BodyShop Business
Green Shop: Why Can't We Recycle All Parts of a Car?

4/5/2012

Why can't we recycle all parts of a car? Germany recycles almost everything it produces. In other countries, people pick dumps for plastic and are paid.

Asked by Janice Hallee, David Mathieu Autobody, Waterville, Maine

My first impulse in responding to a question like this is to evaluate the economics of the situation: is there a demand? Is there a supply to meet that demand? Is there an opportunity for someone to gain a positive advantage if they develop some kind of solid, business-based solution?

There are at least two possibilities for recycling an automobile at the end of its useful life: 1) harvest any remaining usable parts and assemblies to be used in the repair of other vehicles, or 2) turn it into scrap to be processed and recycled into another generation of new products. Then there are components like mercury switches that are removed from vehicles to minimize damage to the environment.

Harvesting Parts
Let’s look at the two primary recycling options. Then, let’s ask the basic question again: “Is there a demand for used parts by the collision repair industry?”

If you asked the top “Class A” shops in the country, the answer to whether there is demand would probably be, “Not so much.” Body shops, technicians, collision repair associations and, more recently, OEMs are all coming out with clear messages and positions opposed to the installation of used parts in the repair of some collision-damaged vehicles. Until that changes, the first element (demand) is removed from the equation and the conclusion will not be an increase in “recycling all parts of the car” – no matter how much supply there is.

This is where things get confusing. Collision repair facilities that refuse to install a used part because it has a dent in it are something of a contradiction. At the core of their existence, collision shops fix dents. Obviously, they’re not resistant because they have to repair the dent – it’s all about whether the shop can make as much gross profit installing a used part as a new one. Now, we’re trying to answer an environmental question with an economic answer. It doesn’t mean either motivation is wrong; it just means we haven’t come up with an equitable solution yet. That’s the basis for a whole other discussion.

The Scrap Option
Then, there is the other recyc- ling option: scrap. Recycling facilities process scrap as part of their normal business operations. Recently, demand in China has driven the price of scrap metals to fairly high levels. The tons and tons of junk fenders, hoods and other sheet metal parts are crushed and moved to shredding facilities and then further processed by smelters both in this country and abroad. This is a price “bubble,” and no one knows how long demand will hold scrap values at current levels.

The point is that there is a demand for scrap. The problem with the scrap pile behind most collision repair shops is that it will never be big enough to merit a special effort to move it to a shredder or smelter worth the resources needed to do that. In many cases, that scrap pile becomes an expense for the repair facility to get rid of. Recycling facilities do have the volume of scrap to make processing it cost effective. Is anyone able to connect these two obvious dots? 

Isn’t it interesting to see that both options come down to depending on a strong business-to-business relationship between repairers and auto recycling facilities? 

Working Together
When repair shops, insurance adjusters and recyclers work together to make installing a used part and a new part revenue neutral for the shops, more used parts will be installed. When repair shops see that their used/new part gross profit is comparable, they’ll no longer need OEM statements that discourage installation of used parts as negotiating leverage. When insurance adjusters begin to apply all labor factors in the P-pages of their estimating systems, there will be far less resistance to installing used parts by both shop management and techs. Recyclers are obviously in business to sell used parts; once the demand is established, the pricing and equity for everyone involved will work itself out.

To once again address the scrap pile out back, when shops develop strong relationships with area recyclers, they can easily work out a solution that involves the recycler picking up scrap whenever they’re delivering used replacement parts. All any of this will take is a simple adjustment of business attitude; recyclers and repairers are not enemies!

Regarding recycling the rest of the materials cars are made of, the same formula applies. As soon as there is sufficient demand, the “supply” that’s now going into the landfill will be re-directed into a process that recycles it into another generation of the same type of product or re-purposes it to be used for something entirely different.

Consider old tires. For years, they were just thrown onto huge piles that became “mosquito hatcheries.” Then along came the second or third generation of artificial turf, and now thousands of tires are being ground up to become the base for football fields and playgrounds everywhere. When the demand is established, the supply will be directed to fill it.
Mel Hunke has been a part of the collision industry for 53 years, serving as a shop owner, technical school instructor, association manager and attendee of many industry seminars. He currently works for Premium Recycled Parts, Midwest. He can be reached at mhunke@qrpmw.com or (913) 268-6082.


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