The 2017 Disaster Season and the Automotive Aftermarket's Road to Recovery
When it comes to disasters, it is always best to prepare for the worst and hope for the best. Those located on the Eastern and Gulf Coastal regions know that late summer and fall storms can be truly destructive, while the West Coast lives in fear of earthquakes and fires.
2017 was notable in that there were all-time heat records in several states that helped create the conditions that lead to more than 100 large fires across the country. Of course, the most intense fires arrived after what has been an extremely active hurricane season that included 17 named storms, including three that made landfall and left a path of destruction.
The Storm SurgeIt is actually rare that a single hurricane will hit the United States in a given year, but 2017 saw three powerful storms make landfall - one after another.
It began with Hurricane Harvey, a category 4 hurricane that hit Texas in late August, followed by Hurricane Irma that hit parts of Florida just days later, and, finally, there was Hurricane Maria, which practically destroyed much of Puerto Rico.
In total, the storms resulted in some 900 fatalities and caused nearly $370 billion in total damage, making this the costliest tropical cyclone season on record. Much of this destruction was from Hurricane Maria, which could exceed more than 1,000 people killed and accounted for $103.45 billion in damage.
That storm formed on September 16 and hit the U.S. territory of Puerto Rico on September 20. The coastal La Perla neighborhood of San Juan was largely destroyed, while the community of Cataño was also extensively damaged. The hurricane completely devastated the island's power grid and left nearly all 3.4 million residents of the island without electricity for many weeks. Even by early December, parts of the island were still without power.
Getting back to business has been slow to say the least, and the storm impacted the quick lube business directly. All 14 Autocare locations in Puerto Rico were affected in one way or another, Pepe Betances, the company's vice president, told NOLN. This ranged from some minor damage to much more serious issues.
"Obviously, the landscaping suffered a lot, but the most common damage was the signage. We had pylon signs that fell down or were ripped out," Betances said. "We also had from six to 12 feet of flooding in most of the basements."
Two of the Autocare locations saw much more significant damage, with one losing a 12 by 5-foot section of the roof - while the other had damage to its acrylic sky lights, which further caused the bay doors to be ripped off.
"The wind and rain that got in caused damage to the inventory and some of the equipment - computers in the bays, menu signs, air and cabin filters, wipers and spark plugs," Betances added. "We also had water damage in the waiting area and manager's office."
All of the Pep Boys' locations in Puerto Rico also suffered some sort of damage. A Pep Boys company spokesperson told NOLN that all the stores faced challenges, and the storm impacted practically all of the company's associates and customers on some level. The island territory is still recovering, but all of the Pep Boys locations were open and operating by the Christmas holiday, yet many of the brand's commercial customers have not reopened yet.
Betances was also happy to report that most of Autocare's shops were back and operating far quicker than might have been expected given the destruction that Maria brought - yet to get there meant investment in new equipment.
"We were up and running in most stores in two to two and a half weeks," Betances explained. "Some of the stores were fully operational, but in others we had a lot of trouble with the computers, and the damage was attributed to power surges.
"We had to order three new lube servers," he added. "While we waited for the servers, all invoices had to be done manually and with price lists printed prior to the hurricane."
One particular location did not have an electric generator, so techs were only able to service cars with plastic oil quarts and a minimum number of employees.
"We did this in order to provide our employees with some income in this difficult time since we were barely breaking even," admitted Betances, who added that many of the employees were affected, some of whom literally lost everything when their homes were destroyed.
This was a familiar tale unfortunately this year with many shops reporting that at some point employees were sleeping at the shop.
Moreover, just as it is likely that large sections of Puerto Rico will never be the same, neither will parts of Houston, the fourth largest city in the country, after the August arrival of Hurricane Harvey.
That storm caused $198.63 billion in damage - making it the costliest tropical cyclone on record. It took the lives of 91 people directly or indirectly; and left more than 300,000 people without electricity, while some 30,000 people were displaced because of the storm.
"Parts of Houston are still devastated, and there are huge swaths in parts of the city that had water to the roofs," said Chuck Stasny of Houston-based AAMCO Total Car Care.
"We had about half a million cars just taken off the road," Brian Johnson, owner of Honest-1 in Copperfield, Texas, told NOLN.
Johnson added that he saw up to a 25 percent decrease in sales from the storm.
"Car dealerships are doing well," he remarked, adding that it took months for daily volume to return. "Now we're staying steady again, but we did see a decrease in business."
Houston will likely take years to recover, yet because of other storms, the spotlight moved on. In fact, the water from Harvey had barely receded when the attention turned from Houston to Florida as a second major storm barreled down on the continental United States.
Hurricane Irma, which had already devastated several Caribbean Islands as a Category 5 hurricane, hit the Florida Keys in early September, where it destroyed up to 25 percent of the islands' buildings and significantly damaged up to 65 percent of them.
"We were closed for two weeks from the storms," said George Quintana of Zip Automotive in Key West, which was hit hard by Hurricane Irma. "Everybody was closed because of the hurricane. It took a bit of time for us to get back up to work."
Even those who weren't in the direct path of Irma as it made its way to mainland Florida still lost business as a result of the storm.
"The week of a hurricane no one takes their car in for servicing unless they have time to prepare for a drive out of town," explained Dan Morris, of Honest-1 in Daytona Beach, Florida, who estimated that the storm resulted in about $20,000 in lost revenue.
"We closed up the shop before the storm on Friday at noon, and the hurricane hit on Monday," Morris said. "We lost a few days getting back after the storm, too. Fortunately, we've rebounded as customers needed to deal with their cars."
The one bright spot was that for much of Florida there was actually time to prepare, but following Harvey, the waiting took an emotional toll as it wasn't clear where Irma might strike.
"Everyone was affected emotionally," explained Amber Kossak, CEO of industry vendor Solid Start of Lakeland, Florida. "When you have to prepare for something that you are not sure of the outcome, there is always a level of fear and uncertainty."
Much of Florida was lucky in that the storm turned out to sea.
"Physically, we made it through safely," added Kossack, who explained that the damage was mostly downed trees and power lines.
The one-two punch of Harvey and Irma did impact Texas and Florida enough that U.S. employment declined for the month of September, the first time since September 2010. This hit the leisure and hospitality industries especially hard, but also affected total vehicle sales for the month.
Yet, the resilience in both regions has been strong, and for the auto service industry, it really was back to business as soon as the skies cleared.
"Over all, recovery went well and our team handled things like a champ," Kossak said. "No. 1, we made sure our team was OK and healthy, and then No. 2 we checked on our warehouse. Our company was out of power for four days, but we were in the office and shipping product the day after the hurricane, making it happen."
However, for many operators, the cleanup and recovery could be years in the making. While his shop didn't suffer much damage from Hurricane Harvey in August, AAMCO Total Car Care's Stasny told NOLN he knows other operators who weren't so lucky.
"There were a couple of shops that were closed for two months or more," Stasny added. "Even if they were ready they had to deal with the red tape from the city to open."
Fires in the WestLast year was truly one like no other. Even as Texas, Florida and Puerto Rico dried out, another wave of disaster was unleashed on California, where dry was the last thing anyone wanted.
Despite the fact that much of the state finally saw significant late-winter and spring rains in early 2017, which ended a record drought, the 2017 fire season in California was in a word, devastating. It affected much of the state in the final three months of the year.
In fact, 2017 saw not one series of fires, but two almost equally destructive fires that were felt in both the northern and southern parts of the state. No doubt residents would truly welcome a return of the caustic floods that now must seem like a distant memory.
The October fires in Northern California, which lasted from the 8th until the 31st of the month, affected at least 245,000 acres. In total, there were more than 250 individual fires and some 8,900 buildings were destroyed across four counties. The human toll, sadly, was even greater, as at least 44 people were killed and nearly 200 people injured. Estimates are that it could take five to 10 years for the region to make a full recovery.
Hard hit in the October fires was Sonoma County, known for its scenic beauty and world famous wineries.
"We are very fortunate that downtown and surrounding shopping areas were not affected by the fires, however most businesses did close due to evacuation of these areas," said Brenda Beal, spokesperson for the Sonoma Valley Chamber of Commerce. "We are saddened by the loss of homes and life that was suffered by those in our community and have worked hard these last few months to help everyone in our community with recovery."
Local businesses, including those in the quick lube and auto service industry, were especially hard hit.
"It affected us greatly," said Mark Reece, manager of Benedetti Tire Service. "Our shop is only about seven miles from the main area that was affected by the fires in Santa Rosa, so I can say that all our employees and many of our customers were affected directly by these fall fires. It was a difficult time for us."
Reece's shop may have lost a solid day and a half of business - something few small operators can easily overcome - but he added that several employees were displaced for weeks.
"One employee was out of his house for three weeks," Reece added. "It was a tough time for him, and he had to sleep at the shops."
For Reece, it will be a slow recovery.
"Things are slowly getting back to normal, but we've seen a downturn in car count," he explained. "We've had so many customers come in who admitted they lost something."
The Golden State was hit by a second punch as 22 additional fires broke out in Southern California, fueled by unusually powerful Santa Ana winds. A state of emergency was declared in Ventura and Los Angeles counties, followed by San Diego County. In total, more than 276,000 acres were devastated and, as of press time, one firefighter and one civilian had lost their lives.
The Thomas Fire, which started on December 4 about 60 miles northwest of downtown Los Angeles, was the largest and has caused 50,000 people to evacuate, destroyed at least 794 structures and burned roughly 234,000 acres. Fortunately, no life has been lost in this fire, and the impact to many businesses has been manageable.
"There has been minimal impact to Jiffy Lube service centers in Southern California," explained Jiffy Lube spokesperson Jennifer Friedmann. "A service center closed for half a day but otherwise, all stores have remained open for business. One employee in the Santa Barbara area was evacuated but otherwise, everyone appears safe."
Business After the DisasterWhether it was the rains from the hurricanes or fire damage, there could be one silver lining in that auto service businesses can pick up almost immediately as people seek to have their cars checked out and issues resolved.
"We were closed one day for the storm and back at the shop the next day, but we had no customers so I told everyone to go home," Houston-based Stasny noted.
"The third day, we were up and running, and it was light work for a few days. Then, the cars came pouring in," Stasny said. "We've seen a lot of flood damaged cars, and I think we'll be finding contaminated systems for years to come. The storm was unfortunately good for auto repair, and it will likely stay that way for years."
This uptick was even being seen in Puerto Rico by mid-December.
"Most stores are servicing 30 percent and up to 40 percent more vehicles per day," said Autocare's Betances. "Customers became more conscious of the importance of proper maintenance after dealing with their electric home generators."
However, part of this increase in car count has been due to the fact that many competitors in the quick lube industry have still not recovered.
"We are happy with the new business but believe this number should taper off as more stores continue to open in the first months of 2018," Betances added. " But with good customer service and our facilities, we should retain a good number of them."
Preparing for Next TimeThe takeaway from the storms and fires is that preparation is important - and that is more than just nailing boards over the windows. A disaster plan is something all businesses should have in one way or another.
"A proper insurance package is key," Betances said. "If the store is in a flood hazard area, flood insurance is a must-have. Also, a two to three month business interruption clause is important. That was a life saver for us."
When possible, most operators would agree that a cash reserve for operating expenses, covering at least two to three weeks, should be in place. There should also be a plan in place to get up and running should community services be cut off.
"Electric power generators with a diesel reserve for at least five operating days is super important," Betances said. "Diesel got very scarce the first two weeks. Suppliers could not assure delivery, and gas station lines could take up to 10 hours with a fixed maximum per person."
For Mike Humphrey, master franchisor for Autolab in Texas, the preparation plan is 25 percent getting ready and 75 percent getting back to business.
"We knew the storm was coming, so we had the time to get ready," Humphrey told NOLN.
Communication is another issue to consider.
"It is a small thing, but we made sure our emergency contact list was up to date," said Honest-1's Morris.
"We made sure, too, our crews were tied together with phone, texting and social media," Humphrey explained. "Through texting and social media, we were able to check on our guys and know they were safe. But the other part is that from social media and email, we were able to quickly get information out to our customers. We could let our customers know we were open and back in business. We offered suggestions on how they could work with insurance companies to deal with the damage to their cars. We explained we're here to do what we can to get your car in here and dried out."
Of course, the situation can be different when there is massive power loss - that can make communication a bit more challenging.
"There are definitely things we learned and now have in place to make sure we will be up and running faster or not go down at all," said Solid Start's Kossak. "When you lose phones, email and power you understand you have to get up and running as fast as possible in order to communicate with your customers."
"We had three generators that worked our offices the four days we went without power," explained Crystal Mathews, vice president at Solid Start. "We also went and purchased a cellular hot spot since all internet was down. We highly recommend companies hosting an off-site server; that way you do not lose any needed information or emails."
A good plan should also be made prior with employees to establish communication after an incident.
"We would tell employees to show up in one or two stores at a set time a couple of days after the hurricane and to try and spread the word with any other employees they could reach," Betances explained. "Since communication by cell phone the first couple of weeks was very difficult, if not almost impossible, What's App was very helpful when Internet could be found."
Proper maintenance should also be key to making sure that your business can be up and running quickly, too.
"A stock of all important parts should be kept including oil, air and diesel filters, belts, oil and coolant," Betances said. "These were nearly impossible to get for the first month. When suppliers started delivering again, any item ordered was four of what was usually ordered. Inventory became very scarce and is still not at what it was prior to Hurricane Maria."
When you know disaster is coming - which the hurricanes may allow - move what can be moved out of harm's way either for storage or supplying another location.
"With hurricanes if you are in low laying areas it is about going to high ground," said Honest-1's Johnson. "We moved as much as we could to get if off the ground. Literally anything that wasn't bolted to the floor was moved."
"Our shop didn't flood, but the water came within six inches of reaching the building," Morris said. "We were prepared, and whatever we had outside we moved it in doors."
Morris added that the tanks of both old and new oil were drained and moved. This was done as the staff boarded up the windows and prepared for the worst, which he added took a full half a day.
Devastation spread heavily across the country in 2017. No matter where your shop is located, you could be threatened with a hurricane, wildfire or flood. Let the lessons learned in 2017 live on, so you can be prepared if devastation ever comes knocking at your door.
Stay Calm, But Prepare Before the Storm:
Wisdom Learned from Hurricane KatrinaWith hurricanes, it pays to take advantage of the "calm before the storm," which, with the rush at grocery stores and gas stations, not to mention the mad dash out of town, the prep time is anything but calm.
"It is very true that hurricanes can give you many days notice," said Lenny Saucier, director of training at Take 5 Oil Change. "The course of the storm changes every few hours, making you feel more confident or less confident about the storm track."
Many Take 5 Oil Change locations were impacted by Hurricane Katrina back in 2005, and learned firsthand what it means to prepare for the worst and how to recover from it.
"Your stores will become busier as the cone remains on your general area," Saucier told NOLN. "It is absolutely imperative that you take the warning seriously. Your employees themselves not only need to take care of the customers, but they have their lives, and they need to board up and pack up, too."
This is a big balancing act of work and life that not only has to be attended to, but can alter every few hours, Saucier added.
"The magic trick - and yes it is purely magic - is ensuring your customers have safe vehicles, your employees have safe families and, lastly, that your shop is safe. I put the shop last, as your insurance will typically take care of a shop in a disaster. Human life cannot be replaced, no matter how much money is awarded," he said.
If anything good did come from Katrina, it was that it taught some operators in hurricane-prone regions how to prepare for a major storm. First, take the threat seriously.
"Plan, communicate, evaluate your plan, communicate, change your plan as needed and communicate," Saucier explained.
"Our Risk Manager, David Warren, has always done a superlative job of ensuring proper communications and safety of all of our employees that could be in harm's way," he added. "Have a plan, and make it known. Make it so known that you get tired of hearing about it. The plan doesn't stop at the anticipation of arrival of a hurricane, the plan of making sure your team made it safely, your shop is in good standing and getting back open for the needed public is the other part of the plan."
When the storm passes often comes the hard part, the road to recovery. With a hurricane, this can take days, weeks, months or even years. In many cases, the rains may stop but the worst comes with the flooding, which was certainly the case with New Orleans back in 2005.
Even now, a question often asked is, how long was the recovery from Katrina?
"There are so many ways to answer this. Some would say that we never did," Saucier said. "But when you look at the great city of New Orleans, the beautiful Gulf Coast and our wonderful company of Take 5, we didn't recover; we prospered. This disaster showed the nation - and more importantly each other - that prospering is done by the leaders, the strong willed and the dedicated. After the waters drained from many of our shops and out of our cities, it became very obvious what type of company and community we were to become. You can see it by looking to the left and to the right of the great men and women standing next you rebuilding what was thought to be lost."
Oilstop Steps Up in California Fire RecoveryAt the most tragic of times, good will often shine through. This was noted in the efforts by Oilstop, which had been impacted by October's Northern California fires. Oilstop is doing its part to provide relief to communities suffering loss from fires in Northern, and now Southern, California.
The fires that swept through Northern California were especially personal for Oilstop, as one staff member at the Petaluma location lost his home, while another employee at the Rohnert Park location had family members who lost their homes. Oilstop is now helping each with financial assistance.
While all six Sonoma County Oilstop locations were closed for several days at the height of the fires, all employees were paid for those days. In addition, Oilstop announced that it would take a key role in the region's recovery efforts, and from November 1-15 asked its customers at all of its locations nationwide for a $1 donation. That donation was matched dollar for dollar with all funds being donated to Redwood Credit Union North Bay Fire Relief.
During the same time, all six Sonoma County Oilstop locations offered customers who may have been affected by the fires a complimentary cabin air filter at the time of an oil change. This program, which ran from November 1 to 15, was a way to help customers deal with filters that may have been affected by particulate matter or smoke. In total, the company gave away and installed 2,118 cabin air filters, which were provided by Service Champ and S&E Distributing.
Several Oilstop locations in Southern California were forced to close early due to the hazardous air conditions, but, as of press time, no staff had been as adversely affected as those in the October fires. To support local recovery efforts, six additional Oilstop locations stepped up fundraising efforts for fire relief in support of the fire recovery efforts in Southern California.
"In spite of the catastrophic devastation the fires caused, the response to it by local organizations and people was nothing short of a miracle," said Larry Dahl, president of Oilstop.
With the fires in Southern California mostly under control by the middle of December, it was a season of miracles. Now the recovery can begin.