Auto Service World
Feature   January 1, 2002   by Auto Service World

Over the Counter: January 2002


Apprentice Tool Tax Measure Brings Modest Benefits

December’s federal budget included the previously announced modest relief for apprentice technicians, with estimates ranging from a high of $600 to less than $250.

The culmination of decades of work by a variety of organizations, the move is being touted as a victory by various groups, including the Automotive Industries Association of Canada, the Canadian Automobile Dealers Association, and the Canadian Automotive Repair and Service Council (CARS) to name just three.

Its impact on drawing new youth into the automotive trade will likely be in line with the modest level of tax relief offered, however. The federal government offered the following example: Alexandra, an automotive service technician apprentice, earns $25,000 as an apprentice in a year and spends $5,000 on new tools in the year. Alexandra’s deduction is $3,750 ($5,000 – $1,250 [the greater of $1,000 and 5% of $25,000]), representing a federal income tax savings of $600.

An analysis of the real-world numbers paints a different picture.

The government estimates the measure will cost them $5 million in revenue in 2002. According to CARS’s 1999 report on the industry, “Bridging the Gaps,” in 1998 there were 12,835 apprentices in the automotive mechanical repair and collision sectors. Applying the government’s revenue impact over this amount works out to just $389.56 per apprentice.

From an earnings and expenditure standpoint, an estimate from the Automotive Aftermarket Retailers of Ontario (AARO) puts Ontario apprenticeship earnings on average at $20,000, with a range from $18,000 to $22,000. CARS’s 1998 estimate is that a starter set of tools costs $3,000 to $4,000. Applying these numbers to the formula (the minimum of $1,000 off the top) equals a deductible amount of $2,000 to $3,000. This translates into a tax savings of $320 to $480.

However, if one applies the median yearly tool expense as reported by a major tool manufacturer, $2,600, the tax benefit becomes even smaller at $256. (In fact, every time a new factor was added to the calculation, the estimated tax credit dropped.)

Other items may in fact have a greater impact on the industry, notably a reduced waiting period for employment insurance retraining programs; $24 million of increased funding to increase support for councils such as CARS; and tax deductions for adult basic education tuition assistance.

Independent Distributors Limited Joins Bestbuy Distributors

Independent Distributors Limited has joined Bestbuy Distributors, boosting the buying group’s Western Canada membership.

Independent Distributors Limited (IDL) and Bestbuy officially announced the deal with the handing over of Bestbuy’s Code of Ethics at its Toronto, Ont., head office. Pictured, left to right, are: Dov Lidor, executive vice-president, Bestbuy, John Brunelle, president of IDL, Rod Anderson, president of Bestbuy, and Ritchie York, past president, IDL.

The arrangement will see Independent Distributors Limited’s (IDL) 32 Western Canada members become part of the Bestbuy network, while retaining their local IDL identity. IDL members will continue to have their accounting dealings with IDL’s head office, but will be able to take advantage of Bestbuy’s Mississauga, Ont., warehouse. IDL has been in existence since 1964 with its head office in Moose Jaw, Sask.

Bestbuy president Rod Anderson said that the addition of IDL’s members to the network adds to the buying group’s strength in Western Canada. “We are a national buying group, but looking for growth opportunities. This gives us tremendous representation in Western Canada.” Bestbuy currently has 68 members operating 129 points of sale, but has previously been underrepresented in Western Canada.

R-12 Phase Out Rules Take Effect in Ontario

Ontario’s air conditioning service regulations, eliminating R-12 service, took effect on January 1.

In addition to prohibiting the use of R-12 in a/c service, the new regulations also ushered in new technician certification and record keeping. Technicians who took the certification test prior to June 30, 2001 must write a recertification test. Recertification will be phased in over three years.

For more information on the new regulations, visit www.ene.gov.on.ca.

Canadian Remanufacturer Gets $250,000 Infusion

C.V. Tech, a company that specializes in remanufacturing CV shafts and rack & pinion steering racks for the automotive aftermarket, has been awarded a $250,000 investment from the Fonds rgional de solidarit FTQ Outaouais (Outaouais Regional Solidarity Fund QFL).

“We’re very happy to have been able to count on the involvement of the Fonds rgional de solidarit FTQ Outaouais to back our ongoing development,” said C.V. Tech president Franois Desmarais. “Our firm has an outstanding growth record, and this investment fits in with our plans to restructure our production line and inventory management, both for higher output and better quality.”

The Fonds rgional de solidarit FTQ Outaouais is a development capital fund whose mission is to invest in regionally based companies that offer solid potential for growth and job creation. It acts as a complement to traditional financing instruments offered through financial institutions and government agencies.

Honeywell Canada Confirms Reorganization, Bendix Goes Own Way

Honeywell Canada has reorganized its business in Canada, combining its Prestone, Fram and Autolite businesses and leaving Bendix customers to buy from the U.S.

Honeywell Friction Materials, supplier of the Bendix product in Canada, ceased operations as a Canadian business entity at year end, but will provide its Canadian customers with a U.S.-based international program.

The international program being made available to Canadian distributor customers has them deal directly with the U.S. offices of Honeywell Friction Materials. Customers will be classified as U.S. customers, point of purchase will be the U.S., product will be shipped from the U.S., and invoicing will be in U.S. dollars.

At least one national group has already opted to continue offering the brand under the new program.

Honeywell has also announced that the Fram, Autolite and Prestone businesses have been combined into the Consumer Product Group (CPG), with consolidated warehousing, shipping and invoicing functions. Administra-tive offices–including sales, marketing and customer service–have shifted to Mississauga, Ont. from Stratford, Ont., though the Stratford filter plant will continue to operate as normal.

Take a Bus, Get a Subsidy

A subsidy of up to $750 is being offered for groups bussing to the Canadian International Automotive Show next May.

The Automotive Industries Association of Canada is making a subsidy available to all members that organize a group from outside of the Greater Toronto Area to visit the show, being held May 3 to 5, 2002 at the International Centre in Toronto. Individuals who help organize a bus will also have their names placed in a draw for a premium set of golf clubs.

The subsidized bus program as well as preferred bus rates are being offered through PMCL/Greyhound bus lines. Groups will be eligible for subsidies of up to $750 per busload of people visiting the show, provided that all requirements are met.

To qualify, organizers must organize a minimum of 35 visitors per bus to the show, ensure that each visitor is pre-registered for the show, and organize all of the bus details for pick-up and drop-off in their area.

Visitors can be jobbers, automotive service providers (installers), students currently enrolled in an automotive program, or employees of an automotive company. For more details, contact the AIA at (613) 728-5821.

E.R.I. Group Holds Successful Meeting

The E.R.I. Group reports that its Annual General Meeting was a successful event.

Held at the Embassy Suites Hotel, Markham, Ont., the event included a tour of the Markham distribution center, a presentation by noted speaker Bob Greenwood, and an awards dinner.

Jeff Scott, president of Ertel Manufacturing
Corporation of Canada Ltd., accepted the “2001 Outstanding Service” award. The “2001 Order Desk Person of the Year” awards were presented to Stu McLean (Western Canada), Mike Keenan (Central Canada) and Bernard Desjardins (Eastern Canada), all representing Ertel Manufacturing Corporation of Canada Ltd. The “2001 Sales Rep of the Year” awards were presented to Ron Killby (Western Canada) of Hastings, Inc., Peter McKinnon (Central Canada) and Dany Anderson (Eastern Canada) of Ertel Manufacturing Corporation of Canada Ltd. The “2001 Largest Sales Growth” award was presented to Corteco Canada and accepted by Rolf Muench, national sales manager.

Steve Tripp (at center) was the big winner in the Auto Value Rub ‘n’ Win Sweepstakes. Tripp, of Auto Tech, Peterborough, Ont., and a customer of Bridgenorth Auto Supply in Bridgenorth, Ont., took home a $1,000 gift certificate to Home Depot. Pictured are Bob Bobert (left), general manager of Base Automotive Warehousing, and Joe Charlebois, Bridgenorth Auto Supply (at right).

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The Bosch spark plug also celebrates its 100th anniversary this year. Robert Bosch conceived of the magneto-spark plug combination in January 1902.

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CORRECTION:

A Kendall advertisement in the December issue omitted the last digit in the phone number of distributor Case N’ Drum Oil of London, Ont. The full phone number is 1-800-265-7642.

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Merithian Products Corp., has appointed National Sales Inc. as its sales agent for Eastern Canada. National Sales will be responsible for the sales and promotion of all products under the Thermafix and Merithian trademarks throughout Eastern Canada. Holm, Hicks and White Ltd. will continue to represent Merithian in Western Canada.

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In U.S. news, AutoZone has sold TruckPro, its heavy-duty truck parts subsidiary, to a group of investors led by Paratus Capital Management of Boston and New York. The decision to sell was made in early in 2001.

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Clevite has brought its engine parts catalog online at www.CEEKOnline.com, also accessible through www.engineparts.com.

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The Raybestos brand turns 100 this year. A number of promotions are planned to highlight one of the aftermarket’s oldest names.