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AUTO September 2010 – Volume 1 Number 4

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

‘Auto Recyclers Deserve Better’

Designing the ultimate in Auto Recycling Equipment

What the new national association will mean for the auto recycling industry

Auto Recycling Eco Friendly

Around the Traps … Paradise Auto Parts AARA … All you need to know Special Reports, local and global news

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

Associations, New Zealand and the US


new association has been formed for auto recyclers, ARAA – Auto Recyclers Association of Australia and apart from the question as to why it has been formed the other question is why would you not be a member? If everyone was a member of the association how strong would it then be in its representation of the industry? Having said that of course not everyone was a member of APRAA and they did achieve a lot for the industry over a period of time but maybe it is time for a change. Associations, as far as I am concerned, would benefit by being stand-alone for a particular industry but of course allied or associated to another, not run by another is also preferable. I am sure that you feel that no-one runs your business as well as you and if this is the case why would you have people not directly associated with your industry running your association? When you take a look inside at the people who will be involved in the new association, ARAA, I think you will be impressed. I am confident with the support of the recyclers the industry can once again put their issues and concerns for the forefront and also be more informed about issues that

other organisations worldwide. There are two major trade events coming up in the US during October and November. The first is NACE in October and the second SEMA in November, both being held in Las Vegas. We will be attending both events and will be reporting on them in our next issue. There are many recyclers and suppliers at both events and at SEMA there is to be a major meeting between collision repairers and recyclers which I will attend. This will be their third meeting and they are much closer to understanding what they expect of each other in order to conduct good business together. I look forward to letting you know what results from the meeting. The Australian Auto Recyclers Conference 2010 on 18th to 20th November should be a must attend for anyone in this industry. Go to for more information ... see you there! ARA Talk to you in the next issue. David Newton-Ross, Editor


will affect their business in the future. One of the people directly involved with ARAA is David Nolan and you can read about him in his bio on this page. His background will stand him in good stead as we all move forward (sorry Julia!) from here. The Auto Recycling Australia magazine, I am pleased to advise, will now be going to our friends in New Zealand each quarter who are members of APIA and also SMRANZ. APIA via Maurice O'Reilly of course are regular contributors (see page 21) and Mike Third recently visited with SMRANZ members at their annual general meeting and convention (see page 22) and they have asked to be included on the mailing list. Ties such as this can only strengthen the relationship we have and the magazine also now goes out to many



David Nolan, ARAA National Policy Council member – BIO David Nolan brings to ARAA more than 30 years experience in employer representation, 10 years of which has been spent in the automotive industry. David was Deputy Executive Director of the Victorian Automobile Chamber of Commerce and Victorian/Tasmanian Representative for the Motor Trades Association of Australia. He has extensive knowledge and experience of a number of motor trades sectors and in the workings of industry associations. Prior to joining VACC, David had been Director of the Australian Chamber of Commerce and Industry and Executive Director of the South Australian Employers Federation. Following the departure of the "eastern states" associations from

MTAA, David was invited to meet with a number of key auto recycling industry figures to review the current state of auto recycler representation and the likely future path for such representation. It was clear that a viable national alternative to APRAA was not going to emerge in the foreseeable future and in the meantime the national representation of the industry would be in limbo. David therefore agreed to join with those who had a vision for the future of auto recycling in Australia and a determination to take action in the pursuit of that vision, rather than simply waiting to see what emerges from the politicking that has been occurring over recent years between various state associations. ARA AUTO




Editor: David Newton-Ross 02 9973 2298 0418 298 572

Views and AUTO News, Information for


Publisher: Mike Third 03 9793 4022 0419 525 330 Contributors: Maurice O’Reilly Bill Bartlett Sub Editor: George Ball

Production Enquiries: Stone Dezine 109 Kenmare Road, Londonderry NSW 2753 02 4777 5650 Printed by: Bright Print 02 9757 3000

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







Local News, Views and Information A New Association is formed The Auto Recyclers Association of Australia is up and running. Why has it been formed, what does it mean for you and your business and who is involved? A full report on this significant industry development.

12 Don't just think ... do something Chris Daglis of Auto Parts Recyclers discusses the environment and what action can be taken by everyone involved in this industry to make a difference.

13 New Damage Criteria

Published by: Auto Recycling Australia Pty Ltd 121 Greens Road, Dandenong, Vic 3175, Australia 03 9793 4022


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Advertising Sales Enquiries: David Newton-Ross 02 9973 2298 Chris Stone 02 4777 5650

The National


NMVTRC talks about the new draft criteria for classifying damage to motor vehicles that is being 'road tested' right now.

14 Global News, Views and Information 16 Around the Traps ... Paradise Auto Parts Hugo Pellegrini talks about his involvement in the industry and the challenges that are ahead. He is ready to meet those challenges ... are you?

18 Cutting Corners Bill Bartlett talks about the new association and the recently announced cash for clunkers proposal.

20 Going Green With so much hazardous waste contained in ELVs what is your business doing to ensure that they do not become an environmental problem? ARAA is planning to assist in this area.

21 Recycling across the Ditch Maurice O'Reilly reports on how all parties involved in the recycling industry can meet, discuss and work together towards a fair, transparent and negotiable outcome.

22 New Zealand SMRANZ Conference Report More than 200 delegates attended the recent Scrap Metal Recycling Association of New Zealand Annual General Meeting and Convention in Auckland. Read about how successful it turned out to be.





Professional Auto Recyclers


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Local News ★



Duesmann & Hensel Recycling Australia Opens Catalytic Converter Processing Plant Duesmann & Hensel Recycling Australia Pty. Ltd., a member of the Duesmann & Hensel group of companies headquartered in Germany, a world leader in recycling of catalytic converters, has officially opened its catalytic converter processing plant in Carrum Downs, Victoria. With the start-up of this processing facility for catalytic converters, the recycling of this material enters a completely new era in Australia. As this facility is the only one of its kind in Australia, customers from Australia and New Zealand have now, for the first time ever, full transparency in the determination of the value of their catalytic converters in a local operation. There is no more need for sampling and treatment overseas. Duesmann & Hensel perform the following operations in Carrum Downs: ▲ Decanning of converters and separating the valuable ceramic carrier (typically called 'monolith') from its metal shroud ▲ Crushing of the monolith in a ball mill to a defined particle size ▲ Drawing of a representative sample of the crushed monolith for the determination of the precious metals contents ▲ Determination of exact monolith weight ▲ Fine preparation of samples for precious metals analysis at any qualified laboratory. All these processes have been transferred from the German headquarters, where they have proved reliable and well accepted over years; the processes in Carrum Downs are fully

transparent to the customer, be it in the presence of the customer's representative or an independent witness. In addition, Duesmann & Hensel settles refining lots as soon as three weeks after the completion of sampling in Carrum Downs, giving customers significant advantages of quicker cash flow and feedback on the quality of the material. In comparison to outright sale of catalytic converters after visual inspection only, this process of 'toll refining with local sampling' provides customers the following benefits: ▲ Consistently, in the short and long term, the fairest process for customer and recycler as the value of material is determined exactly ▲ No influence of 'change of pricing policies' often observed in market purchases of catalytic converters ▲ Prepayment on delivery of material is possible, final payment of the exact values three weeks after completion of sampling





▲ Only toll refining offers additional options for the disposition of the precious metals contained in the catalytic converters: ● metals can be kept on a weight account and sold when the market terms seem suitable, different metals can even be sold at different times ● metals can be returned physically (Pd, Pt as bars or bullions, Rh as sponge) with certificates of analysis for sale to the market at any time later ● metals credited can be used to produce fresh precious metal containing products. Customers with lot sizes of 300 Catalytic converters or more are ideally positioned to experience the benefits of this new process characterised by full transparency thereby alleviating the sometimes unpleasant practices of this industry and providing the customer with better bottom line returns. ARA For further information, contact Duesmann & Hensel Recycling Australia toll free on Tel: 1300 727 275.


Auto recyclers have the chance to Kobelco rewards new customers get together after all 2010 should have seen the convening of APRAA's biennial conference but unfortunately for the auto recycling industry, this important national event became another casualty under the MTAA/MTA administration. Fortunately, a major vendor to the industry has come to the rescue. Software provider Actual Systems, not happy with the loss of the opportunity to show-case its Pinnacle product, has decided to fill the void by staging an industry get-together. Recyclers will now have the opportunity of meeting, networking, socialising and exchanging ideas as they have done for more than 25 years. The Pinnacle event, Australian Auto Recyclers Conference 2010, not only promises to be a great occasion for Pinnacle users but recognises the industry need, Actual systems have opened the event to any recycler wishing to attend. To be held at the exclusive Shoal Bay Resort north of Newcastle, the event promises to be a great chance to catch up with old acquaintances and test-drive the latest

Pinnacle software. Actual Systems are to be applauded for opening their event to the broader industry and filling the gap in 2010. David Nolan, Executive Director of the Auto Recyclers Association of Australia, has also been invited to provide a presentation on the new national Auto Recyclers Association. This will be a valuable opportunity for many in the industry to meet him and hear about key issues affecting our future. The Big Event Planned for Next Year With a new national industry association now in place, we will be seeing fullblown national Auto Recycling Conventions and tradeshows from next year onwards. The 2011 'Back to the Future' Auto Recycling Australia International Conference and Trade Show will be held on the Gold Coast from Thursday 22nd to Sunday 25th September, 2011. Mark it in your diary! ARA Editor: The opportunity to network with your peers is not to be missed; make sure you get there.

Kobelco, the world leading manufacture of Multi Dismantling Machines, has established its mark down-under. Since November last year Kobelco has sold six of its 'state of the art' Multi Dismantling Machines in our region. Five have been sold to auto recyclers in Australia and one is on its way to New Zealand. Extremely pleased with the growth in business to date, Kobelco in typical Japanese style has decided to show its appreciation by rewarding the owners of these new Dismantling Machines with an-allexpenses-paid trip to Japan this October. The lucky group of auto recyclers will take in the sights of Tokyo, Mt Fuji as well as a visit to one of Japan's best Auto Recycling facilities. How good is that for after sales service! It certainly makes you feel confident that you will be looked after when you buy a Kobelco. ARA





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Special Report


A New National Association for Auto Recyclers The Motor Trades Association of Australia (MTAA) has split in two and left the Auto Recycling Industry without an effective national industry body to represent its interests. With environmental issues and schemes like the Gillard 'Cash For Clunkers' moving to the forefront of public attention the industry is in a precarious position without an independent voice.


ince the old APRAA surrendered its autonomy to the MTAA, many recyclers have become increasingly dissatisfied with the level of representation afforded our industry. The auto recycling industry has not had the focus and resources it needs to get our message through to policy makers at both state and federal levels. We have not had the support systems in place to work with businesses across the industry in defining standards and assisting recyclers to improve their business practices. We have not had any significant marketing and promotion of the important economic and environmental role we play. In fact, we have gone backwards in a very big way. Gone is our nationally recognised accreditation program. Gone is our national industry conference. Gone are all the benefits provided by the association website Our insurance scheme? gone! Where are our award programs and the scholarship fund? What happened to the $30,000 in funds we had invested? Many recyclers will remember the huge amount of time, energy and commitment by those men and women of vision who sought to change the image of the industry and established APRAA, a vital association which went on to gain recognition as the peak representative authority for professional auto recyclers in Australia. We once had an effective national voice, but that has been lost as a result of the political upheaval that has occurred between the state motor trades associations. All of the "eastern states" associations have resigned from the Motor Trades Association of Australia – it is now left with only SA, WA and the two




Territories as its members. The eastern states associations have announced they have formed a new association to compete with MTAA – but where does that leave our industry? In Limbo For too long the various motor trades associations, particularly in the Eastern States, have regarded our industry as being at the "bottom of the food chain". They have not allocated the resources to ensure we are properly represented – at either the state or national level. Our once-formidable APRAA membership has been disseminated across all the MTAs. We now remain too few in numbers at the state level to attract any consideration. Their attention is focused on their big high profile memberships – car dealers, motorcycle dealers, mechanical repairers, body repairers and the like. The issues of concern to auto recyclers are low in priority. Their efforts on behalf of our industry have been lukewarm, to say the least. Who will the MTA's represent in addressing a 'Cash for Clunkers' type scheme. Car dealers or auto recyclers? We know the answer! The auto recycling industry needs to be represented by those whose livelihood depends on it. Following the recent election, it is now clear the Greens are going to be much more influential, and environmental issues will be at the forefront of the new government's policy agenda. Now is the time for us to make a determined effort to gain proper recognition as a vital automotive industry sector. Our industry is crucial in limiting

the environmental impact of the motor vehicle throughout its life cycle. We have the right to be recognised for the essential role we play in society. We make a huge environmental contribution to our communities in the following ways: ● First, by properly decommissioning Endof-Life vehicles – we ensure hazardous wastes are removed and disposed of appropriately. ●Second, by recovering reusable parts and promoting 'reuse' as the most responsible form of recycling. ●Third, by providing to consumers a real value for money alternative to the costly and often unnecessary use of new parts. ●Fourth, through our pre-shredder separating and segregating, we recover recyclable materials. We help to prevent excessive land fill and conserve our precious resources. Now, more than ever, we need an effective national voice that can gain the recognition auto recycling needs and deserves. The major economic and environmental contribution we make needs to be understood by not just the policy makers in Canberra but by the entire community. If the community doesn't value auto recycling as an essential activity we will continue to be regarded as a cottage industry of secondhand trash and treasure merchants. Junk yards, that society could generally do without. At the end of the day you want your business to be worth something, don’t you? Support the new Auto Recyclers Association of Australia and share the vision. 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.

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ARAA – Policy Agenda

ARAA policies will be set by the National Policy Council after due consideration and consultation with the industry. As a starting point, however, the following are issues we would expect to be on our policy agenda over the period ahead. The Future Direction of Our Industry The future for the automotive recycling industry lies in the promotion of its green credentials, and recognition by governments and the community of the substantial environmental contribution this industry makes through both the recycling of automotive parts and by ensuring the environmentally sound management of End-of-Life Vehicles (ELVs). ARAA has a vital role to play in working with governments in the development of a sensible and practical regulatory framework for the treatment of end of life vehicles. Promotion of Environmental and Economic benefits of Recycling ARAA policy should clearly state the environmental and economic benefits that flow from the use of recycled components, and promote 'reuse' whenever the opportunity arises. Enhancement of the Public Image of the Recycling Industry There is a need for development of a national public relations strategy that lifts the profile and promotes the value to society and consumers of the automotive recycling industry. Proposed New ARAA Accreditation Program The focus of a new accreditation program should be on providing recyclers with the tools they can use to improve their business and raise industry standards so that they are in tune with the expectations of our modern society. It should give businesses the ability to enter the program and provide them with the assistance needed to enable them to improve all areas of their operation. It should be a management tool that provides a pathway through a course of action and ongoing improvement to meet




agreed industry standards. The Accreditation program should provide the continuous improvement stepping stones. It should define the objectives and provide a mechanism to help businesses achieve them. It should be simple, and should address the issues that actually matter. The Accreditation program should allow recyclers to progress at a rate that they are comfortable with and recognise the progress and achievements each business makes. Written Off Vehicles It is important that the auto recycling industry develops a clear view as to the potential economic impact on this industry of a change in the current regulatory regime relating to "economic write-offs". The current New South Wales government is the only government that has so far endorsed this approach and committed to legislate for change. It is likely other governments will follow, but our industry needs to clearly understand the new operating arrangements that will be adopted by regulators and insurers and have a clear policy position on the conditions it believes should apply in the future. Land Fill Reduction Strategy Waste generated from ELV's is a significant contributor to landfill in Australia. Only the metal content is currently being recovered with the rest, 30 percent going to landfill. There may be ways in which the auto recycling industry could contribute to a reduction in the volume of landfill, through measures such as recovery of tyres, bumper bars and other plastics. ARAA should explore means by which there can be a "win-win" outcome of an economic benefit to auto recyclers and an environmental benefit to the community.

"Cash for Clunkers" Programs How are all the 'Clunkers' disposed of? Who handles them? What are their qualifications? How much are they worth? There are many answers to be sought. There is a far greater negative environmental impact from replacing an old car with a new car than could ever be caused by the higher levels of carbon dioxide emissions that flow from continued use of the older vehicle. The total level of greenhouse emissions attributable to the manufacture of each new motor car massively exceeds the level of atmospheric pollution produced from fuel consumed by the older vehicle it is replacing. The same applies for replacement parts. It is important that governments at all levels understand and accept the environmental benefits that derive from replacing damaged or worn parts with recycled parts rather than new parts. Relationships with Insurers It is important that the motor vehicle insurance industry respects and has confidence in the Auto Recycling industry as a credible and professional supplier of replacement auto parts. In all circumstances where use of a

secondhand part is appropriate, ARAA will seek to evidence to insurers that the Australian auto recycling industry is capable of meeting their needs. Relationships with the Body Repair and Mechanical Repair Sectors Body repairers and mechanical repairers are the most important customers for the bulk of auto parts recyclers. ARAA needs to do all that is possible to promote the professionalism, competence and capability of the auto parts recycling industry to meet the needs of these businesses. Refrigerant Recovery Regulation Restricted refrigerant handling licence for refrigeration and air-conditioning equipment de-commissioners Effective refrigerant recovery, along with other environmental impact issues associated with End of Life Vehicles, will inevitability make it necessary that all enterprises handling ELVs be

properly regulated and monitored to ensure compliance. ARAA must play a leading role in guiding this process or we will be governed by any number of regulatory authorities, all with different agendas, seeking to exercise control over our activities. On-Line Salvage available to Accredited Recyclers After earlier promising indications of insurance company support for such a scheme, progress has stagnated. One major insurer was prepared to go along with it but the reluctance of some other insurers to participate left the scheme in limbo. There is a need for ARAA to regenerate activity around this. Insurers Preferred Supplier Schemes ARAA will seek to ensure that any preferred supplier schemes maximise the opportunities for increasing the use of recycled parts in repair of motor vehicles.

ARAA would like to see the opportunity for all recyclers who meet standards agreed with the insurance industry to participate in such schemes. Product Liability Insurance This is an issue that may be being overlooked by many recyclers. Having adequate insurance coverage addresses risks potentially faced by recycler businesses. Constructive Working Relationship with the National Motor Vehicle Theft Reduction Council (NMVTRC) The NMVTRC is jointly funded by the State and territory governments and by the Insurance industry with the objective of reducing the incidence of vehicle theft across Australia. The auto recycling industry is able to play an active and positive role to limit the activities of car thieves. ARAA will look to work closely with the Theft Reduction Council so that it can pursue its agenda in harmony with the auto recycling industry. ARA

A Course of Action Through National Policy Council


he policies of the Auto Recyclers Association of Australia are formulated by the ARAA National Policy Council. This Council is made up of people who have a passion for our industry and who want to participate in shaping the future directions for auto recycling in Australia. The Chairman of the National Policy Council is Simon Hemingway of Justoyota in Moorabbin, Victoria. It holds its meetings by teleconference, generally on a bi-monthly basis. Members of the Inaugural National Policy Council are: Queensland Lawrie Beacham, Jeeepart Recyclers, Hervey Bay Jeff Hume, Total Parts Plus, Moorooka Viv Connolly, Sandgate Wreckers, Sandgate Darren Connolly, Sandgate Wreckers, Sandgate Ron Bowes, Pick-a-Part, Rockhampton South Australia Mark Kraulis, U-PULL-IT, Lonsdale Peter Barrows, Top Spot Auto Dismantlers, Mount Gambier

Hugo Pellegrini, Paradise Auto Parts, Para Hills West Northern Territory Keith Jessup, Palmerston 4WD Spares, Palmerston Western Australia Michael Beasley, JTW Auto Parts, O'Connor Kevin McAuliffe, Westwide Motor Wreckers, Maddington Victoria Simon Hemingway, Justoyota, Moorabbin Mike Third, Total Auto Recyclers, Dandenong Bill Bartlett, SafetyQuip, Nunawading Chris Daglis, APR Pty Ltd, Keilor East Geoff Paton, Daiauto, Braeside James Phillip, First Auto Parts Plus, Seaford New South Wales Fred Silk, Sapphire Fast Parts, Pambula Michael Kirkwood, Coastal Eurowreck, Toormina Damien Grant, Bathurst Auto Parts, Bathurst

Tasmania Ian Grant, Churchill Park Parts World, Launceston Matthew Woolley, Japanese Car Parts, Moonah ARAA wants to be an inclusive association where the views of all persons are able to be heard and considered and where policy is developed based on the widest possible input from within the membership. In addition to the National Policy Council, ARAA will have a number of Policy Development Committees whose role will be to consider in greater detail specific issues affecting our industry, and to develop policy proposals for consideration by the Council. In order to minimise the time demands on members, all meetings are held by teleconference. We invite all members who want to have a say in the future of our industry to register their interest in either the Council or a Policy Development Committee. You can register your interest by ringing David Nolan on Tel: 03 9502 7513 or 0418 829 110. ARA AUTO




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Special Report



"Don't Just Think, DO something!" (John Kennedy Snr – Hawthorn Football Coach and legend)


ecently I wrote an article "The Climate Has Changed" which I must say got a great amount of attention. Thank you to all who made contact with me to discuss the article. Today, I want to take this a step further and ask some tough questions and make a call to action. Cost reduction, consolidation, throughput, CSI and unit costs are all words on the lips of any panel repair shop owner today. Where does the environment and the role the industry plays fit into the pecking order? Is it something we use as a marketing vehicle only? Is it, as I was told the other day, "the warm and fuzzies?" What is the real answer? Well, hard to say, but perhaps it's time to take action on what each of us can personally do. Many industries are paying significant attention and committing very large amounts of money and resources into this question and are making very different decisions on how they do business. Our industry is at the pointy end of a big problem. How big? The family car is one of the single biggest contributors to climate change and pollution we have seen in the history of mankind. The automotive industry ranks high on the priority list of carbon creators. Yet at this stage the formula for making decisions in our country is largely short term financial and does not include the environment as a part of the equation. How is the government going to factor in a carbon cost for what we do? Let's face it; there are probably more questions than answers at this stage in this area with the Rudd government's failed ETS… But there is no doubt, whatever shape it takes, change in this area is on its way and quick! Many repairers and their work providers have worked hard in the area of sustainability. Some even have a policy on their preferred repairer network and their recycling behaviours, which is commendable. Reducing the environmental impact of a repair shop




now means a repairer may recycle cardboard, use rain-water tanks or recycle solvents. These are all important initiatives and many forward thinkers have already invested significant capital in these areas. OK, let's not beat around the bush, if we are serious about the environmental footprint, yes these recycling initiatives will help, but the biggest single opportunity to reduce the size of this footprint is to reuse more parts in our repair process. Why is re-use so much better than recycling? The answer here is very simple. The energy used to recycle a car panel and return it to service is massive; it requires the following at a minimum: 1. Remove the part 2. Freight and consolidate a batch 3. Ship (often offshore) 4. Remanufacture (often this requires many steps and many more materials and labour) 5. Package 6. Ship (often offshore) 7. Store 8. Freight 9. Fit. Re-using requires about one tenth of the energy, less than one quarter of the steps and shipping, if not less. Yet the repair industry in Australia uses under 5 percent* or often less re-used parts in total? Will taking action and increasing reused parts use to levels above 10 percent cost the industry? With approximately 45 percent of the cost of the average repair being parts it is an important consideration. It should be noted that there have been some insurers that have made the repairer's decision much easier. Some key insurers now offer repairers a margin that is often much better than that available to them on their new parts. In return they are looking for increased usage and a repair cost benefit while delivering the environmental benefits that are also a key driver for them. While others sit on the fence, we must commend those that are acting. As a great Hawthorn AFL football coach, John

Kennedy Snr once said "Don't just think, do something!" We all have a role to play. ▲ The manufacturers now accept their responsibility for the environmental impact of what they make and if they don't, if it's just lip service, then we should hold them accountable. ▲ Dismantlers need to provide a much better product. ▲ Governments need to have policy that supports the right behaviours. ▲ Repairers need to re-use where possible. ▲ The customer needs to demand a repair that is responsible. We all need to find a way to take action, to do something. By working together with a willingness to find the solutions, we will make the difference we need to. I am lucky enough to work closely with repairers, dismantlers and insurers and can confidently say that the climate has changed. Leading repair shops are using re-used parts as part of their cost reduction strategy and are achieving throughput levels that were unheard of two to three years ago. Some forward thinking responsible insurers are rewarding repairers for their efforts to use more reused parts and the APR dismantlers along with others in the industry are delivering the goods. Each of us needs to ask, "What action am I taking?" This question needs to be the same whether we are a customer, an owner or the person doing the repair. If you would like to know more about how you can become one of the "do" repairers, dismantlers or insurers, contact me direct on Tel: 0411 743 560 or by email at ARA Chris Daglis Managing Director, APR Pty Ltd *This percent is an estimate used for the purpose of this article and not in any way related to any insurer data

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New Damage Criteria a Step Closer


egular readers of Auto Recycling Australia will be aware that the National Motor Vehicle Theft Reduction Council (NMVTRC) is undertaking a range of projects that seek to better manage written-off vehicles (WOV) in order to further restrict opportunities for illegal manipulation and unsafe repair practices. In late 2009 we engaged forensic vehicle engineers Delta V Experts (DVE) to consult extensively with relevant industry and agency representatives with the aim of developing a new set of draft damage classification criteria that will address identified deficiencies of the current system. The present damage criteria that are used to determine the SWO status of a damaged vehicle were developed in the mid nineties and in the main have met industries' needs but it is now recognised that they have not kept pace with the rapid developments in vehicle electronics, safety systems and construction methods. In many cases these advanced technologies fundamentally change not only the skill set required to safely repair a vehicle but also the economics of doing so. From time to time the NMVTRC has responded to claims from recyclers of inappropriate classification of vehicles under the current criteria. In some cases we have asked that specific vehicles be re-assessed due to the apparent level of damage that could be seen in a photograph. Almost invariably the RWO

classification was found to be correct according to a strict "letter of the law" adherence to the criteria despite the seemingly inconsistent overall level of damage to the vehicle. In order to better understand the impact of individual assessors' interpretations of how the damage criteria should be applied the NMVTRC commissioned an independent audit of a large sample of WOVs that were to be sold at auction in Brisbane, Sydney, Melbourne and Perth. Consisting of over 400 vehicles the aim of the audit was to assess the consistency with which the current criteria were being applied across the country. The audit was conducted by former assessing executive Allan Gribble. Overall, Gribble found that the classification system was operating at a high level of consistency and there was no evidence of any significant misclassification of vehicles either intentionally or through poor assessing practices. However, he did verify that in some cases strict application of the relatively simple damage criteria currently in use does result in vehicles that would otherwise be seen as severely damaged being categorised as RWOs. Gribble therefore recommended that the DVE project should aim to ensure that the new criteria when strictly and objectively applied would more consistently identify and appropriately classify those vehicles suited only for dismantling.

AutoRecyclers Association of Australia

Are your business contact details in the ARAA National Auto Recyclers Directory up-to-date?

National Auto Recyclers Directory ARAA wishes to exploit every opportunity to support your business. As part of its role in servicing the needs of the auto recycling industry ARAA will be promoting your business in a national directory of Auto Recyclers. This is what the industry Directory provides: The first comprehensive, truly national On-line Directory of Australian Auto Recyclers. Ability to find recyclers by location, vehicle type, vehicle brand and specialty services offered. Makes it easier for body repairers, mechanical repairers and the public to find your business.

The new draft criteria are being road tested in August with a team of experienced assessors applying them to a random sample of damaged vehicles already classified as RWO under the current system. The trial has been designed to identify any unforeseen "shop floor" constraints to applying the criteria and to measure the level of classification consistency across the assessing group. As the new criteria are designed to be more rigorous it is expected that they will result in a significantly larger percentage of vehicles being classified as SWO than required by the current criteria. Recyclers need to be aware however, that around 60 percent of current RWO's are already being purchased for dismantling so the potential impact of these changes on stock availability and pricing may not be as great as some commentators believe. To help ensure the new criteria will receive the broadest possible support we have established an Expert Reference Group (ERG) with twenty-one stakeholder representatives drawn nationally from a cross-section of transport agencies, police, insurers, auction houses Recyclers and the motor trades. The ERG members have reviewed all aspects of the DVE work as it has progressed and will comment on the outcome of this road test phase of the project before the NMVTRC makes its final recommendations to the nation's transport agencies in September. ARA

ARAA works to Promote Your Business FREE LISTING FOR YOUR BUSINESS Update your business details now Complete the Yellow Insert included with this magazine, or go to: AUTO




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Global News & ★



Auto Companies Attack Quality Alternatives

Consumers and environment harmed by groundless attack on recycled automotive parts. As sure as the sun rises in the east and sets in the west, original equipment parts manufacturers, faced with declining sales, will aimlessly attack quality parts alternatives. The latest campaign comes from Hyundai Motor America, a subsidiary of Hyundai Motor Company of Korea. In a July 2010 press release, Hyundai proclaims, "Hyundai does not support the use or re-use of components removed or recycled from an existing collisiondamaged vehicle." Thus, one can infer from their statement that Hyundai does not support the repair and subsequent use back on the road of any vehicle that has been involved in a prior collision. Unfortunately, automakers and "new" original equipment manufacturers (OEM) have a long history of erecting barriers to further their substantial hold on the vehicle parts replacement market. From withholding essential Vehicle Identification Number (VIN) information on the parts compatibility of various vehicle makes, models and years to the full court negative press campaign on the integrity of recycled parts, automakers stand as a road block to a more robust auto parts recycling network. According to the most recent Mitchell Repair Collision Data, OEM parts represented "67.9 percent of all parts dollars specified by Mitchell-equipped estimators. This is yet another decline from previous quarters and reflects a continuing trend". The steady movement away from new OEM parts has occurred as consumers and the collision repair industry become better educated on the




quality part alternatives that are in the marketplace. To put into prospective this trend, the new OEM parts usage for the same report was 74.4 percent as recently as the second quarter of 2008. At present, recycled auto parts are competing against a new OEM auto parts industry that command huge marketing and institutional advantages in the collision and mechanical auto repair markets. However, educated consumers embrace "recycled" auto parts usage because of the benefits to the environment along with their substantial consumer savings in reduced repair costs and lower insurance premiums. Not to mention, these quality "green" auto parts meet the performance, safety, fit and durability standards of the new OEM. Furthermore, Hyundai and countless other automakers tout the quality of their own pre-owned vehicles that contain thousands of used parts. For instance, Hyundai's website markets its own certified pre-owned vehicle program as a "practical choice" and one that "accomplishes the goals of the valueconscious consumer". Evoking a famous line by comedian George Carlin, "If you can't beat them, arrange to have them beaten." Regrettably, auto manufacturers are "hammering" their own parts and needlessly trashing the very principles industry founders such as Henry Ford and Ransom Olds pioneered – interchangeable parts. These manufacturers "safety" campaigns are self serving and hypocritical especially when one takes into account that, last year alone, auto manufacturers had to recall some 16.4 million vehicles. ARA

India's first auto recycling plant


According to a report by the Press Trust of India the country's first automobile recycling plant is being built at the Sicot industrial estate on the outskirts of Chennai's India's fifth most populous city. The plant is being jointly set up by Society of Indian Automobile Manufacturers (SIAM) and NATRiP the National Automotive Testing and R&D Infrastructure Project and is likely to be commissioned in the first quarter of 2011 "It will help create awareness among the recyclers about safe disposal of automobiles and will also serve as a model for industry," said Ikbal Nathani President of Metal Recycling Association of India (MRAI). MRAI is amongst one of the industry bodies from whom Ministry of Heavy Industry, under which NATRiP functions, is taking feedback about safe disposal of automobiles. The plant is coming up with an estimated cost of around Rs 1 crore (AU$240,000). It comprises of basic recycling unit for manual dismantling of vehicles in phase one followed by a shredder plant. ARA

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The International round table meeting on auto recycling SEDA in Russia The 5th annual conference on automobile recycling took place in St Petersburg recently. SEDA´s Director of Business Development, Mr Edgar Root, was invited to make a presentation on the "Best Practice for End of Life Vehicle Drainage". Industry leaders as well as the head of the Russian waste recyclers organizing committee Mrs Galina Tsutskareva took part in this event. The conference was considered by all to be a big success and SEDA are pleased to announce that their new distributors for Russia have since sold a comprehensive SEDA vehicle drainage station near Moscow. SEDA are looking forward to successful business in this developing market. ARA

The International round table meeting on auto recycling is being held from the 19th to the 21st of September in one of the oldest cities in North America – Québec City – Quebec Canada. The Automotive Recyclers of Canada (ARC) will host representatives from leading automotive recycling associations including; Automotive Recyclers Association (ARA) of USA, European Group of Automotive Recycling Association (EGARA) EU, Japan Automotive Recycling Association (JARA) , Malaysian Automotive Recycling Association (MARA), Auto Recyclers Association of Australia (ARAA). Held roughly every 18 months, the event will build on past success in Coffs Harbour Australia 2008, Tokyo Japan 2007, Las Vegas USA 2006, and Brussels Belgium 2005; with the 5th International Roundtable Meeting in one of the oldest

cities in North America – Québec City. The IRT brings auto recyclers from around the world to share successes and best practices, and to exchange national and international information in this increasingly global industry. This time the three-day event will follow the provincial ARPAC meeting. International delegates are being encouraged to participate in both events. The IRT will feature tours of local recycling facilities where delegates can see first hand what is happening within the auto recycling industry in the host country. In addition to tours, the IRT will feature country reports, guest speakers, and a spousal program, a tour of historic Old Québec, presentations and roundtable discussions among the country associations. ARA Editor: We will have a full report on the round table meeting in our next issue.





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Paradise Auto Parts – South Australia

Around the



Auto Recycling Eco Friendly

Paradise Auto Parts … committed to change


aradise Auto Parts is a family business. In 1985 Hugo Pellegrini and his uncle purchased One Stop Wrecking and later changed the name to Paradise Toyota Recyclers and today Paradise Auto Parts. Through the years it acquired two other businesses – Landcruiser Spares and Parafield Auto Wreckers – all being Toyota parts specialists. About five years ago it merged into one business recycling all makes and models with new premises purpose built for auto recycling. Paradise Auto Parts has grown to become one of the leading auto recyclers in South Australia, still operating as a family business that focuses on being competitive and delivering top quality customer service. We talk to Hugo about his business. ARA: How did you get started in auto recycling? HP: At the age of 22 I began working in a wrecking yard as a motor mechanic fitting secondhand engines and gearboxes. I spent five years working there, and realized there is more to it than being a motor mechanic. I realized I wanted to be involved in the auto recycling business but I had no way to fund it. In 1985 I got together with my uncle, Agostino. He was an inspiring person with a lot of experience and patience and never afraid to take on difficult jobs. Unfortunately he passed away in 2000 of a critical illness, but we still kept the business running and his two sons are now a vital part of the business. About five years ago my son also began to work in the business to follow the trade. Today, Maria and I are the Directors of Paradise Auto Parts and it is our aim to carry on the business into the next generation. ARA: How has your business changed over the years? HP: About five years ago we moved away from the 'go-check' business process ("hang on, I'll go check if we've got it") to computerised inventory. We now focus on




efficiency, and how to work smarter. Our computer system enables me to assess what parts we are selling and the prices we are achieving. Based on this information I make an assessment as to what stock we need to acquire, and what I should pay. We are no longer buying based on "gut instinct" or emotion – we are buying based on hard data as to our past turnover. ARA: How has the marketing of your business changed? HP: 20 years ago I used to run "prime position" in the Yellow Pages. This was a large cost and the benefit could not be measured. We have moved away from that to more aggressive direct marketing, using our sales staff to build a better


recyclers only represent about 7 percent in the parts sales market in Australia. The other 93 percent is new parts and aftermarket parts. It's a fact that if a body repairer or mechanical repairer can't find a secondhand part after a couple of enquiries they will push their customer towards a new part and we will all lose out. As an industry we need to look at how we can collectively get in there and capture a larger proportion of the total parts sales market. That is the real challenge we all face. ARA: How do we meet that challenge? HP: We should be looking at how, by working together more, we can grow the market share for the whole industry. There is great opportunity for all of us to grow our businesses by working together and communicating better with each other. If you work together with the other guys in the industry, then if I haven't got a part I know who has, and we can both benefit from making a sale.

relationship with our customers and better understand their needs. ARA: Do you call yourself a generalist or specialist recycler? HP: We made a move about three years ago away from being a Toyota specialist – we had been that for 20 years. We are now a general dismantler – all makes and models. The reason for this is that our business carries significant overheads, and we needed to have a broader product base to enable us to develop a larger customer base ARA: What have been the best years for the business? HP: We had good years from 1985 when we started until 2000. But in the early 2000s as the game got tougher and the overheads got bigger we had to look for efficiency and work smarter. When I look back I realise that we were only employing more people to process more cars and store more parts that weren't selling. I realised we needed to get smarter and we introduced new systems that have given us a big turnaround in our business.

smarter. We have to analyse and be more efficient in the processing our vehicles so we keep our costs and overheads in line with our sales. ARA: Do you need to get bigger to grow? HP: I don't believe that to be the case. You don't need to get bigger in your own business. I believe that networking is really what is going to accelerate the profits in our business. Recyclers need to work more as a team and to communicate more. We collectively only have a very small share of the total parts sales market. Our real competition isn't other recyclers. We need to understand that auto

ARA: What do you see as the major issues facing the auto recycling industry over next decade? HP: The changing technology of vehicles will present many challenges for us – such as properly treating hybrid and electric cars. The major priority is getting our act together as an industry in relation to our environmental management and our OHS performance. Our biggest challenge as an industry is to recycle properly – to drain the pollutants properly and dispose of the product properly. ARA Editor: As you can see from the images of Paradise Auto Parts it is a facility to be proud of and a credit to Hugo and the industry. He talks about the importance of getting together and networking, how true!

ARA: What is your vision for your business over next 10 years? HP: The business environment will be tougher and we will have to work a lot





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It's time ... the new Association F

or starters, I must say I'm in full support of the aims of the new industry association ARAA and pleased to be a member of the team. The unfortunate and well publicised disputes between various State MTA's and their national secretariat MTAA, has resulted in a lack of national representation for the auto parts recycling industry, along with other sections of the retail motor industry. This has all occurred within a climate of destabilising State and national political change, which must have a trickle-down effect in contributing to trading uncertainty often reported by industry members. Initially informal meetings of auto parts recyclers discussed their dissatisfaction with the level of industry representation, agreed that the position was unacceptable and unlikely to improve. It was decided that too many significant issues were on hold and that it was time to end the uncertainty and form a recycling-specific, stand-alone organisation which must be capable of responding directly to challenges which face the legitimate recycling industry. It is encouraging that this has now happened, as outlined in letters to all recyclers around Australia and in this magazine. Industry support has been excellent, especially from those willing to be involved in policy formulation. Co-incidentally, a prominent recycler called today in support of the new Association and his comments were pretty concise. "It's about time recyclers return to having a separate organisation. It's clear to me that since APRAA joined




MTAA, our industry has simply struggled to be heard nationally and we no longer have an accreditation system. No matter how hard our representative's work under any multi-industry organisation, recyclers risk not being heard. I'm over the squabbling between the MTA's and MTAA and as there is no longer a national body, I don't see ARAA as being in competition with anybody. He added, "My State MTA is very useful in my day-to-day business but we need national strength and I've got too much at stake in my business not to join and help the new group." This has been a common reaction to the formation of ARAA, with recyclers also valuing the services provided by their State MTA's. ARAA supports this position and recommends the benefits of State MTA membership to all recyclers. Clunkers ... cash, and the environment? Ironically, the newest recycling challenge has become the recently announced Australian version of the "Cash for Clunkers" scheme which, based on overseas experience, clearly requires much attention to detail if it is going to attract consumer interest here, (as outlined in this column in the previous edition of ARA). Apart from the proposed uninspiring $2000.00 incentive to trade a clunker, the Labor policy announcement simply referred to "scrapping" these vehicles. What about the effects on other sections of the motor trade, re-use of parts and a requirement for proper decontamination by qualified recyclers? Hardly a well-rounded policy statement,

given that the stated aim of retiring these cars is to improve the environment! We wait the supporting economic modelling with interest. It would be difficult to find a more powerful reminder of the need for strong/inspired input to AUSINDUSTRY to ensure that clunker-program vehicles, along with all ELV's, must be handled by the legitimate industry and it is essential that all arms of Government grasp the point that cars which are environmentally efficient during their operating life, potentially have these benefits negated if not properly processed and decontaminated at end of life. The current toleration of the unqualified "cottage industry" involved in the collection and handling of ELV's around Australia has the potential to compromise the sustainability of motor vehicles in our society, despite the best efforts of manufacturers who are required to meet constantly tightening emission targets. Perhaps the proposed clunker scheme may have provided food for thought towards instigating a more rounded "cradle-to-grave" approach to achieving green targets? Not surprisingly, this issue has resulted in much spirited comment from recyclers and is high on ARAA's policy agenda. Irrespective of which party eventually forms a Government after the recent elections, "the environment" will become increasingly prominent. Apart from Cash for Clunkers and any other environmental plans Labor may have, Liberals commitment to greening Australia includes a 15000 member "Green Army" which will be working with existing Landcare groups

focusing on general environmental management. All industry sectors constantly strive to minimise their carbon footprint by improving their operations and as would be expected, the significance of this issue will continue to grow. Liability insurance ... know your limits. A recycler who provides a fitting service for parts sold in his business recently received an unwelcome surprise. His staff supplied and fitted a replacement electronic control module in a customer's car, involving substantial work removing and reinstalling interior trim and components. All tested OK and the customer was happy ... until next day when the item failed, necessitating replacement under warranty and other work identifying any underlying fault which may have contributed to the failure. In view of considerable lost time in the warranty work, the workshop decided to lodge a claim on their Liability Policy. They were taken aback on being advised that their specific policy did not cover the replacement of the original unit, since he did not have "re-performance

cover". The policy provided cover for other damage which may have resulted, but not re-performance of the original job. The moral of the story is that Liability policies are complex, in order to cover all types of industries and contain exclusions and additions specific to the needs of a particular business. Obviously, it is worthwhile making sure your broker or insurer understand and provide for your specific needs. Cheap insurance may turn out to be ... just that! Recalls, Green Dealers ... and standards. At a time when most auto manufacturers are striving to overcome the effects of the Global Financial Crisis, many are experiencing expensive recalls which are not helping the bottom line.

It is encouraging to note that Toyota, who has had their share of problems, is also keeping their eye on maintaining their drive for constant improvement in all areas of their operations. This has now extended to their dealerships which are being encouraged to join the Toyota Environmental Dealer Program, with Patterson Cheney in Melbourne being the first to achieve five-star rating. This self-regulatory setting of operating standards in the automotive retail sector is yet another indicator of this culture developing throughout the automotive sector ... inevitably extending to the handling of ELV's and auto parts recycling generally. Speaking of recalls, it was a little surprising to read of Ferrari also being infected with the recall-bug, involving fuel pipes in '90's vehicles. Just thought I should mention that so that all Ferrari recyclers have an opportunity to check their stock! What next ... Rolls Royce? Wishing you healthy and profitable trading. ARA Bill Bartlett, Editorial Contributor





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Australian Auto Recyclers are increasingly becoming “Green"


n Australia, approximately 720,000 cars reach their end of life each year. These vehicles have either been written off after being involved in collisions or have reached the end of useful service life. Either way it's a lot of vehicles that must be dealt with. When one considers all of the hazardous waste contained within these ELVs, the image quickly takes on nightmare status in terms of negative impact on Australia's environment. This is where auto recyclers Australia-wide become major players on the green field of environmental protection. Although most people give little thought to the important role that auto recyclers play in day-to-day life, imagine what would happen if we recyclers ceased to exist. Without responsible auto recyclers, these vehicles have the potential to create a disastrous boom in environmental pollution across the Australian landscape. One of reasons the Auto Recyclers Association of Australia (ARAA) was formed was to assist individual auto recyclers in complying with industry regulations and to act as a liaison between auto recyclers and government authorities. This National organization for auto recyclers will help disseminate information of concern to individual auto recyclers. Another of ARAA's functions will be to assist auto recyclers throughout Australia maintain compliance with important environmental regulations. With increased environmental awareness and the desire to protect the country's delicate natural resources, auto recyclers everywhere are working harder than ever to create green yards where automobile waste products are properly managed, contained, safely disposed of, or recycled. ARAA will be instrumental in helping the industry achieve this. The average passenger automobile contains at least eight hazardous waste products. These include petrol or diesel or LPG, motor oil, transmission fluid, brake




fluid, power steering oil, coolant, lead, and air-conditioning gas. Legitimate auto recyclers provide the necessary services to ensure that these hazardous components are removed from automobiles before they are sent to the shredder for scrap metal recycling. With more than 2000 businesses located throughout the country handling ELV's, ARAA will work to ensure that as many as possible of these recyclers are informed to allow compliance with federal, state and local laws. Auto recyclers in Australia are the country's first and best defence against environmental pollution from end of life vehicles. Already throughout Australia, including regional centers and rural areas, many forward-thinking auto recyclers have spent a considerable amount of money on environmental compliance. With the assistance of ARAA, this industry will have the opportunity of becoming one of the most compliant of all industries involved in handling hazardous waste in Australia. This will ensure that the auto recycling industry will be regarded as a vital industry sector, properly recognized within our society. It is the intention of ARAA to provide assistance to recyclers so that they can develop their own environmental management systems, enabling them to maintain environmental compliance and to ensure ongoing improvement. This will also allow even smaller recyclers to meet compliance guidelines without undue financial strain, while improving their "green" credentials. ARA

URG Pinnacle Conference The annual URG Pinnacle conference, held in Denver in April of this year, was another huge success with close to 600 attendees – an increase of 45 percent over the previous year! It attracted recyclers from all over the US, Europe and Australia with its quality speakers and content and is fast becoming THE conference for Pinnacle and non Pinnacle users alike. The event gave all those who attended a chance to network, learn from each other and most importantly, socialise! The latest Pinnacle offering, Pinnacle Professional, was on display with lots of exciting new gadgets for everyone to try out. Mobile computing was a hot topic this year. The Cipherlab barcode scanners and Motorola MC55 handheld PC's were available for demonstration running various programs, from stock checking utilities to inventory input and auction bidding assistants. For those already using Pinnacle, there was plenty of opportunity to sit in on advanced training sessions and for those considering Pinnacle for their business, continual demos were held showing the application's key features and advantages. With positive feedback from everyone attending, the dates are already locked in for next year's URG Pinnacle Conference (April 14th-17th 2011) so mark your calendars! And don't forget that Pinnacle is hosting its inaugural Australian Auto Recyclers Conference in November this year at idyllic Shoal Bay, so keep the 18th-20th November free. Go to for more information and to make your booking now! ARA

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2011 'Back to the Future' Conference

Auto Recycling Australia is staging the Auto Recycling Australia International Conference in September 2011 at the Gold Coast. This is planned to be held at the same time and same venue as the Collision Repair Specialists of Australia (CRSA) conference so there will be a great opportunity to network with many industry leaders from the collision repair side and possibly a combined industry session. More details will follow in future issues of ARA, stay tuned! ARA




New Zealand Parts Supply and Vehicle Repair Market

Improving Industry Relationships New Zealand Parts Suppliers are enjoying improved relations With Insurers and Repairers ... through frank discussion.


he past 25 years have seen any upgrades being addressed enormous changes in the between repairer and insurer. vehicle repair market. While This evolved to a 20 percent the most significant are linked to discount on parts rule which the evolution of vehicles and the was designed to offset any complexity of repair, some of the upgrades required for most difficult to manage have imperfections. It effectively related to the relationship reduced the insurers' costs and between the parties involved in trimmed the suppliers' margins. the repair process. The parties were all happy as MAURICE O'REILLY As in the rest of the world, the suppliers' knew their selling the New Zealand vehicle repair industry price and the repairers were guaranteed had four separate participants that all payment to prepare parts for the vehicle have their own agenda and priorities. (whether it was required or not – swings Customer: wants their damaged vehicle and roundabouts). back as soon as possible in at least as Within a few years the discount became good condition as it was before the seen as the repairers handling profit and accident with as little inconvenience and requests were made to the insurer and at no unforeseen cost. supplier for an allowance to prepare or Insurer: needs to honour their obligation repair the parts back to perfection. Often to their customer but has to keep the cost both parties paid for the same work. The of repair as low as possible to remain supplier usually considered the allowance competitive in their market and to make a was too generous and in many instances profit for their shareholders. wiped out any profit margin. The scene Repairer: is running a business with the was effectively set for mounting disputes and failing relationships between all parties. expectation of making a good living from The introduction of electronic their skills and time. Considers the vehicle procurement systems enabled the owner to be their customer and wants to insurers to become involved in locating impress them with the best possible parts nationally. This increased experience in unfortunate circumstances. competition between suppliers in the Parts & Consumables Supplier: is also industry and effectively drove prices down running a business that involves to the levels where many supplies were considerable invested capital and unprofitable. It also reduced the personal knowledge. They also must make a profit to communications between the parties and continue in business and consider the ruined the relationships that had been repairer as their principal customer while developed over years of trading. The facing demands from both the vehicle insurers claimed the high ground by owner and insurer. This group is divided into considering the vehicle owner was their OEM (new) parts suppliers and Recycled or exclusive customer, repairers who were Aftermarket suppliers which add a further compliant were chosen as preferred element of competition and friction. repairers and a 'divide and rule' mentality This article deals principally with the developed throughout the industry. Few evolution in the recycled parts supply were happy as most felt they had lost industry and their relationship with control of key elements in their insurers which as been stormy during the businesses. Aggravation mounted, past 25 years to say the least. particularly in the area of refurbishment of Back in the dim dark ages there was parts that were not considered perfect. little communication between suppliers This resulted in repairers lobbying for and insurers. The repairer was pivotal in greater use of new OEM parts which were the process and totally managed the usually more expensive and provided repair. Salvaged and recycled panel parts them with a larger handling fee. This in were usually were sold at net cost, with

turn drove repair costs back up in an environment where the value of the vehicles was reducing – resulting in an increase in uneconomic repairs. This situation was detrimental to all parties. The customer was unhappy being paid out a sum they thought was unreasonable as they were often unable to replace their car with one as good as they had prior to the accident. The insurers' costs increased reducing their profitability. The repairer lost a job in their workshop, often after incurring costs. The suppliers failed to make any sales. Following a number of years of continual bickering and disintegrating relationships, the Collision Repair Association (CRA) started having regular meetings with the various insurers … and found that consultation worked. The Automotive Parts Industry Association (APIA) was quick to follow and the parties developed a number of discussion opportunities that have spectacularly reduced tension, solved problems and reached a far better understanding of all of the issues involved in the automotive repair industry. The working party which has evolved consists of insurers, recycled and new parts suppliers, repairers and procurement representation. These participants have agreed in principle that to go forward, a better understanding has to exist between all parties to acknowledge that problems exist and to determine what can be agreed upon that is mutually acceptable and beneficial. The next meeting should put guide lines in place that will be recognised by all and serve to facilitate regular consultation. The basis for all discussion is that all facets of the repair industry must be fair, transparent, and negotiable and that everyone must be able to make a fair profit to enable them to remain in their respective industry sectors. The recycled parts suppliers are very positive about these developments and are keen participants. ARA Editor: It really does show what you can do when you work together! AUTO







New Zealand Conference report Last month I travelled to Auckland NZ to attend the Scrap Metal Recycling Association of New Zealand (SMRANZ) conference and trade show because we have nothing like it this side of the ditch. I am certainly glad I made the effort. Mike Third reports.


hy is it that the Kiwis too often seem to do things better than we do? SMRANZ has only about 120 members mostly mum and dad businesses and yet their annual industry get together was an excellent example of how to put on really great industry event. Thanks Korina, Kara, and Brett, we'll put what we've learnt into practice here in Aussie when next year we stage the Auto Recycling Australia Conference!. The Scrap Metal Recycling Association of New Zealand (SMRANZ) recently hosted its 42nd Annual General Meeting and Convention in Auckland. Attended by over 200 delegates this convention has been growing steadily every year, and it's not surprising given the range of events they have on offer for their members. The two-day event was kicked off with tours to local scrap metal yards where delegates were given the opportunity to openly spy on their competitors while being personally shown through their facilities. This really is a unique event given that on any other day the bulk of these delegates work in direct competition with each other, and yet once a year they come together to work for the greater good of their industry as a whole. The site tours are followed up with an afternoon of workshops that this year covered topics such as the best practice for the de-pollution of end-of-life vehicles presented by SEDA Environmental and a forum on electronics recycling. Workshops were presented by keynote speakers, many of whom travelled from as far away as Australia, Singapore and Europe to be in attendance. One of the biggest draw cards to the event is the Trade Show, which this year had more than 32 exhibitors and included an outdoor arena for some great equipment displays. It's a great sight to see material handlers lined up next to each other, and not just for those in the scrap metal industry; traffic passing the




event slowed to a crawl during the twoday event as the sight caught the public's eye as well. One can't help but be impressed by the Trade Show; all of the exhibitors put on great trade booth displays, offer show specials, mingle with the delegates on an informal and relaxed level, and seem to be really keen to support the industry. This is shown by a number of exhibitors taking up the sponsorship of several events, including the bar tabs for both the Friday and Saturday night functions. It was a packed two days, and while there was a lot to get through SMRANZ members did it with a good dose of humour, making all of the events a great success. It's easy to see why SMRANZ has such a strong and growing membership because this convention

really is designed by industry people for industry people. I was particularly amused by the V8 heads that were sandblasted and polished for use as tea light candle holders at the closing dinner! At least that's what I think they were. A bit hard to tell after a few too many of those exhibitor sponsored 'Lion Reds'. ARA

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 EMAIL Copyright 2008-2009 OneSteel Recycling Pty Limited ABN 28 002 707 262. Updated 0909. TS0516


AUSTRALIA AUSTRALIA ‘Auto Recyclers Deserve Better’ ‘Auto Recyclers Deserve Better’ Around the Traps … Paradise Auto Parts AARA … All you ne...

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