Rick Galloway: And maybe I’ll just add just a little bit more to that. You talked about the synergy piece. Craig, it’s important to understand on the synergy piece, we’ve accelerated some stuff. We’ve talked about how we closed 10 facilities within the FinishMaster business. As far as the overall synergies, we’re roughly 20% of our synergies have already been achieved on a run rate basis as of today.
Craig Kennison: As a follow-up to that, Rick, I thought a lot of those synergies were tied to leases, which maybe three years before their expiration. So how are you able to accelerate what are essentially contractual agreements?
Rick Galloway: Yes. They weren’t all tied to that. There’s a fair amount on the FinishMaster side that go throughout the period. So if there’s something that is a little bit tighter, a little bit closer, that’s the area that we were able to identify and say a pull in that opportunity and close those facilities at an earlier time.
Craig Kennison: Thank you.
Rick Galloway: Yep.
Operator: Our next question comes from Scott Stember from MKM Partners. Your line is now open.
Scott Stember: Good morning guys. Thanks for taking my questions as well.
Nick Zarcone: Good morning, Scott.
Scott Stember: Can you talk about in Europe and Germany, you mentioned that it sounds like there was some progress in negotiations, I guess, later in the quarter. Are we trending in the right direction? Just trying to get a sense of how long this could potentially last and how far into 2024?
Nick Zarcone: Are you talking about the strike in Germany?
Scott Stember: Yes, sorry about that. Yes, the strike in Germany.
Nick Zarcone: Yes. So look, employees or certain employees at our big distribution center in Sulzbach-Rosenberg, which fulfills all of our branches in Germany, a number of those folks belong to a union or a works council as they’re called over on the other side of the pond. We don’t have advanced warning as to when they decide to call a strike. It’s very episodic. The issue is we’re down in headcount. Not all the members go on strike, but probably we lose about 40% of our workforce when they are out in strike. And that creates significant issues in trying to move product into and out of the distribution center. But we need to replenish our branches on a daily basis. Because if the product is not out in the branch the next morning, it can’t be sold.
And some of the key bottlenecks are actually on the inbound movement of goods, as you can imagine, with less people to bring all that product in. The vendor delivery trucks get stacked up out in the drive, et cetera, et cetera, right? We have a phenomenal team at Stahlgruber that’s doing everything possible to mitigate the issues. We are in flight in bringing in a second DC [ph online up in Bielefeld, which is in the northern part of Germany, but that’s not going to come online in time to help with the strikes. The branch and corporate personnel in Bavaria, we pulled some of those folks into the distribution center to help with staffing. We’re still down even after that from an overall headcount perspective, and obviously, those employees are not as productive because they’re doing new things.
We’re trying to push more inventory out into the branches on non-strike days, but there are limits as to how much the branches can hold from a practical perspective. And we have to make educated guesses as to what product each particular branch may need in the future, which is not the same as fulfilling orders based on actual sales to [indiscernible]. As I indicated, the employees have been on strike for several days here in October, and we anticipate that’s going to continue. The biggest part of it is it’s not like in the U.S. where, say, Ford, GM and Chrysler are all negotiating separately with the UAW. Here, there’s a group of employers, including Stahlgruber, that are all part of the same works council. And we need to get to a settlement as a group, we cannot do a one-off settlement with the union.
