The two biggest competitors in the oil change business - both with strong Utah ties - may be partners by the end of 1998.
Under a plan announced Wednesday, Quaker State Corp. and a portion of Pennzoil Company will merge to form a new organization with annual sales of $3 billion.To make the deal work, Houston-based Pennzoil will spin off its motor oil, refined products and franchise operations into a separate company with annual sales of about $2 billion. That company will then merge with Irving, Texas-based Quaker State.
But the merger's effect on the future of Quaker State's Q Lube and Pennzoil's Jiffy Lube remains to be seen.
Allon Cohne, communications manager for Salt Lake-based Q Lube, said Quaker State and Pennzoil officials have yet to decide on a name or specific plan for the new company.
And he does not expect to know more until the proposed deal is approved by shareholders and federal regulators, which could take three to six months.
"We are pretty much going on with business as usual," Cohne said. "There are so many different scenarios that could happen. Our fate is pretty much undetermined at this point."
About 250 people work at Q Lube's Salt Lake headquarters. The company has 31 service centers in Utah and 573 nationwide.
Cohne said the company was born out of Minit-Lube, a part of the Arctic Circle chain that was created here in 1977. Quaker State bought Minit-Lube in 1985 and created Q Lube, Cohne said. Since then, it has branded all of its service centers as Q Lubes.
"It's kind of interesting in that respect, as we have just finished our conversion process," he said. "Now everything's Q Lube, and now we might be changing again. But we're not sure."
Cohne said he had heard rumors that a merger was in the works, but the announcement still surprised him.
"There are a lot of loyal Q Lube customers out there, and there are a lot of loyal Jiffy Lube customers," he said. "People are partial, like they are partial to Coke or Pepsi, with their motor oil. . . . It sounds weird, but it's true."
Jiffy Lube started in 1979 with a handful of service centers in Salt Lake, according to the company's World Wide Web site. It was acquired by Pennzoil in 1990, and it now runs more than 1,400 centers in 47 states, including 14 in Utah.
Donovan Munford, manager of the Jiffy Lube at 900 W. 3300 South, said Jiffy Lube and Q Lube are "vastly different" companies. While Q Lube focuses on fast oil changes, he said, Jiffy Lube makes its money from ancillary services.
The two companies offer a basic oil change for about the same price, when all coupons and discounts are taken into account, Munford said. And since both compete with hundreds of other businesses, he said, he does not think the merger will lead to higher prices.
"It really depends on what the corporate mother companies are going to require of their franchisees," Munford said. "From a customer's point of view, there are people out there who absolutely cannot stand Pennzoil and Jiffy Lube, and the same is true of Q Lube as well.
"As far as the general public, I don't know if they will be all that pleased to see it."