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Dan Risley Talks to Autobody News about ASA by Chasidy Sisk
Only a month after beginning work with the Automotive Service Association (ASA) as their Executive Vice President, collision industry veteran Dan Risley was offered the position of ASA Interim Executive Director. With 26 years of industry experience under his belt, Risley intends to offer his expertise to benefit ASA and the auto repair industry as a whole. He took time out to share his goals for ASA and his stance on several industry concerns with Autobody News readers. See Dan Risley Talks ASA, Page 30
GCIA 2013 Survey Results Shows Need for Higher Rates to Meet Labor & Material Costs
$42.88 and frame labor at $64.88. “I think this year’s survey continues to show the need for higher rates in the market to keep up with the rising expense of labor and material,” said GCIA Executive Director Howard Batchelor. “As I have expressed in the past, the survey is a tool that shops can use to negotiate the market rate. If a shop has DRPs, they can also use the survey to review their current rates with insurers and chose to participate or not. Because of the Most Favorite Nation program, if a shop offers a rate to another insurer, then they must offer to them. The one thing that shops can See Survey Results, Page 6
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The Georgia Collision Industry Association (GCIA) recently completed its 7th Annual Labor & Materials Rate Survey for metro Atlanta and Georgia. This year, 305 shops participated in eight regions. Results were tabulated by region and by annual gross sales. For example, 199 shops who grossed $1 million or less responded with a rate of $43.27 for body labor, $43.28 for paint labor, $62.65 for frame labor and $29.61 for P&M. In Region 7, which includes the cities of Macon and Warner Robbins, 101 shops responded their body labor rates were $42.92 with paint labor at
VOL. 4 ISSUE 5 JULY 2013
Federal Anticompetition Lawsuit Against GM Program Dismissed Again but Amended Complaint is Allowed A federal judge in Louisiana has again dismissed an aftermarket parts retailer’s lawsuit challenging GM’s ‘Bump the Competition’ program designed to boost sales of originalequipment parts at dealerships, but he gave the plaintiff, Felder’s Collision Parts Inc., permission to amend its complaint. The initial complaint, filed in October 2012, was dismissed in April 2013 by U.S. District Judge James Brady. The complaint said the program, which requires dealerships to ‘sell OEM parts below dealer cost,’ is a violation of the Sherman Act, the
Robinson-Patman Act (which prohibits anticompetitive pricing) as well as the Louisiana unfair trade practices and anti-trust laws. Court documents describe antitrust, monopoly, and predatory pricing concerns. Felder’s Collision alleges that GM and original-equipment parts distributors such as All Star Automotive Group engaged in illegal “predatory pricing” practices to undercut aftermarket prices and drive aftermarket competitors out of business. The suit alleges violations of federal and state antitrust and state consumer protec-
A Superior Court judge has ordered The Hartford Insurance Company to pay $20 million to Connecticut auto body shops for an unfair trade practice related to hourly labor rates for vehicle repairs. The judge’s recent decision for punitive damages is in addition to a jury award of nearly $15 million decided against the company in 2009. On Nov. 17, 2009, a jury hearing the case awarded $14.77 million to the auto body association, saying that the insurer engaged in a practice that resulted in a loss to the repair shops. Judge Alfred J. Jennings Jr. has now added $20 million in punitive damages in his ruling on June 5. The Auto Body Association of Connecticut alleged that The Hartford pressured its in-house appraisers to put artificially low labor rates in their appraisals. The jury found that the company’s practices regarding hourly rates paid for auto body repairs were unfair, and the judge said the company tried to cover up its conduct by instructing employees not to write anything down about labor rates in favor of off-the record conversations.
“The punitive damages award is intended not only to punish The Hartford for its unfair trade practices, including what the court cited as The Hartford’s intentional efforts to conceal its conduct from regulators and the public, but also to deter all insurance carriers in the market from engaging in the same unlawful conduct,” said David A. Slossberg, attorney for the Auto Body Association. Slossberg is with the firm Hurwitz, Sagarin, Slossberg & Knuff in Milford, CT. “The court has placed the entire industry on notice that forcing their appraisers to violate the code of ethics by writing estimates at unreasonably low labor rates must stop,” Slossberg said. Slossberg said he believes it’s the largest punitive damages award under the unfair trade practices law in state history. The insurance company is disappointed and plans to appeal, said The Hartford’s spokesman, Thomas Hambrick. The company contends its conduct was not improper. The case may apply to about 1,500 shops in Connecticut.
See Anticompetition Suit, Page 15
Judge Rules The Hartford Owes Connecticut Body Shops $20 Million For Unfair Labor Rate Practices
See CT Shops to get $20M, Page 32
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