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‘Keep the goose that
lays the golden eggs
well fed’
The worldwide automotive recycling market was worth more than US$ 75 billion

(EUR 70 billion) in 2018 and is projected to witness up to 20% growth by 2025.

But with the cards thrown up in the air by the Covid-19 pandemic, can the indus-

try bounce back to its former glory?

it as there are only so many places you
can cut costs: you can reduce payroll
or you can buy fewer vehicles to sell
parts off. Unfortunately, in this scenar-
io, you have to make cuts in both
areas. It’s simple maths.’
Robertson wants to avoid going down
to a skeleton crew although, if the
company goes under, there would be
no work for anyone to return to.
‘You’re doing the people a bigger dis-
service not to take bold action,’ he
argues. Daglis agrees, saying ‘at the
end of the day, you’ve got to save the
goose. It’s the goose that lays the
golden egg. You’ve got to keep it well
fed.’ Robertson nods. ‘I will do what-
ever it takes. For instance, I’m going
to cut my own salary for the coming
months. If needed, I’m going to tap
into my retirement savings and invest
them in the company.’
It is a different reality now, acknowl-
edges Chad Counselman, business

‘We want to keep our attitude positive
but we can’t ignore what’s happening
at the moment. It certainly is a chal-
lenging time. Cash flow is a problem,
with sales already down significantly
at most Australian car recyclers and
scrapyards,’ says Chris Daglis, owner
of Melbourne-based automotive con-
sultancy firm PARTnered Solutions.
‘Most likely, the global economy will
be down for some time. That’s why we
have to be smart and find new ways
to attract business.’
Daglis insists that recycled original
equipment parts are critical compo-

nents for the worldwide automotive
industry. ‘We provide go-to parts for
anyone in the chain ranging from car
repair workshops to vehicle manufac-
turers. Our parts are just as good as
the original counterparts coming
straight from the factory.’
What’s more, with production of fac-
tories in China significantly down,
original parts are very hard to come
buy at the moment. ‘Demand is
steady but the supply is simply not
there. It’s causing delays of several
weeks,’ Daglis notes. ‘Last week, a
friend of mine needed a replacement
part for her Peugeot but was told by
the repair shop it would take almost a
month to come in. So I phoned up a
local scrapyard not 20 minutes away
and, sure enough, they had five of
these parts lying around.’ Daglis con-
cludes, ‘If we play this right, the coro-
navirus could actually accelerate car
recycling.’

Into the storm
Eager to discuss the best survival
strategy, Daglis recently organised a
virtual conference. Among those tak-
ing part was Scott Robertson, owner
of Robertson’s Auto Salvage in

Massachusetts and president of the
US Auto Recycling Association, who
said revenue had decreased roughly
50% recently.
‘I’ve heard from people based in New
York, Connecticut and New Jersey
saying that revenue is down by 80%.
These drops came practically over-
night. Within four or five business
days, our whole world changed,’
Robertson spelled out. ‘No one could
prepare for this. I imagine it feels kind
of like sailing into a hurricane when
you’re expecting good weather – all
of a sudden you’re hitting big waves.’
All things considered, it’s challenging
to remain optimistic and he admits,
‘The cash flow problem is the first
thing I think about when I get up, and
the last thing on my mind before I go
to sleep. I’m lying there wondering,
how am I going to make this work?
How am I going to survive in business
earning half of what I usually do, but
with 100% of my expenses?’
A number of US scrap yards were
closed throughout April. ‘It doesn’t
surprise me, to be honest. Every day,
you really need to ask yourself a hard
question: is it worthwhile staying
open? I decided to stay open.’

skeleton crew
Robertson adds, ‘A few days ago, our
financial manager came up to me and
said we can keep going if we reduce
the team to eight workers. My first
reaction was “Let’s hope it doesn’t
come to that.” He jokingly told me I
was lucky to be one of them and I get

a U T h o R Kirstin Linnenkoper

Chris Daglis

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