Federated Auto Parts and National Pronto Association released additional details to program members today, including frequently asked questions, about the merger of the two companies, which was announced Dec. 10.
This merger will have combined sales volume exceeding $7 billion with more than 5,000 outlets in North America allowing it to improve member services and better compete with anyone in the aftermarket. The newly formed organization will be known as “Automotive Parts Services Group” or simply “The Group.”
The merger will build upon what is best from both organizations maintaining current leadership and office staff with a focus on improvement. Both the Federated Group and National Pronto Group will continue to serve their member’s needs but will work together to focus on improvement in every possible area, the company said.
Moving forward, the two organizations will work to combine their efforts in customer support programs, IT and data management, electronic catalog, co-man warehouse, national accounts, and line commonality.
Both Pronto and Federated headquarters will remain in place and continue to support their respective member’s needs, marketing programs, and brands, while moving to shared resources in all areas that offer efficiencies and improvement opportunities to remain competitive in a changing market.
The following are some frequently asked questions regarding this announcement:
Q. Who will run the new organization?
A. Bill Maggs and Rusty Bishop will be co-CEOs of the new organization while also maintaining their current roles with Pronto and Federated. The goal of the new organization is to build on the success, cultures and relationships both groups have had in the past while working together for a stronger future.
Q. What happens with other staff members and group employees?
A. Both Pronto and Federated have a strong history of operating lean and mean. The plan is to maintain all current people and positions with a goal to share best practices, increase value and effectiveness. In most areas, the emphasis will be on improved programs and support with no added cost. Leadership will look to develop succession plans and an evolving organizational structure will be created to maximize collaboration efforts.
Q. So if staffs and offices stay the same, what changes?
A. Potentially everything else! There have been a number of meetings to identify the potential for creating benefits for all members, suppliers, customers, and employees and the opportunities are substantial. For example, there are benefits in collaborating on National Accounts, Data Management, Electronic Catalog, Inventory Management and Availability, Purchasing, Warranty and Roadside Assistance programs, Co-Man Warehouse, Direct Importing, Internet Support, and Training, just to name a few.
Q. Will the members from both groups actually act as one?
A. The merger received outstanding support by members of both groups. Every participant is dedicated to exploring ways to improve through collaboration including combining certain national meetings. Every topic has been discussed and there is philosophical agreement on direction in every important area. The Leadership understands what it takes to make a merger successful and is dedicated to making it work for everyone. While a group this size will always have some market and product exceptions; the goal is a united direction wherever there is benefit.
Q. How will decisions be made?
A. There will be defined processes for all areas of decision making with leadership and members involved based on effective and timely communications. Everyone is dedicated to working together as collaborative partners with a goal of efficiently making logical decisions based on extensive analysis, insight and input from all.
Q. You mentioned Co-Man, will Pronto members be able to use the Federated Co-Man Warehouse?
A. Yes. Pronto members will have the option of participating in the Co-Man warehouse. This is a good example of leveraging current resources across a larger enterprise. With enhanced volume and growth there will be increased activity in all areas of Co-Man including purchasing, warehouse, logistics, payables, and receivables. This is certainly an area where the merger will likely create jobs rather than eliminate them.
Q. How will purchasing and merchandising work? Will this be combined?
A. The merger will provide for combined line reviews and leverage of combined volumes. The goal is to be competitive with large competitors at acquisition cost. This merger brings together two groups who focus on top quality brands with value added benefits and features backed with outstanding service and extensive training.
Q. What does this mean for suppliers?
A. Ultimately fewer meetings for our vendor partners, more efficient relationships, a more line common customer base, better partner for National Accounts, more information, sales growth, ability to “sell” product benefits, unique focus on DIFM, and much more. It should be looked at as an opportunity to sell more and influence mix.
Q. Are other groups likely to follow and merge?
A. Only time will tell but it is likely that others will feel the need to try and do something. However, what will make the Federated/Pronto merger successful are a number of unique attributes others may not possess. These begin with a lack of market conflicts. There are minimal market conflicts between members of the two groups and in many markets there are positive working relationships. It is a merger of equals with a focus on equal collaboration that is fair for all. Both groups are dedicated to making the merger benefit all members from the largest to the smallest. The overall focus is on selling more and operating more efficiently while sharing resources and expertise. Both groups have similar cultures, maintain right- sized staffs, and focus on partnerships with their vendors. In summary, they are more alike than different. Each has a strong, single marketing brand that will continue to be supported and membership focused on growth and long-term success. Ultimately these two groups have all the elements in place to make it work.
Q. What additional details can you share?
While we have identified many areas of opportunity and potential improvement, we do not have all the answers today and will not tomorrow. This will be a process that continues to evolve and requires great collaboration and dedication from all. However it is the right thing to do for everyone involved and these are the right parties to make it work. The future is now much clearer and positive for members of this merger and the vision will be further enhanced as time goes on.
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