Subscribe to glassBYTEs!™/AGRR Magazine Exclusive Interview with Belron CEO Gary Lubner Concerning the Acquisition of Diamond Glass

The news that Belron U.S. was the high bidder in the auction of Diamond Glass of Kingston, Penn., (CLICK HERE for related story) sent a collective gasp throughout the North American auto glass industry late last week. Earlier today, Belron chief executive officer (CEO) Gary Lubner took time for an exclusive interview with™/AGRR magazine® to discuss the purchase from his office in London.

Q-There's been a lot of discussion in the industry concerning Belron's interest in Diamond. Many in the industry don't understand why Belron would have wanted to acquire the company. Can you explain what was so attractive about Diamond that made it worth the bid?

LUBNER: We have been pretty consistent in our approach to the U.S. market in that we wanted to grow it profitably. We never wanted to just grow it bigger, but to grow it profitably. In that sense, Diamond offers us an opportunity to do so. From a financial point of view, the deal made a lot of sense to us. We think we will make a good return on it. We went through very rigorous process to assess such a decision, and felt it would be a good move for us.

Q-It's hard to see how a company that was losing money would prove a profitable purchase. I would expect Belron will run the company in a much different way that it had been run in the past.

LUBNER: It would be wrong to believe that we would continue to follow a model that led to bankruptcy. We have proved in our businesses around the world that we can make acquisitions and grow them profitably. We will do the same things over there [in the United States]. Remember, this process was very, very short. Diamond went into Chapter 11 on April 1, and we only have had a matter of weeks to make an assessment. We have seen more than enough, though, to know that it would be a worthwhile move for us.

Q-When Belron acquired Safelite, the two companies were generally viewed to have similar cultures, making the integration go a bit more smoothly than it might otherwise have gone. That will not necessarily be the case with Belron and Diamond. How do plan on integrating two companies with such dissimilar cultures that have been mortal business enemies for years?

LUBNER: Fair point. But I have found that most people on the ground installing glass and managing technicians all want the same things. They want to do a good job. I believe Diamond employees feel this same way. The problems sometimes can be found in the strategies chosen by senior employees, rather than the people …

Diamond gives us much more coverage and capacity. It gives us access to more business. In my view, the culture is not difficult to change. It's about looking after customers and, if you want the staff to look after customer, you have to look after the staff. We are going to be transparent, open, honest and fair. You can change things pretty quickly that way.

Q--What are Diamond employees being told?

LUBNER: Tom [Feeney, Belron US president and CEO] is on his way to Kingston right now. The first meeting is at 1 p.m. All Diamond employees are coming on to Belron payroll at this time. We are promising them that they will hear news from us first and be dealt with fairly. I think, in a situation like this, that's all they can hope for. Diamond was in Chapter 11 before our involvement, we didn't cause that. I would expect most people understand this.

Q-Belron US has made an issue of its hiring practices, including employee background checks and drug testing. Do you anticipate that new employees from Diamond will be required to take a drug test?

LUBNER: That's a level of detail I am not completely familiar with. I expect we will look at all the employment practices going forward.

Q-Would you expect Bill Cogswell to be staying on? Or any members of the senior management team?

LUBNER: All also to be discussed. There have been no decisions made yet … The truth is we still don't own the company. It will be a matter of days and weeks before we do.

Q-I noticed the bankruptcy judge ordered a check of the deal under the Hart-Scott-Rubino Act. Are you anticipating any issues of size or antitrust with the Federal Trade Commission [FTC]?

LUBNER: It's really early in the process and the lawyers are looking at that right now. There is a possibly that we may have to file above a certain market size, but I don't know the particulars.

Q-Did you have any conversations with Ken Levine or the Newport Group concerning a possible acquisition prior to the auction?

LUBNER: None at all. We were never approached by any one …

Q-Is there anything else you'd like our readers to know?

LUBNER: Our intention with Diamond is to try and maintain the sales force as much as we can. To do that, we must make sure that those who get and make sales are taken care of.

Q-Is there anything you are concerned about that could possibly stop or affect the sale?

LUBNER: I don't think there's anything that will still stop the sale.

For a video interview with Belron US CEO Tom Feeney, CLICK HERE.

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