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Vol. 12 / Issue 3 / June 2021
Biden Touts America’s Electric Automotive Future During Ford Tour, Test Drives Electric F-150 by Nick Niedzwiadek
President Joe Biden traveled to Michigan on Tuesday May 18th to drum up support for his plans to reorient the American economy toward a greener future, and to lavish
praise on Ford Motor Co. as it shows off an electric version of its signature pickup truck slated for next year. “We’re at a great inflection point in American history,” Biden said in Dearborn after touring Ford’s electric vehicle production facility. “How we handle the next four to 10 years is going to determine where we are going to be 30, 40, 50 years from now. It’s one of those moments in American history.” Biden’s visit was timed to Ford’s official rollout of its Lightning truck later this week, and the president was See Ford Tour, Page 28
Overall Rate of Uninsured Drivers Nationally Remains Flat by John Yoswick
Efforts to crack down on uninsured motorists in the U.S. appear to be having little effect, according to the most recent findings from the Insurance Research Council (IRC). In a report updated every three or four years, the IRC in April estimated one in eight drivers on the road in 2019―12.6%―lacked insurance. That’s down from 13% in 2015, but up from 12.3% in 2010. The figure potentially impacts collision repairers in that insured vehicles are more likely to be repaired
after an accident, and because atfault drivers who lack insurance increase insurance costs for those with policies. But state law regulates insurance, including enforcement of insurance requirements for drivers, and the rate of uninsured drivers varies widely by state, according to IRC data. Just 3.1% of New Jersey drivers lacked insurance in 2019―down significantly from 14.9% in 2015― but at the other end of the spectrum, nearly three in 10 drivers (29.4%) in See Uninsured Drivers, Page 21
Two Responses to COVID for Collision Repairers— Resilience and Realization by David Roberts, Focus Advisors
In dozens of discussions with shop owners over the past four months, there is a marked divergence among MSOs about their plans for the future. Many who are experiencing a strong rebound in revenues have strong balance sheets and managed their expenses throughout the pandemic, and now have embarked on more aggressive expansion. Others are reconsidering their alternatives post-COVID, as their recovery proceeds more unevenly and more slow-
ly than anticipated. The former are carefully identifying expansion opportunities. One client is in the process of buying a dealer body shop. Another client has committed to building a large greenfield location in a rapidly expanding portion of his market. Among those who are reconsidering their future are some who have been planning their exit opportunities for a long time but have been reluctant to pull the trigger. Others are exhausted: “I just don’t have it in me to roll this rock up the mountain one See Two Responses to COVID, Page 16
Historic Recovery Ahead for U.S. Economy in 2021, Predicts UCF Economist by Josh Miranda, UCF Today
Fueled by a release of pent-up economic demand, unemployment will decline and Americans will spend more money through 2021, says Sean Snaith, renowned economist and director of UCF’s Institute for Economic Forecasting. While consumer spending shrank by 3.9% in 2020 amid the recession, the institute’s first-quarter U.S. forecast predicts spending will accelerate to an increase of 5.4% this year and slow to an increase of 2.6% by 2024. CARES Act funding and the COVID-19 vaccine are quelling fear of the pandemic, prompting consumers to open their wallets and businesses to hire new employees. Snaith maintains a positive outlook on the months ahead, but it could take until 2022 for unemployment to fall back to pre-pandemic levels. “Job growth will help ease the damage to the labor market from the lockdown, but the road to recovery will take at least another year,”
Snaith says. “Consumers are powering this recovery, and as the effects of the pandemic fade, consumer confidence will rise in tow.” In the report, Snaith predicts: Job growth will continue. The growth rate will reach 3.9% in 2021, before slowing to 3.1% in 2022, 0.8% in 2023 and 0.5% in 2024. Unemployment will decline to 4.2% by 2023. The housing market will continue to progress and improve through 2021—new-home construction will rise from 1.38 million in 2020 to 1.56 million in 2021, then decelerate to 1.24 million by 2024. Real Gross Domestic Product (GDP) growth will accelerate from its historic 2020 low to 5.4% in 2021, before easing to 4% in 2022, 2.5% in 2023 and 2.4% in 2024. With economic policy measures largely at a standstill in Washington, D.C., public health initiatives will likely drive the speed of the nation’s economic recovery. The looming See Historic Recovery, Page 23
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REGIONAL AASP/NJ Members Gain Insight into Impact of ADAS at Membership Meeting.......................25 Bill Requiring Zero Emissions for New Vehicles in NY by 2035 Heads to Governor....................6 DePalo and Sons Auto Body, GEICO, NABC Recycled Rides Program Donate Refurbished Vehicle ......................................10 Imhotep Institute Charter High School Teacher Named 2020 Axalta All-Pro Teacher of the Year .......................................14 Massachusetts to Lift COVID Restrictions May 29, State to Meet Vaccination Goal by Beginning of June ....................................24 NY Small Business Owners Face Looming Hike on Unemployment Premiums ................18 Pennsylvania Man Convicted of Fraud, Identity Theft, False Statement Offenses in Auto Warranty Scheme ..............................12 Pennsylvania Small Businesses’ Need for Workers ‘a Huge Issue,’ Industry Representative Says .......................................8 Realistic Labor Rate Data, Estimate Audit Tool Highlight AASP/NJ Meeting ....................10 Structure Fire Destroys Auto Shop in Waldo, ME ..6 The Durable Companies, GEICO, NABC Donate Refurbished Vehicle to Veteran ......................22 Wilson Tech Teams Sweep New York Auto Tech Competition ..........................................22
Gary Ledoux Writes into the Sunset...............54 Collision Repair Veteran Brings I-CAR Training to Collision Industry in China .........................50 Everything’s Changed: The Pandemic’s Impact Will Be Felt Long After We Stop Wearing Masks ...............................................4 Ford Releases New Position Statement
Mazda Wholesale Parts Dealers ...................... 56
asTech .............................................................. 6
Mercedes-Benz of Atlantic City ......................... 7
Audi Wholesale Parts Dealers .......................... 55
Mercedes-Benz of Fort Washington ................... 7
BMW Wholesale Parts Dealers ...................42-43
Mercedes-Benz of Paramus ............................ 25
Cadillac of Mahwah ........................................ 35
Mercedes-Benz of West Chester ....................... 7
Central Avenue Chrysler-Jeep-Dodge-Ram ..... 19
Mercedes-Benz of Wilmington ........................ 27
Certified Automotive Parts Association ............ 12
Mercedes-Benz Wholesale Parts Dealers ........ 59
Choice Bumper ............................................... 18
MINI Wholesale Parts Dealers.......................... 44
Classifieds ...................................................... 62
MOPAR Wholesale Parts Dealers ................36-37
Colad/EMM Specialties ................................... 64
New Holland Ford ........................................... 21
Colonial Automotive Group .............................. 29
New Holland Toyota ........................................ 50
Courtesy Mitsubishi ........................................ 40
Nissan/Infiniti Wholesale Parts Dealers............ 61
Registration Open for CIECA CONNEX 2021 .......21
DePaula Chevrolet-Ford .................................. 45
Northstar Kia................................................... 24
Regulator Stresses Need for Documented
Dover Dodge-Chrysler-Jeep ............................ 15
Nucar ............................................................. 11
Eastchester Chrysler-Jeep-Dodge ................... 10
Open Road Acura of East Brunswick ............... 38
Empire Auto Parts ........................................... 30
Packer Norris Parts ......................................... 17
Flemington Auto Group ................................... 41
Porsche Huntington......................................... 38
Ford Wholesale Parts Dealers .......................... 53
Porsche Wholesale Parts Dealers .................... 49
GM Wholesale Parts Dealers ........................... 47
Pro Spot International ....................................... 2
Healey Brothers .............................................. 13
Rafferty Subaru................................................. 6
Honda-Acura Wholesale Parts Dealers .31, 32-33
SATA Dan-Am Company .................................... 5
Hyundai Wholesale Parts Dealers .................... 52
Schultz Ford.................................................... 39
Infiniti of Norwood .......................................... 20
Security Dodge-Chrysler-Jeep-Ram ................ 23
Insta Finish ....................................................... 9
Subaru Wholesale Parts Dealers...................... 57
Jaguar Land Rover Cherry Hill......................... 34
Toyota Wholesale Parts Dealers....................... 60
Jeff D’Ambrosio Chrysler-Jeep-Dodge ............ 26
Volkswagen of Kingston .................................. 28
Jeff D’Ambrosio Volkswagen........................... 22
Volkswagen Wholesale Parts Dealers .............. 63
Kia Motors Wholesale Parts Dealers ................ 51
White Plains Volkswagen ................................ 50
Kia of Attleboro ............................................... 40
Yonkers Kia ..................................................... 46
Best in a Decade...........................................30 Fossil Fuel Emergency: U.S. Races to Move Gasoline After a Pipeline Hack.......................60 FTC Examines Anti-Competitive Repair Restrictions, Recommends Ways to Expand Consumers’ Options .........................58 Historic Recovery Ahead for U.S. Economy in 2021, Predicts UCF Economist ....................1 How to Get Your Customers to Trust You in a Skeptical World ......................................46 LexisNexis U.S. Auto Insurance Trends Report Shows COVID-19’s Impact on the Industry ....45 Now is the Perfect Time to Sell or Trade Your Car: Kelley Blue Book ............................61 Overall Rate of Uninsured Drivers Nationally Remains Flat...................................................1
Collision Repair Customer Authorization, Updates ........................................................53
Anderson - Collision Repair Industry Has a
Sherwin-Williams’ Lee Rush Provides Insight
Yoswick - CIC Speakers Discuss Employment Issues Related to Vaccines, Fire-Related Concerns with Evs ........................................44
on Quality Validation Needs ...........................48 Tesla and Its Peers Proving EVs Inherently Safer than Combustion Cars .........................27 Tesla Says All Supercharger Energy Will Be Renewable in 2021 ..................................56 Toyota Acquires Lyft’s Self-Driving Unit for More Than Half a Billion Dollars ....................62
Toyota’s Insurance Agency Has HQ ....................23
ASE Offers Free Training ...................................20
Two Responses to COVID for Collision
Auto Care Association Applauds FTC Report on Anti-Competitive Repair Restrictions ........35 Biden Touts America’s Electric Automotive Future During Ford Tour, Test Drives Electric F-150 ....1 Biden’s Emissions Pledge Comes with Economic Consequences, Experts Warn ........58 Chip Shortage Forces U.S. Automakers to Shift Focus to High-Profit Vehicles.................60 Collision Repair Industry Veteran and Author
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American Icon Automotive .............................. 16
Ford Reports 1Q Net Income of $3.3B,
SEMA Show Registration Open .........................23
Health and Safety Program ...........................38
Serving New York, New Jersey, Pennsylvania, Delaware, Maryland, Northern Virginia, Connecticut, Rhode Island, Massachusetts, Maine, New Hampshire, Vermont and adjacent metro areas. Autobody News is a monthly publication for the autobody industry. Permission to reproduce in any form the material published in Autobody News must be obtained in writing from the publisher. ©2021 Adamantine Media LLC.
Long Automotive Group .................................. 14
SBA Announces PPP General Funds Exhausted .40
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Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Contributing Writers: John Yoswick, Janet Chaney, Toby Chess, Ed Attanasio, Chasidy Sisk, Stacey Phillips Advertising Sales: Joe Momber, Norman Morano, Johnny Barrett (800) 699-8251 Office Manager: Louise Tedesco Digital Marketing Manager: Bryan Malinski Art Director: Rodolfo Garcia Graphic Designer: Vicki Sitarz Online and Web Content Editor: Abby Andrews Accounting Manager: Heather Priddy Permissions Editor: Randi Scholtes Office Assistant: Dianne Pray
Acura of Westchester ...................................... 48
on Bumper Fascias .......................................56
COLUMNISTS New Voice on OEM Safety Inspections...........34
INDEX OF ADVERTISERS
Repairers—Resilience and Realization............1 UAW Suggests EV Tax Credit Should Only Apply to U.S.-Built Cars .................................28 Vehicle Trade-In Values Climb to All-Time Record High in March: Edmunds ...................26 Volkswagen Group Reports Strong Results in Q1 2021 ...................................................57 Why Tesla Hasn’t Been Affected by the Global Chip Shortage ...............................................61
Kundert Volvo.................................................... 8
autobodynews.com / JUNE 2021 AUTOBODY NEWS 3
Everything’s Changed: The Pandemic’s Impact Will Be Felt Long After We Stop Wearing Masks by Paul A. Eisenstein, The Detroit Bureau
Visit any North American auto assembly plant and you’ll quickly notice how much things have changed since factories reopened after a two-month shutdown during spring 2020. There are the ever-present masks, of course, and the way things have been reorganized, in break rooms as well as on the line, to minimize the risk of spreading the COVID-19 virus. It’s likely a matter of time until workers can remove their masks. But many of the other changes are likely to be permanent. Indeed, from manufacturing to marketing and retailing, there have been a number of changes brought by the pandemic that are likely to be long term and, perhaps, permanent. And they will impact automotive buyers as well as manufacturers. “The pandemic has just changed the game,” said David Cole, chairman emeritus of the Center for Automotive Research. “Just about every automaker,” he said, will be changing business practices “to hedge against unexpected situations, whether an earthquake or a pandemic.” The pandemic has played out in plenty of unexpected ways. That includes the ongoing shortage of semiconductors forcing almost every manufacturer to slow―and in some cases temporarily halt―production. With millions of Americans in lockdown and even more working from home, chip vendors face unprecedented demand from manufacturers of web cameras, videogame consoles and cellphones, leaving automakers high and dry. Experts warn the situation could continue through the end of this year. It’s highlighted the vulnerabilities of an automotive manufacturing system that has, during the past 30 years, evolved into a just-in-time process mandating minimum inventories. In many cases, factories receive parts just minutes before they’re needed on the line. When it all works it can hold down costs and give automakers more control over production schedules―while also improving quality. When it fails, well, automakers can be forced to shut plants down.
Floods, blizzards, even earthquakes can briefly disrupt the JIT system. Typically the impact of those events is has been brief, the semiconductor shortage reveals the logistics behind lean inventory systems also can come crashing down for an extended period. At a recent event hosted by Automotive News, Ford CEO Jim Farley admitted he has just begun to recognize the challenges of maintaining thin factory inventories, adding, “Most other industries use safety stock for critical components like chips.”
On average, U.S. dealers have between a 60- to 75-day supply of every model they sell on their lots. That approach is costly and creates a variety of problems. A large dealership can spend tens, even hundreds of thousands of dollars a month in inventory holding costs. Manufacturers must guess what vehicles consumers will buy months ahead, and if they’re wrong they usually wind up paying for their mistakes in the form of hefty incentives. That became especially apparent during the run up to the Great
Weld curtains hang across the door line at FCA’s Sterling Heights (Michigan) Assembly Plant to protect employees from the spread and transmission of COVID-19
While the just-in-time system isn’t likely to be abandoned, analyst Cole and others expect the industry to make some big changes. There’ll likely be more padding to prevent unexpected disruptions. And automakers may have to set up “safety stock” of critical goods, such microchips, more like the way they handled things in the pre-JIT era. Ironically, we’re likely to see big cuts in inventory at the other end of the automotive chain. Since the industry’s earliest days, manufacturers have pushed dealers to maintain a large stock of vehicles. The argument is American car buyers want instant gratification. Unlike motorists in Europe and other parts of the world who are willing to wait for their vehicle to be delivered from the factory, Americans expect to go shopping and then drive home in their new model the same day.
4 JUNE 2021 AUTOBODY NEWS / autobodynews.com
Recession, some products carrying givebacks of more than $10,000. Such profit-eating incentives played a major role in driving General Motors and then Chrysler LLC into bankruptcy in 2009. “I’ve been saying for years that overproduction” to keep showrooms overstocked “has been ruinous for the industry,” Mike Jackson, the CEO of AutoNation, America’s largest auto retail chain, told TheDetroit Bureau.com. If anything, the pandemic has led to a massive reduction in dealer stocks, J.D. Power reporting U.S. retailers had about 1 million fewer vehicles in stock during the first quarter than they normally would. The pandemic factory shutdowns created the shortage, but the ongoing microchip shortage means manufacturers can’t refill pipelines as quick as they’d hoped. And, it turns out, that’s a good thing.
AutoNation and most of its retail competitors posted their biggest profits ever during the first quarter of this year. Clearly, the fact U.S. buyers are hungrier than ever for new vehicles has helped. And what dealers and manufacturers have both discovered is that “buyers were willing to wait,” according to Jackson, sometimes as long as six weeks to take delivery of the vehicles they sought. It has helped that the industry has been tinkering with the retail process. Most automakers have developed sophisticated new online shopping tools. The key has been to let buyers control the purchase process, whether they went to do everything in the showroom or shop entirely online, said Jackson and other dealers. AutoNation, in particular, has made it possible for customers to not only track inventory on dealer lots but also vehicles in transit from factory to showroom. So, while automakers are rushing to rebuild the inventories of especially popular models, like the Toyota RAV4 and Ford F-150, customers shouldn’t expect to find acres of unsold vehicles at most showrooms going forward. “We’ll never go back to levels of inventory we had pre-pandemic because we’ve learned we can be much more efficient,” GM Chairman and CEO Mary Barra said during a May 5 earnings call. If the first quarter is any indication, this approach will prove to be a lot more profitable for manufacturers and retailers alike. But consumers should expect to not only be in for a wait when they’re ready to buy but also to pay a bit more. Lower inventories mean lower factory incentives and less lucrative discounts from dealers desperate to clear out inventory, said Cole. On the positive side, leaning out the marketing and distribution system could cut overall costs, money that manufacturers could pass on the consumers in the form of lower sticker prices. We thank The Detroit Bureau for reprint permission.
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Bill Requiring Zero Emissions for New Vehicles in NY by 2035 Heads to Governor by New York State Sen. Pete Harckham
New York is now just the governor’s signature away from a zero-emissions future on its roadways, as legislation from State Sen. Pete Harckham and State Assemblyman Steve Englebright requiring all instate sales of new passenger cars and trucks be zero emission by 2035 has been approved by the State Legislature. The legislation now heads to Gov. Andrew M. Cuomo for approval. A further stipulation of the bill is that all in-state sales of medium-duty and heavy-duty trucks be zero emissions by 2045. Similar sales of offroad vehicles and power equipment will also be expected to be zero emissions by 2035. “Requiring vehicles to be entirely free of carbon and other toxic emissions is the best way to ramp up our fight against climate change,” said Harckham, a member of the Senate Committee on Environmental Conservation. “We need to take decisive action right now, and I am heartened that a number of other states
have realized this as well. “Together, we can make a difference, but it is going to take an all-out initiative to save our planet, and this is how New York and other states can impact the environment.” “We need to take aggressive action and end carbon pollution to successfully combat the climate crisis,” said Englebright, chair of Assembly Committee on Environmental Conservation. “Transitioning to zero-emission vehicles in New York will definitely help reduce the dangerous pollutants that are harming our environment and causing myriad health problems for our residents. Also, building cleaner cars will mean more new manufacturing and service jobs across the country.” Building on the landmark New York Climate Leadership and Community Protection Act (CLCPA) passed in 2019, the new legislation is similar to recent mandates issued in California regarding zero emission vehicles to fight air pollution and increased production of greenhouse gases. To date, only California has adopted a zero emission law for vehicles.
The new laws are causing automakers to ramp up development of fully electric and hybrid-powered vehicles. “Thanks to the Climate Leadership and Community Protection Act, New York envisions a not-toodistant future where electric vehicles dominate our roads,” said Sen. Todd Kaminsky, chair of the Senate Environmental Conservation Committee. “The challenge of transforming our transportation sector is imperative to combating climate change―and this bill is exactly the bold, aggressive and necessary action required to help us meet those goals, reduce our carbon footprint and ultimately save our planet.” New York’s CLCPA contains climate targets that are among the most stringent nationally. To reach the goal of 85% reduction in greenhouse gas emissions by 2050, it is necessary to aggressively pursue bench marks that will reduce emissions from personal motor vehicles. Personal transportation accounts for roughly 20% of American’s greenhouse gas emissions. By eliminating this as a source of emissions, New York will be one step closer to meet-
ing its climate change goals. Harckham and Englebright added they hoped the change over in state sales to zero-emission vehicles could take place sooner than 2035. The ambitious legislation, which will amend state environmental law, targets 2045 for when total fleet transitions for zero emission trucks and buses should take place. To encourage the meeting of the zero-emission requirement, the legislation specifies CLCPA’s Climate Action Council and various state agencies, including the Public Service Commission, accelerate the development of affordable fueling and charging options for zero emission vehicles, with a focus on ensuring access in low-income and economically disadvantaged communities. Source: Office of New York State Sen. Pete Harckham
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Structure Fire Destroys Auto Shop in Waldo, ME by WABI News Desk
Officials say no one was injured in a structure fire April 23 in Waldo, ME, that destroyed an auto body shop. According to the Waldo fire chief, fire crews from around Waldo County responded to the fire on Savage Road just after 8 p.m. Officials say Brown and Son Auto Body is a total loss. Crews actively fought the flames for 20 minutes. They say they’re not sure of the cause and at this point the fire is not suspicious. However, the Maine Forest Service was on scene April 24 and said there is a person of interest who they think may have more information. They say they saw a man in dark clothing walking towards the auto body shop on Poors Mills Road on April 23, just before the call was made. We thank WABI 5 News for reprint permission.
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Pennsylvania Small Businesses’ Need for Workers ‘a Huge Issue,’ Industry Representative Says by Dave Fidlin, The Center Square
From construction to fast food, small businesses across Pennsylvania are grappling with a worker shortage, an industry representative said recently, leading to exacerbated financial challenges for owners trying to regain a solid footing more than a year after COVID-19’s onset. Greg Moreland, who serves as director of the National Federation of Independent Business’ Pennsylvania chapter, said he has been hearing from small businesses in a cross-section of industries about the challenges of filling vacant positions. “I think staffing is a huge issue, across the board,” Moreland said in an interview with The Center Square. “I don’t think there are many industries that say, ‘We have absolutely no problems with staffing at this time.’” Moreland’s comments come on the heels of NFIB’s new April jobs report, indicating 44% of small businesses across the U.S. have been unable to fill open jobs. The new report represents a higher increase in the growing challenge; in March, 42% of respondents reported an inability to
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fill open positions. Within Pennsylvania, Moreland said the statistics across many small business industries are higher than national averages. “Pennsylvania has been one of the states that has put more restrictions on these industries than some of our other states,” Moreland said. The reason for the labor shortage, as has been widely reported, is a confluence of factors, including continued supplemental unemployment benefits to the tune of $300 per week from the federal government under President Joe Biden’s administration. NFIB Chief Economist Bill Dunkelberg said there are other competing circumstances in the mix as well, including the ongoing rollout of vaccines and continued challenges with parents contending with child care-related issues. “Many small business owners who are trying to hire are finding themselves unsuccessful and are having to delay the hiring or offer higher wages,” Dunkelberg said in a statement. “Some owners are offering ‘show up’ bonuses for workers who agree to take the job and actually
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show up for work.” The challenges within Pennsylvania come at a time when Gov. Tom Wolf has announced loosened restrictions at month’s end. Other than continued calls for mask wearing, many of the COVID-19 safeguards that had been in place are being lifted.
nia’s small businesses, which collectively employ about 2 million people. “There’s been little predictability in the last 15 months,” Moreland said. “For far too many businesses, the nail is already in the coffin, and they’ve already closed their doors or they’re contemplating closing their doors.”
“Many small business owners who are trying to hire are finding themselves unsuccessful and are having to delay the hiring or offer higher wages,” — Bill Dunkelberg “We, as an organization, welcome that news,” Moreland said. “But the problem that we’re facing, and what we’re hearing, from businesses is that regardless of what percentage you allow them to open at, if they can’t fill their staffing needs, they can’t open fully.” While there have been an assortment of grants and federal programs to assist small businesses in the past year, Moreland said there have been mounting concerns about Pennsylva-
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On a national scale, NFIB reported 8% of survey respondents cited labor costs as their greatest challenge. An additional 24% cited labor quality as the top overall concern. Across the country, NFIB estimates 37% of small businesses have openings for skilled workers, and an additional 20% have a need for unskilled labor. We thank The Center Square for reprint permission.
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autobodynews.com / JUNE 2021 AUTOBODY NEWS 9
Realistic Labor Rate Data, Estimate Audit Tool Highlight AASP/NJ Meeting Knowledge is power. Members of the Alliance of Automotive Service Providers of New Jersey (AASP/NJ) were shown just how important this statement is during the association’s recent virtual meeting, which featured tools and resources designed to help collision repairers get paid more for the work they do at labor rates they deserve. AASP/NJ welcomed Richard and Sam Valenzuela of National AutoBody Research (NABR), creators of the Variable Rate System (now known as Labor Rate Hero), who gave attendees the latest information regarding their New Jersey Labor Rate Survey results, advancements to their BillableGenie program and how their most recent endeavor, LaborRateHero.com, can be used to shops’ advantage to get properly reimbursed. “The punchline here is that this tool enables shops to get paid for more of their work at better rates,” Sam Valenzuela said. To date, about 220 shops in the Garden State have responded to the survey. Sam Valenzuela encouraged attendees to either participate in the
process for the first time or take it again if they haven’t done so in the past year, to ensure NABR has the most current data in its system. Results collected to date have shown New Jersey shops’ posted door rate for body labor has indeed increased over time. Attendees also learned what the average posted rates in the state were in comparison with the average posted rates across the U.S. The cost of living in the Garden State is 23% higher than the U.S. average, yet New Jersey posted rates do not reflect this higher amount. With the newly launched LaborRateHero.com, anyone from consumers to body shops and even insurers can view what the posted door rates are at body shops in any area of the U.S. This data can be used as ammunition to show insurers they do in fact pay for work at higher rates. “Do [insurance companies] ever show you the list of body shops to show you how they come up with the rate [they pay]? No, they don’t,” Sam Valenzuela observed. “In a free market economy like we are sup-
tomers,” Richard Valenzuela said. “Knowledge is power, and New Jersey shops have an opportunity.” The system currently holds 8,700 records nationwide, with roughly 518 coming from New Jersey. “The more records we have, the more data we have and the more powerful it is for you to collect [on],” Richard Valenzuela said. AASP/NJ also welcomed Deric Krist of Kri-Tech Solutions, LLC, who discussed the benefits of a new tool known as the Estimate Audit Tool. The objective of the product is to eliminate the back-and-forth process of sending in a repair plan and receiving an estimate back from an insurer that doesn’t accurately reflect the work needed. AASP/NJ President Jerry McNee urged attendees to take advantage of the services presented at the meeting. “These tools can be put to work. It’s crystal clear to me that you can say, ‘If you are paying somebody [that], then you can certainly pay me because I am not the only one.’”
posed to have―and especially in this industry―it’s a fight. It’s very important to have pricing be transparent so everyone can see it […] If you can’t see what the prices are, then all kinds of shenanigans go on. I think you guys have experienced that. “There’s no reason to accept anything an insurance company tells you about labor rates if they can’t prove it,” he added. “If they want to prove what prices are in a market― and I’m not talking about discounted prices; I’m talking about the market rate―there’s no reason for you to believe what they tell you if they can’t back it up and show you. Now, [this] is here for you to use.” NABR’s BillableGenie subscription service uses repair data from approved and paid estimates and makes the data searchable and available to users to show exactly what insurers are paying for jobs around the country. “BillableGenie comes in by telling you what you are actually getting paid. It’s about what your shop is getting paid by not only the insurance company but also by cus-
DePalo and Sons Auto Body, GEICO, NABC Recycled Rides Program Donate Refurbished Vehicle Recently, a deserving Huntington, NY, recipient experienced a life-changing event―the presentation of vehicles to provide them independence and the ability to work and take care of their family―thanks to DePalo and Sons Auto Body and car donor GEICO, along with the National Auto Body Council (NABC) Recycled Rides program. The presentation was held at the DePalo and Sons Auto Body in Huntington, NY. The deserving recipient, Kenroy French, was selected by the Office of Veteran Affairs. He received a 2016 VW Passat donated by GEICO and repaired by the team at DePalo and Sons. French is currently enlisted in the Army National Guard. He originally enlisted in 2019 and has served proudly ever since. He was recently stationed in Plattsburg, NY, and is currently located in Long Island while being assigned to the COVID Mission, where he is tasked with helping the vaccination rollout ef-
ficiency and organization. French is married and is a proud father of his young daughter. “I’m very honored and fortunate to have been selected for this gifting and is very grateful for all of the parties involved,” said French. NABC Recycled Rides is a unique program in which businesses representing all facets of the collision repair industry team up to repair and donate vehicles to individuals and families in need of reliable transportation. Since the inception of the NABC Recycled Rides program in 2007, members of the NABC have donated more than 2,600 vehicles valued at more than $36 million. Additional partners in the NABC Recycled Rides presentation included 1-800 Charity Cars. Source: NABC
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Pennsylvania Man Convicted of Fraud, Identity Theft, False Statement Offenses in Auto Warranty Scheme The U.S. Attorney’s Office for the Middle District of Pennsylvania announced on May 11, Brian Larry, 59, of Clark’s Summit, PA, was convicted following a seven-day jury trial held before U.S. District Court Judge Malachy E. Mannion of mail fraud, wire fraud, aggravated identity theft and false statement offenses. According to Acting U.S. Attorney Bruce D. Brandler, Larry was charged with defrauding his former employer, a Wilkes-Barrebased automobile warranty company, from approximately January 2014 through October 2018. Larry was convicted of stealing the personal information of warranty policy owners and providing it to his coconspirators, who created false invoices for nonexistent automobile repair work supposedly performed at various garages in Rhode Island, Massachusetts and Pennsylvania, including by forging the policy owners’ signatures on the paperwork. The false and forged documentation was then sent to the warranty company, where Larry approved payment of the invoices. During the course of the scheme, Larry and his coconspirators obtained approximately $400,000 paid out by the warranty company pursuant to the false invoices, including thousands of dollars in repair work for Larry’s personal vehicle that he charged to other policy owners. The evidence at trial showed Larry then falsified internal warranty company documents in an attempt to conceal his crimes. The jury returned a guilty verdict after approximately two hours of deliberation. Larry was convicted of every count in his indictment: one count of conspiring to commit mail fraud and wire fraud, four
counts of wire fraud, two counts of mail fraud, five counts of aggravated identity theft and one count of making a false statement to the FBI when he denied receiving cash kickbacks in exchange for his participation in the scheme. Three of Larry’s coconspirators previously pleaded guilty in connection with the scheme, and are awaiting sentencing. Matthew Gershkoff, 64, of North Providence, RI, pleaded guilty to conspiring to commit wire fraud and to aggravated identity theft, and is awaiting sentencing. Gershkoff was convicted of preparing false invoices for nonexistent automobile repairs at multiple automobile repair shops located in Rhode Island and in Massachusetts, and for forging policy owners’ signatures. Gershkoff pleaded guilty May 18, 2020, to causing between $250,000 and $550,000 of fraudulent loss to the Wilkes-Barre-based automobile warranty company, and has agreed to repay restitution. Jason Pannone, 39, of North Providence, RI, pleaded guilty to conspiring to commit wire fraud and mail fraud and to aggravated identity theft, and is awaiting sentencing. Pannone was convicted of processing false invoices for nonexistent automobile repairs through his Providence automobile detailing shop, Platinum Auto Services, and through a North Attleboro, MA, automobile repair shop, Ultra Auto Services. Pannone pleaded guilty March 23 to causing between $150,000 and $250,000 of fraudulent loss to the Wilkes-Barre-based automobile warranty company, and he has agreed to repay more than $128,000
in restitution. Herman Cabral, 62, of Cranston, RI, pleaded guilty to conspiring to commit wire fraud. Cabral was convicted of processing false invoices for nonexistent automobile repairs through his Providence automobile repair shop, A Plus Collision Center. Cabral pleaded guilty on July 23, 2019, to causing between $150,000 and $250,000 of fraudulent loss to the Wilkes-Barre-based automobile warranty company, and he has agreed to repay more than $211,000 in restitution. The case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorneys Phillip J. Caraballo and Jeffrey St John prosecuted the case. A sentence following a finding of guilt is imposed by the judge after consideration of the applicable federal sentencing statutes and the federal sentencing guidelines. The maximum penalty under
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Source: U.S. State’s Attorney’s Office Middle District of Pennsylvania
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federal law for the fraud offenses are 20 years of imprisonment, a term of supervised release following imprisonment and a fine. The aggravated identity theft charges carry a mandatory consecutive twoyear minimum. Under the sentencing guidelines, the judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Imhotep Institute Charter High School Teacher Named 2020 Axalta All-Pro Teacher of the Year Axalta, a leading global supplier of liquid and powder coatings, and the Philadelphia Eagles honored 10 Philadelphia-area teachers for their commitment to students, school and community. The sixth-annual All-Pro Teachers program received hundreds of nominations from which 10 local teachers were chosen for their outstanding drive, innovative teaching methods and the use of science, technology, engineering and mathematics (STEM) education in their classrooms. Shirley Posey, an 11th grade biology teacher at Imhotep Institute Charter High School and one of the honorees, was recognized as the 2020 Axalta All-Pro Teacher of the Year. Each of the teachers received a donation toward continuing STEM education in their school, four tickets to an upcoming Eagles game, a personalized Eagles jersey and football and were automatically nominated for the 2020 Axalta AllPro Teacher of the Year. “Education is the foundation of future growth and success, and
we recognize the criticality of exposing today’s students to STEM subjects,” said Robert Bryant, Axalta’s CEO. “Axalta is proud to partner with the Philadelphia Eagles to honor, support, and celebrate teachers and the role they play in inspiring the next generation.” Posey was nominated by fellow teacher, Trichita Covington, who said, “Shirley’s efforts have helped to increase her students’ biology scores on the Keystone Exams and have motivated them to become innovative thinkers by using their imagination to apply the information they’ve learned in their textbooks. She’s turned her biology classroom into a learning space that is producing the next generation of scientists and engineers.” As the 2020 Axalta All-Pro Teacher of the Year, Posey will receive additional funding and an Eagles-themed pep rally to be held for the entire school, when appropriate. “The Philadelphia Eagles are proud to congratulate Shirley
Posey, and all of the 2020 Axalta All-Pro Teachers, on this well-deserved honor that recognizes their inspirational commitment to STEM education, their professions and most importantly, their students,” said Catherine Carlson, Philadelphia Eagles senior vice president, revenue and strategy. “Through each of their unique teaching styles and stewardship, these honorees are preparing their students to be future leaders. We are thrilled to join Axalta, as we do every year, in celebrating these unsung heroes for their passion, dedication and enthusiasm in the classroom.” The 2020 Axalta All-Pro Teachers are: • Andrew Bachman—Pottstown High School, engineering and technology • Dr. Ryan Baxter—West Catholic Preparatory School, engineering • Shaun DeLoche—Delran High School, mathematics • Vincent Doud—Woodbury Jr/ Sr High School, video arts design and innovation
• Shirley Posey—Imhotep Institute Charter High School, biology • Jess Kriegner—Ocean City Intermediate School, mathematics • Nancy Mulville—Cinnaminson High School, business/ computer science • Brian Nucifore—Camden County Technical High School, engineering • Michael Omilian—Moorestown Friends School, mathematics • Melissa Tracy—Odyssey Charter School, social studies Every year, the Philadelphia Eagles and Axalta honor outstanding fifth through 12th grade STEM educators across the Greater Philadelphia region as part of the All-Pro Teachers program. Axalta congratulates the 2020 winners and encourages students and schools throughout the Philadelphia region to learn more about the Axalta All-Pro Teachers program by visiting https://www. philadelphiaeagles.com/community/allproteachers/. Source: Axalta
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Two Responses to COVID more time. COVID really took it out of me.” Slow recovery seems to be a common thread: “I’m finally ramping up, but at this rate it will take me over a year to get back to where I was.” COVID may be the straw that broke the camel’s back for some. Between pressures from insurance companies (including being dropped by State Farm or USAA), additional investments for certifications and new equipment, and the retirement of senior technicians, several operators have decided that it’s time to let somebody else take over the business. For some of our clients, the hard decision to sell has already been made. Now they’re spending their time preparing their companies for a positive exit with a more defined future for their technicians and managers. One operator who is still sitting on the fence is concerned an acquirer may not treat his employees as well as he does. Another is worried because his children have no interest in the business, the family name on the door will be lost forever. Another is uncertain about whether he will ever regain his pre-COVID profitability even though his revenues are coming back strongly. For operators who are reengaging positively with their businesses, many have taken the opportunity during the pandemic to revamp their operations, restructure their teams, improve their training and upgrade their facilities. One of our clients improved his margins by two points during COVID. His comment was, “I finally got around to doing things I’d wanted to do for 15 years.” Conclusions Coming Out of COVID Undoubtedly, savvy operators are recognizing that staying in the industry will require more capital, more scale and better leadership. Some have very frankly recognized their own limitations and decided to add senior management with capabilities greater than their own. One of the questions we get is, “How should I compensate a senior leader with better management skills than
me?” Our response is to never be afraid to pay somebody really well if they are contributing more value to the business than you can do by yourself. A smart operator who intends to create equity value in the business to be harvested in the future can’t do it alone. So be prepared to pay a generous salary and benefits as well as some equity or stock appreciation rights to that new leader. Another area where operators are finding increasing need is in finance. For those growing beyond the $20 million mark in revenue with six or more shops, really competent and experienced financial assistance is a necessity. One option is to outsource contractors. Part-time CFOs are an alternative. A really well qualified controller or CFO can relieve the owners of many administrative and financial burdens in a rapidly growing organization. Questions Both expanding operators and those who are considering exiting the business are asking many of the same questions. What about valuations? How much will my COVID numbers hurt me? Will I be judged valued on my 2019 numbers or my 2020 numbers? In general, all acquirers look primarily at the trailing 12 months revenues and EBITDA. However, our firm has been successful in helping acquirers understand that full year 2019 and first quarter 2021 are fairly indicative of the capability and health of the business. In looking ahead to 2021, business performance in 2019 is a fairly reliable indication of where the business will likely return or exceed. However, as 2019 falls farther back in the rearview mirror, we think valuations will be more based on 2021 results and their progression. How do acquirers look at EBITDA during the PPP loan period? PPP loans can be challenging for acquirers to analyze. Their impact on the business is admittedly hard to tease out. Highlighting excess labor that was retained during COVID in accordance with the PPP loans has been a successful way for our clients to engage with acquirers. However, we have also been
16 JUNE 2021 AUTOBODY NEWS / autobodynews.com
successful treating PPP (and EIDL) loans as grants, and thus income, which tend to more than offset the extra costs imposed by their forgiveness criteria. Is it a good idea to grow right now? Yes. We think there are opportunities in just about every market to find and acquire other operators who are struggling or who just want to exit. By acquiring another operator, you get immediate cash flow and (hopefully) EBITDA, a trained staff and an operating business. Fixing an underperforming business isn’t simple but if the core staff and relationships are there, it’s a more immediate return than starting from scratch. A brown or greenfield startup is lots of fun and challenging with infrastructure costs, hiring staff, obtaining licenses and establishing new DRP relationships, but EBITDA is slow in developing. For those operators who are acquiring, we’ve also seen creative methods for financing the purchase, including seller financing and SBA loans that wrap both the business and the real estate into one loan.
What have we seen among acquirers during the COVID period? Almost every large acquirer paused briefly to reassess their own acquisition criteria and to stabilize their operations. Caliber, which has slowed its pace of acquisitions over the last year and a half, temporarily suspended rent payments to a number of its landlords. It also paused or eliminated some internal and external initiatives. However, Caliber restored both back rent and current payments to landlords in the midst of the pandemic and has not wavered since. Several of the more seasoned super-regional acquirers, such as Crash Champions and Classic Collision, hardly slowed at all. And new entrants, Quality Collision and CollisionRight, launched in the midst of the pandemic. CARSTAR and FIXAUTO USA continued to add new franchisees although at a slower pace than pre-COVID. Smaller operators such as Mitchco, now up to four locations in Florida, G&C with 19 locations in Northern California, and several See Two Responses to COVID, Page 20
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NY Small Business Owners Face Looming Hike on Unemployment Premiums by Steve Bittenbender, The Center Square
New York small business owners have endured quite an ordeal over the past 13 months thanks to the COVID-19 pandemic, which brought about emergency regulations that either closed or restricted their operations and forced them to lay off workers. Now, as the pandemic appears to be waning, many of them received yet another unpleasant surprise: a substantial increase in their unemployment premiums. This came despite New York lawmakers passing legislation aimed to keep COVID-related closures from impacting a business owner’s rating, which factors into their premium amounts. According to the New York State Restaurant Association, a western New York establishment still saw its rate increase by 133%, meaning it will pay $471 a week this year—or nearly $270 more each week. A New York City coffee shop saw its rate rise even more, meaning it will have to pay more than $9,800 each quarter, compared to about $4,100 a quarter this past year. The unexpected increases prompted NYSRA President Melissa Fleischut to send a letter to Gov. Andrew Cuomo, Senate Majority Leader Andrea Stewart-Cousins, D-Yonkers, and Assembly Speaker Carl Heastie, D-Bronx, on April 19 to say the organization was “taken aback” by the increases even after Senate Bill 1197 and Assembly Bill 2001-A became law. “It is critical the Governor and Legislature address the unfair and substantial unemployment insurance rate increase on restaurants for our industry to be successful. If not, the burden on unemployment insurance will surely grow and restaurants will close,” Fleischut said in a statement.
Restaurants aren’t alone in the suffering. NFIB New York said nearly nine in 10 of its members surveyed earlier in April reported seeing their premiums increase. For 73%, their rates rose by more than 25%. A third saw their premiums skyrocket by between 100 to 400%. Among the more significant increases was a Capital Region clothier that saw its unemployment insurance cost go up by more than $20,000. A manufacturer in New York that employs 88 workers saw its rate increase by $300 per employee, while a Finger Lakes restaurant that employs 35 experienced an $8,000 increase. While the legislation in question did keep COVID-19-related unemployment from factoring into the equation, it did not, however, keep the state from raising rates to keep the fund from running out of money. The state borrowed more than $10 billion to help make unemployment payments last year. “The fact that employers are struggling was the impetus for this legislation and we have heard concerns about the recent surprise increases,” state Sen. Roxanne J. Persaud, D-Brooklyn, who sponsored the unemployment legislation, told The Center Square. “Absent the statutory prohibition on negative experience ratings, employers would be paying even more.” NFIB New York State Director Greg Biryla told The Center Square the legislation led by Persaud and Assemblyman Ken Zebrowski, D-Clarkstown, was “an important first step,” but noted that other factors are at work in the increase. “Further, UI premiums, charges and taxes function as a payroll tax of sorts, creating an additional disincentive for small businesses who are looking to drive our recovery with jobs and growth,” Birlya said. He added the small business or-
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ganization is talking with state leaders in Albany in an attempt to find a way to take at least some of the burden off employers. In a statement to The Center Square, the state Department of Labor said it understands businesses need support at this time. It said the state has taken other measures to help restaurants and other businesses. Among the programs for restaurants are a $25 million grant program created to help dining establishments that serve distressed and underrepresented areas and a $35 million return-to-work tax credit program. Small businesses across the board, including for-profit arts and cultural institutions, can seek grants from an $800 million recovery program. “(B)usinesses in New York state have access to an estimated $57 billion in federal support through the Paycheck Protection Program, the FY 2022 Budget is providing $1 billion in support for businesses and the state worked with the private sector to provide a $100 million loan
fund for small businesses,” the DOL said in the statement. On April 20, state Sen. George Borrello, R-Sunset Bay, called on the DOL to crack down on fraudulent claims. He said that “countless” New Yorkers have had their identities compromised and used to file bogus claims. With wide-scale fraud happening, he said, the state shouldn’t put an undue burden on businesses trying to recover from the past year. “I am hearing from small businesses in my district who did not lay off any employees in the past year, who have been shocked to receive unemployment insurance tax bills that have increased 200% or more,” said Borrello, a small-business owner himself. “It is incomprehensible that employers are being asked to fix this problem, which was caused by a once-in-a-century pandemic and made truly disastrous by bad policy decisions.” We thank The Center Square for reprint permission.
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Two Responses to COVID others took advantage of local opportunities to continue growing their footprint. In short, the additional competition for quality MSOs has kept buying interest and valuations high despite the pandemic. People ask us what we are paying most attention to in the industry 1. OE requirements and certifications. OEMs are increasingly recognizing that access to technologically complex parts and certifications gives them more ways to improve their OE parts sales and margins. A $4,500 headlight with a patented sensor included is a not-so-subtle way to insure parts profitability. 2. Consolidation―discussed above. We expect the acceleration of consolidation to continue. 3. Diversification. Caliber is now emphasizing its diversification into glass, service and ADAS work. LKQ
has added ADAS services to its offerings and is buying up smaller ADAS firms. LKQ now claims with the acquisition of the Elitek subsidiary, it’s the largest U.S. provider. Many regional operators are creating their own ADAS companies as well. 4. Changes in DRP networks. Painful reductions in the State Farm and USAA DRPs, GEICO shifts and Progressive expansions have really impacted both large and smaller MSOs. Replacing State Farm volumes with smaller DRPs cannot make up the difference. 5. Changes in insurance market share. When one considers the remarkable changes among auto insurers over the last 10 years, the most surprising and far-reaching impact is how the direct marketers―GEICO and Progressive―have grown their total market share. These two companies have grown from 16% to 27% of all premiums written in the U.S. in a decade. The top 10 insurers have grown to almost 75% of all vehicles insured. More and more clout is moving to fewer and fewer insurers.
What we expect to see for the rest of the year Miles driven: We think travel by car will come roaring back. People are so anxious to move around the country. They still can’t travel to Canada or Mexico very easily so expect summer travel in the U.S. to be up above 2019 levels. Many more transactions: With two active national consolidators, five super-regional MSOs and at least six private equity firms still looking for platforms, we expect to see many more transactions in 2021 and 2022. Much of the volume will be driven by the expansion plans of these acquirers. Some will be driven by potential tax rate increases both at the national and the state level. Many will be driven by retirements of operators. And sadly, many will be driven by the exits of struggling businesses. We thank Focus Advisors for reprint permission.
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Uninsured Drivers Mississippi were driving uninsured. That was up from 23.7% in 2015, which doesn’t bode well, given the
2017, but saw the percentage of uninsured drivers there rise from 20% in 2015 to 23.7% in 2019. More than one in four drivers in Alabama in 2007 lacked insurance, but tougher state regulations brought that down to 18.4% in 2015. State
The Insurance Research Council issued a report this year showing the rate of uninsured drivers ranges from a low of 3.1% of drivers in New Jersey to a high of 29.4% in Mississippi
state implemented an insurance verification system for traffic stops in 2017 and further toughened penalties for driving uninsured in 2018. Tennessee similarly launched an insurance verification system in
regulators earlier this year said they expected that had dropped still further, to 10% or less by 2019. But the IRC report pegs the number as actually having risen to 19.5% that year. North Dakota also saw a big
spike in uninsured motorists, from 6.8% in 2015 to 13% in 2019. Idaho last summer implemented increased efforts to crack down on uninsured drivers, which comprised about 8.2% of the state’s drivers in 2015, but jumped to 13.2% by 2019. Arkansas also began cracking down on uninsured drivers last year. A new law that went into effect in January 2020 requires a state agency to notify residents whose registered vehicles appear to lack insurance that they have been fined $100 for the lapse. If they don’t provide proof of insurance within 30 days, their vehicle registration can be suspended. By the end of last August, the state had mailed 179,126 such letters to Arkansas drivers. The state hopes to reduce its rate of uninsured drivers, which stood at 19.3% in 2019, according to the IRC. Two large states did see significant declines from 2015 to 2019 in uninsured driving. Florida fell from having 26.7% of drivers uninsured in 2015―the highest in the nation― to 20.4% in 2019, and Texas cut its rate nearly in half, from 14.1% in 2015 to just 8.3% in 2019.
Registration Open for CIECA CONNEX 2021 CIECA announced early bird registration is now open for its annual conference, CONNEX 2021. The in-person event is being held Sept. 14-16 in Charlotte, NC. In addition to a line-up of top industry speakers, there will be networking opportunities, a vehicle gifting by the National Auto Body Council (NABC) as part of its Recycled Rides program and a tour of the NASCAR Hall of Fame. All industry stakeholders, including CIECA members and non-members, are invited to attend to hear about current and future industry challenges and opportunities; gain timely, relevant business and technical knowledge; and take part in learning opportunities for all industry segments. For more information about CIECA CONNEX, including sponsorship and speaking opportunities, visit https://cieca. zohobackstage.com/CONNEX2021#/?lang=en Discounted room rates at the Hilton Charlotte University Place are available now. Source: CIECA
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Wilson Tech Teams Sweep New York Auto Tech Competition Teams from Wilson Tech High School in Northport, NY, swept the Greater New York Automobile Dealers Association’s (GNYADA) 2021 Automotive Technology Championship, with students taking home thousands of dollars in scholarships on the road to promising careers as future auto techs in one of the nation’s fastest-growing fields. For the first time, all three top finishers were teams from the same school, competing against 30 other two-student teams from throughout the metro area, in a competition that usually requires students to diagnose and fix pre-programmed bugs in a vehicle operating system and engine in the shortest amount of time. However, due to the COVID-19 pandemic, this year’s competition, held May 12, was conducted virtually, with students working on specially designed computer simulations of vehicles and auto system interfaces. For 30 years, GNYADA has sponsored the New York Automotive Technology Competition
to educate the next generation of automotive technicians and accelerate the development and demonstration of new technologies to franchised new car dealers and the automotive industry. GNYADA uses the competition to challenge schools to push the curriculum of automotive education to a more rigorous standard, ensuring students master the skills they need to succeed as lifelong learners, workers and citizens. The Auto Tech Competition represents a unique coalition of franchised new car dealers, auto manufacturers, government and academic partners who work together to ensure students will be ready for the demands of working in the service centers of franchised new car dealers. The competition is designed to be robust and relevant to the real world, reflecting the knowledge and skills that young people need for success in today’s technologically advanced automotive industry. “In the 30 years of the com-
The Durable Companies, GEICO, NABC Donate Refurbished Vehicle to Veteran Recently, a deserving Connecticut veteran experienced a life-changing event―the presentation of a refurbished vehicle to provide him independence and the ability to work and take care of his family― thanks to The Durable Companies and car donor GEICO, along with the National Auto Body Council (NABC) Recycled Rides program. The presentation was held recently at The Durable Companies collision repair facility in Waterbury, CT. The deserving recipient was selected by the New Haven Vet Center to receive the 2012 Ford Explorer. GEICO donated the vehicle and the Durable Companies refurbished it. Enterprise also participated, donating six months of insurance for the veteran. “On behalf of the veteran who received the vehicle last week and on behalf of The New Haven Vet Center, I’d like to offer a huge thank you for the help and resources of the National Auto Body Council,” said John D. Berube, LMFT, of the New Haven Vet Center. “Our
recipient is thrilled with the Ford Explorer and he is now able to work occasionally and can get himself to and from appointments at the VA.” NABC Recycled Rides is a unique program in which businesses representing all facets of the collision repair industry team up to repair and donate vehicles to individuals and families in need of reliable transportation. Since the inception of the NABC Recycled Rides program in 2007, members of the NABC have donated more than 2,600 vehicles valued at more than $36 million. Additional partners in the NABC Recycled Rides presentation included 1-800 Charity Cars. Source: NABC
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petition, we’ve seen a tremendous advancement in the technology of the cars themselves, but now we even see advancements in the way that students are taught and learn,” said Oliver Brodlieb, president, East Hills Chrysler Jeep Dodge, and GNYADA Education Committee chairman. “Who would have guessed that we’d be here today holding a virtual competition? But this is just another example of the resilience of the franchised new car industry. “The skills they displayed will help them as they embark on careers as auto technicians, who can earn up to $100,000 or more working at dealerships throughout the region.” There are a tens of thousands of auto tech jobs opening up in the coming years, and New York’s franchise new car dealers fund the competition to identify auto tech stars of the future. Auto technicians today have icreasingly specialized technology skills to fix the high-tech cars being produced. The curriculum for the competition is adjusted
annually to respond the changing automotive technology. The top student winners were Hunter Johanson and Ryan Proce, coached by teacher Michael Angelino. First place winners were awarded $2,000 scholarships from GNYADA, and scholarships ranging from $7,500 to $15,000 from technical training schools. In second place were fellow Wilson Tech students Jake Mayer and Manahil Ejaz, also coached by Angelino. Rounding out the top three were the team of Christian Colavito and Dylan Walsh, whose teacher was Ralph Savarese. Second place finishers received $1,000 scholarships from GNYADA, and scholarships ranging from $5,000 to $10,000 from technical training schools. Third place took home $500 GNYADA scholarships and $2,500 to $5,000 from technical schools. Source: GNYADA
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Historic Recovery possibility of future lockdowns, vaccine distribution concerns and the nation’s understanding of the COVID-19 virus will have the greatest effect on the strength of the rebound. Interest rates are similarly projected to remain near zero until mid2024, when the Federal Reserve will slowly begin reversing the rate cuts made during the COVID-19 recession. The Fed’s delay to increase interest rates will help fuel investment growth once the pandemic subsides. “This is all uncharted territory for monetary policy,” Snaith says. “Washington D.C. has been focused on politics more so than the economy and there is no previous playbook on how best to carry policy forward.” For the complete U.S. report from the Institute for Economic Forecasting, visit business.ucf.edu/ centers-institutes/institute-economic-forecasting. The Institute for Economic Forecasting strives to provide
complete, accurate and timely national, state and regional forecasts and economic analyses. Snaith is a national expert in economics, forecasting, market sizing and economic analysis who authors quarterly reports about the state of the economy. Bloomberg News has named Snaith as one of the country’s most accurate forecasters for his predictions about the Federal Reserve’s benchmark interest rate, the Federal Funds rate. We thank UCF Today for reprint permission.
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Toyota’s Insurance Agency Has HQ
SEMA Show Registration Open
Toyota Insurance Management Solutions (TIMS) reached a major milestone the last week of April, as it established its first official office space and national headquarters in Plano, TX. TIMS, Toyota’s exclusive independent insurance agency, was launched in April 2016 to provide Toyota customers with a seamless way to compare and buy car insurance policies online, and find their best usage-based insurance options using data-driven recommendations and a personalized purchase experience. As the full-service agency expanded to offer a variety of insurance products in addition to auto—including home, renters, recreational vehicle and even pet insurance—the TIMS team required a larger space to support the future growth of the organization and bolster innovation. For more information, visit www.toyotaims.com.
Registration for the 2021 SEMA Show, scheduled for Nov. 2-5 at the Las Vegas Convention Center in Las Vegas, NV, is now open at www.semashow.com/ register. The 2021 SEMA Show already has more than 1,500 companies confirmed to exhibit and many more expected. Exhibitors include major automakers and small businesses, as well as iconic aftermarket manufacturers who are enhancing their booths to heighten their presence at what will be the first industry-wide in-person gathering for the $46.2 billion specialty automotive industry in nearly two years. Registration is offered in three categories—attendee, exhibitor and media—and everyone must qualify to receive a badge and attend. For more information about qualifying documents and the 2021 SEMA Show, log on to www.semashow.com.
Source: Toyota Insurance Management Solutions
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autobodynews.com / JUNE 2021 AUTOBODY NEWS 23 1/6/21 9:11 AM
Massachusetts to Lift COVID Restrictions May 29, State to Meet Vaccination Goal by Beginning of June The Baker-Polito Administration announced May 17 that Massachusetts is on track to meet the goal of vaccinating 4.1 million residents by the first week of June, and all remaining COVID-19 restrictions will be lifted effective May 29. The Commonwealth’s face covering order will also be rescinded on May 29. The Department of Public Health will issue a new face covering advisory consistent with the Centers for Disease Control and Prevention’s updated guidance. Face coverings will still be mandatory for all individuals on public and private transportation systems—including rideshares, livery, taxi, ferries, MBTA, Commuter Rail and transportation stations—in health care facilities and in other settings hosting vulnerable populations, such as congregate care settings. Gov. Charlie Baker will end the State of Emergency on June 15. The administration also announced updates that will be effective May 18 to revise face covering requirements for youth and amateur sports and other guidance relating to childcare programs and K-12 schools. The administration will release updated guidance for summer camps effective May 29. The administration is able to take these steps to reopen the Commonwealth’s economy because Massachusetts is on track to meet the goal set in December to fully vaccinate more than 4 million individuals by the first week of June. The Commonwealth leads the nation in vaccinating residents, with 75% of adults receiving at least one dose. To date, more than 4 million residents have received a first dose, with 3.2 million fully
vaccinated. New cases have dropped by 89% since Jan. 8. COVID hospitalizations are down 88% since Jan. 1 and the positive test rate is down by 88% from peaking at 8.7% on Jan. 1 to 1% today. Effective May 29 Effective May 29, all industries will be permitted to open. With the exception of remaining face-covering requirements for public and private transportation systems and facilities housing vulnerable populations, all industry restrictions will be lifted, and capacity will increase to 100% for all industries. The gathering limit will be rescinded. All industries will be encouraged to follow CDC guidance for cleaning and hygiene protocols. On May 18, 2020, the administration published the reopening phases, which called for ending restrictions when vaccines became widely available. Today, there are more than 975 locations for Massachusetts residents to access vaccines without delay. Face Covering Guidance In line with updated CDC face covering guidance, the administration will rescind the current face covering order and issue a new face covering advisory effective May 29. Non-vaccinated individuals are advised to continue wearing face masks and to continue distancing in most settings. The advisory will also recommend fully vaccinated individuals no longer need to wear a face covering or social distance indoors or outdoors except for in certain situations. Face coverings will still be required for all individuals on public
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and private transportation—including rideshares, livery, taxi, ferries, MBTA, Commuter Rail and transportation stations—health care facilities and providers, congregate care settings and health and rehabilitative day services. Face coverings will also remain required indoors for staff and students of K-12 schools and early education providers. Youth and Amateur Sports Face Covering Guidance Effective May 18, the youth and amateur sports guidance will be updated to no longer require face coverings for youth athletes 18 and under while playing outdoor sports. Effective May 29, all youth and amateur sports restrictions will be lifted. K-12, Early Education and Summer Camp Guidance Effective May 18, guidance from the Department of Elementary and
Secondary Education and the Department of Early Education and Care will be updated to no longer require masks for outdoor activities like recess and to allow for the sharing of objects in classrooms, in both K-12 and childcare settings. This guidance will remain in effect beyond May 29. The administration will release updated guidance for summer camps, effective May 29, which will include no longer requiring masks for outdoor activities. State of Emergency Order Baker will end the State of Emergency on June 15, and the administration will work with legislative and municipal partners during this period in order to manage an orderly transition from emergency measures adopted by executive order and special legislation during the period of the State of Emergency. Source: Mass.gov
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AASP/NJ Members Gain Insight into Impact of ADAS at Membership Meeting This was the takeaway from the Alliance of Automotive Service Providers of New Jersey’s (AASP/NJ) recent virtual membership meeting, “ADAS: 2021 & Beyond,” where Northeast Division Manager Jim DeLeo and Northeast Regional Trainer Tom Kelley of Hunter Engineering Company gave an extensive overview on how this technology evolved, how it is changing the way repairs are performed and what is coming down the pike. “The numbers of vehicles that are affected by ADAS are growing daily,” DeLeo said. “If you think back to 2012, when steering angle sensors were mandated by the federal government to be equipped on every passenger car and light-duty truck, the reason was that the statistics on rollovers were overwhelming. Vehicles with steering angle sensors had a reduction of rollovers that couldn’t be ignored; therefore, it was mandated. “Fast forward to today, the automotive vehicle manufacturers— not the federal government—got together and mandated for 2023 that every vehicle has automatic emer-
gency braking,” he added. “So, when you think about it, these autonomous systems and autonomous driving cars are here. The public demands them and the manufacturers will supply them, so more and more of these systems are to be standard.”
The overall purpose of ADAS is to reduce accidents; therefore, it is crucial these systems are properly calibrated. Failure to do so will cause these systems to malfunction, putting the driver at risk and causing the shop to be held liable.
“Educate your customers. Run clinics to educate them. They really don’t have a grasp on what they are being sold. You have to know these systems, and your technicians have to be educated as well.” — Tom Kelley Fixing these vehicles leaves shop owners with much to consider. If the service one provides adversely affects ADAS performance, then the facility could face legal trouble. Many choose to sublet the work; however, this could create problems, as the shop gives up control of the quality of work but the shop retains the liability. DeLeo believes the growing appearance of these systems at shops will “separate the men from the boys” and force them to have no choice but to address it in-house.
Using steering angle sensors as an example, Kelley stressed the days of “just setting the toe are pretty much gone.” Cameras and radars detect the vehicle’s path and the objects in front of it. If they are even the slightest bit off, the direction of the steering will be affected. “All of these systems are based on a vehicle that is square and pointing straight down the road, with all of its wheels pointing forward in a geometric center line. If it went down the road with the steering pointed to the left, my steering would be off, so
you need to set the thrust line first. If it goes down the road like this, it’d be ‘dog tracking,’ taking up more lane and pointed in the wrong direction. It’s an extremely important component, which is why alignment has to be done properly.” Kelley suggested repairers should also keep in mind many customers are likely unaware of the capabilities of the ADAS equipment in their vehicles. “Educate your customers. Run clinics to educate them. They really don’t have a grasp on what they are being sold. You have to know these systems, and your technicians have to be educated as well.” AASP/NJ President Jerry McNee expressed how important it is members continue to stay involved in what is going on in the industry and learn as much as they can about ADAS and other technologies. “If you say you are fixing cars correctly, you have to have all your bases covered. There is no other way around it.” For more information on AASP/ NJ, visit aaspnj.org. Source: AASP/NJ
autobodynews.com / JUNE 2021 AUTOBODY NEWS 25
Vehicle Trade-In Values Climb to All-Time Record High in March: Edmunds The car shopping experts at Edmunds say vehicle owners might be pleasantly surprised if they take a moment to check how much their car is worth right now. According to Edmunds data, the average value for all used vehicles traded in during the month of March hit an all-time high, climbing to $17,080, compared to $14,160 a year ago. Edmunds analysts say demand is soaring for used vehicles as chipset shortages continue to severely constrain the supply of new vehicles in the market: New vehicle inventory on sale at dealerships nationwide is down by 36% in March 2021 compared to a year ago. According to Edmunds data, trucks retain the greatest value and command the highest trade-in prices of all consumer vehicles in the market right now. Edmunds analysts took a look at all 2018 model year vehicles traded in during March and determined their respective retained values by comparing the average trade-in price of each model against its average original MSRP. Ford F-250 Super Duty, GMC
Sierra 2500 Heavy Duty and F-350 Super Duty all tied for the No. 1 spot on the list, retaining 80% of their value on average. “The chipset shortage is wreaking havoc on new vehicle production, but we’re also seeing surprisingly healthy car shopper demand, which has likely grown stronger in light of vaccines rolling out quicker than anticipated,” said Jessica Caldwell, Edmunds’ executive director of insights. “These two factors combined are disrupting the market in a way we haven’t ever really seen before.” Edmunds analysts say that consumers who might have typically been new-car shoppers are increasingly turning to the used market in search of more alternatives and better value. Traffic to the Edmunds website’s used vehicle inventory pages jumped approximately 300% in March compared to a year ago. “It seems impossible, with the pandemic still raging in many parts of the country, that new vehicle sales could be at the highest March level in more than two decades, but here we are,” said Caldwell. “Until
automakers can start cranking out new vehicles again, we’re going to see increased demand and higher trade-in values for used vehicles as well.” Edmunds experts note a positive trend emerging as a result of rising trade-in values: Fewer consumers are upside down on their car loans, and those who are upside down owe less. According to Edmunds data, 30% of all vehicle trade-ins during March had negative equity, compared to 40% last March. The average amount owed by consumers who were upside down on their car loan was $4,583 in March, compared to $5,405 a year ago. “If you were upside down on your car loan a few months ago, there’s a decent chance that you could be in the black today,” said Ivan Drury, Edmunds’ senior manager of insights. “Consumers who own a vehicle and are thinking of making a new car purchase in the near future should consider pulling the trigger now. The inventory situation isn’t going to get any better any time soon, and you could essentially
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be wiping away multiple car payments with the added value of your trade-in.” To help car shoppers who are looking to take advantage of this seller’s market, Edmunds experts advise getting a vehicle appraisal, which can be done online or in person at your local dealership. Or you can get an instant cash offer for your vehicle from a site such as Edmunds. If you’re currently leasing a vehicle, you have options as well; Edmunds experts outline them here. “Many consumers believe the old adage that you lose half the value of your vehicle when you drive off the lot, but that is simply far from the truth today. In fact, we’re seeing many vehicles hold a huge amount of value multiple years into ownership,” said Drury. “Every car owner out there should take a minute to check how much they can get for their vehicle, no matter the age or mileage or condition that it’s in. You could have extra money sitting in your driveway and not even know it.” Source: Edmunds
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Tesla and Its Peers Proving EVs Inherently Safer than Combustion Cars Mustang Mach-E were able to secure high rankings in the IIHS’ An analysis of insurance data in stringent safety tests, with the forthe U.S. has shown injury claims mer receiving a Top Safety Pick+ are notably less common among award and the latter receiving a all-electric vehicles like the Tesla lower but still impressive Top SafeModel 3 and its peers. ty Pick rating. The findings were shared by Other all-electric vehicles, most the Insurance Institute for Highway notably the Tesla Model 3, the Audi Safety (IIHS) in a recent report, e-tron and the Audi e-tron Sportback, have qualified for the 2021 Top Safety Pick+ award. The release of the XC40 Recharge and Mach-E’s stay ratings coincided with a recent study of insurance losses for electric vehicles by the IIHS-affiliated Highway Loss Data Institute. The study looked at electric and conventional versions of nine vehicles produced from 2011 and 2019, and it examined colTesla Model 3 undergoes crash tests with the IIHS. lision, property damage Credit: IIHS liability and injury claims. As per the study’s findings, which followed the release of its safety ratings for the 2021 Volvo the rates of injury claims related to XC40 Recharge and the Ford Mus- drivers and passengers of electric vehicles were more than 40% lower tang Mach-E. The XC40 Recharge and the compared to their internal combusby Simon Alvarez, Teslarati
tion-powered counterparts between 2011 and 2019. The IIHS notes these results were similar to the findings of an earlier study from the Highway Loss Data Institute (HLDI) that focused on hybrid cars, which pointed out the lower injury rates may be due to the weight of the vehicles’ batteries. As per the HLDI, the large batteries used in hybrids make vehicles substantially heavier than conventional cars. Occupants of heavier vehicles are exposed to lower forces in multi-vehicle crashes. Matt Moore, HLDI vice president, explained these findings in a statement. “Weight is a big factor. Hybrids on average are 10% heavier than their standard counterparts. This extra mass gives them an advantage in crashes that their conventional twins don’t have,” he said. This weight advantage is even more notable in all-electric cars like the Tesla Model 3, on account of their substantially larger battery packs. This was true for the XC40 Recharge, which features a curb weight of 4,787 lbs., significantly
heavier than the 3,811 lbs. of its combustion-powered counterpart. Even the Mach-E, an all-electric model, is hefty at 4,516 lbs. IIHS President David Harkey is optimistic about the study’s findings. In a statement, he noted the study further proves all-electric cars are as safe or even safer than conventional vehicles. This means a transition to sustainable vehicles would likely not require as many compromises on the part of consumers. “It’s fantastic to see more proof that these vehicles are as safe as or safer than gasoline- and diesel-powered cars. We can now say with confidence that making the U.S. fleet more environmentally friendly doesn’t require any compromises in terms of safety,” he said. We thank Teslarati for reprint permission.
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Ford Tour eager to put his gearhead persona on full display. “My name is Joe Biden, and I’m a car guy,” he exclaimed at the start of his remarks. During his speech Biden joked about taking the electric truck for a spin without his security detail, and
The idea of an all-electric pickup is a bit of a gamble given trucks’ decadeslong popularity among consumers and the degree to which they’re embedded in American culture, particularly in conservative-leaning enclaves. But automakers in recent years have been stepping up their investment in electric vehicles as the technology improves and they begin to move out of niche status in the public perception.
“How we handle the next four to 10 years is going to determine where we are going to be 30, 40, 50 years from now. It’s one of those moments in American history.” — President Joe Biden also reminisced about his fondness for the Ford Fairlane, a model that was discontinued during the Nixon administration. Afterward, Biden zipped around in one of the electric trucks wrapped in a pattern carmakers use to thwart corporate snoops. “This sucker’s quick,” Biden, behind the wheel, said to reporters stationed nearby.
“The future of the auto industry is electric — there’s no turning back,” Biden said. “The real question is whether we will lead or we’ll fall behind in the race for the future.” Biden’s road show was overshadowed somewhat by the continued hostilities between Israel and Palestinians, a conflict that has billowed for weeks before escalating in
recent days. At least 200 Palestinians have been killed during the clash, including dozens of children and many other civilians. Hamas and other militants in Gaza have directed thousands of rockets at Israel, though the Israeli death count is substantially lower because of its advanced missile defense system. The president has tried to deescalate the situation while juggling domestic political pressure from both Republicans and Democrats to take sides as the White House’s calls for a cease-fire have gone unheeded. Several leading Democratic lawmakers were gearing up to call on the Biden administration to pause a $735 million arms sale to Israel amid the violence before changing course on Tuesday. House Foreign Affairs Chair Gregory Meeks (D-N.Y.) said the decision was made after the White House offered to brief members of Congress on the issue on Wednesday, though that reversal has rankled some Democrats supportive of the pressure tactic. The situation was not far from the stage during Tuesday’s event.
Among those in attendance was Rep. Rashida Tlaib (D-Mich.), one of the first Muslim women ever elected to Congress and who has pushed the Biden administration to take a firmer stance toward Israel over its use of force amid the unrest. Tlaib has family living in the region, and Biden said he was keeping them in his prayers. “I admire your intellect and passion and concern for so many other people,” Biden said. “You are a fighter, and God thank you for being a fighter.” Biden also spoke to Tlaib as he arrived in Michigan, though after the president’s speech she declined a reporter’s inquiry about what the two discussed. It was also evident that Biden wanted to steer the attention toward the new car, rather than clashes between Israel and Palestinians. He rebuffed a reporter’s attempt to ask him about the situation, “unless you get in front of the car as I step on it.” “I’m only teasing,” Biden said.
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UAW Suggests EV Tax Credit Should Only Apply to U.S.-Built CarsSales Rep: Norman Morano
response from The White House related to the UAW’s comments, Advertiser: According to a report from Au- President Joe Biden has already tomotive News, inKen lateVangorder April, the talked about the $174 billion plan Volkswagen of Kingston to support U.S. EV production. UAW suggested electric car tax “There’s no reason why incentives should 1249 only Ulster apply Ave to American workers can’t lead the cars assembled in the U.S. NY 12401 Kingston of elecThe existing tax credit845-336-5300x4 of up world in the Phone: Fax:production 845-336-7436 to $7,500 has no requirement that tric vehicles and batteries,” Biden said. the cars be made on our shores. Today’s Date: GM made the UAW aware The report quotes UAW Vice2/15/2021 it already has plans to spend $9 President Terry Dittes: onVW domestic battery man“The UAW isAd working with billion type: quarter page w/ DLP listing the Biden administration and ufacturing facilities and job creation domestically. Congress to makeInstructions sure that the to Graphic Designer: The UAW also recently went final legislation extending electric vehicle subsidies is clear that after Ford for its plans to build an all thetheinformation 8th page spec ad. EV plantininhisMexico. According those investments1)Use subsidize to Automotive News, Ford was jobs of U.S. workers.” to build EVs in Ohio, This comes on2)Use the heels an planning theof Liberty VW Qtr page ad template announcement from General Mo- but changed course to assemble tors stating it has plans to invest them in Mexico, where the Mus3)Include the network logos: Parts Trader, OE $1 billion in Mexico to build EVs tang Mach-E is being produced. Connection, and Collision Link story. is a developing in the country starting in 2023. OPS TraxThis U.S. Rep. Debbie Dingell, As more concrete details become available, Inside EVs will continD-MI, followed up4)Use with the a statesame bullet points in the Liberty VW ue to publish articles. ment that EVs “must be builtdon’t in use ad. Please the bulletrelated point in the America” and money should existing 8thnot page spec ad. We thank Inside EVs for reprint be spent to ship jobs to Mexico. While there was no official permission. by Steven Loveday, Inside EVs
28 JUNE 2021 AUTOBODY NormNEWS / autobodynews.com
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Colonial Cadillac of Woburn 201 Cambridge Rd., Woburn, MA 01801 Ph: 781-935-7009 / Fx: 781-933-7728 Hours: M, T, Th, F 7-5; W 7-8; Sat 8-4 www.buycolonialcadillac.com Colonial Chevrolet 171 Great Rd., Acton, MA 01720 Ph: 978-263-3994 / Fx: 978-263-8587 Hours: M-F 7-5; Sat 8-4 email@example.com Colonial South Chevrolet 361 State St., Dartmouth, MA 02747 Ph: 508-997-6711 / Fx: 508-979-1219 Hours: M-F 8-5; Sat 8-4 firstname.lastname@example.org Colonial West Chevrolet 314 John Fitch Hwy., Fitchburg, MA 01420 Ph: 978-503-7480 / Fx: 978-345-1152 Hours: M-F 8-5; Sat 8-4 autobodynews.com / JUNE 2021 AUTOBODY NEWS 29
Ford Reports 1Q Net Income of $3.3B, Best in a Decade First-quarter operating improvements around the globe, customer receptivity to new products and Ford’s skillful management of the effects from a worldwide semiconductor shortage contributed to one of its strongest operating performances in years. “Our team is relentlessly executing our plan to turn around our automotive business so that we can create and deliver the high-value, always-on experience that our Ford and Lincoln customers deserve,” said Jim Farley, Ford’s president and CEO. “There’s no question we’re becoming a stronger, more resilient company.” Ford’s first-quarter revenue increased to $36.2 billion, producing net income of $3.3 billion, its best since 2011, and record adjusted EBIT of $4.8 billion. Quarterly adjusted EBIT (earnings before interest and taxes) of $4.8 billion included a noncash gain of $902 million on Ford’s investment in Rivian. The gain, from Rivian’s Series F funding round in January, was factored into 2021 guidance Ford provided in early February. Adjusted EBIT additionally benefited from robust customer demand for the company’s new products, tight vehicle inventories and favorable year-over-year cost performance. The strength of Ford’s first-quarter results was geographically broadbased, with automotive EBIT outside North America totaling $454 million, compared with a loss of $526 million last year. Reported first-quarter cash flow from operations was $4.5 billion. Despite the strong quarterly adjusted EBIT, adjusted free cash flow was negative $396 million, primarily reflecting the temporary effects of adverse timing differences and higher inventory as a result of the global semiconductor shortage. Ford CFO John Lawler said semiconductor availability, which was exacerbated by a fire at a supplier plant in Japan in March, will get worse before it gets better. Currently, the company believes the issue will bottom out during the second quarter, with improvement through the remainder of the year. In the meantime, he said the company’s attention is on managing the supply chain around the clock,
every day, and enhancing execution in Ford’s underlying business. As examples of the latter, he pointed to recent high-quality launches of the Mustang Mach-E SUV, all-new 2021 F-150 pickup and Bronco Sport SUV. First-quarter warranty costs improved by more than $400 million from a year ago. “Seeing our people transforming Ford at the same time they’re navigating the effects of a global pandemic and serious supply chain issuesis impressive and gratifying,” said Lawler. “We’re changing the trajectory of our earnings power and our ability to invest in customer experience and growth.” Customers appear to be noticing. Data intelligence company Morning Consult reported Ford among the companies in U.S. gaining consumer trust. The improvement was attributed chiefly to Ford engineering, producing and distributing millions of pieces of equipment to help protect communities amid the COVID-19 pandemic. Ford’s first-quarter revenue in North America increased 5% to $23 billion, benefiting from strong customer demand for Mustang Mach-E, the all-new 2021 F-150 and Bronco Sport and tight vehicle inventories related to semiconductor-related production declines. SUVs and pickups both accounted for increased shares of regional sales. EBIT rose to $2.9 billion. The semiconductor shortage has prompted Ford to accelerate modernization of its sales processes―incorporating new ordering capabilities to make them more appealing to customers, raise inventory turn rates, and reduce and maintain inventories below traditional levels. Mustang Mach-E illustrates the related potential: 70% of customers who purchased the batteryelectric SUV are new to Ford. So far, twothirds of reservations for the all-electric SUV have been converted to orders. Further enhancements to the online shopping process―developed in collaboration with dealers―went live in March. The reservations-to-orders rate is similar for the reimagined, all-new Bronco, sales of which are expected to start this summer. Ford is also making good on its
30 JUNE 2021 AUTOBODY NEWS / autobodynews.com
commitment to lead the electrification revolution in transportation. In addition to bringing more electrified vehicles to market, the company announced formation of a new global battery center of excellence, Ford Ion Park, to accelerate researchand development of battery and battery-cell technology and include future battery manufacturing. Lawler said Ford was among the first automakers to identify the potential for a 10% to 20% adverse effect on manufacturing volumes from increasing constraints on global semiconductor supplies entering 2021. In early February, the company said the risk had the potential to reduce Ford’s full-year adjusted EBIT by $1 billion to $2.5 billion. Ford has updated its 2021 outlook to account for expanded consequences from the semiconductor shortage, made worse by the recent supplier fire in Japan. While the issue is a significant headwind to the company, Lawler said Ford is taking definitive actions to address a range of possible outcomes.
Largely because of the additional effect of the supplier fire, Ford now expects to lose about 50% of its planned second-quarter production, up from 17% in the first quarter―again, implying Q2 will be the trough of the issue. Ford anticipates the flow of semiconductors from the Japan supplier to resume by the end of the second quarter―but, like many others in the industry, that the broader global semiconductor shortage may not be fully resolved until 2022. The company now assumes it will lose 10% of planned second-half 2021 production. All told, Ford now expects to lose about 1.1 million units of production this year to the semiconductor shortage. Accordingly, the company anticipates full-year 2021 adjusted EBIT to be between $5.5 billion and $6.5 billion, including an adverse effect of about $2.5 billion from the semiconductor issue. Adjusted free cash flow for the full year is projected to be $500 million to $1.5 billion. Source: Ford
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Dept. Hours: M-F 8-7; Sat 8-4 firstname.lastname@example.org 32 JUNE 2021 AUTOBODY NEWS / autobodynews.com
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Dept. Hours: M-F 8-5; Sat 8-1 firstname.lastname@example.org autobodynews.com / JUNE 2021 AUTOBODY NEWS 33
From the Desk of Mike Anderson with Mike Anderson
Mike Anderson is the president and owner of Collision Advice, a consulting company for the auto body/collision repair industry. For nearly 25 years, he was the owner of Wagonwork Collision Center, an OEM-certified, full-service auto body repair facility in Alexandria, VA.
Collision Repair Industry Has a New Voice on OEM Safety Inspections One of the issues I have written and spoken about most passionately recently―including being quoted in an article on the front page of Autobody News in April―is my belief the post-collision safety inspections called for by most automakers are the single biggest friction point in the collision repair industry right now. We see shops looking to do the right thing, but getting pushback from third-party payers. This is why I want to give a shout-out to the team at I-CAR. They recently held a virtual summit in regards to automaker safety inspections as the start of some dialogue about what some OEMs require, when those inspections are needed, what outcomes they produce and what they can prevent. I-CAR invited participants from all industry stakeholders―OEMs,
insurers and collision repairers― and about 150 people participated. This is important because it’s only when we start talking about these issues that we can work toward resolution while ensuring the vehicle owner gets a complete and safe repair. It would have been unrealistic
to go into that virtual summit expecting a solution would come out of just one meeting. But I’m encouraged by what I’ve seen happening since that time. I had one specific insurer, for example, ask me to put them in touch with some of the OEMs to have a direct dialogue to better un-
I-CAR has posted a brief form shops can use to submit information on the safety inspections they perform, what triggered the inspections and what was found
derstand this issue. It was an insurer seeking to do the right thing. So I want to give a shout-out to that insurer―even though I can’t identify them here―and to the OEMs that agreed to speak with that company. I want to give a shout-out to FCA, now part of Stellantis, for publishing an updated statement this spring to provide more clarity in regard to steering columns after a collision. The automaker also held a webinar for its certified collision repair shops to give those collision professionals a chance to hear from the automaker’s technical experts and get more information about safety inspections. Thank you to the team at FCA. They heard the voice of the industry, and said, “Let’s engage in some dialogue on this.” There’s another automaker that, depending on when you are reading
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this, has announced, or will soon, a new matrix and parameters for the safety inspections on its vehicles, to narrow down which are required under which circumstances. But there’s another thing that resulted from that I-CAR summit, and this is where I’m issuing a call to action to you. I-CAR wants to continue to move this issue forward with all stakeholders, but needs more data to do so. So I-CAR has posted a brief form** shops can use to submit information on the safety inspections they perform, what triggered the inspections, and what was found. You find that form at https:// rts.i-car.com/srs-inspection-feed back-form I strongly encourage you to take action and regularly submit information to I-CAR. When the OEM procedures for a vehicle you are repairing call for a seat belt inspection, or call for R&I for inspection of an airbag sensor or module, or require you to measure the steering column or to R&I the dash to check the support brace, submit those examples to I-CAR. Whether those inspections
reveal damage or not, submit that to I-CAR. Those of you who know me know I always seem to have a new saying or expression I recite regularly. My current one is this: There are people in life who WATCH stuff happen, and there are people in life who MAKE stuff happen. I’m choosing to be someone who makes stuff happen. And that’s what I want to invite you to do. Don’t sit on the sidelines and complain about these issues. Let your voice be heard. My biggest concern is that I-CAR, in an effort to move this issue forward, sets up this data collection, but nobody submits any examples. They’re going to say: This isn’t an issue. But it is an issue, an important issue. But if we don’t submit anything to I-CAR so they can see it is, then shame on us. We have an avenue to have a voice, a way to have our voice heard. So I strongly encourage you to use it. This is the only way to further the dialogue to find a solution that works for everyone. As I also often say: Don’t delay; do it today.
Auto Care Association Applauds FTC Report on Anti-Competitive Repair Restrictions by Camille Sheehan, Auto Care Association
The Auto Care Association on May 7 applauded a report issued by the Federal Trade Commission (FTC), “Nixing the Fix: An FTC Report to Congress on Repair Restrictions.” The report found “there is scant evidence to support manufacturer justifications for repair restriction” and stated the FTC “stands ready to work with lawmakers, either at the state or federal level, to ensure that consumers have choices when they need to repair products that they purchase and own.” “We are pleased that the commission listened to the testimony from our association, as well as the other groups, during the 2019 ‘Nix the Fix’ hearing and took into consideration the information that
we submitted to the agency over many years,” said Bill Hanvey, president and CEO, Auto Care Association. “The Auto Care Association is proud of its efforts to secure right to repair legislation both on a state and federal level and we hope that this report will be the beginning of increased efforts by the commission to join us in addressing the anti-competitive actions of vehicle manufacturers,” Hanvey added. “We fully support the FTC’s efforts in ensuring that consumers continue to have choices on where they have their vehicle repaired.” Visit autocare.org/government-relations to learn more about the Auto Care Association’s right to repair initiatives. Source: Auto Care Association
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autobodynews.com / JUNE 2021 AUTOBODY NEWS 37 3/18/21 9:21 AM
Tips for Busy Body Shops
Stacey Phillips is an award-winning freelance writer and editor for the automotive industry. She has 20 years of experience writing for a variety of publications, and is co-author of “The Secrets of America’s Greatest Body Shops.” She can be reached at firstname.lastname@example.org.
with Stacey Phillips
Best Practices for an Effective Health and Safety Program “The goal is to help companies An effective health and safety program can help collision repair facil- proactively identify risks, stay upities reduce injury and illness rates, to-date on evolving regulations and with compensation Stacey Phillips keep workers safe,” said Curtis, who decrease workers’ costs, increase productivity and im- has worked with KPA for 17 years. He estimates KPA completed prove morale across the workforce, according to Wayne Curtis, direc- more than 20,000 in-person and virtual field visits to auto dealerships, tor of field services at KPA. Based in Lafayette, CO, KPA collision repair shops, trucking and provides environment, health and rental car locations in 2020. This is a similar number that took place safety (EHS) and workplace comwith Victoria Antonelli pliance software and services for a prior to the pandemic. In addition, wide range of industries, including the company conducted 1.2 million trainings last year, the majority of automotive. Each year, about 100 KPA safe- which were online. “It was certainly challenging ty specialists conduct audits at more than 2,000 auto collision-related fa- for us during the pandemic,” said cilities across the U.S.,Ed Puerto Rico Curtis. “I was impressed with our with Attanasio and Canada to determine if busi- team keeping up with the services nesses are compliant. Once the eval- and demands.” Autobody News reached out to uations are complete, the company then discusses concerning issues, of- Curtis to learn more about the imfers recommendations and conducts portance of establishing an effective health and safety program that entraining if necessary.
OE Shop Certification
sures compliance with national and state regulations.
How can a collision repair facility ensure proper compli-
I recommend starting with the basics. The first step is to evaluate the shop’s current situation and do an assessment. I’m emphatic that all collision repairers should perform an audit to identify environmental and safety risks. This will help determine the necessary actions to meet mandatory requirements, avoid citations and potential legal action. Third-party companies, such as KPA, are available for these types of audits. After reviewing the inspection results, the next step is to determine the priorities when developing a health and safety program that ad-
dresses the high-risk areas in your workplace. All collision centers are required to have a written hazard communication program and provide training to employees as a basic Occupational Safety and Health Administration (OSHA) requirement. Facilities are also required to install a program to protect workers from respiratory hazards. Shop owners and managers can ask themselves: “Are all employees trained on our workplace hazards and how to protect themselves? Have employees who wear tight-fitting respirators been fit tested? Have they been medically evaluated to wear a respirator and do you have proof of medical clearance on file?” If the answer is “no” and a facility determines that it doesn’t have a good process in place, it’s important to find someone who can assist. Not only can it help streamline the steps
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needed to navigate the maze of regulations, but it can also bring the shop to a level of compliance sooner, faster and less expensive than you can do on your own. In addition, facilities should pay close attention to environmental requirements. This includes practices related to waste management, documenting hazardous waste inspections, container labeling and retaining waste manifests. A safe workplace requires more than just being compliant. Periodic evaluations can help identify weaknesses in the processes your company uses to address hazards. By being proactive, it allows everyone to have the knowledge to identify and resolve hazards before they create a serious incident.
lision industry is heavily regulated when it comes to EHS. The same standards that apply to auto dealerships apply to collision centers. It’s imperative to have the tools, resources and equipment that allow for the most compliant and safe applications.
It seems that the Biden administration is paying close attention to the environment, specifically the Clean Air Act. I’ve also seen increased activity with the EPA 6H Rule, the National Emission Standards for Hazardous Air Pollutants. EPA Region 4 recently sent out letters to collision centers reminding
What types of regulations should repair facilities be aware
There are requirements by OSHA, the Environmental Protection Agency (EPA) and Department of Transportation (DOT), as well as state regulations. The col-
Wayne Curtis of KPA said providing regular safety training for employees helps collision repair facilities establish a safety culture and is proven to reduce injuries
who is subject to 6H rule requirements and emphasizing the importance of compliance. The 6H rule requires an initial notification form to be sent to the EPA, ongoing employee training and other requirements such as paint booth filter efficiency and HVLP paint guns. The industry is adapting to these rules. With newer paint lines carrying fewer heavy metals, petitioning the EPA for an exemption is now possible. We are very focused on that right now and feel that it will be a key focus area over the next few years. The EPA Clean Air Act penalty policy is stringent and has escalation factors for larger businesses. The EPA expects larger companies, that have better funding and resources, to use these resources to achieve compliance. If non-compliance is observed, an economic penalty is assessed based on the size of the violator. If you are an MSO and have one facility that is not compliant, you could be looking at hundreds of thousands if not millions of dollars of liability. It’s critical for shops to devel-
op written compliance programs for federal and state safety regulations. In some areas of the country, such as California, it can be really challenging to keep up with the regulatory climate without having a dedicated EHS person on your staff. Compliance is often very complex and having a consulting company that comes in to help navigate can be advantageous.
What are some best practices facilities can put into place?
Business success cannot occur without having a workforce educated in industry regulations, internal policies, safety and ethics. At a minimum, all employees should be trained on the types of hazards that are present and where they can get access to information about chemicals that can lead to these types of situations. This is where compliance training can be so helpful. Many accidents that take place in the workplace are avoidable. Providing regular safety training for employees helps you establish a safety culture and is proven
autobodynews.com / JUNE 2021 AUTOBODY NEWS 39
to reduce injuries. I always recommend establishing a safety committee and holding regular meetings. It’s a great way to keep your team up-to-date with EHS initiatives and helps adds a strategy on how to achieve your EHS goals. A good rule of thumb is having a quarterly safety committee meeting to assign preventative actions, develop incentive and enforcement programs and review processes. Helpful checklists and resources are available at https://www.kpa. io.
What are some of the most impactful changes you have seen as a result of COVID-19?
There are a lot of changes regarding regulations that have happened since the pandemic. In March 2021, an OSHA Directive was released, outlining the policies and procedures for implementing a National Emphasis Program (NEP) for COVID-19. The NEP focuses on high-hazard industries such as health care and dentistry, which are more likely to come in
direct contact with COVID-19 positive cases. The collision industry was not listed as a primary focus of the NEP. When President Biden came into office, OSHA provided updated COVID guidance within a week. Since that time, we’ve seen the initial steps towards scaling back of CDC guidance. We expect that’s a sign of the vaccinations and more information on the risk of infection. President Biden also asked OSHA to investigate if an Emergency Temporary Standard (ETS), a new OSHA standard, should be issued regarding COVID. On April 26, OSHA issued a proposal for a Federal ETS to be issued. An ETS would effectively bypass the normal rulemaking process of OSHA. If adopted, OSHA would have six months to adopt a permanent rule. We expect to know more about the details of OSHA’s proposed rule soon. In regard to local COVID regulations, these still remain very different and under direct enforcement. It’s imperative to follow what is going on in the state, county and city where your business operates. That
SBA Announces PPP General Funds Exhausted The U.S. Small Business Administration on May 4 informed trade associations the PPP general fund has been exhausted and is closed to new applications. In connection with this news, trade assocations can no longer submit new applications to the SBA. The SBA has reserved approximately $6 billion for loans that have been submitted, but not approved due to hold code issues. If your application’s status in the portal is “Submitted to SBA,” lenders will continue working to clear the hold code and obtain SBA approval. Borrowers whose applications have an SBA hold code can check their status in the portal by following this guide and can log into their account via The Loan Source website. Unfortunately, the ~$6 billion reserve does not provide
relief for borrowers experiencing error codes issued by SBA at submission. If your application’s status in the portal is “Underwriter Reviewed” or prior, trade associations are not able to submit your application to SBA for approval. If your loan has an error code or otherwise has not yet been submitted to SBA, you are encouraged to apply through a CFI, which have $8.6 billion reserved in funding for new loans. A list of lenders is available via the SBA website. Please note, if your application’s status in the portal is “SBA Approved,” “Loan Note Sent for E-sign,” “Signed Loan Note Received” or “Funded,” your loan was approved by SBA prior to the exhausting of funds and will continue processing.
can be very challenging since each local area has done things very differently in regulating the pandemic.
What are some of your predictions for the future?
Short-term, we should expect a loosening of COVID guidelines and a greater consideration on the risk of infection. I recommend all businesses to continue to remain in alignment with CDC and OSHA guidelines even while vaccinations increase and local regulations are lifted. Long-term, it will be interesting to see the Biden administration’s activities and how that will impact our industry. Over time, we expect increased budgets to be passed for agencies such as OSHA, EPA and DOT. Likewise, we should expect increased funding for enforcement, leading to more boots-on-the-ground inspectors performing more frequent inspections. Protecting the environment was a key campaign pledge for Biden so we will be keeping a close eye on any areas of emphasis, namely air and
water. KPA will remain on the lookout for any areas that impact collision centers and how we comply. On the federal level, 6H will continue to be a focus. Also, we expect to see increased enforcement under the Clean Air Act penalty policy for car and truck modifications that reduce the original manufacturer emissions settings or equipment. The ultimate goal should be to have an overall compliance program for your business. We all have challenges hiring workers and if we’re down one or two employees due to an entirely preventable safety accident, it speaks directly to the bottom line. By implementing good strategies and being compliant, the fewer incidents shops will have and the less likely they will be involved in litigation. From an owner’s perspective, you can sleep better at night knowing you have an established compliance program in place to help ensure a safe, healthy, compliant and productive workplace. You limit your risks and know your employees will return home in good health to their family members.
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Industry Insight with John Yoswick
—John Yoswick is a freelance writer based in Portland, Oregon who has been writing about the automotive industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). Contact him by email at jyoswick@SpiritOne.com.
CIC Speakers Discuss Employment Issues Related to Vaccines, Fire-Related Concerns with EVs
California-based employment law that it would create an undue hardattorney Cory King told Collision ship, and that is defined as having Industry Conference (CIC) attend- more than a ‘de minimis’ cost or with Ed Attanasio ees in April that while employers burden on the employer,” an analycan require workers to get vaccinat- sis an employment lawyer can walk ed for COVID-19, they should make you through. sure they get legal guidance in doConcerns about long-term efing so to avoid violating any state or fects of the vaccine or belief “it’s federal regulations. a government science experiment” “The short with answerEd is Attanasio yes, you cannot negate an employer mandate can [require vaccines], but as with because “fear is not a protected cateanything in the law, it’s not that sim- gory,” King said. ple,” King said. “But before you force someKing predicated his presenta- body to get vaccinated, or fire sometion by saying he can’t provide legal body because they refuse to get vacadvice in such a setting, but was of- cinated, I strongly encourage you to fering some issues business owners make the phone call to your attorwith Ed Attanasio would want to discuss with their le- ney,” he said. gal counsel. There are also privacy protecKing said in most states, for ex- tion steps to take if an employer ample, employees must be paid for collects proof of vaccination from their time getting vaccinated if it’s employees. King was asked what an a job requirement. Some with Edemployers Attanasio employer should do if an employee have sought to reduce this cost by asks how many of their coworkers bringing in someone to do the vacci- are vaccinated. nations in-house, King said, but un“I would recommend against der that scenario, employers must be [revealing] anything [related to that] careful to avoid violating the Amer- unless you have some local or state icans with Disabilities Act (ADA) regulation that says you need to,” relative to medical inquiries, King said. “Because that immediwith Staceygiven Phillips that pre-screening questions are re- ately starts the witch hunt: Who’s quired for those getting vaccinated. vaccinated? Who’s not? You argu“If they don’t want to answer ably could be viewed as disclosing. those questions, or they answer them It’s not worth the risk. I would not and are denied the opportunity to get go into that. I can’t give a specific the vaccine because don’t pass answer without researching it to withthey Stacey Phillips the pre-screening, you cannot ask make sure there’s nothing specific them why they did not get vaccinat- to [your] locality. But the general ed,” King said. “If you do, you are recommendation is I would not be arguably potentially running afoul disclosing anything like this.” of the ADA.” Employers also have to provide Equipment, Insurance Issues for EV with Stacey Phillips “a reasonable accommodation” for Repairs those not willing to be vaccinated A number of speakers at CIC disbecause of a religious or “sincerely cussed some of the fire-related safety held belief,” he said, but again, this precautions shops should take relais an area where a company should tive to regularly having electric veget legal advice. Don’t question the hicles―especially those with lithium sincerity of their belief or get into batteries―in the shop for repairs. with Stacey Phillips an argument over this, King said. “One thing is to call your [busiRather, acknowledge what they are ness] insurance company and find saying, tell them you will look into out how this may impact your preit and get legal advice. miums,” said Mark Quarto of Fu“You can make it through this, turetech, an electric vehicle training no question,” King said. “The way organization. “They probably will you would overcome that is to show have some ideas on other things
Social Media for Shops
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you’ll need to do with your building.” David Willett with ProSight Specialty Insurance concurred. “It does take additional coverage, and it does take additional risk measures,” he said. “We get asked those questions from the knowledgeable [shops]. The scary ones are the ones that don’t ask those questions. The industry is woefully unprepared for this.” Quarto said it is also advisable to make sure “the fire marshal is alerted to what you’re doing in your building.” He said the National Fire Protective Association is currently “finalizing some requirements for where battery packs are to be stored, how far they need to be apart when they are stored when they are out of the vehicle.” Quarto was asked what body shops should look for in an electric
Media and Publicity for Shops
vehicle charging station for their shop. He said most EVs will be compatible with any 220-volt charger that is SAE J 1772 compliant. “It’s considered to be a Level 2 charger,” he said, which can charge most vehicles in four or five hours, as compared to a 110-volt charger that will require two or three times that long. “There are some other options, fast-charging, but typically a shop isn’t going to need a fast charger. They’re very expensive. The J 1772 chargers are anywhere from $300 to $800, maybe $1,000.” It will require a dedicated 220volt circuit, he said. “Nothing else on there. Otherwise the charger will get tripped all the time,” Quarto said. Another speaker during the discussion of EVs at CIC mentioned shops may want a forklift to load or unload EV battery packs into or
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from delivery vehicles. Willett said forklifts are another item to discuss with your business insurer. “We haven’t had those in many shops, and for those in the collision repair industry thinking about having a forklift, there’s a lot of additional training and safety requirements,” he said. CIC Among First In-Person Meetings The discussion took place during the first of the quarterly CIC meetings held in-person since January of last year. Organizers said about 130 people attended the meeting in Phoenix―about half as many as is typical―but the meeting was open to “virtual attendees” as well. “We’ve been very anxious to get back to a live scenario,” CIC Chairman Darrell Amberson said at the conclusion of the first day of the two-day meeting. “We knew there were some risks with that. We knew that hardly anyone else in the industry is meeting live. But we also felt like somebody has to be the first to jump off the dock. I’ll say right now, the water feels pretty darn good. It’s been absolutely terrific.”
LexisNexis U.S. Auto Insurance Trends Report Shows COVID-19’s Impact on the Industry LexisNexis Risk Solutions on May 10 released its 2021 U.S. Auto Insurance Trends Report, which aggregates annual market data about driving behaviors, auto insurance shopping, underwriting and claims to help insurance carriers better understand the shifting landscape. This year’s report analyzes 2020 data to reveal changes in consumer behavior, carriers’ reaction and the overall impact of the COVID-19 pandemic on the auto insurance industry. It also provides auto insurance carriers with trended insights to help improve their capabilities and competitiveness across the auto insurance lifecycle. “When we look at all of the 2020 auto insurance trends, we can see a pattern that comes from a series of disassociated events,” said Adam Pichon, vice president and general manager, auto insurance, LexisNexis Risk Solutions. “While the evolving impact of the pandemic is still unknown, understanding these trends and evaluating their projections can help insurers make better business decisions and more
confidently prepare for the future regardless of unexpected market turbulence.” The report looks at how consumer behavior and carrier business practices tied to the auto insurance policy lifecycle diverged in 2020 from the patterns we typically see―largely due to the influence of COVID-19. Auto Insurance Trends Highlights a Rollercoaster Year The auto insurance shopping data fluctuations were turbulent throughout 2020. However, year over year, 2020 shopping volumes closed 5.3% higher than 2019 with an annual year-end shop rate of 41%. Cyclical policy renewal patterns for many consumers were interrupted by the pandemic with new business policies written down 12.6% in April 2020 and 10.4% year over year. Even so, this unusual activity still prompted an overall net increase for 2020, bringing market retention to 83%. Empty roadways gave rise to dangerous driving behavior with a noted increase in high-speed in-
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stances first observed in mid-March 2020 and that held at 10% higher than 2019 figures for the remainder of the year. New generational data illustrated an increase of Driving Under the Influence (DUI) violations among younger drivers―particularly those in the Generation Z age segment, with an approximate 50% increase in recorded violations in March and April of 2020. Collision claims decreased, but severity rose, much like the reduction in total miles driven, the volume of collisions and subsequent claims dropped considerably. Collision severity saw a 3.7% year-over-year increase in 2020. The trends identified in this year’s report highlight several opportunities for auto insurance carriers to improve their business operations regarding quoting, underwriting and claims, and prepare for any future disruptions. Source: LexisNexis
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How to Get Your Customers to Trust You in a Skeptical World by Ed Attanasio
Do your customers trust you? If so, how and if not―why? People want to trust their financial advisors, teachers, lawyers, doctors, politicians and, yes, the people who work on their cars. But many consumers entering any business transaction are often skeptical at the outset, and that’s why trust has to be established and reinforced over time. Every business wants its customers to trust them and feel comfortable enough to use their services again and refer them to others. A body shop is being judged every day―by its customers, insurance partners and vendors, and in a world of instant transparency, trust is more important. Throw in the pandemic and a full year of uncertainty, and people are more skeptical about everything now. One body shop owner told me recently he doesn’t even ask what’s next, he just puts his head down and gets the work done, in order to maintain his sanity. “20/20,” “60 Minutes,” “Fight Back! With David Horowitz,” “CBC Marketplace,” “Project Bumper” and “The Investigators” have produced multiple TV episodes about body shops ripping off customers. I recently saw a news segment produced by CBS Chicago designed to protect consumers, but they also scare them. As a result, many vehicle owners are wary before they even enter any repair facility for the first time. In the old days, these types of reports appeared on TV once or twice, but now they’re available on YouTube 24/7. Bad press illustrates the importance of building trust with your customers. In general, American drivers don’t trust auto mechanics, according to a AAA survey. It found 66% of drivers do not trust car repair shops in general, though 64% indicated they do take their car currently to a repair shop with a reliable mechanic whom they can trust. The AAA survey also shows 33%―75 million motorists in total―are still trying to find a trusted service department, which leaves
them vulnerable for when their car breaks down. Here are the top reasons why American drivers mistrust automotive repair shops, both mechanical and collision:
Collision repair is one of those how important they are to establish industries where the average custom- trust with your customer. Point them er is already disgruntled, so the goal out when they show up to your shop is to both placate them and get them for an estimate, almost like a checklist, because studies prove that when to trust you―and that’s not easy. In most cases, your customer is you show someone five truths, they in a rush and wants everything done feel you are trustworthy.” Recommends unnecessary services yesterday. No one ever says, “Hey― Here is an example of five truths (76%) let’s have some fun and get our car communicated during the first 10 Overcharges (73%) serviced!” Vehicle repairs rank right minutes interacting with the cusA negative experience (53%) tomer for the first time: the appearup there with trips to the dentist. Sub-quality work (49%) John Stuef is an industry con- ance of your shop/reception area; the sultant, life coach and the author way your people dress and speak; Other main offenders include charging of “From Doing to Leading: Your the plaques on your walls showing for OE parts that are either Guide for Inspiring People I-CAR, training and OE certificaaftermarket parts, phantom on the Front Lines.” He tions; the overall attitude in the shop; repairs, lapses in communihas managed MSO shops and the thoroughness of the estimate. cation and bait-and-switch Stuef claims you can’t build for decades and dealt with tactics. literally thousands of cus- rapport until you establish trust, and Interestingly, older vetomers, so the topic of trust the best way is with the five truisms. hicle owners from the Baby One way to build trust is by is a subject Stuef has been Boomer generation are most John Stuef, industry studying for decades and using technology to provide a betlikely to trust car repair fa- consultant, life coach developing techniques to ter experience for your clients. By cilities, compared to Millen- and author, said if address it. using today’s tools, you can enable nials and Gen-Xers. Twenty you can establish “Trust is built when peo- them to make their lives easier and five truisms with percent of Boomers surveyed ple see that your actions line drama-free. a new customer, for the AAA study say they they will trust you up with the words you say,” Now they can eliminate phone “totally trust” the auto repair Stuef said. “I often talk calls and paperwork; they can comcompletely industry. about the five truisms and See Skeptical World, Page 56 In addition, Boomers are also more likely to have a car repair shop they trust (76%), compared with 55% of Millennials and 56% of Gen-Xers. Philip Reed, a reporter for Edmunds, interviewed a handful of body shop owners for a blog, “ConYonker s fessions from the Auto Body Shop, Kia Your Kia Get Your Car Fixed Right WithPa Source rts out Getting Ripped Off.” He interviewed shop owners off the record, so he got truly candid reactions. Reed heard things like, “I don’t care what state you live in, for every 10 body shops, three of them are unethical and five of them do mediocre work at best;” “The last thing we want is a bad reputation or reports of poor customer service;” The Right Part Makes the Difference “Most body shop owners are very concerned about getting good feedback and building a list of customers who’ll come back next time work is needed.” Genuine Kia OEM Parts M-Th 7:30am-8pm So, if indeed 30% of all the F 7:30am-7pm Fast & Free Delivery shops out there are shady, how do Sat 8am-5pm Efficient Service on All Orders you convince the public you are a Fax Your Order Today member of that 70% category? How 1840 Central Park Ave Yonkers, NY 10710 do you build trust with customers 914.652.7665 Fax who are not in a positive space afwww.yonkerskia.com ter an accident has added a bunch of drama to their lives?
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Sherwin-Williams’ Lee Rush Provides Insight on Quality Validation Needs by Chasidy Rae Sisk
On March 25, the Tennessee Collision Repairers Association (TCRA) hosted an evening of training, featuring Lee Rush from Sherwin-Williams, who explained “Why Ignoring Quality Control Will Cost You Profits and Sales.” Rush promised to deliver an informative presentation on quality control as well as a demonstration of a new QC product. TCRA President JMark Smith welcomed attendees from the Carolinas Collision Association (CCA) and the Mississippi Collision Repair Association (MSCRA), and noted, “QC is an important part of our business, and as a member of TCRA, quality repairs are something we place a lot of emphasis on because we want repairs done correctly.” Beginning by sharing some details about his background and experience, predominantly as part of an operations team, Rush offered insight into how to implement processes in multiple locations with multiple variations. “Over the years, in-process quality validation proved to be challenging,” Rush said. “The industry needs methods and procedures to evaluate quality throughout the process instead of figuring out what needs to be reworked once the repair is completed, or worse―having the consumer find the quality issues!” After chasing a better method for quality validation and verification for years, Rush joined Sherwin-Williams, where he works with shops on developing and improving the business model, allowing him to educate those shops on why ignoring QC and technology costs profits and sales. His goal for the presentation was to provide enough insight to begin to change the shops think about quality validation. “The first part of this is just changing how we think and beginning to move away from tradition into a new business model,” he said. “Technology is our friend when it comes to quality validation,” Rush continued. “The industry is finally catching up with regards to applications that improve our ability to bet-
ter manage, lifting the burden and allowing us to focus ON business instead of being crazy IN the business.” While the industry has long known there is a need to validate quality, the real challenge has always been determining how to do it. “We need to validate quality prior to the consumer validating it,” Rush stressed. “Over the years, we’ve tried many methods with limited―or no―success, but QC validation continues to be a universal challenge for
On March 25, the Tennessee Collision Repairers Association (TCRA) hosted an evening of training, focused on QC validation methods
the collision industry. This industry is a high variation business model, and all that complexity from vehicle to vehicle adds complexity. “Quality is a pain point on every production floor, plus it presents a huge liability risk that won’t be defendable with a pencil and paper checklist going forward.” Rush also addressed how quality issues cost every shop profits and sales, both in materials costs related to reworks as well as by preventing the shop from creating new revenue. “We’ve grown tolerant to this disruption in production, and we need to focus now on improving our labor utilization,” he said. Shops face increased liability and risk due to vehicle complexity and required repair methods related to ADAS, complex steels, aluminum, carbon fiber, electronic components and new bonding technologies. “These increase our liability and risk, which is getting steeper and steeper for collision operators every day,” Rush said. “Change is constant; make sure quality is constant, too.” The need for in-process QC validation is even greater due to insurer demands related to DRP service level agreements, including varying insurer needs, virtual claims, approval process, inconsistent appraisals,
48 JUNE 2021 AUTOBODY NEWS / autobodynews.com
customer handling process, parts usage and authorizations, and supplement authorizations. “The market hadn’t produced any real technology to help and assist shops as they verify quality with their techs. It’s contingent on us to remind people and ensure we remain compliant from program to program,” Rush said. “Now, there’s technology to assist us with this, and it can easily be managed through a phone application to ensure each claim is handled according to that carrier’s expectations and requirements.” QC validation is also a relevant component of customer satisfaction, and citing a study that showed 82% of consumers are less likely to use a business after seeing a negative review, Rush identified causes of those: missed delivery times, defects on delivered vehicles and poor internal communication. “Our current internal communication method is ‘stop and tell someone,’ but that’s disruptive because it negatively impacts labor utiliza-
tion,” Rush pointed out. “It’s a bad system, but we’re going to rectify that with technology and in-house quality validation.” Poor quality costs shops in reworks, increased cycle time, wasted production time, inefficient communication processes and recurring unaddressed issues with parts, equipment or skills. “It’s cumulative, so we’re all desensitized to it. But we have to take care of it. The reality is when we stop, reverse or rework, cumulatively, this replaces a lot of potential labor we could have produced and sales that could have followed,” Rush said. “If you calculate it, you’ll be shocked at the amount of profit, cost and sales impacts.” Traditionally, shops perform QC during a visual post-repair inspection, but the only items that can be seen post-repair are fit, function and finish. “Post-repair inspections don’t tell us about the unibody or frame, if the suspension measurements are within tolerance or if the structural
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components are welded correctly,” Rush noted. “There’s no validity with a paper checklist, and no method to recall or review the data. There are a lot of challenges with the traditional QC methodology, and the industry has a real need for a consistent QC validation method.” The average collision repair requires a 20-step process, according to Rush, as well as an average of 75 individual operations, 23.6 labor hours and 10 new parts replaced. “Vehicle damage repair is a highly variable practice; I believe the automotive industry has the highest degree of variability in any industry,” Rush said. “The average vehicle will go through five different practice repair phases, and eight to 10 individuals can be a part of each repair order. Given the massive amount of variation, a paper and pencil checklist does not meet the need of today’s repair cycle complexities; it demands a better solution.” Rush suggests a method that uses quality validation technology to ensure shops are verifying and validating quality as the vehicle cy-
cles through the repair process. He believes the industry needs a “digital tool, designed to be used with any tablet or handheld that doesn’t require special purchases. It should use imported repair order data, identify non-compliance using photo triggers and enhance communication, while also providing fully customizable, dynamic SOPs. “It must allow us to inspect quality in-process regardless of the vehicle, the insurer, the OE requirement and the number of handoffs, or why use the application?” Sherwin-Williams developed the Collision Core Quality application to meet these needs. “Conducting in-process quality validation gives shops the ability to verify the operation was completed and then validate whether it was done correctly by passing or failing it,” Rush said. “It includes an event log to demonstrate the QC validation and protect shops from liability by showing that we have a deliberate in-process QC system. These documents verify that we’re serious about our QC process, and they will stand up against scrutiny.”
The application also allows users to sort and distribute finished records, emailing them to anyone during or after the repair. It also removes blockages and allows for labor optimization by enhancing internal communication. “The minute I hit ‘fail,’ the app communicates to those who need to know,” Rush said. “The instant real-time communication is the most powerful aspect for me.” Shops can load as many customized SOPs as desired, and the app also allows technicians to pull down OEM repair methods directly from the manufacturer and save them to the repair order, demonstrating responsibility and due diligence with regard to liability and risk. The Quality Validation dashboard allows users to analyze where failures are occurring most frequently so they can evaluate whether processes need to be modified to reduce failures. “Today, we have nothing. We’re intuitive to a degree because we know a little, but we really don’t know what we don’t know. We want to have these records and reporting
ability so we can review them, document them and improve our repair process based on that data,” Rush advised. “Highly technical vehicles require highly technical repairs. Quality validation must be an accessible, simple-to-use solution to address a complex problem, plus it must provide high-level dynamic quality checks and produce a full digital reporting trail,” Rush said. “This app offers a mechanism to record and remove errors, improve quality and efficiency, and reduce repair liability while improving internal communications, which also reduces errors.” Rush proceeded to demonstrate how to use the app to conduct quality validation through the repair process, showing how photos can be added in-app and raving over the communication piece. He also showed different customizable features before answering attendees’ questions. Sherwin-Williams’ Collision Core Quality application is available to anyone in the collision repair industry; users do not need to be customers of See Validation Needs, Page 52
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Collision Repair Veteran Brings I-CAR Training to Collision Industry in China strip where he worked with the pit crew. Tony has incredible hands that Like many others who work in the can fix or build anything he visualizcollision repair industry, you could es.” — Don Doak, lifelong friend. say Tony Simon grew up in a body We began to repair heavy-dushop. His great-grandpa, grandpa, ty trucks in 1964. Soon after, we dad and brothers all worked on vehi- stopped working on passenger vehicles, in some form or another. cles. As the business grew, we needSimon had a passion for cars ed more shop space and upgraded and turned that into a long-term ca- our equipment. reer where he had the opportunity to Shop employees were hard to work internationally, bring I-CAR come by as not many people worked training to China and meet some of on heavy trucks. Few auto techs the most dedicated collision repair- wanted to make the transition. As a ers along the way. Here is his story, result, we developed an in-shop trainas told to Stacey Phillips. ing program for repair procedures starting in the late 1960s. A man named Kevin Costner came to work for us after graduating from high school in 1979 and became a trusted employee. Kevin is currently a technical trainer at Gerber Collision. “Tony is a dreamer. He envisions a project and sees Pictured, left to right, are Sue Zheng; Zhang Jingwei, vice president of the China Automobile Maintenance and Repair it through. He doesn’t take Association; Ron Olsson, president of Pro Spot Internationrejection as a stopping point. al; and Tony Simon during a student skills competition in He works around it. Tony Wu Xi, China, in 2013 taught me to see the world I was born in Dallas, TX. Af- much differently… that there are no ter World War II, my dad worked restrictions in life. I can be the best I on John Deere tractors until he was can be at repairing vehicles and being hired at Ed Mauer Ford repairing a human being.” — Kevin Costner. and painting vehicles. We lived in In 1983, my Dad retired, so my a house with a very large garage brother and I closed the truck shop where he repaired what they called and I moved to Kauai, HI. I worked “re-builders.” as the body shop manager at Kuio Dad saved enough money to Motors, a small GM/Nissan dealer open his first body shop and I spent on the island’s south side. my free time on weekends and sumWe moved back to Texas in mers at his facility. I swept the floor, 1985 and I opened Simon Company cleaned the toilets, anything to be Body Shop the following year. As there. I admired the way people re- my business grew, I opened another paired and painted vehicles. shop nearby in 1987 to handle the Rudy, a painter and body man work volume. Kevin began working at the shop, taught me how to paint, with us again. along with my Dad and older brothUnfortunately, I needed to close er and mentor, Fred. Fred was my my shops in 1991 due to a divorce. inspiration. We worked together for In 1996, I was hired as a body tech 20 years and he provided me with at a local GM dealership where I the skills and knowledge that I have worked for two years. depended on throughout my life. During this time, I attended my “Tony was born to be a body first I-CAR class. I became interestman. Even as a child, he was draw- ed in becoming an instructor and I ing custom cars. By the time he was contacted the I-CAR southwest rein junior high, he worked at his dad’s gional manager to begin that jourbody shop after school and Satur- ney. Jeff Peevy soon came on board days. Then on Sunday, he would go as the regional manager. He currentwith his dad and brother to the drag ly holds the position of vice presiby Stacey Phillips
50 JUNE 2021 AUTOBODY NEWS / autobodynews.com
dent, Technical Products, Programs & Services at I-CAR. I moved to New Zealand in 1998. I found a job in a panel beater shop (body shop) that participated in I-CAR training―A1 Paint and Body in Auckland, North Island, NZ. I worked in the paint shop as a prepper and eventually performed collision repair work while attending I-CAR classes. I also taught panel bonding on the North Island for New Zealand I-CAR. When my father passed away in 2000, I returned to the U.S from New Zealand. Jeff asked if I would conduct I-CAR classes for him in the Phoenix, AZ, and East Texas areas. “Tony has a genuine dedication to educating the industry and will go to extreme lengths to make it happen. Once, while preparing for an I-CAR regional conference, Tony drove 100 miles one way just to help load boxes because I had hurt my back. Tony never sought recognition for all the work he has done for the industry over the years. He
simply just wanted to see that people learned things they needed to know.” — Jeff Peevy. Several times, I drove non-stop from Arizona to Texas for a class in Ft. Worth and only had two students. To help solve the low-attendance problem, we came up with a plan under the I-CAR Fort Worth committee leadership of Dave Gauthier―to arrange some sponsors and give away two free classes. We held an awareness event called The I-CAR EXTREME and taught 237 students at one time. One of the sponsors was Tim Curran, owner of Car-O-Liner Southwest Company. Tim asked Ron Olsson, president of Pro Spot International, to donate a demonstration spot welder, as Tim sold both brands. Pro Spot sent a spot welder and an engineer, Bob Pulth, from the company’s California factory to demonstrate how to use it, because spot welding was a new technology to the collision industry back then. The demonstration included a chemist from Lord Fusor, who replaced
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a quarter panel with weld bonding prepared by Kevin and his team. Since that first event, many similar types of programs have been conducted. “Tony has definitely been a gifted teacher and very generously contributed his time and knowledge with many technicians over the years. Tony will always be remembered as a true pioneer with I-CAR and its training mission,” — Tim Curran. I had wanted to visit China since President Nixon traveled there. I learned that Car-O-liner was going to sell equipment in China, so I asked Tim to introduce me to CarO-Liner’s international sales rep. I arranged a meeting with the rep the following year and developed a plan. Car-O-Liner had a relationship with Shandong Jiatong University in China and provided them with a frame machine and measuring equipment. The school operated a shop on campus but did not use the equipment. The rep thought I could help him train the school and encourage them to use the equipment. I made an agreement with the school to teach the students English while I also traveled for them, lecturing about collision repair. During the summer, I lectured at a China automobile association meeting in Yantai. I met a lot of leaders and spoke on the use of 75/25 gas in MIG welding. At that time, shops had MIG welders but bought 100% CO2 gas to weld with because it was cheaper. One of the attendees was the China National Model for collision repair shops, Mr. Wei. He understood the meaning of my lecture and began to change his shops over to
80/20 gas. This has been my main measure of success working in China. A teacher at the school knew that I had lived and worked in New Zealand and introduced me to Xiangyun Zheng (Sue), an English major at Shandong University in Jinan. Shortly after we met, I asked Sue to travel with me to a lecture and be my interpreter.
overcame the culture and language and I feel he even helped the collision industry there with training and his relationships with equipment companies here in the U.S.” — Kevin Costner. In 2006, we attended the I-CAR annual meeting in Scottsdale, AZ, and Jeff suggested that we meet with the head of the I-CAR weld test program about a new pilot program where testing was conducted in shops rather than schools. In addition to being president of Pro Spot, Ron was an I-CAR board member and was attending the conference. I asked if he could provide a trailer and welders for the pilot program and he said, “Yes.” Ron had recently sold welders to Sterling Auto Body and needed to proTony Simon is shown giving a demonstration during vide MIG and spot-welding the 10th China International Auto Repair Tech, Tool and training for each of the 57 Equipment Fair in Beijing, China shops. Sue and I mapped In 2004, the Chinese govern- a route of all the locations, found ment asked Sue and me to conduct the Gold Class shops along the way an 11-month training program in and faxed ahead to see if any shops 40 cities for the China Automobile wanted tests performed. Maintenance and Repair Association (CAMRA). As part of the program, there was a competition. We trained 120 students in each city. The competition was a new endeavor for the collision industry in China and still takes place. The students measured and pulled, MIG welded and spot-weldVisit these Genuine ed with a Pro Spot PR-2000 welder Hyundai Parts Dealers donated by Ron Olsson. Since 2005, Sue and I have traveled back and forth to China to focus Connecticut on collision repair training and testMERIDEN HYUNDAI ing. We also taught in Taiwan and Meriden mainland China for AIG insurance. 318 South Broad St. “When Tony headed to China, 203-935-0896 I don’t believe he knew anyone. He 203-935-0895
Continued from Page 49
Validation Needs Sherwin-Williams. “Traditionally, we don’t inspect quality until the repair is completed, but we really aren’t inspecting quality―we’re just repairing the vehicle, passing it to the next department, and hoping they find the issue if
there is one,” Rush said in conclusion. “We’re checking boxes but not really inspecting quality while the repair is in-process. “We don’t inspect quality, and we have to change that behavior. The industry needs to create a new tradition of quality validation.” For more information about TCRA, visit MyTCRA.com.
52 JUNE 2021 AUTOBODY NEWS / autobodynews.com
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Most people thought we were scammers as no one had heard of inshop weld testing. We traveled more than 15,000 miles to 110 cities in 42 states over 10 months. Until October 2018, we spent 250 or more nights a year in a hotel on the road training and testing. I-CAR then asked that we work as consultants with their China endeavor. Over the years, many people and companies have requested that I-CAR train in China. We introduced I-CAR to some of our business friends in China and began to arrange face-to-face meetings in 2019, where Sue acted as the translator. Unfortunately, the COVID-19 virus began to spread and that ended all the work, here and in China. I hope the industry recognizes what a great opportunity that I-CAR has given our industry to gain the knowledge to repair today’s complex vehicles. Without I-CAR and the great people who are part of their leadership team, like John Van Alstyne, CEO and president, and Jeff Peevy, our industry wouldn’t be the same.
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Regulator Stresses Need for Documented Collision Repair Customer Authorization, Updates by John Yoswick
Though the California Bureau of Automotive Repair (BAR) www. bar.ca.gov does not have jurisdiction over auto body shops beyond the more than 4,000 in the Golden State, some information shared by BAR Chief Patrick Dorais in a recent webinar could be instructive to shops elsewhere as well. Dorais said his agency, which also oversees about 31,000 dealerships, mechanical shops and smog check stations, receives about 17,000 consumer complaints a year―though not surprisingly, many fewer this past year during the pandemic. Generally only about 1,000 of those involve body shops, Dorais said. “In about a third of those complaints in the auto body area, consumers are alleging either that the shop made false or misleading statements, or they failed to obtain the customer’s authorization,” he said. “Consumers are commonly reporting to us that they feel misled about the length of time for the repairs, and not having
any understanding of what was being done to their vehicles. Those are the kinds of things we commonly see in our complaints.” Though few states have a regulatory body like the BAR overseeing the industry, most have consumer protection laws requiring customer authorization for repairs, so ensuring such authorizations are well documented could reduce―or at least counter― many consumer complaints. The BAR’s “Write It Right” guide (https://www.bar.ca.gov/pdf/ WriteItRight.pdf) for shops was updated two years ago to indicate electronic authorization is permitted, even offering a screenshot of what a text authorization should look like. Status updates sent to customers via email or text can also provide good documentation―provided they are saved by the shop―to counter many consumer complaints. “We may come to you, saying the customer is saying this, here’s what they’re alleging,” Dorais said during the webinar. “As a shop owner or manager, you can say, ‘No, we’ve
got something that tells a different story, and here’s my proof.’ That’s really important to preserve that document.” Those outside California might also take note of the BAR’s prohibition on page 7 of the “Write It Right” document on the use of such part descriptions. “Each new replacement crash part listed in an autobody or collision repair estimate must be an OEM crash part unless specifically identified as a non-OEM aftermarket crash part,” the document dictates. “Descriptors like Opt-OEM, Alt-OEM, OEM-Surplus, Like Kind Quality, Quality Replacement Part and similar designations do not satisfy this requirement.” The ambiguity of those parts descriptions are something a Collision Industry Conference (CIC) committee has been working to address. During CIC in mid-2020, the committee showed how the list of parts categories varies among parts platforms and estimating systems. The committee showed several flowcharts demonstrating how all these variations in
parts categories can result in the exact same part being described two different ways on estimates. In one example, a vendor selling OEM parts outside of the authorized OEM channel enters those parts into a platform that uses the “OEM Surplus” category for such parts. That platform feeds into an estimating system that uses the “Optional OEM” label for those parts. That runs up against the BAR’s prohibition on the use of the “Opt-OEM” label. “So while that part can go into the estimating platform as ‘OptOEM,’ the end-user is required to choose what they are going to call it on the estimate,” said Aaron Schulenburg of the Society of Collision Repair Specialists, who co-chairs the CIC committee. “You then have a situation where a shop repair plan, and an insurance company estimate, may each potentially choose different nomenclature for the exact same part. One may identify that as an aftermarket part, and one may identify it as an OEM part, and you have an estimating platform that allows for that choice.”
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Collision Repair Industry Veteran and Author Gary Ledoux Writes into the Sunset can get old quickly. “One of my uncles had a great If you’ve been in the collision repair career, but he didn’t know what to industry in any capacity within the do when he retired,” he said. “He last decade or so, you likely know ended up watching television 24/7 who Gary Ledoux is. and died at 78 without really enjoyHe wrote for Autobody News ing his retirement. I decided that that for several years, is the author of wasn’t going to happen to me.” five different books, including one Ledoux took business and voabout the history of collision repair cational classes in high school, then in America, and played an integral spent some time at NH Voc-Tech role at American Honda when it de- College. He landed a series of jobs at veloped its ProFirst Body Shop Cer- various local parts jobbers, PBE jobtification program in 2010. bers and car dealerships. He worked Now semi-retired at age 68 and the parts departments at Toyota, Alfa living in Jacksonville, FL, Ledoux is Romeo, Subaru and Acura stores, as currently working on a book about well as selling new vehicles at one the history of his hometown fire Ford dealer and working as a service department, with a working title of advisor at another. “Nashua’s Bravest: The History of In 1973, Ledoux tried to beFirefighting in Nashua, NH.” come a firefighter in his hometown of Nashua, but he didn’t meet the physical requirements. He was too short― even after “fudging my application a little,” he said. One year later, he relocated to Amherst, NH, where, being all-volunteer, the fire department’s physical requirements weren’t so critical. Ledoux was accepted and served as a volunteer firefighter for the next four Gary Ledoux, author of “YesterWreck: The History of the years. Collision Repair Industry in America,” is enjoying his retirement after working for Honda for three decades Like firefighters everywhere, volunteers can be In 2018, Ledoux published his called out at any time of the day or fifth book, “YesterWreck: The His- night. tory of the Collision Repair Industry “Being a volunteer company, the in America,” an 860-page book that fire station was not manned. When has been getting positive reviews the alarm sounded, you ran to the from people throughout the indus- station, grabbed a truck and went,” try. Four previous books centered on Ledoux said. “One time, there was Old West history. a house on fire right across the road Ledoux has embraced the ste- from the firehouse, less than 20 yards reotypical retirement plan, purchas- away. By the time a police officer on ing a 37-ft. Itasca motorhome that night patrol noticed it, notified the already has 25,000 miles on it. He’s fire department and we responded, driven from Palm Springs to north- the house was fully involved. We ern California, across the U.S. from managed to save the cellar hole. It California to Florida and from Key was rather embarrassing, but someWest to New Hampshire, and has times that’s just how it works.” big plans to see more of the country In 1988, Ledoux landed a posifirsthand within the next few years. tion at American Honda as a district Ledoux’s No. 1 goal in retire- parts aanager for the Acura diviment is to be active and pursue his sion, first for the northeastern U.S. creative passions, such as writing and later for the southeastern U.S. and travel. He has learned by exam- He worked for American Honda in ple that if you don’t proactively pur- varying capacities for more than 29 sue a productive retirement, things years. by Ed Attanasio
54 JUNE 2021 AUTOBODY NEWS / autobodynews.com
From 1998 to 2017, he was an assistant national manager for the wholesale parts marketing department, eventually concentrating on the collision repair industry. That’s when he met literally hundreds of body shop owners all over the country and developed a wide range of highly successful advertising/marketing promotions for Honda’s wholesale parts marketing department. In 2009, American Honda assembled a team to develop the company’s first OE body shop certification program. “There were about 12 of us and we did a complete year of research before we pulled the trigger on the program,” Ledoux said. “A lot of the OEs were featuring certification programs, so the clock was running. At first, it was called the Honda ProFirst Recognized Program, but we realized that we needed to have the word ‘certified’ in there, so, in time, we changed it to the Honda ProFirst Certified Body Shop Program. “It was great watching it grow and witnessing its success. When I retired from Honda in 2017, we had 1,200 shops in the program and now they have closer to 1,600. It works because shops value the certification and Honda owners respect it.” Why does the ProFirst Program―now called the Honda and Acura Certified Collision Program―work so well for shops that have invested heavily in specific tools, training and equipment to do proper repairs on Hondas and Acuras? “It benefits everybody and, in the end, it results in a quality, OE standard repair,” he said. “Back in the day, just having the right parts was enough but that doesn’t make it anymore, because today’s cars are so sophisticated and the technology is changing all the time.” Ledoux has been writing professionally since 1992, including five books, columns and feature articles in multiple Old West magazines, a running column in Motorcycle Industry and Power Equipment Trade magazines and a column and feature articles in Autobody News, and he was publisher and editor of the Honda ProFirst Quarterly Magazine.
A big part of Ledoux’s legacy includes his definitive history of the collision repair industry, “YesterWreck: The History of the Collision Repair Industry in America,” which he published in 2018. He saw a definite need for a book that chronicles the history of body shops, complete with a collection of 60 photographs used to tell the story. It was a labor of love that tested Ledoux, but he was proud of the finished product. “I found a ton of great stories and anecdotes from the early years of the industry, plus I spent countless hours poring over industry magazines going back as far as the early 1960s,” he said. “Historians take a lot of information and put it into a narrative that is accurate and entertaining, so that was my goal with ‘YesterWreck.’” In “Nashua’s Bravest: The History of Firefighting in Nashua, NH,” Ledoux is now writing about another one of his passions―fire departments and their colorful histories. “When I started asking around about the history of the Nashua Fire Department, I discovered that several people had documents that were partially written while others just had notes they collected over the years. But nobody knew how to turn it into a book,” Ledoux said. “I thought, I can take all of it and put it into a book that people would love to read, with the addition of my own research.” The book is slated to be published the first quarter of 2022. Just like in John Steinbeck’s “Travels with Charley,” Ledoux and his wife Rachel and their dogs, Snoop, Bridget, Bailey and Mindy, will be taking to the highways and byways of America. With his trusty laptop onboard, Ledoux and his family are poised and prepared to take on this new stage in their lives. As Gary would say, “Happy trails!”
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Ford Releases New Position Statement on Bumper Fascias Ford and Lincoln vehicles contain many state-of-the-art features that provide occupant safety and enhance the driving experience. Bumper fascias play an integral role in the performance and functionality of these features. The original bumper fascias on Ford Motor Company vehicles are designed and manufactured to function with advanced driver assistance systems (ADAS), including Pre-Collision Assist with AEB, BLIS® with Cross-Traffic Alert, Intelligent Adaptive Cruise, Lane-Keeping System, Active Park Assist, Evasive Steering Assist, BLIS® with Trailer Coverage and Pro Trailer Backup Assist. During body repairs that involve front and rear bumper fascias, it is critical the vehicle be restored to proper operating condition to ensure these important safety systems function correctly. Repair of bumper fascias using fillers, reinforcement tape, hot staples or plastic welding can adversely affect ADAS operation. For this reason, Ford Motor Company is limiting repairs on front and rear bumper fascias on all Ford Motor Company vehicles equipped with any ADAS features to topcoat refinish
Topcoat finish cannot exceed 12 mils (300 microns) in total thickness. Any bumper fascia damage that requires substrate repairs must be replaced. Measurement of the topcoat finish requires the use of an ultrasonic paint thickness gauge, such as PosiTector 200 or Phase II UTG-2900, available through Rotunda. The following points provide an overview of bumper fascia repairs: • Paint repairs can be made if the material thickness does not exceed 12 mils (300 microns) in total thickness • Use of any filler materials or reinforcement tapes to repair substrate damage is not permitted • Use of hot staples or plastic welding to repair cracks or damage is not permitted • Repair of any sonic-welded sensor retainer rings or tabs is not allowed, due to possible misalignment and incorrect operation of the sensor • Note that vehicle wraps, bumper stickers and aftermarket accessories in the area of the fascia can create system operation concerns Reconditioned, refurbished or salvage bumper fascias may have
been repaired using substrate repairs, including the use of filler material, plastic welding and hot staples, which can interfere with ADAS operation. For this reason, Ford Motor Company does not approve the use of reconditioned, refurbished or salvage bumper fascias. Only by using Ford Original Equipment bumper fascias can you be assured of the fit, function and safety of the repair. Ford recommends the use of the Integrated Diagnostic System (IDS) or Ford Diagnosis and Repair System (FDRS) to perform all vehicle diagnostic testing, and when performing module programing and system calibrations during collision repairs. Additionally, Ford factory diagnostic and repair procedures should be used when carrying out all collision repairs. Ford dealer-owned body shops can access service information, training and diagnostic scan tool support through the Professional Technician Society at http://www.fordtechservice.dealerconnection.com and independent collision repairers can find information at www.motorcraftservice.com. Source: Ford
Skeptical World municate instantly via text or email. If they want photos of the repair, it’s a snap, and they are kept in the loop during every stage of the process. By writing estimates that are fast, easy and, most importantly, accurate, there are never surprises along the way. By bringing more to the table with new technology and cutting-edge techniques, vehicle repairers are building trusting relationships with their customers. By continually pursuing cutting-edge tools, these forward-thinkers will continue to excel in a market that’s already more knowledgeable, skeptical and more discerning than ever. You can tell people great things about your business all day long, but folks want to see it, and the five truisms described by Stuef will always speak louder than words. The underlying message is if you run a good shop that produces quality work, trust is the byproduct and good things will happen as a result.
Tesla Says All Supercharger Energy Will Be Renewable in 2021 by Steven Loveday, Inside EVs
Reportedly, on Earth Day, April 22, Tesla announced it has plans to power all Superchargers with renewable energy by the end of 2021. This would work to significantly reduce costs over the long term and make driving a Tesla even better for the environment. Tesla’s Supercharger network is arguably one of its top advantages over other brands producing electric cars. While most other automakers count on third-party public charging options, Tesla is constantly improving and expanding its fast and reliable Supercharger network. Keep in mind, Tesla also has its own solar business, so this plan won’t really be something new for the automaker. Even if competing brands decided to roll out a massive network of public fast-chargers over a short period of time, there’s a pretty solid chance they’re not planning to make them all run on solar energy. And, if they did, they may have to go to a company like Tesla for
help. Apple recently announced it’s using Tesla’s battery storage systems at its California solar farm. The report about the Superchargers running on renewable energy was published by Electrek. As the story goes, Justin Lange, Tesla’s marketing chief for mid-Atlantic Superchargers, posted some interesting information about Tesla’s Supercharger network and its progress. The post surfaced on Earth Day and include the following sentence: “Additionally, all our Supercharger energy will be 100% renewable in 2021.” Lange also highlighted Tesla’s Supercharger milestones, including delivering 2.4 TWh of energy, enabling 8.3 billion emission-free miles, saving 334 million gallons of gas and offseting 6.6 billion pounds of CO2. This seems like a very lofty goal. Can Tesla do it? Do you believe this will apply to all areas across the globe, or just to those for which Lange is responsible? We thank Inside EVs for reprint permission.
56 JUNE 2021 AUTOBODY NEWS / autobodynews.com
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Volkswagen Group Reports Strong Results in Q1 2021 by Mark Kane, Inside EVs
The Volkswagen Group, which includes Volkswagen, Audi, Porsche, Skoda, SEAT and more, reported quite strong business results in the first quarter of 2021. Let’s first take a look at general numbers and then focus on the plug-in electric car sales.
especially considering the semiconductor shortages. “We started the year with great momentum and are on a strong operational course,” said Herbert Diess, CEO of the Volkswagen Group. “This is clearly reflected in our positive quarterly figures. At the same time, we remain fully committed to our transformation
“Our successful e-offensive continues to gain momentum and we have significantly expanded it with attractive new models” — Herbert Diess, The group has increased its vehicle deliveries by 21.2% yearover-year to 2.4 million, compared to 2.0 million in Q1 2020. That’s 12.4% of global car sales. That allowed it to increase the revenues to $62.4 billion, up 13.2% year-over-year, but more importantly, the operating profits improved to $4.8 billion, which is 7.7% gross margin. The income after tax will be $3.4 billion—5.4% of revenues. It’s not a bad start to the year,
into a climate-neutral and software-driven mobility group. “Our successful e-offensive continues to gain momentum and we have significantly expanded it with attractive new models. We are also making good progress with the key topic of digitalization and have reached important milestones. There is still much more we can achieve in the remainder of the year.” The Volkswagen Group out-
lined four major areas of business: hardware, software, battery and charging as well as mobility and services. The software business is in its early investment phase, but over time it is expected to generate some income through licenses. Volkswagen Group plug-in car sales In Q1 2021, the Volkswagen Group delivered some 133,000 plug-in electric vehicles globally: • BEVs: about 59,948 (up 78.4% year-over-year) and 2.5% of the total volume • PHEVs: about 73,374 (up 178% year-over-year) and 3.05% of the total volume • Total: about 133,322 (up 122% year-over-year) and 5.56% of the total volume For comparison, in 2020 the group sold over 422,000 plug-ins. All-electric car sales by market: Europe: 42,421 (71%)
North America: 7,588 (13%) China: 6,244 (10%) Others: 3,695 (6%) Total: 59,948 All-electric car sales by brand: Volkswagen (cars): 30,735 (51%) Audi: 14,583 (24%) Porsche: 9,072 (15%) Skoda: 2,455 (4%) SEAT: 2,217 (4%) Volkswagen (commercial vehicles): 687 (1%) Other: 199 (near 0%) Total: 59,948 The top selling plug-in models were: BEVs: Volkswagen e-up!, Volkswagen ID.3 and Volkswagen ID.4, Audi e-tron, Audi e-tron Sportback and Porsche Taycan PHEVs: Volkswagen Golf hatchback, Volkswagen Passat Estate, Audi A3 Sport-back and Audi Q5, Skoda Octavia Combi, SEAT Leon Sportstourer and Porsche Cayenne We thank Inside EVs for reprint permission.
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Biden’s Emissions Pledge Comes with Economic Consequences, Experts Warn by Casey Harper, The Center Square
President Joe Biden is expected to announce a pledge April 22 to cut U.S. greenhouse gas emissions in half within less than a decade. Biden will announce the aggressive pledge, according to multiple reports, the same day the White House hosts dozens of world leaders for a virtual climate summit. The pledge would commit the U.S. to lower its emissions by 50% from 2005 levels by the year 2030. But critics were quick to point out flaws with the plan. “Based on currently available technology, there is no way to halve America’s emissions in such a short period of time without radically impacting our battered economy,” said Heather Reams, executive director of Citizens for Responsible Energy Solutions. “We know that by 2030, 90% of all new emissions will come from the developing world and China, so we need solutions that can be adopted as readily in India as in Indiana.” During the summit, which also falls on Earth Day, leaders will discuss a range of environmental and energy issues like coal power plants and carbon emissions. Though Biden has not made the formal announcement, his rhetoric on the campaign trail indicated he plans to take an aggressive stance on environmental issues. “As president, Biden will lead the world to address the climate emergency and lead through the power of example, by ensuring the U.S. achieves a 100% clean energy
economy and net-zero emissions no later than 2050,” Biden’s climate plan released during the presidential campaign says. “He will lead an effort to get every major country to ramp up the ambition of their domestic climate targets,” the plan adds. Biden’s pledge could devastate parts of the country reliant on fossil fuels for their livelihood. Wyoming and West Virginia have the most sig-
President Joe Biden. Credit: Shutterstock.
nificant coal producing capabilities, followed by Pennsylvania, Illinois and Kentucky. Those states produced about 500 million short tons of coal in 2019, more than 70% of the nation’s coal output. A short ton is equal to 2,000 pounds. “Last year during the COVID pandemic, the U.S. cut its emissions by 12% and we all know at what cost,” said Daniel Turner, founder of the energy workers advocacy group Power the Future. “Thousands of small businesses have been closed forever. Unemployment skyrocketed. Entire industries like airlines, hospitality, tourism, have been bankrupted.” Turner’s comments indicate the kind of opposition that Biden, and Democrats who support him, are likely to get from Republicans. Other critics say Americans can
expect widespread blackouts, higher energy prices and economic downturn if Biden’s plan is enacted. “The Biden-Harris administration’s reported second-round commitment under the unratified Paris climate treaty is preposterous and irresponsible,” said Myron Ebell, director of the Center on Energy & Environment for the Competitive Enterprise Institute. “Trying to cut greenhouse gas emissions by 50% below 2005 levels by 2030 would cause energy prices to skyrocket, make blackouts a common occurrence and lead to widespread energy poverty. Luckily, the Biden-Harris commitment is merely an expression of intention and with no legal basis.” Reports indicate the traditional fossil fuel industry supports a little less than 7 million U.S. jobs. Those jobs are often concentrated in certain pockets of the country, meaning a reduction in the fossil fuel industry could send entire cities and even regions into economic recession. “[Biden] will make sure those commitments are transparent and enforceable, and stop countries from cheating by using America’s economic leverage and power of example,” Biden’s campaign pledge reads. “He will fully integrate climate change into our foreign policy and national security strategies, as well as our approach to trade.” Those international relationships, though, are exactly what concerns many experts, who say China will use America’s restraint as an opportunity to gain an economic advantage. “We will forgo our American, domestic, reliable, inexpensive, abun-
dant energy to buy inferior Chinese products which are expensive and inefficient,” Turner said. “Meanwhile China continues to expand, build, grow it’s economy primarily through coal-fired plants and by expanding its production of oil and gas worldwide. China and Russia are thrilled that the American president is willing to punish his own country to achieve a globalist standard which they holistically ignore.” Making public pledges to world leaders will grab headlines and earn favor with the Democratic base, but critics say it will do little to change the reality on the ground without help from Capitol Hill. Biden will need Congressional support to enact the widespread changes needed to make his ambitious promises come to fruition. “We must count on widespread public opposition to convince enough Democrats in Congress to join with Republicans to defeat implementation of this grotesque power grab to cripple the American economy,” Ebell added. Biden does have allies among Democrats who are eager to get a win for the party’s base. Democrats on April 20 re-introduced the Green New Deal ahead of Biden’s summit, pushing for a total reworking of the nation’s spending as well as the energy industry. “Do we intend on sending a message to the Biden administration that we need to go bigger and bolder?” asked Rep. Alexandria Ocasio-Cortez, D-NY. “The answer is absolutely yes.” We thank The Center Square for reprint permission.
FTC Examines Anti-Competitive Repair Restrictions, Recommends Ways to Expand Consumers’ Options In a new report to Congress, the Federal Trade Commission (FTC) identified numerous types of repair restrictions, such as using adhesives that make parts difficult to replace, limiting the availability of spare parts and making diagnostic software unavailable. The report’s findings, including that “there is scant evidence to support manufacturers’ justifications for repair restrictions,” are primarily based on responses to the FTC’s requests for public comments and empirical re-
search issued in connection with its July 2019 workshop, “Nixing the Fix: A Workshop on Repair Restrictions.” The report explores means of expanding consumers’ repair options and how the FTC could assist in that expansion, consistent with its statutory authority. In addition, the FTC notes it stands ready to work with lawmakers, either at the state or federal level, to ensure consumers have choices when they need to repair products that they purchase and own. Congress directed the FTC to
58 JUNE 2021 AUTOBODY NEWS / autobodynews.com
issue the report, noting it “is aware of the FTC’s ongoing review of how manufacturers—in particular mobile phone and car manufacturers—may limit repairs by consumers and repair shops, and how those limitations may increase costs, limit choice and impact consumers’ rights under the Magnuson-Moss Warranty Act.” Congress specifically directed the FTC to include recommendations on how to best address these problems. The FTC voted 4-0 to authorize staff to send the report to Congress.
The FTC works to promote competition and to protect and educate consumers. Learn more about consumer topics and report scams, fraud and bad business practices online at ReportFraud.ftc.gov. Like the FTC on Facebook(link is external), follow on Twitter(link is external), get consumer alerts, read blogs and subscribe to press releases for the latest FTC news and resources. Source: FTC
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Fossil Fuel Emergency: U.S. Races to Move Gasoline After a Pipeline Hack by Brad Bergan, Interesting Engineering
In an effort to delay the effects of a gasoline shortage and subsequent price spike on the East Coast, the Biden Administration just issued an order to enable overtime for some truck drivers moving gasoline, according to a May 9 declaration from the Department of Transportation. This comes in response to the shutdown of one of the country’s most critical fossil fuel pipelines following one of the largest cyberattacks on gas and oil infrastructure in American history. Fossil fuel shortage could affect the East Coast On May 7, Colonial Pipeline said it suffered a critical ransomware attack—forcing it to halt all operations while it worked to secure its IT architecture from hackers. Some of the company’s smaller pipelines have resumed service, but as of May 10, the pipeline’s main pathways were still shut down for an unspecified timeframe. “On May 7, the Colonial Pipeline Company learned it was the
victim of a cybersecurity attack. We have since determined that this incident involves ransomware,” read the statement from the fossil fuel company. “In response, we proactively took certain systems offline to contain the threat, which has temporarily halted all pipeline operations, and affected some of our IT systems.” The Department of Transportation (DOT) subsequently declared a state of emergency, following the shutdown, and waived requirements for drivers and motor carriers working to circumvent potential shortages from the pipeline shutdown. This means they can drive for more than 11 hours, the typical daily limit, in a collective effort to delay the potential fuel shortages that can happen, since Colonial’s pipeline network fuels roughly 45% of all gasoline on the East Coast. The DOT said the Colonial pipeline shutdown may create shortages of “gasoline, diesel, jet fuel and other refined petroleum products,” with overtime waivers effective in the following territories:
Virginia, Texas, Tennessee, South Carolina, Pennsylvania, Noth Carolina, New York, Mississippi, Maryland, Louisiana, Kentucky, Georgia, Florida, Delaware, the District of Columbia, Arkansas and Alabama.
gas. This is a big deal.” Especially since road and rail transport are far more expensive than pipelines—and there’s another caveat to extending road and rail-based supply lines for fossil fuel. Colonial’s pipeline is integral to the energy infrastructure of the U.S., stretching more than 5,000 miles and moving more than 2.5 million gallons of gasoline daily from refineries throughout the Gulf Coast to more than 50 million people on or near the East Coast. Several tanker trucks racing gasoline down a highThe shutdown comes while way under the sun. Credit: Rasica/iStock many are just starting to resume their normal transits to The East Coast could see pump work. If the pipeline doesn’t go online in the next several days, anprices spike in the coming week “This is the largest impact on the alysts have said fuel prices might energy system in the United States rise along the Eastern Seaboard, we’ve seen from a cyberattack, full with scattered shortages. This was a breaking story and stop,” said CEO Rob Lee of Dragos, an infrastructure-focused se- was regularly updated as new incurity firm, in a report from Wired. formation became available. “You have a real ability to impact the electric system in a broad way We thank Interesting Engineering by cutting the supply of natural for reprint permission.
Chip Shortage Forces U.S. Automakers to Shift Focus to High-Profit Vehicles by Sam D. Smith, CarScoops
It would appear that during a tumultuous period for car production, U.S. automakers may begin to focus on lower volume, premium-priced cars over cheaper alternatives. A report by Reuters details an investor call from GM CEO Mary Barra, who stated the company can deliver better results without stockpiling vehicles or padding sales volumes with low-priced, low-margin models. U.S. automakers have often opted to keep up production of higher-volume, lower-margin cars, appealing to a broad cross-section of buyers. As Jalopnik points out, the concept of Alfred Sloan, GM’s president and chairman in the 1920s until the late 1950s, was “a car for every purse and purpose.” But after a challenging period during the pandemic and the difficulty faced in sourcing semiconductors for production, by prioritizing sales of higher-margin cars, GM has been able to post solid profits for the first quarter.
“We’ll never go back to that level of inventories that we held pre-pandemic because we’ve learned we can be much more efficient,” said Barra. Similar statements have been made by other automakers as well, including Stellantis and Ford.
During the chip shortage, General Motors has shifted supply and supported the production of higher-margin cars while temporarily halting production of high-volume but less expensive models. The General recently announced it would idle production of its second-best selling U.S. model, the Chevrolet Equinox. They have also
60 JUNE 2021 AUTOBODY NEWS / autobodynews.com
curtailed the output of the Cadillac XT4 and Chevy Malibu. Attaining greater profitability by way of reducing stockpiling, shunning volume sellers and focusing on models with fatter margins isn’t a new concept to Detroit’s Big Three. However, it wasn’t widely implemented due to pressure to keep factories open and chase sales numbers. But thanks to external pressure from the lack of supply, automakers have been forced to go down this route. The boost in profitability and share value will, no doubt, be hard to unsee. It’s not all good news for GM, though. Barra went on to say the semiconductor situation is likely to worsen before it gets better, and both Ford and Stellantis predicted supply delays will likely continue into 2022. GM also forecasts the chip shortage is likely to see $1.5 billion to $2 billion lost from this year’s profit. We thank CarScoops for reprint permission.
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Now is the Perfect Time to Sell or Trade Your Car: Kelley Blue Book If you have been considering selling or trading in your car anytime soon, now is the time to get serious. With low vehicle inventory on dealership lots, increased car-shopper demand and resulting high prices, the market conditions are prime for peak consumer profit for people selling their vehicle, according to Kelley Blue Book. Used-car prices are up 18% yearover-year, meaning a used car sitting in someone’s garage right now is currently worth on average nearly onefifth more than it was last year. Given the high-ticket prices of vehicles, that percentage can translate into quite a bit more cash lining a seller’s pockets. To view it another way, vehicles that were retaining 55% of their value a few months ago are fetching 60% to 65% of it now. The biggest factor contributing to the current market conditions is limited supply of used cars. According to data from vAuto, there are approximately 2.34 million used cars available in America today. That’s more than 530,000 fewer than just one year ago in 2020, and about 430,000 less than during the same period in a
more normal 2019. These circumstances point to a huge opportunity for people thinking about selling or trading in their current vehicle. “There has never been a much better time to sell or trade in your car than right now during this strong seller’s market,” said Matt DeLorenzo, senior managing editor for Kelley Blue Book. “Dealerships are seeking more used-car inventory, and prices are reaching sky high. If you’re in a position to sell, it’s a great time to command top dollar for your old car. And if you’re trading in your vehicle to purchase a new one, the increased value of your used car will help take some of the sting out of the higher price you’re likely to pay when purchasing a car in these market conditions.” Consumers who want to buy a car right now are facing some tough times. Prices are high, supply is low and the forces that could change these conditions are caught up in a perfect storm of complex factors. A worldwide microchip shortage has severely limited new-car production, and the COVID-19 pandemic has triggered many people to look
for an inexpensive car rather than use public transit for their daily commute. Dealerships have fewer used vehicles to offer right now, but people are still buying cars and the demand is growing. Increased vaccinations are leading to the world slowly reopening, and when combined with boosted disposable income from government stimulus programs designed to kickstart the economy, people are shopping for cars again in droves. “America may be slowly returning to some semblance of normal, but the car market isn’t,” said DeLorenzo. “This means that people’s prior car-shopping experiences will not be able to tell them exactly how to handle this market. If consumers are even able to find the vehicle they want right now, they need to be prepared and understand they’re likely going to pay more for it than they probably thought they would. “With demand high and supply low, manufacturers aren’t offering as many discounts as people are accustomed to seeing; without available incentives, dealerships aren’t able to negotiate as much. And we don’t expect this to change much anytime
soon—it’s going to be a lean market for quite some time.” Understanding what your car is worth when selling or trading in, and what you should expect to pay when you’re buying a new or used car, can ensure you get the most for your money in either situation. Before selling or trading in a used car, consumers should research the trusted Blue Book Value® of their vehicle. Prior to purchasing any new or used vehicle, experts recommend that car shoppers check out the Fair Purchase Price range for that specific model on KBB.com. Based on thousands of data points and updated weekly to factor in changing market conditions, Kelley Blue Book’s Fair Purchase Price helps people understand what they should realistically expect to pay for that particular vehicle in their local area. For more information about the timing of buying, selling and trading in cars given the current related market conditions, visit https://www.kbb. com/car-advice/is-now-the-time-tobuy-sell-or-trade-in-a-used-car/ Source: Kelley Blue Book
Why Tesla Hasn’t Been Affected by the Global Chip Shortage by Andrei Nedelea, Inside EVs
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The pandemic has had an effect on the microchip industry, and this has hindered the production of everything that requires them. It also drove up demand for some electronics, which further deepened the problem. Industries affected by the shortage included the automotive sector, but Tesla recently announced how it found a workaround that should allow it to be unaffected by the insufficient chip situation. Tesla was previously affected, and during the most recent earnings call, CEO Elon Musk compared the situation to wartime shortages. However, the manufacturer found a way around the problem by opting to use microcontrollers instead, and redesigning the software to be compatible with different chips from other supplies. “In Q1, we were able to navigate through global chip supply shortage issues in part by pivoting extremely quickly to new microcontrollers, while simultaneously
developing firmware for new chips made by new suppliers,” Tesla said. This has to be some kind of achievement: to design a new chip, find a new company to make it and modify the firmware in order to make everything compatible—all of this was done on the fly, without really stopping vehicle production. We’re pretty sure legacy automakers would not be very inclined to do something like this, even though this move allowed Tesla to bypass the shortage that affected pretty much every other major carmaker, causing delays. Tesla has proven yet again that it does not have to do things exactly like the traditional automakers that are often hindered by their size and inability to apply changes quickly. If the chip shortage persists, and there’s a good chance that it will affect the industry through 2021, this kind of mentality will keep giving Tesla an edge over OEMs. We thank Inside EVs for reprint permission.
autobodynews.com / JUNE 2021 AUTOBODY NEWS 61
Toyota Acquires Lyft’s Self-Driving Unit for More Than Half a Billion Dollars by Joey Klender, Teslarati
Toyota Motor Corporation will acquire Lyft’s self-driving unit, an announcement confirmed April 26. The cost of the deal is $550 million, and Toyota’s new Woven Planet division will handle the Japanese company’s automation ambitions. Lyft will receive $200 million in cash from Toyota up front, and the remaining $350 million of the deal will be paid over the next five years. “The transaction is also expected to remove $100 million of annualized non-GAAP operating expenses on a net basis—primarily from reduced R&D spend—which will accelerate Lyft’s path to Adjusted EBITDA profitability,” Lyft said in a press release. Toyota will not only acquire the self-driving unit, but the deal will also provide the automaker with Lyft’s 300 employees. “Not only will this transaction allow Lyft to focus on advancing our leading Autonomous platform and transportation network, this
partnership will help pull in our profitability timeline,” said John Zimmer, co-founder and president of Lyft. “Assuming the transaction
closes within the expected timeframe and the COVID recovery continues, we are confident that we can achieve Adjusted EBITDA profitability in the third quarter of this year.” Woven Planet Chief Executive James Kuffner told reporters April 27, “This is the first step of establishing and bringing together the people. Obviously, building technology and product requires people, and that’s much what this acquisition is about.” Kuffner is likely referencing the presence in Silicon Valley and London that Woven Planet will now have because of the acquisition. The partnership and could alleviate the issues that come with
the acquisition of a new company. Lyft’s advantages in the acquisition allow it to take a profit away from the development of self-driving technologies. Lyft hasn’t released its self-driving tech, which is aimed toward complete automation, known as Level 5 autonomy, but
it can give the rest of the tasks to Toyota while walking away with a hefty profit. Meanwhile, Toyota gains more experience and expertise in the self-driving sector through the acquisition. Toyota has Level 2 automation with advanced driver assistance tech. Level 2 describes “Partial Driving Automation” through Advanced Driver Assistance Systems.
“The vehicle can perform steering and acceleration. The human still monitors all tasks and can take control at any time,” according to Synopsys‘ breakdown of automation levels. Kuffner said Woven Planet will continue investing and growing its team but did not give any further details about acquisition plans or a timeline that would describe possible moves in the future. According to Reuters‘ coverage of the acquisition, Toyota will “likely make more deals, even if they do not ultimately lead to self-driving vehicles to ‘actively gather software and people who have knowledge.’” This is according to Seiji Sugiura, a senior analyst at Tokai Tokyo Research Institute. The transaction is expected to close in Q3 2021 and will be subjected to required regulatory approvals and other closing conditions. We thank Teslarati for reprint permission.
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