When times get tough, America's ingenuity for recycling shines
The showroom looks like any auto dealership. It's clean, well-lighted, and populated by employees eager to help. There are free hotdogs and popcorn to nibble on, and balloons for the kids.
In one corner sits a cream-colored 1979 Toyota Celica . . . with a smashed in front end. As a matter of fact, if there had been nothing wrong with this car, it wouldn't have been here. This is Robertson's Auto Salvage in Wareham, Mass. But don't call it a junkyard.
The popular image of a junkyard - a veritable graveyard of jumbled wrecks guarded by a mean dog - is not about to become obsolete. But there's a new breed of auto salvage enterprise emerging, and it's going for a cleaner, more businesslike operation - and larger profits.
That shift is typified by Robertson's. Over the past 12 years, auto salvaging has become big business for brothers Scott and Howard Robertson. In fiscal 1982, which for them ended in November, the company grossed $6 million. They made Inc. magazine's recent list of the nation's ''top 500 fastest growing companies,'' (No. 456) - the only auto salvage business included.
Organization and a willingness to reinvest profits have been the keys to their success. The cars in the 25-acre field are organized by manufacturer and model. But the customer may not have to venture outside to find the right part - chances are it's in the warehouse, where it has been removed from the body of the car, cleaned, priced, and even shrink-wrapped in plastic to give it a feel of newness. Mechanics work day and night on the ''disassembly line'' dismantling wrecks.
Desktop computers also help streamline the operation. In one system the brothers list their parts inventory, and in another, their ''reparable wrecks'' - cars like the '79 Toyota that a customer can repair, ending up with a like-new car at a cheaper than wholesale price. The average price of a reparable wreck is
High-tech organization does not necessarily mean higher prices than their country-cousin competitors. In fact, Scott Robertson says, prices in less organized junkyards are often higher because the owners don't know what their stock is worth and they don't keep good records. ''They don't make it desirable for the customer to come back,'' he says.
Because Robertson's trades only in late-model cars ('77 and newer), millions of Americans who still own older cars probably won't find replacement parts there. Indeed, some old-car buffs enjoy the serendipity of the more traditional yard - sometimes dubbed ''the poor man's auto show'' - which can have anything from Model T's to 1960s Dodge Darts to Detroit's more recent offerings.
A recent study on the US and Canadian used auto parts industry paints a healthy picture. Conducted by Arthur D. Little Inc. of Cambridge, Mass., the study reports annual sales of $4 billion for the industry, with growth of about 10 percent in 1981. Auto parts recycling and salvage is the 16th largest industry in the US.
''People buy new in good times - they throw things away. When times get tight , people look harder for a better deal,'' says Russell McKinnon of the Automotive Dismantlers and Recyclers Association, the Washington-based interest group that works to improve the industry and its public image. ''(The price of) junkyard replacement parts is one-third to one-half below that of new parts, and warranties are often better. There are also not that many comebacks (returned goods).''
Concurrently, more people are driving used cars and are also keeping their cars longer, according to a recent study by Hertz Corporation. Three out of four US households now rely on used cars.
The common wisdom used to be that the auto salvage industry was recession-proof. But since the current recession is so deep and prolonged, even this industry is suffering. Mr. McKinnon says the 10 percent growth rate likely will drop in 1982. The severely depressed steel market has also hurt auto recyclers, who are getting a fraction of the price they used to receive for scrap metal.
Competition among auto salvage dealers has grown in recent years for late-model car parts, driving up the cost. Sagging new-car sales has meant a smaller proportion of new cars on the road. Also, a nationwide crackdown on drunken driving and milder winter weather in recent years have meant fewer accidents - and fewer wrecks for salvagers to buy.
The Robertsons get around the shortage by thinking big. Every Monday and Tuesday, they take a company plane to New York and New Jersey to buy wrecks and theft recoveries at insurance company auctions. The Robertsons' own haulers transport their purchases back to Wareham. Business also comes to them from far and wide: One customer drove out from Ohio for a Peugeot diesel engine.
What's ahead for Robertson's? One clue hangs on the office wall: a blueprint for a $500,000 addition that will be the showroom for reparable wrecks. When the addition is completed, the cars (and salesmen and customers) will be protected from the elements. For the coming fiscal year, Scott Robertson projects sales of surprised to see us make $10 million.''