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Top Ten News Stories of 2004


12/1/2005
By Amy Antenora

Whether you believe 2004 was a good or bad year for the aftermarket, no one can argue this was a big news year for our industry. Here's a month-by-month look at what Counterman and aftermarketNews.com and consider to be biggest news events of 2004.
 

A CHANGING OF THE GUARDS AT AAIA AND MEMA

Serving as a unified voice for members, associations play a key role in a number of industries. Two of the most prominent trade associations for the automotive aftermarket - the Automotive Aftermarket Industry Association (AAIA) and the Motor & Equipment Manufacturers Association (MEMA) - underwent significant leadership changes.

In January, Kathleen Schmatz officially took over as president and CEO of AAIA, succeeding Alfred Gaspar, who retired after 40 years in the industry.

Schmatz has been recognized as one of the industry's finest representatives, commended for her savvy leadership and vocal support of the automotive aftermarket. This year at the Automotive Aftermarket Products Expo (AAPEX) she was named the very first "Aftermarket Woman of the Year," by the Car Care Council Women's Board, which she helped found. In addition, Schmatz this year was awarded the Martin Fromm Lifetime Achievement Award.

At MEMA, changes in leadership came as a surprise, with the sudden resignation in May of its President and CEO Chris Bates. Bates had been with MEMA for 16 years and had served as the association's top executive since 2001. Following the announcement, the industry buzzed with questions about his resignation, and who might replace him.

MEMA Chairman Scott Meyer, recently retired president of Ken-Tool in Akron, OH, stepped in as interim president until the group found a permanent replacement. At AAPEX in November, MEMA capped its 100th anniversary celebration with the introduction of industry veteran Bob McKenna as its new president and CEO.

An aftermarket veteran of 35 years, McKenna came to MEMA following his departure from Atlanta-based Genuine Parts Co. (GPC), where he served as group vice president and chairman of the board for NAPA.

McKenna's new role at MEMA marks an impressive turn for the association and the aftermarket as a whole, as he becomes the first distribution exec to lead a membership primarily comprised of manufacturers.

 


LEADERSHIP CHANGES AT THE DISTRIBUTION LEVEL

The industry witnessed other noteworthy organizational changes in early January, when aftermarket veteran Steve Handschuh announced he was leaving his post as president of NAPA Auto Parts to join major auto parts retailer AutoZone - a symbolic move for the massive retailer as it works to increase its share of the aftermarket's DIFM business. Handschuh was named senior vice president of AutoZone's AZ Commercial division, the retailer's fastest growing segment.

Just a few days later, Bob Susor was picked to succeed Handschuh as president of NAPA. Another longtime veteran of Genuine Parts Co. (GPC) Susor previously served as executive vice president of the company, which holds the title of NAPA's largest member.

Note: In late November, the Coalition for Auto Repair Equality (CARE) announced that Handschuh will join CARE to lobby for passage of the Vehicle Owners' Right to Repair Act in the 109th Congress. Handschuh will take a leave of absence from AutoZone.

 


TWO AFTERMARKET ASSOCIATIONS TEAM UP

Back at the association level the industry put its money where its mouth is when it comes to that popular industry buzzword - collaboration. At the Automotive Warehouse Distributors Association (AWDA) General Session in January, AWDA's board of governors approved a proposal to join forces with AAIA.

Founded in 1947, AWDA is the oldest organized group of warehouse distributors and their suppliers. Over the years, AWDA's membership dwindled, primarily due to consolidation in the marketplace. Yet today, they are as vital as ever thanks to the success of their remaining members, most of whom were responsible for the aforementioned consolidations.

Over the years, AWDA and AAIA have worked closely in a number of key areas such as education and government affairs. According to AWDA, the merger ensures the future of the association's identity and heritage while adding the extensive resources and benefits available through AAIA to its own.

 


THE LOSS OF AN INDUSTRY ICON

While the year began with a number of exciting changes, the unexpected death of Art Fisher was a sad moment for many in the industry. Fisher died Jan. 15 in Staunton, Va., at the age of 65.

Fisher was CEO of Fisher Auto Parts and founded Federated Auto Parts Distributors in 1985. Under his leadership, Fisher Auto Parts grew from a single location to become one of the largest independently owned auto parts chains in the U.S. Today, there are more than 300 Fisher Auto Parts stores, with 18 warehouses and more than 2,000 employees.

Federated quickly became one of the industry's premier programmed marketing groups under Fisher, with more than 3,800 Federated Auto Parts Stores and 2,400 Federated Car Care Centers nationwide. Fisher served on the board of governors of AWDA and served as chairman in 2001.

Fisher, a former teacher, continued his love of education in his career in the aftermarket. In recognition of his profound impact on the industry, this year's AWDA Memorial Scholarship Fund, which benefits students pursuing automotive aftermarket careers, was re-named the Art Fisher Memorial Scholarship Fund.

 


A MERGER OF TWO LONGTIME CARQUEST MEMBERS

On Feb. 19, the industry caught wind of a major industry consolidation, when Straus-Frank Co. and General Parts Inc. (GPI) announced an agreement to merge. Both GPI and Straus-Frank have been members of the CARQUEST Distribution Group for more than 30 years.

Straus-Frank, also known as Strafco, is also one of the automotive aftermarket's oldest businesses, and was established more than a century ago in 1870. Strafco was headquartered in San Antonio, Texas, and operated four CARQUEST distribution centers, which served 317 CARQUEST auto parts stores, including 116 company-owned stores.

GPI operates 35 distribution centers and more than 1,200 company-owned stores. The company distributes its products to about 4,000 CARQUEST and other auto parts stores across North America.

This merger was a major step for both companies, as Straus-Frank keeps its historic legacy alive in the aftermarket through the partnership and GPI continues its expansive growth in the distribution sector.

 


DANA AAG SOLD TO BUYOUT FIRM

What is undoubtedly the most talked about industry news of the year, Dana Corp. announced in July it would sell its Automotive Aftermarket Group (AAG) to Cypress Group, a New York-based buyout firm. The $1 billion sale closed on Nov. 30.

The past two years have been turbulent for Dana Corp. In September '03, Dana Chairman and CEO Joe Magliochetti died and was replaced in April of this year by former GM exec Michael Burns. To make matters worse, in Nov. '03, the company fought off a hostile takeover bid from ArvinMeritor. A month later, Dana rocked the industry when it announced plans to sell the AAG unit and focus more on its OE customers. This decision, some speculate, has created a sea change in the aftermarket, with several other well-known manufacturers deciding to get rid of their aftermarket businesses and focus more on OE and heavy duty customers.

The sale of Dana AAG included well-known brands Raybestos, WIX and Spicer, among others, along with 52 facilities employing approximately 13,000 people worldwide. Combined annual sales for these operations totaled approximately $2 billion in 2003. The transaction also involved several premier replacement product brands and a variety of under-vehicle components.

Since then, Dana AAG was renamed Affinia and a new organizational structure was announced in October.

Editor's Note: It appears that Cypress Group will become a familiar name in the aftermarket, and not only through its acquisition of Dana AAG. Since the Dana acquisition, Cypress Group also announced that it joined up with Goldman Sachs Capital Partners to buy Cooper-Standard Automotive for $1.2 billion.

 


A NEW DISTRIBUTION NETWORK IN NORTH AMERICA

In September, surprising news came out of Montreal that Uni-Select, Canada's second-largest automotive and heavy-duty distributor, run by Jacques Landreville, would merge with family-owned Middle Atlantic Warehouse Distributor (MAWDI). Based in Tonawanda, NY, MAWDI operates 31 distribution centers and 145 corporate stores in 18 states.

The merger, completed on Nov. 1, significantly expands Uni-Select's reach into the U.S., where it will generate revenues of approximately $470 million.

All current MAWDI and Uni-Select locations will remain under their original names, but at the corporate level MAWDI will operate as a subsidiary of Uni-Select USA. All of the various companies within Uni-Select USA, including MAWDI, will be referred to as Automotive Group USA.

Clay Buzzard, MAWDI's majority shareholder will be invited to join the Uni-Select board of directors. His son, Jim Buzzard, has been appointed executive vice president of Uni-Select, Inc., responsible for Automotive Group USA.

 


RIGHT TO REPAIR MAKES IT TO THE HOUSE FLOOR

On Sept. 22, scores of representatives from the automotive aftermarket along with representatives from the original equipment manufacturers turned up on Capitol Hill to attend a Congressional hearing on HR 2735 - the Motor Vehicle Owners' Right to Repair Act, which would legally require car manufacturers make available all service and repair information to independent service technicians.

The hearing was the farthest yet that HR 2735 has gone on Capitol Hill, since first being introduced in 2001.

In 2002, the Automotive Service Association reached an agreement with the Association of International Automobile Manufacturers and the Alliance of Automobile Manufacturers, to provide independent repair shops with the same service, tooling and training information they give to their franchised dealerships. The three associations that created the agreement maintain it is an adequate solution to the problem. However, those in support of Right to Repair disagree, and question whether problems obtaining repair information can be promptly, fairly and affordably resolved with the OEMs. Those for HR 2735 believe legislation will provide the necessary checks and balances to keep information flowing to the aftermarket.

At the hearing in September, Congress told the carmakers this is the last attempt to get this issue solved before it will intervene.

In addition to the significant progress made this year with Right to Repair, this was a major first for the automotive service industry, as the hearing was the first time the industry was the main focus of a Congressional hearing.

 


ARVINMERITOR PUTS LVA UNIT UP FOR SALE

After originally attempting a hostile takeover of Dana Corp. in 2003, this year ArvinMeritor made a move that may have been inspired by Dana's recent sale of its Automotive Aftermarket Group. In a similar turn of events, ArvinMeritor announced this fall it wants to sell off its Light Vehicle Aftermarket (LVA) unit.

Following its failed hostile takeover bid for Dana in '03, ArvinMeritor announced in October that it plans to divest its Light Vehicle Aftermarket (LVA) unit in order to leverage its core competencies in the global automotive and commercial truck markets. LVA supplies exhaust systems, filters and ride control and motion control products to retailers, distributors and all major car companies around the world. The unit posted more than $800 million in sales in 2003 and employs approximately 5,000 people at 21 facilities in seven countries.

As of yet, no one has stepped up to buy LVA, but many in the industry speculate this could be another potential acquisition for Dana AAG's new owners, Cypress Group, or some other investment firm.

 


NACE JOINS INDUSTRY WEEK IN VEGAS

For the first time ever, this year organizers for the International Autobody Congress & Exposition (NACE) moved the annual event to November this year to coincide with Automotive Aftermarket Industry Week in Las Vegas.

Thanks to the wise move, NACE organizers reported a 26 percent increase in total attendance in 2004, and experienced a 13 percent growth in exhibitor registrations with more than 500 companies occupying 2,000 booths.

Moving NACE to AAIW was not only a draw for attendees. It also helped bring back some major players in the collision market -- the major paint companies, many of which did not attend or drastically cut their budgets for trade shows the past few years.

 


WHAT'S IN STORE FOR 2005?

What will the future hold for the automotive aftermarket in 2005? If the changes that took place this year are any indication, the industry's future looks bright.

This year we've seen industry associations and distributors merge with synergistic partners to help maintain their longevity and strengthen the industry. Trade show budgets and attendance have increased. And, major industry players in the manufacturing sector have seen the value in selling their aftermarket businesses to focus on core competencies on the OE side, allowing more aftermarket-focused companies to take over those brands. All are changes that will undoubtedly move this industry forward in 2005, and beyond.

The TOP 10 Newsmakers of 2004

Our editorial team selected 10 that have had a direct impact on the success of the aftermarket in 2004. An in-depth article will appear in the January issue.

 


  • Richard Beirne, Gary Kremer, Tim Lee, Ron Levene and Fletcher Lord
    The leaders behind the future of AWDA.


  • Steve Handschuh
    Takes his wholesale distribution expertise to AutoZone.


  • Pete Kornafel
    Sets the stage for technology changes at GPI.


  • John Lampe
    Retires after leading BridgestoneFirestone back to solid ground.


  • Jacques Landreville, Clay Buzzard and Jim Buzzard
    A family business goes public.


  • Scott Luckett
    Technology leader for the aftermarket.


  • Larry McCurdy
    Helping Cypress Group acquire the Dana AAG.


  • Bob McKenna
    Bringing aftermarket experience to MEMA.


  • Kathleen Schmatz
    Aftermarket veteran takes AAIA reins.


  • O. Temple Sloan
    Leading CARQUEST's largest member.















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