September/October 2004
What’s equipment maker Kendig Kneen doing in the car recycling business? Gaining field knowledge about his machinery, improving the auto-dismantling mousetrap, and having a ball while doing it.
By Kent Kiser
To Kendig Kneen, it made perfect sense to enter the self-service car parts business. After all, his manufacturing company, Al-jon Inc. (Ottumwa, Iowa), had been making specialized equipment for car dismantling and recycling since 1963, so he already knew that industry well and had extensive contacts in the business. Plus, he had “always been intrigued by the self-service parts concept.” So when the opportunity arose in 1999 for Kneen to become a partner in a self-service car parts venture, he jumped at the chance. With that move, Kneen the Manufacturer also became Kneen the Auto Recycler, and now—five years later—he continues to enjoy the best
of both worlds.
Entering the Biz
The self-service auto dismantling venture that gave the Kneen family its foothold in the recycling world was Vehicle Recycling Solutions Inc. (VRS), a holding company doing business under the trade name U-Wrench-It.
VRS was founded in the mid-1990s by veteran auto dismantlers Butch Webber, brothers Ron and Richard Copher, Howard Veneklasen, and other partners no longer with the group. These partners brought decades of car dismantling experience to the venture as well as high-profile reputations. Webber and Veneklasen, for instance, are past presidents of the Automotive Recyclers Association (ARA) (Fairfax, Va.), while the Copher brothers have been active members for years in that association.
Kneen knew the VRS partners through his manufacturing ties to the industry as well as his own involvement in ARA. “I told Ron that if he ever wanted to expand the VRS partnership, I was very interested,” he recalls. In 1999, Kneen’s chance finally came, and he and his brother signed on as equal VRS partners. “I wanted to get involved not only because it’s a good business,” he notes, “but also because it gives me the opportunity as a manufacturer to better understand the needs of the industry. Al-jon’s equipment has always been designed to be that intermediary step between the auto dismantler and the scrap shredder, so it was a natural step for us to become more involved in the actual process that our equipment is used for.”
At the time, VRS already had U-Wrench-It self-service parts plants up and running in St. Louis and Kansas City, Mo. By 2001, the company had acquired two additional operations—in Columbus, Ohio, and Virginia Beach, Va.—which it upgraded and officially opened in 2002. That was also the year Kneen became president of VRS, a title he now shares with his brother. With that appointment, Kneen the Auto Recycler had arrived.
Success Through Separation
While VRS did not come up with the pick-your-part concept—it was introduced in California in the late 1960s—the company has improved on the mousetrap, so to speak, mainly through “the further separation of materials,” Kneen says.
“The key to making money in scrap has always been separation of materials,” he explains, “and there are a lot of materials to separate in a car.” These materials can be separated at either a car dismantling facility or a scrap shredding operation. “It’s all a question of who wants to get the profit out of the car and who is set up to do so,” Kneen states. In his view, there was ample room for improvement in the separation and recovery aspects of car dismantling yards. So Kneen and his VRS partners set about to “get as much material out of a car as possible prior to its final recycling step at the shredder.”
To achieve that goal, the company developed a dismantling system you have to see to believe. Cars enter the plant whole and leave as empty shells, with virtually all recoverable parts extracted. How does this happen?
The U-Wrench-It recycling process begins with fluid removal. Incoming cars are placed on an elevated rack, and employees drain the antifreeze, motor oil, transmission fluid, power steering oil, and more. This stage also includes the removal of lead-acid batteries, catalytic converters, jacks, and Freon. Employees even clean any trash out of the vehicles to prevent such rubbish from being scattered around the facility. Cars are then moved to another rack that has specialized equipment for puncturing the gas tank and capturing any residual gas. The company’s spec requires three holes to be punched in each tank to prevent any residual gas from posing safety or environmental hazards.
“We want the car to be clean when it goes into the yard,” Kneen says. “We want to be good stewards of our property, and we also recycle the materials we remove.”
Indeed. The company reuses or recycles virtually all of the materials from these initial dismantling and fluid-removal stages. Antifreeze, for instance, is filtered, bottled, and resold for $1.99 a gallon. Lead-acid batteries that can hold a charge are recharged and resold, while dead batteries are sold as scrap—same as catalytic converters, aluminum license plates, jacks, and other items. Used motor oil is sold for use as a fuel for industrial boilers or to rerefiners. Good tires are also removed and sold. Recovered gasoline, meanwhile, is given as a goodwill gesture to customers, tow-truck operators, and employees.
After this initial stage, the “clean” car is placed in the U-Wrench-It yard and made available for parts. Cars are grouped in four general sections based on their manufacturer—GM, Ford Chrysler, or Foreign. To help customers find the car they need, every vehicle has its year, make, and model written on both sides, as well as the date it is placed in the yard. Each chassis is positioned securely on four props to elevate it off the ground to give customers better access to all parts. And there the cars sit in neatly aligned rows, waiting for customers to come and pick their parts.
To enter the U-Wrench-It yard, customers must be 16 years old and must sign a form releasing the company from liability in the event they are injured. All tools and toolboxes are inspected to make sure customers don’t bring in gas torches, power tools (other than small battery-powered units), or jacks. “It’s important for us to know that people enter the yard properly,” Kneen says. The final requirement is that each person must pay $1 to enter the yard. This nominal fee helps the firm offset environmental costs and provide better inventory, he explains.
Once in the yard, customers are allowed to roam through the rows of cars in search of their desired parts. As the days pass, the cars get picked apart, looking more and more like puzzles with pieces missing. Each row of cars is then pulled on a rotating 28-day schedule. Why 28 days? “The speed of the business requires the cars to turn every month,” says Jeff Landon, general manager of VRS.
The day before a row of cars is pulled, however, a “decore” team of employees removes high-value core items such as alternators that can be sold as products rather than as scrap. Once these items are removed, the picked-over cars are removed and enter the plant’s scrapping system.
The scrap operations at all four U-Wrench-It facilities are based on two pieces of equipment—an Al-jon 1100 hydrostatic loader and an Al-jon Impact V car crusher. The loader is specially designed to remove additional parts from scrap vehicles—such as the engine, transmission, radiator, heater core, and more—for their scrap value. “We’ll pull cast iron disc brakes, brake calipers—anything that there’s a remote market for out there, we’re going to get off the car,” says Kneen. To maximize recovery, employees use pneumatic wrenches and other tools to disassemble specific parts, such as removing aluminum components from engines as well as some catalytic converters that are accessible only when the engine is out of the car. This step is essential to achieving the goal of higher separation—and improving the car-dismantling mousetrap. As Kneen boasts, “We get more nonferrous values out of vehicles than what others have in the past.”
After undergoing this extensive decoring process, vehicles follow what Kneen calls “a traditional scrapping process.” That is, the empty hulks are flattened in the Al-jon crusher and sold to shredders in the region.
That, in a nutshell, is the U-Wrench-It method for recycling cars.
It’s All About the Customer
Kneen and his VRS partners are proud of and excited about U-Wrench-It’s dismantling process, which helped the firm achieve the ARA distinction of being a Certified Automotive Recycler. Even so, VRS partner Butch Webber maintains that customer service is the real key to the company’s success.
What that means, Kneen says, is that the firm has “an extremely friendly staff, and we go out of our way to be nice to our customers because we want them to come back.” How nice is U-Wrench-It? For starters, the company provides a playroom for children. Since customers aren’t allowed to bring their children into the yard, this playroom enables them to leave their kids in a safe, comfortable place while they work.
The company also offers “small creature comforts” for customers, such as a hand-washing station—“something you don’t find in a lot of self-service facilities,” Kneen says. There’s also a covered structure in the yard that gives people a place to sit and get some shade. This structure also has a cooler with free water or Gatorade for customers. To help them carry their toolboxes and parts, U-Wrench-It offers free wheelbarrows and A-frame hoists—items that some self-service firms charge customers to use. In addition, the company offers free assistance using Interchange, a computer program that tells customers if their part is available on other models besides their own.
One of the best services, of course, is enabling customers to save money on car parts. This is important, Kneen says, because “most of our customers are people who need a part because their car is broken and they need to go to work.” As such, the company strives to make the purchasing process as economical and simple as possible, which it does in part by using a flat pricing structure for parts. All passenger-car engines, for instance, are $99.99 regardless of the make, model, or age of the vehicle. All doors are $29.99. All starters are $9.99, and so on. “The customer always gets a deal,” Jeff Landon says.
While this flat pricing approach isn’t unique in the self-service parts business, “what is new with our operation,” Kneen says, “is we give a 30-day unconditional money-back guarantee. If the part doesn’t work or if you decide you don’t want it, we don’t even ask. If you come back with a receipt, you get your money back, or you can go back in the yard and get another one. That assures our customers that they won’t have any issues with their purchases.”
This intense focus on the customer is all focused on one end: “We want them to come back,” Kneen states. “Part of that is unquestionably the way you present yourself and the way you make the experience as friendly as possible for your customers. We want to make the process easy and enjoyable.”
U-Wrench-It must be onto something because it gets about 20,000 customers through each of its plants every month, according to Kneen. “We really are bringing a service to the community, and people really appreciate us,” he says. Great service is certainly part of the answer, but attracting customers also depends on promotion. Currently, the company spends more than $1 million a year on TV, radio, and print advertising for its four operations.
U-Wrench-It spends so much on advertising, in part, to ensure a steady flow of cars and customers through its plants. It also advertises, though, to educate the public about the self-service parts concept. As Kneen observes, “A lot of people don’t know how the business works unless they already have a self-service operation in their town, so we have to tell them how it works and how it can benefit them.”
Other Keys to Success
Beyond customer-service issues, the most important factor in attracting new customers and retaining existing ones is having fresh inventory, Kneen notes. U-Wrench-It achieves this by circulating some 1,000 cars through each of its yards every month.
To keep up with this kind of inventory turn, the company must always be in the market buying cars, with each operation usually having one inside car buyer and one outside buyer. “Pur-chasing is a key component of this business,” Kneen says. “You have to have inventory.”
U-Wrench-It’s facilities generally purchase cars within a 40-mile radius, drawing cars from sources such as charity programs, insurance pools, public auctions, abandoned vehicle programs, towing companies, and individual sellers. The amount paid for a car varies based on its make, model, and year, with the average age of cars in U-Wrench-It’s yards generally in the early 1990s, Kneen says. Due to the frequent rotation of its cars—and to keep overhead down—the company does not keep a detailed inventory of each car in the yard.
Another part of U-Wrench-It’s success has been standardizing its self-service and dismantling business model throughout its four operations and sticking to it. Each operation follows the same customer procedures, sells parts for the same prices, offers the same creature comforts for customers, follows the same dismantling steps, organizes their inventory the same, rotates rows of cars on the same general schedule, uses the same equipment in their scrapping operations, and so on. “We can take an employee out of any one of our operations, drop him in the same slot in another operation, and other than the fact that the town’s name is different, they would never know the difference,” Kneen notes.
U-Wrench-It achieves its standardized approach, in part, by having management trainees visit and learn about the other operations. In addition, the firm’s management structure includes an overall regional manager—Mark Austerman—who visits all operations to make sure they’re functioning appropriately. Kneen also praises VRS partner Howard Veneklasen, who “watches the numbers like a hawk. He’s good at it and provides invaluable analysis that catches problems before they escalate.”
Two final keys to success are having motivated employees and being a good corporate citizen in the community. “A critical aspect of a successful business are the people you have conducting the business for you,” Jeff Landon states. Currently, each U-Wrench-It plant has about 23 employees, with four corporate executives—such as Landon—overseeing all operations. While he boasts about the firm’s current employees, he notes that it’s no easy feat finding the right people—those with a passion for the industry—and getting them to perform at a high level. “People are the trickiest part of a business,” says Landon. “If they’re all ‘I’ and no ‘We,’ then you can’t make a go of it.”
As for being a good corporate citizen, U-Wrench-It fulfills that role, in part, by having a facility with an attractive public image. “Our yards don’t look like you’re going into a junkyard,” Kneen says. “They look more like retail stores, with clean parking lots and well-manicured grounds. We want to present ourselves well to the community and to our customers.”
Another part of being a good corporate citizen is doing good deeds in the community. U-Wrench-It does this, in part, by accepting various automotive fluids as well as batteries from citizens for free. This kind of gesture can establish invaluable goodwill in the community and ensure acceptance of the company among local legislators, regulators, and citizens. As Kneen says proudly, “We have letters from mayors and city council members saying ‘U-Wrench-It does exactly what they say they’ll do. They do it right, they do it clean, they’re good citizens supporting the community, and they put in an installation that you won’t be ashamed of.’” As the company expanded its operations, such positive letters helped it navigate the “hardest part of this business”—getting the permits needed to open yards in other communities, Kneen notes.
That ability could come in handy as U-Wrench-It ponders its future expansion plans. Growth is definitely on the horizon. As Kneen remarks, “my brother and I got involved with U-Wrench-It because we wanted to grow it, and that is still our intention today.”
Even as the company looks to expand through additional operations, it also plans to continue growing and improving its current facilities. “You don’t have to expand every day to have growth,” Kneen says, explaining that continuous improvement is some of the most important growth. “This job is never done,” he concludes. “Every day is a new opportunity, a new way to deliver service to the customer—and the more ways that you find, the more customers you get. It’s that simple.” •
Kent Kiser is publisher and editor-in-chief of Scrap.
What’s equipment maker Kendig Kneen doing in the car recycling business? Gaining field knowledge about his machinery, improving the auto-dismantling mousetrap, and having a ball while doing it.