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Latest COVID-19 Surge Hitting Ram Truck Production at Stellantis by Eric D. Lawrence, Detroit Free Press

Michigan’s worst-in-the-nation COVID-19 surge could be affecting auto production at the plant where the popular Ram 1500 pickup is built. A published report put the number of absent production workers who either tested positive or were in quarantine on April 13 at 630, up from about 200 from a week prior. Bloomberg, citing unnamed sources, said Stellantis’ Sterling Heights Assembly Plant, known as SHAP, “fell short of its daily build number by between 200 and 300 ve-

hicles this week.” More than 7,800 workers are employed at SHAP, according to the company, but that total includes other types of workers beyond production, such as skilled trades.  Spokespeople for  Stellantis, the company formed from the merger of Fiat Chrysler Automobiles and Peugeot-maker PSA Group earlier this year, responded with a company statement when asked about the accuracy of the report. “Stellantis continues to be vigilant in enforcing our comprehensive, See Ram Truck Production, Page 21

Overall Rate of Uninsured Drivers Nationally Remains Flat by John Yoswick

Efforts to crack down on uninsured motorists in the U.S. appear to be having little effect, according to the most recent findings from the Insurance Research Council (IRC). In a report updated every three or four years, the IRC in April estimated one in eight drivers on the road in 2019―12.6%―lacked insurance. That’s down from 13% in 2015, but up from 12.3% in 2010. The figure potentially impacts collision repairers in that insured vehicles are more likely to be repaired

after an accident, and because atfault drivers who lack insurance increase insurance costs for those with policies. But state law regulates insurance, including enforcement of insurance requirements for drivers, and the rate of uninsured drivers varies widely by state, according to IRC data. Just 3.1% of New Jersey drivers lacked insurance in 2019―down significantly from 14.9% in 2015― but at the other end of the spectrum, nearly three in 10 drivers (29.4%) in See Uninsured Drivers, Page 16

39 YEARS

AUTOBODYNEWS.COM Vol. 10 / Issue 9 / June 2021

Two Responses to COVID for Collision Repairers— Resilience and Realization by David Roberts, Focus Advisors

In dozens of discussions with shop owners over the past four months, there is a marked divergence among MSOs about their plans for the future. Many who are experiencing a strong rebound in revenues have strong balance sheets and managed their expenses throughout the pandemic, and now have embarked on more aggressive expansion. Others are reconsidering their alternatives post-COVID, as their recovery proceeds more unevenly and more slow-

ly than anticipated. The former are carefully identifying expansion opportunities. One client is in the process of buying a dealer body shop. Another client has committed to building a large greenfield location in a rapidly expanding portion of his market. Among those who are reconsidering their future are some who have been planning their exit opportunities for a long time but have been reluctant to pull the trigger. Others are exhausted: “I just don’t have it in me to roll this rock up the mountain one See Two Responses to COVID, Page 14

Historic Recovery Ahead for U.S. Economy in 2021, Predicts UCF Economist by Josh Miranda, UCF Today

Fueled by a release of pent-up economic demand, unemployment will decline and Americans will spend more money through 2021, says Sean Snaith, renowned economist and director of UCF’s Institute for Economic Forecasting. While consumer spending shrank by 3.9% in 2020 amid the recession, the institute’s first-quarter U.S. forecast predicts spending will accelerate to an increase of 5.4% this year and slow to an increase of 2.6% by 2024. CARES Act funding and the COVID-19 vaccine are quelling fear of the pandemic, prompting consumers to open their wallets and businesses to hire new employees. Snaith maintains a positive outlook on the months ahead, but it could take until 2022 for unemployment to fall back to pre-pandemic levels. “Job growth will help ease the damage to the labor market from the lockdown, but the road to recovery will take at least another year,”

Snaith says. “Consumers are powering this recovery, and as the effects of the pandemic fade, consumer confidence will rise in tow.” In the report, Snaith predicts: Job growth will continue. The growth rate will reach 3.9% in 2021, before slowing to 3.1% in 2022, 0.8% in 2023 and 0.5% in 2024. Unemployment will decline to 4.2% by 2023. The housing market will continue to progress and improve through 2021—new-home construction will rise from 1.38 million in 2020 to 1.56 million in 2021, then decelerate to 1.24 million by 2024. Real Gross Domestic Product (GDP) growth will accelerate from its historic 2020 low to 5.4% in 2021, before easing to 4% in 2022, 2.5% in 2023 and 2.4% in 2024. With economic policy measures largely at a standstill in Washington, D.C., public health initiatives will likely drive the speed of the nation’s economic recovery. The looming See Historic Recovery, Page 16

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CONTENTS

SEMA Show Registration Open

REGIONAL

FordDirect Picks Platform Provider��������������������21

2021 Chicago Auto Show ‘Special Edition’

Fossil Fuel Emergency: U.S. Races to Move Gasoline After a Pipeline Hack�����������������������43

Auto Body Shop Proposed in Wadsworth, OH������8

FTC Examines Anti-Competitive Repair

COVID-19 Survivor Saved by Classic Cars�����������6

Restrictions, Recommends Ways to

Crash Champions Acquires 8 Leading Collision

Expand Consumers’ Options�������������������������40

Repair Shops in Midwest������������������������������12 Police Issue Alert on Cars Stolen from Dealerships in Midwest���������������������������������12 Rivian Purchases More Land for Factory Expansion Ahead of R1T Deliveries�����������������8 Washburn Tech, NABC Recycled Rides, United Way of Topeka, KS, Donate Two Refurbished Vehicles����������������������������������������������������������6

Historic Recovery Ahead for U.S. Economy in 2021, Predicts UCF Economist��������������������1 How to Get Your Customers to Trust You in a Skeptical World������������������������������������������38 Latest COVID-19 Surge Hitting Ram Truck Production at Stellantis�����������������������������������1 LexisNexis U.S. Auto Insurance Trends Report Shows COVID-19’s Impact on the Industry����35 Mitchell 1 Expands ADAS Coverage�������������������35

COLUMNISTS

Mobile 3D Hail Damage System Here����������������12

Anderson - Collision Repair Industry Has a

Now is the Perfect Time to Sell or Trade

New Voice on OEM Safety Inspections�����������24 Phillips - Best Practices for an Effective Health and Safety Program���������������������������28 Yoswick - CIC Speakers Discuss Employment Issues Related to Vaccines, Fire-Related Concerns with Evs����������������������������������������36

Your Car: Kelley Blue Book����������������������������43 Overall Rate of Uninsured Drivers Nationally

INDEX OF ADVERTISERS

Scheduled for July 15-19�����������������������������13

Registration for the 2021 SEMA Show, scheduled for Nov. 2-5 at the Las Vegas Convention Center in Las Vegas, NV, is now open at www.semashow.com/register. The 2021 SEMA Show already has more than 1,500 companies confirmed to exhibit and many more expected. Exhibitors include major automakers and small businesses, as well as iconic aftermarket manufacturers who are enhancing their booths to heighten their presence at

what will be the first industry-wide in-person gathering for the $46.2 billion specialty automotive industry in nearly two years. Registration is offered in three categories—attendee, exhibitor and media—and everyone must qualify to receive a badge and attend. For more information about qualifying documents and the 2021 SEMA Show, log on to www.semashow. com. Source: SEMA

Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Contributing Writers: John Yoswick, Janet Chaney, Toby Chess, Ed Attanasio, Chasidy Sisk, Stacey Phillips, Eric Murphy, Ron Liesch Advertising Sales: Joe Momber, Norman Morano, Johnny Barrett (800) 699-8251 Office Manager: Louise Tedesco Digital Marketing Manager: Bryan Malinski Art Director: Rodolfo Garcia Graphic Designer: Vicki Sitarz Online and Web Content Editor: Abby Andrews Accounting Manager: Heather Priddy Permissions Editor: Randi Scholtes Office Assistant: Dianne Pray

Serving Illinois, Iowa, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin and adjacent metro areas. Autobody News is a monthly publication for the autobody industry. Permission to reproduce in any form the material published in Autobody News must be obtained in writing from the publisher. ©2021 Adamantine Media LLC.

American Icon Automotive Finishes������������������� 8

Kia of Lansing������������������������������������������������� 21

asTech�������������������������������������������������������������� 6

Kia Wholesale Parts Dealers���������������������������� 33

Audi Wholesale Parts Dealers�������������������������� 31

KSI Auto Parts������������������������������������������������� 14

AutoNation Collision Parts��������������������������������� 5

Laurel Auto Group of Westmont����������������������� 17

BMW Wholesale Parts Dealers������������������������ 35

Luther Bloomington Acura-Subaru������������������ 15

Certified Automotive Parts Association������������ 12

Luther Kia of Bloomington������������������������������� 29

Classic BMW MINI������������������������������������������� 20

McGrath City Hyundai������������������������������������� 21

Classic Chevrolet�������������������������������������������� 19

Midwest Parts Group���������������������������������10-11

Classifieds������������������������������������������������������ 42

MINI Wholesale Parts Dealers�������������������������� 34

Columbia Hyundai������������������������������������������� 16

MOPAR Wholesale Parts Dealers����������������26-27

Ford Wholesale Parts Dealers�������������������������� 38

Nissan/Infiniti Wholesale Parts Dealers������������ 39

Gandrud Parts Center���������������������������������������� 9

Patrick Hyundai���������������������������������������������� 29

GM Wholesale Parts Dealers��������������������������� 37

Pro Spot International��������������������������������������� 2

Hawkinson Kia������������������������������������������������ 24

SATA Dan-Am Company������������������������������������ 7

Honda-Acura Wholesale Parts Dealers�������22-23

Sears Imported Autos, Inc������������������������������� 18

Hyundai Wholesale Parts Dealers�������������������� 41

Shaheen Chevrolet Parts Warehouse��������������� 13

Insta Finish ���������������������������������������������������� 44

Subaru Wholesale Parts Dealers���������������������� 39

Kelly BMW������������������������������������������������������ 28

The Sharpe Collection of Automobiles������������� 25

Autobody News P.O. Box 1516 Carlsbad, CA 92018 (800) 699-8251 (760) 603-3229 Fax www.autobodynews.com editor@autobodynews.com

Remains Flat��������������������������������������������������1 Registration Open for CIECA CONNEX 2021�������18 Regulator Stresses Need for Documented Collision Repair Customer Authorization, Updates��������������������������������������������������������31

NATIONAL

Rivian Receives Property Tax Abatement after

AkzoNobel Launches Training Platform���������������8

Exceeding Expectations in Normal, IL������������18

ASA Releases New App�������������������������������������36

SEMA Show Registration Open���������������������������3

ASE Offers Free Training�����������������������������������13

Sherwin-Williams’ Lee Rush Provides Insight

asTech Introduces Live-Chat�����������������������������20 Axalta Launches Mobility Coatings��������������������16 Biden’s Emissions Pledge Comes with Economic Consequences, Experts Warn������������������������40 Chip Shortage Forces U.S. Automakers to Shift Focus to High-Profit Vehicles�����������������39 Collision Repair Industry Veteran and Author Gary Ledoux Writes into the Sunset���������������30 Everything’s Changed: The Pandemic’s Impact Will Be Felt Long After We Stop Wearing Masks�����������������������������������������������4

on Quality Validation Needs���������������������������32 Toyota Acquires Lyft’s Self-Driving Unit for More Than Half a Billion Dollars��������������������42 Two Responses to COVID for Collision Repairers—Resilience and Realization������������1 UAW Suggests EV Tax Credit Should Only Apply to U.S.-Built Cars���������������������������������34 Volkswagen Group Reports Strong Results in Q1 2021���������������������������������������������������41 Working on Cars Attracts Students to Ohio Auto Collision Repair Program�����������������������20

autobodynews.com / JUNE 2021 AUTOBODY NEWS 3


Everything’s Changed: The Pandemic’s Impact Will Be Felt Long After We Stop Wearing Masks by Paul A. Eisenstein, The Detroit Bureau

Visit any North American auto assembly plant and you’ll quickly notice how much things have changed since factories reopened after a two-month shutdown during spring 2020. There are the ever-present masks, of course, and the way things have been reorganized, in break rooms as well as on the line, to minimize the risk of spreading the COVID-19 virus. It’s likely a matter of time until workers can remove their masks. But many of the other changes are likely to be permanent. Indeed, from manufacturing to marketing and retailing, there have been a number of changes brought by the pandemic that are likely to be long term and, perhaps, permanent. And they will impact automotive buyers as well as manufacturers. “The pandemic has just changed the game,” said David Cole, chairman emeritus of the Center for Automotive Research. “Just about every automaker,” he said, will be changing business practices “to hedge against unexpected situations, whether an earthquake or a pandemic.” The pandemic has played out in plenty of unexpected ways. That includes the ongoing shortage of semiconductors  forcing almost every manufacturer to slow―and in some cases temporarily halt―production. With millions of Americans in lockdown and even more working from home, chip vendors face unprecedented demand from manufacturers of web cameras, videogame consoles and cellphones, leaving automakers high and dry. Experts warn the situation could continue through the end of this year. It’s highlighted the vulnerabilities of an automotive manufacturing system that has, during the past 30 years, evolved into a just-in-time process mandating minimum inventories. In many cases, factories receive parts just minutes before they’re needed on the line. When it all works it can hold down costs and give automakers more control over production schedules―while also improving quality. When it fails, well, automakers can be forced to shut plants down.

Floods, blizzards, even earthquakes can briefly disrupt the JIT system. Typically the impact of those events is has been brief, the semiconductor shortage reveals the logistics behind lean inventory systems also can come crashing down for an extended period. At a recent event hosted by Automotive News, Ford CEO Jim Farley admitted he has just begun to recognize the challenges of maintaining thin factory inventories, adding, “Most other industries use safety stock for critical components like chips.”

On average, U.S. dealers have between a 60- to 75-day supply of every model they sell on their lots. That approach is costly and creates a variety of problems. A large dealership can spend tens, even hundreds of thousands of dollars a month in inventory holding costs. Manufacturers must guess what vehicles consumers will buy months ahead, and if they’re wrong they usually wind up paying for their mistakes in the form of hefty incentives. That became especially apparent during the run up to the Great

Weld curtains hang across the door line at FCA’s Sterling Heights (Michigan) Assembly Plant to protect employees from the spread and transmission of COVID-19

While the just-in-time system isn’t likely to be abandoned, analyst Cole and others expect the industry to make some big changes. There’ll likely be more padding to prevent unexpected disruptions. And automakers may have to set up “safety stock” of critical goods, such microchips, more like the way they handled things in the pre-JIT era. Ironically, we’re likely to see big cuts in inventory at the other end of the automotive chain. Since the industry’s earliest days, manufacturers have pushed dealers to maintain a large stock of vehicles. The argument is American car buyers want instant gratification. Unlike motorists in Europe and other parts of the world who are willing to wait for their vehicle to be delivered from the factory, Americans expect to go shopping and then drive home in their new model the same day.

4 JUNE 2021 AUTOBODY NEWS / autobodynews.com

Recession, some products carrying givebacks of more than $10,000. Such profit-eating incentives played a major role in driving General Motors and then Chrysler LLC into bankruptcy in 2009. “I’ve been saying for years that overproduction” to keep showrooms overstocked “has been ruinous for the industry,” Mike Jackson, the CEO of AutoNation, America’s largest auto retail chain, told TheDetroit Bureau.com. If anything, the pandemic has led to a massive reduction in dealer stocks, J.D. Power reporting U.S. retailers had about 1 million fewer vehicles in stock during the first quarter than they normally would. The pandemic factory shutdowns created the shortage, but the ongoing microchip shortage means manufacturers can’t refill pipelines as quick as they’d hoped. And, it turns out, that’s a good thing.

AutoNation and most of its retail competitors posted their biggest profits ever during the first quarter of this year. Clearly, the fact U.S. buyers are hungrier than ever for new vehicles has helped. And what dealers and manufacturers have both discovered is that “buyers were willing to wait,” according to Jackson, sometimes as long as six weeks to take delivery of the vehicles they sought. It has helped that the industry has been tinkering with the retail process. Most automakers have developed sophisticated new online shopping tools. The key has been to let buyers control the purchase process, whether they went to do everything in the showroom or shop entirely online, said Jackson and other dealers. AutoNation, in particular, has made it possible for customers to not only track inventory on dealer lots but also vehicles in transit from factory to showroom. So, while automakers are rushing to rebuild the inventories of especially popular models, like the Toyota RAV4 and Ford F-150, customers shouldn’t expect to find acres of unsold vehicles at most showrooms going forward. “We’ll never go back to levels of inventory we had pre-pandemic because we’ve learned we can be much more efficient,” GM Chairman and CEO Mary Barra said during a May 5 earnings call. If the first quarter is any indication, this approach will prove to be a lot more profitable for manufacturers and retailers alike. But consumers should expect to not only be in for a wait when they’re ready to buy but also to pay a bit more. Lower inventories mean lower factory incentives and less lucrative discounts from dealers desperate to clear out inventory, said Cole. On the positive side, leaning out the marketing and distribution system could cut overall costs, money that manufacturers could pass on the consumers in the form of lower sticker prices. We thank The Detroit Bureau for reprint permission.


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Washburn Tech, NABC Recycled Rides, United Way of Topeka, KS, Donate Two Refurbished Vehicles On May 7, two deserving Topeka, KS, recipients experienced a life-changing event—the presentation of vehicles to provide them independence and the ability to work and take care of their families—thanks to the instructors and students at Washburn Tech, along with the National Auto Body Council (NABC) Recycled Rides. The presentation was held at the United Way of Greater Topeka, which selected the deserving recipients. The vehicles were provided by two private donors. Washburn Tech program instructor Eric Showalter and his wife Sharlene were joined by Dr. Jerry Farley and Dr. JuliAnn Mazachek, also from Washburn Tech, and Bill Garoutte, president and CEO of the NABC. The NABC Recycled Rides presentation was a milestone for Washburn Tech, marking the 29th and 30th vehicle donation for them. Washburn Tech leads the country in NABC Recycled Rides presentations among technical schools.   “What an honor to be here today to celebrate this tremendous

achievement for Washburn Tech, Eric and Sharlene Showalter and their students,” said Garoutte. “For more than a decade, the team at Washburn Tech has shown an incredible commitment to the NABC Recycled Rides program, the opportunity it provides their students to learn in a hands-on setting and the enrichment of helping others in need.” The recipients were Natalie Rodriguez and Amber Strait. Rodriguez, who received a 2006 Chevrolet Equinox, is a soonto-be mother of two. An assistant manager at a retail store, she has relied on others for transportation. Her work shift often ends long after the bus system no longer runs, resulting in long waits until friends can come to pick her up from work. This gift is life-changing in many ways, but likely the most important is allowing her more time at home with her soon-to-be two children instead of waiting for others to pick her up. Strait, who received a 2006 Nissan Maxima, suffered unimaginable loss at the age of 10 and has experienced a life of ups and downs.

She entered the CaRE program with the Topeka Rescue mission and began an internship with the City of Topeka. She was hired full-time by the city but was laid off after six months due to the pandemic. She went back to the mission for a month before she found another job, one that she still holds today. She will celebrate her one-year work anniversary there next month. “We are so proud to be able to present these two vehicles today on behalf of our Washburn Tech students and team members,” said Eric Showalter. “We began work on these two vehicles before COVID, and had to put the presentation on hold for a year until it was safe for everyone to return to work and school. That makes today even more memorable. Congratulations to our students for a terrific job on these vehicles, and congratulations to Natalie and Amber.” “We couldn’t have wished for a better event and a better morning to come back to the good work of NABC Recycled Rides,” said Jessica Lehnherr, president and CEO of the United Way of Greater Topeka.

“The driveaway is always the icing on the cake for a process that takes so many people working on the cars, collecting the applications and the toughest work of all, choosing just two recipients. Every year the students amaze us with their skills and their compassion. We are so grateful that Washburn Tech continues to include United Way of Greater Topeka in this uplifting effort.” NABC Recycled Rides is a unique program in which businesses representing all facets of the collision repair industry team up to repair and donate vehicles to individuals and families in need of reliable transportation. Since the inception of the NABC Recycled Rides program in 2007, members of the NABC have donated more than 2,600 vehicles valued at more than $36 million.   Additional partners in the NABC Recycled Rides presentation included 1-800 Charity Cars, State Farm Insurance, Performance Tire and Wheel, O’Reilly Auto Parts and Kansas Automotive Warehouse. Source: NABC

COVID-19 Survivor Saved by Classic Cars by Steven Symes, Motorious

Gerald Krogmeier of Fort Madison, IA, said his long-standing love of classic cars  helped pull him through a brush with death at the hands of COVID-19. A year ago, the man was in thehospital and the outlook was grim. Doctors told his wife there was only a 10% Krogmeier would survive as he was put on a ventilator. Thankfully, he pulled through, and credits the classic American cars he loves  for motivating him through the tough times. Like many other gearheads, Krogmeier loves to  restore old cars. That passion has gotten him through ups and downs in life, and it also gave him something to look forward to as his outlook was uncertain while in the hospital. “That’s our goal, to save old stuff from being crushed,” said Krogmeier. Like his cars, the man is a survivor. Krogmeier points out at this point in his life, all he can cling to is his love of cars and associating with others who share his deep passion. He’s certainly not the only

gearhead who says the hobby has saved them from a horrible fate, and he won’t be the last.

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Even after staying in the hospital for five months and going through seven months of physical therapy, Krogmeier still has a long way to go on the path to recovery. He says his voice has never been the same. Walking unassisted isn’t possible, either, and even then the man claims to “fall over a lot.” Doctors still aren’t sure he will ever fully recover, but Krogmeier sounds hopeful. What keeps driving him forward is the chance to show off his classic vehicles at car shows. He and his wife said they usually attend about 50 shows a year, something they hope to keep doing. We thank Motorious for reprint permission.

6 JUNE 2021 AUTOBODY NEWS / autobodynews.com

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AkzoNobel Launches Training Platform AkzoNobel on May 4 announced the launch of its new Acoat Selected digital training platform containing business services content relevant to end-user customers. This training content was previously only available to Sikkens customers through faceto-face instruction by a services consultant at the customer location. The digital platform is now also available to AkzoNobel’s Lesonal customers. The digital training platform contains seven content categories, most relevant to collision repair shop owners/managers and production managers, including process improvement, human resources, marketing, technical, sales, finance and more. The training fulfills I-CAR continuing education credit requirements and is free of charge for AkzoNobel’s Sikkens and Lesonal customers. Access it at www.AkzoNobelTraining.com. Source: AkzoNobel

Auto Body Shop Proposed in Wadsworth, OH by Jonathan Delozier, The Medina Gazette

A new auto body shop could be opening on College Street in Wadsworth, OH, in the near future after project specs were approved by the Wadsworth Planning Commission. Integrity Collision has shown interest in purchasing space at 487 College St. currently being used for commercial printing. The company operates another Wadsworth auto shop at 869 Broad St. “The new applicant would like to convert this to an auto body repair shop,” Planning and Zoning Director Jeff Kaiser said April 27. “Automotive repair uses are permitted in the C-3 district as long as they’re not conducted within 50 feet of any residential zoning district.” Kaiser showed residences do border the College Street facility on the south and southwest sides, referring to homes on Westgate and Parkview avenues. He said the proposed auto body shop is roughly 50 feet away from shared property lines. “The code itself is not clear where the 50 feet is measured from,”

Kaiser said. “Is it property line from property line? Is it where the use takes place on the site to the property line? That’s how I’ve interpreted it since everything is going to take place within the building itself. The building is about 50 feet away from the shared property line, so the minimum separation is addressed. “I think the commission needs to remember the zoning code was really written back in the ‘50s and ‘60s when there was more of an emphasis on separating quote-unquote ‘uses that weren’t compatible with each other,’” he added. “I think technology and the ability to contain sounds and fumes have kind of changed that a bit.” Nearby existing commercial establishments including auto repair services were also cited by Kaiser in his presentation. Plans also include a fence that would be installed between the aforementioned homes and a vacant lot to the south of the building, where the business would store vehicles. Fencing extending west toward Westgate Avenue could be added when and if the business expands its parking, Kaiser said.

“I could see a situation where we want to extend this fencing to enclose the entire vehicle parking-slash-storage area,” he said. It also was shown that trees and shrubs on the south side could be crossing into residential property. “The thought was to leave whatever is there and enhance it further with fencing,” Kaiser said. “That’ll be especially important in the winter months when a lot of those trees go dormant and lose their leaves.” Integrity Collision’s Crystal Van Nostran said a property line survey had been scheduled for May 5. “I think the commission wants to continue to be good neighbors to the neighbors that have been there for a long time and to maintain as much screening as we can,” said Ward 4 Councilman Bruce Darlington. The Medina County Building Department also will review project specifications soon, according to officials. We thank The Medina Gazette for reprint permission.

Rivian Purchases More Land for Factory Expansion Ahead of R1T Deliveries by Maria Merano, Teslarati

Rivian has already set plans in motion to expand its existing manufacturing factory in Normal, IL. The EV automaker also purchased acres of land with further expansion in mind for the future. Rivian submitted a resolution for Normal’s Town Council to conditionally approve an amended site plan. The council voted 6-0 in favor of Rivian’s proposal. The resolution proposes building expansions and the addition of a charging canopy. Rivian’s amended site plan also included a new entrance to College Avenue to align with the company’s driveway. Rivian proposed two building additions to its 510-acre property, formerly known as the Diamond-Star Mitsubishi plant. One building will cover 45,000 square feet, and the second will take up 51,000 square feet. The EV automaker also proposed a 60,000-square foot charging canopy to charge Rivian vehicles fresh from the production line. Illustrations revealed that Rivian plans to

install solar panels on the canopy. According to town council records, Rivian recently purchased 380 acres of unannexed farmland across Rivian Motorway. Rivian petitioned to have the parcel of land annexed to the Town of Normal. However, properties annexed to the Town of Normal are automatically assigned agricultural zoning. So, Rivian also requested the town council rezone 320 acres of the farmland to M-2 general manufacturing to expand for industrial use. After some discussion, the council approved the annexation of Rivian’s 380-acre farmland to the Town of Normal and the rezoning of 320 acres to M-2 general manufacturing. Based on the recent Normal Town Council meeting, Rivian is eager to grow and expand after  R1T deliveries  start in June. Rivian seems to be thinking beyond 2021 and already has plans for the next few years after deliveries kick off in a month.  We thank Teslarati for reprint permission.

8 JUNE 2021 AUTOBODY NEWS / autobodynews.com

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Crash Champions Acquires 8 Leading Collision Repair Shops in Midwest Crash Champions, LLC, one of the nation’s largest independent collision repair companies, closed out April with the acquisition of eight leading collision repair shops in Illinois, Missouri, Ohio and Wisconsin. These top-performing shops complement Crash Champions’ earlier acquisition of nine additional collision repair shops located throughout the vibrant Midwestern market at the start of 2021. In East Moline, IL, Crash Champions completed the acquisition of Collision Repair Center, Inc. This acquisition strategically followed the company’s 2020 acquisitions of Chicago Collision, DuPage Auto Body and Albany Auto Body in the greater Chicago area, as well as Arnold’s Auto Body, Inc. in nearby Davenport, IA. Surrounding Springfield, MO, Crash Champions completed the acquisition of Branson Collision Center, which boasts 20,000 square feet across its facility. This acquisition continued Crash Champions’ expansion into the Missouri market, strategically supplementing the company’s earlier acquisitions of Dodson-Williams Automotive and French Davis

Collision in 2020. In Ohio, the company acquired three Excalibur Auto Body collision repair shops located across Cleveland, Medina and Rocky River. Crash Champions entered the Cleveland market in January through the acquisition of three earlier shops in the Excalibur platform, located in Streetsboro, Chagrin Falls and South Euclid. These latest acquisitions of Excalibur Auto Body shops have created one of the largest collision repair companies in the greater Cleveland metro area. Crash Champions first entered Ohio in Columbus with its successful acquisitions of Auto Body Collision and Glass and Fred Rieser in 2020. In Wisconsin, Crash Champions announced the acquisition of two Quality Auto Body, Inc. repair shops, located in Milwaukee and Mequon and boasting 27,000 square feet across the two facilities. In nearby Slinger, WI, Crash Champions also completed the acquisition of D&M Auto Body. These three acquisitions strategically follow the company’s 2020 acquisitions of Silver Spring Automotive in Milwau-

kee and Gillette’s Collision Center in Waukesha. “Through these strategic acquisitions, Crash Champions will be better positioned to serve the greater Midwestern markets as we continue on this remarkable growth trajectory,” said Matt Ebert, founder and CEO of Crash Champions. “All eight of these repair shops will now enjoy the opportunity to further professionalize, improve operations and drive top-line growth and profitability under the Crash Champions banner. “We look forward to learning from these remarkable shops—who share our mission of unparalleled customer service and industry excellence—to create even greater value for our customers, employees and shareholders for years to come.” Crash Champions is one of the largest independent collision repair companies in America with more than 900 team members serving locations across the greater-Chicago area; Wisconsin; Davenport, IA; Kansas; Missouri; Ohio; and Southern California. For more information, visit www.crashchampions.com. Source: Crash Champions

Mobile 3D Hail Damage System Here Chief Collision Technology has the collision industry covered this hail season with the introduction of the industry’s first mobile 3D hail damage scanning system. The Constellation, a complete workflow system, tracks hail-damaged vehicles throughout the entire process from first notice of loss, through the claims process and finally to vehicle repair. The system is now available and gives insurance providers, collision shops and fleet managers a complete hail management repair solution. After a major hail event, the mobile system is deployed and can be set up quickly at any location within 24 to 48 hours, and can accommodate everything from small passenger vehicles and SUVs to pickup trucks. Learn more at https://chieftechnology.com/constellation/ Source: Chief Collision Technology

Police Issue Alert on Cars Stolen from Dealerships in Midwest Thieves have stolen more than 100 vehicles this year at dealerships from southeast Wisconsin to northwest Indiana, nearly triple the number stolen in all of 2020. Highland Park, IL, police on April 20 issued an alert to help slow the efforts. Car rental agencies and service shops also have been the targets of thieves, who are stealing vehicles from parking lots and from inside buildings. “These thefts have occurred by subjects breaking into the buildings and gaining access to vehicles which have keys left inside or are otherwise accessible. This is commonly found in the service departments of the dealerships,” said Brian Bodden, a detective with the Highland Park Police Department. Thefts in the area have climbed annually since at least 2017, when just seven vehicles were taken from dealerships in the same area. Police have made arrests, and Bodden said they have recovered some vehicles, sometimes re-tagged out of state.   “The offenders have also obtained re-programmers and are tar-

geting high-end Dodge and Jeep vehicles. It is believed this crew is searching social media and other online platforms,” Bodden said. Police offered several tips to help thwart thieves:  • Secure all keys  • Cut power to overhead service doors  • Block service doors with vehicles or other similar items  • Make sure alarms are functional and in working order. Call police for all overnight activations  • If video surveillance is present, check to make sure that cameras are operational and focused on building areas from which entry can be gained. “The technology that was created specifically to eliminate car thefts, such as key fob technology, is now being used against us,” a Chicago Police Department official said to reporters in April on a day when five stolen cars were recovered in the city, and 12 people—about half of them teenagers—were arrested. Source: Chicago Automobile Trade Association

12 JUNE 2021 AUTOBODY NEWS / autobodynews.com

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2021 Chicago Auto Show ‘Special Edition’ Scheduled for July 15-19 Chicago Auto Show officials announced May 4 they received approval from state and city officials to host a special edition of the show July 15-19 at McCormick Place. The Chicago Auto Show will be one of the McCormick Place’s first live, in-person events since the COVID-19 pandemic shutdown. The special edition show will move to the West Building of the McCormick Place complex and expand outdoors to take advantage of July weather. With the show’s move, attendees will now experience more outdoor test drive opportunities, test tracks and technology demonstrations, which will take place along Indiana Avenue and surrounding city streets. Auto show fans will be able to enjoy favorites like the Camp Jeep and Ram Truck indoor test tracks as well as Subaru’s popular pet adoption event—all of which will be executed in a safe and healthy manner. Ford has also embraced the show’s outdoor space availability with experiences featuring the new Bronco, Bronco Sport and all-electric Mustang Mach-E SUV. “We’ve been working with Mc-

Cormick Place officials for months on an opening plan, and very early on they saw that our show may provide a pathway to re-opening the facility,” said Chicago Auto Show General Manager Dave Sloan. “We stand committed to providing a safe environment for all involved and will carefully adhere to the health and safety protocols and guidelines set forth by city and state officials. “McCormick Place is an important economic engine for our city and state, and we take very seriously the responsibility that comes with helping to get it running again.” The show’s 2021 plan begins with an electronic ticketing process. Tickets for the 2021 Chicago Auto Show will be sold exclusively online. Attendees will be able to select their preferred attendance date and time using timed entrance windows designed to carefully control crowd capacity throughout each event day. Show organizers will also intentionally regulate the number of attendees throughout the day to control the number of people on the show floor at any given time. Attendees will also have the

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opportunity to pre-register for onsite activations including indoor and outdoor test track and ride-and-drive events. This will allow attendees to schedule participation in various show attractions ahead of time, diminishing lines and reducing congestion within exhibits. “While we believe February is the right time for the Chicago Auto Show to have its biggest impact on the industry and the area economy, we’re thrilled to be able to experiment with the July dates,” said Sloan. “The timing has allowed us to get creative and try new things and the automakers have really embraced it.” Among their new ideas, Chicago Auto Show organizers are seeking approval on plans to transform Indiana Avenue into an automotive street festival in the evening of most show days featuring local food, entertainment and, of course, shiny new cars and trucks. The 2021 Chicago Auto Show special edition will run July 15 through July 19. Ticket information and important show updates can be found at ChicagoAutoShow.com. Source: Chicago Auto Show

The ASE Education Foundation has partnered with several auto care industry companies and organizations to offer free e-learning and online training resources for its auto, truck and collision instructors and students. Several car manufacturers and auto parts suppliers have provided free access to training and online educational resources. In addition, some of the top training providers in the industry are offering access to online classes and resources. Most recently, CARQUEST Technical Institute (CTI) and WORLDPAC Training Institute (WTI) made available unlimited access to their virtual classrooms so that career and technical instructors can share the information with their students, and ASE itself is providing free access to its Introduction to Automotive Service e-learning program to all students in ASE-accredited programs. Visit https://www.aseeducationfoundation.org/elearning. Source: ASE

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Continued from Cover

Two Responses to COVID more time. COVID really took it out of me.” Slow recovery seems to be a common thread: “I’m finally ramping up, but at this rate it will take me over a year to get back to where I was.” COVID may be the straw that broke the camel’s back for some. Between pressures from insurance companies (including being dropped by State Farm or USAA), additional investments for certifications and new equipment, and the retirement of senior technicians, several operators have decided that it’s time to let somebody else take over the business. For some of our clients, the hard decision to sell has already been made. Now they’re spending their time preparing their companies for a positive exit with a more defined future for their technicians and managers. One operator who is still sitting on the fence is concerned an acquirer may not treat his employees as well as he does. Another is worried because his children have no interest in the business, the family name on the door will be lost forever. Another is uncertain about whether he will ever regain his pre-COVID profitability even though his revenues are coming back strongly. For operators who are reengaging positively with their businesses, many have taken the opportunity during the pandemic to revamp their operations, restructure their teams, improve their training and upgrade their facilities. One of our clients improved his margins by two points during COVID. His comment was, “I finally got around to doing things I’d wanted to do for 15 years.” Conclusions Coming Out of COVID Undoubtedly, savvy operators are recognizing that staying in the industry will require more capital, more scale and better leadership. Some have very frankly recognized their own limitations and decided to add senior management with capabilities greater than their own. One of the questions we get is, “How should I compensate a senior leader with better management skills than

me?” Our response is to never be afraid to pay somebody really well if they are contributing more value to the business than you can do by yourself. A smart operator who intends to create equity value in the business to be harvested in the future can’t do it alone. So be prepared to pay a generous salary and benefits as well as some equity or stock appreciation rights to that new leader. Another area where operators are finding increasing need is in finance. For those growing beyond the $20 million mark in revenue with six or more shops, really competent and experienced financial assistance is a necessity. One option is to outsource contractors. Part-time CFOs are an alternative. A really well qualified controller or CFO can relieve the owners of many administrative and financial burdens in a rapidly growing organization. Questions Both expanding operators and those who are considering exiting the business are asking many of the same questions. What about valuations?  How much will my COVID numbers hurt me? Will I be judged valued on my 2019 numbers or my 2020 numbers? In general, all acquirers look primarily at the trailing 12 months revenues and EBITDA. However, our firm has been successful in helping acquirers understand that full year 2019 and first quarter 2021 are fairly indicative of the capability and health of the business. In looking ahead to 2021, business performance in 2019 is a fairly reliable indication of where the business will likely return or exceed. However, as 2019 falls farther back in the rearview mirror, we think valuations will be more based on 2021 results and their progression. How do acquirers look at EBITDA during the PPP loan period? PPP loans can be challenging for acquirers to analyze. Their impact on the business is admittedly hard to tease out. Highlighting excess labor that was retained during COVID in accordance with the PPP loans has been a successful way for our clients to engage with acquirers. However, we have also been

14 JUNE 2021 AUTOBODY NEWS / autobodynews.com

successful treating PPP (and EIDL) loans as grants, and thus income, which tend to more than offset the extra costs imposed by their forgiveness criteria. Is it a good idea to grow right now? Yes. We think there are opportunities in just about every market to find and acquire other operators who are struggling or who just want to exit. By acquiring another operator, you get immediate cash flow and (hopefully) EBITDA, a trained staff and an operating business.  Fixing an underperforming business isn’t simple but if the core staff and relationships are there, it’s a more immediate return than starting from scratch. A brown or greenfield startup is lots of fun and challenging with infrastructure costs, hiring staff, obtaining licenses and establishing new DRP relationships, but EBITDA is slow in developing.  For those operators who are acquiring, we’ve also seen creative methods for financing the purchase, including seller financing and SBA loans that wrap both the business and the real estate into one loan.

What have we seen among acquirers during the COVID period? Almost every large acquirer paused briefly to reassess their own acquisition criteria and to stabilize their operations. Caliber, which has slowed its pace of acquisitions over the last year and a half, temporarily suspended rent payments to a number of its landlords. It also paused or eliminated some internal and external initiatives. However, Caliber restored both back rent and current payments to landlords in the midst of the pandemic and has not wavered since. Several of the more seasoned super-regional acquirers, such as Crash Champions and Classic Collision, hardly slowed at all. And new entrants, Quality Collision and CollisionRight, launched in the midst of the pandemic. CARSTAR and FIXAUTO USA continued to add new franchisees although at a slower pace than pre-COVID. Smaller operators such as Mitchco, now up to four locations in Florida, G&C with 19 locations in Northern California, and several See Two Responses to COVID, Page 18

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Continued from Cover

Uninsured Drivers Mississippi were driving uninsured. That was up from 23.7% in 2015, which doesn’t bode well, given the

2017, but saw the percentage of uninsured drivers there rise from 20% in 2015 to 23.7% in 2019. More than one in four drivers in Alabama in 2007 lacked insurance, but tougher state regulations brought that down to 18.4% in 2015. State

The Insurance Research Council issued a report this year showing the rate of uninsured drivers ranges from a low of 3.1% of drivers in New Jersey to a high of 29.4% in Mississippi

state implemented an insurance verification system for traffic stops in 2017 and further toughened penalties for driving uninsured in 2018. Tennessee similarly launched an insurance verification system in

regulators earlier this year said they expected that had dropped still further, to 10% or less by 2019. But the IRC report pegs the number as actually having risen to 19.5% that year. North Dakota also saw a big

Continued from Cover

ic-forecasting. The Institute for Economic Forecasting strives to provide complete, accurate and timely national, state and regional forecasts and economic analyses. Snaith is a national expert in economics, forecasting, market sizing and economic analysis who authors quarterly reports about the state of the economy. Bloomberg News has named Snaith as one of the country’s most accurate forecasters for his predictions about the Federal Reserve’s benchmark interest rate, the Federal Funds rate.

Historic Recovery possibility of future lockdowns, vaccine distribution concerns and the nation’s understanding of the COVID-19 virus will have the greatest effect on the strength of the rebound. Interest rates are similarly projected to remain near zero until mid2024, when the Federal Reserve will slowly begin reversing the rate cuts made during the COVID-19 recession. The Fed’s delay to increase interest rates will help fuel investment growth once the pandemic subsides. “This is all uncharted territory for monetary policy,” Snaith says. “Washington D.C. has been focused on politics more so than the economy and there is no previous playbook on how best to carry policy forward.” For the complete U.S. report from the Institute for Economic Forecasting, visit business.ucf.edu/ centers-institutes/institute-econom-

We thank UCF Today for reprint permission.

spike in uninsured motorists, from 6.8% in 2015 to 13% in 2019. Idaho last summer implemented increased efforts to crack down on uninsured drivers, which comprised about 8.2% of the state’s drivers in 2015, but jumped to 13.2% by 2019. Arkansas also began cracking down on uninsured drivers last year. A new law that went into effect in January 2020 requires a state agency to notify residents whose registered vehicles appear to lack insurance that they have been fined $100 for the lapse. If they don’t provide proof of insurance within 30 days, their vehicle registration can be suspended. By the end of last August, the state had mailed 179,126 such letters to Arkansas drivers. The state hopes to reduce its rate of uninsured drivers, which stood at 19.3% in 2019, according to the IRC. Two large states did see significant declines from 2015 to 2019 in uninsured driving. Florida fell from having 26.7% of drivers uninsured in 2015―the highest in the nation― to 20.4% in 2019, and Texas cut its rate nearly in half, from 14.1% in 2015 to just 8.3% in 2019.

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16 JUNE 2021 AUTOBODY NEWS / autobodynews.com

Axalta, a leading global supplier of liquid and powder coatings, on April 22 announced the launch of Axalta Mobility Coatings, a rebranding of its Transportation Coatings business unit. The redefined business will focus on supporting the accelerating demand for e-mobility and the evolving coatings needs of established and emerging light and commercial vehicle original equipment manufacturers (OEMs), fleet owners and shared mobility providers. As part of the rebranding, Axalta Mobility Coatings is unveiling a new solutions portfolio that brings together the best of Axalta’s experience and innovation into three categories: Core Mobility Solutions, Advanced Mobility Solutions and Axalta Advantage. For more information about Axalta Mobility Coatings, visit www.axalta.com. Source: Axalta

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Registration Open for CIECA CONNEX 2021 CIECA announced early bird registration is now open for its annual conference, CONNEX 2021. The in-person event is being held Sept. 14-16 in Charlotte, NC. In addition to a line-up of top industry speakers, there will be networking opportunities, a vehicle gifting by the National Auto Body Council (NABC) as part of its Recycled Rides program and a tour of the NASCAR Hall of Fame. All industry stakeholders, including CIECA members and non-members, are invited to attend to hear about current and future industry challenges and opportunities; gain timely, relevant business and technical knowledge; and take part in learning opportunities for all industry segments. For more information about CIECA CONNEX, including sponsorship and speaking opportunities, visit https://cieca. zohobackstage.com/CONNEX2021#/?lang=en Discounted room rates at the Hilton Charlotte University Place are available now. Source: CIECA

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Two Responses to COVID others took advantage of local opportunities to continue growing their footprint. In short, the additional competition for quality MSOs has kept buying interest and valuations high despite the pandemic. People ask us what we are paying most attention to in the industry 1. OE requirements and certifications. OEMs are increasingly recognizing that access to technologically complex parts and certifications gives them more ways to improve their OE parts sales and margins. A $4,500 headlight with a patented sensor included is a not-so-subtle way to insure parts profitability. 2. Consolidation―discussed above. We expect the acceleration of consolidation to continue. 3.  Diversification.  Caliber is now emphasizing its diversification into glass, service and ADAS work. LKQ

has added ADAS services to its offerings and is buying up smaller ADAS firms. LKQ now claims with the acquisition of the Elitek subsidiary, it’s the largest U.S. provider. Many regional operators are creating their own ADAS companies as well. 4. Changes in DRP networks. Painful reductions in the State Farm and USAA DRPs, GEICO shifts and Progressive expansions have really impacted both large and smaller MSOs. Replacing State Farm volumes with smaller DRPs cannot make up the difference. 5. Changes in insurance market share.  When one considers the remarkable changes among auto insurers over the last 10 years, the most surprising and far-reaching impact is how the direct marketers―GEICO and Progressive―have grown their total market share. These two companies have grown from 16% to 27% of all premiums written in the U.S. in a decade. The top 10 insurers have grown to almost 75% of all vehicles insured. More and more clout is moving to fewer and fewer insurers.

What we expect to see for the rest of the year Miles driven: We think travel by car will come roaring back. People are so anxious to move around the country. They still can’t travel to Canada or Mexico very easily so expect summer travel in the U.S. to be up above 2019 levels. Many more transactions:  With two active national consolidators, five super-regional MSOs and at least six private equity firms still looking for platforms, we expect to see many more transactions in 2021 and 2022. Much of the volume will be driven by the expansion plans of these acquirers. Some will be driven by potential tax rate increases both at the national and the state level. Many will be driven by retirements of operators. And sadly, many will be driven by the exits of struggling businesses. We thank Focus Advisors for reprint permission.

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Rivian Receives Property Tax Abatement after Exceeding Expectations in Normal, IL by Maria Merano, Teslarati

The Normal, IL, Town Council approved a property tax abatement for Rivian, noting the company exceeded expectations. In 2016, the town council approved an economic incentive agreement with Rivian Automotive relating to the company’s location and operation of an automobile manufacturing facility, formerly owned by Mitsubishi. As per the agreement, the Town of Normal—and other affected taxing bodies—agreed to abate Rivian’s property taxes for five years, provided that the EV automaker met specific criteria. Rivian was given the following benchmarks for reductions in its 2020 property taxes, paid in 2021:  • Invest at least $32 million in project expenses  • Employ 300 full-time employees with an average salary equal to greater than the average weekly salary in McLean County as measured by the Bureau of Labor Statistics of the U.S. Department of Labor According to the Economic Development Council’s Patrick Hoban, Rivian met 2020’s benchmarks and

the following year’s abatement criteria. “The original plan, as you know, was to create about 500 jobs, and I think they’re about at 1,300,” Hoban noted. Zach Dietmeier, Rivian’s senior manager of plant communications in Normal, not so subtly hinted the EV automaker actually employed more than 1,300 people thus far. He said Rivian surpassed 1,400 hires as of May 3, noting the company adds 50 to 80 employees per week at its current pace. Dietmeier also said Rivian has contributed 1,800 construction jobs at its peak to Normal, separate from the jobs directly linked to the company. Councilwoman Karyn Smith added Rivian exceeded its expected investment of $32 million by 2020 10 times over. As of May 3, Rivian has invested $300 million in the town of Normal. The town council seemed pleased with Rivian’s progress and adherence to the abatement agreement. Following the unanimous approval for the property tax abatement, council members approved Rivian’s plans to expand its manufacturing factory.  We thank Teslarati for reprint permission.

18 JUNE 2021 AUTOBODY NEWS / autobodynews.com

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Working on Cars Attracts Students to Ohio Auto Collision Repair Program by Darryl McGee, Xenia Daily Gazette

For Greene County (Ohio) Career Center auto collision repair teacher Rick Burton, it is fairly easy to describe how his program attracts students. “Kids get drawn in by people, especially family, who are working on cars,” Burton said. GCCC’s auto collision repair program consists of various aspects. Body work and paint are two of the most important skills students will learn. “We teach them to weld, basic mechanical work, ton of soft skills and estimating,” Burton said. “We get into various forms of restoration work.” One of the highlights for students who participate in the program is getting to put their welding and mechanical skills to work in other labs on GCCC’s campus. According to Burton, interactions with customers play a huge role in the field of auto collision repair. As a result, he prepares students for such situations. “Whenever possible, we put students in live situations with customers,” Burton said. Burton said part of the learning process for the auto collision repair industry requires students to become involved with I-CAR, a national accreditation program. “Students leave GCCC with two platinum certifications,” Burton said. “The credentials in this program are adult credentials.” Entry-level career opportunities are available for students in Burton’s program. He constantly receives calls requesting assistance for helper positions of body technician and painting.

During their senior year, students in the program are able to participate in work placement. During the lunch period, students will leave the school and work the rest of the afternoon. For further education, students work one-on-one with a technician.

Greene County Career Center auto collision repair students Hannah Graves, left, and Dailyn Arnold, right.

The new building and its accompanying facilities mean a lot to the advancement of the program. “We went from a 40-year-old paint booth to three paint areas. The areas are top of the line and state of art facilities,” Burton said. “Students are learning in the best possible areas and with the best tools. My paint booth is the newest in town.” Fairborn High School junior Hannah Graves took a unique approach when deciding to become a part of the program. Originally, she was deciding between two different labs. However, visits to GCCC changed her mind. “When I came for CAD Days and Greene Day, I felt like it was something that I could get involved in. It was something about the lab that drew me in,” Graves said. Graves added auto collision repair is a male-dominated field, which also encouraged her to become involved in the program.

Xenia High School junior Dailyn Arnold shared the same sentiment as Graves. With the field being so male-dominated, she wants to make a difference. Plus, the field does not contain many women of color. Arnold wants that to change. Arnold’s dad is involved with the mechanical side of auto repair. However, that area did not appeal to her. Her path to the program mirrors Graves’ path. “I was between two labs. On Greene Day, I visited Mr. Burton’s lab. Something clicked for me,” Arnold said. Being a student at GCCC and in the auto collision repair program has completely altered the outlook on Arnold’s future. “Before coming to GCCC, I was not thinking long-term. I was thinking about working in a factory and paying bills,” Arnold said. “After I came here, my long-term outlook changed. It allowed me to take my career and future more seriously.” After graduating from GCCC, Arnold hopes to get an internship at

a parts shop. One goal is to become a body technician. Graves believes the program will have a major positive effect on her life. First and foremost, the program enables Graves to plan her future. Her long-term goal is to be the manager of a shop she owns. “In the short-term, I want to get an internship to get my foot in the field. I want to make people realize they want me,” Graves said. “Just because you have something rough going on, that does not mean you cannot get past it.” Upon graduation from GCCC, Graves wants to acquire an internship. She hopes she will be able to take the baby steps needed to become a technician. “Prove Yourself” is a motto Graves abides by. “In this field, being a woman means nothing. I want to have my own shop and prove to people that I can do it,” Graves said. We thank the Xenia Daily Gazette for reprint permission.

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asTech Introduces Live-Chat asTech is now offering a new live-chat feature, making it easier for customers to communicate with technicians. The chat feature is available on the company’s mobile app, native app and via asTech.com. The live-chat will allow customers to chat back and forth to discuss fixes on the vehicle, see

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when an asTech technician has joined the conversation, chat in multiple languages with its translator service and save chat log to review another time. Learn more about the livechat feature at http://astech.com/ astech-chat/. Source: asTech

20 JUNE 2021 AUTOBODY NEWS / autobodynews.com

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Continued from Cover

Ram Truck Production multilayered program of health and safety measures that was put in place last year to protect our employees. As COVID cases are increasing in communities across Michigan, we also have had employees test positive. We continue to be aggressive in following recommended guidelines for contact tracing,” according to the statement provided by spokeswoman Jodi Tinson. “We also continue to strongly encourage our employees to follow the same health and safety measures whenever they are out and about.” The company said employees are urged to get vaccinated and that it has been facilitating employee vaccinations in metro Detroit. The UAW said cases are up, although it did not confirm the specific numbers. “While the numbers change by shift, we can say that there is an recent increase in cases, as there is throughout Michigan,” according to a statement from UAW Vice President

Cindy Estrada. “Based on our daily calls with the company we know many of the absences are not positive cases, but rather absences due to close contact quarantine, waiting on test results or other COVID-related absences to be as cautious as possible and keep the plants and our UAW members and families safe.” The union noted its protocols call for self-reporting and quarantine for exposures in and out of the plant. The situation puts extra stress on a company already dealing with extensive production issues connected to the global chip shortage. Five Stellantis plants in North America are currently shut down: • Warren Truck, north of Detroit—Ram 1500 Classic pickup • Belvidere Assembly in Illinois—Jeep Cherokee SUV • Windsor Assembly, in Ontario but near Detroit—Chrysler Pacifica and Pacifica Hybrid minivans • Toluca Assembly, west of Mexico City—Jeep Compass The shutdown has now been extended for several plants. Belvidere, Windsor and Toluca are now sched-

uled to be down until the end of April. Warren Truck is to be down until the end of May, although the company said it “remains on track for the launch of the all new Grand Wagoneer.” The strategy has left  other, high-margin plants operating. Spokeswoman Shawn Morgan noted the company continues “to prioritize key products as we work to get through the situation.” Stellantis is far from alone in feeling the effects of the chip shortage. Automakers, including Ford and General Motors, have also been forced to grapple with the fallout, and have had their own production disruptions. But with COVID-19 cases once again adding to the woes, Stellantis is facing new pressure because any production losses at SHAP affect one of the company’s most profitable vehicles, the newer version of the Ram 1500. We thank the Detroit Free Press for reprint permission.

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FordDirect Picks Platform Provider Dealer Inspire (DI), a Cars.com Inc. company that provides technology and digital advertising solutions to the automotive industry, announced it was selected by FordDirect as a preferred website and technology platform provider for its approximately 3,000 local U.S. dealerships. Dealer Inspire empowers local dealers with one endto-end platform that seamlessly drives more customers from search to signature, more efficiently. Designed to convert traffic directly from its highly-targeted digital advertising campaigns, DI’s modern website experience helps shoppers find the right vehicle in seconds and then connect with the dealership team in real-time using built-in chat and retailing technologies to start and even complete the buying process online. For more information about DI’s offerings for Ford, visit www. dealerinspire.com/ford. Ford dealers interested in partnering with DI can call (877) 899-8346 or email sales@dealerinspire.com. Source: Dealer Inspire

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autobodynews.com / JUNE 2021 AUTOBODY NEWS 23


From the Desk of Mike Anderson with Mike Anderson

Mike Anderson is the president and owner of Collision Advice, a consulting company for the auto body/collision repair industry. For nearly 25 years, he was the owner of Wagonwork Collision Center, an OEM-certified, full-service auto body repair facility in Alexandria, VA.

Collision Repair Industry Has a New Voice on OEM Safety Inspections One of the issues I have written and spoken about most passionately recently―including being quoted in an article on the front page of Autobody News in April―is my belief the post-collision safety inspections called for by most automakers are the single biggest friction point in the collision repair industry right now.

touch with some of the OEMs to have a direct dialogue to better understand this issue. It was an insurer seeking to do the right thing. So I want to give a shout-out to that insurer―even though I can’t identify them here―and to the OEMs that agreed to speak with that company. I want to give a shout-out to FCA, now part of Stellantis, for

I-CAR has posted a brief form shops can use to submit information on the safety inspections they perform, what triggered the inspections and what was found

We see shops looking to do the right thing, but getting pushback from third-party payers. This is why I want to give a shout-out to the team at I-CAR. They recently held a virtual summit in regards to automaker safety inspections as the start of some dialogue about what some OEMs require, when those inspections are needed, what outcomes they produce and what they can prevent. I-CAR invited participants from all industry stakeholders―OEMs, insurers and collision repairers― and about 150 people participated. This is important because it’s only when we start talking about these issues that we can work toward resolution while ensuring the vehicle owner gets a complete and safe repair. It would have been unrealistic to go into that virtual summit expecting a solution would come out of just one meeting. But I’m encouraged by what I’ve seen happening since that time. I had one specific insurer, for example, ask me to put them in

publishing an updated statement this spring to provide more clarity in regard to steering columns after a collision. The automaker also held a webinar for its certified collision repair shops to give those collision professionals a chance to hear from the automaker’s technical experts and get more information about safety inspections. Thank you to the team at FCA. They heard the voice of the industry, and said, “Let’s engage in some dialogue on this.” There’s another automaker that, depending on when you are reading this, has announced, or will soon, a new matrix and parameters for the safety inspections on its vehicles, to narrow down which are required under which circumstances. But there’s another thing that resulted from that I-CAR summit, and this is where I’m issuing a call to action to you. I-CAR wants to continue to move this issue forward with all stakeholders, but needs more data to do so. So I-CAR has posted a brief form** shops can use to submit information on the safety

24 JUNE 2021 AUTOBODY NEWS / autobodynews.com

inspections they perform, what triggered the inspections, and what was found. You find that form at https:// rts.i-car.com/srs-inspection-feed back-form I strongly encourage you to take action and regularly submit information to I-CAR. When the OEM procedures for a vehicle you are repairing call for a seat belt inspection, or call for R&I for inspection of an airbag sensor or module, or require you to measure the steering column or to R&I the dash to check the support brace, submit those examples to I-CAR. Whether those inspections reveal damage or not, submit that to I-CAR. Those of you who know me know I always seem to have a new saying or expression I recite regularly. My current one is this: There are people in life who WATCH stuff

happen, and there are people in life who MAKE stuff happen. I’m choosing to be someone who makes stuff happen. And that’s what I want to invite you to do. Don’t sit on the sidelines and complain about these issues. Let your voice be heard. My biggest concern is that I-CAR, in an effort to move this issue forward, sets up this data collection, but nobody submits any examples. They’re going to say: This isn’t an issue. But it is an issue, an important issue. But if we don’t submit anything to I-CAR so they can see it is, then shame on us. We have an avenue to have a voice, a way to have our voice heard. So I strongly encourage you to use it. This is the only way to further the dialogue to find a solution that works for everyone. As I also often say: Don’t delay; do it today.

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Tips for Busy Body Shops

Stacey Phillips is an award-winning freelance writer and editor for the automotive industry. She has 20 years of experience writing for a variety of publications, and is co-author of “The Secrets of America’s Greatest Body Shops.” She can be reached at sphillips.autobodynews@gmail.com.

with Stacey Phillips

Best Practices for an Effective Health and Safety Program An effective health and safety pro- Curtis. “I was impressed with our gram can help collision repair facil- team keeping up with the services ities reduce injury and illness rates, and demands.” with compensation Stacey Phillips decrease workers’ Autobody News reached out to costs, increase productivity and im- Curtis to learn more about the improve morale across the workforce, portance of establishing an effective according to Wayne Curtis, direc- health and safety program that entor of field services at KPA. sures compliance with national and Based in Lafayette, CO, KPA state regulations. provides environment, health and safety (EHS) and workplace comwith Victoria Antonelli How can a collision repair pliance software and services for a facility ensure proper compliwide range of industries, including ance? automotive. Each year, about 100 KPA safeI recommend starting with ty specialists conduct audits at more the basics. The first step is to than 2,000 auto collision-related fa- evaluate the shop’s current situation cilities across the U.S.,Ed Puerto Rico and do an assessment. with Attanasio and Canada to determine if busi- I’m emphatic that all collision nesses are compliant. Once the eval- repairers should perform an audit to identify environmental and safety risks. This will help determine the necessary actions to meet mandatory requirements, avoid citations and with Gary Ledouxpotential legal action. Third-party companies, such as KPA, are available for these types of audits. After reviewing the inspection results, the next step is to determine the priorities when developing a health and safety program that adWayne Curtis of KPA said providing regular dresses the high-risk areas in your safety training for employees helps collision with Stacey Phillips workplace. All collision centers are repair facilities establish a safety culture and is proven to reduce injuries required to have a written hazard communication program and prouations are complete, the company vide training to employees as a basic then discusses concerning issues, of- Occupational Safety and Health Adfers recommendations and conducts ministration (OSHA) requirement. training if necessary. Facilities are also required to with Mike Anderson “The goal is to help companies install a program to protect workproactively identify risks, stay up- ers from respiratory hazards. Shop to-date on evolving regulations and owners and managers can ask themkeep workers safe,” said Curtis, who selves: “Are all employees trained has worked with KPA for 17 years. on our workplace hazards and how He estimates KPA completed to protect themselves? Have emmore than 20,000 in-person and vir- ployees who wear tight-fitting restual field visits to auto dealerships, pirators been fit tested? Have they collision repair shops, trucking and been medically evaluated to wear a rental car locations in 2020. This respirator and do you have proof of is a similar number that took place medical clearance on file?” prior to the pandemic. In addition, If the answer is “no” and a facilthe company conducted 1.2 million ity determines that it doesn’t have a trainings last year, the majority of good process in place, it’s important which were online. to find someone who can assist. Not “It was certainly challenging only can it help streamline the steps for us during the pandemic,” said needed to navigate the maze of regu-

My SEMA

Shop Strategies

Q:

A: Product Innovation

OE Shop Certification

lations, but it can also bring the shop to a level of compliance sooner, faster and less expensive than you can do on your own. In addition, facilities should pay close attention to environmental requirements. This includes practices related to waste management, documenting hazardous waste inspections, container labeling and retaining waste manifests. A safe workplace requires more than just being compliant. Periodic evaluations can help identify weaknesses in the processes your company uses to address hazards. By being proactive, it allows everyone to have the knowledge to identify and resolve hazards before they create a serious incident.

Q: of?

What types of regulations should repair facilities be aware

A:

There are requirements by OSHA, the Environmental Protection Agency (EPA) and Department of Transportation (DOT), as well as state regulations. The collision industry is heavily regulated when it comes to EHS. The same standards that apply to auto dealerships apply to collision centers. It’s imperative to have the tools, resources and equipment that allow for the most compliant and safe applications. It seems that the Biden administration is paying close attention to the environment, specifically the Clean Air Act. I’ve also seen increased activity with the EPA 6H Rule, the National Emission Standards for Hazardous Air Pollutants. EPA Region 4 recently sent out letters to collision centers reminding who is subject to 6H rule requirements and emphasizing the impor-

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tance of compliance. The 6H rule requires an initial notification form to be sent to the EPA, ongoing employee training and other requirements such as paint booth filter efficiency and HVLP paint guns. The industry is adapting to these rules. With newer paint lines carrying fewer heavy metals, petitioning the EPA for an exemption is now possible. We are very focused on that right now and feel that it will be a key focus area over the next few years. The EPA Clean Air Act penalty policy is stringent and has escalation factors for larger businesses.  The EPA expects larger companies, that have better funding and resources, to use these resources to achieve compliance. If non-compliance is observed, an economic penalty is assessed based on the size of the violator. If you are an MSO and have one facility that is not compliant, you could be looking at hundreds of thousands if not millions of dollars of liability. It’s critical for shops to develop written compliance programs for federal and state safety regulations.

In some areas of the country, such as California, it can be really challenging to keep up with the regulatory climate without having a dedicated EHS person on your staff. Compliance is often very complex and having a consulting company that comes in to help navigate can be advantageous.

Q: A:

What are some best practices facilities can put into place?

Business success cannot occur without having a workforce educated in industry regulations, internal policies, safety and ethics. At a minimum, all employees should be trained on the types of hazards that are present and where they can get access to information about chemicals that can lead to these types of situations. This is where compliance training can be so helpful. Many accidents that take place in the workplace are avoidable. Providing regular safety training for employees helps you establish a safety culture and is proven to reduce injuries. I always recommend establish-

ing a safety committee and holding regular meetings. It’s a great way to keep your team up-to-date with EHS initiatives and helps adds a strategy on how to achieve your EHS goals. A good rule of thumb is having a quarterly safety committee meeting to assign preventative actions, develop incentive and enforcement programs and review processes. Helpful checklists and resources are available at https://www.kpa. io.

Q:

What are some of the most impactful changes you have seen as a result of COVID-19?

A:

There are a lot of changes regarding regulations that have happened since the pandemic. In March 2021, an OSHA Directive was released, outlining the policies and procedures for implementing a National Emphasis Program (NEP) for COVID-19. The NEP focuses on high-hazard industries such as health care and dentistry, which are more likely to come in direct contact with COVID-19 positive cases. The collision industry

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was not listed as a primary focus of the NEP. When President Biden came into office, OSHA provided updated COVID guidance within a week. Since that time, we’ve seen the initial steps towards scaling back of CDC guidance. We expect that’s a sign of the vaccinations and more information on the risk of infection. President Biden also asked OSHA to investigate if an Emergency Temporary Standard (ETS), a new OSHA standard, should be issued regarding COVID. On April 26, OSHA issued a proposal for a Federal ETS to be issued. An ETS would effectively bypass the normal rulemaking process of OSHA. If adopted, OSHA would have six months to adopt a permanent rule. We expect to know more about the details of OSHA’s proposed rule soon. In regard to local COVID regulations, these still remain very different and under direct enforcement. It’s imperative to follow what is going on in the state, county and city where your business operates. That can be very challenging since each local area has done things very differently in regulating the pandemic.   What are some of your predictions for the future?

Q: A:

Short-term, we should expect a loosening of COVID guidelines and a greater consideration on the risk of infection. I recommend all businesses to continue to remain in alignment with CDC and OSHA guidelines even while vaccinations increase and local regulations are lifted. Long-term, it will be interesting to see the Biden administration’s activities and how that will impact our industry. Over time, we expect increased budgets to be passed for agencies such as OSHA, EPA and DOT.  Likewise, we should expect increased funding for enforcement, leading to more boots-on-the-ground inspectors performing more frequent inspections. Protecting the environment was a key campaign pledge for Biden so we will be keeping a close eye on any areas of emphasis, namely air and water. KPA will remain on the lookout for any areas that impact collision centers and how we comply. See Safety Program, Page 34

autobodynews.com / JUNE 2021 AUTOBODY NEWS 29


Collision Repair Industry Veteran and Author Gary Ledoux Writes into the Sunset can get old quickly. “One of my uncles had a great If you’ve been in the collision repair career, but he didn’t know what to industry in any capacity within the do when he retired,” he said. “He last decade or so, you likely know ended up watching television 24/7 who Gary Ledoux is. and died at 78 without really enjoy He wrote for Autobody News ing his retirement. I decided that that for several years, is the author of wasn’t going to happen to me.” five different books, including one Ledoux took business and voabout the history of collision repair cational classes in high school, then in America, and played an integral spent some time at NH Voc-Tech role at American Honda when it de- College. He landed a series of jobs at veloped its ProFirst Body Shop Cer- various local parts jobbers, PBE jobtification program in 2010. bers and car dealerships. He worked Now semi-retired at age 68 and the parts departments at Toyota, Alfa living in Jacksonville, FL, Ledoux is Romeo, Subaru and Acura stores, as currently working on a book about well as selling new vehicles at one the history of his hometown fire Ford dealer and working as a service department, with a working title of advisor at another. “Nashua’s Bravest: The History of In 1973, Ledoux tried to become a firefighter in his hometown Firefighting in Nashua, NH.” of Nashua, but he didn’t meet the physical requirements. He was too short― even after “fudging my application a little,” he said. One year later, he relocated to Amherst, NH, where, being all-volunteer, the fire department’s physical requirements weren’t so critical. Ledoux was accepted and served as a volunteer firefighter for the next four Gary Ledoux, author of “YesterWreck: The History of the years. Collision Repair Industry in America,” is enjoying his retirement after working for Honda for three decades Like firefighters everywhere, volunteers can be In 2018, Ledoux published his called out at any time of the day or fifth book, “YesterWreck: The His- night. “Being a volunteer company, the tory of the Collision Repair Industry in America,” an 860-page book that fire station was not manned. When has been getting positive reviews the alarm sounded, you ran to the from people throughout the indus- station, grabbed a truck and went,” try. Four previous books centered on Ledoux said. “One time, there was Old West history. a house on fire right across the road Ledoux has embraced the ste- from the firehouse, less than 20 yards reotypical retirement plan, purchas- away. By the time a police officer on ing a 37-ft. Itasca motorhome that night patrol noticed it, notified the already has 25,000 miles on it. He’s fire department and we responded, driven from Palm Springs to north- the house was fully involved. We ern California, across the U.S. from managed to save the cellar hole. It California to Florida and from Key was rather embarrassing, but someWest to New Hampshire, and has times that’s just how it works.” In 1988, Ledoux landed a posibig plans to see more of the country firsthand within the next few years. tion at American Honda as a district Ledoux’s No. 1 goal in retire- parts aanager for the Acura diviment is to be active and pursue his sion, first for the northeastern U.S. creative passions, such as writing and later for the southeastern U.S. and travel. He has learned by exam- He worked for American Honda in ple that if you don’t proactively pur- varying capacities for more than 29 sue a productive retirement, things years. by Ed Attanasio

30 JUNE 2021 AUTOBODY NEWS / autobodynews.com

From 1998 to 2017, he was an assistant national manager for the wholesale parts marketing department, eventually concentrating on the collision repair industry. That’s when he met literally hundreds of body shop owners all over the country and developed a wide range of highly successful advertising/marketing promotions for Honda’s wholesale parts marketing department. In 2009, American Honda assembled a team to develop the company’s first OE body shop certification program. “There were about 12 of us and we did a complete year of research before we pulled the trigger on the program,” Ledoux said. “A lot of the OEs were featuring certification programs, so the clock was running. At first, it was called the Honda ProFirst Recognized Program, but we realized that we needed to have the word ‘certified’ in there, so, in time, we changed it to the Honda ProFirst Certified Body Shop Program. “It was great watching it grow and witnessing its success. When I retired from Honda in 2017, we had 1,200 shops in the program and now they have closer to 1,600. It works because shops value the certification and Honda owners respect it.” Why does the ProFirst Program―now called the Honda and Acura Certified Collision Program―work so well for shops that have invested heavily in specific tools, training and equipment to do proper repairs on Hondas and Acuras? “It benefits everybody and, in the end, it results in a quality, OE standard repair,” he said. “Back in the day, just having the right parts was enough but that doesn’t make it anymore, because today’s cars are so sophisticated and the technology is changing all the time.” Ledoux has been writing professionally since 1992, including five books, columns and feature articles in multiple Old West magazines, a running column in Motorcycle Industry and Power Equipment Trade magazines and a column and feature articles in Autobody News, and he was publisher and editor of the Honda ProFirst Quarterly Magazine.

A big part of Ledoux’s legacy includes his definitive history of the collision repair industry, “YesterWreck: The History of the Collision Repair Industry in America,” which he published in 2018. He saw a definite need for a book that chronicles the history of body shops, complete with a collection of 60 photographs used to tell the story. It was a labor of love that tested Ledoux, but he was proud of the finished product. “I found a ton of great stories and anecdotes from the early years of the industry, plus I spent countless hours poring over industry magazines going back as far as the early 1960s,” he said. “Historians take a lot of information and put it into a narrative that is accurate and entertaining, so that was my goal with ‘YesterWreck.’” In “Nashua’s Bravest: The History of Firefighting in Nashua, NH,” Ledoux is now writing about another one of his passions―fire departments and their colorful histories. “When I started asking around about the history of the Nashua Fire Department, I discovered that several people had documents that were partially written while others just had notes they collected over the years. But nobody knew how to turn it into a book,” Ledoux said. “I thought, I can take all of it and put it into a book that people would love to read, with the addition of my own research.” The book is slated to be published the first quarter of 2022. Just like in John Steinbeck’s “Travels with Charley,” Ledoux and his wife Rachel and their dogs, Snoop, Bridget, Bailey and Mindy, will be taking to the highways and byways of America. With his trusty laptop onboard, Ledoux and his family are poised and prepared to take on this new stage in their lives. As Gary would say, “Happy trails!”

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Regulator Stresses Need for Documented Collision Repair Customer Authorization, Updates by John Yoswick

Though the California Bureau of Automotive Repair (BAR) www. bar.ca.gov does not have jurisdiction over auto body shops beyond the more than 4,000 in the Golden State, some information shared by BAR Chief Patrick Dorais in a recent webinar could be instructive to shops elsewhere as well. Dorais said his agency, which also oversees about 31,000 dealerships, mechanical shops and smog check stations, receives about 17,000 consumer complaints a year―though not surprisingly, many fewer this past year during the pandemic. Generally only about 1,000 of those involve body shops, Dorais said. “In about a third of those complaints in the auto body area, consumers are alleging either that the shop made false or misleading statements, or they failed to obtain the customer’s authorization,” he said. “Consumers are commonly reporting to us that they feel misled about the length of time for the repairs, and not having

any understanding of what was being done to their vehicles. Those are the kinds of things we commonly see in our complaints.” Though few states have a regulatory body like the BAR overseeing the industry, most have consumer protection laws requiring customer authorization for repairs, so ensuring such authorizations are well documented could reduce―or at least counter― many consumer complaints. The BAR’s “Write It Right” guide (https://www.bar.ca.gov/pdf/ WriteItRight.pdf) for shops was updated two years ago to indicate electronic authorization is permitted, even offering a screenshot of what a text authorization should look like. Status updates sent to customers via email or text can also provide good documentation―provided they are saved by the shop―to counter many consumer complaints. “We may come to you, saying the customer is saying this, here’s what they’re alleging,” Dorais said during the webinar. “As a shop owner or manager, you can say, ‘No, we’ve

got something that tells a different story, and here’s my proof.’ That’s really important to preserve that document.” Those outside California might also take note of the BAR’s prohibition on page 7 of the “Write It Right” document on the use of such part descriptions. “Each new replacement crash part listed in an autobody or collision repair estimate must be an OEM crash part unless specifically identified as a non-OEM aftermarket crash part,” the document dictates. “Descriptors like Opt-OEM, Alt-OEM, OEM-Surplus, Like Kind Quality, Quality Replacement Part and similar designations do not satisfy this requirement.” The ambiguity of those parts descriptions are something a Collision Industry Conference (CIC) committee has been working to address. During CIC in mid-2020, the committee showed how the list of parts categories varies among parts platforms and estimating systems. The committee showed several flowcharts demonstrating how all these variations in

parts categories can result in the exact same part being described two different ways on estimates. In one example, a vendor selling OEM parts outside of the authorized OEM channel enters those parts into a platform that uses the “OEM Surplus” category for such parts. That platform feeds into an estimating system that uses the “Optional OEM” label for those parts. That runs up against the BAR’s prohibition on the use of the “Opt-OEM” label. “So while that part can go into the estimating platform as ‘OptOEM,’ the end-user is required to choose what they are going to call it on the estimate,” said Aaron Schulenburg of the Society of Collision Repair Specialists, who co-chairs the CIC committee. “You then have a situation where a shop repair plan, and an insurance company estimate, may each potentially choose different nomenclature for the exact same part. One may identify that as an aftermarket part, and one may identify it as an OEM part, and you have an estimating platform that allows for that choice.”

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Sherwin-Williams’ Lee Rush Provides Insight on Quality Validation Needs by Chasidy Rae Sisk

On March 25, the Tennessee Collision Repairers Association (TCRA) hosted an evening of training, featuring Lee Rush from Sherwin-Williams, who explained “Why Ignoring Quality Control Will Cost You Profits and Sales.” Rush promised to deliver an informative presentation on quality control as well as a demonstration of a new QC product. TCRA President JMark Smith welcomed attendees from the Carolinas Collision Association (CCA) and the Mississippi Collision Repair Association (MSCRA), and noted, “QC is an important part of our business, and as a member of TCRA, quality repairs are something we place a lot of emphasis on because we want repairs done correctly.” Beginning by sharing some details about his background and experience, predominantly as part of an operations team, Rush offered insight into how to implement processes in multiple locations with multiple variations. “Over the years, in-process quality validation proved to be challenging,” Rush said. “The industry needs methods and procedures to evaluate quality throughout the process instead of figuring out what needs to be reworked once the repair is completed, or worse―having the consumer find the quality issues!” After chasing a better method for quality validation and verification for years, Rush joined Sherwin-Williams, where he works with shops on developing and improving the business model, allowing him to educate those shops on why ignoring QC and technology costs profits and sales. His goal for the presentation was to provide enough insight to begin to change the shops think about quality validation. “The first part of this is just changing how we think and beginning to move away from tradition into a new business model,” he said. “Technology is our friend when it comes to quality validation,” Rush continued. “The industry is finally catching up with regards to applications that improve our ability to bet-

ter manage, lifting the burden and allowing us to focus ON business instead of being crazy IN the business.” While the industry has long known there is a need to validate quality, the real challenge has always been determining how to do it. “We need to validate quality prior to the consumer validating it,” Rush stressed. “Over the years, we’ve tried many methods with limited―or no―success, but QC validation continues to be a universal challenge for

On March 25, the Tennessee Collision Repairers Association (TCRA) hosted an evening of training, focused on QC validation methods

the collision industry. This industry is a high variation business model, and all that complexity from vehicle to vehicle adds complexity. “Quality is a pain point on every production floor, plus it presents a huge liability risk that won’t be defendable with a pencil and paper checklist going forward.” Rush also addressed how quality issues cost every shop profits and sales, both in materials costs related

stant, too.” The need for in-process QC validation is even greater due to insurer demands related to DRP service level agreements, including varying insurer needs, virtual claims, approval process, inconsistent appraisals, customer handling process, parts usage and authorizations, and supplement authorizations. “The market hadn’t produced any real technology to help and assist shops as they verify quality with their techs. It’s contingent on us to remind people and ensure we remain compliant from program to program,” Rush said. “Now, there’s technology to assist us with this, and it can easily be managed through a phone application to ensure each claim is handled according to that carrier’s expectations and requirements.” QC validation is also a relevant component of customer satisfaction, and citing a study that showed 82% of consumers are less likely to use a business after seeing a negative review, Rush identified causes of those: missed delivery times, defects on delivered vehicles and poor internal communication. “Our current internal communication method is ‘stop and tell someone,’ but that’s disruptive because it negatively impacts labor utiliza-

“Vehicle damage repair is a highly variable practice; I believe the automotive industry has the highest degree of variability in any industry,” — Lee Rush to reworks as well as by preventing the shop from creating new revenue. “We’ve grown tolerant to this disruption in production, and we need to focus now on improving our labor utilization,” he said. Shops face increased liability and risk due to vehicle complexity and required repair methods related to ADAS, complex steels, aluminum, carbon fiber, electronic components and new bonding technologies. “These increase our liability and risk, which is getting steeper and steeper for collision operators every day,” Rush said. “Change is constant; make sure quality is con-

32 JUNE 2021 AUTOBODY NEWS / autobodynews.com

tion,” Rush pointed out. “It’s a bad system, but we’re going to rectify that with technology and in-house quality validation.” Poor quality costs shops in reworks, increased cycle time, wasted production time, inefficient communication processes and recurring unaddressed issues with parts, equipment or skills. “It’s cumulative, so we’re all desensitized to it. But we have to take care of it. The reality is when we stop, reverse or rework, cumulatively, this replaces a lot of potential labor we could have produced and sales that could have followed,” Rush said. “If you calculate it, you’ll

be shocked at the amount of profit, cost and sales impacts.” Traditionally, shops perform QC during a visual post-repair inspection, but the only items that can be seen post-repair are fit, function and finish. “Post-repair inspections don’t tell us about the unibody or frame, if the suspension measurements are within tolerance or if the structural components are welded correctly,” Rush noted. “There’s no validity with a paper checklist, and no method to recall or review the data. There are a lot of challenges with the traditional QC methodology, and the industry has a real need for a consistent QC validation method.” The average collision repair requires a 20-step process, according to Rush, as well as an average of 75 individual operations, 23.6 labor hours and 10 new parts replaced. “Vehicle damage repair is a highly variable practice; I believe the automotive industry has the highest degree of variability in any industry,” Rush said. “The average vehicle will go through five different practice repair phases, and eight to 10 individuals can be a part of each repair order. Given the massive amount of variation, a paper and pencil checklist does not meet the need of today’s repair cycle complexities; it demands a better solution.” Rush suggests a method that uses quality validation technology to ensure shops are verifying and validating quality as the vehicle cycles through the repair process. He believes the industry needs a “digital tool, designed to be used with any tablet or handheld that doesn’t require special purchases. It should use imported repair order data, identify non-compliance using photo triggers and enhance communication, while also providing fully customizable, dynamic SOPs. “It must allow us to inspect quality in-process regardless of the vehicle, the insurer, the OE requirement and the number of handoffs, or why use the application?” Sherwin-Williams developed the Collision Core Quality application to meet these needs. “Conducting in-process quality


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validation gives shops the ability to verify the operation was completed and then validate whether it was done correctly by passing or failing it,” Rush said. “It includes an event log to demonstrate the QC validation and protect shops from liability by showing that we have a deliberate in-process QC system. These documents verify that we’re serious about our QC process, and they will stand up against scrutiny.” The application also allows users to sort and distribute finished records, emailing them to anyone during or after the repair. It also removes blockages and allows for labor optimization by enhancing internal communication. “The minute I hit ‘fail,’ the app communicates to those who need to know,” Rush said. “The instant real-time communication is the most powerful aspect for me.” Shops can load as many customized SOPs as desired, and the app also allows technicians to pull down OEM repair methods directly from the manufacturer and save them to the repair order, demonstrating responsibility and due diligence

with regard to liability and risk. The Quality Validation dashboard allows users to analyze where failures are occurring most frequently so they can evaluate whether processes need to be modified to reduce failures. “Today, we have nothing. We’re intuitive to a degree because we know a little, but we really don’t know what we don’t know. We want to have these records and reporting ability so we can review them, document them and improve our repair process based on that data,” Rush advised. “Highly technical vehicles require highly technical repairs. Quality validation must be an accessible, simple-to-use solution to address a complex problem, plus it must provide high-level dynamic quality checks and produce a full digital reporting trail,” Rush said. “This app offers a mechanism to record and remove errors, improve quality and efficiency, and reduce repair liability while improving internal communications, which also reduces errors.” Rush proceeded to demonstrate how to use the app to conduct quality

validation through the repair process, showing how photos can be added inapp and raving over the communication piece. He also showed different customizable features before answering attendees’ questions. Sherwin-Williams’ Collision Core Quality application is available to anyone in the collision repair industry; users do not need to be customers of Sherwin-Williams. “Traditionally, we don’t inspect quality until the repair is completed, but we really aren’t inspecting quality―we’re just repairing the vehicle, passing it to the next department, and hoping they find the issue if there is one,” Rush said in conclusion. “We’re checking boxes but not really inspecting quality while the repair is in-process. “We don’t inspect quality, and we have to change that behavior. The industry needs to create a new tradition of quality validation.” For more information about TCRA, visit MyTCRA.com.

AUTOBODY

Continued from Page 29

Safety Program On the federal level, 6H will continue to be a focus. Also, we expect to see increased enforcement under the Clean Air Act penalty policy for car and truck modifications that reduce the original manufacturer emissions settings or equipment. The ultimate goal should be to have an overall compliance program for your business. We all have challenges hiring workers and if we’re down one or two employees due to an entirely preventable safety accident, it speaks directly to the bottom line. By implementing good strategies and being compliant, the fewer incidents shops will have and the less likely they will be involved in litigation. From an owner’s perspective, you can sleep better at night knowing you have an established compliance program in place to help ensure a safe, healthy, compliant and productive workplace. You limit your risks and know your employees will return home in good health to their family members.

UAW Suggests EV Tax Credit Should Only Apply to U.S.-Built Cars by Steven Loveday, Inside EVs

According to a report from Automotive News, in late April, the UAW suggested electric car tax incentives should only apply to cars assembled in the U.S. The existing tax credit of up to $7,500 has no requirement that the cars be made on our shores. The report quotes UAW Vice President Terry Dittes: “The UAW is working with the Biden administration and Congress to make sure that the final legislation extending electric vehicle subsidies is clear that those investments subsidize the jobs of U.S. workers.” This comes on the heels of an announcement from General Motors  stating it has plans to invest $1 billion in Mexico to build EVs in the country starting in 2023. U.S. Rep. Debbie Dingell, D-MI, followed up with a statement that EVs “must be built in America” and money should not be spent to ship jobs to Mexico. While there was no official

response from The White House related to the UAW’s comments, President Joe Biden has already talked about the $174 billion plan to support U.S. EV production. “There’s no reason why American workers can’t lead the world in the production of electric vehicles and batteries,” Biden said. GM made the UAW aware it already has plans to spend $9 billion on domestic battery manufacturing facilities and job creation domestically. The UAW also recently went after Ford for its plans to build an EV plant in Mexico. According to Automotive News, Ford was planning to build EVs in Ohio, but changed course to assemble them in Mexico, where the Mustang Mach-E is being produced. This is a developing story. As more concrete details become available, Inside EVs will continue to publish related articles. We thank Inside EVs for reprint permission.

34 JUNE 2021 AUTOBODY NEWS / autobodynews.com

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LexisNexis U.S. Auto Insurance Trends Report Shows COVID-19’s Impact on the Industry LexisNexis Risk Solutions on May 10 released its 2021 U.S. Auto Insurance Trends Report, which aggregates annual market data about driving behaviors, auto insurance shopping, underwriting and claims to help insurance carriers better understand the shifting landscape. This year’s report analyzes 2020 data to reveal changes in consumer behavior, carriers’ reaction and the overall impact of the COVID-19 pandemic on the auto insurance industry. It also provides auto insurance carriers with trended insights to help improve their capabilities and competitiveness across the auto insurance lifecycle. “When we look at all of the 2020 auto insurance trends, we can see a pattern that comes from a series of disassociated events,” said Adam Pichon, vice president and general manager, auto insurance, LexisNexis Risk Solutions. “While the evolving impact of the pandemic is still unknown, understanding these trends and evaluating their projections can help insurers make better business decisions and more

confidently prepare for the future regardless of unexpected market turbulence.” The report looks at how consumer behavior and carrier business practices tied to the auto insurance policy lifecycle diverged in 2020 from the patterns we typically see―largely due to the influence of COVID-19. Auto Insurance Trends Highlights a Rollercoaster Year The auto insurance shopping data fluctuations were turbulent throughout 2020. However, year over year, 2020 shopping volumes closed 5.3% higher than 2019 with an annual year-end shop rate of 41%. Cyclical policy renewal patterns for many consumers were interrupted by the pandemic with new business policies written down 12.6% in April 2020 and 10.4% year over year. Even so, this unusual activity still prompted an overall net increase for 2020, bringing market retention to 83%. Empty roadways gave rise to dangerous driving behavior with a noted increase in high-speed in-

Mitchell 1 Expands ADAS Coverage

stances first observed in mid-March 2020 and that held at 10% higher than 2019 figures for the remainder of the year. New generational data illustrated an increase of Driving Under the Influence (DUI) violations among younger drivers―particularly those in the Generation Z age segment, with an approximate 50% increase in recorded violations in March and April of 2020. Collision claims decreased, but severity rose, much like the reduction in total miles driven, the volume of collisions and subsequent claims dropped considerably. Collision severity saw a 3.7% year-over-year increase in 2020. The trends identified in this year’s report highlight several opportunities for auto insurance carriers to improve their business operations regarding quoting, underwriting and claims, and prepare for any future disruptions. Source: LexisNexis

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Mitchell 1 announced May 11 it now offers the Driver Assist ADAS QuickLink feature across its suite of repair information software, expanding coverage to most makes and models of cars, light trucks and commercial trucks. The unique QuickLink dashboard view is available in both ProDemand automotive repair information and TruckSeries commercial truck repair information. The feature is exclusive to Mitchell 1 and delivers immediate access to a table presenting a consolidated overview of ADAS-related components, including whether the components of an ADAS feature will require calibration or special tools like targets or a scan tool to complete the job. Unlike cars and light trucks, with Class 4-8 commercial trucks the manufacturer of the ADAS component for a particular vehicle is not always known. TruckSeries provides that detail with the component name when needed or when it is known. Source: Mitchell 1

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©2021 BMW of North America, LLC. The BMW name, model names and logo are registered trademarks. autobodynews.com / JUNE 2021 AUTOBODY NEWS 35


Industry Insight with John Yoswick

—John Yoswick is a freelance writer based in Portland, Oregon who has been writing about the automotive industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). Contact him by email at jyoswick@SpiritOne.com.

CIC Speakers Discuss Employment Issues Related to Vaccines, Fire-Related Concerns with EVs California-based employment law get legal advice. Don’t question the attorney Cory King told Collision sincerity of their belief or get into Industry Conference (CIC) attend- an argument over this, King said. with Edemployers Attanasio Rather, acknowledge what they are ees in April that while can require workers to get vaccinat- saying, tell them you will look into ed for COVID-19, they should make it and get legal advice. sure they get legal guidance in do- “You can make it through this, ing so to avoid violating any state or no question,” King said. “The way federal regulations. you would overcome that is to show “The short answer is yes, you that it would create an undue hardwith Ed Attanasio can [require vaccines], but as with ship, and that is defined as having anything in the law, it’s not that sim- more than a ‘de minimis’ cost or burden on the employer,” an analyple,” King said. King predicated his presenta- sis an employment lawyer can walk tion by saying he can’t provide legal you through. advice in such a setting, but was of- Concerns about long-term effering some issues business owners fects of the vaccine or belief “it’s with Ed would want to discuss withAttanasio their le- a government science experiment” gal counsel. cannot negate an employer mandate King said in most states, for ex- because “fear is not a protected cateample, employees must be paid for gory,” King said. their time getting vaccinated if it’s “But before you force somea job requirement. Some employbody to get vaccinated, or fire somewith Ed Attanasio ers have sought to reduce this cost body because they refuse to get vacby bringing in someone to do the cinated, I strongly encourage you to vaccinations in-house, King said, make the phone call to your attorbut under that scenario, employers ney,” he said. must be careful to avoid violating There are also privacy protecthe Americans with Disabilities Act tion steps to take if an employer (ADA) relativewith to medical inquicollects proof of vaccination from Stacey Phillips ries, given that pre-screening ques- employees. King was asked what an tions are required for those getting employer should do if an employee vaccinated. asks how many of their coworkers “If they don’t want to answer are vaccinated. “I would recommend against those questions, or they answer them and are denied the opportunity to get [revealing] anything [related to that] with Stacey Phillips the vaccine because they don’t pass unless you have some local or state the pre-screening, you cannot ask regulation that says you need to,” them why they did not get vaccinat- King said. “Because that immedied,” King said. “If you do, you are ately starts the witch hunt: Who’s arguably potentially running afoul vaccinated? Who’s not? You arguof the ADA.” ably could be viewed as disclosing. Stacey Phillips Employers with also have to provide It’s not worth the risk. I would not “a reasonable accommodation” for go into that. I can’t give a specific those not willing to be vaccinated answer without researching it to because of a religious or “sincerely make sure there’s nothing specific held belief,” he said, but again, this to [your] locality. But the general is an area where a company should recommendation is I would not be

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disclosing anything like this.” Equipment, Insurance Issues for EV Repairs A number of speakers at CIC discussed some of the fire-related safety precautions shops should take relative to regularly having electric vehicles―especially those with lithium batteries―in the shop for repairs. “One thing is to call your [business] insurance company and find out how this may impact your premiums,” said Mark Quarto of Futuretech, an electric vehicle training organization. “They probably will have some ideas on other things you’ll need to do with your building.” David Willett with ProSight Specialty Insurance concurred. “It does take additional coverage, and it does take additional risk measures,” he said. “We get asked those questions from the knowledgeable [shops]. The scary ones are the ones that don’t ask those questions. The industry is woefully unprepared for this.” Quarto said it is also advisable to make sure “the fire marshal is alerted to what you’re doing in your building.” He said the National Fire Protective Association is currently “finalizing some requirements for where battery packs are to be stored, how far they need to be apart when they are stored when they are out of the vehicle.” Quarto was asked what body shops should look for in an electric vehicle charging station for their shop. He said most EVs will be compatible with any 220-volt charger that is SAE J 1772 compliant. “It’s considered to be a Level 2 charger,” he said, which can charge most vehicles in four or five hours,

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as compared to a 110-volt charger that will require two or three times that long. “There are some other options, fast-charging, but typically a shop isn’t going to need a fast charger. They’re very expensive. The J 1772 chargers are anywhere from $300 to $800, maybe $1,000.” It will require a dedicated 220volt circuit, he said. “Nothing else on there. Otherwise the charger will get tripped all the time,” Quarto said. Another speaker during the discussion of EVs at CIC mentioned shops may want a forklift to load or unload EV battery packs into or from delivery vehicles. Willett said forklifts are another item to discuss with your business insurer. “We haven’t had those in many shops, and for those in the collision repair industry thinking about having a forklift, there’s a lot of additional training and safety requirements,” he said. CIC Among First In-Person Meetings The discussion took place during the first of the quarterly CIC meetings held in-person since January of last year. Organizers said about 130 people attended the meeting in Phoenix―about half as many as is typical―but the meeting was open to “virtual attendees” as well. “We’ve been very anxious to get back to a live scenario,” CIC Chairman Darrell Amberson said at the conclusion of the first day of the two-day meeting. “We knew there were some risks with that. We knew that hardly anyone else in the industry is meeting live. But we also felt like somebody has to be the first to jump off the dock. I’ll say right now, the water feels pretty darn good. It’s been absolutely terrific.”

with Stacey Phillips

ASA Releases New App

ASA upgraded its mobile app to a new platform with multiple opportunities for members. To download, go to the App Store on iPhone or Google Play on Android and search for “ASA

Engage.” Get membership information, including renewal information, and find and connect with fellow shop members and update your shop profile so customers can find it easi-

Shop Strategies with Victoria Antonelli

36 JUNE 2021 AUTOBODY NEWS / autobodynews.com

er. Access industry-breaking news on the go; register for virtual, live and hybrid industry events; get breaking legislative updates, industry-specific news for mechanical and collision

segments and technical info. Get helpful business tips to advance your shop, and use a “shop locator” to find an ASA shop. Source: ASA


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How to Get Your Customers to Trust You in a Skeptical World by Ed Attanasio

Do your customers trust you? If so, how and if not―why? People want to trust their financial advisors, teachers, lawyers, doctors, politicians and, yes, the people who work on their cars. But many consumers entering any business transaction are often skeptical at the outset, and that’s why trust has to be established and reinforced over time. Every business wants its customers to trust them and feel comfortable enough to use their services again and refer them to others. A body shop is being judged every day―by its customers, insurance partners and vendors, and in a world of instant transparency, trust is more important. Throw in the pandemic and a full year of uncertainty, and people are more skeptical about everything now. One body shop owner told me recently he doesn’t even ask what’s next, he just puts his head down and gets the work done, in order to maintain his sanity. “20/20,” “60 Minutes,” “Fight Back! With David Horowitz,” “CBC Marketplace,” “Project Bumper” and “The Investigators” have produced multiple TV episodes about body shops ripping off customers. I recently saw a news segment produced by CBS Chicago designed to protect consumers, but they also scare them. As a result, many vehicle owners are wary before they even enter any repair facility for the first time. In the old days, these types of reports appeared on TV once or twice, but now they’re available on YouTube 24/7. Bad press illustrates the importance of building trust with your customers. In general, American drivers don’t trust auto mechanics, according to a AAA survey. It found 66% of drivers do not trust car repair shops in general, though 64% indicated they do take their car currently to a repair shop with a reliable mechanic whom they can trust. The AAA survey also shows 33%―75 million motorists in total―are still trying to find a trusted service department, which leaves

them vulnerable for when their car breaks down. Here are the top reasons why American drivers mistrust automotive repair shops, both mechanical and collision:

Collision repair is one of those trust with your customer. Point them industries where the average custom- out when they show up to your shop er is already disgruntled, so the goal for an estimate, almost like a checkis to both placate them and get them list, because studies prove that when to trust you―and that’s not easy. you show someone five truths, they In most cases, your customer is feel you are trustworthy.” in a rush and wants everything done Here is an example of five truths Recommends unnecessary services yesterday. No one ever says, “Hey― communicated during the first 10 (76%) let’s have some fun and get our car minutes interacting with the cusOvercharges (73%) serviced!” Vehicle repairs rank right tomer for the first time: the appearA negative experience (53%) up there with trips to the dentist. ance of your shop/reception area; the John Stuef is an industry con- way your people dress and speak; Sub-quality work (49%) sultant, life coach and the author the plaques on your walls showing Other main offenders include charging of “From Doing to Leading: Your I-CAR, training and OE certificaGuide for Inspiring People tions; the overall attitude in the shop; for OE parts that are either on the Front Lines.” He has and the thoroughness of the estimate. aftermarket parts, phantom managed MSO shops for repairs, lapses in communiStuef claims you can’t build cation and bait-and-switch decades and dealt with liter- rapport until you establish trust, and tactics. ally thousands of customers, the best way is with the five truisms. Interestingly, older veso the topic of trust is a sub- One way to build trust is by hicle owners from the Baby ject Stuef has been studying using technology to provide a betBoomer generation are John Stuef, industry for decades and developing ter experience for your clients. By most likely to trust car re- consultant, life coach techniques to address it. using today’s tools, you can enable “Trust is built when peo- them to make their lives easier and pair facilities, compared to and author, said if Millennials and Gen-Xers. you can establish ple see that your actions line drama-free. five truisms with Twenty percent of Boomers up with the words you say,” Now they can eliminate phone a new customer, surveyed for the AAA study they will trust you Stuef said. “I often talk about calls and paperwork; they can comsay they “totally trust” the the five truisms and how im- municate instantly via text or email. completely auto repair industry. portant they are to establish If they want photos of the repair, it’s In addition, Boomers are also more likely to have a car repair shop they trust (76%), compared with 55% of Millennials and 56% of Gen-Xers. Philip Reed, a reporter for Edmunds, interviewed a handful of body shop owners for a blog, “Confessions from the Auto Body Shop, Get Your Car Fixed Right Without Getting Ripped Off.” He interviewed shop owners off the record, so he got truly candid reactions. TRUST FORD PARTS Reed heard things like, “I don’t CERTIFIED PARTS WHOLESALING DEALERS care what state you live in, for every 10 body shops, three of them KANSAS NEBRASKA are unethical and five of them do Rusty Eck Ford Fremont Motors of mediocre work at best;” “The last WICHITA Scottsbluff thing we want is a bad reputation or 316-685-9131 SCOTTSBLUFF reports of poor customer service;” 308-635-3701 316-685-7759 Fax “Most body shop owners are very Hours: M-F 8-5 308-635-4981 Fax concerned about getting good feedHours: M-F 7:30-6; Sat 9-3 back and building a list of customers jlockwood@fremontmotors.com who’ll come back next time work is needed.” So, if indeed 30% of all the shops out there are shady, how do you convince the public you are a member of that 70% category? How do you build trust with customers who are not in a positive space after an accident has added a bunch of drama to their lives?

38 JUNE 2021 AUTOBODY NEWS / autobodynews.com


a snap, and they are kept in the loop during every stage of the process. By writing estimates that are fast, easy and, most importantly, accurate, there are never surprises along the way. By bringing more to the table with new technology and cutting-edge techniques, vehicle repairers are building trusting relationships with their customers. By continually pursuing cutting-edge tools, these forward-thinkers will continue to excel in a market that’s already more knowledgeable, skeptical and more discerning than ever. You can tell people great things about your business all day long, but folks want to see it, and the five truisms described by Stuef will always speak louder than words. The underlying message is if you run a good shop that produces quality work, trust is the byproduct and good things will happen as a result.

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Chip Shortage Forces U.S. Automakers to Shift Focus to High-Profit Vehicles by Sam D. Smith, CarScoops

It would appear that during a tumultuous period for car production, U.S. automakers may begin to focus on lower volume, premium-priced cars over cheaper alternatives. A report by Reuters details an investor call from GM CEO Mary Barra, who stated the company can deliver better results without stockpiling vehicles or padding sales volumes with low-priced, low-margin models. U.S. automakers have often opted to keep up production of higher-volume, lower-margin cars, appealing to a broad cross-section of buyers. As Jalopnik points out, the concept  of Alfred Sloan, GM’s president and chairman in the 1920s until the late 1950s, was “a car for every purse and purpose.” But after a challenging period during the pandemic and the difficulty faced in sourcing semiconductors for production, by prioritizing sales of higher-margin cars, GM has been able to post solid profits for the first quarter.

“We’ll never go back to that level of inventories that we held pre-pandemic because we’ve learned we can be much more efficient,” said Barra. Similar statements have been made by other automakers as well, including Stellantis and Ford.

During the chip shortage, General Motors has shifted supply and supported the production of higher-margin cars while temporarily halting production of high-volume but less expensive models. The General recently announced it would idle production of its second-best selling U.S. model, the Chevrolet Equinox. They have also

curtailed the output of the Cadillac XT4 and Chevy Malibu. Attaining greater profitability by way of reducing stockpiling, shunning volume sellers and focusing on models with fatter margins isn’t a new concept to Detroit’s Big Three. However, it wasn’t widely implemented due to pressure to keep factories open and chase sales numbers. But thanks to external pressure from the lack of supply, automakers have been forced to go down this route. The boost in profitability and share value will, no doubt, be hard to unsee. It’s not all good news for GM, though. Barra went on to say the semiconductor situation is likely to worsen before it gets better, and both Ford and Stellantis predicted supply delays will likely continue into 2022. GM also forecasts the chip shortage is likely to see $1.5 billion to $2 billion lost from this year’s profit. We thank CarScoops for reprint permission.

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Biden’s Emissions Pledge Comes with Economic Consequences, Experts Warn by Casey Harper, The Center Square

President Joe Biden is expected to announce a pledge April 22 to cut U.S. greenhouse gas emissions in half within less than a decade. Biden will announce the aggressive pledge, according to multiple reports, the same day the White House hosts dozens of world leaders for a virtual climate summit. The pledge would commit the U.S. to lower its emissions by 50% from 2005 levels by the year 2030. But critics were quick to point out flaws with the plan. “Based on currently available technology, there is no way to halve America’s emissions in such a short period of time without radically impacting our battered economy,” said Heather Reams, executive director of Citizens for Responsible Energy Solutions. “We know that by 2030, 90% of all new emissions will come from the developing world and China, so we need solutions that can be adopted as readily in India as in Indiana.” During the summit, which also falls on Earth Day, leaders will discuss a range of environmental and energy issues like coal power plants and carbon emissions. Though Biden has not made the formal announcement, his rhetoric on the campaign trail indicated he plans to take an aggressive stance on environmental issues. “As president, Biden will lead the world to address the climate emergency and lead through the power of example, by ensuring the U.S. achieves a 100% clean energy

economy and net-zero emissions no later than 2050,” Biden’s climate plan released during the presidential campaign says. “He will lead an effort to get every major country to ramp up the ambition of their domestic climate targets,” the plan adds. Biden’s pledge could devastate parts of the country reliant on fossil fuels for their livelihood. Wyoming and West Virginia have the most sig-

President Joe Biden. Credit: Shutterstock.

nificant coal producing capabilities, followed by Pennsylvania, Illinois and Kentucky. Those states produced about 500 million short tons of coal in 2019, more than 70% of the nation’s coal output. A short ton is equal to 2,000 pounds. “Last year during the COVID pandemic, the U.S. cut its emissions by 12% and we all know at what cost,” said Daniel Turner, founder of the energy workers advocacy group Power the Future. “Thousands of small businesses have been closed forever. Unemployment skyrocketed. Entire industries like airlines, hospitality, tourism, have been bankrupted.” Turner’s comments indicate the kind of opposition that Biden, and Democrats who support him, are likely to get from Republicans. Other critics say Americans can

expect widespread blackouts, higher energy prices and economic downturn if Biden’s plan is enacted. “The Biden-Harris administration’s reported second-round commitment under the unratified Paris climate treaty is preposterous and irresponsible,” said Myron Ebell, director of the Center on Energy & Environment for the Competitive Enterprise Institute. “Trying to cut greenhouse gas emissions by 50% below 2005 levels by 2030 would cause energy prices to skyrocket, make blackouts a common occurrence and lead to widespread energy poverty. Luckily, the Biden-Harris commitment is merely an expression of intention and with no legal basis.” Reports indicate the traditional fossil fuel industry supports a little less than 7 million U.S. jobs. Those jobs are often concentrated in certain pockets of the country, meaning a reduction in the fossil fuel industry could send entire cities and even regions into economic recession. “[Biden] will make sure those commitments are transparent and enforceable, and stop countries from cheating by using America’s economic leverage and power of example,” Biden’s campaign pledge reads. “He will fully integrate climate change into our foreign policy and national security strategies, as well as our approach to trade.” Those international relationships, though, are exactly what concerns many experts, who say China will use America’s restraint as an opportunity to gain an economic advantage. “We will forgo our American, domestic, reliable, inexpensive, abun-

dant energy to buy inferior Chinese products which are expensive and inefficient,” Turner said. “Meanwhile China continues to expand, build, grow it’s economy primarily through coal-fired plants and by expanding its production of oil and gas worldwide. China and Russia are thrilled that the American president is willing to punish his own country to achieve a globalist standard which they holistically ignore.” Making public pledges to world leaders will grab headlines and earn favor with the Democratic base, but critics say it will do little to change the reality on the ground without help from Capitol Hill. Biden will need Congressional support to enact the widespread changes needed to make his ambitious promises come to fruition. “We must count on widespread public opposition to convince enough Democrats in Congress to join with Republicans to defeat implementation of this grotesque power grab to cripple the American economy,” Ebell added. Biden does have allies among Democrats who are eager to get a win for the party’s base. Democrats on April 20 re-introduced the Green New Deal ahead of Biden’s summit, pushing for a total reworking of the nation’s spending as well as the energy industry. “Do we intend on sending a message to the Biden administration that we need to go bigger and bolder?” asked Rep. Alexandria Ocasio-Cortez, D-NY. “The answer is absolutely yes.” We thank The Center Square for reprint permission.

FTC Examines Anti-Competitive Repair Restrictions, Recommends Ways to Expand Consumers’ Options In a new report to Congress, the Federal Trade Commission (FTC) identified numerous types of repair restrictions, such as using adhesives that make parts difficult to replace, limiting the availability of spare parts and making diagnostic software unavailable. The report’s findings, including that “there is scant evidence to support manufacturers’ justifications for repair restrictions,” are primarily based on responses to the FTC’s requests for public comments and empirical re-

search issued in connection with its July 2019 workshop, “Nixing the Fix: A Workshop on Repair Restrictions.”   The report explores means of expanding consumers’ repair options and how the FTC could assist in that expansion, consistent with its statutory authority. In addition, the FTC notes it stands ready to work with lawmakers, either at the state or federal level, to ensure consumers have choices when they need to repair products that they purchase and own. Congress directed the FTC to

40 JUNE 2021 AUTOBODY NEWS / autobodynews.com

issue the report, noting it “is aware of the FTC’s ongoing review of how manufacturers—in particular mobile phone and car manufacturers—may limit repairs by consumers and repair shops, and how those limitations may increase costs, limit choice and impact consumers’ rights under the Magnuson-Moss Warranty Act.” Congress specifically directed the FTC to include recommendations on how to best address these problems. The FTC voted 4-0 to authorize staff to send the report to Congress.

The FTC works to promote competition and to protect and educate consumers. Learn more about consumer topics and report scams, fraud and bad business practices online at ReportFraud.ftc.gov. Like the FTC on  Facebook(link is external), follow on  Twitter(link is external), get  consumer alerts, read blogs and subscribe to press releases for the latest FTC news and resources. Source: FTC


Volkswagen Group Reports Strong Results in Q1 2021 by Mark Kane, Inside EVs

The Volkswagen Group, which includes Volkswagen, Audi, Porsche, Skoda,  SEAT and more, reported quite strong business results in the first quarter of 2021. Let’s first take a look at general numbers and then focus on the plug-in electric car sales.

especially considering the semiconductor shortages. “We started the year with great momentum and are on a strong operational course,” said Herbert Diess, CEO of the Volkswagen Group. “This is clearly reflected in our positive quarterly figures. At the same time, we remain fully committed to our transformation

“Our successful e-offensive continues to gain momentum and we have significantly expanded it with attractive new models” — Herbert Diess, The group has increased its vehicle deliveries by 21.2% yearover-year to 2.4 million, compared to 2.0 million in Q1 2020. That’s 12.4% of global car sales. That allowed it to increase the revenues to $62.4 billion, up 13.2% year-over-year, but more importantly, the operating profits improved to $4.8 billion, which is 7.7% gross margin. The income after tax will be $3.4 billion—5.4% of revenues. It’s not a bad start to the year,

into a climate-neutral and software-driven mobility group. “Our successful e-offensive continues to gain momentum and we have significantly expanded it with attractive new models. We are also making good progress with the key topic of digitalization and have reached important milestones. There is still much more we can achieve in the remainder of the year.” The Volkswagen Group out-

lined four major areas of business: hardware, software, battery and charging as well as mobility and services. The software business is in its early investment phase, but over time it is expected to generate some income through licenses. Volkswagen Group plug-in car sales In Q1 2021, the Volkswagen Group delivered some 133,000 plug-in electric vehicles globally: • BEVs: about  59,948  (up 78.4%  year-over-year) and  2.5%  of the total volume • PHEVs:  about  73,374  (up 178%  year-over-year) and  3.05%  of the total volume • Total:  about  133,322  (up 122%  year-over-year) and  5.56%  of the total volume For comparison,  in 2020 the group sold over 422,000 plug-ins. All-electric car sales by market: Europe: 42,421 (71%)

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The top selling plug-in models were: BEVs: Volkswagen e-up!, Volkswagen ID.3 and Volkswagen ID.4, Audi e-tron, Audi e-tron Sportback and Porsche Taycan PHEVs: Volkswagen Golf hatchback, Volkswagen Passat Estate, Audi A3 Sport-back and Audi Q5, Skoda Octavia Combi, SEAT Leon Sportstourer and Porsche Cayenne

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All-electric car sales by brand: Volkswagen (cars): 30,735 (51%) Audi: 14,583 (24%) Porsche: 9,072 (15%) Skoda: 2,455 (4%) SEAT: 2,217 (4%) Volkswagen (commercial vehicles): 687 (1%) Other: 199 (near 0%) Total: 59,948

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FOR YOUR COLLISION JOB. autobodynews.com / JUNE 2021 AUTOBODY NEWS 41


Toyota Acquires Lyft’s Self-Driving Unit for More Than Half a Billion Dollars by Joey Klender, Teslarati

Toyota Motor Corporation will acquire Lyft’s self-driving unit, an announcement confirmed April 26. The cost of the deal is $550 million, and Toyota’s new Woven Planet division will handle the Japanese company’s automation ambitions. Lyft will receive $200 million in cash from Toyota up front, and the remaining $350 million of the deal will be paid over the next five years. “The transaction is also expected to remove $100 million of annualized non-GAAP operating expenses on a net basis—primarily from reduced R&D spend—which will accelerate Lyft’s path to Adjusted EBITDA profitability,” Lyft said in a press release. Toyota will not only acquire the self-driving unit, but the deal will also provide the automaker with Lyft’s 300 employees. “Not only will this transaction allow Lyft to focus on advancing our leading Autonomous platform and transportation network, this

partnership will help pull in our profitability timeline,” said John Zimmer, co-founder and president of Lyft. “Assuming the transaction

closes within the expected timeframe and the COVID recovery continues, we are confident that we can achieve Adjusted EBITDA profitability in the third quarter of this year.” Woven Planet Chief Executive James Kuffner told reporters April 27, “This is the first step of establishing and bringing together the people. Obviously, building technology and product requires people, and that’s much what this acquisition is about.” Kuffner is likely referencing the presence in Silicon Valley and London that Woven Planet will now have because of the acquisition. The partnership and could alleviate the issues that come with

the acquisition of a new company. Lyft’s advantages in the acquisition allow it to take a profit away from the development of self-driving technologies. Lyft hasn’t released its self-driving tech, which is aimed toward complete automation, known as Level 5 autonomy, but

it can give the rest of the tasks to Toyota while walking away with a hefty profit. Meanwhile, Toyota gains more experience and expertise in the self-driving sector through the acquisition. Toyota has Level 2 automation with advanced driver assistance tech. Level 2 describes “Partial Driving Automation” through Advanced Driver Assistance Systems.

“The vehicle can perform steering and acceleration. The human still monitors all tasks and can take control at any time,” according to Synopsys‘ breakdown of automation levels. Kuffner said Woven Planet will continue investing and growing its team but did not give any further details about acquisition plans or a timeline that would describe possible moves in the future. According to  Reuters‘ coverage of the acquisition, Toyota will “likely make more deals, even if they do not ultimately lead to self-driving vehicles to ‘actively gather software and people who have knowledge.’” This is according to Seiji Sugiura, a senior analyst at Tokai Tokyo Research Institute. The transaction is expected to close in Q3 2021 and will be subjected to required regulatory approvals and other closing conditions. We thank Teslarati for reprint permission.

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Fossil Fuel Emergency: U.S. Races to Move Gasoline After a Pipeline Hack by Brad Bergan, Interesting Engineering

In an effort to delay the effects of a gasoline shortage and subsequent price spike on the East Coast, the Biden Administration just issued an order to enable overtime for some truck drivers moving gasoline, according to a May 9 declaration from the Department of Transportation. This comes in response to the shutdown of one of the country’s most critical fossil fuel pipelines following one of the largest cyberattacks on gas and oil infrastructure in American history. Fossil fuel shortage could affect the East Coast On May 7, Colonial Pipeline said it  suffered a critical ransomware attack—forcing it to halt all operations while it worked to secure its IT architecture from hackers. Some of the company’s smaller pipelines have resumed service, but as of May 10, the pipeline’s main pathways were still shut down for an unspecified timeframe. “On May 7, the Colonial Pipeline Company learned it was the

victim of a cybersecurity attack. We have since determined that this incident involves ransomware,” read the statement from the fossil fuel company. “In response, we proactively took certain systems offline to contain the threat, which has temporarily halted all pipeline operations, and affected some of our IT systems.” The Department of Transportation (DOT) subsequently declared a state of emergency, following the shutdown, and waived requirements for drivers and motor carriers working to circumvent potential shortages from the pipeline shutdown. This means they can drive for more than 11 hours, the typical daily limit, in a collective effort to delay the potential fuel shortages that can happen, since Colonial’s pipeline network fuels  roughly 45% of all gasoline on the East Coast. The DOT said the Colonial pipeline shutdown may create shortages of “gasoline, diesel, jet fuel and other refined petroleum products,” with overtime waivers effective in the following territories:

Virginia, Texas, Tennessee, South Carolina, Pennsylvania, Noth Carolina, New York, Mississippi, Maryland, Louisiana, Kentucky, Georgia, Florida, Delaware, the District of Columbia, Arkansas and Alabama.

gas. This is a big deal.” Especially since road and rail transport are far more expensive than pipelines—and there’s another caveat to extending road and rail-based supply lines for fossil fuel. Colonial’s pipeline is integral to the energy infrastructure of the U.S., stretching more than 5,000 miles and moving more than 2.5 million gallons of gasoline daily from refineries throughout the Gulf Coast to more than 50 million people on or near the East Coast. Several tanker trucks racing gasoline down a highThe shutdown comes while way under the sun. Credit: Rasica/iStock many are just starting to resume their normal transits to The East Coast could see pump work. If the pipeline doesn’t go online in the next several days, anprices spike in the coming week “This is the largest impact on the alysts have said  fuel prices might energy system in the United States rise along the Eastern Seaboard, we’ve seen from a cyberattack, full with scattered shortages. stop,” said CEO Rob Lee of Dra- This was a breaking story and gos, an infrastructure-focused se- was regularly updated as new incurity firm, in a report from Wired. formation became available. “You have a real ability to impact the electric system in a broad way We thank Interesting Engineering by cutting the supply of natural for reprint permission.

Now is the Perfect Time to Sell or Trade Your Car: Kelley Blue Book If you have been considering selling or trading in your car anytime soon, now is the time to get serious. With low vehicle inventory on dealership lots, increased car-shopper demand and resulting high prices, the market conditions are prime for peak consumer profit for people selling their vehicle, according to Kelley Blue Book. Used-car prices are up 18% yearover-year, meaning a used car sitting in someone’s garage right now is currently worth on average nearly onefifth more than it was last year. Given the high-ticket prices of vehicles, that percentage can translate into quite a bit more cash lining a seller’s pockets. To view it another way, vehicles that were retaining 55% of their value a few months ago are fetching 60% to 65% of it now. The biggest factor contributing to the current market conditions is limited supply of used cars. According to data from vAuto, there are approximately 2.34 million used cars available in America today. That’s more than 530,000 fewer than just one year ago in 2020, and about 430,000 less than during the same period in a

more normal 2019. These circumstances point to a huge opportunity for people thinking about selling or trading in their current vehicle. “There has never been a much better time to sell or trade in your car than right now during this strong seller’s market,” said Matt DeLorenzo, senior managing editor for Kelley Blue Book. “Dealerships are seeking more used-car inventory, and prices are reaching sky high. If you’re in a position to sell, it’s a great time to command top dollar for your old car. And if you’re trading in your vehicle to purchase a new one, the increased value of your used car will help take some of the sting out of the higher price you’re likely to pay when purchasing a car in these market conditions.” Consumers who want to buy a car right now are facing some tough times. Prices are high, supply is low and the forces that could change these conditions are caught up in a perfect storm of complex factors. A worldwide microchip shortage has severely limited new-car production, and the COVID-19 pandemic has triggered many people to look

for an inexpensive car rather than use public transit for their daily commute. Dealerships have fewer used vehicles to offer right now, but people are still buying cars and the demand is growing. Increased vaccinations are leading to the world slowly reopening, and when combined with boosted disposable income from government stimulus programs designed to kickstart the economy, people are shopping for cars again in droves. “America may be slowly returning to some semblance of normal, but the car market isn’t,” said DeLorenzo. “This means that people’s prior car-shopping experiences will not be able to tell them exactly how to handle this market. If consumers are even able to find the vehicle they want right now, they need to be prepared and understand they’re likely going to pay more for it than they probably thought they would. “With demand high and supply low, manufacturers aren’t offering as many discounts as people are accustomed to seeing; without available incentives, dealerships aren’t able to negotiate as much. And we don’t expect this to change much anytime

soon—it’s going to be a lean market for quite some time.” Understanding what your car is worth when selling or trading in, and what you should expect to pay when you’re buying a new or used car, can ensure you get the most for your money in either situation. Before selling or trading in a used car, consumers should research the trusted Blue Book Value® of their vehicle. Prior to purchasing any new or used vehicle, experts recommend that car shoppers check out the Fair Purchase Price range for that specific model on KBB.com. Based on thousands of data points and updated weekly to factor in changing market conditions, Kelley Blue Book’s Fair Purchase Price helps people understand what they should realistically expect to pay for that particular vehicle in their local area. For more information about the timing of buying, selling and trading in cars given the current related market conditions, visit https://www.kbb. com/car-advice/is-now-the-time-tobuy-sell-or-trade-in-a-used-car/ Source: Kelley Blue Book

autobodynews.com / JUNE 2021 AUTOBODY NEWS 43


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June 2021 Midwest Edition  

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