direct P&L responsibility and accountable for overall concept development, proof of concept and franchisor launch. • Researched and assessed potential start-up opportunities and ranking methodology, reviewed risks, selected semi- finalists, evaluated alternatives, analyzed market, developed financial model, validated economic viability and scalability. Communicated final strategy to the board for approval. Received start-up funding to launch both corporate stores and franchisor. • Defined and developed all aspects of the business system including: branding; sales & marketing; customer experience; trade dress; real estate and construction; customer service requirements; financial targets; performance standards; operational policies and procedures; accounting; organizational design; recruiting; employee experience; and operations. • Developed digital and integrated marketing plans and launched e-commerce platform. Continually reviewed and measured marketing investments and redeployed resources based upon consumer impact analysis. • Launched and tested pilot prototype location in less than 3 months which became profitable in less than 6 months and was cash flow positive before the end of the first year with 3 additional locations under development. • Commenced Franchising within 12 months of proof of concept. Developed franchised dealer development strategy. Prepared franchise disclosure documents with external counsel. Implemented new franchised dealer orientation and start-up programs. • Sold first franchise within 6 months of offer. • Researched consumer insights and developed a robust customer centric guest experience strategy with feedback loop.
NOVUS, Inc. and NOVUS Franchising Inc. A Subsidiary of TCG International Inc. St. Paul, MN 04/1997 to 01/2018 Senior Vice President Vice President & General Manager
Direct P&L responsibility and overall management, direction and coordination of NOVUS and Shat R Proof portfolio on a global basis. Responsible for operations in the USA, Canada, the Netherlands, England and Australia. Recruited, hired and motivated staff. ● Continued Strong Franchise Growth by adding over 50 locations in the final 3 years. ● Negotiated and renewed a long-term exclusive distribution agreement with Le Joint Francais, an indirectly owned company of Total S.A., to market their auto glass replacement adhesives and developed and implemented a marketing and business plan to launch the SRP Totalseal brand in North America. Managed long-term win-win vendor relationship. ● Developed and implemented a new operational model for NOVUS Glass Restoration resulting in significant new initial fees, lease income and product sales. Developed clear documentation (training programs and manuals) and operating procedures to significantly improve each dealer's time to market and improve their financial results. ● Rationalized and right sized international operations in Europe resulting in a turnaround which greatly improved profitability for both NOVUS and master partners. Operated 2 sales offices and warehouses in Europe. ● Re-acquired franchise rights to Australia from previous NOVUS Australian area franchisors. Negotiated a new Australian franchised dealer agreement directly with the NOVUS Australian franchisees. Renewed over ninety-five percent of the NOVUS Australian dealer contracts. Responsible for sales administration and warehouse operations. ● Conducted value chain analysis, defined key measurements, refined the value proposition and developed analytics to improve decision-making and accountability through implementation of a Marketing and Operations Dashboard. ● Repositioned marketing focus from traditional auto glass retail strategies to focus on e-commerce. Negotiated National Agreement with SEO/SEM partner that resulted in an exponential increase in lead flow. ● Developed a Customer Scorecard to identify key performance metrics. Repositioned resources to align with consumer needs analysis. Reviewed scorecard results monthly with business team to drive continuous improvement resulting in year-over-year sales increase of 15% and EBITDA increase of over 10%. ● Developed Product Portfolio Strategy to address individual market segments. Implemented product roadmaps to identify new products and improve existing products for each group’s marketing, branding and merchandising needs. ● Built a product roadmap to align R&D and Manufacturing strategies with the business objectives. Delivered 10 new products in 2016 resulting in an 20% sales increase. Oversaw manufacturing, assembly, packaging, shipping and logistics. ● Built partnership relationship with NOVUS Franchise Advisory Council to proactively react to key business issues impacting the NOVUS franchised dealers. Provided strategic leadership and franchise engagement. Jointly reviewed network health assessment and recommended strategic initiatives to address issues. Identified project risks, built consensus, established new business processes, reviewed project costs with stakeholders and launched cross functional teams to implement each solution. Analyzed performance to continuously improve results and shorten the implementation timeline. These programs collectively resulted in cost savings for the franchised dealers of at least 10% and business development opportunities with a sales increase of upward of 25%. Case 6:18-cv-02184-CEM-LRH Document 243-2 Filed 11/03/20 Page 29 of 30 PageID 6537
Dow Automotive A Subsidiary of The Dow Chemical Company Dayton, OH 09/1993 to 04/1997
Marketing Manager Product Manager
Responsible for development and coordination of marketing and sales activities for all new and existing product lines and markets plus implementation of the product development process. Developed and implemented short and long-term corporate growth strategies and plans. Implemented data driven analysis to ensure Dow corporate objectives are met. ● Developed portfolio and product strategy. Researched customer requirements, identified new product and market opportunities. Managed cross functional team consisting of Sales, R&D, Manufacturing, Quality Assurance, Regulatory & Engineering to specify, develop, forecast and introduce all new product and market opportunities. Regularly evaluated and assessed product design reviews. New products introduced in 1995 accounted for over 50% of 1996’s sales. ● Developed short and long-term metrics, key performance indicators, the business plan, detailed operating budget and marketing strategies. Presented to Senior Dow management for approval. ● Reported financial performance on a weekly, monthly and annual basis. Benchmarked our performance against both our competitors and best in class organizations. ● Proactively analyzed customer and market intelligence to develop flexible customer centric marketing and sale programs. ● Developed and implemented all marketing, merchandising and pricing programs for new and existing products. ● Assessed, maintained and updated field sales force and customer training programs for new and existing products. ● Led re-branding efforts to comply with both customer needs analysis and updated Dow corporate requirements. This led to improved competitive positioning as well as compliance with global regulatory and labeling requirements ● Managed all communication activities and programs to influence and build relationships with customers.
Pilkington North America Inc. A subsidiary of Nippon Sheet Glass Co. Toledo, OH 1987 to 09/1993
Project Manager AGR Logistics and System Integration
Responsible for implementation of $6MM strategy to replace existing business systems and distribution operations with world class systems and facilities to improve overall operating results and lower distribution costs while significantly improving customer satisfaction. ● Conceptualized, investigated, researched and managed logistics study analyzing functional and business requirements for order processing and warehousing systems to develop innovative business solutions, identify best practices and key performance measures. Communicated and reported results with applicable stakeholders. Drafted AGR Logistics Strategy approved by Senior Pilkington Management and the Executive Board. ● Reviewed, tested and performed due diligence on potential system integrators. Recommended finalists and received funding to implement project. ● Worked collaboratively with Senior Pilkington Management to design and manage overall project plan. Built cross functional team from field operations, logistics and corporate staff to execute this strategy. ● Re-engineered operational policies and procedures. Wrote updated operating manuals, communicated changes and conducted training throughout the organization. ● Analyzed existing distribution network and designed operational improvements to increase customer satisfaction while significantly increasing workforce productivity and reducing headcount. ● Team Coach for TQM (Total Quality Management) and developed benchmarking process to define Pilkington’s current level of customer satisfaction. Collaborated with senior management to launch the group’s continuous improvement initiatives to over 100 locations.
Special Project Manager for TransAmerica Acquisition Responsible for integrating $55MM business consisting of 32 distribution warehouses into existing wholesale business and divestiture of 87 retail locations. Performed due diligence on financial and operational data in order to verify and validate the acquisition agreement. ● Developed acquisition strategy and implementation plan to incorporate all existing and acquired business operations. Communicated deliverables to AGR Senior Management. Built integration team that met or exceeded all critical project timelines and expected financial milestones. ● Rationalized 10 redundant locations. Designed and executed plan to utilize these assets to build 10 additional greenfield start-ups. Managed project plan and critical timeline to open these locations on-time and under budget. ● Defined market and service levels, set up, monitor and managed annual sales plan. ● Developed several operational efficiencies that reduced overall system cost by over $500M in the first six months. ● Reviewed operational procedures of acquired locations focusing on identifying best practices. Incorporated appropriate business process improvements into existing Pilkington procedures.
Case 6:18-cv-02184-CEM-LRH Document 243-2 Filed 11/03/20 Page 30 of 30 PageID 6538
Manager Wholesale Products and Operations Analysis
Responsible for supervising inventory team of 4 regional control specialists that managed a $50MM inventory. Accountable for researching and developing marketing strategies to properly position the profit center's products. Managed sales activities for all national accounts. Coordinated the group's annual budgeting and strategic planning process. Provided monthly business and financial analysis to Senior Pilkington Management with a written overview to the Executive Board. ● Acting Regional Operations Director of Eastern Region, consisting of 25 warehouses and over 150 personnel. Region had record quarterly financial results during this time. ● Established national pricing policies and procedures and prioritized opportunities for growth. ● Managed product offerings including end to end product line life cycles. Managed regulatory requirements for non- glass products. Negotiated supply agreements with external vendors to complement and supplement product lines. ● Prepared Annual Operating Plan including strategic initiatives, financial targets and performance standards. ● Analyzed existing business strategies, developed proof of concept and implemented continuous improvement programs to reduce cost while maintaining appropriate customer service and management control. ● Increased inventory turnover by more than 30% each year. ● Managed private labeled products, marketing, merchandising and promotional programs with external vendors.
Senior Planning Analyst
Responsible for developing appropriate financial and business models and conducting in-depth market analysis of the business unit's expansion strategy. ● Facilitated annual strategic portfolio planning sessions for $400MM business unit. This included market and industry attractiveness, competitive analysis, opportunities for growth, identification of risks, acquisition strategies, data analysis with global profit center managers. This included the overall business unit’s strategic plan, each division’s business and sales plans and their operational budgets. Reported monthly financial performance, market trends, factors impacting performance to Senior Pilkington Management. ● Prioritized new market opportunities and performed on-site due diligence, competitive analysis and customer market research. Prepared proforma financial and market feasibility studies for 10 major acquisitions and 25 greenfield start-ups. ● Researched, assessed risk, developed, documented, tested and managed the implementation of the service center growth strategy. ● Analyzed and reviewed strategic business initiatives, business performance and key business KPIs and presented monthly summary to Senior Pilkington Management including the Executive Board. ● Project leader coordinating the development of an expansion strategy for Pilkington’s retail group with external consultants from The MAC Group (Capgemini Consulting).
Market Research Analyst
Responsible for the researching, collection, evaluation and dissemination of market information necessary for the development of strategic plans and market forecasts. ● Drafted and Coordinated Annual Strategic Plan for each division of the SBU. ● Provided short and long-term forecasts of market volumes and market share by customer channel, product line and geographic area. ● Conducted market intelligence analysis for each of the 125 major metropolitan markets in North America. ● Developed Metrics and Key Performance Indicators (KPIs) for each division of the SBU. Reported and presented KPIs monthly report to Senior Pilkington Management. ● Designed a consistent feedback loop between operations and corporate to tract competitive business intelligence and major market trends.
Education Master of Business Administration in Marketing & Finance The Stephen M. Ross School of Business University of Michigan, Ann Arbor, MI Bachelor of Arts in Chemistry The College of Wooster, Wooster, OH
Awards National Windshield Repair Association -- Pioneer Award Numerous President's Awards at Pilkington & Dow
Volunteer Boards Auto Glass Safety Council -- Director National Windshield Repair Association Director, Vice President and Treasurer ANSI Repair of Laminated Auto Glass Standard Chairman
Publications Author: How to Survive COVID19. Auto Glass Repair and Replacement Magazine. March/April 2020. Pages 22-24. Author: Delight your customers with Windshield Repair. Auto Glass Repair and Replacement Magazine. To be published.