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Maryland Connecticut Rhode Island Massachusetts
14 Fort Wayne, IN, Shops Opt Out of State Farm’s Select Service Citing PartsTrader by Chasidy Rae Sisk
In December 2013, State Farm experienced a dramatic reduction in the number of shops participating in Select Service (their direct repair program) in the Fort Wayne, IN, area due to the implementation of PartsTrader. Of the 22 local shops particiTodd Bonecutter pating in the DRP, 14 (over 60%) opted out of the program, though some of these shops had
been on the program for decades. Several shop owners and managers were willing to discuss their reasons for being removed from the Select Service. Todd Bonecutter, General Manager at Glenbrook Collision at 100 W. Coliseum Blvd in Ft. Wayne, said he opposes PartsTrader as a mandated tool. “We don’t like being told where we can buy our parts or being prevented from buying parts from our usual vendors. This is just a stepping stone for the insurers to dictate other things in the collision industry. They See Shops Opt Out, Page 48
A NYC Select Service Shop Decides to “Just Say No” to PartsTrader as a Mandate
See Just Say No, Page 10
P.O. BOX 1516, CARLSBAD, CA 92018
As State Farm rolls out PartsTrader in various metropolitan areas across the country, a growing number of shops appear to be withdrawing from their Select Service DRP. Recently, shops in several states have withdrawn from the program, and this trend is now spreading to NY where Angelo and Gus Palakis, owners of Dale-Way Auto Body Center in the Bronx, refused to sign up for PartsTrader and were subsequently removed from State Farm’s Select Service Program. In January 2014, Angelo posted on LinkedIn: “State Farm is in the
process of rolling out PartsTrader in NY. We declined to sign on so we were immediately removed from the service first program. Hopefully, most shops in NY will do the same!” Palakis graciously agreed to discuss his reasons for refusing to use PartsTrader. Angelo was “very upset about the implementation of PartsTrader because it’s extortion! By State Farm making the use of PartsTrader mandatory, it’s dictating to body shops where to buy parts from, with potential savings for State Farm at the body shops’ expense. You are not given a
Change Service Requested
by Chasidy Rae Sisk
VOL. 3 ISSUE 11 FEBRUARY 2014
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Industry Observations from Collision Attorney
ERICA EVERSMAN If you’ve been paying the least bit of attention to legal issues in the collision repair industry over the past decade, you probably know of Erica Eversman, an OH-based attorney and consumer advocate who specializes in understanding collision repairers’ issues and their impact on consumer safety. A noted authority and frequent speaker on the topics of diminished value, DRP networks and the influence insurers attempt to exert over repairers, Eversman serves as a consultant to the industry, assisting repairers to analyze proposed regulations and laws affecting collision repair. In addition to creating “AutoMuse”, an award-winning blog, she is chief counsel for Vehicle Information Services, Inc. and the founder of the Automotive Education and Policy Institute, a non-profit organization geared towards educating consumers. Though Eversman is obviously busy playing so many roles, she took time from her hectic schedule to talk to Autobody News readers about some of the major concerns plaguing the collision repair industry today. As a consumer advocate, Eversman stresses that consumer education is vital; “first and foremost, consumers are the people in charge of their vehicles, but if they don’t have the proper information, they can’t stand up for themselves. They are the only ones who can effect meaningful change because it is their vehicles and their contract with the insurance company.” Furthermore, collision repairers must comply with consumer protection laws, so they are the ones at risk of noncompliance when insurer interference promotes a situation where repairers are asked to do as the insurer requests, which is always focused on cost and saving money rather than on providing a quality repair. The shop can only do so much, and if the consumer doesn’t help, they are essentially saying that the repair is good enough, even if it’s not actually safe.
INTERVIEW by Chasidy Rae Sisk
continued on page 18
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COLUMNISTS Attanasio - How to Improve Your Success with Google in 2014 . . . . . . . . . . . . . . . . . . 42 Chess - Honda’s Repair Instructions Need to Be Read and Followed . . . . . . . . . . . . . . . 51 Franklin - Re-Think Your Marketing For The New Year. . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Sisk - AASP-Massachusetts Prepares for 2014 with a Strategic Plan. . . . . . . . . . . . . . 14 Sisk - Montana Repairers Form a Small Association with Big Goals . . . . . . . . . . . . . 26 Yoswick - Shops Can Put News and Trends Related To Auto Insurers To Good Use . . . . . . 8
NATIONAL 14 Fort Wayne, IN, Shops Opt Out of State Farm’s Select Service Citing PartsTrader . . . . . . . . . . 1 14 States to Increase the Minimum Wage in 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 3M Presents its Top Body Shop Resolutions for 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 AAIA Releases 67 page 2013 Digital Collision Repair Trends Report with Analysis of Whole Industry . . . . . . . . . . . . . . . . . . . . . . 43 ABRA Acquires X2 Collision in Southern Illinois . 30 Attorneys Report Settlement of Largest [Auto Lending] Loan Discrimination Case in History . 47 Axalta Global Color Popularity 2013 . . . . . . . . . 44 Baton Rouge Tech is Safelite National Champion . 21 Beware Hole-in-One Golf Insurance Scams . . . 63 Body Shops and Towing Backed Up During Snowstorms in Indiana . . . . . . . . . . . . . . . . 30 Bosch Demos Driverless Car . . . . . . . . . . . . . . 59 California BAR Releases Consumer Inspection Video . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 CCC Acquires Auto Injury Solutions Inc. . . . . . 58 Chrysler Files Suit Against LKQ on RAM Design Patents . . . . . . . . . . . . . . . . . . . . . . . 3 Chrysler Seeks Registration of Diagnostic Software . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 CIC in Brief, More Next Issue . . . . . . . . . . . . . . 58 CIC Roundtable Launches Consumer Website for OEMs. . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Couple Guilty of Embezzlement from MI Auto Glass Company Get Probation and $189K in Fines . 46 Daydreaming Tops List of Crash-Causing Distractions. . . . . . . . . . . . . . . . . . . . . . . . . 63 Elk Grove, CA, CarMax Flooded with Job Applications . . . . . . . . . . . . . . . . . . . . . . . . 35 Enterprise Donates $25,000 to Education Foundation . . . . . . . . . . . . . . . . . . . . . . . . . 57
Fiat Completes Purchase of Chrysler Using $1.9B Chrysler Funding, Deal Heads Off IPO Wanted by UAW . . . . . . . . . . . . . . . . . . 13 Fire Destroys St. Augustine, FL’s Complete Collision . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Ford Approves Chief and Elektron Equipment for 2015 F-150 Repairs . . . . . . . . . . . . . . . . 60 Ford Approves Pro-Spot for Repairs of New F-150 . . . . . . . . . . . . . . . . . . . . . . . . . 39 Ford Rep Paul Massie on Repairing the 2015 F-150. . . . . . . . . . . . . . . . . . . . . . . . . 61 Ford’s 2015 F-150 Launch Focuses Repairer Concern on Costs and Benefits . . . . . . . . . . 16 Ford’s Best Selling F-150 Gets Lighter and Tougher . . . . . . . . . . . . . . . . . . . . . . . . 60 Hyundai, Kia Expect to Top 2013 Global Vehicle Sales. . . . . . . . . . . . . . . . . . . . . . . . 63 I-CAR President Van Alstyne Talks Welding and Training at CIC . . . . . . . . . . . . . . . . . . . 29 I-CAR Appoints Elise Quadrozzi as Director, Segment Development for Insurance . . . . . . 21 Industry Observations from Collision Attorney Erica Eversman . . . . . . . . . . . . . . . . . . . . . . . 1 Insurance Companies Manipulate Repair Costs Says Shop-Sponsored Complaint in Mississippi Court . . . . . . . . . . . . . . . . . . . . 49 Japanese Auto Lighting Supplier to Receive $56.6 Million Criminal Fine . . . . . . . . . . . . . 46 K&M Collision of NC Files Six Separate Shortpay Lawsuits . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 LKQ Responds to Chrysler Design Patents Suit . 3 Meet California’s NEW Bar Chief, Patrick Dorais . 22 Mercedes-Benz Recalls Some 2013 Vehicles for OCS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Minicars Fail Tough New IIHS Crash Test, Chevy Spark ‘Acceptable’ . . . . . . . . . . . . . . 35 MN Media Reports Increased Body Shop Traffic . 30 Mobileye Integrates with Accel Connected Car Technology . . . . . . . . . . . . . . . . . . . . . . 36 NASTF Board Appoints 2014 Co-Chairs . . . . . . 59 Nelson County High School in Lovingston, VA, Strives to Get Students to Work Right Away . 25 New Driver Authorization Cards Allow Legal Driving in Nevada, Insurance Has Been Available . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 NHTSA Moves Ahead on Backup Camera Legislation. . . . . . . . . . . . . . . . . . . . . . . . . . 60 North American Car & Truck Production Hits 16.6M Units . . . . . . . . . . . . . . . . . . . . . . . . 59 Not All Insurance Carriers Will Sell Policies to Newly Carded Immigrant Drivers, Citing History . 6 OSHA Implements New Internet Resources to Encourage Safer Practices: Toolkit Options and PEL Tables . . . . . . . . . . . . . . . . . . . . . . 43 OSHA Piles On Fines after Failure to Abate in NJ . 13 OSHA Gives Whistleblowers More Online Options . 10 Other Lightweights at the Detroit Auto Show . . 63 Pacific Collision Centers, Elite Group, and Supporters Donate 2013 Ford Focus to Family with Handicapped Child . . . . . . . . . . 57 PPG Introduces New Color Tool . . . . . . . . . . . . 55 Santa Monica FIAT is Now Largest FIAT Dealer in USA . . . . . . . . . . . . . . . . . . . . . . . 34 Self Driving Cars Could Dramatically Decrease Accidents . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Service King Acquires All Six Las-Vegas Based Collision Authority Repair Centers . . . . . . . . 20 Shops Weather All Kinds of Winter Weather Disruptions but More Polar Vortex Coming?. 38 State Farm and I-CAR Partner on New Welding Initiative, Easy Registration, Reduced Prices . 28 State Farm to Exit Canadian Market, Credit Union Buying. . . . . . . . . . . . . . . . . . . 63 Study Estimates 9% of Cars will be Self-Driving by 2035 . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 SUV Crashes into Colleyville, GA, Body Shop, Alcohol a Factor . . . . . . . . . . . . . . . . . . . . . 59 Texas Repairer Says He Wants His Tax Refunded . 53 What Precautions Need to be Taken Doing Windshield Repair in Very Cold Weather?. . . 40
Chrysler has filed a patent infringement action against LKQ and Keystone Automotive, saying the companies are producing and/or selling parts that infringe on 10 of its patented designs, specifically related to the Dodge RAM brand. Chrysler noted that LKQ's regulatory filings have the company stating that one of the risks of manufacturing aftermarket parts is patent infringement. The filing, which was made with federal court in Detroit, MI, Jan. 17, has Chrysler looking for a ban on the parts that infringe on the patents and damages “adequate to compensate Chrysler for the infringement, including the infringers’ profits, Chrysler’s lost profits, and/or no less than a reasonable royalty... Damages alone will not be a sufficient remedy under the law, and Chrysler has been and will continue to be irreparably harmed by Defendants’ infringement of the Ram Design Patents. Only a permanent injunction against Defendants will be adequate.” The suit seeks attorneys fees, a jury trial, and an award tripling the damages found at trial. LKQ has responded (next story.)
Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Contributing Writers: Tom Franklin, David Brown, John Yoswick, Janet Chaney, Toby Chess, Ed Attanasio, Chasidy Sisk Advertising Sales: Joe Momber, Sean Hartman, Bill Doyle (800) 699-8251 Sales Assistant: Louise Tedesco Art Director: Rodolfo Garcia Serving New York, New Jersey, Pennsylvania, Delaware, Maryland, Connecticut, Rhode Island, Massachusetts
Acura of Westchester . . . . . . . . . . 26 Amato Agency. . . . . . . . . . . . . . . . 42 Audi Wholesale Parts Dealers. . . . 57 Automotive Service Equipment . . 12 Axalta Coating Systems . . . . . . . . . 5 B & R Associates. . . . . . . . . . . . . . 25 Baystate Chrysler-Jeep-Dodge-Ram. 21 BMW Wholesale Parts Dealers . . . 53 CCC Information Services. . . . . . . 11 Central Avenue Chrysler-JeepDodge . . . . . . . . . . . . . . . . . . . . 13 Certified Automotive Parts Association (CAPA) . . . . . . . . . . 23 Classifieds . . . . . . . . . . . . . . . . . . . 62 Colours, Inc . . . . . . . . . . . . . . . . . . 17 Continental Auto Parts . . . . . . . . . 20 Creative Metal Manufacturing . . . . 30 DCH Family of BMW Stores . . . . . 27 Ditschman/Flemington Auto Group. . 2 Downdraft Systems . . . . . . . . . . . . . 8 Empire Auto Parts . . . . . . . . . . . . . 22 Equalizer Industries, Inc . . . . . . . . . 6 Fitzgerald’s Lakeforest HyundaiSubaru. . . . . . . . . . . . . . . . . . . . 51 Ford Wholesale Parts Dealers. . . . 55 Fred Beans Parts. . . . . . . . . . . . . . 64 Future Cure . . . . . . . . . . . . . . . . . . 28 Gary Rome Hyundai-Kia . . . . . . . . 39 Glanzmann Subaru . . . . . . . . . . . . 29 GM Wholesale Parts Dealers . . . . 50 Goyette’s Inc . . . . . . . . . . . . . . . . . 40 Hackettstown Honda. . . . . . . . . . . 16 Honda-Acura Wholesale Parts Dealers . . . . . . . . . . . . . . . . . 32-33
LKQ Responds to Chrysler Design Patents Suit
LKQ Corporation confirmed that a complaint has been filed against it by Chrysler Group LLC in the U.S. District Court in the Eastern District of Michigan. The lawsuit contends that certain aftermarket parts LKQ sells infringe Chrysler design patents relating to the Dodge RAM pickup truck. LKQ says it believes that the lawsuit is without merit and will defend it vigorously, “Moreover, the parts we sell that allegedly relate to these design patents represent an immaterial amount of our revenue. They represent less than one-tenth of one percent (0.001) of our estimated 2013 total revenue and less than onehalf of one-tenth of one percent (0.0005) of our estimated total revenue for all the years since the first patent was granted (2009 through 2013).” LKQ says it has forged mutually-beneficial business relationships with other auto manufacturers and cites its license arrangement with Ford, in place since 2009. The license arrangements allow the company to sell aftermarket parts covered by certain patents in exchange for a license fee. 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. ©2014 Adamantine Media LLC. Autobody News P.O. Box 1516, Carlsbad, CA 92018 (800) 699-8251 (760) 603-3229 Fax www.autobodynews.com Email: email@example.com
REGIONAL A NYC Select Service Shop Decides to “Just Say No” to PartsTrader as a Mandate. . . . . . . 1 Auto Collision Specialists Says it is the First Mercedes-Certified Body Shop in Baltimore, MD . . . . . . . . . . . . . . . . . . . . . 17 Connecticut Personal Injury Attorney Pleads Guilty to Defrauding 10 Insurance Carriers of a Total $2.5 Million . . . . . . . . . . . . . . . . . 34 Delaware Drivers Have New Protections Under the Law. . . . . . . . . . . . . . . . . . . . . . . 40 Long Island City Repairer Gets Tesla’s Approval . 13 MD Charges Insurance Agent with 87 Fraud Counts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 NJ Considers Banning ‘All Distractions’ While Driving. . . . . . . . . . . . . . . . . . . . . . . . 12 NSM Insurance Acquires Collector Car Insurer . 12 NY Attorney General Advises that Repos on Payday or Title Loans are Illegal in the State. . 4 NY Gov. Cuomo Approves Esurance Program to Install Anti-Texting While Driving Devices . . . . 4 PA Residents Have Right to E-Proof of Insurance in March . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Samuel F. Fortunato Passes. . . . . . . . . . . . . . . 12 Ulster BOCES in NY Gets I-CAR and GEICO $5K Grant Via Collision Education Foundation . . . 17 Western NY to Receive State Funds to Combat Insurance Fraud and Auto Theft . . . . . . . . . . 20
Chrysler Files Suit Against LKQ on RAM Design Patents
Hyundai Wholesale Parts Dealers. 49 I-CAR . . . . . . . . . . . . . . . . . . . . . . . 62 Ikotec USA. . . . . . . . . . . . . . . . . . . . 9 Jaguar Wholesale Parts Dealers. . 63 Kia Motors Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . 41 Koeppel VW-Mazda. . . . . . . . . . . . 47 Lexus Wholesale Parts Dealers. . . 60 Martech Services Company . . . . . 10 Maxon Hyundai . . . . . . . . . . . . . . . 34 Maxon Mazda . . . . . . . . . . . . . . . . 24 Mazda Wholesale Parts Dealers . . 56 MINI Wholesale Parts Dealers. . . . 52 MOPAR Wholesale Parts Dealers . 37 Nissan/Infiniti Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . 58 Porsche Wholesale Parts Dealers. 59 PreFab Ads . . . . . . . . . . . . . . . . . . . 4 Providence Lacquer & Supply Centre . . . . . . . . . . . . . . . . . . . . 14 Ruge’s Parts Center . . . . . . . . . . . 35 Security Dodge-Chrysler-Jeep . . . . 7 Subaru Wholesale Parts Dealers . 45 Sussman Auto Group . . . . . . . . . . 43 TechZone Airbag Service . . . . . . . 38 Thompson Organization . . . . . . . . 19 Toyota Wholesale Parts Dealers . . 61 Valspar Automotive . . . . . . . . . . . . 15 Volkswagen Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . 57 Volvo Wholesale Parts Dealers . . . 54 Wagner Auto Group . . . . . . . . . . . 31 Yonkers Kia . . . . . . . . . . . . . . . . . . 36 York Kia of Medford. . . . . . . . . . . . 46
www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 3
NY Gov. Cuomo Approves Esurance Program to Install Anti-Texting While Driving Devices
A new program that utilizes telematics and is aimed at curbing teen texting while driving has been approved in New York state, according to Governor Andrew M. Cuomo. The program, from insurer Esurance, allows policyholders to install a device free of charge in their cars to help prevent teens from texting and calling while driving. The initiative, which was reviewed and approved by the Department of Financial Services, lets parents choose to create customized “block lists” that can stop specific cell phone activities when the car is in motion. “It’s encouraging to see programs that give parents new tools to help stop their sons and daughters from texting while driving,” said Governor Cuomo. “A combination of inattention and inexperience has far too often produced tragic results for teenage drivers. That’s why my Administration will continue to do everything it can to discourage distracted driving and help parents better protect their children on the highways.” Benjamin M. Lawsky, superintendent of financial services, said, “I applaud Esurance for using innovative technology to discourage texting
while driving, which could help prevent accidents and save lives. That’s a step toward keeping not only teen drivers, but everyone else, safer on the roads. We encourage other insurers to consider using this type of technology – known as ‘telematics’ – to help reduce distracted driving and hold down premiums over the long term.”
Under Esurance’s new voluntary program, policyholders may install an in-car device into their teen’s car that, in conjunction with an Esurance app installed on their teen driver’s phone, can limit the use of text, email, application usage and phone calls while driving (with the exception of 911). The device can also monitor driving
NY Attorney General Advises that Repos on Payday or Title Loans are Illegal in the State
New York’s attorney general’s office recently sent a warning letter to the American Recovery Association about repossessing vehicles owned by state residents that are connected with title loans, which law enforcement officials contend are illegal in the Empire State. In the document posted on ARA’s website, assistant attorney general James Morrissey explained payday loans are illegal in New York, but firms are using online channels to accomplish the same endeavor by using a vehicle title as collateral. Morrissey clarified that the following attributes taken together make loans illegal in New York: —A personal loan to a New York resident of $25,000 or less from a lender that is not licensed by the New York State Department of Financial Services. —The loan is for personal, family, household or investment purposes. —The unlicensed lender charges an annual interest rate of more than 16 percent. “If the lender is a federally chartered bank, or a bank that is chartered by a state other than New York State,
the loan may not violate New York law. This would rarely be the case with a title loan,” Morrissey said. “Your members should be aware that if they repossess the motor vehicles of New York residents based on an illegal title loans, they too may find themselves the subject of an investigation and an enforcement action by the (Office of the Attorney General),” Morrissey went on to tell the ARA here. Morrissey added that the New York attorney general believes that repossessing vehicles based on illegal, void and unenforceable loans constitutes illegal, fraudulent and deceptive business practices. He said a court could order penalties of up to $5,000 for each deceptive act as well as costs. “I welcome the opportunity to speak with you to discuss what role the ARA could play in assuring that its members do not enforce payday or title loans that violate New York civil and criminal usury laws,” Morrissey said.
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4 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com
behavior, including speeding, hard braking, fast acceleration, and other activities. Parents can log onto an Esurance Web portal to customize the device and review their teens’ driving habits. “We are pleased that Governor Cuomo, Superintendent Lawsky, and the state of New York have approved our teen driver safety program,” said Esurance president and CEO Gary Tolman. “Esurance DriveSafe can empower parents with smart, innovative technology to help their teens become safer, more responsible drivers.” Governor Cuomo has taken a number of steps to enhance the safety of New York roads and discourage texting while driving. He has: Directed the DMV to increase the number of points earned against a person’s driving record for convictions for cell-phone related infractions. Signed a law that raises the penalties for young and new drivers caught texting-while-driving to the same severity as the penalties for speeding and reckless driving.
Designated 91 “Texting Zones” on the New York State Thruway and state highways to give drivers a pulloff area to park and use their phones. The Governor has also worked to increase awareness among drivers about the dangers of texting while driving. Statistics show that texting and using a cellphone while driving is a growing trend, whereas alcohol-related driving has declined. From 2005 to 2011, there has been an approximately 143% increase in cell phone-related crashes in New York state. In that same time period, there has been an approximately 18% decrease in alcohol-related crashes in New York state. In 2011, there were 25,165 fatal and personal injury crashes involving distracted driving in New York, compared to 4,628 caused by alcohol-related driving. In New York state, the number of tickets issued for texting-while-driving (30,166) approached the number of DWI/DWAI arrests (43,954) in 2012. In fact, between 2011 and 2012, there was a 234% increase in the number of tickets issued for texting while driving. In the same time period, there was a 4% decrease in the number of DWI/DWAI arrests.
www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 5
New Driver Authorization Cards Allow Legal Driving in Nevada, Insurance Has Been Available A law passed by the 2013 Legislature and signed by Republican Gov. Brian Sandoval allows immigrants in Nevada without citizenship status to obtain driver authorization cards. An increasing number of states have been passing similar laws in recent years, and 11 states and the District of Columbia have enacted such measures. These cards authorize the holder to drive a motor vehicle on Nevada public streets and highways. A DAC is not valid as identification to obtain any state benefits, licenses or services or for federal purposes such as boarding aircraft or entering facilities where ID is required. Driver Authorization Cards are valid for one year from the date of issuance. You may renew the card each year. All renewals and address changes must be completed in person. You cannot drive legally in Nevada without a driver’s license but you have long been able to buy auto insurance without one. It’s a little known fact that illegal aliens in Nevada have already been able to insure themselves, purchasing insurance for as little as $30 a month and as much as $200. It meets the state’s requirements, even if they’ve been illegally driving the roads. Las Vegas agent Esperanza Montelongo sells at least a dozen poli-
cies for liability coverage a month. She has sold more than 5,000 policies in the past eight years for American Access, a Chicago-based insurance carrier that saw an opportunity to provide auto insurance to a segment of people who have been ignored by mainstream insurance companies. These immigrants have been considered a high risk because they can’t produce a valid driver’s license. Montelongo estimated that at least 80 percent of the undocumented population in Las Vegas already have insurance. Asked whether from a business standpoint she’s looking forward to Nevada’s new driver authorization card, which will allow immigrants in the country illegally to legally drive in Nevada starting , the 58-year-old Nebraskaborn woman sat back and chuckled. “Gosh, I can only hope that there’s a huge fluctuation in business. But I’m not anticipating it because most of the Mexicans here are already insured,” she said, referring to Las Vegas. “And I say Mexicans because we’re talking about Mexicans. Nevada is Mexican country. They’re the majority of my customers, and they’re fiercely loyal.” It’s an interesting approach to doing the right thing and yet such pur-
Not All Insurance Carriers Will Sell Policies to Newly Carded Immigrant Drivers, Citing History
Although some insurance companies anticipate a flood of new policies, many are taking a wait and see approach to the newly legal drivers. Some car insurance companies anticipate a new golden market in new driving privileges. Even before the cards were available, these carriers found that the illegal driver segment is very profitable. The insurance companies experience good “retention,” meaning that the policies renew regularly. Just as important is the fact that illegal immigrants seldom report small accidents to lower the chances that they'll have a brush with the law. Companies like Progressive, Farmers Group, Bristol West, Infinity P&C and Alliance United have been putting a lot of effort into expanding this part of their book of business. Even though many states deny driver's licenses to illegal immigrants, the law generally doesn't prevent insurers from selling insurance to unlicensed drivers and car owners. Companies like Progressive are already writing car insurance for illegal immigrant drivers and expect to sell more now that licenses are available to illegals. However others are more cau-
tious. Farmers Insurance Group of Companies, for example, is still taking a wait-and-see approach as to whether it will insure the new motorists, according to Robert Compan, the company’s government and industry affairs manager. He estimates it will take at least three years to figure out whether there’s a profit in the business. “The law doesn’t mandate that we sell it,” said Compan, an executive board member for the Nevada Insurance Council, an educational and public policy arm of the industry. “But if there’s a profit margin to be made, of course we’re going to sell it, but how do you rate it if they don’t have a driving history? How do you rate it if somebody doesn’t have a credit history? If we don’t know how they manage their daily lives, it could be difficult providing insurance. “Normally, what we’ll do is take a look at the driving history and predicate the rates on that, but in this case it’s hard to rate somebody who doesn’t exist in the system,” he said. Compounding the problem, See Immigrant Drivers, Page 10
6 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com
chases have been upstaged by the political hype surrounding the new card and the boon that an estimated 60,000 card-carrying customers are expected to bring insurance companies across the Silver State under Senate Bill 303, Montelongo said. The legislation was designed to make the roads safer on the premise that motorists will not only be required to purchase insurance but also to pass DMV tests demonstrating that they know how to drive and understand the rules of the road. Aztec isn’t the only insurance agency doing business in the valley. Nearly 50 such companies, most licensed and registered under the Nevada Department of Insurance, can be found in and around predominantly Latino neighborhoods. There’s Insurance for Less down the block from the Aztec Insurance office. There’s El Sol Insurance about a mile away. Estrella Insurance a little bit farther. Many of these insurance companies here have been selling liability policies for years to immigrant motorists who want to be covered in case of an accident. In the absence of a license, the immigrants want to have proof of insurance should they be cited for a traffic infraction and wind up in court.
Alfonso Garcia, a criminal attorney, has represented hundreds of immigrants who have had to explain to Las Vegas judges why they don’t have a valid driver’s license. Many times that proof-of-insurance card brings leniency, not only from the traffic cop but also from the judge. “We’re talking about people who are already on the radar for being in the country illegally,” he said. “The last thing they want to do is get stopped and not have proof of insurance.” Mostly, Garcia said, the judges accommodate them by reducing charges and fines for first-time offenders. “They know that just about any of us can get cited for a traffic infraction, and so they give them a chance,” he said. “Just like they’d give you or me a chance.” But because they are living in the country illegally, it can be difficult to produce a driver’s license without first producing proof of legal residency. This fact has led some offenders trekking across state lines to apply for driver’s licenses in the more lenient states, such as Oregon, Washington and New Mexico. “But all that’s about to change,” Garcia said. “Now everything will be above board with the new law, and the judges are hip to that.”
www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 7
Industry Insight with John Yoswick
—John Yoswick is a freelance writer based in Portland, Oregon, who has a body shop in the family and 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.
Shops Can Put News and Trends Related To Auto Insurers To Good Use It’s easy as a shop owner to get so caught up in day-to-day operations that it can be a challenge to follow just the news directly affecting collision repairers. But there’s plenty of insurance-related news that shops also should know about, because it can help them educate their customers, market their business, and maybe even alter how they vote or shop for insurance themselves.
Insurer pushes for more alternative parts As of this year, The Hartford is now requiring its direct repair shops to use “any appropriate alternative part when it is available” regardless of the age or mileage of the vehicle being repaired. A memo from Bethany Siddall, director of auto claims for The Hartford, tells shops the new policy is subject to state law, and that any salvage parts still must be of the same model year or newer than the vehicle being
repaired. But unless prohibited by state law, the new mandate means available non-OEM parts must be used even on current model year vehicles. “Keep in mind that each claim should be handled on an individual basis and any variance from this standard should be clearly documented in the claim file,” Siddall’s memo states. State Farm encouraging welding training, certification. When I-CAR announced a new lower pricing structure for its welding qualification testing (now called Welding Training and Certification) early this year, it also announced that State Farm negotiated a discount for its Select Service shops as well. The announced continues State Farm’s track record of encouraging but not mandating certain training requirements on its direct repair shops. “We believe welding proficiency benefits State Farm policyholders by providing quality repairs to policyholder vehicles,” Russ Hoffbauer, di-
rector of property and casualty claims for State Farm, said. “While participating in the I-CAR Welding Training and Certification is not mandatory for Select Service repairers, we anticipate that repairers will be eager to take advantage of this unique opportunity.” Tardy insurance regulation report issued by the feds. Nearly two years after it was due, a new report released by the Federal Insurance Office in December concludes more federal regulation of some aspects of insurance is needed. Rather than debating federalvs. state-oversight of insurance, the report suggests a hybrid approach, with federal involvement where beneficial in an otherwise state-based system. Most of the federal regulation suggested in the report deals with mortgage insurance and international insurance issues, but it also calls for oversight of personal lines in terms of practices related to risk-profiling groups and individuals based on personal information.
Insurer groups were generally pleased with the report’s support for more consistent state-based regulation of the industry but were more skeptical of its call for more federal involvement.
State insurance regulator group in upheaval At the same time when increased federal oversight of the insurance industry is being proposed, the association of state insurance regulators appears to be having internal Tom Leonardi conflicts. Connecticut Insurance Commissioner Tom Leonardi is calling for an outside firm to conduct a corporate-governance review of the National Association of Insurance Commissioners (NAIC), questioning what he sees as poor decisions by the group’s executive com-
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mittee and what he called NAIC’s “imperial presidency.” Leonardi cited as one example the decision by last year’s president, Kevin McCarty of Florida, “to give the Federal Insurance Office one of the NAIC’s three seats on the International Association of Insurance Supervisors Executive Committee.” He was also critical of some insurance commissioners’ decision to turn down an invitation to meet with President Obama. “This could be so bad that it might be the pivotal point we later recognize that doomed state-based regulation. Talk about a self-inflicted wound,” Washington Commissioner Mike Kreidler is quoted in the letter. Leonardi said “cronyism” and the “undue influence of two former [unnamed] commissioners,” is undermining the NAIC and gives fodder to those who question “whether we are up to the task of regulating the largest insurance market in the world.” Other state insurance commissioners have raised similar concerns but believe the NAIC needs to attempt to address the issues internally before seeking the outside review that Leonardi wants. State enacts new deductible rules. Pennsylvania Gov. Tom Corbett in December signed a new law that allows insurers to offer zero-deductible auto policies? Previous state law required a deductible of at least $100. The legislation also drops the current mandate that policyholders selecting a deductible below $500 acknowledge Tom Corbett in writing that they recognize that “a lower deductible means a higher premium.”
Insurer offers telematics as a way for parents to track teen drivers Esurance says parents in 39 states who have installed its DriveSafe telematics device on their vehicle can now pair the device with their teenage driver’s cell phone to limit (on some phone brands) texting or other use of the phone while the car is in motion. The system also allows parents to monitor a teen’s driving behaviors including routes taken, speeding, hard braking or driving past curfew. Esurance says the information is not shared with the insurer nor is it used to determine premiums.
Insurance exec a big, big winner Ira Curry, a 56-year-old vice president for property-casualty in the Atlanta office of Aspen Insurance, was one of two winners in December’s Mega Millions $636 million jackpot. An Aspen spokesman said Curry had taken a leave from the company “to disappear with family for a while.” Curry took the lump-sum cash option, walking away with about $120 million after taxes.
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Insurer to offer policies in another state Pennsylvania-based Erie Insurance Group will expand into Kentucky, its 13th state, by early next year. Erie is the 15th largest personal auto insurer in the country, although nearly half of its premiums are from insureds in its home state.
Idea of city-owned insurer debated An editorial in the Detroit News urged Mayor-elect Michael Duggan to drop his idea of starting a city-owned auto insurance company. Duggan first raised the idea last fall while campaigning to become Detroit’s next mayor. Detroit residents by some estimates have the highest auto insurance rates of any city in the country, leading some residents to use suburban addresses when buying auto Mike Duggan insurance. Duggan said his own auto insurance rates doubled when he moved from nearby Livonia to within the city limits of Detroit. The newspaper says Duggan should not take on such a risky endeavor but should instead focus on efforts to curtail auto thefts and to lobby the state for reform of the nofault system. One claim in the editorial surely caught the eye of collision repairers. “If Duggan believes he can lower premiums by taking the profit out of insurance, he’s in for an awakening,” the editorial states. “There is no profit in auto insurance, (Peter) Kuhnmuench (executive director of the Insurance Institute of Michigan), says.”
John Yoswick is also the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). He can be contacted by email at: jyoswick@SpiritOne.com.
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Continued from Page Cover
Just Say No
choice; if you do not use PartsTrader, they remove you from their Select Service Repair Program and start steering your customers to other body shops.” Using PartsTrader would also create more administrative work for the shops, Palakis believes. In turn, this will increase the shops’ cycle times as well as rental costs for the consumer. Because PartsTrader requires purchasing parts from the vendor that bids the lowest price, a ten-part order could potentially be shipped from multiple vendors. Palakis recently read an article about a shop owner using PartsTrader whose number of vendors grew from 30 to 300, most of which were located outside his market area. “To manage parts from so many different vendors would be very timeconsuming (receiving them, checking them, and distributing them),” Palakis explains. “To return a wrong or damaged part would also be very timeconsuming since you have to find where the part came from and what procedure that vendor wants you to follow.” Currently, Dale Way has accounts with most of their vendors, granting them 30 days to pay their bills, but using PartsTrader would necessitate paying for their parts upfront, though State Farm won’t pay the shop until the repair is finished and the vehicle is delivered to the customer. According to Palakis, “this is a lot of time that we wouldn’t be compensated for. At the same time, our parts profit margins will shrink. For example, since you’re not purchasing your GM parts from one vendor, you would not be getting the same discount or service. Our ability to negotiate a better parts discount, as an independent business, would be taken away, leaving us at the mercy of the vendors on PartsTrader. Since opening Dale-Way Auto Body Center in 1981, the Palakis brothers have developed close relationships with their vendors. “Not only when it comes to parts; sometimes, we may need information or help with a vehicle, and they are always there for us. By using PartsTrader, these relationships would be destroyed,” Palakis says. “State Farm asked us to sign on with PartsTrader and provide them with a list of our vendors so they can
approach them and basically intimidate them to sign on and pay a monthly fee or lose our shop’s parts business – those are mafia-like tactics! There is no benefit to the repairer or the customer.” Serving the customer’s best interest is a high priority for Palakis, but he does not feel that State Farm’s actions regarding PartsTrader align with this goal. “We have a responsibility to our customers who entrust their vehicle repairs to us, the auto body repair professionals. They trust us to repair their vehicles using the best procedures, parts and materials available, but using PartsTrader would mean I’m putting the insurance company’s interest before the customers who authorized us to repair their vehicle in the first place. In the end, the repairer and the consumer would lose, while the insurer and PartsTrader would profit.” In business for over 30 years, Dale-Way Auto Body Center repairs around 80 to 100 vehicles monthly. Currently, they participate in DRPS for three smaller insurance carriers that are “somewhat fair and do not try to micromanage us,” Palakis shares. In the 1990s, they enrolled in several DRPs for major insurers, such as Allstate, Geico and State Farm, among others. Palakis explains that the reason for joining these DRPs was because they felt that Dale-Way “could serve our own customer better by writing our own estimate, thus eliminating the need for most supplements and not having to wait for adjusters who were mostly incompetent. We also thought these programs could better our industry because they required shops to be licensed, equipped and trained, thus perhaps leading to higher and fairer labor rates. Obviously, we were wrong.” Dale-Way began withdrawing from these programs as long as a decade ago when “they tried to micromanage us and dictate how repairs should be done,” Palakis recalls. Even if State Farm was willing to terminate the mandated use of PartsTrader, Palakis would not rejoin their DRP; “the way that they are strong-arming our industry, I don’t think I would trust State Farm enough to participate in their Select Service Repair Program again.” Palakis feels that what State Farm is doing, in terms of their interference in the repair process, is illegal; he hopes that the lawsuits against State
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Farm and PartsTrader are successful in MS and FL and that more states follow suit in resisting this tortuous interference via legal channels. He also believes that “this is just the beginning – once State Farm and PartsTrader implement this program across the country and State Farm has all its Select Service shops using it, after a period of time, State Farm will utilize PartsTrader to squeeze a bigger percentage of the parts profits away from body shops, maybe even just send the parts to the shops and pay them a handling fee.” What would be Palakis’s advice to shop owners who are still deciding whether to sign up for PartTrader? “Just say ‘no’,” he suggests. “If most shops say ‘no’, State Farm will get the message and stop the mandated use of PartsTrader. If this industry keeps allowing insurers to dictate our practices and interfere in our businesses, it will reduce your parts profits, and you will have less control of your own business.” Dale-Way Auto Body Center 3039 Tibbett Ave. Bronx, NY 10463 718-601-8100 www.Dale-Way.com
OSHA Gives Whistleblowers More Online Options
Employees covered by any of 22 whistleblower statutes administered by OSHA can now file their complaints with the agency online. The five-part online form prompts workers to include basic whistleblower complaint information so they can be contacted easily for follow-up. Complaints are routed automatically to the appropriate regional whistleblower investigators. The form is downloadable and can be submitted in hard-copy format by fax, mail or hand delivery. “The ability of workers to speak out and exercise their rights without fear of retaliation provides the backbone for some of American workers’ most essential protections,” OSHA Assistant Secretary Dr. David Michaels said. “Whistleblower laws protect not only workers, but also the public at large and now workers will have an additional avenue available to file a complaint with OSHA.”
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MD Charges Insurance Agent with 87 Fraud Counts
Carolyn Yvonne Nowicki, 43, an insurance agent in Pasadena, MD, has been charged with 87 counts of insurance fraud and felony theft and one count of theft scheme over $100,000 by the Maryland attorney general’s office. The indictment alleges that from June 22, 2009 through May 13, 2011, Nowicki stole a total of $117,150.59 in insurance premium funds from 57 individuals and businesses. At the time of the theft, Nowicki was working as an insurance agent at Main Street Insurance, an independent insurance agency located in Pasadena. Her scheme targeted customers of Main Street Insurance and involved numerous insurance companies. In Maryland, a fraudulent insurance claim having a value of $300 or more is a felony and is punishable by a maximum sentence of 15 years incarceration and a $10,000 fine, according to state authorities. A theft scheme involving $100,000 or more is a felony punishable by a maximum sentence of 25 years incarceration and a $25,000 fine. The case is being prosecuted by the Insurance Fraud Unit of the Maryland Attorney General’s Office.
PA Residents Have Right to E-Proof of Insurance in March
Pennsylvania residents will soon be able to prove they have auto insurance via electronic mobile devices during a traffic stop. Residents will be able to receive their proof of auto insurance electronically or sign up for collision coverage without a deductible. Senate Bill 1040 allows insurance companies to electronically issue financial responsibility identification cards, if both the insurance company and consumer agree. “With the type of technology we literally have at our fingertips, we receive all sorts of documents electronically,” said Rep. Tina Pickett (R), who serves as chairman of the House Insurance Committee. “It is time to update our laws to reflect this change, and that’s why we [have worked] to make it easier for motorists to receive their auto insurance cards electronically.” The legislation also removes the requirement that vehicle owners carry insurance policies with a minimum deductible for collision coverage. Currently, state law mandates that vehicle owners carry a $100 minimum deductible for collision coverage. ductible policy. The law takes effect in March. Other states, including VA and ME, have similar legislation.
NJ Considers Banning ‘All Distractions’ While Driving
Such activities as smoking, drinking coffee or putting on make-up while driving could be a no-no in New Jersey if a bill introduced in the state Assembly gains traction. The Assembly’s transportation committee voted 12-0 to advance the bill, which proposes to fine drivers who “engage in any activity unrelated to the operation of a motor vehicle in a manner that interferes with the safe operation of a vehicle.” The bill doesn’t lay out which activities would cause distracted driving, instead leaving that up to the police to determine. The bill has not been introduced in the state Senate.
Samuel F. Fortunato Passes
Samuel F. Fortunato, age 84, of Little Silver, died Jan. 8. He was New Jersey Insurance Commissioner under Gov. Jim Florio. It was during this time that he implemented the FAIR Automobile Insurance Reform Act of 1990. He presided over the largest life insurer rehabilitation in history with the collapse of Mutual Benefit Life ensuring payment of benefits to thousands of policyholders. Mr. Fortunato was born and raised in Brooklyn, New York.
NSM Insurance Acquires Collector Car Insurer
NSM Insurance Group has acquired American Collectors Insurance of Cherry Hill, NJ, a 40-year-old insurer of collector cars and other collectibles. Terms were not disclosed. NSM, a national commercial P&C insurance program administrator based in Conshohocken, Pa., specializes in the development and implementation of industry-specific insurance programs across the U.S. The company will triple its collector car business with this acquisition, according to NSM. “We are looking forward to growing and expanding American Collectors,” said Geof McKernan, CEO of NSM Insurance Group. NSM underwrites more than 20 admitted and non-admitted insurance programs nationally. In addition to collector cars, other niche markets the company serves are coastal condominium associations, social service, hospitality, professional liability for lawyers and dentists, construction and workers compensation. In a statement, NSM said it is “aggressively seeking” to acquire additional collector car businesses, program managers and niche specific insurance businesses.
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Fiat Completes Purchase of Chrysler Using $1.9B Chrysler Funding, Deal Heads Off IPO Wanted by UAW
Fiat has completed the acquisition of shares in Chrysler Group it did not previously own, making the U.S. unit a wholly-owned subsidiary of the Italian carmaker. The deal headed off a public stock offering of Chrysler shares that Fiat and Chrysler didn’t want, but the UAW was forcing, in order to set a value on its stake. The company announced that it had struck the $4.35 billion deal to gain full control of Chrysler on Jan. 1, ending more than a year of talks that had obstructed CEO Sergio Marchionne’s efforts to combine the two automakers’ under one management structure. Fiat bought the remaining 41.46 percent stake in Chrysler from a retiree healthcare trust affiliated with the UAW. The trust, known as a voluntary employee beneficiary association or VEBA, has received $3.65 billion in cash for the stake, $1.9 billion of which came from Chrysler and $1.75 billion from Fiat. Chrysler has also committed to giving the UAW trust another $700 million in four equal annual installments, the first of which was paid in connection with the deal closure, Fiat said. Fiat previously bought out the
stake held by Canadian governments, so once the current deal closes, Fiat and Chrysler can be merged into a single company. The deal will unite the Fiat and Lancia brands and Alfa Romeo, Maserati and Ferrari, with Chrysler and Dodge mass market groups and Jeep. Marchionne, a Canadian/Italian accountant, will remain as CEO through at least 2016 to pursue the merger of Fiat and Chrysler as part of a strategy to maintain earnings growth, Chairman John Elkann told journalists in Detroit on Jan. 13. Marchionne has estimated that Fiat and Chrysler together are the seventh-biggest carmaker worldwide. The two companies sold about 4.4 million vehicles combined last year, about half the annual production of Volkswagen, GM, and Toyota. Marchionne has said that the US has the best claim as headquarters for the new company and that, once the Chrysler combination is complete, Fiat would be open to additional partnerships with other carmakers, such as Peugeot Citroen and Suzuki Motor Corp. Chrysler, meanwhile, has reported solid earnings—$1.14 billion for the first three quarters of 2013, and nine consecutive profitable quarters.
Long Island City Repairer Gets Tesla’s Approval
Premium electric vehicle manufacturer Tesla Motors has invited Precision Auto Works, 3746 9th St, Long Island City, to become a Tesla Approved Collision Repair Center (TACRC). Precision Auto Works is the only Tesla certified collision center in New York City. Mike Giannakos, an owner of Precision Auto Works, said Precision’s I-CAR-certified Technicians were invited to Tesla headquarters in Fremont, CA to complete a combined 160 hours of factory training on the fully-electric, aluminum-constructed vehicles. “It’s exciting for Precision Auto Works to be a part of the green automaking revolution,” said Giannakos, who is an ASE certified Master Technician who holds a BS in Mechanical Engineering and is also FAA-certified in aircraft repair, “... and to see so much cutting-edge technology in each Tesla vehicle.” The shop began the process two years ago when they pursued specialized hybrid and electric vehicle training and certification through Go-Green Auto Centers of Long Island. Precision Auto Works of LIC provides both collision and mechanical repairs in Long Island City, NY.
OSHA Piles On Fines after Failure to Abate in NJ
In September last year the U.S. Department of Labor’s OSHA cited Jersey Shore Steel for four violations, including three failure-toabate citations, at its Jackson facility. Proposed penalties total $115,400 after OSHA’s follow-up inspection. “By not abating past violations, Jersey Shore Steel keeps its employees vulnerable to hazards that can cause injuries and, possibly, death,” said Paula Dixon-Roderick, director of OSHA’s local office. “It’s vital to correct all hazards immediately to protect workers at the facility.” The failure-to-abate notices, which carry $111,000 in penalties, relate to the company’s failure to develop and implement a written lockout/tagout program that prevents inadvertent machine start-up; require fork truck operators to have their performance evaluated at least once every three years; and train workers to use portable fire extinguishers. A failure-to-abate notice applies to a condition, hazard or practice, found upon re-inspection, that the employer was originally cited for and failed to correct. The company was also fined $4,400 for lacking proper machine guarding.
www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 13
Chasidy Rae Sisk is a freelance technical writer from Wilmington, Delaware, who writes on a variety of fields and subjects, and grew up in a family of NASCAR fans. She can be contacted at firstname.lastname@example.org.
AASP-Massachusetts Prepares for 2014 with a Strategic Plan with Chasidy Rae Sisk
As 2013 draws to a close, AASP-MA prepares for what it sees as an exciting new year. Though the Board of Directors’ last meeting of 2013 was canceled due to inclement weather, they have used the time to make plans for 2014. Executive Director Jillian Zywien notes “2013 was a year of change for AASP-MA, and I am encouraged by the feedback received from our leadership and members. We had a successful year, and I look forward to 2014.”
The association will hold their first quarter Statewide Informational and Educational meeting on January 14th at the Doubletree Hotel in Westboro, MA, where all statewide and board meetings are scheduled to convene. According to Zywien, “our upcoming State Meeting will focus on a number of recent AASP-MA projects, including: our strategic planning session, our new member benefit offerings, and updates to our website and social media presence. We will also be presenting on legislative activities and the decision by Auto Damage Apraiser Licensing Board (ADALB, see Autobody News, Jan issue) to open the regulations (CMR 211, 212) for updates and changes. This meeting is a great opportunity for members and nonmembers, too.” Additional statewide meetings are scheduled for March 11, May 13 and September 9, 2014. AASP-MA’s Board of Directors met on January 9th to discuss the ADALB’s recent decision to open current regulations for review by both the ADALB and the Division “in an effort to update antiquated language, align the regulations with current business practices, and make sure the ADALB is doing its job.” The Board of Directors has selected five sections of regulations they would like to see reviewed: conflict of interest, contact with claimant and selection of repair facilities, revocation and suspension, conduct of appraisals,
and requirements of personal inspection and photographs. Both CMR 211 and CMR 212 are to be reviewed by the Division’s general counsel and staff, with those recommendations being reviewed at the ADALB’s next meeting on February 25th. After this review, a notice of hearing will be distributed for public comment, and the formal hearing will be scheduled. Regarding AASP-MA’s role in this review, Zywien explains, “AASPMA’s legislative committee has set up a meeting to review the regulations and formulate and submit our response to the Division and the ADALB. On January 7, we will be formulating our strategy for the upcoming ADALB. This is an important opportunity for our member shops to play an active role in the rewrite of these regulations. Please pay close attention to all future association publications as this initiative develops.” AASP-MA’s Board of Directors plans to meet monthly in 2014 with subsequent meetings scheduled for February 25, March 25, April 22, May 27, June 24, July 22, August 26, September 23, October 28, November 25, and December 16. AASP-MA has determined that they will hold their Annual Golf Outing at the Charter Oak Country Club in Hudson, MA on either June 10th or 12th, while Casino Night 2014 will be held on either November 8th or 15th. Though individual chapters of the association have yet to establish dates for their planned events, they intend to host the same events as in past years, such as the Midstate Chapter’s Annual BBQ and the Western’s Chapter’s yearly Clambake. At their recent strategic planning meeting, AASP-MA’s Board of Director’s primary goals were to “clearly define AASP-MA’s mission statement, vision, and strategies and to provide members with a clear understanding of the association’s direction on behalf of the entire industry... This is the first time the Board of Directors has participated in this kind of exercise, and I believe they did a fantastic job in aligning the new plan to members’ needs,” Zywien boasts. The association has also re-
14 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com
vamped their mission statement to “Building the Success of the Auto Repair Industry”, which has been incorporated into their new logo. When the Board of Directors was asked what 2016 if they face no hurdles, they established a long list of like-to-haves. In addition to having a functioning ADALB and increasing membership to 500 individuals, they would like to have an auto labor rate change and a vehicle for sustained increases, as well as to strengthen participant appointees from the industry to the government. They also strive to be a subject matter expert to legislators, Departments of Insurance, media and consumers, plus they’d like to improve the image of collision repair owners and facilities to include setting the standards for the industry. Other goals include: “have our member shops be proud to be members and have clout with insurers, to be the education provider to the industry and
provide continuing education programs for shops and employees, have an increase in sponsor and vendor involvement, and have fair negotiations achieved through regulatory restructuring to include parts procurement.” While AASP-MA is a known advocate within the industry and among their peers, they have asked themselves how they will achieve their plan. Zywien and the Board of Directors respond, “we have the intestinal fortitude, resources, and determination to win. We focus on advancing the collision industry. We make you a more successful business owner. We work to solve industry wide problems. We are the experts for our industry, and we have ‘right’ on our side.” AASP-MA has their work cut out for them as they aspire to reach their visions, but Zywien is optimistic; “I am really looking forward to delving deeper into our strategic plan and tackling some of our goals.”
www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 15
Ford’s 2015 F-150 Launch Focuses Repairer Concern on Costs and Benefits Ford has spend 5 years developing its 2015 F-150, the first full size pickup with a 95% aluminum body, and it has invested heavily in a market segment it already dominates. Ford started work in 2009 on the truck program that yielded the F-150, according to COO Mark Fields in assessing its ability to service, manufacture and purchase material before deciding on an aluminum body. What are the costs of this radical reengineering to consumers? Ford has implied the sticker price will be “roughly the same as the current F150, from $24,500 to $55,000.” Maybe. But what is indisputable is aluminum’s inherently higher price. Aluminum sheet currently costs $2.20 per pound vs. steel at 75 cents per pound. Analysts say you can roughly calculate the price premium of the new F-150 by figuring $2 extra per pound saved (700 lbs.) If those estimates are correct, the new F-150 should cost about $1,400 more than its predecessor. Ford also charges an extra $2,095 for adding the EcoBoost engine option on the current F-150. Repairers though have different concerns: the impact of probable higher insurance rates; the complexity of aluminum repair; and the potential impact on the iconic brand they’re used to working on. Writes Craig Trudell in Automotive News, “Less than 10 percent of the more than 30,000 independent repair shops in the United States are certified and meet training and equipment requirements to work with most aluDarrell Amberson minum auto body File Photo parts, according to an estimate by Darrell Amberson, ASA chairman. While some dealerships do in-house body work, independent businesses handle the vast majority of collision repair in the United States, he said. “Ford is betting buyers will accept what it estimates will be a 10 percent jump in costs to insure the pickup in return for improved fuel economy, towing and payload. Ford must also get the aftermarket industry up to speed as it debuts the highest-profile vehicle ever to swap steel for aluminum.”
“You don’t get any more mainstream than the F-150,” Amberson, who is also vice president of operations for LaMettry’s Collision Inc. in Minneapolis. Insurers see the material as more of a liability and Ford expects rates on the new F-150 to be about 10 percent higher than its predecessor. Ford has
2015 Ford F-150
said it isn’t worried about this because the current F-150 is now about 10 percent cheaper to insure than competing trucks, said Doug Scott, Ford’s truck marketing manager. But repair shops need separate hand tools for aluminum and steel such as wire brushes, grinders and sanders, because corrosion can happen when dissimilar metals come in contact with one another. The repair industry also has less experience with differences in how aluminum springs back from impacts compared with steel. “Aluminum has a very poor memory and it resists straightening attempts,” noted Jeff Poole, a coordinator for I-CAR. “Experience really pays dividends here, and this is where we’ve got a learning curve ahead of us.” Ford’s internal data show that 90 percent of customers live within two hours of a capable repair facility for today’s F-150, and 80 percent are within 30 minutes, Ford’s Scott said. Buyers of the aluminum-bodied F-150 will have the same access by the time it arrives in dealerships late this year, he said. “We’ve just been waiting for the reveal to unveil a certification process for dealer-owned body shops and the independent channel,” Scott said. Once the decision was made to go with the material, Ford was able to select a military grade high-strength alloy, thicker than what’s used in the current truck, because aluminum is about one-third the density of steel, Fields told reporters. “The new F series is going to be more dent- and ding-resistant,” he said. “Our engineers have great tests
16 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com
where they’re dropping bowling balls. We’ve actually been testing this with a number of our customers, in the construction industry, the mining industry, to help us.” Residual values for the new F150, which measure how well the truck retains its worth after years of ownership, could decline because of higher insurance costs. “The automakers can force their certified body shops to be able to work with aluminum, but that still could narrow down the choice and the scope of shops that consumers and insurance companies will have,” Larry Dominique, the president of ALG, which has forecast residual values for almost 50 years. “This will work itself out, but it could take 10 years.” Ford produces its F-series trucks in much higher volume than other aluminum-centric manufacturers do. Past examples of aluminum use in auto bodies are inconsistent in terms of whether insurance rates rise and affect ownership costs that play a role in forecasting residuals, Dominique said. “Truck owners are so damn loyal,” he said.
Manufacturing experts and steelindustry advocates say that moving to aluminum will require fundamental changes to how Ford truck bodies make their way down the assembly line. Ford is adding thousands of salaried workers including technical engineers to support new-product introductions and assigned Fields the task of honing its processes. The complicated switch to aluminum from steel in the F-150's body contributes to IHS Automotive's estimate that Ford will need to take about six weeks of downtime at each of its truck plants to retool and swap out robots and machinery. However, Ford estimates that 80 percent of its customers are or will be comfortable with its use of aluminum because they know it in other applications, such as with toolboxes and ladders that need to be both strong and light, Scott said. The ability of the industry to prove it can handle collision work on the new F-150 will be tested soon after the truck reaches the market, said See Ford’s 2015 F-150, Page 24
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Auto Collision Specialists Says it is the First Mercedes-Certified Body Shop in Baltimore, MD
On December 13, 2013, Auto Collision Specialists, in Baltimore was recognized by admission to the Mercedes-Benz Tier 2/Elite Certified Collision Program. Only a selected number of shops throughout the United States have been granted this elite certification for aluminum structural repair. Mercedes-Benz has said that Tier 2 certifications will be limited, as needed, per market area. ACS became the first Mercedes-Benz Certified Collision Center in the Baltimore area when the certification program was initially instated. In the past year, MercedesBenz introduced an even more exclusive program for aluminum structural repair, and ACS was one of the first to apply. To become a member, collision repair facilities must prove, in the course of a rigorous audit, that they possess the equipment and technical training to qualify. Typically, an auto body shop will require multiple audits and numerous corrective actions before being granted certification. ACS was one of the few in the history of the program to achieve Tier 2/Elite status after the first audit, with no corrective actions required.
Aluminum is widely used in the construction of luxury vehicles. Proper repair of aluminum body vehicles requires specialized training and equipment, including specialized tools and welds, which can only be used in a controlled clean room. Aluminum structural repairs should be performed only by certified shops with the proper equipment and technical training. In addition to their specialized aluminum welding equipment, Auto Collision Specialist’s technician Dan Scilipote has been certified for receiving advanced training in Aluminum Structural Welding. Technicians possessing that certification are required to have considerable experience in Gas-Metal Arc (GMA) Welding, and in the repair of complex body structure damage. This new elite certification comes as a result of ACS’s continued investment in the latest equipment and training. ACS utilizes: Genuine Mercedes-Benz Replacement Parts, M-B approved equipment; dedicated fixture bench approved by Mercedes-Benz to ensure assembly-line accuracy; and ASE, I-Car and Mercedes-Benz certified technicians.
Ulster BOCES in NY Gets I-CAR and GEICO $5K Grant Via Collision Education Foundation Students in the Ulster BOCES Career & Technical Center’s Auto Collision Technology program in New Paltz, NY, got an early holiday surprise. Thanks to a successful collaboration between administrators, instructors, and students, the program received an I-Car Collision Repair Education Foundation grant worth $5,000. The grant was funded by the GEICO Philanthropic Foundation and provided funding for the purchase of much-needed new tools and equipment for the program. Among the purchases was a seven-drawer rolling metal cabinet and five-drawer top chest, all filled with items that the students can use in their hands-on auto collision shop, including an 11-piece metric flare nut wrench set, an eight-piece standard flare nut wrench set, a punch set, a portable pressure blaster, and much more. “This grant allowed our program to spend our shrinking budget on program improvements, and not to have to spend it on replacing or repairing old tools and equipment,” said instructor Dave Rosenberg. “As school districts, including Ulster BOCES, trim budgets, we need to find alternative ways to assure that
our students have the proper tools and equipment to gain the skills they need to excel in their field. This grant will provide a huge boost to the Automotive Collision Technology program and its students,” says Ulster BOCES Grant Coordinator Bonnie Meadow.
Kingston High School student Eric Stinemire, who will be continuing his education in auto collision repair at Hudson Valley Community College, appreciates all of the work that went into getting the grant. “Now we know we have tools that work, and we can get the job done.” The Automotive Collision Technology program is dedicated to providing technologically advanced collision repair training and certification through state-of-the-art curricula and hands-on training that educates students in three primary areas: collision repair, automotive refinishing technology, and damage estimating and management.
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Continued from Cover
According to Eversman, consumers possess the power in relation to shops and insurers, so they must demand what they are entitled to or the insurance companies will steer them to low-cost shops that may not be performing quality repairs. These con-
helping to alter insurers’ behavior. Additionally, it “sheds light on how much you can trust insurance company ads that promise to take care of you but don’t explain how they intend to do so,” Eversman explains. Eversman hopes these shortpay cases will cause insurance companies to reevaluate their attitudes. Though collision repairers can’t control insurer’s behavior, this type of litigation
provides them with an opportunity to be fairly compensated for their work which, in turn, allows them to acquire the training necessary to branch out to other vehicles. Still, this concern is detrimental to consumers, and it should be resolved by the Departments of Insurance who insist this only involves collision repair shops and insurance companies due to their failure to understand that most of these shops that are being shortchanged are non-DRP facilities that have no contracts with or obligations to the insurance companies. Eversman is “appalled it has come to this because the Departments of Insurance are not doing their job
a state statute prohibiting repairers from installing salvage parts on a vehicle unless those parts were removed by an Ohio licensed salvage dealer. Eversman fears that the mandate requiring the use of parts procurement systems, especially PartsTrader, will lead repairers to violate these types of statues, creating a dangerous situation which could potentially lead to consumer protection-related lawsuits. Eversman feels that these issues could be rectified easily; “State Farm should withdraw their mandate requiring the use of PartsTrader. Then, PartsTrader would be like other parts procurement systems, and it would have to compete on its own merits, allowing repairers to have more power in choosing parts, ensuring those parts come from a legitimate source, and adhering to the law.” Eversman sees the PARTS Act as “an absolute example of the extremes to which any industry will go to get what it wants without consideration for other industries. The patent laws focus on rewarding companies that spend money and produce or design something unique, protecting them for a designated period of time. Aftermarket parts manufacturers and insurers are trying to obtain an exemption for imitation crash parts from the application of the patent laws, but if Con-
which is to protect the consumers since insurance companies are not properly and fairly paying these claims.” Another example of insurer interference in the collision repair industry is seen in State Farm’s mandate for shops on their Select program to use PartsTrader. Eversman insists, “anything which is imposed on collision repairers from an outside entity is inherently a bad thing. There are other parts procurement systems that shops use, but it is their decision. I find the mandate to use PartsTrader troubling, and I’m also troubled by the application as recent disclosures have indicated estimates coming back with alterations to labor rates which have nothing to do with parts! This is not what PartsTrader was intended to do, as represented by State Farm and PartsTrader.” The state of OH specifically has
gress really wants to do something good for the consumers, they should focus on evaluating patents on medication; that would be far more beneficial than exempting imitation parts!” An interesting side of this proposed legislation is the fact that, for decades, the insurance and aftermarket parts industries have claimed that the imitation parts are “purely cosmetic” and have nothing to do with how the vehicle performs in a collision; however, because the parts auto makers seek to protect are cosmetic—the standard for design patent eligibility—imitation crash parts manufacturers are now arguing that their parts do have a meaningful function in the car’s performance. Eversman says “this is a terrible idea! We have patent laws for a reason, and since imitation parts manufacturers haven’t demonstrated a significant need to change this, we
“There is a confluence of things impacting repairers that they don’t have much control over.”
cerns should be highlighted because “if consumers had any idea that they’re driving potentially dangerous vehicles due to insurer interference, they would be appalled, but they have no clue what’s going on.” Actually, insurers have no role in the repair process whatsoever; they are only supposed to sign the check paying for the repairs, but they’ve become involved because the closer their involvement, the more control they can exert, allowing them to avoid dispersing full payment on repairs. Rather than arguing labor rates and shortchanging repairers, Eversman believes insurers should “take a step back, consider what they are asking shops to do, and reevaluate whether their requests are fair.” When insurers refuse to compensate for the full repair cost, shops are forced to pursue shortpay cases, but Eversman admits, “litigation is not pleasant. You may get what you’re entitled to at the end of the day, but you have to trudge through mud to get there.” Recently, there has been a significant rise in the number of shortpay lawsuits being pursued in the courts, but this is not a novel or recent experience. Eversman believes that “collision repairers have had enough interference in their businesses from a third party entity who doesn’t perform repairs or accept liability. They are tired of being shortchanged on payments, so they are turning to the courts for attention, but no one is excited to go to court.” There are benefits to this recent influx, though. Not only do these lawsuits send a message to the insurance industry, they also serve to create awareness of these issues amongst repairers, attorneys and consumers nationwide, raising public scrutiny and
“Anything that is imposed on collision repairers from an outside entity is inherently a bad thing.”
18 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com
may as well do away with patents [if the PARTS Act is passed] since it undermines the entire patent system.” Though Eversman admits that she has not been very involved with and is not particularly informed on the Right to Repair, she wants collision repairers to be able to make a living doing what they’re good at. On the flip side, she has significant concerns with the increasing technology and sophistication of vehicles, as well as the use of alternate metals and composite parts, and she believes the industry is rapidly approaching a point where not everyone has the necessary skills and equipment to safely repair all vehicles. Because Eversman also wants consumers’ vehicles to be repaired safely, she can see the value of restricting this information to those who have received the proper training, yet since she also sees value in permitting any repairer access to this information in order to repair all vehicles, her opinion is split between these two conflicting interests. Additionally, there are many other challenges facing the collision repair industry. For starters, the industry is in a continuous state of flux, partially because of the changing nature of the vehicles themselves and also due to the significant presence of consolidators and multi-shop operators (MSOs). Many MSOs are actively buying other shops, leaving independent shops feeling that they can’t compete and providing an escape route for shop owners who are exasperated with the current state of the industry. Of course, the still impoverished state of the economy comes with its own set of problems which also negatively impact repairers. Finally, the fact that people are driving less and winters have been milder in recent years leading to fewer accidents also affects some shops’ business. Overall, Eversman believes there is “a confluence of things impacting repairers that they don’t have much control over.” Fortunately, there are some preemptive measures that shops can take to protect themselves from some of these problems. Stay tuned to Autobody News for a future series on key documentation that every shop should consider utilizing.
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Western NY to Receive State Funds to Combat Insurance Fraud and Auto Theft More than half a dozen police departments and law enforcement agencies in Western New York will receive new state funds to help fight auto theft and insurance fraud. Gov. Andrew Cuomo announced the state will provide nearly $4 million in grant funding to 29 organizations statewide through its Motor Vehicle Theft and Insurance Fraud Prevention program, administered by the state Division of Criminal Justice Services. The program targets the state’s urban centers and is funded through a $10 fee assessed on insurance policies issued for vehicles registered in the state. Grants will be used to fund salaries for assistant district attorneys and investigators assigned to handle motor vehicle theft and insurance fraud cases; enhanced enforcement and sting operations; and for specialized training for prosecutors, police officers and investigators. Grants awarded in the Western New York region include: Erie County District Attorney’s Office, $120,700; Niagara County District Attorney’s Office, $152,100; Buffalo
Police Department, $121,000; Cheektowaga Police Department, $48,000; Niagara Falls Police Department, $36,500; and Niagara County Sheriff’s Office, $21,500. Statewide grants include $57,000 for the New York Anti-Car Theft and Fraud Association; and $31,900 to the New York State Prosecutor’s Training Institute. Motor vehicle theft has been steadily declining in New York, according to the governor’s office, with the number of motor vehicle thefts in New York declining 90 percent since 1997. In 2012, 18,677 incidents of suspected motor vehicle insurance fraud were reported to the Insurance Frauds Bureau of the state Department of Financial Services, a 9 percent increase over 2011, when 17,121 suspected incidents of fraud were reported.
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Service King Acquires All Six Las-Vegas Based Collision Authority Repair Centers
Service King Collision Repair Centers announced Jan. 15 that it has acquired Las Vegas-based Collision Authority. Service King, with more than 110 locations in Texas, Tennessee, Arizona, Arkansas, Mississippi, Oklahoma, and now Nevada, acquired Collision Authority’s 6 collision repair centers in the Las Vegas-Henderson area. Said Chris Anderson, Market Vice President for Service King, “Collision Authority is the premier provider of high quality repairs and exceptional customer service in the southern Nevada market. Starting in 1991, Michael Spears, Vicki Dessaints, and Bill Falls built a locally owned company with high integrity and values. We look forward to expanding their successful culture and operations.” With this acquisition, Service King will now operate 18 repair shops in the western United States. Collision Authority’s state-of-the-art repair facilities cover 210,000 square feet and are capable of serving more than 1,500 cars per month. Collision Authority’s partners, Michael Spears and Vicki Dessaints,
and 130 team members will be joining more than 2,300 Service King teammates across the country. Spears has over 22 years of industry experience, helping grow Collision Authority to become the largest and most successful chain of auto body shops in Nevada. “We never intended to sell, but after spending considerable time with Service King, we knew that Service King would be a great fit,” said Spears. “Service King shares the same commitment to high quality customer service and teammate values that made our stores number one in Las Vegas. This is an excellent opportunity for myself, Vicki and the entire Collision Authority team to join the premier and growing Service King brand.” “With our current presence in Arizona, we are excited about the opportunity to expand into Nevada and be able to serve our customers and the insurance community in the Western United States,” said Chris Abraham, Chief Executive Officer of Service King. “We welcome the Collision Authority team and are thrilled that they will be joining the growing Service King family.”
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Baton Rouge Tech is Safelite National Champion
Safelite AutoGlass®, the country’s largest vehicle glass repair and replacement company, has crowned Casey Rose from Baton Rouge, LA, as the national champion of its 2014 technician competition. The bi-annual event—Safelite’s Best of Belron® —brings together the company’s top 12 technicians to compete for the title, a cash prize of $10,000 and to represent Safelite AutoGlass in the international Best of Belron® Competition, a tournament hosted by Safelite’s parent company, which includes champions from each of its 35 countries. Belron® is the world’s largest vehicle glass repair and replacement company, with 25,000 employees operating in over 30 countries. The event took place on January 10-11, 2014, in Columbus, Ohio, welcoming guests from all over the country. The competition, which includes windshield replacement, windshield repair, back glass replacement and side glass replacement, is based on skill, quality and customer service. The 12 competitors were identified in a series of market and regional competitions. Representing Safelite’s MidSouth region, Casey Rose has been with the company for five years. The
father of two met his wife at Safelite, who is a customer advocate supervisor Jill Mace. He will travel to Rome, Italy in May to compete for the international title.
Casey Rose (center) accepting his award
To prepare for the competition, Rose worked closely with his technician manager Tony Darbonne. “I couldn’t have done it without Tony. Together, we studied the notes that our technician director provided and I made sure to take time with my customers,” Rose said. “I just felt good when I stepped away from my vehicle after the competition, knowing I communicated well with my customers making sure they understood what was going on. While I am excited to win, each one of the 12 guys are winners.”
I-CAR Appoints Elise Quadrozzi as Director, Segment Development for Insurance
I-CAR® welcomes Elise Quadrozzi, CPCU, AIC, AIM, AU, ARP to ICAR as Director, Segment Development for Insurance. Quadrozzi joins I-CAR after serving two terms as Board Chair on the I-CAR International Board of Directors and was previously Director of Claims for Houston International Insurance Group (HIIG). In her new role with ICAR, Quadrozzi will focus on development of broader training options for the insurance segment, introduction of additional insurance specific roles in I-CAR’s flagship Professional Development Program™ and engaging new insurers beyond the “Top Ten.” John Van Alstyne, I-CAR CEO said, “To strategically focus on each of the key industry segments we serve, I-CAR uses a segment-based approach to managing and expanding support in the Collision Repair, Insurance, OEM and Education segments.” Van Alstyne continued, “Our success with this strategy since 2011 has confirmed its effectiveness and
we are thrilled to welcome Elise to the team leading our insurance segment initiatives.” With over 20 years of industry experience, Quadrozzi has held senior executive and management positions and has extensive experience in claims and operations management. Prior to her role at Houston International Insurance Group, Quadrozzi worked at Crawford & Co. as Director of Channel Management where she focused on Crawford’s education business. She has also served as Senior Vice President, Claims and Operations, for Assurance America and previously led development of an Accident Management business unit for Akzo Nobel Coatings. “Elise’s extensive industry knowledge and experience, as well as her understanding of the critical roles that safety and training play in the collision repair industry, supports I-CAR’s vision and organizational goals. Elise will certainly be a valuable asset to our leadership team and the industry,” explained Van Alstyne.
www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 21
Meet California’s NEW Bar Chief, Patrick Dorais
Appointed by Governor Edmund G. Brown, Jr. effective November 8, 2013, Patrick Dorais is the new Chief of the Bureau of Automotive Repair (BAR). In this position, he oversees all operational matters, including licensing and enforcement activities and the administration of the Smog Check Program. Dorais served as BAR Deputy Chief of Smog Check Operations, Engineering, Research Administration and Consumer Assistance Division from 2007 to 2013 and has been working in government in some capacity since 1986, with a focus on consumer rights.
ABN: What have you learned about the job that you didn’t know initially within your first two months in the position? PD: As Deputy Chief, my focus was the administration of the Smog Check Program. Since my appointment as Chief, I have learned more about BAR’s other programs and objectives that are aimed at ensuring a fair and competitive automotive repair marketplace for California consumers. I’ve also learned that we have a great number of qualified and professional people her at the BAR that are committed to promoting consumer protection and the automotive repair Patrick Dorais industry. I’m honored to work with these individuals and appreciate their dedication to maintaining BAR’s mission and values. Lastly, I’ve learned that although our stakeholders come from varying perspectives, we all share in the same objective –to provide consumers with quality automotive repair services.
ABN: In this position, you’re overseeing 600 people; an annual operating budget of approximately $200 million and a statewide network of 12 field offices. It’s an enormous responsibility, so where do you begin? Are you planning on making significant changes and if so, what will they be? PD: I was involved in the development of BAR’s current Strategic Plan, which identifies our organization’s goals and objectives for the next four years. This plan provides an effective framework that I will follow to oversee and uphold the services and programs we provide and to make any
necessary improvements or changes. I believe in the old adage if it ain't broke, don’t fix it. We have a solid plan to follow and we will make adjustments as necessary to reflect the interests of consumers and other stakeholders. I also believe in surrounding yourself with good people and hiring dedicated staff to get the job done right. I used this approach when appointing Dan Povey as Deputy Chief of Field Operations and Enforcement and will do the same to fill the vacancies for Deputy Chief of Smog Check Operations and Deputy Chief of Consumer Assistance, Licensing and Administrative Support Programs.
ABN: When I talk to body shops in California, they feel like many illegal operators stay off your radar and thereby continue to do shady work. How would you respond to this claim? PD: This issue is something we continue to address, but we can’t do it alone. We encourage any shop that suspects unlicensed activity to contact their local BAR field office and report their concerns so we can investigate these issues.
ABN: Midnight Body Shops who aren’t licensed and operating under the radar still seem to exist in considerable numbers, according to body shop owners I’ve polled. How has the BAR dealt with shady shops and how can they be stopped? PD: BAR utilizes two enforcement paths for unregistered shops. First, regulations for issuing citations took effect in October 2011, and BAR regularly issues citations to unlicensed facilities under this authority. Second, BAR continuously fosters relationships with district attorneys throughout the state in an effort to create support for criminal and civil filings against unlicensed facilities. In addition, BAR is exploring an industry suggestion to require in regulation that providers of automotive repair services publish their registration numbering all advertisements. This will further enhance BAR’s ability to identify those who are engaged in unlicensed activity.
ABN: When you’re encountering shops breaking the law, how are they normally doing it? And is it true that most of your consumer complaints deal with mechanical (rather than collision) issues? PD: The most common auto body vi-
22 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com
olation is failure to provide the parts or services specified on the invoice. When looking at all auto repair complaint trends, the majority of complaints received by BAR involve mechanical issues. BAR categorizes complaints by component or the type of repair. Examples of this are Auto Body, Engine Repair, and Automatic Transmission. The greatest percentage of complaints received fall under these categories.
ABN: Both of your predecessors tried to create a BAR that is a kinder and gentler organization. What is going to be your approach to enforcement? PD: It’s all about balance and creating an open line of communication with our registrants and licensees. We will educate those who are trying to do the right thing to ensure they are in compliance. We will also exercise our enforcement authority for those who are deliberately harming the consumer or trying to circumvent the law, and thereby undermining the operations of those who truly want to comply. I will ensure that our enforcement team has the tools and resources they
need to appropriately address these issues.
ABN: BAR’s Auto Body Inspection program has gained a lot of exposure and I’ve received positive reports about it from people within the collision industry. How many inspections did the BAR conduct in 2013 and do you plan to make any changes to it in 2014? PD: In 2013, BAR conducted 104 nocost auto body inspections. Since BAR’s highest priority is to protect the public, we have set a goal to create greater awareness of our consumer programs and to promote increased participation in the Auto Body Inspection Program (Program). To meet this goal, BAR, with the assistance of the Department of Consumer Affairs (DCA), recently released a YouTube video to highlight the Program’s services. The video has been posted on various social media sites and is available on BAR’s Web site at: www.autorepair.ca.gov.
ABN: Of the nearly 15,000 complaints received every year, how many of these are collision repair-related and how many of these are acted on?
www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 23
PD: Auto body related complaints typically account for approximately 10% of all complaints BAR receives. BAR investigates all complaints received and contacts the consumer to document their concerns and obtain the final invoice before performing an inspection of the vehicle. BAR addresses any deficiencies identified during the inspection with the shop that performed the repairs.
ABN: What are your top three priorities overall? PD: Consumer protection is always paramount. We need to get back to the basics of what we do well, which is promoting and protecting the interests of California consumers. Over the past few years, our efforts have been focused on several side projects that have diverted our attention from our main objectives. We will renew our consumer focus and ensure the success of our programs, which include the Auto Body Inspection Program and the rollout of the new On-Board Diagnostic Inspection System (OIS). Collaboration is also a top priority. BAR does not have all the answers on the best methods for consumer protection and proper regulation of the
automotive repair industry. We want to work with all stakeholders, including those inside and outside of our organization, to continue to be a leader in the automotive repair industry. To do this, we have also prioritized communication and consistency. We strive for regulatory consistency and want to do government in a way where all parties have a voice and can participate.
ABN: Another of your predecessor’s stated goals was to embrace the technologies available to you to be more effective, including updating your Web site and using the Internet/Intranet to more effectively communicate and disseminate relevant information more quickly. How will you continue in this area and what changes are you planning technologically? PD: The BAR uses various approaches to disseminate program specific and general information, including Facebook, Twitter, YouTube, news releases, Webcasts, regulatory workshops, public meetings, publications, and mailing lists. Our public Web site is the most effective and comprehensive source used to communicate information to consumers, licensees, and interested parties. Information provided to con-
sumers includes on-line services to find Smog Check stations and automotive repair dealers and to verify the status of licenses and registrations, Smog Check and vehicle maintenance assistance, outreach and educational information, and dispute resolution and complaint reporting materials. Web tools provided to Smog Check technicians, lamp and brake adjustors, and stations include information on licensing, training, and program updates. A complete revision to our public Web site is currently underway and is planned for release in mid2014. The revised Web site will be more user-friendly for both consumers and industry and will include relevant and up-to-date information about BAR programs. The Web site will feature a cleaner look-and-feel and will have a consumer focus to ensure that important information is easily accessible and understood by the general public. The BAR is also considering electronic certificates for lamp and brake inspections. This process is still under consideration and would replace the current paper certificate with an electronic certificate similar to those issued for Smog Check inspections.
Continued from Page 16
Ford’s 2015 F-150
Amberson. “People don’t wait until the vehicle is a few years old to start having accidents,” he said. “We can see them very early on.” It’s expected the first F-150s will hit dealerships in the third quarter. Ford said last week that the truck will go on sale in the fourth quarter. “This is the biggest bet of the show and maybe one of the biggest bets ever in the car industry,” Mike Jackson, CEO of AutoNation Inc., said in an interview. “Ford is going to have to execute, and building at that volume in aluminum has never been done in the history of the automobile business. And there are reasons it hasn’t been done: It’s expensive, and it’s complicated and it’s difficult to work with.” It’s a lot to ask” [of dealers], Jackson said. “But that’s the price of leadership.”
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Nelson County High School in Lovingston, VA, Strives to Get Students to Work Right Away With plenty of hands-on experience intertwined with book work, the automotive technology program at Nelson County High School in Lovingston, VA, makes strides each year to continue offering a useful vocational alternative for students hoping to work right after graduation. “We try to teach them so when they leave here, they could make someone money,” teacher Mike Fanelli said. The program is split into three years. As sophomores, students take a one-semester auto mechanics course that is about half book work and half shop work. In their junior and senior years, the students take a two-semester course with an increased emphasis on shop work. This school year, Fanelli teaches 40 sophomores, 16 juniors and 10 seniors. A majority of students graduate certified by Virginia State Police to be state inspectors, or they get that certification soon after graduation, Fanelli said. That certification alone provides a degree of job security for the students. After leaving the high school’s program, students have branched out to work as auto technicians in several surrounding areas, including Charlottesville, Lynchburg and Amherst County. “We supply a lot of centers in the area with entry-level individuals,” Fanelli said. For instance, of the eight
students who graduated from the program in May, four already are employed in the field, and all eight are doing state inspection work, he said. NCHS graduate Aaron Scheib, 19, who completed the program in 2012, said he enjoyed the Auto technology program and felt it gave him a solid foundation for his work in the industry. “It’s a great program,” said Scheib, who works as an auto technician at the Nelson County Public Schools bus garage, working on a variety of countyowned vehicles. During his senior year, he did an internship with the garage and then was employed full-time after graduation. Going through the program meant he and other students “could get into what we wanted to a little earlier on,” he said. Since 2000, NCHS has been accredited under the National Institute for Automotive Service Excellence (ASE), which means the instruction, course of study, facility and equipment have been evaluated by the National Automotive Technicians Education Foundation (NATEF) and met standards of quality for training auto technicians. “It brings the program to a higher level,” Fanelli said. Earlier this year, the NCHS program was re-certified through 2018. “Basically, they want these kids to
have good entry-level skills,” said Fanelli, who has been an ASE master technician for more than 30 years and a NCHS teacher since 2006. He said the high school’s program has been improving over the years to match the way cars have become more “technical and complicated.” Fanelli worked to move the class away from being a “hobby shop,” and NATEF’s enforced requirements have helped, he said. “We’ve got a lot more stringent, I guess,” he said. “More rigid in some ways, but I think we’ve definitely come a long ways. But cars are so complicated. I mean, not anyone can fix them anymore.” NCHS is certified in four of eight areas monitored by NATEF: brakes, electrical/electronic systems, engine performance and suspension and steering. During the course of the students’ time in the three auto classes, the learning is comprehensive. “We try to teach them a little bit of everything,” Fanelli said. First and foremost is shop safety. Secondly, the students learn theories and small details car owners may not know or be able to apply when it comes to solving problems with their cars. “We just teach [the students] a step-by-step, scientific method of troubleshooting it,” he said. “But the first
thing we always do is verify the problem.” A less obvious skill set taught in the course involves knowing how to interact with others, since students will be dealing with customers in the professional world. “We try to teach them the soft skills, how to talk to people,” Fanelli said. “You know, if you think [a car is] a piece of junk, it may be someone’s baby, and you need to respect it.” The school owns 10 vehicles that the students can practice on, and sometimes teachers or other students can bring in their cars. Fridays often provide an extra treat for those in the class, as Fanelli allows them to bring in their own vehicles to work on. Scheib said that was his favorite thing about the course — “having free range of the shop on that day.” He said the students also were lucky to have a master technician with a state inspection license as a teacher. Overall, Schieb said, everything he needed to know heading into his job, he gained through the program. All the basic information he learned, especially knowledge about how to operate a lift, shop safety, changing oil, tire maintenance and more, has been used during his time at the bus garage. “They leave with a wealth of knowledge,” Fanelli said.
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Montana Repairers Form a Small Association with Big Goals In the early 1980s, a group of collision repairers in Montana realized “we fight battles on a daily basis in this industry, and it’s better to do battle as a group than on our own,” as described by repairer Bruce Halcro. They formed the Montana Collision Repair Specialists (MCRS) and their current president, Bruce Halcro, describes it as “an awfully active association. We are very involved in training, and we also have a strong legislative agenda.” Representing members from all over the big sky state, MCRS’s mission is “to provide management and technical training to enhance the professional ability of each individual and improve the quality of the collision repair industry in the State of Montana.” Halcro expands on this goal, adding the desire to continue to be a voice not only for collision repair facilities in MT but also on a national level, noting “trends in our industry tend to start elsewhere and migrate to more rural areas like MT, so we like to stay abreast of these trends to ensure that our members are aware of any changes in the industry.” MCRS strives to be a useful resource to help all collision repair facilities, whether they are small independent shops, larger multi-shop operators or dealerships. Their mission is to enhance the collision repair industry in their state and to create a safer, more well-trained industry overall. Halcro believes that training and legislation are the two key components in achieving this initiative. As part of their efforts, MCRS became an affiliate of the Society of Collision Repair Specialists (SCRS) about ten years ago because they felt they needed more of a national presence. Halcro “can’t say enough about what SCRS has done for our association and for the industry nationally.” Halcro stresses the importance of legislative involvement when it comes
to reaching MCRS’s goals. In MT, legislators only meet every other year, and since 2014 is not one of these years, MCRS is currently focused on planning and determining which issues need to be addressed most. As such, Halcro is “keeping a close eye on the parts issue nationally, including the different forms of action being taken in various states.” The parts issue is one of the biggest dilemmas currently facing the collision repair industry, Halcro believes. “In my shop, parts are always a challenge since we’re located in a rural area, but shops have worked through this problem for years. Parts procurement systems cause delays in obtaining parts because they are sourcing them from all over the country, but the insurers still hold us to the same cycle time standards as urban areas where parts are much more easily accessible.” Another problem is that many aftermarket parts ordered are unusable upon receipt, leaving shops to begin the process all over again. As a result, Halcro believes that there is a need for tighter regulations on parts quality. “Parts procurement systems are being mandated without any accountability as to whether these programs are in the best interest of the shops. I don’t see any benefits. Their claim was that it would improve efficiency, but this is not true according to feedback from shops on the program. I see it as being a trainwreck when it’s rolled out in MT.” Still, Halcro sees no reason to focus on one company; he thinks that State Farm and PartsTrader are taking a big hit on this issue somewhat unfairly since other insurers are also starting to mandate the use of parts procurement systems, but, according to Halcro, “Mandated use doesn’t work. It’s not beneficial, and the decision should be more collaborative.
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The insurers claim that collision repair shops are their partners, so they should spend time with their partners to determine what’s best for the industry as a whole.” MCRS’s legislative involvement is important for the association’s members because it is related to ensuring that consumers’ vehicles are repaired safely. When shops are forced to take shortcuts because of insurer mandates, the consumers are not getting what they paid for, plus it can result in unsafe repairs. Additionally, when insurance companies refuse to pay for certain repairs, collision repair facilities are left with the choice of absorbing the cost or passing it along to their customers. These shortpay situations are unfair to the consumers, and the shops’ best recourse is through legislative activity. In fact, MT has an unique law, passed several sessions ago, that prohibits insurers from dismissing procedures
that both they and the collision repair facility agreed upon. Halcro believes the law has been hugely successful as it has alleviated many of the shortpays that were coming through before it was passed. Of course, there are always challenges associated with pursuing legislative changes. MCRS is a relatively small association, and though they employ a lobbyist, they still have to battle the insurers’ lobbyists, plus they have to get legislators to understand that the issues doesn’t just concern the insurance and collision repair industries; it is a matter of consumers’ safety. Halcro states, “our association is professional and well-respected at the Capitol, but there are always challenges. We aren’t there to play politics—we have real concerns that need to be addressed. Sometimes, our initiatives fail. It’s not always pleasant, but it’s important for MCRS’s members and their customers.”
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Halcro also weighed in on some other legislative issues on a national scale. Regarding the Right to Repair, he believes “the proper information should be available to shops repairing vehicles so that they can properly and safely repair the vehicles going back on the road.” The PARTS Act is another cause for attention. Halcro’s opinion is that “manufacturers spend millions of dollars to pass safety tests with the proper parts and materials designed for specific vehicles. Aftermarket parts that mimic these OEM parts aren’t always properly tested, and this can alter the safety ratings on the vehicle, a key deciding factor for many people when they purchase a new car. We also have a high return rate on aftermarket parts, and I just don’t believe they’re always designed the same as OEM parts. They aren’t all bad, and there is definitely a place for aftermarket parts, but I don’t believe they belong on a twoyear-old car.” Training is also a key initiative for MCRS, and a national trainer is scheduled to attend their next meeting at the end of March. The association’s Board of Directors will also be
meeting in February for a planning session to establish their 2014 agenda and to discuss a potential legislative agenda for the next session. In the meantime, MCRS strives to maintain an updated website to ensure their members are informed of national trends and issues in the industry. Currently, there are around 100 members in the association with about 75-80% being repairers and vendors making up the remainder. Like most associations, membership and ongoing participation is always a challenge for MCRS, especially as it pertains to smaller shops whose owners write estimates and repair vehicles, making it difficult for them to leave their business. Still, Halcro has found that once they come to a meeting, most of these repairers become regular attendees. “This is a tough industry and surviving every day is a challenge, but it’s easier when we face the challenges together as a group.”
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State Farm and I-CAR Partner on New Welding Initiative, Easy Registration, Reduced Prices
State Farm Insurance has teamed with I-CAR and invites all of its Select Service repairers to participate in I-CAR’s Welding Training & Certification program throughout 2014. This initiative supports State Farm’s commitment to training that will enable its repairers to perform proper welds that yield quality repairs. The program offers Select Service businesses the opportunity to easily register for welding training directly through a provided link on their websites, at newly reduced price levels. Russ Hoffbauer, P&C Claims director from State Farm, explain, “We believe welding proficiency benefits State Farm policyholders by providing quality repairs to policyholder vehicles. While participating in the I-CAR Welding Certification is not mandatory for Select Service repairers, we anticipate that repairers will be eager to take advantage of this unique opportunity.” Repairers who participate in ICAR’s Welding Training & Certification program will find they benefit from an assessment of shop infrastructure and equipment that includes coaching and trouble- shooting, ensuring readiness for a successful train-
ing event. Once a shop passes the assessment, each student in class will receive personal instruction, have the ability to practice on the equipment that they use in-shop every day, then apply their skills and demonstrate through a certification test that they have a confirmed level of welding skills. “I commend State Farm for working with I-CAR to develop this initiative that supports the industry’s need to better prepare repairers for the welding required today and in the future,” states I-CAR CEO & president John Van Alstyne. For more information on I-CAR courses, visit www.i-car.com.
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Mercedes-Benz Recalls Some 2013 Vehicles for OCS
Mercedes-Benz is recalling certain model year 2013 SL63, SL550, and SL65 vehicles manufactured Jan. 16, 2013, through April 30, 2013, according to the National Highway Traffic Safety Administration. The affected vehicles are equipped with an occupant classification system (OCS) that may not detect a very light person sitting in the front passenger seat. If the OCS does not detect a very light person sitting in the seat, the passenger side air bag would be turned off. In the event of a crash necessitating side air bag deployment, the passenger would be at an increased risk of injury. Mercedes will notify owners, and dealers will replace the passenger side seat cushion including the OCS. The recall is expected to begin in December 2013. Owners may contact Mercedes at 1-201-573-0600. Owners may also contact the National Highway Traffic Safety Administration Vehicle Safety Hotline at 1-888-327-4236 (TTY 1-800-4249153), or go to www.safercar.gov.
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I-CAR President Van Alstyne Talks Welding and Training at CIC I-CAR® CEO & President, John Van Alstyne, addressed I-CAR’s leading initiatives for 2014 and reviewed 2013 milestones during a speech at the Collision Industry Conference (CIC) meeting in Palm Springs on Jan. 16. The 2014 initiatives highlighted by Van Alstyne will have a significant impact on the industry and will deliver on I-CAR’s commitment to education, knowledge and collisionrepair solutions. Van Alstyne honed in on enhancements to I-CAR’s industry-recognized Welding Training & Certification™ program and the Repairability Technical Support initiative in 2014. Van Alstyne stated, “Today, as the major provider of welding training to the collision repair industry, ICAR estimates that at least two-thirds of technicians who weld lack formal welding training.” He added, “I-CAR has beefed up its welding programs and significantly reduced pricing to encourage repairers to more broadly invest in the training that makes perhaps the biggest difference in complete, safe and quality repairs for the ultimate benefit of the consumer. To effectively navigate the vehicle technol-
ogy tsunami our industry is facing, repairers today need technicians that are trained and certified with up-todate welding skills in order to perform the complex structural repairs that are now required.” Major insurers, such as State Farm, and OEMs, including GM, have already committed to partnering with I-CAR in 2014, encouraging or requiring their networks to participate in I-CAR’s Welding Training & Certification. Van Alstyne also provided an update on the Repairability Technical Support initiative. Van Alstyne shared details on the launch of the dedicated “technical knowledge” website, upcoming plans and key milestones that have been achieved. This initiative launched in 2013 and is designed to provide technical repair knowledge, address gaps in repair procedures and enhance industry technical communication with OEMs. “I-CAR thanks the industry for its support in 2013. Through your commitment, I-CAR is well positioned to deliver on its vision in 2014 and beyond,” explained Van Alstyne. Key 2013 accomplishments that
Van Alstyne shared were the milestone $200,000 donation to the Collision Repair Education Foundation on behalf of the industry, no price increases for the third consecutive year, the introduction of Gold Class™ program enhancements, a $2.6 million investment in a new learning content management system (LCMS), the expansion of network partner programs and new Professional Development Program™ training. Van Alstyne further renewed ICAR’s commitment to hold all pricing flat again in 2014, except the Welding reductions mentioned. He also announced that an estimated $165,000 donation will be made by I-CAR to the Collision Repair Education Foundation in 2014, representing $1 for every class the industry took with I-CAR in 2013.
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Body Shops and Towing Backed Up During Snowstorms in Indiana Winter weather travel advisories have lifted and shops are seeing increased traffic in Ft. Wayne, Indiana. For Kelley Auto Group Collision, technicians have just begun to receive these vehicles, according to Nathan Nix, manager of body shops at 500 E. State Blvd. and at 633 Avenue of Autos in the 14/69 Auto Mall in Ft. Wayne. Since the company services drivable and nondrivable vehicles, technicians have worked hard to get drivable vehicles finished in order to begin work on the nondrivable vehicles. “The question is, how soon can we get to them without giving someone an expectation that’s too great?” Nix asked. Besides dealing with insurance companies, Nix said nondrivable cars take time to move into the shop from the lot. “We use state of the art equipment to move the vehicle inside without creating additional damage,” Nix said. “We dissect the damaged parts of the car thoroughly. This shortens the repair time and ultimately provides a better service to the customer.” With tow services two days behind schedule, both locations will con-
tinue to receive vehicles steadily the remainder of this week. Nix said technicians were working overtime and weekends. Nix also said Hertz and Enterprise, two car rental agencies with which Kelley works, are pulling cars from other cities that are not affected by the snowstorm to help customers in need. Mark Muntzinger, owner of Mark’s Body Shop, also reported an increase in business that he expects to last the next few weeks. “We’re here to serve the community to get them back on the road,” Muntzinger said. “We smooth out the bad situation.” People who have had trouble starting their cars have also flooded Gouty Service Center Inc. with calls. Owner Ron Katt said he was backed up about 8–10 hours because wrecker companies were backed up. The lag time body shops were experiencing in receiving vehicles is directly related to towing services that are experiencing heavy call volume from distressed drivers and police. Blue Eagle Towing’s operations manager said the company usually receives 60 calls in a 24-hour period, but was receiving 80 to 100 calls by noon.
The company, which services light-duty (cars) and heavy-duty (trucks) vehicles, has especially seen an increase in heavy-duty calls—from five to 10 calls a day to almost 150 calls a day. Dan Parker, who owns Parker Service Inc., Kelley Wrecker, Hinsey’s Wrecker Service, Dan’s Towing and Allen County Towing, has doubled business because of the latest snowstorm. The 24-hour towing service, which averages 250–300 tows a day, now is towing 500–600 vehicles daily, according to Dan Parker, third-generation owner of Parker Service Inc. “The first two days we were getting 100 calls an hour,” Parker said. “Now we’re scheduling for Friday.” Among the five towing services, Parker said, 80 employees using 55 trucks are doing their best to jump start and pull out stuck cars, tow vehicles and assist disabled semis. “This is the busiest we’ve seen it in 20 years,” Parker said, adding that tow services are usually busy for about a day or so after a snowstorm – but not four days. “So far everybody’s been pretty understanding,” Parker said. “We’re working through it as fast as we can.”
ABRA Acquires X2 Collision in Southern Illinois
ABRA Auto Body & Glass announced the acquisition of X2 Collision in Southern Illinois, just outside St. Louis, MO. Terms of the deal were not disclosed. ABRA’s portfolio now includes 132 company-owned locations and 48 independently-owned franchises for a total of 180 collision repair centers in 17 states. “This deal is another important step for us and strengthens our position as an industry leader,” said Duane Rouse, ABRA’s president and chief executive officer. “This acquisition builds on our increasing success in the region and helps meet the demand of our customers and business partners. This is an exciting time for the company and the next chapter in ABRA’s aggressive growth strategy.” The new ABRA location is at 2727 Maryville Road in Maryville, IL, and will serve the Metro East, surrounding communities, and the city of St. Louis, MO. X2 employees will join ABRA’s staff and continue servicing long-time customers in the area. “For many years our repair center has been a trusted part of the community,” said Scott Jennings, owner of X2 Collision.
MN Media Reports Increased Body Shop Traffic
Freezing rain and low temperatures turned Northland roadways into a skating rink causing many accidents. “Black ice happened, it's a real thing,” Duluth resident Bridgette Baker told NNCNow.com. According to Duluth Police, 56 crashes happened Sunday, Jan. 12 between 9:30 AM and 3:30 PM from icy roads. “A lot of cars were going sideways down the hills, ya know, nothing real heavy as far as hits go,” said Steve Nelson, owner of Twin Ports Collision Repair. Local auto body repair shop workers say although these types of slippery road conditions cause headaches for many, they boost repair shop business. “I do make my living on other peoples' misfortune, but everything is going good, we're getting as many cars as we can done so it's a great year,” said Nelson. A great year for repair shops... but for drivers, slippery roads only create headaches. “I've been trying to get it into a auto body shop and they're all very busy,” said Baker, Some shops are fully booked through the next month, because of accidents like these.
“I was skidding on the freeway, just trying to get up to freeway speed, and hit some black ice and collided with another vehicle,” said Baker. For Baker, the collision means a dent in her pocket financially, and unanticipated time and energy spent searching for a way to fix her vehicle. “Most of them are just smaller jobs. When it was real cold the bumpers would just shatter, so we're doing a lot of that, too,” said Nelson. Local repair shop workers urge everyone in the Northland to drive slowly during these slippery times. Although there were 56 crashes in a six hour time span in Duluth Sunday, none were fatal. Of the 56, 34 were off-road vehicle crashes, while statewide offroad crash statistics were 111.
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www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 33
Connecticut Personal Injury Attorney Pleads Guilty to Defrauding 10 Insurance Carriers of a Total $2.5 Million A Connecticut personal injury lawyer pleaded guilty to charges that he masterminded an extensive insurance fraud scheme that defrauded 10 insurance carriers a total $2.5 million, say reports from local media sources. During an undercover investigation by federal authorities dubbed “Operation Running Man,” which began in 2011, it was discovered that Joseph P. Haddad, 65, of Bridgeport, CT, in concert with doctors and chiropractors, was allegedly recruiting victims of minor traffic accidents by using “runners” to track them down. The runners’ job was to find clients involved in motor vehicle accidents. The runners would also obtain and review accident records from local police departments. The conspirators were said to have provided the victims with unnecessary medical services and overstated their injuries for the purposes of receiving millions from the automobile insurance companies. Once runners had directed clients to Haddad, he would refer them to a Stamford chiropractor and an unlicensed Fairfield doctor, who ordered treatments for the patients at Haddad’s request. Francisco R. Carbone, 53, an internist from Fairfield whose medical li-
cense was revoked in 2005, would submit claims for services he never provided to patients. He would inflate the seriousness of the patients’ conditions, and would instruct a Monroe osteopath to write prescriptions for clients. James W. Marshall Jr., who also admitted to his involvement in the scheme, is said to have written over 145 prescriptions for more than 4,400 pills for accident victims he never diagnosed. Haddad also directed his clients to Marc Kirshner, a Stamford chiropractor. Kirshner owned a chain of chiropractic offices in Connecticut called Health First and a diagnostic testing company called Midas Medical. He admitted to performing medical services on his patients at Haddad’s direction. When necessary, he would justify lengthy treatment with falsified medical records. The patients were sent to Midas Medical for $2,000 “nerve velocity tests.” Authorities say that Haddad and Kirshner instructed Carbone to refer clients to the diagnostic testing company because the procedure would likely result in a higher settlement if ordered by a doctor. Haddad decided how much his
co-conspirators would be paid for the medical services ordered, and sometimes paid them only a fraction of the amount he reported to insurers. The U.S. Attorney’s Office said that more than 10 insurance carriers lost up to $2.5 million as a result of the conspiracy. Haddad pleaded guilty to mail fraud and conspiracy to commit mail fraud. Prosecutors initially charged him with nine counts of fraud, mail fraud, and conspiracy. Haddad is the seventh person to admit involvement in the scheme. He pleaded guilty to mail fraud and conspiracy to commit mail fraud. He faces a maximum prison sentence of 20 years for each charge, and a fine of up to $3.5 million, in addition to the $1.7 million he agreed to pay in restitution under the plea agreement he reached with the government. He and his co-conspirators also face a pending civil case Allstate Insurance Co. brought against them. The case was investigated by the Federal Bureau of Investigation, with the assistance of the National Insurance Crime Bureau, the Metropolitan Property and Casualty Insurance’s special investigation unit and the Travelers Insurance Co.
Santa Monica FIAT is Now Largest FIAT Dealer in USA
Santa Monica FIAT announced it was the number one FIAT store in the country in 2013. The dealership just had its grand opening in May 2012, making 2013 the first full calendar year for the store. In spite of that, the dealer sold 813 new cars since January 1st. “We're so proud of the entire team here,” Santa Monica FIAT General Manager Jon Schwartz said. “To have come this far in such a short time is a huge achievement.” The battle for the top spot was a close one. The Southern California dealer just edged out its closest rival by less than 20 sales. The large numbers are a testament to the growing popularity of the cars themselves. General Sales Manager, Jason Frieder admits the charming character of the FIATs makes his job easier. “Santa Monica has really embraced FIAT,” Frieder said. “They're fun, different, affordable and don't use much gas. They really are the perfect California car.” One of the main reasons for the store's success could be the introduction of the allelectric FIAT 500e. The new electric car is only available in California and is one of the most affordable EVs on the market.
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Minicars Fail Tough New IIHS Crash Test, Chevy Spark ‘Acceptable’
“The Chevrolet Spark was the only minicar out of 11 tested to earn an ‘acceptable’ rating in the Insurance Institute for Highway Safety’s small overlap front-crash test, which was introduced in 2012,” writes Phil Gusman at PropertyCasualty360. The test simulates what happens when the front corner of a car collides with another vehicle or a stationary object such as a tree—25 percent of a car’s front end on the driver side strikes a five-foot-tall rigid barrier at 40 mph. The small overlap test is now part of IIHS’ basic battery of tests. The IIHS explains, “The test is more difficult than the head-on crashes conducted by the government or the longstanding IIHS moderate overlap test because most of the vehicle’s frontend crush zone is bypassed. That makes it hard for the vehicle to manage crash energy, and the occupant compartment can collapse as a result. “Nevertheless, in many size categories, manufacturers have found ways to improve vehicle structures to meet this challenge.” In the most recent minicar front overlap test, the Honda Fit, Fiat 500, Hyundai Accent, Toyota Prius c, Nissan Versa sedan and 2014 Mitsubishi Mirage all received “poor” overall ratings.
The 2014 Ford Fiesta (built after August 2013), Toyota Yaris, Kia Rio and Mazda 2 received “marginal” overall ratings.
2014 Chevrolet Spark
The Spark, which received an “acceptable” overall rating, received “good” ratings on all dummy injury measures, “acceptable” on restraints and kinematics, and “marginal” on structure. No minicar earned a rating above “marginal” on structure, which the IIHS calls “the most fundamental element of occupant protection.” The IIHS says, “The Chevrolet Spark’s ‘acceptable’ rating in the test, along with good ratings in the Institute’s four other crashworthiness evaluations, earns the new minicar a 2014 Top Safety Pick award.” The IIHS says all of the minicars except the Spark and the Mazda 2
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earned low ratings for restraints and kinematics. “Seven of the eleven were downgraded for allowing too much occupant forward motion during the crash,” says the IIHS. “In these cases, either the safety belt didn’t do a good enough job holding the dummy in place, or the dummy’s head missed or slid off the frontal airbag.” The two worst performers are the Honda Fit and the Fiat 500, says the IIHS. “In both cases, intruding structure seriously compromised the driver’s space, and the steering column was pushed back toward the driver. In the case of the Fit, the dummy’s head barely contacted the frontal airbag before sliding off and hitting the instrument panel. During the test of the 500, the driver door opened after the hinges tore. An open door creates a risk that the driver could be partially or completely ejected.” The IIHS raised the bar for its 2014 rating, and as a result, just 39 vehicles earned either a Top Safety Pick+ or Top Safety Pick compared to 130 vehicles in 2013. The main difference, says IIHS President Adrian Lund in a statement, is that the “small overlap front crash is now part of our basic battery of tests, and good or acceptable performance should be part of every vehicle's safety credentials.”
Elk Grove CarMax Flooded with Job Applications
CarMax says it’s been overwhelmed during its effort to fill 100 positions with people searching for jobs. The new dealership won’t open until February, but thousands of people have come looking for work in Elk Grove. “We’ve had over 5,000 applications to fill approximately 130 positions,” said Bruce Juchnik with CarMax. That’s nearly 40 people competing for each job. While unemployment figures may be dropping, the volume of applications show how many people are looking for work in Sacramento. “Right now, with a lot of companies that were looking to hire just seasonal jobs, at CarMax we are looking for people to start a career,” Juchnik said. With new car sales on the rise, CarMax may not be the only dealership in the area hiring soon, said Brian Moss with the California New Car Dealers Association. The recession slashed car sales in half to around 1 million by 2009. But numbers are bouncing back, with 1.7 million cars sold last year. CarMax is still accepting applications to fill 55 positions.
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On Creative Marketing
Tom Franklin has been a sales and marketing consultant for fifty years. He has written numerous books and provides marketing solutions and services for many businesses. He can be reached at (323) 871-6862 or at firstname.lastname@example.org. See Tom’s columns at www.autobodynews.com under Columnists > Franklin
Re-Think Your Marketing For The New Year with Thomas Franklin
When you’re running a busy shop, Even with customers’ informait’s necessary to have many systems tion about who sent them, it’s still not and procedures more or less on auto- always possible to know how to reinmatic. There’s no time to address force the sources that sent business to every situation newly every time. the shop. Some insurance company Lean processes and procedures have referrals will specify the customer’s been carefully thought out so if agent but sometimes the agent is many everyone adheres to the system, the miles away so that it’s not practical to shop runs smoothly. with Dick Strom market to thse remote agents. If most Nevertheless, periodically it’s of the jobs come to the shop referred necessary to re-evaluate any system or by one insurance company, how seprocedure that’s been used for a long cure is it to bet the survival of the shop time. I, for example, tend to invest in on one source that could cripple the dividend-bearing securities that I can shop if it stops sending work? One count on generating consistent income again, the investment metaphor apfor the long haul. But from time-to- plies. How secure is it to put most of time I have to weed out the poor pro- your investment money into purchasducers and replace them with better ing or holding just one stock, bond or producers or perhaps just purchase other security? It’s well known that a more of the good producers. An astute certain amount of diversity is necesshop owner or manager should do the sary to protect oneself against possiwith Lee Amaradio same thing with marketing proce- bleJr. market turndowns. dures. Another factor that must be conSadly many shops fail to accu- sidered in a re-evaluaton is the cost of rately track the effectiveness of pro- each marketing action. Some promomotional ads, mailings, e-mails, tional actions are hard to track but cost website hits and events. At one time so little it may be worth keeping them this was understandable. We didn’t in motion. But if a marketing move is have tools like hit counters or e-mails costly, it’s definitely worthwhile to received reports or 800 number calls. take a close look at how much profit But even tools like these don’t really that action is creating. One shop tell us whether any of these promo- owner I knew well kept a DRP with a tional responses turned into real jobs. low-profit, cut-rate insurance comwith Sheila Our only reliable statistic is the Loftus cus- pany that he knew barely made him a tomer’s report about what sent him or profit on each job. But when he was her to the shop. Without those num- able to get a contract with a much betbers the shop owner or manager has ter paying DRP, he dropped the other no real idea what marketing actions to one like a rock! drop and which ones to double up, to I’ve found that some shop ownrefine or replace. ers don’t really know the true cost of
referral arrangements with insurance companies, dealerships and other referral sources. If the labor and parts discount is calculated per job, and give-aways factored in, like lot damage, totals storage and more, the real costs of some of those relationships may be much more than they seem to be at a glance. Like the automatic production procedure, a shop owner may have gotten so comfortable with a relationship, he or she may not realize it’s time to re-evaluate that relationship and perhaps consider looking for a new one -- or re-negotiating the profitability of that long-term situation. Finally, our world has changed significantly with the proliferation of smart phones and tablets. New apps for these pop up daily now, and there is an expectation that every business can provide instant electronic information. Printed paper phone books and many publications are now rarely
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read or used. Resources spent in this direction may be totally wasted. While it can be costly to seek out a good provider for social media promotion and possibly even a smart phone app, it would be wise to face up to that cost now or be left behind in the dust. And even this marketing effort and cost might not be necessary if a shop’s primary customer base is unlikely to seek out or respond to this electronic kind of marketing. The location, age, environment and occupations of a shop’s customers could be such that the shop could get away with another year of limited state-of-the-art electronic marketing. But the young people becoming adults today are totally conversant with smart phones, social media and more. If a shop plans to be in business past this year, there’s no getting aweay from the need to embrace these new technologies and put the marketing dollars in that direction.
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Mobileye Integrates with Accel Connected Car Technology
Mobileye, a Dutch private company their driver’s behavior on the road. and a leader in camera-based advanced Isaac Litman, Mobileye CEO driver assistance systems (ADAS) commented: “[This] is an elegant sotechnologies for the automotive indus- lution that allows both the driver and with Janet Chaney try and Accel Telecom Ltd., a leading a third party to receive Mobileye’s life provider of cellular based connected saving alerts in real time which is a car solutions, have announced the inte- real need for fleet managers, busigration of Mobileye’s Collision avoid- nesses, families and more. We are ance system with Accel’s VOYAGER happy to partner with Accel on this connected car smartphone. The inte- exciting offering and believe it will grated solution allows remote monitor- enhance the Mobileye experience.” ing of Mobileye alerts transmitted via Marc Seelenfreund, Accel CEO the VOYAGER 3G cellular connec- said, “the integrated VOYAGER– tion, which is ideal for fleet managers, Mobileye solution will add an addiinsurance companies and families that tional layer of driver safety via remote want to receive real time updates on monitoring of Mobileye alerts.”
Industry Overview with Janet Chaney
36 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com
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www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 37
Shops Weather All Kinds of Winter Weather Disruptions but More Polar Vortex Coming? by Chasidy Rae Sisk
This January added another new meteorological term to collective vocabulary even though the phenomenon it describes has been known since 1853. January 2014 started off with a frigid slow-moving cyclone known as a polar vortex that wrought havoc throughout the midwest and eastern parts of the country with recordbreaking low temperatures and icy winds. Worse news perhaps is that the polar vortex will get stronger and move farther south later in January, causing cold to intensify in the Midwest and East and drought to build in California and the West. Impact from the another surge of very cold air may include the already familiar risks from below-zero temperatures including life-threatening conditions and frostbite. The new invasion of frigid air will produce lake-effect snow downwind of areas of open water. While much of Lake Erie has frozen over, most of the other Great Lakes are still open. Some areas immediately downwind of Lake Erie may get colder with a late January outbreak (compared to the last) as a result. Beginning on Thursday, January 2nd, the polar vortex spewed snow and freezing rains throughout the country until about Tuesday, January 7th. Over two dozen states from the Midwest to the Northeast and even the Southeast were impacted by this cold front, so it’s no surprise that this unusual event also affected many businesses nationwide, including collision repair facilities. Tiger’s Body Shop in Chicago fortunately did not suffer many ill effects, according to Greg Yonan, a member of the family that owns the facility. “It was really cold, and though there may have been an increase in accidents related to the icy road conditions, we haven’t seen the effects yet. Monday, Jan. 6, was so cold that we had several appointment cancellations because people didn’t want to leave their homes.” Though their equipment worked fine since the inside of their shop was well-heated, the water coming in from the street froze, and they had to wait for the city to come out and solve that problem. Overall, though, Yonan notes that it has been business as usual.
Mike Hartman, owner of Hartman Auto Body Inc. in Waterloo IN, noted some effects from the weather because “when a major storm is fore-
Projections for Late January
cast in advance, people heed the warning and stay off the streets. It also impacted volumes quite a bit. We have had a couple of cancellations each week for the last three weeks because customers do not want to get out in the snow or extremely cold temperatures.” In terms of operations, Hartman experienced several cold-related technical difficulties; “our paint booth quit working when it was -18 degrees Fahrenheit and -40 degrees Fahrenheit on the wind chill. I had to go on top of the roof, which had 12 inches of snow on it, to reset the main computer module. What a trip! It’s also harder to write a very accurate estimate when customers bring their car in and it is covered with snow, ice and salt. We would really like to have the vehicle for half a day so we could wash it and let it thaw out.” Debbie Ross, Office Manager at Route 1 Auto Body in Fairfield, CT, their shop was lucky enough that the unprecedented low temperatures didn’t really have a negative impact on their business or their equipment. “We have been able to service all of our customers. Other than wearing more layers of clothes, we have been lucky… We did have a few new customers whose collisions were a result of sliding on black ice but not many. I think that because the worst weather was on a weekend, there were less people on the road because they didn’t have to be.” For Don Mallon Chevrolet in Norwich, CT, the Polar Vortex generated more business, according to Collision Manager, Dawn Barden. “It has actually brought us more business, more front and rear bumper covers cracking upon a minor impact, instead of flexing. One of the customers said that a shopping car-
38 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com
riage rolled into her front cover, and it left a hole in it . They are breaking like ice or glass shattering… I do not think that it has affected our business in a negative way here in the collision center; however, in our service department, it has definitely slowed them down; people do not want to drive out in the colder weather unless they have to!” Don Mallon Chevrolet did suffer some technical inconveniences due to the weather, though. “Our paint booth sprinkler heads froze and broke, leaking in the booth and making us two days behind on paint after repairs were made. My painter says that it is taking more time for the bake cycle now, and we have added an additional heater in the paint mix room as we have water-based paint which is at a greater risk of freezing now with the low temperatures. The heater in our office has not been able to keep up with the colder weather either, plus my customers’ cars are having issues with the lift gates freezing because the gate shocks grease probably froze,” Barden said. Craig Camacho, Marketing Di-
rector at Keenan Auto Body Inc. in Clifton Heights, PA, notes that their volumes have increased by 25% across the board. “Claim volume has increased in our entire servicing footprint, directly related to the recent low temps, snow and ice… Our tooling and machinery was not affected one bit, but our locations were hindered by the snowfall and the need for snow plows and salt.” Though Keenan Auto Body experienced some delays due to their technicians being unable to work, Camacho looks upon this dilemma graciously. “As they say, family first. Many of our employees and techs were home taking care of their own driveways and walkways, ensuring their families’ safety and the safety of others as their primary focus. Our customers were made aware by our staffs that, due to the low temperatures, heavy snowfall and ice developing, there may be delays in completing their vehicles on time.” Rich Tornetta, Marketing Communications Manager of eight CollisionMax Auto Body and Glass
Centers in PA and NJ, notes quite a few issues caused by the Polar Vortex. “Customers sometimes would not show up for their scheduled estimate appointments or repairs. This could be due to cars not starting, being buried in snow or the roads not being adequately plowed and salted for safe travel. The weather has delayed our technicians who’ve had issues making it in to work on time due to unsafe driving conditions, cars not starting or being plowed in by passing trucks. We’d spend time digging out vehicles to be repaired and then gaining access to the parts in the storage facilities which are commonly located outdoors. Some mornings were spent plowing and shoveling outside bays to get cars in. Once the vehicles got into the shop, we’d sometimes use heat guns and/or air hoses to melt and remove the remaining snow/ice. The time spent cleaning the storage facilities is time not spent repairing vehicles, so this had a negative effect on production.” Tornetta said that CollisionMax had to postpone valet delivery of vehicles to their customers because of the unsafe driving conditions, and
there were also delays with parts deliveries which, in turn, caused delays in repairs. He adds, “below freezing temperatures made mobile auto glass repair and replacement difficult for our technicians both due to unsafe travel conditions and because their fingers would get numb within minutes of being outside.” There were also some technical difficulties as “the spray booth and older equipment tend to fail during cold streaks because they’ve been working overtime,” Tornetta explains. On the positive side, Tornetta notes that “collision workflow is up about 15% compared to what we normally run. Our glass business saw a spike in volume as well, due to the extremely low temperatures which caused many windshields with small chips to crack. In some instances, increased non-drivable volume has caused extended scheduling on drivable repairs.” As we move further south, we see less impact from the cold weather. According to Assistant Manager Walt Link, at Nalley Collision in Doraville, GA, suffered few effects caused by the abnormally cold weather. A few employees were
delayed due to the snow, but the cold weather did not impact volumes or cause any problems with equipment. “We had a bit of ice in the parking lot, but we didn’t have an issue.” Link is uncertain whether volumes were affected as business seems to be picking up as usual after the holidays, with numbers appearing to be consistent with last year. Alysia Hanks, Office Manager of Lakeway Collision in Mandeville, LA, states “the weather didn’t really affect us in anyway, except that our guys hate working in the cold, so production slowed down a lot!” The Polar Vortex is a regular circulation of strong winds surrounding the Arctic Pole, but normally, these winds keep the coldest air trapped in the Arctic regions of the Northern Hemisphere. Occasionally the vortex can become distorted, permitting this super cold air to travel further south. Though it is inconvenient and certainly unpleasant, the Polar Vortex of early January 2014 seems to have had little long-lasting impact on most shops’ operations. However, meteorologists say the during the third and fourth weeks of January, more changes will take
place. The high amplitude pattern is forecast to get more extreme.pattern will gradually change the current mixture of Pacific and Arctic air in the Canada Prairies and the North Central U.S. to all Arctic air. The air will get significantly colder over the Canada Prairies and the much of the eastern half of the nation as a result.
Ford Approves Pro-Spot for Repairs of New F-150
Pro Spot has announced that its aluminum repair products are preferred products for the new aluminum F150. The following Pro Spot products are approved by Ford as “Equipment required for aluminum repair” ● Aluminum Weld Station with three upgrade kits available ● SP Smart MIG Series (including the SP-5 Smart MIG) ● Riveter SPR Rivet Gun ● i5 Smart Welder and the i4 Inverter Resistance Spot Welder.
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What Precautions Need to be Taken Doing Windshield Repair in Very Cold Weather?
Some experts were asked by Glassbytes™ what precautions need to be taken in this excessively cold weather. “We’re not doing anything right now,” says Karen Waldroupe of A-1 Glass Co. in Manassas, VA, whose company does in-house and mobile automotive glass repairs just outside of Washington, DC. “We had a lot of snow so people are late coming in. But I’m sure we’ll see it get busier. When it gets cold like this, business increases.” While repairing windshields outside in the bitter cold is not ideal, it can be done, according to officials from GlasWeld and Delta Kits. “There are extra challenges in getting your repairs to cure properly in cold weather,” explains Randy Mackey, GlasWeld’s manager of technical services. “[T]o fully cure your repairs in cold weather, all you need is a little extra patience and preparation. It’s a fact
that resin takes longer to cure in cold weather. This is for several reasons. For starters, the voltage output of the vehicle’s cigarette lighter or power outlet may be lower in cold weather so the UV lamp receives less power and output is less. Also, when your UV lamp is cold, it does not emit as much UV radiation as it does when it is warmed up. And resin that’s cold doesn’t cure as quickly as resin that is at a warmer temperature.” Slow down and give your repairs more time to cure, he says. “You should count on adding an extra one to two minutes to the curing cycle,” Mackey adds. “Also, warm up the UV lamp an extra minute or two before you begin to cure. And when you’re traveling between jobs, keep the UV lamp where it can stay warm— such as inside the vehicle with you.” Keep your resin warm and when-
ever possible, pre-warm the windshield to get the glass to over 60 degree Fahrenheit. “The vehicle’s heater is the best way to warm the glass but other types of heaters can be used as well. Just be careful not to heat the glass too quickly, too hot or on too small an area as windshield damage is more likely to spread under these circumstances,” he explains. Extra precautions during cold weather are definitely necessary, says Bruce McDonald, a sales representative with Delta Kits. “To start, ideally the glass temperature should be between 70 and 100 degrees Fahrenheit. Also, remove any moisture that may be present in the break,” he says. “If warming the glass is necessary, make sure it’s done slowly and evenly. Sudden changes in temperature can cause the glass to crack out, so use caution.”
not the amount of the respective coverages in relation to each other. Moreover, the victim has paid premiums for extra coverage! This injustice has been rectified by the Legislature of Delaware and the law has been amended “to allow innocent victims of motor vehicle collisions to access their own underinsurance benefits in circumstances where the victim’s damages are greater than the amount of the negligent driver’s insurance policy limits.” Thus, for policies written or renewed after January 3, 2014, victims of automobile negligence by drivers with inadequate insurance will only need to demonstrate the at-fault driver’s insurance is insufficient in relation to the injuries sustained to be able to access underinsured benefits. This development in the law is logical and corrects a long-standing quirk in our laws that left many victims of negligence without sufficient legal recourse. So, after January 3, 2014: 1) talk to your insurance agent about underinsurance coverage on your automobile policy; and 2) select or renew adequate underinsurance coverage in case you or your loved ones are struck and injured by an underinsured driver (remember, a Delaware driver may carry as little as $15,000 in liability coverage). Be mindful, though, a renewal of
your policy before January 3, 2014 will NOT qualify. Only your first renewal AFTER January 3, 2014 will qualify. Mark R. Schmidt is an attorney in Media, PA.
Delaware Drivers Have New Protections Under the Law Attorney Mark R. Schmidt has some advice for Delaware drivers. Beginning January 2014 for policies written/renewed after January 3, 2014, Delaware automobile insurance protection will take a major step forward in providing protection for citizens of the First State, Schmidt wrote in his blog at Lawyers.com. Delaware clients can be involved in an auto accident caused by an individual without adequate insurance coverage. This underinsured individual may have only limited liability coverage. Under these circumstances, victims of negligence can access their own automobile insurance policy for underinsurance protection which should be a part of everyone’s comprehensive insurance protection package. Under existing Delaware law, if an injured victim elected Uninsured protection in an amount less than or equal to the amount of coverage available under the at-fault driver’s policy, you will NOT be permitted to access your own policy for underinsurance protection. Therefore, if you have $50,000 in Underinsured coverage and sustained tragic injuries worth in excess of $100,000, you are still NOT permitted to access your own policy unless the at-fault driver has less than $50,000 in coverage. The flaw in the logic of the law is obvious — the driving force should be the value of your injuries
40 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com
AUTO RECYCLING CLING
Using defrosters can be a good way to warm up the glass, he notes. “It blows cool air when the vehicle is first started and gradually the vents warm up as the engine warms up,” McDonald says. Another idea is to use a hairdryer, he says. “Just make sure you warm the area several inches around the damage, and if possible, keep the warm air blowing across the damaged area to maintain an even temperature. Be careful of overheating,” McDonald cautions. “Matching your windshield repair resin and injector temperature to the glass temperature within 10 degrees Fahrenheit will greatly minimize the chance of crack outs,” he points out. But the best solution for doing repairs when the temperature plummets? Take the vehicle in doors if at all possible, McDonald says.
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Social Media for Shops
Ed Attanasio is an automotive journalist based in San Francisco, California. He can be reached at firstname.lastname@example.org.
How to Improve Your Success with Google in 2014 with Ed Attanasio
I tell marketing people at body shops and collision businesses online is Ring all the time that if you pay attention to Ring Marketing in San Jose, CA. Google and stay on top of its periodic Their motto is “We Make Your Phone algorithm updates, you’ll be way Ring” and they specialize in working with Ed not Attanasio ahead of the game. It may sound with small to medium-size companies. that important, but when you think Welton Hong, the COO at Ring Ring about the fact that every website in the Marketing offered us some valuable world is affected by Google in one tips on how body shops can use way or another, you can see that those Google effectively in this new Humwho know how to use it right will ob- mingbird environment. “To optimize viously have a distinct advantage over an auto body shop website for Google their competition. Hummingbird, consider adding more Google’s incarnations (or re- real-world, question-specific queries leases) come with little or no warning into your site content,” Hong said. and every time Google updates itself, “This could be in the form of blog it’s an attention-getter for anyone who posts, FAQs and more.” works with the Internet. Named after In the end, Google still values animals (first there was Penguin and and respects original content and then there was Panda) these updates quality links over anything else. Any revolve around the fact that Google time you’re going to post something wants to reward sites that offer value on your web site or blog, ask yourwhile penalizing those that contain self this—is it of real value to my spam and irrelevant content. The customers? Make certain that you’re newest update is called Hummingbird creating content that is relevant to and it’s been buzzing in every web- your audience and then integrate it master’s ears since it was released into all of your social media. Innearly six months ago. crease your exposure and build your This summer, Google explained brand by positioning yourself as an their newest update in a simple paraexpert in collision and getting the graph: “Hummingbird is paying more word out through to the local media, attention to each word in a query, enincluding radio, TV, print and the Insuring that the whole query—the ternet. And post different types of whole sentence or conversation or content to enhance your SEO and meaning—is taken into account, rather create more opportunities to engage than particular words. The goal is that your audience—especially video, acpages matching the meaning do better, cording to Hong. rather than pages matching just a few “Add more relevant video conwords.” tent to your site,” he said. “It's much Some people will always try to harder for Google to generate this sort beat the system and fool Google with of content in response to inquiries, so “black-hat” tactics, but in the end this type of material will be insulated, they’re like the IRS. You may get at least for now, from the negative efaway with using text that you’re “borfects of Hummingbird.” rowing” from other sites for a while Other Google-related things to conand do other shady things to rank sider this year: highly in local searches, but in the ● Ride the Google+ Train: Google end, the party’s over. And Google is rewards companies that use their not like the American justice sys- products and this is one of their leadtem—no one is innocent until proven ing products. Too many body shops guilty and they could care less about set up Google+ accounts in 2013 and reasonable doubt. did nothing else. Tell your marketing But, do not fear—if you hire a re- people that you want to use Google+ spectable webmaster with a good more and devise a plan. track record that performs honest SEO relevant to your business and adhering ● Going Mobile: The Internet is to Google’s rules, you’ll be fine on- going more mobile every day, so get line. One company that’s been doing on the ball and be a part of it. Google exceptional work for both mechanical wants you to make your site optimized
SEMA Show Goes On
42 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com
for mobile users to attract mobile visitors. Right now, half of all Americans (and every 13-year-old girl out there) own smartphones and one-third own tablets. The number is going to grow at an explosive rate, so get mobile of get lost. “Make sure your site is as mobile-friendly as possible,” Hong explained. “Hummingbird is designed for mobile users. Mobile visitors are quickly outnumbering desktop visitors. You must focus your efforts here.”
● Some Appetizing Google Apps: I use Google Docs every day, because it enables me to share documents easily with others, via my desktop, laptop or smartphone. It saves time, because users can check in whenever and wherever. Also consider Evernote (a great note-taking app) and of course, Gmail and Dropbox. Google tweaked and improved both of these applications in 2013, making them
easier to use and full of new functionality. Whether working on a vehicle or coordinating your marketing efforts, it’s all about having the best tools available and knowing how to use them. Google has literally 50-plus business tools to make you more effective and profitable in 2014 and beyond. So tap into the Google universe and learn which ones are best-suited for you. But, most importantly, learn the Hummingbird update and discover its nuances and capabilities. Make Google a bigger part of your marketing plan this year and plug away at creating a significant presence there. Because Google is here to stay and the shops that use it correctly will reap huge benefits over time. Be patient and stick to your plan and pretty soon you‘ll hear the phone ringing, followed by those wonderful words, “We found you on Google!”
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AAIA Releases 67 page 2013 Digital Collision Repair Trends Report with Analysis of Whole Industry The Automotive Aftermarket Industry Association (AAIA) has released the 2013 Digital Collision Repair Trends report, an online 67-page descriptive analysis of data compiled from primary AAIA research, federal government and independent research data sources. The report highlights the size and scope of the U.S. collision industry, including the paint, body and equipment (PBE) aftermarket, with a brief analysis of the Canadian collision industry. It also includes analyses of factors influencing the collision industry, automotive collision insurance coverage and the Direct Repair Program (DRP). According to this year’s report, collision repair-related sales by aftermarket repair shops grew 2.3 percent in 2012 to $39.7 billion. This growth was driven by several factors such as increased number of registered vehicles, increased road congestion causing a higher frequency of accidents per year and the increased collision repair cost per vehicle. Powered by Nxtbook Media LLC™, this digital publication retains both the traditional design and high quality content of AAIA reports. This online production provides added value with many new functional enhancements. Users can:
● Download Excel-based files, charts, tables and graphs that can be copied and pasted for presentations. ● Turn pages with the click of a mouse. ● View pages in a variety of sizes and formats. ● Quickly locate what you are looking for through a “word search” feature. ● Save material for future reference through the “bookmarks” feature. ● Print the entire publication.
Copies of the new 2013 Digital Collision Repair Trends report are now available—cost is $125 for AAIA members and $250 for nonmembers. To order, visit: www.aftermarket.org and click “Marwww.autobodynews.com ket Intelligence,” or call AAIA market intelligence at 301-654-6664 CHECK IT OUT!
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OSHA Implements New Internet Resources to Encourage Safer Practices: Toolkit Options and PEL Tables
On October 24, 2013, the OccupaCompliance with the exposure tional Safety and Health Administra- limits contained in the annotated PEL tion (OSHA) initiated two new internet tables is voluntary, though recomresources to assist employers in better mended by OSHA. David Michaels, protecting their employees from expo- assistant secretary of labor for occusure to hazardous chemicals. pational safety and health, stated that These initiatives do not create he hopes employers will adopt these new mandatory standards, but rather new PEL tables. He explained, “I adprovide employers with resources that vise employers, who want to ensure OSHA hopes will encourage compa- that their workplaces are safe, to utinies to voluntarily adopt safer policies lize the occupational exposure limits regarding hazardous chemicals. Ac- on these annotated tables, since simcording to OSHA, these new re- ply complying with OSHA’s antisources are needed because many of quated PELs will not guarantee that itsGive standards out-of-date andon failmatters workers will be safe.” Give us your opinion on matters us are your opinion affecting the industry. to adequately protect workers from Employers who use hazardous exposure to hazardous chemicals. chemicals in the workplace are enOne of the new internet re- couraged to review these new internet www.autobodynews.com sources is a toolkit that identifies safer resources in an effort to improve the publisher@autobody CHECKthat IT can OUT! email@example.com chemicals be used in place of safety of their workers. more hazardous chemicals. This toolkit can be found at: http://www.osha.gov/dsg/safer_chemi cals/index.html. OSHA also created Annotated Permissible Exposure Limit tables (annotated PEL tables), which list To advertise Tofor advertise The source timely The source for timely more stringent exposure call Advertising Sales at:limits for call Joe Momber chemicals. The annotated PEL tables every at: information that information that every 800-699-8251 can be found at: 800-699-8251 body shop needs! body shop needs! http://www.osha.gov/dsg/annotatede-mail: e-mail: pels/index.html. firstname.lastname@example.org email@example.com CALL 800-699-8251
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Japanese Auto Lighting Supplier to Receive $56.6 Million Criminal Fine Koito Manufacturing Co. Ltd., a Tokyo-based company, has agreed to plead guilty and to pay a total of $56.6 million in criminal fines for its roles in separate price-fixing conspiracies involving automobile lighting fixtures and lamp ballasts installed in cars sold in the United States and elsewhere, the Department of Justice announced Jan 17. According to a two-count felony charge filed in U.S. District Court for the Eastern District of Michigan in Detroit, Koito engaged in separate conspiracies to rig bids for, and to fix, stabilize and maintain the prices of automobile lighting fixtures and automotive high-intensity discharge (HID) lamp ballasts sold to automakers in the United States and elsewhere. In addition to the criminal fine, Koito has also agreed to cooperate with the department’s ongoing auto parts investigations. The plea agreement is subject to court approval. “The conspirators engaged in long-term conspiracies to fix the prices of essential components used in the production of automobiles,”
said Brent Snyder, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “Today’s criminal fine demonstrates the Antitrust Division’s continued commitment to hold companies accountable for collusive behavior that impacts American consumers.” According to the charges, Koito and its co-conspirators sold the lighting fixtures and ballasts at noncompetitive prices to automakers in the United States and elsewhere. Koito and its co-conspirators carried out the conspiracies through meetings and conversations in which they discussed and agreed upon bids and price quotations and agreed to allocate among the companies certain sales of automotive lighting fixtures and HID lamp ballasts sold to automobile and component manufacturers. Koito’s involvement in the conspiracy to fix prices of automotive lighting fixtures lasted from at least as early as June 1997 until about July 2011. Koito’s involvement in the conspiracy to fix prices of automotive HID lamp ballasts lasted from at least
Couple Guilty of Embezzlement from MI Auto Glass Company Get Probation and $189K in Fines
“We settled on a plea and she and her husband will be at least paying a little back,” says Lynette Hackworth, office manager for A2 Auto Glass based in Washtenaw County, Michigan. Oral and Janice Molden were sentenced to probation this month for allegedly embezzling from the automotive glass company. They have been ordered to pay a combined total of $189,881 in fines. “We’re glad for it to be over,” says Hackworth. “It took way too long and it’s a shame this ever happened. It’s a very sad situation and cost the business a lot of money in attorneys’ fees. Our company is much healthier now and we’re glad to move on.” The couple was accused of embezzling the money over a three-year period. Janice Molden was a bookkeeper for the company and Oral Molden did computer work there. Janice Molden was sentenced to five years of probation and has been ordered to pay $166,440 in fines, according to a report. Her husband was sentenced to two years of probation and ordered to pay $23,441 in fines. Plea deals in the case were reached in October with the sentencing taking place this month. Janice Molden pleaded no contest
to one count of using a computer to commit a crime and one count of embezzling more than $999 but less than $20,000 and an additional count of using a computer to commit a crime. In exchange for the plea, the counts of embezzling $100,000 or more, embezzling $25,000 or more and two additional counts of using a computer to commit a crime were dismissed. Oral Molden pleaded no contest to one count of maliciously using a telecommunications service. In exchange, the court dismissed one court of false pretenses of more than $20,000 and false pretenses between $999 and $20,000, making or permitting a false tax return. Charges against the couple were first brought in 2011, with new counts filed in December 2012. A2 Auto Glass has locations in Ann Arbor and Jackson MI, as well as a mobile service.
as early as July 1998 until at least February 2010. Koito manufactures and sells automotive lighting fixtures, which include automobile headlamps and rear combination lamp assemblies that employ various bulb technologies and are used for forward illumination, visibility and to signal various vehicular functions, such as braking, reversing direction and turning. Koito also manufactures and sells HID lamp ballasts—electrical devices that are essential for the operation of an HID headlamp. HID lamp ballasts regulate the electrical current used to ignite and control the electrical arc that generates the intensely bright light emitted by an automotive HID headlamp fixture. Including Koito, 24 corporations have pleaded guilty or agreed to plead guilty in the department’s investigation into price fixing and bid rigging in the auto parts industry, and have agreed to pay a total of more than $1.8 billion in fines. Additionally, 26 individuals have been charged. Koito is charged with price fixing in violation of the Sherman Act,
which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. Today’s prosecution arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. The charges were brought by the National Criminal Enforcement Section, with the assistance of the Detroit Field Office of the FBI and the FBI headquarters’ International Corruption Unit. Anyone with information concerning this investigation should contact the Antitrust Division’s Citizen Complaint Center at 1-888-6473258, visit: www.justice.gov/atr/ contact/newcase.html or call the Detroit Field Office of the FBI at 313965-2323.
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Attorneys Report Settlement of Largest [Auto Lending] Loan Discrimination Case in History Attorneys William McSwain and Richard Haggerty of Drinker, Biddle and Reath, LLP, a national law firm, have reported that CFPB and DOJ have settled the largest loan discrimination case in history. On December 20, 2013, the Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) announced that the federal government has reached a $98 million settlement with Ally Financial, Inc., and Ally Bank (Ally), resolving allegations that Ally had allowed automobile dealers to charge minority borrowers higher rates of interest on automobile loans than they charged white borrowers. It is the largest auto loan discrimination settlement in United States history. The Ally settlement is the latest collaboration between the CFPB and the DOJ in the enforcement of consumer protection statutes. Since May, when the two agencies announced parallel civil and criminal complaints against a debt settlement company, they have worked together on several initiatives. In early December, CFPB and DOJ signed a memorandum of understanding that outlines the framework of their collaboration on fair lending
enforcement and seeks to avoid duplication of their respective efforts in consumer protection. Companies that offer consumer financial products can expect increased federal scrutiny of their businesses as the two agencies continue this collaboration. Congress created the CFPB as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), which President Obama signed into law on July 21, 2010. Title X of Dodd-Frank, which is entitled the Consumer Financial Protection Act of 2010, specified that the CFPB, which exists as part of the Federal Reserve System, would be charged with the broad task of regulating “the offering and provision of consumer financial products under the Federal consumer financial laws.” 12 U.S.C. § 5491. Its statutory purpose is to “seek to implement and, where applicable, enforce Federal consumer financial law consistently for the purpose of ensuring that all consumers have access to markets for consumer financial products and services and that markets for consumer financial products are fair, transparent, and competitive.” 12 U.S.C. § 5511(a). Accordingly, Con-
gress granted the CFPB authority to enforce 18 existing federal statues related to consumer financial products. The CFPB began its investigation of Ally in September 2012, and it eventually determined that Ally had violated the Equal Credit Opportunity Act (ECOA), which is one of the statutes over which the CFPB has jurisdiction. The ECOA prohibits discrimination “against any applicant, with respect to any aspect of a credit transaction,” on the basis of a number of characteristics, including race and national origin. 12 U.S.C. § 1691. According to the CFPB, Ally did not directly discriminate against consumers. Instead, it allegedly violated the ECOA by allowing “dealer markups.” In a common practice in the auto lending business, Ally set riskbased interest rates on automobile loans, but it then allowed auto dealers to increase the rates before they finalized the loans with consumers. Ally would then share part of the revenue from these dealer markups with the individual dealers. The CFPB’s investigation, which was the agency’s first enforcement action involving discrimination in the auto lending business, concluded that because Ally allowed dealers to in-
crease the rates charged to consumers, more than 235,000 AfricanAmerican, Hispanic, and Asian borrowers paid higher interest rates than similarly situated white borrowers from April 2011 through December 2013. Under the terms of the settlement, which the DOJ filed in the U.S. District Court for the Eastern District of Michigan, Ally will pay $80 million in restitution to consumers along with an $18 million penalty. The settlement also requires Ally to work with the CFPB in establishing a compliance program to monitor potential discrimination in its loan portfolio. According to the CFPB, one option for Ally to maintain compliance is to completely eliminate dealer markups. Ally did not admit to any wrongdoing in the settlement. In addition to their investigation of auto lending practices, the CFPB and DOJ are currently conducting joint investigations in the mortgage industry and other areas involving loans to consumers.
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Continued from Cover
Shops Opt Out
starts with parts, but it’s only a matter of time before they move on to paints and other materials.” Jeff Rice, Estimator at Koester Body Shop at 6818 SR 930 East, also in Ft. Wayne, agrees that the changes to the Select Service program are a bad thing which is why his shop opted out when use of PartsTrader became mandated. He also notes that since being removed from the program, there have been big delays in getting State Farm to get out to the shop to look at new jobs.
The owner of Dan T. Gratz Body Shop, Dan Gratz, said PartsTrader is “just another way of keeping us under State Farm’s thumb and having them dictate how we run our businesses. They are looking for a way to make more money off the little guy, the collision shops… Insurer interference is getting worse and worse. If we don’t take a stand now, when will we? State Farm needs to learn that there are shops who will take a stand for the right thing.” Since the removal of these shops, State Farm has been using small, sometimes uncertified, shops that don’t have the proper training and equipment, according to Gratz who sees this as a “lawsuit waiting to happen… State Farm doesn’t seem to realize that they are running shops out of business by doing things like implementing PartsTrader which reduces our profits. If we can’t make money, we will have to close our doors. Who is going to repair cars then?” Eric Knipscheer, owner of Knipscheer Collision Center at 747 W Superior St in Fort Wayne, opted out of the Select Service because PartsTrader did not offer parts from any local suppliers. He prefers buying locally for the benefit of his local econ-
omy and “really doesn’t appreciate someone telling [him] where to buy his parts.” All four of these shops currently participate in four to six total DRPs, and the consensus seems to be that the Select Service program wasn’t particularly problematic until the use of PartsTrader was enforced. All of these gentlemen agreed that they’d be willing to renegotiate their DRP contracts with State Farm if the insurer ceased to mandate the use of PartsTrader. When asked about the advice they’d give to shops on the Select Service in areas where PartsTrader is not yet mandated, everyone agreed that whether a shop should remain on the program after PartsTrader is implemented is a personal decision each shop must make. Bonecutter suggests that “you understand the ins and outs of the program so you can evaluate your options and make an educated decision in the best interests of your business.” Gratz believes that shops should also consider contacting some of the shops in Fort Wayne that opted out to learn more about the program and why they made the decision to withdraw from the Select Service. Knipscheer cautions that if PartsTrader is not resisted, “other insurers will adopt similar programs if we allow it, and shops will lose the freedom to choose their suppliers and to make a profit.” Mike Hartman, former president of the Indiana Auto Body Association (IABA), is also paying close attention to this situation. Though Hartman Auto Body still participates in Select Service since he is located in an outlying rural area where Part-
sTrader is not yet mandated, once this changes, he will “probably bail out. My sign says Hartman Auto Body, not State Farm Auto Body! I’m not willing to be forced to use PartsTrader because I see no benefit to it whatsoever, especially if there are no local vendors on the system.” From his conversations with some of the shops that chose to opt out, Hartman has found “the shops are
48 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com
not opposed to using parts procurement systems, but they are opposed to having it shoved down their throats. Owners don’t like someone coming in and telling them how to run their shops.” Another problem cited is that since parts vendors in Fort Wayne are not participating in PartsTrader, shops
Hartman believes these shops are doing a fabulous job with explaining the reasons for the delays and educating consumers on their right to choose. Customers have been pretty understanding, and some even dropped State Farm because they were displeased with how the insurer is treating the shops and their customers.
Todd Bonecutter (center) with Glenbrook Collision Staff
have to order parts from outside their area, from suppliers they don’t have relationships with. This negatively impacts the shops’ cycle times as they’re forced to wait to receive their parts, and this affects their scorecard with State Farm. One Fort Wayne dealership opted out of Select Service because the program forbade them from purchasing parts from their own parts department since it wasn’t on PartsTrader, and they didn’t like the loss of control in choosing their parts, particularly in being unable to supply their own body shop. Yet another criticism of PartsTrader is that it cuts the collision repair facility out of the parts profit. In New Zealand, the parts procurement program has progressed and expanded to include paints and materials also, and Hartman fears this happening in the U.S. because “you can’t sustain your business on labor rates alone.” Hartman also notes that the shops that opted out are seeing State Farm take longer to write estimates, sometimes taking as long as a week to even visit the shop. Because of this, longtime customers are being steered to shops on the Select Service where estimates are being written immediately. In one such instance, a shop waited eight days for an appraiser to come out to view a claim; meanwhile, several appraisers from State Farm visited the shop for supplements, yet they refused to write an estimate on the new job, according to Hartman. Though State Farm is making it difficult on the shops that opted out,
The 14 shops, many of them larger facilities and dealerships, which opted out of Select Service were doing approximately 80% of State Farm’s business in Fort Wayne before PartsTrader was mandated. The shops that remain are struggling to keep up with the increase in volumes while State Farm presumably seeks new shops in the Fort Wayne area to join Select Service. IABA continues to monitor the situation closely. In October, Mississippi’s John Mosely and Lloyd Bush attended IABA’s meeting to discuss PartsTrader, and this topic will certainly be pursued at the association’s next meeting. Members of IABA include shops that opted out, as well as those who stayed on Select Service. Hartman thinks “it’s really cool to see so many Fort Wayne shops sticking together. This is a really competitive area, and it’s amazing to see these shops supporting one another. I’ve never seen such solidarity.” State Farm’s has issued the following response: “Repairers who want to leave our Select Service program can inform State Farm and remove themselves. We are aware that some repairers in the Ft. Wayne area have recently done that. Our priority is to continue to meet the needs of our customers in the Ft. Wayne area, and we continue to do all we can to do that.”
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Insurance Companies Manipulate Repair Costs Says Shop-Sponsored Complaint in Mississippi Court A host of body shops has alleged in Mississippi federal court that a group of insurance providers, including State Farm Mutual Automobile Insurance Co. and GEICO General Insurance Co., of conspiring to manipulate car repair costs in order to reduce their payments. The complaint was filed in the U.S. District Court for the Southern District of Mississippi, Northern Division-Jackson. Defendants named in-
cluded: State Farm; Progressive; Allstate; Nationwide; GEICO; United Services Automobile Association; USAA; Safeco; Shelter Mutual Insurance Co.; Direct General Insurance Company of Mississippi; Mississippi Farm Bureau; and Shelter General Insurance Co. The repair shops are represented by John Arthur Eaves Jr. of John Arthur Eaves Attorneys At Law in Jackson, MS.
The suit named 16 separate insurance firms as defendants, but repeatedly alleges that State Farm largely orchestrated the scheme, which the body shops said involves the artificial suppression labor, repair and material costs and the enactment of harsh punitive measures against noncooperating repair providers. One of the main cogs of the alleged scheme is the abuse of direct repair program agreements under which
the body shops agree to certain price concessions in favor of preferential treatment from the insurers, according to the complaint. “The concessions demanded by the individual in exchange for remaining on the direct repair program were not balanced by the purported benefits,” the suit alleged. “The defendants, particularly State Farm, have utilized these agreements to See Insurers Sued, Page 61
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www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 49
Hey Toby! with Toby Chess
Toby Chess is an I-CAR program instructor, Training specialist, and former salvage yard operator. Toby is universally known in the collision industry for his work with first responders and advocacy for body shops and consumers. He can be reached at firstname.lastname@example.org
Honda’s Repair Instructions Need to Be Read and Followed
First and Foremost—Honda states “No body repairs should be attempted without first referring to the appropriate body repair manual for complete information”. I find it amazing how many collision repair shops in this country will repair/replace structural components on with David McClune today’s vehicles without having the 2012 Honda Accord appropriate procedures when the vehicle is estimated and repaired. I also find in appalling that many insurance adjusters will estimate a vehicle without having repair data before writing their estimate. Furthermore, why do body shops have to prove that they need a certain procedure for a OEM stated position, when they should have with John Yoswick this information as well. Just the other day, A shop owner called me 2013 Honda Accord for information to justify why the Question: What is the major differshop could not use heat on repairing ence between the two Honda Ac- a 2010 Toyota Tacoma frame that cords? was damaged in the rear. Moreover, I Answer: The “A” Pillar reinforce- feel that there should be a charge on ment, “B” pillar reinforcement and the estimate for data retrieval. It cost Rocker panel reinforcement are con- me $300.00 for a one year subscripstructed of one of the highest strengths tion to the Honda web site and I don’t steels seen in passenger cars. They have a shop or write estimates anyhave an 1500 MPa steel rating. more. (Sorry for getting off the subwith Richard Steffen Question: What does Honda say ject, but I needed to get it off my when these parts are damaged from a chest.) side impact? Use of Heat for body straightenAnswer:—Plenty ing and repairs. What does Honda say? “When you are doing body 1,500 MPa (HOT STAMP) STEEL straightening and repair procedures: LOCATIONS DO NOT apply heat to any body part 1,500 MPa steel stronger than ordinary during straightening. This may comsteel, so it can help protect vehicle occupromise the internal structure and pangts while reducing overall vehicle strength of high strength steel parts. weight to improve fuel efficiency. The Moreover, any part that has heat apnumbered parts inwith the diagrams Johnbelow Yoswickplied to it during straightening MUST are constructed of 1,500 MPa steel: be replaced with new parts. Ignoring these instructions, may significantly reduce occupant protection in any subsequent collision.” Let’s look at what Honda says about sectioning. “Because of body structure improvements for collision safety and rigidity, the materials, steel thickness and internal reinforcements have become very specific. Follow 4-doorwith Models Karyn Hendricks these guidelines to avoid an unsafe re1 Front Inner Upper Pillar pair: avoid sectioning (cut and joint) except for outer panels and floor pan2 Center Pillar Upper Stiffener els unless a specific procedure is pro3 Side Sill Stiffener vided in the body manual (As I stated 4 Inside Sill Reinforcement previously, how do you repair todays
vehicles without having the repair data) and relace body structural components as assemblies that match the replacement parts configuration. Honda dedicates 3 pages in their guide lines for replacement and welding, but I will address this later on in the article. Honda states in their body repair news about seats with airbags “ damaged front seat covers should be replaced and not repaired. Furthermore, Do not install non-factory seat covers, because they may alter the airbags intended deployment.” Honda also states “NEVER attempt to modify, splice or repair airbag system wiring. If airbag system wiring is damaged, replace the wiring harness(es). What does Honda say about their Tire Pressure Monitoring System (TPMS). “TPMS calibration must be started every time you: Adjust the pressure in one or more tires; Rotate
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50 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com
with David M. Brown
the tires; Replace one or more tires; Replace or update the VSA-modulator control unit. A couple of other items that should be noted when estimating and repairing a 2013 Honda Accord. Honda now sells replaceable headlamp brackets that get broken in an accident. It should noted that they only work if the following criteria is met: No damage to the headlamp assembly and sealing of the headlamp lens and housing is maintained. Some models may be equipped with one or more of the following systems the require aiming after collision repairs (special tools are required to complete the aiming procedures). Lane Watch—Lane Watch uses a camera and center dash display for blind spot detection. The camera must be aimed if the following operations are performed in the repair process: The camera is removed or replaced,
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Door mirror is removed and/or replaced, door panel is removed or replaced or the door is repaired. It should be noted that DTC will not be displayed on the dash, but will be stored in the control module. Forward Warning: The camera must be re-aimed if the FWC camera unit is removed or replaced. If the windshield is removed or replaced, the unit must be re-aimed. Note a dash light will illuminate if the system is inoperative. Adaptive Cruise Control (ACC). The millimeter wave radar of the ACC must be re-aimed if the radar unit is removed or replaced. If damage occurs in the unit’s mounting area, the system needs to be re-aimed. A malfunction of the unit will be displayed in the multi-unit dash. Let’s look at welding and repairing the 1500 MPa steel on the Honda Accord. Honda states when repairing and welding 1500 MPa steel parts as follows: ● NEVER attempt to straighten damaged 1500 MPa steel ● 1500 MPa steel parts MUST be replaced at factory seams using squeeze type resistance spot welds ● MIG weld braze joints should
be used ONLY in locations that can not be reached with STRS welders. ● To maintain adequate weld tensile strength, always set the spot welder to specifications in the body repair manual. ● NEVER perform MAG (aka MIG) welding on 1500 MPa steel parts ● MIG brazed joint locations are specified in the body repair manual ● A single or double hole MID braze may be specified in the body repair manual depending on tensile strength of the parts being joined. ● A pulsed MID welder MUST be used. You can convert most MIG welders to weld bronze silicon, but you have better heat management and control with a pulsed welder. More on this a little later on in the article. ● Parts made of Ultra High Strength Steel (UHSS) must be installed as complete part. No sectioning allowed. FAILURE TO USE THE PROPER EQUIPMENT OR FOLLOW THE PROPER PROCEDURES CAN RESULT IN AN UNSAFE REPAIR. Honda specifications for repairing and welding steels with 590 to 980 MPa ratings: Parts made of High
Strength Steel (590-980 MPa) must be installed as a complete part. No sectioning is allowed unless a procedure is provided in the body repair manual. Plug welds using a MIG welder may be done joining body parts with 590-980 MPa steel ratings. MAG (MIG) butt welding may be done only steel parts with a tensile strength of 590 MPa and lower. You will need to print out the diagram showing the locations of the different strengths of steel from the Honda web site. Here is what Honda specifies for welding 1500 MPa steel on the 2013/2014 Honda Accord. You will need to go to the web site for pictures on the welding procedures.
1500 MPa Parts Welding Specifications ______________________________ High-Strength Steel (1500 MPa) Parts Welding Specifications The high-strength steel (1500 MPa) material is used for the front pillar area, the roof side area, the center pillar area, and the side sill area of the vehicles. Parts replacement for the rein-
forcement and/or the stiffener may be required depending on the damage to the side panel. Take notice that spot welding conditions for welding the replacement parts differ from the normal welding conditions. MIG brazing must be used where spot welding cannot be done. NEVER perform MAG welding. MIG brazing welding method To ensure adequate joint strength, use a pulsed MIG welder with specified wire and the following brazing technique. This will create a capillary action in order to liquefy the solder so that it can penetrate into the upper and lower plates: • Begin brazing about 5mm (0.20in) before the holes(s). • Move the torch across the hole in a zigzag pattern as you close the holes(s). • Continue the brazing operation about 10mm (0.39 in) past the hole(s).
Spot welding specifications
• Current: 9000 A • Pressure: 3432 N (350 kgf, 772 lbf) • Welding cycle: 40 NOTE: When spot welding is per-
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Parts Hours: Mon-Fri: 7:30-6:00; Sat: 8-4 email: Ifsparts@fitzmall.com 905 North Frederick Ave., Gaithersburg, MD 20879 www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 51
formed, make sure that the following conditions are maintained: the specified current, conductivity time, welding pressure, holding time, and shutdown time recommended for spot welder. Follow the spot welder manufacturer's instructions. MIG brazing specifications
• MIG brazing machine with pulse controller • Wire: CuSi3 • Shielding gas: Argon gas (100%)
For joining, or brazing of outer panel (270 MPa) and the high-strength steel (1500 MPa) parts: Drill one hole φ8 mm (0.31 in) at the outer panel. As I previously mentioned, let’s talk welding machines.
I purchased a Prospot SP5 after testing it at the SEMA show.
This diagram is taken from the 2013/2014 Honda Body Repair Manual. It is located in the General Description under Roof and Side Panel 4 Door Construction
NOTE: • For details about correct brazing current and voltage, refer to the equipment manufacturer’s recommendations. • MIG welding/brazing: Metal inert gas welding or brazing where 100% Argon (Ar) shielding gas is used. Argon is inert and does not react with the molten weld pool or brazing operation.
Brazing hole size For joining, or brazing of stiffener (340 and 980 MPa) and the highstrength steel (1500 MPa) parts: Drill two holes φ8 mm (0.31 in) in about 10 mm (0.39 in) pitch.
Upper Stiffener [1.8 (0.071)]
Center Pillar Reinforcement [1.8 (0.071)]
Lower Stiffener [1.8 (0.071)]
This legend is also found on the same page as the diagram. Note that part number 6 is constructed of 3 different metal strengths
You will note that there are 3 spot welds (590 steel)welded to reinforcement on the inside of the vehicle along with 4 spot welds
This is the 5 in one welder. You can MIG Steel, MIG Weld Braze, MIG aluminum, TIG steel and arc weld all in one machine. It is a 220 volt single phase machine that is
Self Driving Cars Could Dramatically Decrease Accidents
Self-driving cars (SDC) that include driver control are expected to hit highways around the globe before 2025 and self-driving “only” cars are anticipated around 2030, according to an emerging technologies study on Autonomous Cars from IHS Automotive, a division of IHS research and analysis firm. In the study, “Emerging Technologies: Autonomous Cars—Not If, But When,” IHS Automotive forecasts total worldwide sales of self-driving cars will grow from nearly 230 thousand in 2025 to 11.8 million in 2035—7 million SDCs with both driver control and autonomous control and 4.8 million that have only autonomous control. In all, there should be nearly 54 million self-driving cars in use globally by 2035. The study anticipates that nearly all of the vehicles in use are likely to be self-driving cars or self-driving commercial vehicles sometime after 2050. The price premium for the SDC electronics technology will add between $7,000 and $10,000 to a car’s sticker price in 2025, a figure that will drop to around $5,000 in 2030 and about $3,000 in 2035 when no driver controls are available.
Center Pillar Stiffener Complete
“There are several benefits from self-driving cars to society, drivers and pedestrians,” said Egil Juliussen, principal analyst for infotainment and autonomous driver assisted systems at Colorado-based IHS Automotive. Juliussen co-authored the study with IHS Automotive senior ADAS analyst Jeremy Carlson. “Accident rates will plunge to near zero for SDCs, although other cars will crash into SDCs, but as the market share of SDCs on the highway grows, overall accident rates will decline steadily,” Juliussen says. “Traffic congestion and air pollution per car should also decline because SDCs can be programmed to be more efficient in their driving patterns.” The study also notes some potential barriers to SDC deployment and two major technology risks: software reliability and cyber security. The barriers include implementation of a legal framework for self-driving cars and establishment of government rules and regulations. Several automakers have said publicly they will have autonomous cars by 2020, or earlier, according to the report.
52 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com
pulsed. It is a very user friendly and the welds that are produced are amazing. This machine is overkill for the body shop. Prospot has the same machine, but with 2 guns (steel, aluminum or MIG braze—
your choice). It is about 25 percent cheaper and I would highly recommend this unit. You can go to Prospot.com and click on the SP welder for a video demonstration of this welder. Now to the actual re-
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placement of the center pillar and rocker reinforcement.
California BAR Releases Consumer Inspection Video
Welding Symbols Plate spot welding Plate spot welding Plate spot welding MAG plug welding MAG welding MIG brazing
L= Welding length unit: mm (in) ( ) and ( )*: The number of welds You will note that there are 3 spot welds (590 steel)welded to reinforcement on the inside of the vehicle along with 4 spot welds
11. From the passenger’s compartment, weld the center inner pillar (A) and the roof side rail (B)
You will note that the upper and lower out sections of the reinforcement are MIG weld braze
1. When replacing the center pillar lower stiffener (A) only, weld it to the center pillar reinforcement (B) and the center pillar upper stiffener (C). ( )*: Welding positions with 590 MPa or higher parts. Confirm the plug welding specifications. (■)*: Welding positions with the center pillar upper stiffener (1500 MPa parts). Confirm the spot welding and the MIG brazing specifications
The California Department of Consumer Affairs’ Bureau of Automotive Repair (BAR) has released a short video for its No-Cost Auto Body Inspection Program. The program provides consumers with no-cost vehicle inspections to ensure all collision repairs listed on their auto body repair invoice were done correctly. “The Auto Body Inspection Program is a great resource for drivers who have recently been in a collision and have had auto body repair done,” said Bureau Chief Patrick Dorais. “To the untrained eye, it can be hard to tell if a repair was done correctly and whether or not the vehicle’s safety has been compromised,” Dorais said. “This program is very easy to participate in and provides consumers with peace of mind about any auto body repairs they may have had performed.” The video features an actual consumer who has used the program, explains how the program works and how to contact BAR to participate. The video can be seen at autobodynews.com.
Texas Repairer Says He Wants His Tax Refunded
Texas passed House Bill 500, amending the tax code definition of “retail trade,” which reclassified independent body shops as eligible for a reduction to 0.5 percent tax, the same that dealership body shops were paying under the “retail” classification. But Robert Jordan of Protech Collision Repair Center in Webster, TX, says he and other repairers should have the .05 extra they have been paying refunded back to them. The Texas Comptroller apparently disagrees: “H.B. 500 did not make the amendment to the tax code retroactive, therefore payment adjustments would not be made for past reports,” said R.J. DeSilva, spokesperson, Texas Comptroller. Jordan estimates his additional tax paid to be $84,000. “I’m not asking for anything that’s not fair and not reasonable,” Jordan told a media source. “I want my .05 back. Any fool who is not asking for it should be. This is a serious hosing and needs to be addressed.” Jordan says he’s going to refile his tax forms showing the correct amount he would have paid had he been a dealer shop.
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www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 53
3M Presents its Top Body Shop Resolutions for 2014 Most New Year’s resolutions involve your body and your health like lose weight, get in shape or improve your diet. But are you making New Year’s resolutions that improve the health of your body shop? Simple changes in the tools, solutions and systems that you are using in your body shop can have a significant impact on your shop’s performance in the year ahead – from productivity to solvent use, materials waste, margin improvement and KPI performance. Here are the top five resolutions you might want to consider as you plan for 2014, courtesy of 3M Automotive Aftermarket, which works with thousands of body shops across the country to help improve performance and profitability.
Resolution #1 – Decrease material waste and solvent use and deliver the savings to the bottom line. Are you sending profits down the drain with wasted materials and unneeded solvent use? The family of 3M™ Accuspray™ System HVLP spray guns with replaceable atomizing head and 3M™ PPS™ technology delivers premium performance at a fraction of the cost and effort. The system can provide exceptional results through excellent atomization, resulting in high transfer efficiency and a large, usable spray pattern with low overspray. It is designed to help improve productivity, reduce solvent consumption and minimize clean-up time. Customers using the 3M PPS technology report that it delivers as much as a 70 percent reduction in the use of cleaning solvents. In addition, the system helps reduce the amount of paint required for a job by as much as 1 to 3 ounces per mix, leading to significant cost and waste reductions. The Accuspray System can be cleaned with as little as 1 to 2 ounces of solvent, versus a pint to quart of solvent for traditional primer guns. This can translate into a more than 90 percent reduction in solvent use. Resolution #2 – Make tough jobs more efficient with the right tools. Removing spot welds from today’s high-strength steel automotive panels can be easier and less expensive, thanks to the new 3M™ Green
Corps™ File Belt and the 3M™ File Belt Tool. Using specialized drill bits to separate panels during disassembly is time-consuming, expensive and challenging for the technician. The 3M Green Corps File Belt is an ideal alternative to drilling, with a long-lasting abrasive surface designed for spot weld removal as well as grinding in other tight areas. A single 3M Green Corps File Belt grinds off many more spot welds than drill bits, and it works well on all types of steel. It is a solution that requires less effort, performs faster and at a cost savings in time and materials. Also available is the ScotchBrite™ Duraflex File Belt that can be used for the removal of window urethane and seam sealer, as well as weld preparation and cleanup applications. Today’s advanced paints can be challenging, too. The 3M™ Cubitron™ II Clean Sanding Hookit™ Disc is a revolutionary advancement in automotive abrasive technology. It features 3M Precision-Shaped Grain Technology that provides faster cutting for paint removal, the early sanding stage in small or large area body repairs, body filler rough shaping and feather edging. It ultimately lasts longer and delivers a finer, more uniform finish. The 3M Cubitron II Clean Sanding Hookit Disc has a cut rate that is as much as 30 percent faster and lasts twice as long as conventional ceramic premium abrasives. This is possible because the discs incorporate triangular-shaped ceramic grain technology that continuously fractures to form sharp points and edges that slice through paint and filler. The technology allows the disc to run cooler and results in a finer finish.
Resolution #3 – Cut the leading reason for comebacks – swirl marks in paint finishes. Almost any paint professional would agree, compounding is the most difficult step in the traditional paint finishing process. The time, the heavy polisher, the mess of the rubbing compound – it all adds up to a significant speed bump in the process of delivering a high-quality paint finishing job. To remove that speed bump, 3M Automotive Aftermarket has re-invented the paint finishing process to eliminate the compound-
54 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com
ing step – thanks to an advanced paint finishing system that features 3M™ Trizact™ abrasives and 3M™ Perfect-It™ 1 Finishing Material. The new 3M Perfect-It Paint Finishing System replaces messy compounds and heavy polishers with a 3M Trizact abrasive disc and DA sander. The new 3M Perfect-It 1 Paint Finishing System offers one-step finishing; deeper, glossier finishes; less time with a heavy polisher; reduced rework and comebacks for swirl marks; cleaner jobs and reduced time for detailing. Paint professionals can say goodbye to swirl marks in 2014!
Resolution #4 – Eliminate texture matching headaches. For automotive professionals, matching textures on rocker panels have always been a challenge. And the current technology for applying these textured coatings and undercoatings means painters struggle with coating thickness, overspray, product waste and cleanup. The new 3M Body Protection System is reinventing how repair technicians spray tex-
tured finishes found on today’s vehicles for rock protection and sound deadening. The innovative 3M Body Protection System helps painters spray low-viscosity textured finishes with fine, medium, coarse or splattered patterns. The 3M Body Protection System gives automotive professionals a powerful new tool for productivity, including: Ability to adjust pressures and spray pattern, allowing for better match to OEM textures. Ability to cut in half application time of textured finishes to rocker panels, wheel wells and undercarriages in many cases. The pressurized 3M Accuspray spray gun allows the product to be sprayed at any angle making it easier to reach lower rocker sections and inside wheel wheels. The painter can easily adjust the spray pattern to reduce overspray and masking. Painters can easily achieve a perfect texture match, which contributes to improved repair quality and higher CSI scores.
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Resolution #5 – Do away with re-dos than 40 percent and reduced re-work for pinholes. and clean-up times of more than 30 When it comes to the shop floor, hours per month. One of the biggest every minute is critical to delivering advantages of the Dynamic Mixing excellent dent repair, on time and at System from 3M is the reduction of profitable margin.Edition? And every pinholes, which reduces additional to athis Southwest minute spent mixing, cleaning and coats of filler or glaze, prevents rereworking repairs represents dollars working of jobs and delivers higher wasted. Automotive professionals customer satisfaction with the final autobodynews.com can stop mixing and start fixing, repair. The unique system achieves thanks to the Dynamic Mixing Sys- this through the automatic mixing tem from 3M, a high-tech tool for system, which ensures pinholes aren’t applying filler and glaze. This inno- blended into the filler and prevents nessvative withsystem mixes Promote your business with the material and over-catalyzation. The system also featuring hardener rightaninexclusive the nozzlearticle to al- featuring delivers a tight wet-coat on the car ways deliver theyour perfect formulation. surface, which discourages pinholes services. products or services. The unique design allows profes- from forming. sionals to dispense the filler when To make these innovative solutions they want it, right where they want part of your shop’s process in 2014, it, at the touch of a trigger. contact your local 3M representative With the Dynamic Mixing Sysor or details! Call for details! distributor. tem, there is no messy mixing For more information on these 251 800-699-8251 process, no wasted materials, and no solutions, visit www.3MCollision. lost time cleaning up. In fact, users com and follow us at www.Facereport a reduction in waste of more book.com/3MCollision.
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PPG Introduces New Color Tool PPG has introduced a dedicated color tool for the value Refinish user. The Value Color Deck provides a visual alternative for finding the best color for a refinish repair. Consisting of 1,800 large, color chips chromatically sorted and sprayed with Refinish paint, the Value Color Deck is the latest addition to PPG’s comprehensive line of best-in-class color identification and matching solutions. “PPG recognizes the importance of the value segment,” said Jennifer Boros, PPG Automotive Refinish segment manager, solvent-borne brands. “The Value Color Deck is one more solution we can offer to collision centers for their vehicle repairs. For the repair technician, this is an affordable path to visual color assessment. Our customers will quickly view the tool as an accurate and effective means to identify the right color for the job.” According to Boros, the Value Color Deck provides the necessary color information required for most cost-effective repairs. The tool will be updated annually. Its chromatic color display opens countless possibilities of color choices independent of vehicle manufacturer, and the large chip size,
with its continuous color display, makes it easy to plaque the chip to the vehicle. “As industry leaders we are committed to providing all our customers with the tools they need to do the very best refinish job possible,” added Mary Kimbro, PPG global color director. “We want to support the value sector with efficient color tools that simplify the color identification process. The Value Color Deck will go a long way to ensure PPG customers have the right tools for the job.” The Value Color Deck is the latest addition to PPG’s industry-leading lineup of color identification and matching tools that includes color information books, Paint It, and COLORMOBILE® and PAINTMANAGER® software. For more about the Value Color Deck, visit the site at www.ppgrefinish.com or call (800) 647-6050.
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K&M Collision of NC Files Six Separate Shortpay Lawsuits by Chasidy Rae Sisk
On November 27, 2013, Michael Bradshaw, VP of Operations at K&M Collision in Hickory, NC, filed six shortpay lawsuits on his customers’ behalf. Of the six cases filed, three were against GEICO, two were against Nationwide, and one was filed against Allstate, with amounts ranging from $680.95 to $5749.64. Some of the claims included in the lawsuits were Breach of Contract, Bad Faith, and Unfair/Deceptive Trade Practices. K&M Collision is being represented by attorney William E. Morgan of Morgan Law PLLC in Hickory, NC. According to Bradshaw, “These claims stem from the insurers’ continual refusal to pay for factory correct repairs according to manufacturer repair specifications and guidelines. Not all insurers are bad; what we’re finding is that many of these companies are doing the right thing and paying for manufacturer correct repairs; however, there is a select group of insurance companies that show complete disregard for manufacturer specified repairs, procedures and safety checks on a consistent basis. Unfortunately, those insurers put us in the position of either performing the operations for free, making the customer responsible for the additional costs or resorting to legal action.” While the six shortpay cases Bradshaw is currently pursuing encompass a little bit of everything, “the most consistent problem is the failure to recognize and reimburse customers for manufacturer recommended repairs and safety checks.” This is particularly the case when only a few shops are performing the operation as it leaves the insurance company uninterested in the manufacturer’s documentation showing the need for the repair, and they will refuse to pay for something which other shops don’t charge, even though the absence of the charge is due to the fact that it is not being done. Bradshaw fears that these insurers are “basing their repair standards on sub-standard repairs being performed.” An example of this is seen with a BMW recently brought to the shop. Because the manufacturer’s facility is only 45 minutes away from K&M Collision, Bradshaw toured the facility and learned about a procedure they
use to correct any imperfections in the paint; however, Nationwide refused to pay the shop to perform this procedure, though manufacturer guidelines indicate it is required and should be billed separately without being included in the paint time. The insurer insisted they have to do what the market dictates, and because most shops don’t perform this requirement, K&M Collision cannot perform it either (or at least they won’t be paid if they do). K&M Collision has been in business since 1991, and though Bradshaw did not begin working there officially until 2006, he has always been around this family-owned and operated business. Despite their decision to refrain from participating in any DRPs, the shop repairs a high volume of vehicles, grossing just over 1.3 million this past year. When questioned about the importance of pursuing shortpay lawsuits, Bradshaw explains, “in order to maintain our 12 manufacturer certifications, pay employees, and make a profit, it’s really a necessity; either we do it, or we don’t make money. The shortpay amounts are usually our profit margins on these jobs.” Though Bradshaw just won a shortpay lawsuit against Nationwide this past summer, he has not seen any improvements in their behavior since the victory; “they seem to change the way they handle claims, in terms of what they will and won’t pay, every few months.” He also notes the oddity of how Nationwide handles appraisals; they usually send at least two people to the shop, one of whom is generally a supervisor, and these individuals will engage in a review of their findings before making a decision about what they’ll pay. It is not uncommon for Nationwide representatives to be at the shop for four hours or more to process just one claim. Additionally, Bradshaw recently ran into a case where Nationwide did not believe certain repairs were necessary, and even after K&M Collision proved the necessity by performing measurements and providing this evidence, the insurer only paid for a portion of the repair. In contrast, Bradshaw notes that he is seeing some improvements from some other insurers. For example, he filed a claim against one insurer for refusing to pay his labor rates because
56 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com
they claimed the rates were too high. Since the lawsuit was filed, this same insurer has not contested four new claims that were processed with higher labor rates than the first case which caused K&M Collision to lodge the complaint. Though Bradshaw believes that the majority of insurance companies are changing their behavior due to the recent influx in shortpay cases being pursued, for some insurers “this is the way it is and the way it’s going to be. Some of these insurers fear paying one shop more than the others because they have the mistaken belief that it’s necessary to pay all shops the same.” This is especially untrue as it pertains to shops that are certified by rare manufacturers, such as Porsche which only has around 50 certified shops in the nation, making it logical that these shops should receive increased compensation when performing the more difficult repairs that these cars call for. Bradshaw believes there will be “fewer cases being filed in the future due to a combination of factors.”
“As always, our main concern is that our customer’s vehicles are repaired safely, as close as humanly possible to their pre-accident condition. The costs involved in having the proper equipment, training, facilities and staff to repair today’s vehicles continues to escalate. But the reimbursement rates have moved very little in the past several years. I think the problem is many times an insurer is attempting to base payment on the lowest cost in the market and not the cost of proper repairs in the market. Based on our conversations with other shop owners around the country, this is a situation I believe is occurring nationwide. I remain hopeful that someday these actions will no longer be necessary as all insurers will choose to do right by their customers.” Bradshaw is fairly confident and optimistic about the outcome of these pending lawsuits. “We put a lot of research into this, and we believe these cases will be decided in our favor.” Trial dates for these six lawsuits have not yet been set, but they are expected to occur sometime during the first half of this year.
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Pacific Collision Centers, Elite Group, and Supporters Donate 2013 Ford Focus to Family with Handicapped Child
On January 15th 2014 at the National Auto Body Council’s annual golf fundraiser, Pacific Collision Centers had the honor of donating a 2013 Ford Focus to family in need. The family was nominated by Variety the Children’s Charity of the Desert, which is a nonprofit organization dedicated to promoting and protecting the health and well-being of underprivileged and special needs children in the Coachella Valley. The organization works closely with low income families.
Refurbished 2013 Ford Focus
The beneficiary of the car was Jennifer Gutierrez, a mother of a two-year-old boy named Angel who
Pacific Collision marketing manager, Martha Pimentel (l) presents the keys to Jennifer Gutierrez and Angel
was diagnosed with a condition called as Arthogryposis Multiplex Congenita. Angel’s arms dangle at his sides along and he has very little leg mobility. Without transportation of their own, Jennifer was forced to take public transportation from Coachella to Loma Linda’s Children’s Hospital multiple times a week for his treatment. Pacific Collision Centers and The Elite Group collaborated with some trusted partners that felt compelled to help in any way possible. With the assistance of Central Ford in South
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Gate, PPG, Single Source Inc., Mr. C’s Towing, K&P Automotive and Keystone we were able to repair the minor damage on the vehicle. As an added bonus Mercury Insurance provided an extended vehicle warranty to 100,000 miles. Additional supporters offered gift and gas cards; they included Davis & Madden Insurance Agency, GP Brown Insurance Agency, Costal Comprehensive Insurance and Agency Manor Insurance Agency. Angel view of the Desert donated a car seat and stroller that were specifically made for children with disabilities. Said Pacific Collision Centers owner Steve Vettel, “Once you experience the pure excitement and energy of gifting a vehicle to a family in need you’re absolutely committed to the program. Having the opportunity to work with our great team members and business partners to make this happen is truly rewarding. It’s my hope that every shop owner would participate in a Recycled Rides event in their community.”
Enterprise Donates $25,000 to Education Foundation
The $25,000 gift from Enterprise will support the foundation’s Collision Repair Education Campaign fund, which allows the organization to provide its annual student scholarships, school grants, and the annual Ultimate Collision Education Makeover $50,000 school grants. “Our collision repair partners play an essential role in the success of our replacement business,” said Bruce Clifton, vice president, insurance replacement for Enterprise Rent-A-Car. “We are pleased to make this contribution to help expand opportunities for young men and women in the collision repair industry.” Added Collision Repair Education Foundation Executive Director Clark Plucinski, “Enterprise’s donation assists the Collision Repair Education Foundation’s ability to help provide support to high school and college collision school programs, instructors and students nationwide.
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Study Estimates 9% of Cars will be Self-Driving by 2035
14 States to Increase the Minimum Wage in 2014
Sales of vehicles able to drive themselves will account for about 9 percent of global auto sales in about two decades, according to a forecast published this month by auto industry consultant IHS Automotive. The study focused on autonomous cars, which can drive with “no attention needed by the driver,” IHS analyst Egil Juliussen said. Such cars are not currently available for sale, but IHS predicts they will be available around 2025. IHS expects global sales of self-driving cars in 2025 to be 230,000—less than 1 percent of the 115 million cars expected to be sold that year. But by 2035, sales of self-driving cars will reach 11.8 million, or 9 percent of the 129 million global auto sales expected that year, Juliussen said. Most of those sales will be in well-established auto markets such as the United States, western Europe and Japan. The pace of growth for self-driving cars will exceed that of electric cars, which have been hobbled by the high cost of batteries, Juliussen said.
As of January 1, 2014, thirteen states will raise the minimum wage for workers. In Arizona ($7.90 per hour), Colorado [pdf] ($8.00 per hour), Connecticut [pdf] ($8.70 per hour), Florida [pdf] ($7.93 per hour), Missouri ($7.50 per hour), Montana ($7.90 per hour), New Jersey ($8.25 per hour), New York ($8.00 per hour), Ohio ($7.95 per hour), Oregon [pdf] ($9.10 per hour), Rhode Island ($8.00 per hour), Vermont [pdf] ($8.73 per hour), and Washington ($9.32 per hour), workers will see an increase. All employers in these states need to display updated posters with the new state minimum wage as required by state law. Additionally, California’s minimum wage will increase to $9.00 per hour on July 1, 2014. The Federal minimum wage remains unchanged at $7.25 per hour. However, if your workers are in a state that has a minimum wage above the Federal rate, you must pay workers the higher rate.
CIC in Brief, More Next Issue
CIC Roundtable Launches Consumer Website for OEMs
CIC chair George Avery welcomed the CIC body before inviting John Van Alstyne, president and CEO of I-CAR, to present the organization’s initiatives for the coming year (see I-CAR story this issue) Following Van Alstyne was a presentation by guest speaker Scott Sorrell, CEO of Sales Adrenaline. Sorrell discussed how to find your value as a business and how to keep reselling that value to customers. The afternoon was focused on reviewing each CIC committee—definitions, insurer/repairer relations, parts and material, data privacy, education and training, human resources, governmental, marketing, and technical—and their plans for the coming year. Notable changes to the committees included putting the definitions committee on hiatus, and the appointing of Randy Hanson, auto director at Allstate, as the new chair of the insurer/repairer relations committee. Hanson will replace Rick Tuuri. Discussion also occured on the data privacy committee on vehicle information technology.
The Collision Industry Conference’s OE Roundtable Committee announced the launch of crashrepairinfo.com, a consumer education site, during the first day of the January 2014 Collision Industry Conference (CIC) planning meeting in Palm Springs, CA. The site is aimed at providing consumers with information that can help them navigate the process of getting their vehicles repaired following a collision. Gary Ledoux, assistant national manager of wholesale parts marketing at Honda and a member of the OE Roundtable Committee, said the site is meant to help vehicle owners make informed decisions about the collision repair of their vehicle. The site includes OE position statements, collision repair basics, what to do in case of an accident, and links to other OE sites. Ledoux said the committee recommends all repairers use the site as a resource and direct customers to the site, as is applicable.
CCC Acquires Auto Injury Solutions Inc.
CCC Information Services Inc. (CCC) announced on Jan. 7 the acquisition of Auto Injury Solutions, Inc. (AIS), formerly a division of Humana Inc. The transaction brings together CCC with AIS, the only national, full-service provider of auto injury medical review solutions. “We’re thrilled to welcome Matt Elges and his team to the CCC family. The acquisition of AIS is an important step in the continued execution of our strategy to expand into adjacent segments in order to better service the auto claims market,” said Githesh Ramamurthy, Chairman and CEO of CCC. “Together, our platform will be able to leverage proven technology, advanced data analytics and worldclass customer service to provide customers with an array of solutions.” Elges said, “The combination of CCC and AIS represents a strong strategic fit that will enable us to expand our reach and leverage our collective strengths in developing innovative new solutions for our customers.
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The National Automotive Service Task Force (NASTF) reported that the Chrysler Group LLC is registering diagnostic software and tools in both dealerships and aftermarket shops to ensure authenticity when servicing customer’s vehicles. NASTF was made aware of this from Chrysler in response to a question NASTF had asked on this topic. License registration has been in use by many OEMs for some time, but in the near future, unregistered Chrysler tools will not operate. Soon, the wiTECH software will show a warning to users whose devices do not hold a valid registration. Registration of the Chrysler tool is free, assuming the user has paid the yearly license fee. A Chrysler spokesperson told NASTF that approximately 80– 90% of known users have already registered their device. Later in 2014, Chrysler will no longer allow unregistered users to operate their wiTECHs. The other affected group will be users of clones of the wiTECH VCI.
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SUV Crashes into Colleyville Body Shop, Alcohol a Factor
Police believe alcohol was a factor in an accident where an SUV crashed into a Colleyville, GA, body shop. The GMC Yukon crashed into the Lone Star Collision repair in the 6800 block of Colleyville Blvd. in Colleyville after hitting a sedan. Colleyville police believe alcohol and speed were a factor in the accident. The driver of the Yukon was taken into custody by Colleyville Police. That person’s name has not yet been released, but sources say that the suspect has prior arrests for DWI and at least one DWI conviction. A grandfather who was driving the sedan that was hit was transported to a local hospital with nonlife threatening injuries along with his granddaughter, who was in the passenger seat. “Had somebody been in the backseat, they would not have survived,” said Captain Robert Hinton with the Colleyville Police. “There was very little left of the car.” Lapier and her husband received a call from police around 11:30 p.m. Jan 1. “It was unbelievable,” said the business’ owner, Jennifer Lapier. “I just couldn’t believe what I saw. I’ve never seen anything like that before.
Fire Destroys St. Augustine, FL’s Complete Collision
The Florida Department of Environmental Protection and Hazmat crews are assessing the damage left behind by a fire at an auto body shop on State Road 207 on Jan. 21. St. Johns County Fire and Rescue arrived on scene at Complete Collison shortly after 12:00 a.m. They said the fire was out just after 1:30 a.m. Local TV News talked to a deputy with the St. Johns County Sheriff's Office who said the building is a total loss. According to their website, Complete Collision is a truck towing, transportation and auto body shop. SR 207 reopened just before 4:30 a.m.
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NASTF Board Appoints 2014 Co-Chairs All 12 of the important co-chair positions on the six working committees of the National Automotive Service Task Force (NASTF) received appointments from the NASTF Board of Directors for the 2014 term. Each committee has one co-chair representing the OEMs and one co-chair representing the independent automotive segment. Appointments included:
In making the appointments, NASTF Chair, Allen Pennebaker, noted “Since the beginning of NASTF the committees have been doing the heavy lifting to be the source of progress in generating solutions that help OEMs and the aftermarket tackle the challenges of service resources. Again this year, the co-chairs of all our committees will Education Committee deal with important initiatives; and”, Rob Barto (Nissan) he continued, “NASTF is very fortuRob Morrell (WorldPac) nate to have such an impressive list of volunteers leading these efforts.” Vehicle Security Committee Information including the comBob Stewart (General Motors) mittee charter, their roster, meeting Claude Hensley (Lockman) dates, responsibilities and past meeting minutes are available for public view Service Information Committee on either of the committee webpages Steve Douglas (Auto Alliance) indexed at www.nastf.org/committees. Dave Zwalina (Automotive One) NASTF was established in 2000 to identify, communicate and resolve Equipment & Tool Committee gaps in the availability and accessibilDennis Blough (Suzuki) ity of automotive service information, Greg Potter (DG Technologies) service training, diagnostic tools, and equipment for the benefit of automoCollision Repair Committee tive service professionals and their Give your(Honda) opinion on matters affecting theincorporated industry. Garyus Ledoux customers. NASTF was Tim Morgan (Spanesi) in 2006 as a 501(c)(6) not-for-profit organization. Communications Committee Additional details can be found at John Cabaniss (Global Automakers) www.nastf.org.
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North American Car & Truck Production Hits 16.6M Units
North American car and truck production reached an estimated 16.6 To advertise Theinsource timely million units 2013, up for 4 percent. call Advertising Sales at: That would mark the that first every time information 800-699-8251 since 2005 that production surbody shop needs! passed 16 million units. Mexican e-mail: firstname.lastname@example.org plantsCALL are expected to have pro800-699-8251 duced a record number of vehicles www.autobodynews.com 918 RSR Your3,071,000 FREE in 2013, Start an estimated units, Mail topping Subscription. 2012’s record of 3,020,404. These Select Dealers Have The Parts You Need. Several manufacturers’ North American totals are expected to See the NEW surpass records set in 2012. Honda, Hyundai-Kia, Nissan and Toyota MARYLAND PENNSYLVANIA all had record producing years in 2013, but BMW, Subaru, VolkswaPorsche of Porschewww.autobodynews.com of gen and AutoAlliance—the FordSilver Spring bucks county Mazda joint venture—produced Silver Spring Warrington fewer units in 2013 than in 2012. While Canada built over 2.4 855-314-6472 215-343-4810 million vehicles in 2012, that num301-890-3748 Fax 215-343-5352 Fax ber is expected to drop to 1.8 email@example.com www.1800THOMPSON.com lion by 2020. Since 2010, auto To advertise makers have invested $42 billion in call Sean Hartman at: manufacturing. The biggest de800-699-8251 clines in Canada are expected to e-mail: come at GM and Chrysler.
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Bosch Demos Driverless Car
Bosch sponsored a Driverless Car Experience at the 2014 International CES (Consumer Electronics To advertise Show), the global gathering place call Joe Momber at: for consumer technologies, held 800-699-8251 Jan. 7 to 10, 2014, in Las Vegas. “Bosch is proud to e-mail: contribute to firstname.lastname@example.org the future of safer driving by continuously developing technologies www.autobodynews.com for a more intelligent and forwardthinking vehicle,” said Mike Mansuetti, president, Robert Bosch LLC. “We predict fully automated driving beyond 2020.” The DriverRegister Your Em less Car Experience took place in the Las Vegas Convention Center (LVCC). Bosch technologies applied to two demonstration vehiat www.autobod cles include: automated parking and pedestrian protection, based on a stereo video camera, which is being shown for the first time in the US. Bosch wanted to show how each driver assistance technology works: intelligent headlight control, integrated cruise assist, traffic jam assist, automatic park assist, pedestrian protection and more.
www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 59
Ford Approves Chief and Elektron Equipment for 2015 F-150 Repairs Ford Motor Co. has named Chief Automotive Technologies and Elektron approved collision repair equipment suppliers for the 2015 F150 pickup truck. Ford’s F-Series has been America’s best-selling vehicle for more than 30 years. To improve fuel economy, Ford has significantly redesigned the F150 to replace the vehicle’s traditional steel body panels and bed with military-grade aluminum. Ford has also increased the amount of high-strength steel in the new F150’s frame from 23 percent to 77 percent. Properly restoring an aluminum collision-damaged vehicle to pre-accident condition requires new repair methods and equipment. Recognizing this, Ford has added a number of Chief and Elektron products to its Rotunda Dealer Equipment program and is encouraging its dealers to invest in the proper equipment and training before the 2015 F-150 hits the showrooms later this year. ‘Chief has the largest installed base of structural repair equipment in North America and is a long-time Ford-approved supplier,’ says Mike Cranfill, vice president of collision for Vehicle Service Group (VSG),
parent company of the Chief and Elektron brands. ‘In fact, more than 60 percent of Ford dealers with body shops currently rely on Chief equipment every day. We have worked closely with Ford to develop a dedicated new structural holding package and target attachments for the 2015 F-150 that will function seamlessly with dealers’ existing Chief frame racks and measuring systems. We are also providing a full range of Elektron welders designed specifically for aluminum repair.’ In addition to the Chief frame racks, LaserLock™ live mapping™ system and Elektron spot welders that are already available to Ford dealers through the Rotunda Dealer Equipment program, Ford has approved the following F-150 special tools: ● Chief Structural Holding with F150 Kit, Complete (part #1283000001) ● Chief F-150 Holding Kit (part #128-300002) ● Chief Deluxe Chain and Clamping Package with Rolling Cart (part #128-619205) Chief Collet Style Target Attachment Set for Non-Ferrous Vehicle
Openings (part #128-540-200) ● Elektron MultiMig 511 Welder with Standard Torch (part #128EL900011) ● Elektron MultiMig 511 Welder with Push-Pull Torch (part # 128EL900012) ● Elektron MultiMig 522 Dual Torch Welder Complete with Standard and Push-Pull Torch (part #128-EL900010) ● Elektron MultiTool Aluminum Dent Repair Station (part #128EL930001)
Chief will also introduce new training through Chief University later this year that will cover proper aluminum repair methods to help technicians prepare to work on the new F-150. ‘Our Chief and Elektron technical experts are working with the Rotunda team to help dealers ensure they are ready to properly repair the new 2015 F-150 as soon as it goes on sale,’ Cranfill says. ‘We can equip them with the training, tools and equipment they need to smoothly transition to aluminum vehicle repair.’ See www.chiefautomotive.com or call (800) 445-9262.
NHTSA Moves Ahead on Backup Camera Legislation
After several delays, the Obama administration is reviewing a revised rule that could push automakers to install backup cameras in more of their cars and trucks. The reworked regulation, submitted to the White House on Dec. 25, would set new rear visibility standards for light vehicles sold in the United States, according to a White House database that tracks the rulemaking process. The standards are aimed at keeping children from being run over and killed by vehicles moving in reverse. Automakers might decide to install backup cameras in all of their models. The standards may also allow automakers to comply by making less costly changes, for example, by redesigning a car’s mirrors to reduce the odds that a child behind the rear bumper will go undetected. The administration intends to release the final rule by January 2015. But that’s not soon enough to satisfy auto safety advocates. Consumers Union filed a lawsuit in September with the goal of compelling the Obama administration to make them a standard feature across the U.S. fleet.
Ford’s Best Selling F-150 Gets Lighter and Tougher
In what many industry analysts consider a risky move for Ford, and others consider a transformative moment, the company is rolling the dice on the pickup line, America’s best-selling truck for 37 years and its best-selling vehicle for 32. The 2015 F-150 will be substantially lighter due to extensive use of aluminum and more high strength steels. Aluminum alloys are used throughout the F-150 body for the first time, as the truck slims down by up to 700 pounds. The lighter body then allows other components such as fuel tanks, brakes and powertrains to also shrink, all while maintaining or improving driving performance and fuel economy, according to companies involved, including Alcoa and Novelis Inc. “This is already the most significant debut at the auto show,” said Joe Langley, a production analyst for researcher IHS Automotive. “Especially since Ford will be taking such a big gamble.” Ford engineers increased the use of high-strength 70,000-psi steel—from 23 percent to 77 percent of the frame—to improve stiffness and durability while reducing weight. The new frame is up to 60 pounds lighter than the current frame. “The frame is the backbone of the
truck, and we delivered a frame that is stronger and more capable than before,” said John Caris, F-150 lead frame engineer. “Our frame team developed exclusive, industry-first engineering techniques to create a truck foundation that is lighter without sacrificing toughness. This F-150 frame is the toughest we have ever built.” Ford engineers also increased the use of advanced materials in the F150 body. “Our objective was to find materials that allowed us to design the truck to be as tough or tougher than the current model, yet could help it be hundreds of pounds lighter for better capability and fuel economy,” said Pete Friedman of Ford manufacturing research. “Out of all the materials we tested, we carefully selected only certain grades of aluminum that met our high performance standards in all of our tests, while allowing us to trim hundreds of pounds from the truck.” The reduced weight of the highstrength, military-grade, aluminum alloys enables the F-150 to tow and haul more than ever while also improving acceleration, braking and handling performance. Also, aluminum alloys will not rust and are resistant to corrosion, helping enhance vehicle life.
60 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com
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Ford Rep Paul Massie on Repairing the 2015 F-150
Paul Massie, powertrain and collision product marketing manager for Ford, spoke at the Collision Industry Conference (CIC) held Jan. 16–17 in Palm Springs, CA. He sought to reassure repairers concerned about the forthcoming newly engineered 2015 F-150 which goes on sale later this year. “We designed the vehicle so it can be easily repaired and accessible so the customer can go where they want to get it repaired,” said Massie. Massie said there will be no restrictions on what kind of shops can repair the vehicle. Ford will not require a shop to have a separate clean room however, it will recommend the use of curtains to separate aluminum from steel work and specific equipment to handle the repairs. The total investment for a shop that is starting from ground zero with aluminum repair can be as high as $50,000. (Autobody News’ next issue will detail a shop’s outlay on clean room setup.) “That’s if you have absolutely no aluminum equipment,” Massie said. “So if you’re already in the aluminum business and already have the equipment and can separate aluminum from steel, you’re probably a long way towards having the equipment you need.” Genuine Ford collision repair parts will be available to all shops. All parts sold will include instructions on how to
properly install them. Ford will begin its education on the 2015 F-150 and aluminum repair at the AASP/NJ Northeast Show March 21–23 at the Meadowlands Expo Center in Secaucus, NJ. A cutaway of the vehicle will be featured so repairers can see all of its structural components. Engineers will be present to talk about the vehicle, and I-CAR training developed with Ford will be available. Ford is also offering to do a presentation on the 2015 F-150 at the next CIC April 9–10 in Portland, OR, although details are not firmed up yet. Information will also be available at NACE in July and SEMA in October. “The goal is to make high-strength, military-grade aluminum alloy collision repair mainstream,” said Massie. “We want it to be as mainstream as it already is for steel.” Elsewhere Ford has said it put the new model through rigorous tests, including cross-country hauls through desert valleys and over high-altitude mountain passes and in climates of 20 degrees below zero and 120 degrees above. A disguised F-150 even raced in the Baja 1000, where it earned the distinction of completing the 883-mile race while some other purpose-built race vehicles could not.
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exert control over plaintiffs' businesses in a variety of manners, well beyond that of an ordinary business agreement.” “The entire collision repair industry is caught between a rock and a hard place," said Eaves. “On one hand, they're trying to maintain the safety and quality of repairs for the customers in a time when the manufacturers are trying to develop more sophisticated, more fuel efficient and safer cars, but yet the insurance industry is trying to force them to cut corners on their repairs. So Mississippi repairers have felt like they have been backed into a corner, and now they have to start to reclaim some of these costs and send a message to the insurance industry." Eaves said the complaint is currently being modified for use in seven other states. Meanwhile, 22 other states are preparing to join the fight. While his law firm is leading the effort, it's also partnering with “talented” attorneys in each state who have experience in asbestos, tobacco and natural disaster litigation. “We're looking to go to all 50 states," Eaves said. “What we need is a few committed shops in each of the 50 states that are willing to take the industry back and join us." Collectively, insurers named in the suit control nearly 70 percent of the automobile insurance business in Mississippi, a dominant position they have used to create a vertical conspiracy in violation of the Sherman Act, the complaint said. The suit accuses State Farm and the other companies of employing various tactics to artificially set rates for repairs, labor and parts used in the restoration of vehicles damaged in accidents, such as refusing to compensate shops for replacement parts when repair is possible though strongly not recommended based on the shop's opinion. Insurers have also routinely engaged in the practice of “steering” in order to punish noncompliant shops, the suit said, elaborating that insurers will urge customers not to seek repairs from a certain shop because quality or customer service issues have cropped up. Used/recycled parts are also mentioned in discussing the insurers
going against the repairers’ expert opinions and therefore “compromising the safety of both the driver and passengers as well as other members of the traveling public.” Another count in the complaint references “quantum meruit,” a concept that states that a party is not allowed to enrich itself at the expense of another. “These statements have been made about certain plaintiffs without any attempt to ascertain the truth thereof,” the suit said. “Not only that, some of the ills recited which implicitly criticize the shops are wholly attributable to the insurer itself.” “Plaintiffs have performed valuable services and expended material resources with the reasonable expectation of payment/compensation for those services and materials. This is their business,” the complaint reads. “Performing said services and expending material resources benefitted Defendants and Defendants’ insured/claimants for whom Defendants are required to provide payment for repairs.” The complaint added that several of the plaintiffs attempted to raise these issues with insurance industry representatives at a meeting held in April. At the meeting, the insurers said that repairs and subsequent payments should be consistent with the estimates prepared through the companies' database software. But the suit said that little has changed since, with State Farm and the other defendants continuing to refuse to make full payments for necessary repairs. The suit seeks treble damages and injunctive relief, along with any other relief the court deems proper. Among the other insurers named in the suit are Progressive Gulf Insurance Co., Allstate Insurance Co. and Nationwide Property And Casualty Insurance Co. An attorney for the repair companies and a representative for State Farm did not immediately respond to requests for comment Wednesday. Counsel information for the insurance companies was not immediately available for comment. The case is Capitol Body Shop, Inc. et al v. Lewis et al., case number 3:14-cv-00012, in the U.S. District Court for the Southern District of Mississippi.
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State Farm to Exit Canadian Market, Credit Union Buying
State Farm Insurance is getting out of Canada. The Bloomington-based insurance giant is selling its Canadian unit to Desjardins Group, Canada’s largest credit union. State Farm, Desjardins and its French partner Credit Mutuel, will invest $1.5 billion in the combined business. State Farm is now the fourth largest auto insurer in Canada, though it’s business is largely concentrated in three provinces. The new business to be run by Desjardins under the State Farm brand for some years would become the second largest Canadian property and casualty insurer with a larger geographical reach. The deal is expected to close in January of 2015. At that point, State Farm’s 1,700 Canadian workers and 500 Agents would work for Desjardins. State Farm Chairman Ed Rust says the agreement allows future cooperative ventures in Canada. Rust told Canadian workers in a letter that the regulatory and political response to the great recession and the company’s US-centric approach limits State Farm’s ability to respond and adapt to changing Canadian markets. Rust calls the decision to sell “difficult” but good for the new operation.
Daydreaming Tops List of Crash-Causing Distractions
Studies and data suggest that drivers need to pay more attention to the task of driving to avoid accidents. According to a recent study, simply being “lost in thought” amounted to 62 percent of the distractions listed as a cause of a fatal automobile accident. The report indicates that roughly 10 percent of fatal traffic accidents involve at least one driver who is distracted. This amounts to about 6,500 people killed each year. Cellphone usage of all types placed second at about 12 percent in the study. This includes both talking on the phone as well as texting and dialing. Using other devices, such as navigation tools, was ranked as being a factor in two percent of fatal accidents as was adjusting the climate control or audio systems. Other major factors include being distracted by the scenery or people outside the vehicle, which accounted for seven percent of accidents, and conversing with passengers, which was listed in five percent of accidents. More minor causes include consuming foods or liquids, adjusting car controls, smoking, moving pets and even swatting insects. These factors were found in about two percent of the incidents.
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Beware Hole-in-One Golf Insurance Scams
Autobody Associations planning golf events with hole in one prizes need to watch out for potential phony insurance scams. A Connecticut man pleaded guilty in Washington state to two counts of selling insurance without a license and one count of first-degree theft after insuring golf tournament hole-in-one prizes and failing to pay. Kevin Kolenda, 55, of Norwalk, Conn., could spend up to three months in jail when sentenced. He must also pay up to $35,000 in restitution. Kolenda started his business in 1995 under the name Golf Marketing. It went through several name changes, including Golf Marketing Worldwide, Golf Marketing Inc., Hole-in-Won.com and its current name, Hole-in-Won.com Worldwide. He has a satellite office in Rye, NY. Kolenda has been accused several times of insurance tournaments and failing to pay hole-in-one winners in several states, including Montana, Ohio, Georgia, California, New York, Hawaii, Alabama, Massachusetts, Florida, Connecticut and North Carolina.
Hyundai, Kia Expect to Top 2013 Global Vehicle Sales
Hyundai and Kia saw their combined global sales rise 6 percent to 6.9 million vehicles from January to November 2013 from a year earlier. The companies said that they are on track to sell more than 7.5 million vehicles globally this year, higher than their earlier target of 7.41 million vehicles. Hyundai and Kia rank fifth in global vehicle sales, and expect a tough year in 2014 as Japanese and European automakers are seen accelerating competition and the United States and Chinese markets slow. In the US, Hyundai’s sales are up 2 percent this year through November while volume has declined 3 percent at Kia in an overall market that has expanded 8 percent. Hyundai and Kia said they saw their combined global sales rise 6 percent to 6.9 million vehicles from January to November this year from a year earlier. Solid sales gains in emerging markets like China and Brazil outweighed slowing sales in the United States and South Korea where Hyundai and Kia have underperformed rivals partly due to aging models. Last year, Hyundai and Kia sold a combined 7.1 million vehicles.
Other Lightweights at the Detroit Auto Show
The redesigned 2015 Ford F-150 and the 2015 BMW M3 and M4 are leading the “lightweight” movement at the 2014 Detroit Auto Show. The push for better fuel economy is helping to drive the movement toward lighter weight vehicles. Consumer demand for more content, such as infotainment systems, leather seats and larger wheels, adds more weight to the car. Automakers are then under pressure to cut weight elsewhere throughout the body of a vehicle in order to improve fuel efficiency. This new diet requires new materials such as aluminum, magnesium and carbon fiber, as every pound counts. The estimated 700 lb weight loss in Ford’s best-selling truck helps the vehicle to “tow more, haul more, accelerate quicker and stop shorter,” while “contributing to efficiency,” Ford said on Monday. The EPA has not yet published fuel economy numbers on the 2015 F-150. BMW said its 2015 BMW M4 Coupe has a curb weight of around 3,300 pounds, “thanks to the rigorous application of intelligent lightweight design measures.” This reflects a weight savings of around 176 pounds over a comparably
equipped predecessor model, according to the automaker.
The weight was reduced through the use of lightweight materials, such as carbon-fiber-reinforced plastic and aluminum on a number of chassis and body components. The 2015 BMW M3 and M4 feature a carbon roof. The cars are on display at the Detroit auto show. Another car in the BMW lineup also puts the emphasis on light weight. The electric 2014 BMW i3 features a body made of carbon fiber. The automaker says this super-light vehicle gets more miles on a charge than its competitors. An all-aluminum body and chassis let Land Rover shave about 800 pounds off the 2014 Range Rover Sport. The 2014 Chevrolet Corvette Stingray, which debuted at the 2013 Detroit Auto Show, features lightweight materials, including an aluminum frame, carbon-fiber hood and a removable roof panel on coupes. Edmunds says: As this trend picks up speed, “lightweight” is becoming a major marketing point, a good thing for car shoppers concerned about fuel economy.
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