Make the System Work for YOU
We would like to start by thanking Veldman’s Auto Parts, Michelle Lechner and the ARI Board of Directors for hosting such a great Spring Fling Event. We were able to attend and it was fun, informative and inspirational – and we won a great basket in the auction. We met several interesting people, with good ideas, great stories and admirable businesses. Ms. Carol Mihalik of the Secretary of State (SOS) spoke as well as Ms. Theresa Bordenkecher of the Indiana Department of Environmental Management
(IDEM). We enjoyed and understood what these ladies talked about. We also heard a presentation from the gentleman at Car-Part.com. This part of the industry eludes us somewhat but we can definitely appreciate the positive impact the internet has had. We are going to focus more on the parts that we understand.
The main focuses of Ms. Mihalik’s talk were gypsy scrappers and titling issues with salvage vehicles. She told a story of how Rudy Giuliani (former mayor of New York City) affected a decrease in the murder rate in the subway by ticketing people who jumped the turnstile and did not pay to ride. The moral of this story is: a small change can often have a large and unexpected impact. Often times we assume that the regulators and legislators know and understand the issues that face our particular industry. Unfortunately, this is not always the case. It was clear that Ms. Mihalik is interested and wants to seek a solution; however, she was not aware of many of the issues that recyclers face. As an industry it is our responsibility to educate the regulators.
As recyclers you are the experts. You know the way business runs and you know the problems that face the industry. When you see a problem, particularly when you see that an illegal activity is having a negative effect on your business, write it down. Write about the problem: who is doing it (doesn’t have to be a person), what are they doing, how are they doing it, why are they doing it and how can the government stop them with an existing law or a new law? Rudy Fields, our president, was angry about a particular tax issue involved with environmentally impaired real estate and back taxes. He sat down one day and drafted a one-page outline for a bill that he felt would fix the problem. He sent it to a lawyer friend who then sent it to a state representative. The legislator wrote a bill from his outline that passed the first run through the legislature. The system is broken in many ways, but it can work for you if you offer up a solution and get it into the right hands.
Let’s tell our regulators how they can fix some little things and make a big impact on the industry and your bottomline. We can facilitate some new regulations that would make the titling process more streamlined and crack down on the ‘gypsies’. Points we took from the meeting about gypsies is that these people are able to do what you do without having licenses, permits, environmental compliance requirements or dealing with titles appropriately. So basically, they take vehicles off the street and prevent a legitimate salvage operation from acquiring that vehicle and using the parts as inventory. If you have solutions to these problems, let them be heard. In the April/May 2011 issue of ARI News both Mike Hierholzer and Michelle Lechner spoke of getting dressed up and going to meet with regulators. This is a great service that ARI provides, take advantage of it!
I had an opportunity to speak at the Spring Fling. I kept it very short because 1) I was competing with the food, 2) no one wants to sit around and listen to a sales pitch by a consultant, and 3) I was a little nervous, which some people aptly pointed out when I was finished. What we were trying to get across; however, was not a sales pitch (entirely). We enjoy working with recyclers, recognize that it is a vital industry and have some ideas that we think will make your business better. Our first idea is that obtaining Clean Yard Status will make your business more effective and potentially make both your business and real estate worth more.
Had I not been moving so quickly during my talk, I might have noticed that Ms. Bordenkecher was trying to stop me to add something. She pulled me aside afterwards and told me that the owner of a Clean Yard had recently informed her that he was able to sell his property at a higher rate because of its Clean Yard status. To us this makes good sense. The elements that distinguish a yard as a Clean Yard are all elements that point to good business practice. A yard can only be a Clean Yard if it is in compliance with the applicable environmental regulations, properly zoned and all licenses are in place. I recently spoke with another gentleman who told me that he paid twice as much for a yard because it was properly zoned and an active salvage license was in place.
The state has certain requirements that automotive recyclers must meet: licensing, permitting, environmental compliance, etc. Each of these processes takes time and money; time and money that you are not able to directly apply to running your business. Each permit, license and status that you work to obtain, therefore, has value. It is not necessarily value that you can put a price tag on, but there is value. If two yards are for sale: one has no licensing and is not in compliance environmentally and the other is an Indiana Clean Yard; my guess is the second yard is worth more. The work has been done and the systems are in place. Not to mention a yard with Clean Yard status is viewed as a good environmental steward, beneficial community member and a better neighbor.
Experience shows us that making the changes necessary to reach and maintain environmental and regulatory compliance facilitates the development of a system that improves the effectiveness of your business. A more effective business is a more profitable business. We are environmental consultants and are familiar with numerous environmental programs. There are not many other programs that award performance like the Indiana Clean Yard Program. With many other programs your only incentive is to avoid the disincentives, such as enforcement and fines. IDEM is offering to award you for reaching compliance and improving your business. Programs like this do not come around every day. This program is a good one; it can help your business and improve your property value.
We are always interested in hearing what you have to say. The more we learn about this industry the better suited we are to represent our clients. If you have ideas or questions, please do not hesitate to call us. Take care!
This article was originally featured in the June/July 2011 issue of ARI Magazine.