M IDW ESTEDITIO N
AUTOBODY IL / IN / IA / KS / KY / MI / MN / MO / NE / ND / OH / SD / WI
Hundreds of Individuals in the Industry Get Much-Appreciated Help from Foundation by John Yoswick
Bryan Kim’s collision and mechanical repair business, like many others, was struggling this spring as the COVID-19 virus and economic shutdown hit the Catonsville, MD, area. Sales at ASE Auto Center were down as much as 50% some months, not enough to cover rent and payroll. “We started bleeding money a little than some shops, that actually shut down for a week or two, but once we started, we bled a lot of money,” said Kim, who has owned the nine-employee business for seven years.
Adding to the challenge: Kim’s fiancé and his shop manager’s wife both contracted COVID-19, forcing Kim and his manager to each stay away from the shop for several weeks. “I didn’t want to bring it to the facility, and luckily no one who works here got sick,” he said. The situation was made a little bit easier, he said, because of some assistance from the Collision Industry Foundation, the nonprofit dedicated to providing emergency financial help or other assistance to members See Help from Foundation, Page 18
8 Things to Know in the Wake of Civil Disorders by Patricia L. Harman, PropertyCasualty360
Following days of riots and protests in cities and towns across the country in the wake of George Floyd’s death, there are many questions concerning insurance coverage, how to manage the risks and what other factors business and property owners should address in the aftermath. According to the Insurance Information Institute website, there is a cost to these events. Before the riots in Minneapolis and other areas—for which numbers are not yet available—the most expensive civil disorder events occurred from April
29 through May 4, 1992, in Los Angeles, following the acquittal of the police officers involved with the arrest and beating of Rodney King. Property Claims Services (PCS), a unit of Verisk Analytics, found the riots and looting caused $775 million in insured losses. More recently, there were $24 million in insured losses following the civil unrest that occurred in Baltimore, MD, in 2015 following the death of Freddie Gray, who died while in police custody after he suffered a spinal cord injury. Here are eight factors to considSee 8 Things to Know, Page 36
PERMIT #288 ANAHEIM, CA
PAID
Change Service Requested P.O. BOX 1516, CARLSBAD, CA 92018
PRESORTED STANDARD U.S. POSTAGE Midwest_Issue_0720.indd 1
38 YEARS
AUTOBODYNEWS.COM Vol. 9 / Issue10 / July 2020
How CIF Assistance Has Benefited Collision Repair Professionals in Time of Need by Stacey Phillips
When the coronavirus restrictions were first put into place, the Collision Industry Foundation (CIF) recognized the challenges being faced by the industry. As a result, the nonprofit organization set up a special COVID-19 fund to support collision repair professionals impacted by the pandemic. “Since 2001, CIF has been dedicated to raising, managing and donating funds to provide emergency relief to collision repairers who have
been impacted by natural disasters or other catastrophic events,” said Michael Quinn, CIF board president and SVP of business development at AirPro Diagnostics. “The donations we received for the COVID-19 fund were vital to help repairers across the country.” CIF established the fund with $100,000 raised previously, and CCC Information Services matched that amount. Other industry organizations and individuals then donated to the fund, including AirPro Diagnostics, Guy Bargnes, Colette See CIF Assistance, Page 20
How Hertz’s Forced Fleet Sale Could Affect the Used Car Market by Chris Brown, Auto Rental News
The sub headline under the Hertz bankruptcy is “Hertz fire sale will flood the used car market and depress prices.” This analysis won’t get us closer to knowing exactly to what extent pricing will be affected—if anyone can do that—but it will reveal the extent of the situation. To understand the moving parts, we need to understand approximately how many vehicles Hertz needs to sell, by when, the outlets for those sales, and then put it in context of the larger market. As a benchmark, let’s start with Hertz’s reporting of 518,580 vehicles in its U.S. fleet as of March 31. That figure should be lower as of the bankruptcy, as Hertz was able to return its guaranteed depreciation (program) units to the manufacturers. (In the fourth quarter of 2019, Hertz reported 29% of its vehicles were program cars, though that percentage has likely dropped to date in the second quarter.)
Hertz had the ability to cut its workforce in half because of the pandemic, but it can’t realistically cut fully half of its fleet due to the decline in demand. Though the ABS holders want to get paid sooner than later, they’ll need to allow Hertz enough of a cushion to operate.
We hear the insurance replacement business remains strong—remember Hertz owns the State Farm business—and assuming an estimated 40% utilization, that means roughly 210,000 cars are on the road right now. A realistic cushion that also meets potential increases in demand would mean Hertz could realistically sell off 130,000 vehicles, but not more than 200,000. Of course, this See Hertz’s Fleet Sale, Page 16
6/15/2020 4:33:17 PM