Brett and Nick get a chance to sit down with Joe Cheatham owner and operator of North Verde Auto Salvage. Joe has been at the auto salvage game for 20 plus years and has a ton of knowledge which he shares with us. Listen and follow along on Rev.com Here or play the youtube video and follow along with the text below.

Nick Snyder:

All right, we are here with another episode of Recycled Idaho. We're sitting here with Joe Cheatham, owner of North Verde Auto Salvage. How are you doing, Joe?

Joe Cheatham:

Doing great.

Nick Snyder:

So let's just get into it real quick, Joe-

Brett Ekart:

How old are you? No, we were just talking about our radio preferences, right? And you said you listen to Bob and Tom still in the mornings.

Joe Cheatham:

Yep, every morning.

Brett Ekart:

You listen to it at the shop? For the record, you live in Oregon.

Joe Cheatham:

Yeah. Ontario, Oregon.

Brett Ekart:

Ontario, Oregon. And you live probably pretty close to your facility?

Joe Cheatham:

Yeah, about four or five miles away. So I listen to them in the morning on my way to work, or when I have to go haul cars, I listen to them on the radio when I'm hauling cars. I haul cars usually on Fridays and Mondays, or Tuesdays. So I'll always, usually listen to the whole show then because I've got-

Brett Ekart:

Hour there.

Joe Cheatham:

An hour in the truck.

Brett Ekart:

Those guys are funny, man. I guess I grew up listening with my dad. He loved Bob and Tom.

Joe Cheatham:

Yeah. Sitting in this setup I'm like, this is how it is when they're doing that radio show.

Brett Ekart:

Yeah, it is. Sit around and shoot the shit, and have fun. That's what it's supposed to be.

Nick Snyder:

So you're in Oregon, but you do a fair amount of business in Idaho too.

Joe Cheatham:

Yeah. I mean the majority of our business is in Idaho because we're right here.

Nick Snyder:

More Oregon.

Joe Cheatham:

I mean, I can throw a rock almost and hit Idaho-

Brett Ekart:

Yeah.

Joe Cheatham:

From where we're sitting. We're right on I-84.

Brett Ekart:

So give us a little bit of background about North Verde Auto Salvage. Tell us how it started, who started it. And I mean, you and I have a lot in common, as a lot of people that we do this podcast with, just because they're family businesses. So just give us the background on North Verde.

Joe Cheatham:

Yeah. So my dad, when he was in his late twenties, early thirties bought a company called Art Service. And they had tow trucks and it was the body shop, and they had ambulances even back then, and it was a lube rack. Anyway, he bought it. The thing was kind of struggling, and found an opportunity to buy it, dad did. My dad didn't know anything about tow trucks at the time, or ambulances or any of that stuff, but he could see a profit margin in these things. And he went out and started doing it.

Brett Ekart:

So what year was that?

Joe Cheatham:

1968.

Brett Ekart:

1968, okay.

Joe Cheatham:

So yeah, he started. And you didn't even have to be an EMT back then to run ambulances. And he went and had basic training in him, and then he got my uncle, which is his younger brother to help him. And then got my grandfather, brought him here from Baker City because that's where my dad was raised, in Baker City, Oregon, and brought him up to help him. And then he had a few people that he hired. I remember when I was a little kid, they had two of those old dial-up telephones. One was red, one was black. One was ambulance calls, one was tow calls

Brett Ekart:

Nice.

Joe Cheatham:

And dad would have to go out on those calls. and he got tired of doing both. So in 1976 he sold the ambulance service, kept the tow trucks and the body shop. And the tow trucks, they were a one acre area there. Back then there was no money in scrap.

Brett Ekart:

No. There still isn't, just so you know. The same is true today.

Joe Cheatham:

They had to look for places to get rid of those hulk vehicles. I mean, they were doing odd things with them, building things out of them, do whatever they could. People put them to dam up their ditches and stuff in the farm fields and things like that.

Brett Ekart:

You have to rip the seats out and rip the cloth off the seats before they ever had the auto shredder.

Joe Cheatham:

Yes.

Brett Ekart:

And so you had to really get down to basically bare iron.

Joe Cheatham:

And so, towing these cars in the impounds that nobody would pick up or whatever, they became a liability. So dad started selling parts off of them. And he found out, "Well, hey look, there's no money and there's no way to get rid of them. I'll just try and sell parts off of them." And so, he founded some old Hollander books and had a guy that was his tow truck driver at the time, that knew about how to do this stuff. And they started cataloging this stuff, shelving some of the better motors and things like that. And doing compression tests on the motors and then sell some of the motoring transmissions out the side of the tow yard there.

Brett Ekart:

Is that at this current facility that it's at now, or is it a different location?

Joe Cheatham:

No, no. This was in Ontario, right on the main street in Ontario.

Brett Ekart:

Okay.

Joe Cheatham:

Yeah. And so that went on until the early 80s and then they kind of outgrew it because the used parts was kind of getting okay.

Brett Ekart:

Yeah.

Joe Cheatham:

So dad wanted to expand the salvage yard. So he found a place where our current yard is now, down at the end of North Verde drive. So we call it North Verde Auto Salvage.

Brett Ekart:

Yeah.

Joe Cheatham:

And found a five acre place down there. There was zones for it because he had to get the correct zoning stuff. So he bought that in '82, '81/'82-ish. They built the building and stuff and got the name established in late '82, and then they opened the doors in spring of '83. And it was just the five acres, like 200 cars for years and years, and his tow truck driver and a couple other guys ran it. And it was kind of a side deal to the body shop and the towing service for years.

Joe Cheatham:

And then I worked for my dad... I went to college. I graduated in '88, went to college, came back in '92, started working for my dad painting cars at the body shop, doing estimates. My dad's sister, who was the bookkeeper, she got ill with cancer. And anyway, he asked me to start doing the books. So started doing the books for that and North Verde. And then he got to the point where he was in his mid-sixties looking at retirement. And he's like, "Well, the salvage yard down there, there's a lot of potential there. Are you interested in it?" And I had never really worked down there. It was a little scary to me, but I'm like, "Well..." He goes, "I'll give you a great deal on it and I'm not going to make you do anything up front."

Joe Cheatham:

And so I could see the opportunity. So I started working down there and-

Brett Ekart:

Because you at least you got to do the books for both.

Joe Cheatham:

Right, right.

Brett Ekart:

Okay, which one can I make-

Joe Cheatham:

And then the body shop, there was a lot of employees. There was some really good employees that had been there for years, that we were going to give them an interest in the business or sell them interest in the business as well, which wasn't a bad thing. But I could see that if I took the salvage yard I could have all my own business, all to myself.

Brett Ekart:

Yeah. That makes sense, yeah.

Joe Cheatham:

So it was one of those things. Anyway, it was scary, but I did it. And then I ended up hiring some very good people. The people I hired were the key to everything.

Brett Ekart:

Yeah.

Joe Cheatham:

So the people that had been down there before were stuck in their old ways, this and that. And I went, came over here to Idaho and went toured some of the yards over here. And some of these guys took me under their wing, some of these yards that have been here for a long, long time. They were really good to me and showed me the ropes. And I started watching how the more successful yards, how they did things. And I would come over and deliver parts to them and then tour around and then ask a lot of questions. And then I would go back and start implementing those things at my own yard. That was the beginning days of computers, when it was a black screen with green numbers on it, is all you had. You didn't have Windows and all that stuff. It was DOS.

Brett Ekart:

Yeah.

Joe Cheatham:

It was pretty primitive. We had dot matrix printers.

Brett Ekart:

They seem to really, and in those days... I try and explain it to people, but in those days you really had to know your cars and your parts because there was no system. You're like, oh, I need a part. Here's all the interchangeable... Here, you can run it on this car, this, this. It kind of gives you a lot more information.

Joe Cheatham:

Yes you did. You had to know it. And when we first got the computers it helped a lot, but you still had to have more knowledge. But right before the computers, right before we installed the computers in the late 90s, because I started working down there in '98 and I took over in '99, we still had the old Hollander books. They're books about this thick, and they will tell you interchange, but it's not like, boom, boom, boom, push a button.

Brett Ekart:

Yeah.

Joe Cheatham:

I need an engine for a '95 Chevy pickup and you hit one button, it tells you everything that fits that.

Brett Ekart:

Mm-hmm (affirmative).

Joe Cheatham:

That's the way it is nowadays. It wasn't like that. You had to have way more knowledge. That's what was scary to me because growing up in the body business, I wasn't a mechanic. I wasn't into mechanical. I didn't know the mechanical parts.

Brett Ekart:

Yeah.

Joe Cheatham:

And luckily I hired good people that did know those things that helped me a lot along the way.

Nick Snyder:

So when you-

Joe Cheatham:

And two are still there to this day.

Brett Ekart:

Oh, wow.

Nick Snyder:

So when you took over, you put in some new protocol, some new systems and you got your own people in.

Joe Cheatham:

Yes, I basically eliminated everybody that was there before.

Nick Snyder:

Just so you could do-

Joe Cheatham:

I didn't eliminate them all at once, but I tried to work with ones that I thought would work out, and they just-

Nick Snyder:

They didn't want to do it your-

Joe Cheatham:

Weren't up to speed, yeah.

Nick Snyder:

They didn't want to do it your way?

Joe Cheatham:

They didn't want to do it my way. They didn't want to get up with the times. They didn't want to use the computers. They didn't want to inventory the cars and put them in the computers. They still wanted to run it the way it was before.

Brett Ekart:

Well, at some point, like every business you have to make the decision. Are you just happy with the status quo, the way it sits today? "I don't want to grow. I'm just happy. I've hit my max potential. The guys I have are good." But when you bring in- my dad and I, and my dad fought this with his dad, right? And I had the same conversation with my dad. Once you hit a certain point, like your dad who is ready to retire, and "This is the guys I've set up. This is the way it is. If you want to grow it, then go find the people that want to work for you," that want to see your vision, because your vision is different than your dad's vision.

Joe Cheatham:

Absolutely, yes.

Nick Snyder:

And I think that's a big thing-

Joe Cheatham:

That's [crosstalk 00:09:38].

Nick Snyder:

That is so important if you want to grow a business. My dad always said, "Oh, you want to put a yard here, here, here." He goes, "That's great. Where are you going to get the people?" And I said, "I'll find them. That's my job." Like, I'm going to go find-

Joe Cheatham:

That's what my dad said too. He said the same thing to me, like "Good luck!"

Nick Snyder:

Good luck finding those people. I'm like, "Yeah. I mean, I'll take all the luck I can get. I'm going to need it." But in general, that's how you build a business. And the other thing that you mentioned too, and that I don't want to pass over, is when you said that you didn't know a ton about the auto salvage business, but you could see the potential in it. You were able to go find people that were already successful and they taught you. They had no real horse in the race. Like, "Why would I want to teach basically someday that could be a competitor?" Right? But only because they were successful and they had enough humility and enough pride in what they did and how they did it, that they were willing to teach you, right?

Joe Cheatham:

It was amazing. It was amazing, yeah. And I appreciate those guys to this day. And they're essentially retired.

Nick Snyder:

And you and I had that conversation before, like I've got a special place in my heart for this guy, or this guy, or this guy. And one of the things I really want people to know is if you've had any level of success, whether you're an athlete or a business owner or whatever, if you just take the time and you see somebody that is hungry and they want to build, they want to do something, you'll get just as much reward out of that as the next guy. Like, as you will build up some monstrous machine that prints money. You'll get a lot of reward out of helping somebody else that you can see the desire that wants to be successful.

Joe Cheatham:

Yes.

Nick Snyder:

Go and help them. There's lots to be said for that.

Joe Cheatham:

Yes.

Nick Snyder:

And then you're true product of it.

Joe Cheatham:

Yes. And building relationships with people, just like the relationship I built with you guys. Building a relationship with those other yards, that only helped me in the future forever and ever. We traded parts with each other. They were my greatest ally. They were only 40 miles away. You would think there would be fierce competitors with us, but no, we were allies in the same industry.

Nick Snyder:

Mm-hmm (affirmative).

Brett Ekart:

Yeah.

Joe Cheatham:

And then same when you guys first came over. The first time that I dealt with United Metals (Recycling) I felt like, "Oh my God. Here's some guys that I can trust," because in this industry you never... When I was young starting out back then, I didn't know who I couldn't trust. And I felt that trust with you guys the very first time. And I'm like, this is people I have to build a relationship with and maintain it, and I have since then and it's 20 years later.

Nick Snyder:

Mm-hmm (affirmative).

Brett Ekart:

Yeah. Well, you asked me earlier, "How's Greg Brown?"

Joe Cheatham:

Yep.

Brett Ekart:

Greg Brown was probably one of those guys, if not the guy that started that [crosstalk 00:12:26].

Joe Cheatham:

He was one of those guys. Your dad owns this great big company, and I'm this little tiny salvage yard in Ontario, went out of his way to come and meet me and visit me way back when.

Brett Ekart:

Yeah.

Joe Cheatham:

I mean, you had to have been, what, in high school?

Brett Ekart:

'99 I was at senior high school.

Joe Cheatham:

Yeah.

Brett Ekart:

Yep.

Joe Cheatham:

So yeah, I remember your dad coming over there and he goes, "Take me for a tour." And we walked around the whole yard and went out there and he said, "You're doing a great job, Joe." And I'm like, wow. It really meant a lot to me.

Brett Ekart:

Mm-hmm (affirmative).

Nick Snyder:

Yeah.

Joe Cheatham:

But building those relationships with people is so important.

Nick Snyder:

And being willing to ask questions. That's what you said. You said, "I asked a lot of questions."

Joe Cheatham:

I asked a lot of questions.

Nick Snyder:

Because you'd be shocked what people will share with you, successful people in general, like Brett was saying. They're going to help other people that are hungry and just want to work.

Joe Cheatham:

That's for sure.

Nick Snyder:

So if you ask the question, nine out of 10 times they'll probably give you the answer. And I think a lot of people are too afraid to ask.

Joe Cheatham:

Well, people that are proud of their business-

Brett Ekart:

Yeah.

Joe Cheatham:

Like to talk about themselves and like talking about their business. That's why I'm here, right?

Brett Ekart:

Yeah, yeah.

Joe Cheatham:

I don't mind talking about myself and my business. I'm pretty proud of what I've accomplished.

Brett Ekart:

What you've built over the years.

Joe Cheatham:

What I've built over the years. And so, that's the way they were. And they could see that I looked up to them and I go, "How do I do this? And how do I do that?" "Hey, come on back here." And then he'd introduce me to their inventory guy. I didn't know how to inventory cars correctly. And they go, "Look, this guy will show you. This is what we use for this. This is how we rack the engines. And this is how you plug them. And this is how you do this." I mean, there was details I didn't know. And I'm going, "Hey, I need to find out everything there is about this industry."

Brett Ekart:

And one thing I always appreciate about when we go, whenever I've been to North Verde, I've been to a lot of auto salvages and it's how tight a ship you run. It's clean, it's organized. There's no bullshit. Like, it's the real deal. And I think that's one of the reasons why you've been as successful as you have. It's this, you put money back into your business. You make money, you put it right back in your business. You can tell just by the way it's set up.

Joe Cheatham:

You've got to take care of what takes care of you, right?

Brett Ekart:

You take care of you, and you said you had guys that you hired in '99, '98, whatever that year was, they're still there. So you've taken care of your guys. And you can see that. I mean, as a business owner-

Joe Cheatham:

I appreciate that.

Brett Ekart:

When I walk into a facility I can see that.

Joe Cheatham:

I'm glad that it shows.

Brett Ekart:

Like I say, especially when you walk into businesses that you've been around that industry a lot, you can tell when somebody takes pride in what they do and how they go about their business. So I've always liked that about your business , I've always appreciated that.

Joe Cheatham:

I appreciate that too. It's good to hear. That's good to hear that other people recognize it.

Brett Ekart:

The most fascinating thing to me about the auto salvage business, and I've always wanted to figure out a way that the scrap community could do it, but an auto salvage that... You were talking about the Hollander system and how you interconnect with other auto salvages, right?

Joe Cheatham:

We're all a big family, basically.

Brett Ekart:

Yeah, you're selling parts of your competitors. So you're competing with them to buy salvage at an auction.

Joe Cheatham:

Mm-hmm (affirmative).

Brett Ekart:

And then you're putting those cars into an inventory system. And then you're basically letting now, your competitors sell those parts that essentially you don't need-

Joe Cheatham:

There's a car that a guy at a salvage yard over in Caldwell, him and I bid on the same car on Thursday. Well, he ends up with the car and on Tuesday I ended up buying the engine out of it and selling it to one of my customers here in Ontario.

Brett Ekart:

Dude, it's so crazy. It's the most unique industry from that standpoint.

Joe Cheatham:

It is. The thing is, you can't ever have enough vehicles to have all the parts you need because there's so many different... This guy who going to need this part off of this car. You couldn't have it all. It's not like buying, like if you're selling people that do podcasts, microphones, you're going to sell a lot of these. But with a vehicle, every vehicle has-

Brett Ekart:

The frame, the base. Yeah.

Joe Cheatham:

Year, make. Every year is different. In a year you might have seven different engines in one vehicle in a year, and did it have an automatic transmission line? And- so all the little details, you can't ever have enough. So you have to cooperate with all the other yards in the country-

Brett Ekart:

Oh, yeah.

Joe Cheatham:

To fulfill your customer's needs. So you're competing for getting all the right vehicles that are in the most demand, that will part out in an okay amount of time so you can make a profit on them. And at the same time, trying to maintain all your customers and your customer base to provide them with the correct parts for whatever their need, whatever their demand is.

Nick Snyder:

Do you ship parts all throughout the country?

Joe Cheatham:

Yes.

Nick Snyder:

Okay. That's what I figured.

Joe Cheatham:

Yeah. We ship stuff, from little stuff in boxes that go all in UPS. And we put engines on pallets. We ship engines all over the country every day, transmissions. We shipped a frame, a whole chassis to Tacoma just a couple of days ago, the complete pickup frame. Even a take of pickup boxes, which we've shipped those which are hard to ship.

Brett Ekart:

So in 20 years, from 99 to 21 years now.

Joe Cheatham:

Yeah, 21 years.

Brett Ekart:

How has the industry changed? What's been the biggest changes that you've seen from when you first started to today?

Joe Cheatham:

There's been good and bad changes. Good changes is technology has gotten way better, way faster. The dial up internet was terrible. It was that era.

Nick Snyder:

Mm-hmm (affirmative).

Brett Ekart:

Yeah.

Joe Cheatham:

So this fast internet, it's been fantastic, just the computer system itself, the inventory system, everything. We used to have a server that was huge like this.

Brett Ekart:

Oh yeah.

Joe Cheatham:

And now we have a server that's like this here.

Brett Ekart:

Yeah. And it does a hundred times more than that one.

Joe Cheatham:

Yes. And the negative thing about the way the industry's changed in my opinion, is some big corporations have gone into the auto salvage business and bought up a lot of the small Mom-and-pop yards around the country.

Brett Ekart:

Mm-hmm (affirmative).

Joe Cheatham:

And it doesn't have the same feel anymore.

Nick Snyder:

Mm-hmm (affirmative).

Joe Cheatham:

Like some of my favorite yards that we used to deal with got gobbled up by this big corporation, and they're horrible to deal with. Their employees, they don't have that same feel. Their employees don't have the same feel for the customers. The customers don't have the same feel for them. And it's just a big number game and they just don't care.

Nick Snyder:

They're missing the relationship.

Joe Cheatham:

They're missing their relationship and that personal relationship. We personally know almost all of our regular customers. We know their names, and we like that relationship and they like that. They want to have confidence in going to someone and buying something that they know, "Hey, I'm going to stand behind it. Hey, you need a little work a little on this here. Hey, can you give me a little bit better deal on this here?"

Brett Ekart:

Yeah.

Joe Cheatham:

You know, this and that. And we work with people or maybe that part failed. They know that, "Hey, it's okay. Verde sold it to us. They'll stand behind it." When you get this big corporation and then you have the same problem with them, they'll say, "Well, corporate policy says I have to do this. Corporate policy says I have to do this." And they hide behind their corporate policy. These big corporations, there's no personality to them.

Brett Ekart:

Yeah. So where do you see that going? Because I was talking to somebody here just the other day who's got some self-serve facilities down in Salt Lake.

Joe Cheatham:

Mm-hmm (affirmative).

Brett Ekart:

He's got three of them down there. And he was telling me that he sees those big corporations that it's not coming to, the prices crash down and-

Joe Cheatham:

Their business plan, their business model is not sustainable-

Brett Ekart:

Yeah.

Joe Cheatham:

Without scrap, because they're trying to do it so production line-oriented that without the high price of scrap, their business model is failing now.

Brett Ekart:

Yeah.

Nick Snyder:

Mm-hmm (affirmative).

Joe Cheatham:

So, if they lose their hold in the industry, it won't hurt my feelings a bit.

Brett Ekart:

Yeah.

Joe Cheatham:

I'd rather to see all these small, independently-owned yards go back up then have this big corporation-

Brett Ekart:

Do you see that happening? I mean, do you see the auto salvage-

Joe Cheatham:

I see it's possible.

Brett Ekart:

Yeah.

Joe Cheatham:

I see it's possible, but-

Brett Ekart:

Or do see those big ones just basically going... Kind of what they'll do is they'll say, "I've got 50 yards in XYZ geographic area, and I can only financially support 30. I'm going to pick my bottom 20 performers and just be done with them." And will those ever be an auto salvage again? I don't know.

Joe Cheatham:

Some won't. Some won't ever be, for one reason is the ground that they're sitting on is more valuable to use for something else. And they couldn't get zoned again to be a salvage yard, which is a tough thing. You know that.

Brett Ekart:

Oh yeah. I mean, you're not...

Joe Cheatham:

So some are going to be gone forever, for sure.

Brett Ekart:

You'll not zone an auto salvage. I don't care where you are. I mean, I went through the zoning process a few times in my day. And the first question they ask me, "Is this going to be auto salvage" I'm like, "No," They're like, "Good, because you'll never get zoned for it." And I've done it in a lot of counties and a lot of cities, and they're like, "No."

Joe Cheatham:

Well, you think about Canyon County, how many there was on the Caldwell Boulevard for years and years, and got zoned in the 50s, 60s and 70s, that once those are not salvage yards anymore, they'll never get zoned again.

Brett Ekart:

Oh yeah.

Joe Cheatham:

In my opinion. I don't think they will.

Brett Ekart:

No, you're right a hundred percent. That land is worth more as a commercial-

Joe Cheatham:

As another Walmart or-

Brett Ekart:

Retail store or something, gas station.

Joe Cheatham:

Gas station or Fast Eddy's or whatever.

Brett Ekart:

So one of the big things, obviously this podcast is Recycled Idaho, so we always like to touch on a recycling aspect of people's businesses. So I think one of the things that gets overlooked in the auto salvage business is how much recycling is actually going on.

Joe Cheatham:

We are auto recyclers.

Brett Ekart:

Yeah, like it's a full ball... I mean-

Joe Cheatham:

We are auto recyclers.

Brett Ekart:

From the fluids to the... I mean, you name it. Just give us a little bit of background from your standpoint, everything that is recycled in an auto salvage.

Joe Cheatham:

So the vehicles, any part that's sellable that's still in good usable condition, we try and sell as a usable part to put on someone's vehicle to keep another vehicle on the road. Whatever's left on that vehicle, whether it's the hulk of the vehicle, which is just the scrap metal, you guys smash that, shred it, recycle that. All the fluids, so if there's fuel in the vehicles, I give all the extra fuel to the employees and put them in the vehicles that we run around the yard.

Brett Ekart:

So that gets-

Joe Cheatham:

That gets recycled. All of the oil, we have a waste oil furnace. So we burn to heat the shop. So we heat the shop with the waste oil.

Brett Ekart:

Antifreeze is recyclable.

Joe Cheatham:

Antifreeze, we put all the antifreeze into a barrel and people come buy it in bulk.

Brett Ekart:

Yeah, which they're buying that from you. That's a commodity.

Joe Cheatham:

It's a commodity, yes. They buy the antifreeze. Yeah.

Brett Ekart:

So I mean, you have aluminum wheels.

Joe Cheatham:

Aluminum.

Brett Ekart:

Catalytic converters.

Joe Cheatham:

Catalytic converters.

Brett Ekart:

I mean, the computers out of these newer cars.

Joe Cheatham:

Yes, we sell a lot of those too.

Brett Ekart:

Those have pretty good value.

Joe Cheatham:

Yeah. We don't sell them just necessarily for scrap or whatever.

Brett Ekart:

Yeah.

Joe Cheatham:

But we sell them also to be reused. And there's rebuilders also. So there's a lot of things we sell to rebuilders. If you go to an O'Reilly's and they say, "Do you want to rebuild this, or rebuild that," so there's cores. We sell cores to rebuilder markets too. So they'll take them and take them to wherever they do in remanufacturers, and sell those as a remanufactured product through O'Reilly's, or AutoZone or whatever. One of those places. So we also are supplying, all those auto salvage yards are supplying all those cores.

Brett Ekart:

Oh yeah.

Joe Cheatham:

There's steering gears. There's core steering gears, alternators, starters, there's the core market and the core market's odd too. It goes up and down.

Brett Ekart:

Yeah. Yeah. That's probably been the biggest thing that I've noticed in the auto salvage industry as a whole, from your second standpoint, is how the actual converters now can swing the price of the salvage so much.

Joe Cheatham:

That is true.

Brett Ekart:

That can drive the price up and down regardless of the parts, depending on the year of the car and whatever else, just because of the way that market is run so hard. I anticipate that playing its course too.

Joe Cheatham:

That fluctuation is always there in the lower end salvage vehicles. So if you're buying the cheaper vehicles that you plan on, "I'm going to sell a few parts of this, but I'm buying this for the scrap value and the catalytic converter," that sways that price on the higher end stuff where you're going, "Hey man, these Duramaxes or motors are blowing up right now. They're in high demand. I need to buy these late models. Do you have any pickups, or these five nines," or whatever. Those-

Brett Ekart:

Whatever your market demands, your customer demands, right?

Joe Cheatham:

You're paying a lot more for that salvage, but you're not taking into account so much the end scrap value, because you're going to be holding onto that vehicle for a significant amount of time.

Brett Ekart:

Yeah.

Joe Cheatham:

So whatever the scrap value is at that time has nothing to do with the scrap value down the road. Because those rigs, you pay a lot of money for them and you're hoping you get your money back out of, say the main component that you're buying it for, the transmission. So if there's a transmission failure out there on this year model vehicle, you're trying to buy those to replace those transmissions for people, say the motors on certain cars. And then the rest of the vehicle may be slower to part out because it's a later model, and it takes longer for that stuff to sell off of it. The end part, the scrap at the end is going to be a long time down the road. It's those "end-of-life" vehicles that people have used up, that are coming in every day, that are less money. You have to be on top of the scrap values for those.

Brett Ekart:

Oh yeah.

Nick Snyder:

When you start seeing trends and like the transmission go out on a certain thing and you start to see it early, do you then go out there and go... Is that what you're doing, is you go and buy all those so you can get ahead of it?

Joe Cheatham:

Yes, in some instances we definitely do.

Nick Snyder:

Do you ever hear from maybe a different part of the country or anything like that, of where it's coming from first?

Joe Cheatham:

Yeah. There's been certain vehicles, where there was maybe sold more of this vehicle that had... Because there used to be, it was a like Ford Focus' that the single overhead cam motors that were failures. And we had a couple of them. And so we got a call from, I don't remember. It was in Utah or maybe even been further away than that. And I'm like, "Yeah, we can't keep enough of these." So then I started whenever they came up at the auction I'm like, "I want to buy it if it has that motor in it!" But if they have the dual cam motor in it, they'd sit on the shelf forever. You never could sell them.

Brett Ekart:

Yeah.

Nick Snyder:

Mm-hmm (affirmative).

Joe Cheatham:

So there's always some.... You try and find out, "Hey, this car is going to make me money." I see in this car I know I'll never sell the motor out of that thing, so that's just going to sit on a shelf forever. So yeah, you're always looking at that. The other thing too is we learned because of that, what cars are good and what cars are bad.

Nick Snyder:

Mm-hmm (affirmative).

Joe Cheatham:

I have my niece or whatever, called her and she goes, "Hey, what kind of car should I buy? What's reliable." We know what's reliable, what's not reliable because we see, okay, there's 7 of these engines sitting on the shelf that have been there for how long.

Nick Snyder:

Yeah.

Brett Ekart:

Which means all the other ones are running good.

Joe Cheatham:

That's going to be reliable. That's another very reliable engine. All the transmissions are good too. The only thing we're selling off these cars is the mirrors.

Brett Ekart:

So people are wrecking them.

Joe Cheatham:

People are wrecking them. The tail lights, the headlights, stuff like that, but we're not selling the mechanical components. Those are well-built cars. They were well-made. The mechanical stuff was well-made. They're reliable. So we find out how reliable a vehicle is.

Nick Snyder:

The knowledge that the auto salvage guys have is awesome, because I have a '02 Honda Civic and my ignition was sticking a little bit. I called Jake at B&K Auto Salvage. I said, "Hey man, I've got an '02 Honda." He knew right away. He's like, "It's-

Joe Cheatham:

Its a common problem.

Nick Snyder:

Yeah, like he just knew.

Joe Cheatham:

Yeah, we get calls on it every-

Nick Snyder:

It took him less than 10 seconds. You know?

Brett Ekart:

So I got a question for you to kind of end it. So in '09, I think we did that cash-for-clunkers deal, right?

Joe Cheatham:

Mm-hmm (affirmative).

Brett Ekart:

And I know it effected everybody in a different way. I was reading an article here the other day and they were talking about how the auto industry fired back up again and going. They're like, "Oh, this cash for clunkers deal was such a great success for these auto manufacturers and this and that." And I don't remember which politician was kind of pushing for something similar. Like, "Hey, we should look at this again." That cash for clunkers deal for the auto salvage industry, was it a good thing? Was it a bad thing? Was it something you guys would like to see again, or no?

Joe Cheatham:

I'd love to see it again.

Brett Ekart:

Just more out of curiosity.

Joe Cheatham:

I'd love to see it again. It was great for us because we could buy this salvage, there was like a set price on it. We could buy it. There was an abundance of it and we could buy it cheaper than we had been able to buy a previously.

Brett Ekart:

Yeah.

Joe Cheatham:

The drawback to it, if they ever have it come back, don't make us blow up the motors they made. They made us. We had to blow the motors up. We couldn't resell the motors. Well, why not? No, not every car that had that motor and it was a clunker.

Brett Ekart:

Yeah.

Nick Snyder:

Mm-hmm (affirmative).

Joe Cheatham:

They're turning a good sellable part into scrap metal.

Nick Snyder:

Yeah.

Brett Ekart:

Mm-hmm (affirmative).

Joe Cheatham:

So they made us put stuff in the motors and destroy the motors, and we're like.... And the transmissions, and then crush the cars over a certain amount of time. They should not do that. If they do it again, just let them live their end of life in the salvage yard.

Nick Snyder:

Yeah.

Joe Cheatham:

And sell off of it organically. And actually, what they would have sold off of it-

Brett Ekart:

Either the people that are fixing those cars up, they didn't have the money or the credit or the whatever else, if you gave them the $4,000 to buy a new car anyways. So you're almost taking away their opportunity to still keep their car running, right?

Joe Cheatham:

Yes.

Nick Snyder:

Mm-hmm (affirmative).

Brett Ekart:

The people that might've been able to take the $4,000 cash for clunkers, or 25, or whatever that number was at the time and go buy-

Joe Cheatham:

Not everybody that owned one of those vehicles turned it in for cash for clunkers.

Brett Ekart:

Yeah. Not everybody could afford it.

Joe Cheatham:

There's still those vehicles on the road, so let's keep those guys on the road too.

Brett Ekart:

Exactly.

Joe Cheatham:

I would understand, you sell it to a salvage yard, "You guys can't put it back on the road." Yeah, I understand that. You have to dismantle it.

Nick Snyder:

Mm-hmm (affirmative). You have to part it out.

Joe Cheatham:

You have to part it out, yeah.

Nick Snyder:

Yeah.

Joe Cheatham:

I would agree to that, but to actually have to destroy the motors and transmissions.

Nick Snyder:

Is the thought process so forced people are forced to go buy new stuff?

Joe Cheatham:

Yes.

Nick Snyder:

Is that the thought process behind that? Okay.

Brett Ekart:

So one more question. So you have kids?

Joe Cheatham:

Mm-hmm (affirmative).

Brett Ekart:

Do you see your kids following in your footsteps, or do you see them kind of doing their own thing? And either way, to each their own.

Joe Cheatham:

Well, my oldest son, my oldest child is my only son and he's in the wine industry. And I never did push him to work down there, and I wanted to diversify and do something different. So I sent him to college and he became a wine maker, and he loves it. And if I needed him and had to have him come back and help me, I probably would. But he's doing fine. Having something different besides being in the automotive business is really nice.

Brett Ekart:

Yeah.

Joe Cheatham:

I'm like, "Let's get something else going on in the family!" And then I have three daughters and for my daughters, my youngest daughter, it's a possibility. The other two, they've already got other careers. So I don't foresee, probably none of my kids are going to are going to take over my business. I wouldn't foresee that, but it's not off the table though.

Brett Ekart:

Yeah. I mean, the only reason I asked because people have asked me that question all the time. I'm like, "I would like to see my sons do whatever they want to do."

Joe Cheatham:

Yeah.

Brett Ekart:

Right? Like, I don't care. I don't have a horse in the race, like I enjoy it. It's always what I enjoy doing, and I enjoy every day of it. Some days are more challenging than others. But if they want to go make wine or do whatever there, I'm like, yeah. Go get it done. Well, thank you, Joe.

Joe Cheatham:

Well, thank you guys.

Nick Snyder:

Yeah. Thanks, Joe.

Brett Ekart:

I appreciate it, man.

Nick Snyder:

Really appreciate it.

Brett Ekart:

Thanks for taking the time, and good luck. I love your business.

Joe Cheatham:

Thank you.

Brett Ekart:

All right. Take care.

Brett Ekart:

Where am I at? A little bit.

Nick Snyder:

Can you hear me? Hello?

Brett Ekart:

Would you guys still have my original hard hat.

Nick Snyder:

I liked that one.

Brett Ekart:

From 2004.

Nick Snyder:

I like that sticker you got on the front.

Brett Ekart:

It's a little rustic, but yeah, it's been around for a while. It's still good. This will make me look a little amateur.

Nick Snyder:

Huh?

Brett Ekart:

This white one you got.

Nick Snyder:

Yeah.

Brett Ekart:

It's new. Looks good.

Joe Cheatham:

I feel goofy in this thing. Do I have to wear this?

Brett Ekart:

What's that?

Joe Cheatham:

Do I have to wear this?

Brett Ekart:

Would you prefer not to?

Joe Cheatham:

Yeah.

Brett Ekart:

I mean, don't worry. We're going to have it on camera though. Is Tom going to throw a fit? If we've got a guest without a hardhat on?

Joe Cheatham:

If I have to wear it, I have to wear it.

Nick Snyder:

Maybe just leave your hat here at night, bring your sunglasses Joe. Let's see how you look then.

Nick Snyder:

Oh yeah. See, you look like a-

Brett Ekart:

We've got to turn on your-

Nick Snyder:

That's good right there.

Joe Cheatham:

Whatever.

Nick Snyder:

Yeah.

Joe Cheatham:

If you say so.

Brett Ekart:

Thank you for listening to another episode of Recycled Idaho. And as we continue the journey across this great state, we look forward to bringing you more stories of people and organizations putting in the work to do the right thing.