Corporate Collaboration Reaps Rewards
Paul Delaney and Stoney Rutledge left Greenleaf Auto Recyclers to join forces on a new business venture, Late Model Import.
PHOTO: STEVE TREMAYNE
Who would your top three picks for a fantasy auto recycling team be? They might include a finance whiz, someone with extensive product-acquisition knowledge and a top salesperson. Paul Delaney and Stoney Rutledge, founders of Late Model Import in Haltom City, Texas, have that in spades. Each brings a number of valuable business skills to the table, which helped them go from corporate vice presidents, to owners of a thriving small business.
Delaney and Rutledge met in 2003 while working at GreenLeaf Auto Recyclers (GreenLeaf) headquarters in Arlington, Texas.
Ford Motor Company founded GreenLeaf in 1999. Individual investors, ab3 Resources, purchased GreenLeaf in 2003 and subsequently sold it to Schnitzer Steel Industries, Inc. (SSI) in 2005. LKQ Corporation has owned GreenLeaf since October 2009.
GreenLeaf was Delaney's introduction to automotive recycling. With an accounting background, he started in 2003 as a liaison between the accounting and operations departments. "I was in charge of all the documentations and measurements associated with how the sites were performing," he elaborated. After SSI acquired GreenLeaf, he moved into operations.
"I was responsible for trying to develop new sources of revenue," added Delaney. "The primary things we did were expand our remanufactured products offerings and expand sales to mechanical insurance customers."
Rutledge, on the other hand, always had a love of vehicles. He got into the business at 22.
"I actually started working for a company called First Choice Auto Recyclers - before it was acquired by Ford - as a salesperson. That was 11 years ago," he said. "I have been a site manager for the (GreenLeaf) Dallas store and for the Fort Worth store. I ran the purchasing department for all of GreenLeaf for about two years and then I became the regional vice president of the southeast region."
The GreenLeaf positions required a lot of hours and travel for both Rutledge and Delaney. Both have young children and their jobs were a strain on their home lives.
"Even working 90 to 100 hours a week that first year, we were home more often than [when we were with GreenLeaf]," Delaney explained. They decided to follow a shared dream and started their own business.
"We kicked it around as an idea and started talking about, 'What would be important to us if we were to start a business?' and 'How could we make sure it would be successful?' We ended up having lots of the same ideas," said Delaney. "Primarily, you've got to have a real strong customer base. We talked about trying to develop an inventory niche where we would carry products the customers want but find hard to acquire used."
"The turning point for us was a year and a half ago," explained Rutledge. "I was actually starting to look for a yard and had a meeting with Ron Sturgeon [RDS Investments in Haltom City] about finance and a bunch of other stuff. After that meeting, I came back and talked to Paul about it. That was when we really got serious about finding a yard. It took us a while to find a place."
Rutledge and Delaney bought the assets of an existing facility owned by Sturgeon. In August, 2009 they opened it as Late Model Import.
"Our first month here, it was literally me, Paul and one other gentleman who did parts pulling / dismantling. I didn't leave the office for at least three weeks for anything," laughed Rutledge. "I was buying all the cars, doing all the sales over the counter and on the phone."
Delaney was doing everything else. He made deliveries, inventoried all of the vehicles Rutledge brought in and was in charge of getting all the supplies.
"When we took over this place, there wasn't a lot of stuff on-hand. We just bought the assets of another business," explained Rutledge. "You'd be amazed how many things you don't even think of on a daily basis that just weren't here when we went to find them."
"It's silly stuff that you know you're always going to need," added Delaney. "But, 'Where do you buy pallets?' 'Where do you buy the little red caps that go in the compressors, and in the engines and in the transmissions?' You know you need them, but actually going out and saying 'Okay I have to set up this account' … that whole process was probably one of the things we underrated the amount of time it was going to take."
Although Delaney and Rutledge admit the first year was a blur, they've started to gain ground with the business. They put in long hours and developed a strong customer base.
"Looking a year down the road, we now have two salespeople, two dismantlers, a parts puller and delivery driver," ticked off Rutledge. "It's been a lot of hard work and we couldn't have got near to the place we are at without the people who work for us."
"We're probably both 60-hours-a-week guys now," added Delaney. "Stoney does sales management, coaching and he is also responsible for all of the product acquisition. So any cars we buy, which we both believe is the second most important thing in the business behind treating customers right, Stoney looks at, calculates and places the bid. He sets all the prices for the parts. I do all of the inventory. One of the things we're proud of is that both owners look at every car before it ever gets dismantled or we've sold a part off it."
Delaney is also responsible for the back office tasks like accounts receivable, collections and all the paperwork. The duo splits the management of order fulfillment and dismantling.
Last year Late Model Import (LateModelImport.com) processed 400 vehicles on five acres. An extra lot was acquired a month ago to accommodate its full line of products. The company has also started to offer some domestic parts.
"We'll have more import vehicles from 2005 and newer than just about anybody else you'll find," declared Delaney. "But our customers have told us that's not all they want. It's been in the last three to five months that we've started offering a broader selection of domestic parts. That was just Stoney and I listening to what our customers were telling us."
Delaney and Rutledge admit working in the corporate environment helped shape their new business. They used some things - like the knowledge gained from the independent businesses involved with GreenLeaf - and avoided other things.
"One of the things Stoney and I agreed on upfront is some of what GreenLeaf was trying to do wasn't in the best interest of the company," explained Delaney. "The job I was hired for, to try to make sure all of the sites act exactly the same, probably wasn't the greatest idea. Every facility is different. Every customer base has different wants and needs. You don't get too far by telling everybody, 'Oh, no, no, this is how we do it.' You get very far by listening to what your customers want."
"The biggest difference between here and there is with any small business," added Rutledge. "If Paul and I need to make a decision it's not sitting in a conference room. It's over coffee in the morning while having a five-minute conversation. We make a decision and go. That keeps us nimble. We can change based off what our customers are telling us, pretty easily."
Dwight Howard, director of supplier relations for APU Solutions (APUSolutions.com) in Overland Park, Kan. is a former GreenLeaf co-worker of Delaney and Rutledge.
"They have an unparalleled amount of intellect in the recycled auto parts industry," said Howard. "They were instrumental in many projects GreenLeaf launched due to their ability to generate data and analyze it to make sound business decisions."