Welcome one and all. You are there. We are here. You are listening to URG On the Go Podcast, the true voice of the automotive recycling industry. We do our best each and every episode to bring you new and informative ways to improve your business Anything that would help you improve your bottom line. We had Chuck Camp, the producer, in the studio. I'm DJ Harrington, the host, and we have and most of you know me as the cardiologist, the doctor, give you a real, true checkup from the neck up each week. We are special today because Amanda Morrison is my co-host of the program. So, amanda, I'll turn it over to you so you can tell our listeners about our special guest today.
Speaker 2:Hi, dj. Thanks so much for having us on Today. We have a special guest that we're going to be talking to. He was our member highlight. The yard that he owns part owns is in Minnesota. We are interviewing Pat Huesers today and he is going to give us a little recap on how he got started. Pat, welcome to the podcast. Thank you so much for being on today.
Speaker 3:Yeah, thanks for having me.
Speaker 2:Yeah, so we just wanted to kind of discuss how you guys got started and how you ended up where you're at today and what got you there.
Speaker 3:Sure. Well, our story's probably kind of long, but I think every recycler's is. So. We are a first-generation yard. There are two owners. There are Mike and I, and we met in high school in seventh grade and hung out, did a lot of stuff together as friends and around 1991, because of a need I had a girlfriend that needed a vehicle.
Speaker 3:We decided to take and fix up a repairable and so we ended up buying an old 84 Honda Civic hatchback and throwing a headlight in it and putting it together a little bit of paintwork in a garage and getting it out the door and it was great. Everything worked out perfect. So after that we decided that, hey, you know what, we can probably make some money doing this stuff. And so we started buying REC Hondas, just focusing on Hondas and doing repairables and turning them around, fixing them in the garage.
Speaker 3:In the city of St Cloud I had a two-stall garage and we were working out of that and that pretty much continued on. We were cranking out vehicles by 93. We were doing a repairable probably once a month, pretty easy, doing a little bit of paintwork for friends and family here and there, and we just kept growing on that. And right about the mid part of 93, the city kind of caught on to what we going on, that we had going on. We had a couple of parts cars laying in the yard and I'm not going to say we were on the best side of town anyway, so we weren't the only ones.
Speaker 3:Regardless of that, yeah when you mix that with painting cars and parting them out in the middle of St Cloud. They weren't so happy. So they gave us the notice to get out of town and from there we moved out to Mike's parents' farm and they had an old coal shed that used to be a pig barn. So we converted it over and insulated it and did everything we need to kind of continue operations there. And so we moved out, hired our first employee, started doing more repairables and starting to accumulate a lot more parts cars still focused on Honda and then in about 95, like the beginning of it, we kind of decided that we were pretty much outgrowing that location. We had found a bank repo piece of property and got it bought, and then we just kind of continued on business as normal, starting to make some plans of building a building and eventually fall came along and we were storing all these salvaged vehicles, all the parts cars, along an edge of a field that had corn in between it and a fairly major highway for the county.
Speaker 2:Sounds like Minnesota. Yeah, yep.
Speaker 3:So the corn got cut off and everyone knew there was a salvage yard there. It was obvious. There was about 50 Hondas with their nose pointed towards the road, with a lot of parts missing.
Speaker 2:A little bit of an eyesore.
Speaker 3:Yeah, definitely.
Speaker 1:I mean, you know that's why the laws exist.
Speaker 2:Right, yeah, exactly, yeah. No, I don't think that's that's. One thing I don't think people realize is how important the recycling industry is for, you know, even the environment. It may, you know, not look great on in the in the field, but you know it's going to be contributing to helping, you know, recycle those parts. So I, yeah, I agree with uh that it's cool that you guys started out that way yeah.
Speaker 3:So then at that point you know we had already plans to move over to this new location and probably get it done within about a year. And so the township board because we were in the township, you know they pulled us in and asked us what the heck was going on. And hey, we already got a plan for this. And so they were hey, that's great, cool, you're moving on to industrial property. Perfect, just get it done.
Speaker 3:And so then we finished the building phase, building on the new property, in late 95 and moved a lot of things between, kind of the end of 95 being in 96, and so we were fully on the property we're on by 96. On the property we're on by 96. From there, you know, it's just been constant growth, adding more employees. We had seven different land acquisitions and that brought us up to 130 acres that we have. That's all one continuous piece and building more buildings. We did 11 different building phases. So our current footprint is we're sitting on top of, you know, 130 acres we use about 35 of that and 110,000 square foot of building, and about half of that is on heated warehouse and the other half is heated work areas.
Speaker 2:Oh, very cool. Yeah, it's got to be heated up there, huh.
Speaker 3:Yeah, oh yeah.
Speaker 2:Yep, dealing with all the elements up there? Well, it's got to be heated up there, huh, yeah, oh yeah. Dealing with all the elements up there Well, that's awesome. So how many cars do you think you process per week, per month, or what does that process kind of look like for you guys for turning over Sure?
Speaker 3:So our goal target. The facility is built for 1,500 cars a year to process and we've been missing that mark in the last few years, but it seems like we're on track this year to make it happen. Hopefully car buying kind of turns around, so it's possible. I think everyone's in the same boat with that. It's kind of tough to get cars.
Speaker 2:Yeah, do you feel like that's kind of one of the biggest struggles right now is car buying and finding the vehicles to part out?
Speaker 3:It hasn't currently limited us, but coming off of a really easy winter for nearly the entire northern part of the US I mean there was just not any weather the pools are going to be really short on cars come June and July and August. You know they kind of always are, but I think it's going to be worse this year, so Interesting.
Speaker 2:How do you guys kind of forecast that kind of stuff? What do you guys do internally to kind of do for your car buying process?
Speaker 3:You know, this year we're doing a little bit smarter buying. We're trying to stock up on some cars so we have enough of a float. I think we're nearly at about 300 vehicles sitting waiting to be processed, so you know that helps a buffer.
Speaker 3:But you know, once we get in the summer it just it's hard choices either pay more for something better or pay less for something just to feed the machine. But either way you got to have the cars because you know we're not going to. We're taking a lot of time and effort to build up our staff, and dismantlers especially and you can't back off that they need to be able to work. If they're not going to work, Well, they're not going to be your employees. So you've got to figure it out.
Speaker 2:Yeah, definitely. Well, with that, we'll come back to employees here after the break. Dj. Can we pause for a quick break?
Speaker 1:You got it, Folks. We'll take a quick break, just like Amanda said, and we'll be right back with a great message. Amanda Stegman, and we'll be right back with a great message.
Speaker 4:The URG Scholarship Foundation was founded in 2014 in honor of individuals who give their talent, time and, very often, their own finances to ensure the growth and success of the automotive recycling industry. We understand college is not for everyone, so each year the foundation offers substantial financial scholarships to auto recycling employees and the children of employees that are attending four-year and technical or trade schools, to assist with their education. Don't leave money on the table. If you have a child or if you're interested in attending continuing education, this money is available to you. Go to u-r-gcom and click on the Scholarship Foundation tab. Urg keeping our industry strong through education.
Speaker 1:Welcome back listeners. Of course you're listening to URG on the Go podcast Now. This podcast is every week. We bring you that information, but I want you to listen, download and listen. We're available on Spotify, itunes, pandora, stitcher, iheartmedia, amazon or wherever you get your podcasts. Amanda, this is a great one. I'll turn it back over to you.
Speaker 2:Thanks, dj. Yep, so we've got Pat here from Pam's Auto and we were just discussing employees and I was going to ask you, pat, for your dismantlers, what do you do to kind of find those good dismantlers that you're hiring, and what does your hiring process look like, as well as pay structure for them?
Speaker 3:Sure, yeah, that's a lot to talk about.
Speaker 3:So in the last five years we have made a couple of different revisions to how we pay what we call an inside dismantler and those are the frontline folks that they're getting the vehicle pretty much as received from the salvage pool where we bought it. There's going to be very few parts removed by any other process and you know they do the majority of our work when we're fully staffed and we currently are we have eight dismantlers fair and apart cars and we have one outside person, that is is you know they're going around through the yard and pulling the small parts like window regulators, stuff like that. But the vast majority of what we do we do a full dismantle and everything gets warehoused so it's ready to go. So, with that said, um, we had tried to go to a purely by part pay per piece model for parts, and we tried that for about a year and a half.
Speaker 2:Interesting.
Speaker 3:Just really weren't very happy with it. It seemed to be okay, but for the employees it was too difficult for them to just manage the thought process on a per piece. So we moved back to more of like a production-based hourly wage and so each employee, each dismantler, has a set hourly wage and they do their vehicle production. We measure their production in units and that's different whether it's a two-wheel drive, all-wheel drive, front-wheel drive, and from there then they meet targets of how much they've dismantled. And when they meet those unit targets we change their base rate of pay up to a higher number and we kind of continue down that road. They also have the ability to go backwards in pay. So it definitely is a performance pay program but it's not hyper-reactive where the pay is changing on a daily basis.
Speaker 3:It takes three, four weeks for it to roll out, so they don't see these variances in their paychecks going up and down, and you know, that's kind of what employees need and what they like.
Speaker 2:Yeah, kind of stability of the paycheck? Yep, very interesting. Okay, and then, so I know we, when I did your interview for the article, you said you had 70 employees and how do you kind of maintain the loyalty and the culture in your staff and training processes whenever you go through that?
Speaker 3:Sure Well, training for us. So we're ISO certified. So what that means for us is all the processes that employees do. Any major process is all documented, step one through 45 or however long it is, and so that makes training pretty easy. When we go to train an employee, you know we'll have like a what we call a training guideline for a position, and a good example would be sales staff. So they have their training documentation guideline is. It's about 14 pages long and we just start out hey, you know, this is the history of PAMS. This is how to answer a phone. We always say thanks for calling PAMS auto and answer the phone. Just all those details and keep building on those building blocks and going through till you finally get to the end of the process.
Speaker 2:And from there.
Speaker 3:Then we train them on more processes. You know well how do you broker a part, how do you give a po to a yard, all those fine details. And the goal is, after we take them through all that and they've also, they're being trained with a manager and their managers, their wingman on the phone, for like the first two weeks. That usually about the fourth week is when they're going to take their first phone call and actually commit to taking customer orders, and then from there so they're wingman with their sales manager for about two weeks and then from there, as long as they've retained everything in the training and the process, they're ready to kind of be released to the wild and be successful. And so that's kind of what the ISO process and even some of the new ARE certifications coming out are to get those pieces in place so that it's easier for your staff to do the training, because even the staff that are training have a guideline on just what the heck to do, and so pieces are just for God.
Speaker 2:Yep, yep. I think documentation is the biggest process. There is the biggest thing that you need to have in place so that your employees know what direction to go to, without having to come to you every five minutes.
Speaker 3:Right. And it doesn't have to be a rigid thing. It isn't like there's a document and we slam it on the table and that's what you learn from.
Speaker 3:It's like hey, this is the guidelines, this is what we work off of. And then the new employee or whoever is learning a new task, they can read through the old documentation too, so they kind of know what the end game is. You can get that 36,000 foot overview and participate in the training, because they know where they're going and they know how far along in the process they are. That helps them too.
Speaker 2:Definitely Yep Creates that loyalty kind of getting them in the door Right Very cool, awesome. So how did you get to, uh, become a URG board member? I kind of want to transition into kind of how you got to where you are today sure.
Speaker 3:Well, I've always tried to be involved in industry things. So, whether that was ARA or URG, um, locally, our Minnesota chapter of recyclers just participating, and a long time ago back in like 2001,. Locally in Minnesota, wisconsin, we had QRP quality recycled parts and you know that was started by a bunch of yards in response to LKQ buying smart parts, and we joined that organization in their fourth or fifth year of existence. Both Mike and I were heavily involved, whether one of us was on the board or I helped write some of the technology on the backside for the delivery service, just always helping out wherever we can. That fostered a lot of relationships with the yards in Wisconsin and Minnesota. Now we're directly trading with them.
Speaker 3:You get to see them and that's ultimately, I think, what it takes for a yard employee or owner if they want to be successfully involved in the industry. At a larger level and just their state is to start participating in the national events and being there every time and spending time talking to people, getting getting out of your comfort zone. You see someone you know who owns the yard. Walk up to them, start talking to them. 95% of these owners love to talk about what they do and they're good at what they do.
Speaker 2:Yeah. And just willing to share, yeah, share all that information. I think that's. I think I say it maybe on every podcast, but it's such a cool industry to be in because everyone's just willing to share the wealth of knowledge that they've built over years and years of experience, and it's a cool way to really get to network and it's like a big family. So it's just a really cool experience to go to these conferences.
Speaker 3:Yeah, one thing that was cool that happened at this URG Dan Snyder and I were sitting down in the bar, I think on Wednesday, before the show was really cooking and going, and we're just talking and he brought up about, you know, dismantling and pay and we're going back and forth. How we do it Basically mirror images of each other and we've never talked.
Speaker 2:Really, oh, that's hilarious.
Speaker 3:So somehow you guys have the same same process, but you haven't really talked about it. Yeah, exactly, you know, and dan dan had a little nugget that we could, you know, turn on to our system, and I gave him a little nugget that he could use in his and they're you know, they seem like small changes, but they're gonna.
Speaker 2:They're gonna make a big difference, so it's pretty cool yeah, that's a great example of of what the networking can really do for each yard individually and as a group. That's awesome, dj. I think is it time to take another break.
Speaker 1:You know what I wanted to ask you this. I was so glad I hope our listeners now this podcast has grown so much, pat, because of guys like yourself and Dan Snyder and all of the other leaders we've had on here. But when you get down to even answering your phone, I agree with you when you are, steve, way back then.
Speaker 1:I thought that was the most fantastic group and you and Mike were very active in it. But so many of our recyclers don't understand. Even the way you answer the phone makes the difference of the call and by you saying thank you, we still have recyclers that listen to this podcast, that say good morning when it's afternoon. Googlers that listen to this podcast they say good morning when it's afternoon and then the person on the other end patch says well, you don't even know what time of day it is.
Speaker 2:I guess it's time I fart the right way you answered the phone.
Speaker 1:That makes a difference. We could take a fast break and when we come back we'll really pick the brains of the co-owner of PAM. We'll be right back, slow down, slow down and move over. Move over when you see signs, lights, vests.
Speaker 4:Please give us some room Slow down, slow down and move over.
Speaker 3:You need help. It's our job down and move over.
Speaker 1:You need help. It's our job To help you, to save you, despite the danger. This danger, this danger is real. Do your part, please. Slow down, slow down and move over. Move over. Welcome back listeners. This is URG on the go podcast. We are the most listened to in the automotive recycling industry and Amanda's doing great with the co-owner of Pam's. I want you all to remember to like, review and share everywhere, and we have a hotline in the podcast center. So if you'd like to hear another industry expert like Pat or like a Dan Snyder, by all means just call the hotline number. I'll give it to you now, 706-409-5603, and leave that message and we will address it. Amanda, back to you and our guests.
Speaker 2:Thank you, DJ. So Pat, we were discussing employees and I know that you have implemented a lot of kind of technology behind a lot of your processes. I know you have a lot of tech background. What are some of the key processes that you've implemented that have helped your employees succeed in selling parts and just the processes of the dismantling industry?
Speaker 3:is to make what and this is a technology term is to make an employee stateless. And what that means is they don't need to remember all the little details of what they've done about something. And so what that means for, like, a salesperson, when they're talking to the customer and they're writing a quote, they have the ability in their client that they're writing the quote in, to get all the details in there. So when they call back they don't have to think about, well, what did I really offer for a warranty, what did I do? And so they can just look at their quote. They can get that refresh of what's happening and then pick up the conversation again with the customer in an intelligent manner and not have a misstep. And that also works in other things, like for our sales staff.
Speaker 3:We have what's called a to-do list and so, as they're doing their daily work so they make a quote, customer calls, they move it up to a work order. It's got a part that they need to order in. Well, they can just save the work order at that point, and then in their to-do list we'll have a reminder that'll go in there that hey, you need to order this part for the order. So they don't have to print something out and put it on their desk and use that as a reminder. So we try and wrap all the technology around that so, a the employees don't have to worry about those types of details there's always a reminder there for them and b we're going kind of paperless with it too, so that their desks aren't cluttered and they're just more organized and they have less chance to make a mistake. And that goes through all our departments, regardless of what it is.
Speaker 3:You know, when we we have a in our what we call quality assurance that's our outgoing product and in that department, as they're handling all the invoices that print out and you know getting those arranged to where they're going to go, well, the salesperson would route them and say, hey, this is most likely going to get delivered on this service, and so they send them kind of that bucket and then they work through the buckets through the day as those timelines for those buckets close and those carriers pick up that product.
Speaker 3:But they don't need to have an overall theme of what's going on. They can look at the production screen and they go hey, you know, it looks like we're sitting on top of 250 packages that need to go out on UPS. Yet Still, looking at two and a half hours before we get to the cutoff, I got four employees shipping. I'll be fine. I don't have to rearrange staff to make this happen, but to give them all those tools. With the technology, you can have all the technology in the world and that's great, but if you don't have the employees that know how to use it or don't participate in it, it kind of doesn't work.
Speaker 2:Definitely. How do you kind of get them to believe in the systems? Is there a long trading process that goes into that, or how does that work?
Speaker 3:Well, most of it's forced. I mean, they don't really get a choice. If they're going to do work here, they're going to have to participate.
Speaker 2:Right, right right.
Speaker 3:Yeah, but.
Speaker 2:I guess the follow-up from the manager is just kind of evaluating the process here and there whenever you guys need it.
Speaker 3:We've got a short feedback loop. If the employees see something wrong with the process, they can speak to their manager and that'll bubble up to upper management management really fast, like literally within a few minutes or hours. And if there's some change that needs to be made, you know we're more than happy to make it. We're always open to new ideas and we always listen to the ideas from the employees. They're the ones doing work. They got the best idea, generally right, so we do that. Um, also, you know the existing culture is a lot of the. The staff that are here believe in all the processes and they understand the technology and the workflow. So when someone comes new into the environment, everyone around them is already embracing.
Speaker 3:It Makes it a lot easier for them to participate too.
Speaker 2:Right, and just kind of showing you know work smarter, not harder, type of thing.
Speaker 3:Exactly yeah.
Speaker 2:Yeah, that's awesome, exactly yeah, yeah, that's awesome. So what exactly has uh URG kind of helped your business uh, in the past and you know currently what what have we done to kind of help you guys develop and succeed?
Speaker 3:sure, well, there's a lot of different angles on that. Um, being on the board, I get to see and hear about a lot of industry trends and issues that are happening, probably before a lot of the other just general industry folks know about them. So that always gives us a hand to kind of try and stay on top of issues. Tons of contacts, you know, going to a show and meeting with people. You know the crowd that's at URG is different than the crowd that's at ARA. They're both super important crowds of people to know. So that's great that URG brings that together and we can participate. As far as technology, it's kind of a joke between Christy and I that you know she'll come up with an idea for a product and if we don't have it somehow, pams will make it pretty fast. So that that definitely works out too yeah um, yeah, you know.
Speaker 3:but I mean there's lots of things you know for us as a larger yard, like we negotiate a lot of our contracts for, like, maybe uniforms or windshields or whatever that urg hasG has offered over the years. You know we're larger so we've negotiated those, the yards that you know they're not sitting on top of a ton of volume. Those are great programs to save a lot of money. And you don't have to negotiate it. The work's done for you.
Speaker 2:Right, yep, yep, we try to make again, you know, work smarter, not harder, just trying to give you tools to be able to create efficiencies and processes that will, you know, make you succeed in the future. So I think that's cool, that you guys can kind of see that and are directly involved with it. We love having you on the board and hearing ideas. I think that's one of the coolest part about URG is that we do have a board of recyclers that are in it every day, cyclers that are in it every day and we're able to kind of reach out to you and and see if new technology that's coming to us, if it's going to work for you guys and kind of, you guys help out so much with all that.
Speaker 1:So we appreciate all you guys on the board no, thank you this is dj and I cannot thank you enough for being on the podcast. What I I would like? I listened to you and Mike speak at ARA a couple years ago and I could not take notes fast enough. So in this segment, this is our last segment of the podcast.
Speaker 1:Could, you give our listeners. Just say an example I have 10 to 12 employees. My wife is doing the accounting work. Is there things that Mike and you decided to do to create the culture of BAMS when you had seven employees back at Mike's parents' pig farm, when you guys really started growing and getting all these Hondas out there Today? I looked at your website. It's fantastic. I see a whole lot more cars than just Hondas out there Today. I looked at your website. It's fantastic. I see a whole lot more cars than just Hondas. Also, it's a fantastic location, so I'll set up and turn it back over to you.
Speaker 3:Sure, Well, let's see. So for us in the early years, and even probably until about the last seven or eight, we, for the most part as owners, plowed every penny we made back into the business, and for someone starting out that's got a smaller number of employees. You know, number one, it's hard to make ends meet because you kind of haven't reached the economies of scale yet.
Speaker 3:You have a lot of employees that are wearing multiple hats and my best advice would be to retain those earnings in the business. Hold them, create a culture of good work ethic by you setting the example At that stage in your yard. You should be the first one there in the morning and you better be pretty close to the last one that leaves at the end of the day. If your employees see you driving in a brand new Chevy pickup and you complain about paying bills, they're not going to want to be part of your culture. So you need to be very positive, you need to support your employees, you need to make good decisions and eventually you'll reach an escape point of that.
Speaker 3:And what will happen is is the business will start to have enough funds that you can start to expand at a faster rate, if that's what you want. Bigger doesn't always necessarily mean better. It can just mean more headaches if you don't have a good plan. And that's kind of always the best advice that I give to to yards that ask us well, hey, if I wanted to have 100 employees, how would I do it? Well, you could just get a bunch of money together and you could do it, but it doesn't mean you're going to make money right. So you, you need to grow into it.
Speaker 3:It can't just happen overnight. So you know and it's the same idea like well, if I just bought twice as many cars, I'd make twice as much money. No, you won't. It does not work that way, so you need to scale it up. But ultimately, you need, your organization needs to have those good bones and key things in place, key employees in place that care and matter, and they work with you as an owner and and key pieces, whether it's technology or building equipment whatever it is, just making good choices as you go along, and sometimes you know those things you can't afford.
Speaker 3:It'd be great to have a new loader, but if you can't afford a new one, well, maybe one with $5,000 isn't so bad. And just make good decisions as you go along and build up.
Speaker 1:Wow, that's awesome, isn't so bad. Just make good decisions as you go along and build up. I just hope all our listeners are taking notes on this, amanda. He's been a great guest. I really think being on the board of URG, urg and all their members are going to get the benefit of learning what Mike and Patty have done at BAMS.
Speaker 2:Yes, definitely, and I think that's you know. That is one thing, Pat you're always wanting to kind of give advice to anyone that's looking for it, and you're always open to new technology and new ways of business, and I think that's how people are going to be staying in business, you know, for a long time. So we really appreciate having you on the podcast today.
Speaker 3:And thank you so much for all of your wonderful advice and feedback.
Speaker 1:You're welcome. Thanks for having me. All right guys, you heard the best. Amanda, you did a great job. Very good interviewing of a very gifted gentleman.
Speaker 2:Thank you DJ, thank you DJ.
Speaker 1:Thank you, DJ Pat. Thank you so much and thanks for donating your time, Because being on the board, you don't get paid for that. Is that a volunteer position?
Speaker 3:Yeah, I'm a volunteer.
Speaker 1:Yeah Well, we thank you for volunteering and you and Mike have done such a great job at PAMS and our listeners. When you go through Minnesota, that door is always open for a fellow URG-er, you know that, and so if you call them on the phone say, listen, I heard on the podcast, we can come visit.
Speaker 3:Yep, come on down.
Speaker 1:Before we get off the podcast podcast, they should go to your website, and a lot of stuff you do on your website they should be doing.
Speaker 3:You know that video up front is a good idea too, you do that yeah, it works pretty good, thank you alright, my friends, until the next time.
Speaker 1:This is DJ Harrington and Amanda Morrison saying God bless all of you and we'll see you, my friends, until the next time. This is DJ Harrington and Amanda Morrison saying God bless all of you and we'll see you on the next URG podcast.