Auto Service World
Feature   October 1, 2004   by Auto Service World

Over The Counter: October 2004


Management Buyout in Offing For Docap

Docap (1985) Corp., which has been under creditor protection since September 2003, is the subject of a management buyout.

Phil Rossi, current president and CEO who is in his 50th year with the company, and Sy Langer, currently the vice-president of finance with 23 years of service, have put together a deal to buy the assets of the company’s headquarters in Mississauga and its distribution centres in Edmonton and Montreal from parent Ivaco. The deal is expected to close at the end of November.

The assets include the current inventories, accounts receivable, building leases and equipment. It also includes the company name and brands offered, though the closing of the deal will be followed with a slight name change.

“The company will continue in the same direction,” says Rossi, who adds that a number of business segments will be sold off or disposed of.

“The focus will be on the same things we do now,” says Rossi. “Docap is essentially an importer. We will continue to offer a continuous flow of new products.

“I like to describe ourselves as an importer, national distributor and manufacturer’s representative. We sell to warehouse distributors, buying groups through their various drop-ship programs, and independent jobbers and wholesalers in the various markets. Think of Docap as a very big convenience store for the automotive and industrial markets.”

The majority of the company’s business has been in the automotive market, though sales to industrial, hardware and various other distribution segments have long been part of the sales mix.

Rossi says that the company’s current product offering is in excess of 21,000 SKUs, ranging from items worth fractions of a penny to products and equipment worth more than a thousand dollars, and include exclusive representation of Cole-Hersee Electrical Products, P&N Cutting Tools and various other products and product lines.

For existing customers, visible changes under the new ownership will be few.

“The company will continue to have the Docap identity,” says Rossi. “There will be some internal changes. We’re in the process of finding a new sales manager and establishing wider representation in southern Ontario. But as far as our customers are concerned, the transition will be transparent.”

Industry Pulls Together to Help Flooded Jobber

When torrential rains inundated the Ontario town of Peterborough this summer, many businesses wondered how they would rebuild. For Sidey Auto Supply owner Greg Walsh, the answer came quickly.

The NAPA associate arrived following the rainstorms to a store that was under a metre of water and raw sewage.

Inventory, computers, files, delivery vehicles and the majority of his store were all virtually destroyed. According to accounts, he estimated that the cleanup would take weeks. Besides the cleanup, most of the stock had to be replaced. That’s when Walsh saw a surprising and welcome turn of events.

First, the NAPA Cambridge distribution facility leaped into action.

Russ Gougeon, territory manager, says that the impact of the situation hit home when he met with Walsh.

“When we arrived, naturally Greg was shaken and concerned about how his business might survive such a blow. A lot of credit goes to Greg’s wife Jo-Ann, who boosted his confidence and addressed every challenge. She was a real pillar and provided Greg with the much-needed support to move forward.”

Suppliers such as Dana Brake & Chassis, Arvin Meritor and Gates Canada were quick to provide assistance replenishing lost inventory. Fellow NAPA associate Troy Pearcy, who operates a store in nearby Lakefield, Ont., offered to have Sidey Auto Supply’s phone number call-forwarded to them in order to assist with his usual day-to-day business. This turned out not to be necessary, but the gesture was nonetheless appreciated.

Other NAPA associates also offered assistance after the DC informed them of the situation at Sidey.

Walsh received a Canadian Tire gift certificate from Dave Elliot of Walker Automotive in Chatham Ont., and other NAPA stores phoned to offer moral support and ask if there was anything they could do.

In the end, with the assistance of suppliers, distribution centre staff, and his fellow NAPA associates, the store was cleaned up and restocked, and the computer up and running, only days after the devastation.

The NAPA dedicated sales staff and managers took to the field, calling on Sidey’s customers and providing a progress report. Walsh says that he thanks his customers for their understanding too.

“Customers were astounded,” says Walsh. “They were amazed that we were that close to being back in full business.”

Engine Price A Factor

When faced with major engine problems, price was the most-often indicated factor for consumers when deciding whether to install a new, used or remanufactured engine into their vehicle, according to “Reman Engines: The Installer’s Perspective,” published by the Automotive Aftermarket Industries Association.

The report is a survey of U.S. shops commissioned by the association and its Engine Repower Council. For details on how to obtain a copy, contact the AAIA at (301) 654-6664.

***

New Members

The AERA-Engine Rebuilder Association has added three new Canadian members. Luc Giroux of Mecanotech L.M. in Hull, Que. has joined, as has Yves Germain at P.G. Bilodeau Diesel Inc. in St-Felix de Dalquier, Que., and Claude Garceau of Motor Centre Ville, in Trois Rivieres, Que.

Real Counterfeiting Information

Spurred by increasing concern over the counterfeit parts issue, The Motor & Equipment Manufacturers Association has created a section of its website dedicated to the topic.

It is designed to be a portal where the industry can go to obtain information relating to the issues of intellectual property and brand protection for motor vehicle products. MEMA’s new section devoted to brand protection and counterfeiting issues is http://www.mema.org/ counter/articles.php. For more information about the section and MEMA’s Brand Protection Council, contact Paul Foley at 919-406-8840 or BrandProtection@mema.org.

Revamped Website

The Automotive Industries Association of Canada has revamped its website to provide better access to information. The website now features a search function to make it easier for visitors to find the information they are looking for.

Also, a new password system for the members-only section of the website will be available. Users will now be able to define their own user name and password based on their preferences.

The AIA website will also feature a new “Quick Poll” feature. Also, the new website will allow visitors to register for AIA events, or purchase AIA publications, using an online or dering system. Visit www.aiacanada.com.

Uni-Select Super Circuit Emphasizes Branding

Uni-Select’s Super Circuit Quebec region trade show offered visitors a chance to win prizes, but the emphasis was on more than this.

The show, held annually in St.-Hyacinthe, is put on by the Boucherville and Quebec City distribution centres and regularly attracts large crowds.

This year, the show’s 10th anniversary, there was an increased focus on national brand awareness.

Michel Maheux, executive vice-president, Automotive Group Canada, says that he is taking a view of the show as being about more than generating immediate sales.

“I think that the show helps to promote the industry. There is a perception out there that aftermarket products aren’t good quality, that they’re not what they once were. We need to change that and shows like this help.”

It is, he says, an important tool for the aftermarket in the battle against dealer competition.

“And it helps promote brands ahead of the price lines,” he adds.

The annual event also allows Uni-Select jobbers the opportunity to honour those reps who serve them best. Uni-Select jobbers buying out of the B
oucherville distribution centre honoured Serge Aubry of Dana, and Marcel Longpr of NGK Spark Plugs of Canada with nominations, but gave the nod to Patrick Grenier of Permatex Canada as representative of the year. Those jobbers buying from the Quebec City distribution centre named Pierre Nadeau of Permatex Canada and Paul Tremblay of Dana as top performers, but the representative of the year award went to Luc Bois of Mark IV Industries.

Gates Canada Celebrates 50 Years, Opens New Administrative Offices

Gates Canada Inc. celebrated its 50th anniversary and opening of its new administrative offices with an open house and reunion in Brantford, Ont.

Current and retired Gates employees and their families, totalling over 600, attended the event, held in bright sunshine and perfect temperatures.

Guests enjoy-ed a tour of the new offices, a barbecued beef dinner, music, displays of historical photographs and memorabilia, a display of over 30 vintage cars and the opportunity to rekindle old friendships.

“Fifty year anniversaries are an important event in the life of any company, and not many companies make it this far,” says Gates Canada CFO and business unit manager Bob Luckhart. “Holding an open house and reunion to thank those people responsible for our success seemed like the appropriate thing to do. After all, it’s the people who make a company, not bricks and mortar, and we wanted to thank as many of them as we could for helping to achieve this milestone.”

The new 15,000 square-foot administration building houses sales, marketing, finance, IT and human resources departments in a well-planned, modern facility. The building, located at 225 Henry Street, Brantford, Ont., is the third head office for Gates Canada.

Spectra Premium to Close Stratford Radiator Plant

Spectra Premium Industries Inc. of Boucherville, Que., has announced the imminent closure of its Stratford radiator plant in Ontario and the consolidation of its aluminum radiator manufacturing operations at its Laval plant in Quebec.

Aluminum radiator manufacturing activities at the Stratford plant are expected to cease on November 19, 2004.

The company is a North American manufacturer of automobile, light-truck and heavy-duty truck aftermarket parts, and is now also present in the original equipment manufacturer market for steel fuel tanks and high-pressure die cast magnesium alloy parts.

As a result of this consolidation at the Laval plant, initial annual savings before income taxes are estimated at close to $2.5 million and will start having an impact as of the second quarter of fiscal 2005-2006, or more specifically as of May 2005. Once the building in Stratford owned by the corporation is sold, annual savings are expected to exceed $3 million pre-tax.

Non-recurring expenses of close to $2.0 million before income taxes, related to this consolidation, will be charged to the results of the third quarter for the current fiscal year. This charge mainly results from severance packages, dismantling costs and the transfer of certain equipment from the Stratford plant to the Laval plant, and costs relative to the closure and disposal of the Stratford plant. Subsequently, for a certain period, the corporation expects to continue to operate its warehousing activities at Stratford. The Stratford plant currently employs 100 people, and this number is expected to be reduced to approximately 10 people as of November 19, 2004.

This consolidation at the Laval plant will not have an impact on the clientele of Spectra Premium, since this plant is already producing many aluminum radiator models. The aluminum radiator line in the Laval plant has been in production for close to a year now, and displays performance indicators and quality standards comparable to those of the Stratford plant.

Supply Chain Management Program Offers Second Seminar

The University of the Aftermarket’s second seminar in its new supply management program, “How to Redesign Supply Chains,” is set for Wednesday and Thursday, Dec. 1-2, hosted by Federal-Mogul Corp., Southfield, Mich.

The Automotive Aftermarket Suppliers Association (AASA) has joined with the University of the Aftermarket to develop and promote this new supply chain management certification program. Aftermarket executives now can earn automotive aftermarket professional (AAP) or master AAP certification through the University of the Aftermarket.

“The emphasis in today’s competitive aftermarket environment is on leaner, more efficient operations,” said Paul Foley, vice president of AASA, the aftermarket segment association of the Motor & Equipment Manufacturers Association (MEMA). “We believe aftermarket suppliers can see significant benefits through a thorough knowledge of supply chain management strategies and techniques, so we have worked closely with the University on this new curriculum,” he noted.

More information and online registration is available through the University of the Aftermarket Web site, http://www.univaftmkt.org/courses.


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