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AUTO May 2011 – Volume 2 Number 1

RECYCLING AU ST R A L I A News, Views and Information for Professional Auto Recyclers

What effects will the

Japanese Tsunami have on the Australian Market?

Around the Traps –

Auto Recycling Eco Friendly

EKW Auto Parts Recyclers and Sunspares Parts Plus IAR 2010 International Roundtable Report Special Reports, Local and Global News


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Up

Front

WITH DAVID NEWTON-ROSS

Mail: P.O. Box: 83, Avalon, NSW 2107 Telephone: 02 9973 2298 Fax: 02 9973 1838 Mobile: 0418 298 572 Email: david@nationalcollisionrepairer.com.au

Major Disasters … What does it mean for the industry?

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e are all only too well aware of the recent disasters in Queensland with the floods and cyclone, in Christchurch with the earthquake and the terrible earthquake and tsunami in Japan. How will this affect business in Australia? Well the Christchurch earthquake probably not a lot but the Queensland floods caused major interruptions to business and while there were many vehicles written off most of them were only suitable for scrap. However in Japan the problems are not restricted to Japan only. Apart from the major disruption to new vehicle supply there will and is a major shortfall of parts expected for the rest of the year. This of course is not restricted to Japanese made vehicles but many other brands that source parts out of Japan. While this is not a very bright picture reports coming in from the US particularly indicate that there will be a boom in used car sales and also in recycled parts. You need to be aware of the recycled parts side and ensure that your inventory of parts is up to date and available as there is no doubt that the collision repair market will be looking for used parts in greater numbers than at present. Talking about the collision repair industry there is a unique opportunity coming up in Melbourne with the Collision Repair Expo being held at the Melbourne Convention Centre from 12 to 14 May. The collision repair shop owners will be there in big numbers from all around Australia and a large contingent from New Zealand. They will be attending the various demonstrations and also the seminars available at the Expo so it is an opportunity to certainly catch up with your customers and to source new customers. If you do come along ensure that you bring with you lots of business cards and any flyers or promotional material on your company. One seminar in particular should be of interest to you and that is on at

1.00pm on Friday 13 May. The topic is NSW Repairable Write Off Legislation and the speaker is James McCall, CEO of MTA NSW. James was one of the main people involved in lobbying government and having this legislation passed so he knows all about it. He can advise how it is working and what it means for insurers, customers, collision repair shops and recyclers…well worth attending the Expo for that alone!

I will be there on booth number AC53 which is the booth for the National Collision Repairer and also the NZ Collision Repairer magazines. If you come to the Expo stop by and say hello, there will also be four or five visitors from the US at our booth for most of the Expo and they are collision repair shop owners who will be joining me on the Body Repair Forum to be held on Saturday 14 May. Networking as you probably know by now is one of my favourite topics and the Expo represents a great opportunity to network. Running alongside the Collision Repair Expo of course is the AAAA event which occupies another three or four halls, so definitely a lot of exhibitors to meet and exhibits to visit … see you there. ARA Talk to you in the next issue. David Newton-Ross, Editor

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UPFRONT WITH DAVID NEWTON-ROSS

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Editor: David Newton-Ross 02 9973 2298 0418 298 572 david@nationalcollisionrepairer.com.au Publisher: Mike Third 03 9793 4022 0419 525 330 mike@tar.com.au Contributors: Maurice O’Reilly Bill Bartlett Sub Editor: George Ball Advertising Sales Enquiries: David Newton-Ross 02 9973 2298 Chris Stone 02 4777 5650 Production Enquiries: Stone Dezine 109 Kenmare Road, Londonderry NSW 2753 02 4777 5650 stonie@pnc.com.au Printed by: Bright Print 02 9757 3000 Published by: Auto Recycling Australia Pty Ltd 121 Greens Road, Dandenong, Vic 3175, Australia 03 9793 4022 The Auto Recycling Australia is published by Auto Recycling Australia Pty Ltd, 121 Greens Road, Dandenong. Phone: (03) 9793 4022. This book is copyright. Apart from any fair dealing for the purpose of private study, research, criticism or review as permitted under the Copyright Act, no part may be reproduced by any process without written permission. Enquiries should be addressed to the publishers. The publishers believe all the information supplied in this book to be correct at the time of printing. They are not, however, in a position to make a guarantee to this effect and accept no liability in the event of any information proving inaccurate. Prices, addresses and phone numbers were, after investigation and to the best of our knowledge and belief, up to date at the time of printing, but the shifting sands of time may change them in some cases. It is not possible for the publishers to ensure that advertisements which appear in this publication comply with the Trade Practices Act, 1974. The responsibility must therefore be on the person, company or advertising agency submitting the advertisements for publication. While every endeavour has been made to ensure complete accuracy, the publishers cannot be held responsible for any errors or omissions. Copyright Š Auto Recycling Australia Pty Ltd ABN 291 392 07748

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Views and AUTO News, Information for

RECYCLING AU ST R A L I A

Contents 6 Local News, Views and Information 7 Auto Aftermarket and Collision Repair Expo

The bi-annual Auto Aftermarket and Collision Repair Expo is on again, this time in Melbourne from 12th to 14th May. Why not get along and mix with potential customers from the industry and also check out the free seminar on the NSW nonrepairable write-off legislation?

8 Future Directions for Recycling in Australia What do you need to do to bring your business in line with environmental regulations either in place or coming soon? This article provides some idea of areas of your business that need to be examined.

10 Around the Traps ... Sunspares Parts Plus Mark Adams received the 2010 Frank Nicastri Award for outstanding environmental performance. What did he do to receive the award? This and other questions answered in this report.

12 Global News, Views and Information 16 IAR 2010 International Roundtable Conference Quebec was the setting for the 5th International Roundtable on Automotive Recycling. Read the full report on the topics discussed from all around the world.

18 Around the Traps ... EKW Auto Parts Recyclers The 2010 Bob Scott Memorial Award for Outstanding Industry Contribution was awarded to Ray Broughton of EKW Auto Parts Recyclers. Ray is a 35-year veteran of the industry but his passion for what he does is obvious in this interview.

20 Cutting Corners Bill Bartlett talks about insurance, the recent floods in Queensland and other hot industry topics

22 ELV System Overhaul? The NMVTRC talks about problems with current practices in the industry and possible solutions. They commissioned a report which can be accessed via their website ... you need to check it out.

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Professional Auto Recyclers


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Local News ★

Roundup

AUTO RECYCLER INDUSTRY NEWS, VIEWS AND INFORMATION

Auto Recyclers Conference Shoal Bay 2010 The Auto Recyclers conference held in Shoal Bay, on the weekend of November 20th, was a terrific success and hosted just over 100 delegates. With many presenters and diverse sessions covering topics from sales techniques to succession planning, there was something for everyone. Actual Systems (the suppliers of Pinnacle software) organised and hosted the event. In addition to the three Australian staff members (Chrissy, Steve, and Brian); a number of international staff was flown in to ensure the conference was varied and exciting. They were Travis (Sale and Demonstrations) from the American Pinnacle team, as well as Dave Morgan (Director of Operations) and Peter Riddle (Managing Director) from the Head Office in the UK. Across the two days there were some 30 breakout sessions. Some were led by Pinnacle software users, others by industry figures. The sessions by Scott Shillinglaw, EBay's Manager of Motors AU & NZ, were very well attended. Actual Systems has just launched an EBay module for its Pinnacle Pro software so many were interested in how to increase efficiency and profits in the growing Australian e-commerce marketplace. Friday morning commenced with Peter Riddle welcoming everyone to the conference and introducing Bill Stevens of Counts consulting who had flown in from Texas to present. Bill's keynote speech "Keys to Success" was well received before the delegates went on to the first of their breakout sessions. The Auto Recyclers Association of Australia (ARAA) was provided with the opportunity to present a Session on reasons for the establishment of this new Association and the role it will play in providing national policy leadership for the auto recycling industry. David Nolan, Executive Director of ARAA, provided an overview of the background to its establishment and spoke about the opportunity ARAA presents for the most substantial auto-recycling businesses across the country to play a leadership role in shaping the future for our industry. Simon Hemingway, Chairman of the ARAA National Policy Council, and Mike Third, a founding Director of ARAA, spoke

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to the meeting about the importance of this industry having a truly independent national industry association that is 100 percent focused on the needs of auto recyclers. There was much socializing to be done over the seafood and carvery buffet that evening, with a few of the more adventurous delegates heading out to party at the local RSL! Saturday offered another round of breakout sessions, as well as opportunities to meet the sponsors and network with colleagues and friends from around Australia. The demo room was kept busy with Pinnacle and nonPinnacle users alike, looking for examples of just how Pinnacle can benefit auto-recycling businesses. The Grand Finale Gala Dinner started with a few closing words from Peter Riddle giving thanks to the sponsors. George Papillo of APRAA (the dinner sponsors) said a few words before Peter introduced Ross Nicastri to award the Frank Nicastri Memorial Award, won this year by Sunspares Parts Plus. Peter Scott then awarded the Bob Scott Memorial Award to East Keilor Wreckers. The dinner was followed by music from a local band, "Saxonova" and as the name implies there was a mean Sax player. The overall response from the delegates was enthusiastic, they enjoyed the location and very relaxed atmosphere. As so often happens at these events the "networking" that took place in the bars at the resort was seen to be very valuable, even apart from the beers that were consumed. Peter Riddle commented, “Although we

RAY BROUGHTON AND PETER SCOTT

organised the event at late notice when it was clear there would be no industry-wide event this year, it has been a great success. Even though we will post a loss on the event we hope the industry can see our commitment to it, Australia is a very important part of our organisation." All in all, the event was very successful for the industry. ARA Editor: Congratulations to Pinnacle and Actual Systems for putting together this very successful conference. In the absence of an association conference it was important for the industry to get together to network and learn. This is exactly what the conference offered and the feedback from delegates is very positive. Watch out for details of the follow up for 2011.


PREVIEW

COLLISION REPAIR EXPO – MELBOURNE AUSTRALIA 2011

Auto Expos sold out

Exhibitor space at the 2011 Collision Repair and Auto Aftermarket Expos – to be held from Thursday 12 May to Saturday 14 May at the Melbourne Exhibition Centre – has sold out.

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trong demand for space began in Sydney during the successful 2009 Collision Repair Expo, with businesses and industry bodies moving quickly to bookstands in their favourite locations for the 2011 Melbourne event. The Australian Automotive Aftermarket Association (AAAA) hosts the Expo and Executive Director Stuart Charity said the early sell out of exhibition space is a bonus for the industry committee organising the show. "This show is run by a committee of committed industry leaders and they can now focus on the remaining critical elements to ensure another successful Expo," he said. Exhibitors showcase The 2011 exhibitor list reads like a who's who of the industry and includes major corporate sponsor Sikkens AkzoNobel, 3M, Automotive Colour & Equipment, SAPE, Car-O-Liner, AG Group, Capricorn Society, Glasurit, GPI Automotive Products, MasterBooth & Master Bench, Oz-Gel, Saint-Gobain, SIA Abrasives, U-Pol, and others. Automotive paint supplier BASF will launch an environmental program on its stand. Visit www.asiapacific.basf.com. The Australian Accident Repair Network (AARN) is attending Expo to promote their services. Visit www.aarn.com.au. BTB Auto Glass & Body Shop Tools manufacturers, imports and distributes a comprehensive range of specialised tools dedicated to the Auto Glass and Collision Repair industries and will demonstrate a range of body panel and glass repair kits. Visit www.btbtools.com. Chassis repair equipment specialist GlobalJig Australia will release its new Dynamic Bench at the Expo. Visit www.globaljig.com.au. SRI Paint Supplies will present its range of paint supplies and its paint alternative Chemspec Metalux2. A full list of all exhibitors is available at www.collisionrepair.com.au

To learn more about the Collision Repair and Auto Aftermarket Expo, please visit www.aftermarketexpo.com.au ARA Editor: This year's Expo promises to be the best ever. As well as the activity shown above a seminar on NSW Repairable Write Off Legislation by James McCall will be held that all auto recyclers should attend. The Collision Repair Expo will see people from all around the world ... I hope to see you there!

International Seminar Series

The popular International Seminar Series offered free to all registered Expo visitors delivers practical information on topics that will help you run a better business. All sessions are held at the Expo and pre-booking is essential as numbers are limited. Make your seminar booking when you pre-register for Expo at www.collisionrepair.com.au. Following receipt of your registration, you will be mailed a seminar ticket with your Expo pass prior to the event. SEMINAR 1 – Friday 13 May, 1.00-2.00pm – NSW Repairable Write Off Legislation James McCall, Motor Traders Association of NSW will provide an overview of the new legislation surrounding the management of written-off vehicles and its impact on the collision repair industry. SEMINAR 2 – Friday 13 May 4.30-5.30pm – Lean Production Techniques – a real world perspective Doug Kirk, global leader AkzoNobel Process Centred Environment Program, and Michael Giarrizzo Jnr, CEO of DCR Systems, a Cleveland Ohio based multi-body shop business, will share their experiences on lean production techniques. SEMINAR 3 – Friday 13 May 6.30-7.30pm – The Impact of New Technologies on Correct Structural Repair Presented by Richard Pratt, I-CAR Australia, this seminar explores the impact of new technologies on correct structural repair today and into the future. INDUSTRY FORUM – Saturday 14 May 8.30-11.00am Part 1 – The Future Technology Challenges – Moderated by David Newton Ross, Publisher, National Collision Repairer Magazine. Hear a panel of industry representatives discussing new paint trends and technologies and their impact on the industry. Will you be ready for the changes? Part 2 – The Body Shop View – Moderated by David Newton-Ross and Jeff Hendler of J D Hendler & Associates, USA. Hear collision shop owners from the US, Australia and New Zealand discuss and contrast key issues impacting on workshops, including new technology, insurer relationships, customer service and expectations. ARA AUTO

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COLLISION REPAIR AND AUTO AFTERMARKET EXPO

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Local News ★

Roundup

AUTO RECYCLER INDUSTRY NEWS, VIEWS AND INFORMATION

MTA NSW calls for a national recycling law! Information from other parts of the world indicate a significant move towards legislating End of Life Vehicles and the ecologically responsible management for the recycling of the materials found in these types of vehicles. There can be no doubt that there is a strong likely hood that Australia will follow suit. Dismantling and recycling the modern motor vehicle is not as straight forward as it once was! With the wide spread use of modern electronics, safety systems and construction techniques, which are all designed to enhance occupant safety, these materials are a valuable resource that can no longer be just sent to a scrap metal facility and "mulched up"

all in one go. The resultant left over waste called "shredder flock" is then sent to general waste disposal. A systematic approach will be needed to address the ever increasing costs associated with the sending of this automotive waste to landfill. Auto Dismantlers are at the forefront of automotive recycling and are best suited to tackle this modern issue head on. Vehicles that have different combined fuel sources, such as hybrids and dual fuel capabilities like Petrol/LPG can provide significant safety challenges. Other vehicles are jammed packed with the latest air bag technologies with anything up to 7 or 8 air bags all detonated by "tiny" explosives charges.

The legislative requirements just to operate an Auto Dismantlers/recycling facility makes this industry the logical avenue for the safe, ecological and economically responsible disposal of the many types of materials and highly flammable liquids, gases and explosive compounds found in motor vehicles today. MTA NSW will endeavour to start the ball rolling due in part to the statutory written-off vehicle laws which are now in full effect. In general, this law requires all vehicles that are written off can only be sold for scrap metal or parts! With this in mind, ELV's in this State are truly poised for this type of legislative governance. ARA

● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●

Future Directions for Auto Recyclers

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his article is one of a series prepared by the Auto Recyclers Association of Australia addressing challenges that the auto recycling industry in Australia will face over the coming years. If you have any feedback on this article, you can submit this through the Association's website (www.autorecycle.com.au) or contact ARAA on the numbers shown below. Environmental Performance options for Australian Auto Recyclers It's hard to get an accurate picture of what is actually happening on the ground across such a diverse and geographically widespread industry. Each business owner will have their own view of how their business is going in terms of environmental compliance, and how others around them are doing. An increasing number of recyclers, aware of overseas trends and conscious that Australian standards are also being strengthened, have become voluntarily pro-active in upgrading their operating procedures. Since improving environmental practices has become a major focus for many Australian recyclers the following is typical of the range of topics many recyclers are now addressing, in line with standards now required in many EU countries. Treatment Facilities Treatment of waste motor vehicles is carried out at a site having:

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in dismantling areas, impermeable surfaces with spillage collection facilities, decanters and cleanser-degreasers; ● storage facilities that are appropriate for dismantled spare parts, including impermeable storage facilities for spare parts that are contaminated with oil; ● containers that are appropriate for the storage of batteries, filters, and condensers containing any PCB or PCT or both; ● storage tanks that are appropriate for the separate segregated storage of any fluid waste from a motor vehicle; ● equipment for the treatment of water (including rainwater) in compliance with all applicable legislation concerning health and environmental matters; ● appropriate storage for used tyres without excessive stockpiling, and minimising any risk of fire. Treatment Operations Treatment operations for the de-pollution of a waste motor vehicle consist of: ● the removal of the battery or batteries; ● the removal of the liquefied gas tank; ● the removal or neutralisation of all potentially explosive components (including air bags); ● the removal and separate collection and storage of all: fuel; motor oil; transmission oil; gearbox oil; hydraulic oil; coolant; antifreeze; brake fluids; air-conditioning

system gases and any other fluid contained in the said vehicle, but excluding any fluid which is necessarily retained for the re-use of the part concerned; the removal, so far as is feasible, of all components identified as containing mercury. These procedures are becoming common practice in parts of Europe, Japan and increasingly expected of those in USA and Canada. They represent the practices that many Australian operators are achieving, in anticipation of mandated Australian standards. What are the options for environmental performance more broadly throughout our industry? One option is for Government to impose more stringent regulations on the industry (as has happened in Europe). We don't want this; the vehicle manufacturers don't want this; and the government would only want to regulate as a last resort. Another option is that major businesses in our industry, already operating to high standards, actively support the establishment of a structured voluntary industry-wide accreditation program which, by example, would encourage wider industry improvement. A further option is for the auto recycling industry to work co-operatively with vehicle manufacturers in the introduction of a voluntary Product Stewardship scheme for End-of-Life vehicles. ARA


SEDA the world leader in ‘End of Life’ Vehicle Drainage Technology Your dismantling process needs SEDA Model One 1 Drainage Tree. SEDA Model One 1 pumps away all waste fluids in full compliance with the highest international standards. SEDA Model One 1 drains: Fuels, Engine Oil, Transmission Oil, Dif Oil, Brake fluid and Coolant quickly and efficiently without risk of a spill. For the typical Australian Auto Parts Recycler who prefers to drain and dismantle his vehicles on a two post hoist/s. The unit can be mounted between a pair of hoists so that two cars can be processed by the one operator. SEDA’s Drainage Tree gives you the ability to suck away all waste fluids simultaneously, enabling a significant boost in productivity while efficiently handling hazardous waste fluids in a manner that exceeds the highest international environmental and safety standards.

Designed by Aussie Dismantlers for Aussie Dismantlers

SEDA Environmental Australia 121 Greens Road Dandenong Australia 3175 Ph: +61 3 9793 9337 ● Fax: +61 3 9794 9844 Mobile: +61 419 525 330 ● Email: mike@tar.com.au


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SUNSPARES PARTS PLUS, YANDINA, QUEENSLAND

Around the

Traps

TAKING TIME-OUT WITH INDUSTRY LEADERS

Mark Adams ...

Sunspares Parts Plus Mark Adams of Sunspares Parts Plus in Yandina, Queensland is the recipient of the 2010 Frank Nicastri Award for outstanding environmental performance. Donated by the Nicastri family, this prestigious award recognises the dedication of the late Frank Nicastri to the auto recycling industry and his untiring efforts to "clean up the industry" through his support and encouragement of proper environmental practices. Mark is a relative newcomer to the industry and his journey into recycling makes interesting reading. ARA: Congratulations on being selected as Australia's most environmentally friendly auto recycler. What made you go down the path of focusing on environment issues? MA: I bought the business six years ago. It was an existing site that I thought that offered good opportunities for improvement. I decided to put a big effort into getting the environmental side of the business right. Firstly, I put up a large water tank at the back. We have about 45,000 litres on site and we've got our consumption of town water down to about a couple of hundred litres per day. We use tank water now in all our wash bays and clean up areas, and we just keep recycling that water and finally use it on our gardens. The other area we focused on is power. I got sick of paying large power bills so I decided to put up a solar unit. I put up a 10kw system first and then added another two 10kw systems. So we're now producing 30,000 kW per year, and we use half that in the business and sell half back to the grid. But water and power are not the only focus of our environment programs. We also ensure the proper depollution of every car that arrives in the yard. All oils are drained and held in a pump-out well that is regularly emptied, and all petrol is collected, filtered and used in our own

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panel shop until about six years ago, but I faced having to relocate the workshop. So instead of doing that I decided to get out of panel beating and look for other opportunities. So I bought the recycling business. ARA: If I was doing a yard tour and went to two or three recyclers in your area what would I see in your business that would be different? MA: Firstly, you would see a very clean and well presented yard – as clean as a dismantling yard can be. That's because we do a lot of retail sales so we want to present a good impression to our customers. We are a Subaru-only establishment. We have a mechanical workshop with two full-time mechanics servicing mostly Subaru. We have a body shop with two tradesmen doing 95 percent Subaru work. We have a Used Car lot with between 12 to 18 vehicles in there. vehicles. We have six vehicles on the road constantly and our monthly fuel bill is less than $700. ARA: What brought you into the auto recycling industry? MA: My background is in the body repair industry. I started work as an apprentice panel beater at 16 years of age and after completing my training I stayed working in the business for a period of time. I eventually bought my own panel shop in my mid 20's. I continued to work the

RECYCLING AROUND THE TRAPS – SUNSPARES PARTS PLUS AU ST R A L I A

ARA: As you only deal in Subaru vehicles where do you get your stock? MA: We pick up stock from around the country. We process about 250 cars per year – an average of five per week. We buy the best we can get from anywhere. 95 percent is sourced from the auctions. Having a body repair background I think I am able to judge pretty well the usable parts I can recover based on the damage that has been done. We bring in a lot of cars from interstate.


quickly spread nationally. They will be repairing a lot more cars because the insurers can't afford to write them off. I can see salvage stock being cheaper because the backyard repairers won't be at the auctions bidding up prices. If anything I can see little dismantling yards popping up everywhere.

ARA: You are based in a regional centre about one hour out of Brisbane. Where is the main market you sell to? MA: We sell all over Australia – from the Northern Territory to Tassie to Perth. We sell a fair bit in the local area (about 50 percent of our sales are in Queensland) but the other half is sold to the rest of Australia. ARA: How do you market yourself outside the State – how do people finds you? MA: These days nearly everyone find us through the Internet. We spend a lot of time working on our web page and placing Google advertisements, and we get a lot of requests through Parts Online. About 80 percent of the interstate sales that we pick up are off the net. ARA: Is this just through people Google searching on Subaru Parts? MA: Yes, if someone searches on Subaru Parts we will almost always come up on the front page. ARA: How have you achieved that success rate?

MA: In essence we have in-house expertise on working the Google system, and this contributes greatly to our sales success. It's mostly through one of our staff members who does our entire Internet work. He just keeps practising and working out how to make the Internet and Google work for us. And he loves doing it. He probably spends half a day or more a week just playing with the website and working on improving our success with Google. We also spend a lot on Google adverts but we get good value for that spend. ARA: What is the proportion of trade sales vs. retail sales MA: Within the local area we would sell over 75 percent to the trade and 25 percent retail. Interstate sales are probably 50/50 retail and trade. ARA: How do you see the business changing over the next five years? MA: I can see it getting a lot more competitive. The abolition of economic write-offs that is about to start in NSW will

ARA: Do you see yourself expanding your business and increasing the number of cars you buy? MA: Subaru is a niche business and there's only a certain amount of parts you can sell into the market. Bigger is not better. It's a matter of maintaining a balance between what you buy, what you hold in stock and what you're able to sell. This business once had 16 staff, but over time we allowed attrition to reduce the number to 10 staff. We now have 30 percent less staff, our turnover went down 10 percent but profit stayed the same. We operate on a one acre site and hold about 80 cars, and that's the optimum size for our business. Given the speciality nature of the business and the size we are, I don't want to get bigger. I just want to do the job better and get it right. ARA: What do you see as the biggest challenge facing the auto-recycling industry? MA: Well everyone goes on about the environment, and we are perceived as being a dirty industry, but I don't believe that has to be the case. If we all do the job properly we will be seen to be a very environmentally responsible industry. ARA Editor: With the "greening" of Australian politics it looks like Mark is staying ahead of the game!

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Global News & ★

Views

AUTO RECYCLER WORLD NEWS AND INFORMATION

Japanese Earthquake and Tsunami ... What does it mean? There has been a lot published since the devastating earthquake and tsunami in Japan but what does this mean for the automotive industry? New Vehicle and Parts Shortages In the US three of the largest auto retailers say they are braced for new vehicle shortages. Apparently they are trying to emphasise the benefits of used vehicles with the real possibility of new vehicle shortages. In fact they are buying customer trade-ins to offset against any shortages. They are buying and selling used vehicles that they would normally trade then wholesale. Supplies of used vehicles as well as new vehicles are expected to be tight from June onwards and to continue to the end of the year. Of course this could be good for Detroit manufacturers provided that their supply of parts is domestic rather than imported! Supply and demand could also drive up prices and profit margins on imported vehicles. Toyota has announced financial deals to assist their dealers in the US with their assembly plants not expected to come back to full capacity until November with many plants operating at 50 percent or less capacity. Analysts are now saying that Toyota may in fact drop to number 3 in sales rankings behind General Motors and Volkswagen AG with South Korea's Hyundai Motors and Kia Motors expected to increase their market share. Honda Motor Co has also confirmed that it will be the end of the year before their production returns to normal. The disaster has been a major setback for Japan, the world's third-largest economy, with exports falling faster than forecast in March and industrial output data due soon expected to show a record decline. Some economists expect industrial production to fall as much as a quarter, month-on-month, in March. The fall in Japanese vehicle output has fed through to major steel suppliers, weighing on profits and prospects for companies, including JFE Holdings. Production has also been disrupted outside Japan, with factories in Europe,

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North America and the rest of Asia scaling back due to parts shortages. Ford Motor Co is idling plants in Taiwan, China and South Africa due to the shortage of parts from Japan after the March 11 earthquake and tsunami, the company said. All three plants, one each in Taiwan, China and South Africa, were scheduled to be shut later, and Ford moved up those dates, a Ford spokesman said. Ford officials declined to say whether production at the plants to be idled this week will be made up with increased production later. The plant in Taiwan makes the Focus, Mondeo, Escape, Econovan, Mazda 3 and Mazda 5. The China plant makes the Fiesta, Mazda2 four-door, and the Mazda3.The plant in South Africa produces the Focus, Bantam, Ranger pickup truck and Mazda BT-50. The Ranger, BT-50 and Bantam are pickup trucks. Mazda Motor Corp is scrambling to recover from last month's earthquake so has identified thousands of auto parts at risk of shortage and is working to either obtain them from alternative suppliers or change their specifications. Mazda research and development chief Seita Kanai, speaking on the sidelines of the Shanghai auto show, said the company is rushing to plug the gaps in its supply chain following the March 11 earthquake in Japan. He said there were "several thousand" at-risk parts Mazda is aiming to resource before stocks of parts made before the quake run out. Some of the newly sourced or newly designed parts are expected to be available for assembly and production use by May, helping ease any shortages. Collision Repair Industry Impact The March 11 Japan earthquake and tsunami has significantly impacted on the country's automotive industry and the ripple effects are being felt in the automotive-insurance and collision-repair industries as replacement parts become

scarce, a new report says. CCC Information Services, which provides technology-based claims-management solutions to its clients, says the quake has damaged automotive plants, and ongoing rolling power outages have slowed the manufacturing of machinery, metals and chemicals used in auto-parts production. "Industry analysts estimate that the production of 516,000 vehicles has been lost in the month following the earthquake," CCC says. The troubles have spilled over to the collision-repair side, and CCC notes that the most immediate impact the industry can expect is higher market value for vehicles seeing production delays, which will drive up total loss costs. Other impacts will be "the inability to get certain replacement parts" and "longer fulfilment time of certain replacement parts driving up claim and repair cycle times”, according to CCC. As an example of issues that can be expected with respect to replacement parts, CCC notes, "Toyota released a list of 'Japan Limited Supply Parts' to its dealers soon after the earthquake, letting them know that they would not be filling any orders of these short-inventory parts to replenish dealer stock." The list included 250 parts. CCC adds that Honda has suspended U.S. orders of Japan-built models, including the Fit, Insight, CR-Z, Civic Hybrid, Acura TSX, Acura RL and "a small number of CR-Vs”. CCC says some of those vehicles might also potentially be at risk of uninterrupted collision-part fulfilment. However, the ultimate impact is difficult to assess. CCC states: "An analysis of 'parts ordered to received average days' shows no significant change since mid-March for any of the different vehicle makes. Low volumes of those parts that automakers identified as already having limited supply also makes it difficult to assess whether there has been any impact to date." ARA Editor: As you can see from this compilation of many reports from around the world Australia cannot expect to be immune from these problems.


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Global News & ★

Views

AUTO RECYCLER WORLD NEWS AND INFORMATION

11th International Automobile Recycling Congress IARC 2011

Magyar Suzuki Corporation, Esztergom (car manufacturing plant) & Alcufer Kft., Esztergom (car dismantling & vehicle drainage plant). ● Mü-Gu Kft., Budapest (shredder and car dismantling plant). The 12th International Automobile Recycling Congress IARC 2012 will take place from March 21- 23, 2012 in Budapest, Hungary. More information: ICM AG, International Congress & Marketing, Schwaderhof 7, 5708 Birrwil, Switzerland, Tel.: +41 62 785 10 00, info@icm.ch, www.icm.ch ARA ●

Over the years, the International Automobile Recycling Congress (IARC) organized by Swiss company ICM AG has become the international platform for discussions of the latest developments and challenges relating to end-of-life vehicle (ELV) recycling. The latest of these events drew an attendance of over 250 delegates from 25 countries as well as 25 exhibitors, including equipment manufacturers and service providers to the industry. Included among the topics and problems put under the microscope at the IARC 2011 gathering in beautiful Budapest were: ● New cars and new recycling technologies ● Where are the new cars sold – where are they going to be recycled? ● Best available recycling technologies ● How do car manufacturers and the industry close the recycling loop? ● Reports of Asian, US and European car manufacturers ● World-wide reports on ELV recycling activities ● Reports about illegal export of wrecks ● European ELV Directive – a monster with no teeth? ● Special: 1 day Workshop on REACH. Cocktail receptions and a networking dinner created an excellent atmosphere to get in touch with business partners, friends and competitors. On the final day of the congress, delegates were also given the opportunity to participate in

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plant tours to: ● Alcufer Kft., Fehervarcsurgo (shredder plant). ● Audi Hungaria Motor Kft., Györ (car manufacturing plant).


Three Auto Recycler Networks Announce Merger The merger of three of the largest independent auto recycling networks in the country was announced at the United Recyclers Group Annual Conference last weekend in Colorado. QRP Midwest, a network of 33 independent recyclers, has joined with two TEAM PRP affiliates, Absolute and Heartland, to form PRP Midwest. The alliance unites 52 independent recyclers in the central geographic region of the United States. Krystyn Roberts, County Line Auto Parts, Kansas City, Missouri, is the Chair of QRP Midwest and feels the timing is right, "Both PRP and QRP Midwest are very excited for the future and the possibilities that will come from our three independent recycling groups joining forces. All groups have different strengths that we have brought to the table and it just makes sense for us to team up to ultimately better serve our customers and our industry." The merger came about quickly after the first meeting between the recycler groups at which sharing delivery system resources was explored. Ultimately, they recognized the benefit of consolidation, leveraging a full integration of the three

trading networks. Significant value will be offered in better service to PRP Midwest mechanical and collision customers through the integrated delivery systems, expanded inventory and access to better salvage procurement options. "The merger of these three qualitydriven membership groups of independent recyclers will no doubt positively impact on the repair community in the regions covered," states Chris Northup, an independent industry consultant who is currently retained by the TEAM PRP National Board of Directors. "Realistically, this could provide the template for a go-forward footprint of independent recyclers to compete on the national scale." Kent Rothwell, Weaver

Auto Parts, Carnesville, Georgia, a Team PRP National Board Member is pleased with the expansion, "Team PRP encourages individualism as we use our combined philosophy to build the strength of our network." Mel Hunke, the General Manager of PRP Midwest, has been working closely with all entities and sees the positive change ahead, "I am optimistic that PRP Midwest will offer even greater customer benefits than the three groups have provided separately in the past. PRP Midwest is ready to assume a leadership role in providing alternate source auto parts to our customers." ARA

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VALE Ross Green We are sad to report from New Zealand on the untimely passing of Ross Green, one of the industries finest achievers. Ross's eldest son Scott outlines some of the milestones of Ross's outstanding career. "Dad first went into business in 1973 when he bought Whenuapai Garage from his father after returning from his and mum's overseas excursion to Australia. In 1975 he brought my auntie's Ford Anglia and advertised the parts for sale. Over the next two weeks the phone rang hot and he made more money from that exercise than out of running his garage. This incited a career charge, which saw the birth of Whenuapai Garage Car Dismantlers. It wasn't long before he sold off the garage and turned the dismantling yard into a Ford only recycled parts specialists. In 1981 Ross opened Flag Forward Autos and over the next few years

expanded to include four yards covering North, South, East and West Auckland. Also in the late 80s he started Confederate Imports, which specialized in importing new Ford car parts from Taiwan. In November 1991 his first self serve yard, 'Pick A Part' was started in Avondale, West Auckland. 1992 saw Ross help establish the Partsworld group with his 'Affordable Partsworld' business being one of the founding members. During his time as chairman of Partsworld the group grew to over forty franchises. In 1999 Ross sold off Affordable Partsworld and Confederate Imports to focus his efforts on building more Pick a Part facilities. In 1998 Pick a Part number 2 opened at Mangere southwest of Auckland followed by Pick a Part Wellington in 2000, Takanini in 2004 and Tauranga in 2006. In conjunction with the 5 Pick a Part sites Ross set up his 'Ram It' facilities to manage vehicle collection, processing and scrap metal. Two separate Ram It facilities were later opened in Hamilton and Palmerston North." Close friend Mike Third had this to say: "At the time of his passing Ross was

busy working on Pick a Part number six. (The first in the South Island near Christchurch). Ross was such an industry 'Mover' / 'Shaker' that he is probably behind the recent Earthquakes! Not only was Ross an industry 'Big Gun', 'Big Game Hunting' was his favourite pastime. Overseas clients would come to stalk the deer he bred at his 7,000-acre wilderness property in the middle of the North Island near Mt Ruapeihu. Ross told me about many of his near death experiences while hunting the most prized game in exotic places like Russia, Afghanistan the USA and Africa. Frequent hunting trips to Africa saw Ross develop a scrap metal venture in Cameroon of all places. Although his untimely passing has touched so many of his industry colleagues around the world they are comforted in knowing Ross was blessed in having a wonderful family and great employees who are more than capable of carrying on his legacy." ARA Editor: As you can see Ross was an Industry icon and he will be sadly missed. Our condolences go to his family at this sad time. AUTO

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Global News & ★

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AUTO RECYCLER WORLD NEWS AND INFORMATION

International Auto Recycling … Highlights from the 2010 International Roundtable in Quebec City Auto recyclers from around the world convened in historic Quebec City to participate in the 5th instalment of the International Roundtable on Automotive Recycling (IRT). The event unites industry leaders and scholars from auto recycling, insurance, repair, and government in one forum over the course of a few days. Previous IRTs have been hosted by Europe, United States, Japan and Australia. This year, the Automotive Recyclers of Canada (ARC) played host to the IRT in Quebec City. Representatives from Canada, United States, Japan, Europe, United Kingdom, Australia, Mexico and Malaysia met to discuss the issues and challenges affecting the worldwide industry. The three-day event began on a high note, sparking new friendships, networking opportunities, and three facility tours at Pieces D'autos Dumont Inc. – a second-generation family business, Lecavalier Auto Parts, one of the oldest auto recycling facilities in Canada and LKQ Pintendre Autos Inc., one of Canada's largest auto recycling facilities. Day two consisted of global presentations and country and association reports. It began with an opening message from Auto Recyclers of Canada (ARC) managing director Steve Fletcher; who also acted as the discussion moderator and host. Ed MacDonald, ARC chairman, formally welcomed the group in the dialectics of each of the visiting countries. He also challenged the group, “The task of this meeting is for everyone to gain a world understanding of automotive recycling," MacDonald said. During the association and country reports, speakers presented snapshots of the recent successes and

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challenges from their regions. Automotive Recyclers Association (ARA) Chief Executive Officer Michael E. Wilson discussed the U.S. recyclers' experiences with the Cash for Clunkers program, which the American government installed in 2008 to try to stimulate the automotive industry. "Most of the vehicles hit the doors last September," Wilson said. "ARA received a lot of mileage from the program and free media helped spread the word on the industry." The program wasn't flawless, however its primary intent was to stimulate auto sales; many government elements didn't take the recyclers into account. As the conversations continued, Canada's Retire Your Ride emerged as a better model, from the recycler's perspective, due to the government consultation with industry along with its more modest scope and cooperation with OEMs. Still operating in Canada, the Retire Your Ride program helped develop and deploy a National Code of Practice for auto recyclers along with ongoing educational and audit components. Martha Cowell from the State of California Auto Dismantlers Association summarized the feelings of all recyclers present (and probably around the world)

with two stunning slides showing the regulations and requirements licensed recyclers must face (there were a lot of them) compared to those hurdles unlicensed recyclers must meet (there were very few). The need for a level playing field for legitimate auto recyclers was a global phenomenon we need to change. Kasper Zom, senior consultant to Auto Recycling Netherlands, discussed the evolution of vehicle recycling and extended producer responsibility in The Netherlands, and outlined practices they've found useful in raising auto recycling awareness. "The most important incentive to handing in a car in The Netherlands is the ownership tax," Zom said. ''When you go to a recycling shop, they will deregister your car for you, and you will not have to pay taxes on it anymore." During the Japan Automotive Recyclers Association presentation, Minoru Gouko, director of automotive environmental analysis, proposed the idea of marketing recycled parts with a points system based on C02 savings. "We inherently know that re-using a part is better than merely recycling the part


MR B.W.GWEE FROM THE MALAYSIAN AUTOMOTIVE RECYCLERS ASSOCIATION

and much better than using a new one – the Japanese initiative will help quantify that benefit to the global environment. I hope the C02 reduction rate of recycled parts gets spearheaded by the IRT network as an international standard for all recyclers in the world as green parts for a greener world," said Gouko. In Malaysia, the import of used automotive parts and components will be prohibited starting June 2011, which will put Malaysian automotive recyclers in serious trouble. "MAARA is vigorously

promoting membership amongst the industry," said Malaysia Automotive Recyclers Association President Gwee Bok Wee. 'We look forward to any support and assistance that international associations have to offer. We are in the process of preparing a proposal to be submitted to the International Trade and Industry Ministry in Malaysia to reconsider their national automotive policy." Mexico, which is currently in the preliminary stages of creating an end-oflife management plan, has enlisted the help of the Japan International Cooperation Agency (JICA). "Some of the problems we have encountered already are insufficient confirmation on treatment of EL Vs [end-of-life vehicles] and shredders that don't receive sufficient ELV metal scrap from ELV dismantling sites due to a lack of reliable relationship," said JICAa's Kazunori Kitagawa. Kitagawa used the IRT as an opportunity to seek input from the world's established automotive recycling associations, many of whom had offered their continued support by the conference's end. Day three of the IRT conference was the last day of the conference and the official round table discussion. The delegates reviewed the previous days' presentations and began to add their voices to the variety of opportunities and challenges the speakers introduced. The general consensus was that more

channels of communications were necessary to share international knowledge and information among the associations as well as with the public. The group agreed to share the Green Parts name and logo, which are owned by Ontario Automotive Recyclers Association and representatives from the ARA volunteered to share their knowledge on trademarking to help the various regions navigate the sometimes complicated terrain of establishing the name and logo. All participants in the discussion agreed that having an internationally recognized brand would be beneficial to the selling of recycled parts. Mike Third and David Nolan attended the IRT representing the Auto Recyclers Association of Australia. "These meetings are very good for networking," said David Nolan. "I learned a lot especially during the tour of the Canadian auto recycler facilities. It was particularly interesting to see how they work with the insurance companies." Nolan was also interested in the conversations surrounding the implementation of the U.S. Cash for Clunkers program, noting that the Australian government was proposing to establish its own program to take older vehicles off the road. "It is clear that the U.S. government had not thought through the details of its [Cash for Clunkers] program. We are going to work with AusIndustry to make sure the avoidable problems are ironed out before an Australian scheme is implemented," Nolan noted. In the end, Ed MacDonald's challenge to better understand the global auto recycling industry was met by everyone there. "The trick now is to carry the great information and momentum forward to the next IRT," MacDonald said. "I think we can do it." ARA Editor: The importance of meetings such as this and the need to attend cannot be over emphasised. To be able to contact your peers from around the world for assistance and advice is invaluable.

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The Auto Recycling Eco Friendly logo will represent the Auto Recycling Australia tick of approval. This will be awarded to members of our AU ST R A L I A industry that show a positive direction towards News, Views and Information for improving our industry. Professional Auto Recyclers

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Auto Recycling Eco Friendly

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EKW Auto Parts Recyclers – East Keilor, Victoria

Around the

Traps

TAKING TIME-OUT WITH INDUSTRY LEADERS

Auto Recycling Eco Friendly

Ray Broughton of EKW Auto Parts Recyclers R ay Broughton is the recipient of the 2010 Bob Scott Memorial Award for Outstanding Industry Contribution. Donated by the Scott family, this prestigious award recognises the hard work and dedication of the late Bob Scott (1920 – 1983, Dubbo NSW) to the industry, and his pioneering endeavours to establish his dream of a viable and operative Used Auto Parts Industry in this country.

ARA: Congratulations Ray on your achievement – this represents the highest possible level of industry recognition of the contribution you have made. RB: It has been a privilege for me to be part of the auto-recycling industry in Australia throughout the past 35 years. The industry has been very good to me. I hope, in return, I have been able to make a worthwhile contribution back to the industry. I would like to say right up front that throughout my two terms as APRAA President and my years on the Committee, it was only through the fantastic work and commitment of the other Committee members that we were able to achieve what we did. Wayne Imlach, who was Secretary at the time, put in a huge amount of effort to the association and my contribution to the industry was a reflection also of the work he did. ARA: How did your industry journey start? RB: I actually began training as a dental technician but didn't like that. I had started pulling a few cars apart while I was doing my apprenticeship, and I liked to buy and sell things. I needed to find a new job, so I thought that wrecking cars might be a good opportunity. My first experience with the industry was when I wrote off my old Monaro. I went to McWhinney's Wrecking and he offered me $200 for the car. I decided to have a go at pulling it apart myself and selling it through the Trading Post. In the end and I made about $1200 out of it. I thought this game was all right, so I rented a factory and started to haul cars in and that was how I got started. I actually started in the business on the

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SHERYL AND RAY BROUGHTON

ROSS NICASTRI, RAY BROUGHTON AND PETER SCOTT

14th May, 1976 – that was the day and I took over the factory. I started off as East Keilor Motor Wreckers which later became East Keilor Wreckers and then EKW. ARA: What were the steps in the evolution of the business? RB: During the early years getting cars was a bit of a challenge. I started going to Sydney and bringing cars down from there. In those days we were wrecking anything but after a few years I decided to focus on Holden, Ford and Japanese only. We were fairly unique in that we started with a factory so we were able to store parts undercover. A lot of wreckers at that time were operating from an open yard with a

RECYCLING AROUND THE TRAPS – EKW AUTO PARTS RECYCLERS AU ST R A L I A

caravan for an office and all the cars stored outside – that was the norm. On the marketing side I would describe my marketing plans as fairly rudimentary. The Age worked well. I tried radio ads but that was useless. I tried cinema ads – they used to impress girlfriends at the drive-in, but didn't sell any parts. 1980 was a big year. The oil crisis had hit in late '79 and it was an unbelievable time because the value of V8's dropped like a rock, and the value of the small Japanese cars went through the roof. I would go to the Custom Credit auctions where the bottom had dropped out of the price of V8 cars. I was picking up Monaro GT's and Ford GT's and Fairlanes and paying a $1000 when their normal value would have been $7000. It was funny that the value of the cars had dropped, but the parts were still worth money. This was one of those opportunities that come along that gave us quite a boost. They were good cars but they were worth nothing even though they wrecked out extremely well. At the same time I realised that the Japanese market was largely untapped. I went to Japan in 1980 and started importing from there. First of all it was just panels, and then mechanicals, and then vehicles. This carried us through the eighties. Our business was booming and we were expanding considerably. At one stage we had a staff of over 65 and were operating eight or nine yards. But at the end of the ‘80s I sat back and looked at the situation and that was when I decided to buy a single larger block in Maidstone and consolidate everything onto that site. ARA: It has been said that the ‘80s and 90's was the golden era for wreckers. RB: That is so, and this was the golden era for the association as well – it was the strongest it has ever been through those years. I was pretty naive when I started out, but this was at a time when the industry was just finding its legs and most others were starting out on the same basis as me. People in the industry started to


RAY ON AN EARLY BUYING TRIP TO JAPAN

APRAA COMMITTEE DURING RAY’S TERM

come together and the auctions played a role in this. You would see other recyclers at the auctions and start talking amongst each other. In 1981 I received a letter from Phil Hassett; he and Bob Scott and Frank Nicastri and others had been to a conference in Hawaii and they came back and said "let's get an organisation together". I thought that was a great idea. This was a time when there were reasons for people to get together. I was active in APRAA from the word go. We all got more out of it than we put in. Initial meetings were held in Sydney, then Lawrie Beacham became Chairman and the focus moved to Melbourne. We would go to meetings and always got something out of it. ARA: You operate the website www.autoparts.com.au – what was your objective in setting up your own on-line parts site? RB: I registered the name in 1998 when the internet was really new, although I didn't start the site until a few years later. When I started the site I followed two principles – it is open to everyone in the industry (there is no requirement to be a member of any association, or any marketing group) and it

is free. Those two principles underpin the site to this day – it remains open to all recyclers and to all customers to our industry and it remains free. I don't make any money out of it, and haven't sought to. It now attracts over 150 requests per day – these are from body repairers, mechanical repairers and the general public as well as from recyclers requesting parts from other recyclers. It plays a valuable role in helping people find parts.

RAY BROUGHTON THE LONE WRECKER AT EAST KEILOR WRECKER’S ORIGINAL PREMISES

ARA: What are your thoughts on the industry now? RB: This is still a fantastic and unique industry. One of its most unique features is the level of communication, information exchange and co-operation that operates between recyclers. That is how we differ from any other motor trades sector. The businesses in most sectors don't need to talk to each other as part of their day to day activities – it is the associations that bring them together. But in this industry

we are constantly communicating with each other. We talk and deal with each other all the time. For most wrecking yards their biggest customer base is probably other wrecking yards. The single biggest customer for each of them is the wrecking industry, and this is unique to auto recycling. ARA Editor: After 35 years in the industry it is good to see that Roy still has the passion and drive which got him where he is today. Networking is so important and it is really highlighted in this interview. 72 EKW STAFF MEMBERS AT TEAMWORK BREAKFAST

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AROUND THE TRAPS – EKW AUTO PARTS RECYCLERS

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Cutting

Corners

BILL BARTLETT – EDITORIAL CONTRIBUTOR

Flooding the news ... what price Insurance?

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n the media quest for keeping citizens up with the latest news, "new" news is soon superseded by "newer" and once a topic fades from the front page it tends to be out of the public mind. A case in point was the vast coverage of flood and cyclone devastation followed by wide coverage of inspirational examples of many generous Australians assisting the clean-up. Although the major events have passed from the front pages, the ongoing issues being faced by many are huge. At one stage, almost one-third of Victoria was also under water, some towns being flooded three times within a few weeks, with wide areas and many houses expected to remain inundated for weeks to come. The confusion surrounding the extent of insurance cover further complicates the recovery for many, especially those left with no house or possessions ... just a mortgage and a soggy block of land and for a variety of reasons, no insurance! It is difficult to comprehend and inexcusable that despite a number of attempts over many years, we do not have a clear national definition of "flooding". With Assistant Treasurer Bill Shorten now jumping onto this problem, calling for action – perhaps this time? The aftermath of major earthquake devastation in Christchurch is yet another trial for our New Zealand friends who were already coping with earlier 'quake issues as well as a sluggish economy. We also empathise with those recyclers affected by these events and recognise their difficulty in getting back to business, even when premises have been restored. With salvage stock not simply available on demand, business and cash flow recovery will be slow for these operators. The best possible spin I heard was by the recycler who commented that, "it was the best spring clean I've ever had...sort of!"

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The previous issue of this magazine flagged the subtleties of Public Liability insurance policy exclusions and inclusions, prompting some to check the extent of their cover. Perhaps it's time to chat with your Insurer/Broker to review and clearly verify your position, now especially regarding water/flood damage. Clunkers Dumped...but what if? Few tears were shed at the announcement that the Government has shelved the Cleaner Car Rebate Scheme to re-allocate this funding to the disaster recovery program. One of the most relieved Government Ministers may have been the astute Senator Kim Carr whose Department had been handed the job of designing and implementing the program ... to begin operating within six months. Many automotive industry players and environmentalists, familiar with similar overseas programs, were dubious that the cost/benefit analysis for CCRS would measure up, whilst recyclers were concerned that a hastily implemented program may contain regulations with

unintended consequences for the legitimate recycling industry. During meetings with Ausindustry who were to structure the clunker-program, ARAA highlighted the benefits of a national management system covering all end-of-life vehicles, not just those falling within the proposed CCRS scheme and it was evident that such a broad ELV management system would not be achievable within the six month time frame. Again, the reprieve may have been a relief to Ausindustry as well! But ... what if the program had been hastily introduced and had imposed stringent and perhaps impractical environmental obligations on all recycling businesses? Maybe this is an opportunity for recyclers to have a look at their environmental standards and if guidance is required, contact ARAA for assistance in preparing an Environmental Action Plan. Having a plan, whether fully implemented or not, could be another form of business insurance. Barbecue truths ... and first impressions. Barbecue topics always range widely and a little alcoholic illumination often strengthens otherwise loosely held views. A friend recently raised the differences he found with a "modern" auto parts recycler compared with his recollection of dealings with recyclers of old. The story was that Fred's Land cruiser had broken down near Dubbo and the local Toyota dealer, unable to supply the


required part until the next day, suggested he try the local 4X4 dismantler, Scott's Parts Plus. Although dubious, he visited Scott's, was pleasantly surprised, obtained the part and was back on the road in no time. The story expanded to a detailed explanation of how "the place was organised, great stock-racking, all the staff wore uniforms, were friendly", etc etc. ... and this one really knocked him out ... "they guaranteed the part!" Fred colourfully compared that experience with his years-ago experiences chasing parts for the Kingswood; "the mess, heaps of parts, greasy grumpy staff and taking a chance on the supplied part, were then par for the course" and he had no reason to even consider used parts with his later model vehicles. Others then kicked in with their favourite recycling experiences but couldn't match Fred's story and the revival of his interest in the viability of used parts. (Still wondering whether Fred was a Scott's plant!) First impressions are the most lasting ... then and now. Numerous businesses have changed with the times, providing customers with good buying experiences and continually improving the Image of the auto parts recycling industry.

They're back ... a Carbon Tax and Emissions Trading Scheme. The Prime Minister has placed CO2 emissions/climate change back on the agenda. The carbon tax grenade, insensitively thrown into the economic mix at a time when taxes are straining to cover disaster recovery, has dismayed many Australians. Of course, it is hoped that we are able to convince our trading partners to share our enthusiasm for this new taxation regime so that Australia's producers are not cost-disadvantaged in a competitive global market. Many analysts believe that a carbon tax will result in a more significant rise in the cost of living than the introduction of the GST and in preparing for this tax it is

essential that the recycling industry is recognised as an "emissions reducer" when carbon credits are being assessed. Auto parts recyclers fulfil a significant role in society managing waste and reducing emissions by recycling parts...without any of the Government subsidies applied to other sectors of the automotive industry. Encouraging seeing at least one innovative auto parts recycler is including in his advertising prominent announcements of the emission savings made when using a range of used parts. Good stuff...not just a gimmick; this is reality and a practical preparation for where we are headed! ARA Bill Bartlett, Editorial Contributor

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CUTTING CORNERS – BILL BARTLETT

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Special Report NMVTRC REPORT

End of Life Vehicle System needs Overhaul

T

he dramatic escalation in scrap metal prices in the lead up to the Global Financial crisis greatly increased the number of players in the end of life vehicle collection business and also led to a surge in older cars being stolen off the street for their scrap value. Notwithstanding the sudden fall in prices in late 2008, the gradual climb back to historical averages has seen the number of players in the scrapped vehicle field remain largely the same and competition remains fierce. Unlike parts dismantlers, metal recyclers are neither required by law to keep records of cars they purchase, nor are they required to notify transport authorities of the identities of cars they demolish and recycle. With an estimated 600,000 ELVs being recycled each year, the recycling of motor cars is a huge national business. The NMVTRC estimates the potential number of cars lost to 'theft for scrap' rackets at around 3500 per year although it could involve anywhere up to twice that number. Another issue of concern is the likelihood that a significant proportion of the body shells of an estimated 9000 stolen and stripped cars also end up in metal shredders because there is no process in place to capture their identities. In June 2009, at the NMVTRC's National Workshop on the Management of Written-off Vehicles, many stakeholders called for an extension of the mandatory written-off vehicle reporting obligations to metal recyclers as a means of reducing profit-motivated vehicle theft. As a result the NMVTRC commissioned a report to examine the structure and day to day functioning of the Australian metal recycling industry and how end-of-life vehicles found their way into the system. The consultant was also asked to examine and comment on the feasibility of changing the written-off vehicle laws to capture end of life vehicles. As most recyclers know, the scrap metal industry is characterised by three

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tiers. At the top of the tree there are a small number of Tier 1 metal recyclers who possess huge, capital-intensive metal shredding and waste sorting facilities. Tier 2 is made up of a much larger number of small to medium enterprises that buy all types of scrap metal, including whole or crushed cars and on-sell to Tier 1 processors or export directly to overseas processors. Tier 3 is made up of very large number of independents who collect cars and other scrap metal direct from the public. Auto recyclers who sell the remains of dismantled cars to metal recyclers fall within the Tier 3 group. There are two main problems with the current system in respect to end-of-life vehicles. The first are the environmental concerns associated with independent collectors selling directly to tier 1 and 2 metal recyclers and failing to employ any type of de-commissioning process. The second is that once a car is crushed its identifiers are nearly impossible to locate and shredding destroys any potential evidence such as fingerprints and DNA. The report takes an objective and pragmatic approach when examining possible means of addressing the current problems associated with end of life vehicles, particularly the issues surrounding changes to the legislated obligations of metal recyclers. It concludes that given the volume of vehicles that are processed each

RECYCLING SPECIAL REPORT – VEHICLE SYSTEM OVERHAUL AU ST R A L I A

year and the industry practices that currently exist, simply extending the written-off vehicle notification requirements to all end of life vehicles will not achieve the desired aims. The costs of doing so would likely exceed any benefits and it would still be relatively easy for criminals to ignore or bypass the requirements. There are no easy fixes to these problems and the true solutions lie in a wholesale re-organisation of the end of life vehicle process. This would ultimately include introducing the concept of an owner having continuous responsibility for a vehicle, supported by financial penalties, until they can demonstrate that it has been delivered to an authorised treatment centre (ATC). The ATC must be legally responsible for, and have the facilities, to verify the legal status of the vehicle, properly de-commission it, and notify the transport agency that the vehicle has been recycled. The economic, environmental, political and industry settings needed to bring about such fundamental changes to the status quo may not yet exist however, the NMVTRC strongly supports the efforts of the recycling industry's peak associations to move in this positive direction. ARA The report on the Feasibility of Including End of Life Vehicles in the Written-Off Vehicle Regime can be found on the NMVTRC website at www.carsafe.com.au


OneSteel Recycling is Australia’s leading scrap metal recycler – making new steel products from recycled scrap metal. Operating in 37 locations across the country, we specialize in servicing the auto recycling industry in every state. Contact the company with the expertise and service level to meet all your scrap metal recycling needs.

Call OneSteel Recycling on 13 METAL (13 63 825). WEBSITE www.onesteel.com EMAIL onesteeldirect@onesteel.com Copyright 2008-2009 OneSteel Recycling Pty Limited ABN 28 002 707 262. Updated 0909. TS0516

book-may-2011  

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