Wrecks Get Wired
There’s no doubt that Jim Gaye runs an auto wrecking yard. Pneumatic tools chatter and roar as workers strip parts from crumpled cars in the 2 1/2-acre lot in an industrial neighborhood on the outskirts of Orange County’s Civic Center.
But look beyond the stacks of used wheels and racks of salvaged parts in the drafty front office and you’re likely to see a grizzled yardman tapping an inquiry into one of several computers lining the front counter at Gaye’s Wrecks West.
Within seconds, the computer tracks down the item from Wrecks West’s inventory of almost 2 million foreign car parts stored on rows of indoor racks.
There are about 1,300 places like Wrecks West in California and many still have tumbledown tin sheds for offices, rows of rusted hulks out back and junkyard dogs that prowl at night.
But most have long since abandoned greasy card files and raspy intercom systems in favor of sophisticated computer programs that enable them to track down anything from the taillight for a 1983 Ford F-10 to a rust-free front fender for a 1996 Ferrari.
Recently, more auto dismantlers have been signing on the Internet, posting Web pages and launching electronic parts locating services as a means of securing a larger chunk of the $5-billion-a-year auto recycling business.
“Computers are the future for this business,” says auto wrecker Steve Redlinger. The 27-year-old former farmer says his rural dismantling yard has doubled its business every year since it opened four years ago, and the computer provided a big boost. The computer system has kept track of inventory, helped provide speedy customer service and given national exposure to Redlinger’s Mid-States Salvage Inc. in Urbana, Iowa.
As the price of auto parts has climbed and the demand by insurance companies for less costly collision repair bills intensified, automobile wreckers like Mid-States have become mainstream sources of parts and electrical equipment for body shops, restorers and do-it-yourself mechanics who don’t want to pay top dollar for new items.
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Used parts, which come with a warranty at most wrecking yards these days, typically sell for about half the price of new parts, although that can vary wildly based on demand and availability.
The price of a new engine management computer for a late-model BMW, for instance, is $900. But David Aase strips them out of crunched Beemers at his wrecking yard in Anaheim and sells them for $125.
Laguna Beach resident Lorne Wilson recently used his laptop computer to track down a pair of factory original wheels for the 1987 Porsche 928 he’s restoring. He paid $250 each for them at an Anaheim wrecking yard that specializes in the only V-8-powered car Porsche ever built. The dealer wanted $1,800 apiece for new wheels.
Computer networks have become even more important because the industry has become so much more sophisticated. Cars now have thousands of parts and most wrecking yards have become boutiques that specialize in just a few makes or models. Few have the space to keep a complete lineup of mechanical and body parts for all domestic and import cars on hand, so they turn to computerized networks to quickly locate parts they don’t have.
In the old days, when the detested appellation “junkyard” was an accurate description of most dismantling businesses, owners kept their inventories in their heads. When a customer came in and asked for something, an employee in oil-stained coveralls was dispatched to hunt it down in the back lot, usually separating it from a mangled car with the help of a hefty wrench or a hacksaw.
Customers usually paid cash, and old-time yard owners freely admit that a lot of the money never made it onto the books. “That’s one reason some of us resisted computerizing for so long,” auto recycler Hurshel Clark says. “We didn’t like the idea of everything in our inventory being available to the competition, and every [sales] ticket we wrote being recorded.”
But Clark, who started in the business sweeping floors at his uncle’s Santa Ana wrecking yard 40 years ago, broke down and installed a computer system at his Placentia yard four years ago. It took months of mind-numbing work to log all of the parts, he says, but once the system was up and running “it made a world of difference. It makes running things easier and makes this a more efficient business.”
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The car-dismantling process has become more sophisticated as well, as wrecking yards try to wring every dollar from mangled hulks.
Yard operators spend thousands of dollars to buy wrecks at insurance salvage auctions and from private parties. To turn a profit, they need to salvage everything they can and turn their inventories as quickly as possible. The days of keeping stacks of wrecked cars--retrieving parts when needed--are long gone except in some rural regions.
Many auto wreckers now do their dismantling inside. Fluids and refrigerants that once were simply drained into the soil are now captured and resold. Wrecked cars seldom remain on the premises more than a few days before being reduced to a neat stack of usable, marketable parts.
In an eloquent display of recycling, the remnants are then shipped off to scrap metal yards, where they are shredded and often exported to Asian steel mills to become the raw material for a new crop of imported cars.
The salvaged parts--separated, cleaned and logged into computers--are stored on racks. Modern operations like Lakenor Auto & Truck Salvage in Santa Fe Springs often display refurbished used parts in brightly lighted showrooms that rival those of big retail auto parts chains.
Lakenor owner Herb Lieberman says terms like “wrecking yard” don’t apply any more because wrecking a car is the last thing he wants to do. He hires technicians who take up to half a day carefully dismantling each wreck to preserve as many parts as possible.
This transformation has been spurred by competitive pressure from overseas parts rebuilders, the huge demand for used parts in the collision repair business and increasing environmental regulation. But computer technology is allowing those who remain in the business to manage and channel the changes.
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Clark, who has owned Clark’s Auto Wrecking in Placentia for 26 years, says he plans to put his yard on the Internet. “If you’re not up to date with technology in this business today,” Clark says, “you won’t survive.”
He says dismantlers used to be able to make money just from buying wrecks and selling them to scrap yards for the value of the metal. Anything they got from parts was pure gravy.
“But now I’m lucky if I can get $25 a car from a scrap dealer,” he says of the wrecks he buys at auction for anywhere from $100 to $5,000 each. “The only way to make money now is to sell the parts.”
Clark’s Auto is one of about 3,000 wrecking yards in the country that have systems linked by computer, satellite, and facsimile machines to a network of suppliers who take credit cards and ship by overnight express.
There are a number of regional and national systems for finding parts. The largest, connecting about 2,000 wrecking yards, is run by Minnesota-based ADP Parts Services, a unit of information technology giant Automated Data Processing Inc. of New Jersey. Members of the ADP network log about 8 million parts in and out of their yards each week, says Mark Herman, the company’s senior vice president.
“The computerized inventory makes it possible to run this business,” says Wrecks West owner Gaye. “My computer tells me what cars a part will fit, what it cost me and how long I’ve had it. If it’s sitting for more than a few weeks, I know that I’ve either got it priced too high or that there’s no market for it.”
Gaye, who buys an average of 10 cars a week for his Santa Ana yard, takes a laptop computer when he goes to salvage auctions. The machine is programmed to check his inventory and pricing history and tell Gaye just how much he can afford to bid on any given car to make a profit on the parts.
If he receives an order for a part he doesn’t have, Gaye or one of his employees taps an inquiry into a keyboard. The system automatically scans the inventories of all the other yards in the network and identifies the yards that have what he needs. Gaye then can call or e-mail the other yards to inquire about prices and place an order.
More important to many wreckers is that insurance adjusters and body shops tap into networks like ADP’s to find low-cost used parts to repair cars damaged in collisions. Herman says ADP’s computers “track a couple million parts inquiries a month.”
For many yards, especially in urban areas like Southern California where crashes are frequent and at-home car repairing has pretty much died out, wholesale orders from insurers and body shops have largely replaced retail sales to mechanics and do-it-yourself car owners. Many Southland wreckers say that as much as 80% of their business is wholesale now--double what it was five years ago when the computerized parts networks were started.
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The Redlinger family’s Mid-States wrecking yard in Iowa provides a clear look at how valuable the computer can be. The yard is an anomaly, opening four years ago while the ranks of auto dismantlers in the nation have been shrinking steadily. Indeed, the industry trade association estimates that there are 9,000 active wrecking yards today, down from 14,000 a decade ago.
But the yard has been profitable every year, with the computer generating business all over the country, Steve Redlinger says. Auto body shops and insurance adjusters are combing the computerized inventory systems looking for price and availability and don’t really care where the wrecking yard is located. During a two-day period recently, Redlinger says, “we’d already sent stuff to Illinois, Arkansas, New York, South Carolina, Colorado and Louisiana.”
While he won’t say how much Mid-States brings in, Redlinger maintains that the business has a 25% gross profit margin. “There’s really good money to be made in auto dismantling if you do it right,” he says.
For many dismantlers, that also means branching out onto the Internet.
So far, a few hundred wreckers have established home pages on the Web, and most weren’t there a year ago.
“It is still experimental, but we think it will really be beneficial,” says Penny White, co-owner of one of the country’s newest wrecking yards, 4-month-old All American Auto Parts in Indianapolis. The site has received so many inquiries that White has hired a college student to help monitor it so that inquiries can be handled promptly.
At Aase Bros., the Porsche, Mercedes-Benz and BMW specialist, nearly 5,500 people have “visited” a Web page that features a color photo tour of the yard facilities and another that shows off the museum-quality display of restored classic sports and racing cars that takes up half the front office.
Doris Aase, who designed the page, says the company pays an Internet service provider $25 a month to maintain the site and provide e-mail access for customers who order by computer--now about 20% of Aase’s business.
“It’s really been good for us,” says her husband, Dave Aase. “As the recession went on here, there were countries overseas where the economies were healthy, and when you’re on the Internet, the whole world is your market.”
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
PARTLY HIGH-TECH
Computers have become a major presence in the auto recycling business, but use of the Internet and Web sites is still comparatively uncommon:
* Computerized inventory system: 80%
* Use Internet to sell, find parts: 25%
* Have own Web site: 6%
Small-Business Industry
Most automotive recyclers are small businesses with 10 or fewer employees generating less than $2 million in annual sales:
EMPLOYEES
1-10: 64%
11-25: 28%
26 or more: 7%
Total Sales, 1995
$700,000 or less: 28%
$700,001-$2 million: 39%
More than $2 million 15%
Don’t know: 18%
Areas of Specialization
Automotive recyclers range from generalists to specialists in foreign sports cars.
* 35% purchase only automobiles that are 5 years old or less
* 27% accept all makes and models, regardless of year.
* 8% specialize in foreign car parts
Industry Facts
By recycling more than 11 million vehicles yearly, the automotive recycling industry:
* Generates $5 billion in annual sales
* Supplies 37% of all iron and steel scrap to U.S. scrap-processing industry
* Saves 85 million barrels of oil that would be used making new parts
Source: Automotive Recyclers Assn.
Researched by JANICE L. JONES / Los Angeles Times
Cyberparts Flourish
There are about 120 wrecking yards on the Internet these days and industry insiders say the number is growing steadily. There’s no central directory of Web pages for wrecking yards, but they’re not hard to find. Most search engines, such as Yahoo, Excite and Magellan, have categories like “businesses” or even “automotive” in which you can set up keyword searches for sites. To make it even easier, you can key in the address of one of several services on the Internet to locate auto parts. They usually have links to lists of auto wreckers that have paid to join these networks. Three of the biggest services are:
* Incomnet AutoNet, (https://www.incomnet.com/autonet.htm), includes a directory of 269 California wrecking yards. Only five have Web sites of their own.
* Auto And Parts (https://www.autop.com/go/), has links to Web pages for 36 wrecking yards in 14 states from Connecticut to Colorado and one each from New Zealand and Australia.
* The Locator (https://www.partslocator.com), an online service of Locator, a national used parts industry magazine. Includes directory of 41 wrecking yards in 25 states, a few of which can be e-mailed, as well as a list of all the dismantling industry trade associations. It also contains a number of profiles of wrecking yards written for Iowa-based Locator magazine.
Among the Southern California dismantlers maintaining Web sites:
* Aase Bros., Anaheim; specializes in Porsches, Mercedes-Benzes and BMWs; (https://www.aasebros.com)
* All Foreign Auto Parts Inc., Fontana; late-model foreign cars and trucks; (https://www.allforeign.com);
* Century Auto Dismantling & Auto Recycling, Sun Valley; foreign and domestic; (https://home.earthlink.net/~edogg66/CNT.htm);
* 928 International, Anaheim; handles only Porsche 928; (https://www.928intl.com);
* World Auto Parts and Dismantling, Glendale; Subaru; (https://www.subaruworld.com).
In addition , the giant Rancho Cordova auto recycling center near Sacramento has its own Web site, listing all 20 of the wrecking yards there and their specialties. Several of the yards have their own Web sites, and those are linked to the Rancho Cordova home page (https://www.rcsr.com:80/).
