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VOL. 4 ISSUE 6 AUGUST 2013
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State Lawmakers Around U.S. Consider Or Approve Legislation Affecting Body Shops by John Yoswick
Dozens of proposed laws that will have an impact on collision repairers get introduced in state capitols around the country every year. Paying attention to them—even if they aren’t up for consideration in your state now—can pay off because you may be interested in getting similar laws enacted in your state. Conversely, a bill you don’t like in another state could make its way to your Capitol, so it’s helpful to know what to watch for. Here’s a look at some of the bills that have recently been introduced, are
under consideration or have been passed by lawmakers around the country.
Parts-related legislation A New York bill (A 7234) (similar to one introduced in Maryland) takes aim at PartsTrader by prohibiting an insurer from requiring a shop to use a specific vendor or process for the procurement of parts or materials necessary for repair of a vehicle. Another New York bill (A 3872) introduced would require consumer notification and consent regarding the type of parts to be used in repairing See Legislation Affecting Shops, Page 8
ASA to Hold ASRW 2014 in Detroit Alongside I-CAR and CIC July 28–Aug 2 this week’s CIC meetings at the Westin Boston Waterfront. Speaking in front of the assembly, Risley said the move backs the ASA’s promise he relayed at CIC in April that NACE will see substantial changes in the coming years. Industry week will take place July 28–Aug. 2, 2014 at Detroit’s Cobo Center, and has the following preliminary schedule of events: Tuesday, July 29 – CIC Meeting & Reception Wednesday, July 30 – I–CAR Conference & Reception Thursday, July 31 – Collision ReSee ASRW 2014, Page 13
Change Service Requested P.O. BOX 1516, CARLSBAD, CA 92018
The Automotive Service Association (ASA) announced at the Collision Industry Conference (CIC) in Boston that the NACE expo will be moving away from its traditional fall event schedule to stage a summer show beginning in Detroit in 2014. NACE (the International Autobody Congress & Exposition), I– CAR (Inter–Industry Conference on Auto Collision Repair) and CIC (Collision Industry Conference) have announced the formation of Industry Week 2014, uniting several of the industry’s key events. The announcement was made by ASA Executive Director Dan Risley at the opening of
Bookkeeper Sentenced to Seven Years For Theft from Florida Body Shop Jennifer Vasseur could have gotten six months in jail, but when she couldn’t make restitution, she was given a seven-year prison sentence. As part of a plea deal, the 38-year-old Winter Haven woman had to repay more than $20,000 that she stole from A&E Auto Body in Eagle Lake, where she worked as a bookkeeper and secretary. The deadline was July 9. She was short about $15,000. Her punishment was up to Circuit Judge Catherine Combee to decide. She ordered Vasseur to serve seven years in prison followed by 10 years of probation. Vasseur was arrested in May 2011 after an investigation by the State Attorney’s Office in Bartow. She wrote unauthorized checks in her name, her husband’s name and to cash, according
to a complaint affidavit. Vasseur told investigators that she took the money to help pay bills, the affidavit states. In May, she pleaded guilty to grand theft and making false entries on the books of a corporation. During the hearing, Vasseur vowed to “pay back every single penny.” She asked for house arrest or probation. “I will pay the money back,” she said. “I’m not the person that I was.” Victoria Arrington, owner of A&E Auto Body, said she and her employees were supportive of Vasseur while she worked there for four years. She described many examples of assistance provided to Vasseur over the years: getting her a car, paying to turn her power on, giving her a computer, See Seven Year Sentence, Page 9
NC Body Shop Wins Short-Pay Arbitration Case Against Nationwide Insurance by Barrett Smith
Michael Bradshaw, vice president of operations for K&M Collision in Hickory, NC, was awarded claimed shortpays in a court-ordered arbitration. The binding arbitration was the result of Bradshaw filing a lawsuit on behalf of K&M Collision’s customer against Nationwide for the insurer’s underpayments of what were determined to be reasonable and necessary repair costs. In North Carolina, every lawsuit filed goes to binding arbitration, and only after same can either party then seek a trial if so inclined. The insurer’s short-pays included: labor rates ($48 body and refinish, $80 mechanical and $65 frame); procedures (i.e. sand and buff, final detail, road test, color tint and collision access time); invoiced paint and materials; sublet markup; fixture usage; and a $250 damage analysis fee which included a comprehensive part-by-part inspection of all components including
exterior panels, inner structure, mechanical components, and SRS and seat belt systems. The award also included storage charges at a rate of $50 per day for a total amount of $2,506.98 plus accrued interest until the insurer’s full payment is made. “I’m glad the courts recognized who the repair experts were,” says Bradshaw. “From the beginning, I was very confident we would succeed through our legal system in proving all our charges to be both reasonable and necessary. For any insurer to expect all shops to operate by the same rates, procedures and charges regardless of training, manufacturer certifications, equipment and facilities is ludicrous. The fact is we have made a commitment to repairing vehicles properly, adhering strictly to all manufacturer repair methods and guidelines, and what we’re consistently finding with some insurers is they care very little about manufacturer certifications and proper See Short-Pay Arbitration, Page 9
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2 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com
NATIONAL ABRA Auto Body & Glass of Clarksville Now I-CAR Gold . . . . . . . . . . . . . . . . . . 4 ASA Meets with Administration Re MFN Clauses . . . . . . . . . . . . . . . . . 14 ASA to Hold ASRW 2014 in Detroit Alongside I-CAR and CIC July 28–Aug 2 . . . . . . . . 1 ASRW Will Have Main Stage with Rotating Speakers . . . . . . . . . . . . . . . . . . . . . . . 13 AudaExplore Makes AudaVIN Available to Collision Shops . . . . . . . . . . . . . . . . 28 Body Shop Burn Camp Donor Recalls His Own Recent Burn. . . . . . . . . . . . . . 32 Body Shop Foreman in Las Vegas Charged with Shooting. . . . . . . . . . . . . 15 CAA Urges Shops To Monitor Insurer Compliance with New Aftermarket Parts Regulations . . . . . . . . . . . . . . . . 28 Caliber Completes Another Successful Food Drive . . . . . . . . . . . . . . . . . . . . . . 32 Car Thefts Up For First Time in Years,
our being able to properly serve our customers and our employees. Insurers have continued cutting their costs while our costs for labor, materials and overhead have steadily increased. The only way we could survive was to either concede to the underpayments and cut our quality of materials and labor…or push back. We found shortpay litigation necessary to stop the insurer’s practice of underpaying our customers and to enable us to provide the quality repairs that earn our customers (and their referrals) for life.” Schaech credited a free legal seminar in Florida hosted by Barrett Smith of Auto Damage Experts, Ray Gunder of Gunder’s Auto Center and Gunder’s attorney, Brent Geohagan, with motivating him and giving him the information he needed to take action. “That was a turning point for us. To hear Ray talk about how he knew that if he hadn’t done something he would be out of business struck a chord in me, and I knew then that I, too, needed to do something or we would lose our business,” Schaech said. “Ray gave much credit to his success in having a great support team in Barrett as his consultant and Brent as his legal counsel.”
Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Contributing Writers: Tom Franklin, Stefan Gesterkamp, John Yoswick, Janet Chaney, Toby Chess, Rich Evans, Ed Attanasio, Chasidy Sisk Advertising Sales: Joe Momber, Sean Hartman, Bill Doyle (800) 699-8251 Sales Assistant: Louise Tedesco Art Director: Rodolfo Garcia
COLUMNISTS Franklin: Still Using a Quota System For Consumer Sales?. . . . . . . . . . . . . . 14 Historical Snapshot: A Look Back at this Month in Collision News History . . . . . 34 Insider: Insurers Hate to Admit It, But Our Success Depends On You and Your Estimators. . . . . . . . . . . . . . . 18 Repairer-Only Rountable Airs the Issues Important to Repairers . . . . . . . . . . . . . 19 SCRS Board Meeting: Partial Panels, Labor Rates, SkillsUSA . . . . . . . . . . . . 24 Sisk: Auto Body Association of Connecticut Supports Members’ Concerns and Fights Unfair Legislation. . . . . . . . . . . . 37 Sisk: Executive Director Jillian Zywien Contributes Expertise in Public Relations to AASP/MA . . . . . . . . . . . . . 35
California Highest . . . . . . . . . . . . . . . . . 6 Carlisle and Company Blogs About PartsTrader . . . . . . . . . . . . . . . . . . . . . 16 Car-O-Liner Gets Honda Approval As Official Supplier . . . . . . . . . . . . . . . . . . 18 CARSTAR Adds Southern CA Location . . . 28 Chrysler Issues Recall on Air Bag Modules . 22 City of Lynn, MA, Orders Shops to ‘Clean Up’ During Code Enforcement Crackdown . 36 Collision Industry Makes Gains at SEMA Show . . . . . . . . . . . . . . . . . . . . 38 Demand is High and Growing for Auto Techs in Michigan . . . . . . . . . . . . 33 EPA Reduces Regulatory Burden of Wipe Use. . . . . . . . . . . . . . . . . . . . . . . 28 FIX Auto Relocates Headquarters to San Diego . . . . . . . . . . . . . . . . . . . . . . 34 Ford to Hire 3000 Salaried Workers in ‘13 . 22 Ford to Recall 13K Vehicles over Door Latches . . . . . . . . . . . . . . . . . . . 22 Future Looks Bright for U.S. Auto Industry, Hiring, Sales . . . . . . . . . . . . . . . . . . . . 23 GM and UTI Partner to Help Grow Supply of Auto Techs . . . . . . . . . . . . . . 22 GM to Recall Four 2012 Volts. . . . . . . . . . 22 Honda Reponds to Amended Class Action Complaint . . . . . . . . . . . . . . . . . 23 I-CAR Tech: OSHA Hazard Communication Standard Revision . . . . . . . . . . . . . . . . 30 Japan’s Diamond Electric to Pay $19M Price Fixing Fine. . . . . . . . . . . . . . . . . . 22 Japan’s Toray Buys Stake in Plasan Carbon Composites . . . . . . . . . . . . . . . 22 LA City Council Pays $4.2M to Owners of Shot-Up Truck . . . . . . . . . . . . . . . . . . 4 MB-USA Pays Out Another $260K in Long-Running WI Lemon Law Case as Legislature Hears Revised Law . . . . 33 MD Shop Owner Wins A Short-Pay Lawsuit vs GEICO . . . . . . . . . . . . . . . . . 3 NASCAR’s Carl Edwards Drives ‘Sweepstakes’ on Henry Ford’s 150th Birthday Celebration in Honor of Fords’s One and Only Race . . . . . . . 26 Nashville I-CAR Volunteers Raise $15K for CREF . . . . . . . . . . . . . . . . . . . . . . . . 6 Nissan Plans Major Reforms in Buying, Shipping, Building . . . . . . . . . . . . . . . . 22 NOLA Shop Owner Implicated in Cover-Up of Hit and Run, Fourth Suspect Sought . 36 OEMs, CARE, and AAIA Seek Solution to Right to Repair. . . . . . . . . . . . . . . . . 23 Oregon Body Shops Grade Insurance Companies . . . . . . . . . . . . . . . . . . . . . 29 Philly Officer Shoots Naked Man for Punching Out Cruiser. . . . . . . . . . . . . . . 6 Rearview Cameras Delayed . . . . . . . . . . . 22 RI Governor Signs Total Loss Bills . . . . . . 31 Risley Added to AMI Board . . . . . . . . . . . 28 State Lawmakers Around U.S. Consider Or Approve Legislation Affecting Body Shops . 1 Steve Belknap, Illinois Shop Owner, Restores 1947 Ford Pickup Found Roadside . . . . 26 VISA and Mastercard Owe About $7.25 Billion to Merchants Who Have Taken Cards Since 2004, Fairness Hearing on Sept. 12 Could Change Amount Owed . 15 Volvo: Six State Class Action Should Not Be Certified . . . . . . . . . . . . . . . . . . 23 Wisconsin Moves to Reform its Lemon Law Known for Excessive Awards . . . . 32 Your Driving Costs—AAA Study Finds Vehicle Ownership Costs are Rising . . . 38
A Maryland body shop owner has won a short-pay lawsuit he filed against GEICO on behalf of a customer. Mark Schaech, co-owner of Mark’s Body Shop of Baltimore, filed the suit against GEICO due to the insurer’s refusal to pay $392.95 in repair costs on behalf of its policyholder. The underpayments included: degreasing vehicle prior to repair; feather, prime and block repaired panels; clean vehicle for delivery; clear OBD fault codes; reset electronics (recorded settings); mask for primer; and overhaul door handle for refinishing. “We offer exceptional quality and service to our customers, and to continue to do so without being properly compensated is simply unreasonable and unsustainable,” said Schaech. “While my father (partner) and I would rather avoid having to take such legal actions, something had to be done as the insurer’s efforts to underpay our customers continued to increase. I felt like that guy in the movie Network where he stuck his head out the window and yelled, ‘I’m mad as hell and I’m not taking this anymore!’ “While Maryland does not allow the recovery of legal fees to the prevailing parties in such issues, we couldn’t allow that to be a deterrent in
REGIONAL Agents Applaud New MS Auto Insurance Verification . . . . . . . . . . . . . . . . . . . . . . 6 Amendment to NC Auto Insurance Bill Rekindles Industry Feud . . . . . . . . . 10 Atlanta I-CAR Committee: $23K for Educ. Foundation. . . . . . . . . . . . . . . . . . . . . . . 4 Auto Body Speed Shop’s Mall Location Stands Out. . . . . . . . . . . . . . . . . . . . . . . 4 Bookkeeper Sentenced to Seven Years For Theft from Florida Body Shop. . . . . . 1 Florida Pays Rewards For Tips on Insurance Fraud . . . . . . . . . . . . . . . . . . 10 Florida’s Rainy Summer is Taking Toll on Body Shops . . . . . . . . . . . . . . . . . . . 4 GEICO Loses PIP Dispute in Florida Supreme Court . . . . . . . . . . . . . . . . . . 10 Gerber’s Newnan, GA, Shop . . . . . . . . . . . 6 Honda’s Alabama Plant Gets $48M, 20-job Expansion. . . . . . . . . . . . . . . . . . 6 NC Body Shop Wins Short-Pay Arbitration Case Against Nationwide Insurance . . . . 1 NC Teenagers Given Second Chance by Fixing Cars at Southside Rides Fndn. . . 12 Nissan Will Add 900 Jobs for Rogues Built in Tennessee . . . . . . . . . . . . . . . . . 4 Shop Robber Caught Red-Handed, Another Bleeds, Runs . . . . . . . . . . . . . . 9 Toyota’s $150M Investment at Alabama Engine Plant . . . . . . . . . . . . . . 4 Weber Automotive’s SC Plant to Supply 84 New Jobs . . . . . . . . . . . . . . . 6
MD Shop Owner Wins A Short-Pay Lawsuit vs GEICO
Serving Florida, Georgia, Alabama, Mississippi and adjacent metro areas, Autobody News is a monthly publication for the auto body industry. Permission to reproduce in any form the material published in Autobody News must be obtained in writing from the publisher. ©2013 Adamantine Media LLC.
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AutoNation Chevrolet Coral Gables . 39
Kia Motors Wholesale Parts Dealers. 27
Car-Part Pro. . . . . . . . . . . . . . . . . . . 23
Malco. . . . . . . . . . . . . . . . . . . . . . . . . 9
BASF . . . . . . . . . . . . . . . . . . . . . . . . . 2 Certified Automotive Parts
Association (CAPA). . . . . . . . . . . 11
Landers Chrysler-Jeep-Dodge . . . . 10 Mercedes-Benz Wholesale Parts
Dealers . . . . . . . . . . . . . . . . . . . . 31
Classifieds. . . . . . . . . . . . . . . . . . . . 38
MOPAR Wholesale Parts Dealers . . 25
Equalizer Industries . . . . . . . . . . . . . 6
Nissan Wholesale Parts Dealers. . . 37
Don Reid Ford. . . . . . . . . . . . . . . . . . 8 Ford Wholesale Parts Dealers
FL, GA, AL, MS . . . . . . . . . . . . . . 29
Forklift Wrecker . . . . . . . . . . . . . . . . . 4
Garmat USA . . . . . . . . . . . . . . . . . . . 9 GM Wholesale Parts Dealers . . . . . 33
Gray-Daniels Auto Family . . . . . . . . . 5
Nalley BMW. . . . . . . . . . . . . . . . . . . 14
Porsche Wholesale Parts Dealers . 30 Preval Spray Gun . . . . . . . . . . . . . . 40 Rare Parts, Inc. . . . . . . . . . . . . . . . . 16 SEMA Trade Show . . . . . . . . . . . . . . 7 Sherwin-Williams Automotive
Finishes . . . . . . . . . . . . . . . . . 12, 13
Gus Machado Ford . . . . . . . . . . . . . 18
Southtowne Hyundai . . . . . . . . . . . 24
Dealers. . . . . . . . . . . . . . . . . . 20-21
Subaru Wholesale Parts Dealers . . 35
Honda-Acura Wholesale Parts
Hyundai Wholesale Parts Dealers . 28 Innovative Tools & Technologies, Inc . 17
Subaru of Gwinnett . . . . . . . . . . . . . 15
Tameron Hyundai . . . . . . . . . . . . . . 19
VIM Tools. . . . . . . . . . . . . . . . . . . . . 32
www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 3
ABRA Auto Body & Glass of Clarksville Now I-CAR Gold
Clarksville-based Wyatt-Johnson Automotive Group has announced that ABRA Auto Body and Glass of Clarksville has been awarded Gold level status from I-CAR, regarded as a leader in research, development and delivery of quality programs for the collision industry. To achieve ICAR Gold level status, a shop must first be platinum-certified with key people in place in structural and nonstructural areas as well as estimators and painters.
Nissan Will Add 900 Jobs for Rogues Built in Tennessee
Nissan is adding 900 jobs to start making the Rogue crossover SUV at its Tennessee plant. The announcement is in addition to 800 jobs added at the Smyrna plant last year, and will bring total employment at the suburban Nashville facility to more than 7,000. Hiring is already underway and Rogue production is scheduled to begin this fall. Building the Rogue in the United States for the first time is part of the Japanese automaker’s plan to have 85 percent of its domestic sales to be produced in North America. This month marks the 30th anniversary of Nissan producing vehicles in the U.S. The plant in Smyrna built its first pickup truck in June 1983. The plant also makes Nissan’s most popular car, the midsize Altima sedan, among other models.
LA City Council Pays $4.2M to Owners of Shot-Up Truck
The Los Angeles City Council has agreed to pay $4.2 million to two women whose truck was shot up by police during the manhunt for copturned-killer Christopher Dorner. The council voted 10-nothing to approve the claim settlement with 47-year-old Margie Carranza and her 71-year-old mother, Emma Hernandez. They earlier were granted $40,000 to replace their truck. The women were injured in February when Los Angeles police riddled their pickup with bullets as they delivered newspapers in Torrance. Police mistook the truck for one that Dorner reportedly was driving. Dorner, a disgruntled and fired LAPD officer, killed four people before he was cornered in a mountain cabin in San Bernardino County and eventually killed himself.
Atlanta I-CAR Committee: $23K for Educ. Foundation
At its fourth annual golf fundraiser, the Atlanta I-CAR Volunteer Committee raised more than $23,000 for the Collision Repair Education Foundation. The funds raised at this event will be reinvested back into Atlantaarea collision repair school programs and students through both grants and student scholarships. This sold-out event took place on May 1, 2013 at the Highlands Golf Course at Lake Arrowhead in Waleska, Georgia. Many corporate sponsors helped make this event possible, including: ABRA Auto Body and Glass; Akzo Nobel; Allstar Lights; Athens Dodge; AudaExplore, a Solera company; CCC Information Services; Cherokee Chrysler Dodge Jeep; Classic Collision; Day’s Chevrolet; Elite Auto Group; Enterprise Rent-a-Car; Gerber Collision & Glass; Hendrick Automotive Group; Hertz Corp.; IAAI; LKQ/Keystone; McDonough Used Auto Parts; Megel Chevrolet; Mitchell ACS; Nalley Group; PPG Automotive Coatings; RBX Holdings; Roswell Infiniti; SherwinWilliams Automotive Finishes; Sterling Autobody Collision; Troncalli Chrysler; Weaver’s Automotive; and World Toyota.
Florida’s Rainy Summer is Taking Toll on Body Shops
Florida’s rainy summer is starting to catch up to Bay area auto body shops according to local media reports. Workers at Elite Euro Cars Collision Services in Spring Hillin Hernando Cty, FL, are busier than ever, but the wet weather is putting them behind. Rain, heat and humidity are the culprits. With the summer rains in full force and then some, a side result is in increase in weatherrelated auto crashes, according to the Florida Highway Patrol. The agency is reporting almost an additional 200 crashes this year in Pinellas and Hillsborough counties compared to this time last year. That is keeping auto body shops busy. One of the more reported, rain-related crashes is rear-end collisions. Many shops say the constant rain and hot weather is hampering business. “The issues we have are the chemicals we use to repair the vehicles are all depended on low humidity,” said Jeff Turner, owner of Elite Collision. “The waterborne products and solvent-borne products we use, they both have to evaporate to dry.” Turner said he now has to rely on the costly practice of using indoor heaters when the rain picks up.
Auto Body Speed Shop’s Mall Location Stands Out
Auto Body Speed Shop (ABSS), a repair shop located in Jacksonville, Florida, is located in a high-end strip mall. ABSS uses its location in the site of a former Blockbuster video store to create a retail look and feel for its customers. The facility boasts floor-to-ceiling windows that allow customers, as well as window-shoppers, to see techs at work. For added transparency, the shop has a live camera on its shop floor so anyone on the website can see what is happening in the shop at any given moment in realtime. Another rare occurrence, wind spires, can be seen on the far side of the property. The three wind spires work in conjunction with rooftop solar panels to decrease utility costs for the shop. The visual uniqueness is
Auto Body Speed Shop’s Mall Location in Jacksonville, FL
sure to make them memorable to both customers and spectators alike.
Toyota’s $150M Investment at Alabama Engine Plant
Toyota said that it will invest an additional $200 million in its North American operations, including $150 million at its Huntsville engine plant, to boost machining capacity and parts production for V-6 engines. Once the project is complete in July 2015, total investment at the Huntsville plant will be $850 million. Total employment there will be 1,150 jobs, following the completion of a previously announced, $80 million V-6 engine assembly expansion that will add 125 jobs by early next year. This marks Toyota’s fifth significant investment announcement at the Huntsville plant since it opened a decade ago. State Sen. Paul Sanford, R-Huntsville, called Toyota’s latest investment an endorsement of Alabama’s workforce. “Toyota has been dedicated to the Huntsville community and we are extremely grateful for the positive impact they have had on our community and the state as a whole,” he said in a prepared statement. In addition to the new investment in Huntsville, Toyota also said today that it will spend $50 million and create 40 jobs at Bodine Aluminum in Troy, MO.
4 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com
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WWW.GRAYDANIELS.COM For All Your Collisions Part Needs www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 5
Gerber’s Newnan, GA, Shop
The Boyd Group Inc. has opened a rebranded collision repair center in Newnan, GA. The new repair center is approximately 30 miles southwest of Atlanta and is in one of the fastest growing cities in Georgia. The Boyd Group’s new 12,500-square-foot repair facility, previously known as Shenandoah Collision Center, will operate under the Gerber Collision & Glass trade name. The Boyd Group now operates 14 collision repair centers in Georgia, and 187 throughout 14 U.S. states.
Car Thefts Up For First Time in Years, California Highest
U.S. auto thefts probably rose in 2012 after eight straight years of declines as criminals took advantage of California’s budget cuts and reduced police forces, an insurance-industry group said. Thefts rose 1.3 percent last year from 715,373 in 2011, according to preliminary data released today by the National Insurance Crime Bureau. Thefts fell about 3 percent in 2011 from a year earlier to the lowest levels since at least 1967, the NICB said, citing data from the Federal Bureau of Investigation. “There were budget crunches in a lot of areas,” Frank Scafidi, a spokesman for the Des Plaines, Illinois-based NICB, said in a telephone interview. “There have been layoffs of police. There’s been less focus on non-violent crimes, because there’s been more focus, as there should be, on violent crimes and crimes against people.” Modesto, California, including Stanislaus County, placed No. 1 in the ranking of auto thefts per capita in 2012. Thefts in Modesto increased by 29 percent from 2011 to about 817 cars per 100,000 people, according to the NICB.
Philly Officer Shoots Naked Man for Punching Out Cruiser
A naked man who went on a rampage was shot by a police officer and seriously wounded in North Philadelphia after punching out the windshield of a squad car, police said. About 5 a.m., an officer noticed the man near 22d Street and Allegheny Avenue “acting in a very unstable and violent manner,” police spokesman Lt. John Stanford said. The man then approached the first officer's car, slamming his hands on the driver's-side door before he punched that car’s windshield, shattering the glass.
Weber Automotive’s SC Plant to Supply 84 New Jobs
Weber Automotive, a maker of vehicle components, will establish its new manufacturing operations in Charleston County. The more than $51 million investment is expected to generate 84 new jobs over the next four years. “We are thrilled about setting up new operations here in North Charleston. South Carolina offers us an excellent business environment and a talented workforce in a region that is growing as an automotive hub. We appreciate all the support we’ve received from state and local officials,” said Daniel Weber, chief financial officer and chief officer of sales for Weber Automotive. Weber Automotive is establishing a new automotive parts manufacturing facility in the Palmetto Commerce Park. The new facility will make drive train components, and is expected to begin operations in 2015. “Weber Automotive’s decision to locate new manufacturing operations in South Carolina is another sign that companies realize South Carolina is the new ‘it’ state for business. Today’s announcement brings more than $51 million and 84 new jobs to North Charleston, and we look forward to Weber Automotive’s future growth here,” said Gov. Nikki Haley.
Honda’s Alabama Plant Gets $48M, 20-job Expansion
The Honda auto plant in Lincoln is expanding again, this time with a $48.4 million project that will create 20 jobs. The Talladega County Commission tonight approved sales and use tax abatements for the project. It is related to the production of direct injection engines and Honda’s “Earth Dreams Technology,” which is designed to increase fuel efficiency and reduce emissions of the V-6 engines produced at the plant. The plant will begin making its own heads instead of getting them from another Honda facility. Construction, equipment installation and testing are expected to be complete in 2014. The jobs will be in the engine plant. “The additional jobs and significant financial investment in our Lincoln facility will offer improved efficiency in costs, quality and delivery for our Alabama manufacturing operations,” said Ted Pratt, spokesman for the Lincoln plant. This is the latest in a string of expansion projects for the 4,000worker facility. Over the past two years, Honda has spent nearly $400 million and added about 400 jobs there.
6 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com
Agents Applaud New MS Auto Insurance Verification
The days of police depending on an insurance card to see if you are driving legally are on the way out. A new verification system will go online next year. One in every three drivers doesn’t have liability insurance something they are required to have by state law. Insurance agents say many drivers have found ways to maneuver around Mississippi’s mandatory auto liability insurance law. “What you find is some consumers try to game the system. They know that there’s a law that says you’ve got to have insurance,” said Angelyn Treutel, South Group Insurance Services President. “So they go in and they make a down payment on the policy. They don’t make any other payments, so their policy has been expired. It’s been canceled, but they have a piece of paper that makes it look as though they still have a policy when, in fact, they have no coverage whatsoever.” To make determining who is driving legally easier to track, the Mississippi Insurance Commissioner is encouraging insurers to sell policies of at least 90 days and not month to month. Treutel said for many customers, that’s not financially feasible.
Nashville I-CAR Volunteers Raise $15K for CREF
The Nashville I-CAR Volunteer Committee recently raised more than $15,000 for the Collision Repair Education Foundation during the group’s annual golf fundraiser in Mount Juliet, TN. The funds raised at the outing will be reinvested back into collision school programs and students in the Nashville area through grants and student scholarships from the Collision Repair Education Foundation. The event took place on May 15, 2013 at the Windtree Golf Club. The 100 participating golfers enjoyed lunch, a round of golf, snacks and beverages on the course, and dinner. They also had the opportunity to partake in a putting contest, closest-tothe-pin contest, and raffle drawing. Instructors and students from local collision schools were also in attendance and got the chance to speak with the donors who support their school. Many industry volunteers and corporate sponsors helped make this event possible. Inter-industry organizations and individuals who are interested in supporting the Education Foundation should contact Brandon Eckenrode at Brandon.Eckenrode@ed-foundation.org or 847-4635244.
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Legislation Affecting Shops their vehicle, and would prohibit the use of anything other than new OEM parts for vehicles less than three years old. A similar bill (HB 362) in Vermont would place a 2-year ban on the insurer-use of the parts on new cars. New regulations that will go into effect in California early next year place significant new limitations on the use of non-OEM parts in that state. The California Department of Insurance finalized regulations this year requiring insurers to pay for the costs to remove, replace and return a defective or non-compliant part; to cease the use of any part known to be non-compliant and to notify the distributor within 30 days; and to pay for repairs based on “accepted trade standards” set by shops licensed by the California Bureau of Automotive Repair. Insurer groups have indicated they may challenge the new regulations, which they say are unnecessary and thwart their ability to negotiate “the most effective, less costly repair,” nor do anything but “pay whatever auto repair shops demand.” Eileen Sottile, vice president of governmental affairs at LKQ Corporation, told non-OEM parts distributors at their convention earlier this year that it’s unclear whether the regulation will have a significant impact on insurers’ use of non-OEM parts in California. She said LKQ is reviewing legal analysis related to a possible suit against the regulator. Such a suit, she said, could challenge the Commissioner’s authority to promulgate the rule, or could be based on the rule’s impact if “we see it has damaged our ability to compete.” Other options, she said, could be to address the issue through legislation, or to do nothing “if we see there truly is no market impact.”
Rates are focus of some bills Nevada lawmakers have approved a bill (SB 170) capping daily storage fees charged by shops at 1.5 times the prevailing storage rate determined by state survey; the new law also sets limits on when storage fees can be charged. After three attempts over the last six years to get legislation related to labor rates passed by Massachusetts lawmakers, a fourth such bill (H 969) has been introduced for the 2013-14 legislative session. The bill has evolved
over the years, and now if passed would establish a labor rate in Massachusetts based on data from an independent study of the average labor rate of five other Northeastern states.
Airbags under scrutiny The National Highway Traffic Safety Administration’s warning last fall to consumers to avoid counterfeit airbag replacements seems to have resurfaced the topic of airbags among some state lawmakers. The New Mexico House unanimously passed a bill (H 118) that would prohibit the manufacturing, sale or installation of a counterfeit or substandard airbags. It would also prohibit selling or installing a device that causes the vehicle diagnostic system to inaccurately indicate that the airbag is functional when a counterfeit airbag is installed. Similar bills have been approved by lawmakers in New York and Connecticut, and by the House in Ohio. Also in New York, a bill (S 3779) would place significant new restrictions on anyone selling or installing a recycled airbag. The seller or installer, for example would be required to maintain records including the airbag identification number, the VIN of the vehicle from which it was removed, the name and address of the purchaser, and the VIN of the vehicle in which it was installed. Other proposals, new laws Bills in other states tackle a variety of topics impacting the industry. Some states have established a damage value threshold at which a vehicle must be declared a total loss. But previously nothing prohibited an insurer from totaling a vehicle below that threshold. The Rhode Island legislature, however, has approving a bill (HB 5263) prohibiting an insurer in that state from declaring a vehicle a total loss if the cost to repair is less than 75 percent of the vehicle’s preaccident value, unless the vehicle owner provides written authorization to do so. Texas Gov. Rick Perry in June signed a new law (HB 500) that allows independent repair shops to be taxed at the same rate as dealerships, parts stores and tire stores; previously shops operated by dealerships were taxed at a significantly lower rate because these businesses were classified as “retail” businesses. A new North Carolina law (HB 247) signed by Gov. Pat McCrory,
8 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com
deals only with health insurance but does ban insurer’s use of “most-favored nation” clauses (such as the one in State Farm uses to require the best rates and discounts that its Select Service shops offer any other insurer) when contracting with health care providers. The Automotive Service Association (ASA) in June wrote to a New Jersey Assembly committee, opposing proposed “Right to Repair” legislation (AB 352), saying that it puts at risk ASA’s agreement with automakers that “already provides independent repairers access to service, tool and training information.” Aaron Lowe, vice president of government affairs for the Automotive Aftermarket Industry Association (AAIA), told the committee his group supports the legislation, but also urged lawmakers to hold off further action on the bill while his group is in “negotiations with the vehicle manufacturers regarding a national agreement on Right to Repair.” Similar Right to Repair bills have been introduced in Maine and New York this year. Connecticut Gov. Dannel Malloy has signed a new law (effective January 1) designed to reduce insurer steering of glass claims; under the new law,
insurers (or third-party claims administrators) must disclose to insured’s during their initial contact that, “You have the right to choose a licensed glass shop where the damage to your motor vehicle will be repaired. If you have a preference, please let us know.” And under a new law (SB 86) that went into effect this past December and designed to combat chop shops, Pennsylvania shops must photocopy the ID of anyone towing or selling a vehicle or major component; the law, requires that photocopy (along with the name and license number of the towing company) must be maintained for three years, and law enforcement agencies have the right to inspect body shops or other automotive businesses (to look for stolen vehicles or parts) any time work is being performed. John Yoswick, a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). He can be contacted by email at: jyoswick@SpiritOne.com.
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Seven Year Sentence providing her extra money to eat at restaurants on the weekend, paying for her cellphone, purchasing massages for her, helping with preparations for her wedding, offering to pay for her to continue her education and sending Vasseur’s daughter to a theater camp. Continued from Cover
Short-Pay Arbitration repairs and only about bottom-line cost and the cheapest repairs possible. My father (the CEO) and I decided if we were going to stay in business and continue to repair vehicles properly, we could no longer accept insurer-dictated repair costs. We found that short-pay litigation was necessary to stop insurer underpayments and provide our customers with the factory-certified repairs their policy affords them.” Bradshaw credited Erica Eversman, Ray Gunder, Barrett Smith and many other industry experts as well as his legal team of Jason A. Orndoff and William E. Mor-
Vasseur’s theft was painful, but the business was able to carry on, she said. “We didn’t lose faith in people though,” Arrington said. “We still hire people, and we still trust them. We could have been cynical, but we believe that people are good.” Prosecutors asked for a five-year prison sentence. The judge went higher, noting Vasseur’s past criminal history. Vasseur said she didn’t know that gan for his legal victory. “I hope our actions and results encourage other quality-minded repairers to seek similar actions against the less-than-ethical insurers,” said Bradshaw. “We learned a great deal in this initial case, and I have had to embark on two more cases against Nationwide for short-pays in the amounts of $5,663.24 and $10,135.52. I’m confident we will prevail as I know we are in the right. I know such actions are necessary to stop such behavior and to best serve our community members, our employees and our company. We’ll continue to share our efforts with others so they may know that they no longer have to accept insurer dictation of repairs, rates, materials and charges.”
her plea deal exposed her to a sevenyear prison sentence, or she wouldn’t have signed it. She thought the most
that she faced was 15 months in prison. Vasseur was also ordered to pay $20,729 in restitution.
Shop Robber Caught Red-Handed, Another Bleeds, Runs
A 49-yr old man is under arrest after surveillance cameras caught him stuck in a fence while trying to escape from Reynolds Auto Body Shop on Cervantes Street in Pensacola, FL on July 8. Weatherspoon was trying to steal items stored out back of the shop, including “two space heaters that were in the scrap pile going to the scrap yard, and a ten-year old radar detector,” said Daniel Williams at Reynolds Auto Repair. But as Weatherspoon tried to make a quick getaway and jump the fence, he got stuck just as police arrived. “Luckily he wasn’t smarter than a fence. He was caught on the fence, and when PPD got him, he had his leg up, caught in the act, [literally] red-handed,” said Williams. Police say Weatherspoon also had marijuana on him when he was arrested. The hapless Weatherspoon wasn’t the only would-be thief trying to steal from local auto repair shops that night. John Denman Owner of Discount Mufflers reported a break in at his location. “It didn’t sound like they were really on top of their game
there,” said Denman. He has owned Discount Mufflers for 20 years and said that, while his auto repair shop has been broken into before, this latest criminal is in a class of his own. “They hurt themselves real good in the process because we had blood all over the floor and all over the cars and stuff” Mechanics spent the morning replacing windows the suspect broke while trying to access the shop. Denman believes the suspect actually broke in twice because he moved a tool box in front of the broken window the first time... Only for it to be knocked down again hours later. And apparently it wasn’t money the suspect was after. Rather, it was gas. “There were some wrenches on the floor where they had came back into the building, and at that time they got the extension cord and the drill,” he said. Denman believes the suspect tried to drill into the gas lines of cars at the shop. But unfortunately for the suspect, the drill was broken leaving him empty-handed. Police are still looking for the suspect in the Discount Mufflers break-in.
www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 9
Amendment to NC Auto Insurance Bill Rekindles Industry Feud The internal feud among North Carolina’s insurance carriers over the way the state regulates auto insurance rates continues to bubble up in the halls and back rooms of the state legislature. FAIR NC, a coalition of insurance companies that this spring failed to win passage of a bill that would have remade the state’s regulatory system, hasn’t given up the fight. Now the coalition, which includes such companies as State Farm, Allstate and Geico, is seeking to amend a heretofore noncontroversial auto insurance bill that was unanimously approved by the Senate in April. SB 180 would make it easier for individual auto insurers to offer special discount programs to North Carolina motorists. The proposed amendment to the bill, which is now before the House Commerce Committee, has drawn cries of protest from Nationwide Insurance – which led a second group of insurers opposed to FAIR NC’s bill – and Insurance Commissioner Wayne Goodwin. In addition to opposing the proposal itself, Nationwide and Goodwin are complaining that FAIR NC is distributing information to legislators that
characterizes the proposal as a “compromise” that “includes proposals supported by the Insurance Commissioner and Nationwide.” “I’m at best puzzled,” Goodwin said. “I’m at worst angry in that the proposed amendment purports to be a compromise that I signed off on.” Susan Valauri, a lobbyist for Nationwide, complained in a letter to members of the House Commerce Committee: “To suggest their amendment is a ‘compromise’ implies negotiation between parties. That has not occurred. It is also incorrect to assert that Nationwide supports proposals in the amendment.” Goodwin called the proposed amendment “another attempt by outof-state companies to change the system for their own benefit.” The proposal that he has seen, Goodwin said, is even worse than the bill that FAIR NC backed this spring. Both measures called for permitting individual insurance companies to opt out of the current system in which the state-created N.C. Rate Bureau submits an overall rate request for all insurers that needs the insurance commissioner’s approval. The former bill enabled companies to pretty much set their own rates
GEICO Loses PIP Dispute in Florida Supreme Court
Adivided Florida Supreme Court has ruled that Geico Corp. could not require a woman to give a statement under oath as a condition of receiving injury benefits after an auto accident. The 5-2 ruling concluded that Florida’s personal-injury-protection insurance laws did not allow the insurer to place such a requirement on plaintiff Merly Nunez and other people like her, calling it “unreasonable and unnecessary.” The majority pointed out that a primary goal of PIP, or no-fault, insurance coverage is to resolve injury claims quickly. The ruling, written by Justice James E.C. Perry, said the Nunez case and other examples show that enforcing such conditions “clearly can and do cause delay and denial of benefits in contravention of the purpose of the PIP statute.” Joining Perry in the opinion were justices Jorge Labarga, R. Fred Lewis, Barbara Pariente and Peggy Quince. The dissenters were Chief Justice Ricky Polston and Justice Charles Canady, who wrote that state law allowed insurers to include such a requirement—known in the industry as an “examination under oath”— in PIP policies. Canady also referred
to insurance-industry arguments that such statements under oath help prevent fraud. “The right to a ‘swift and virtually automatic’ recovery of benefits is a right properly enjoyed by those who in fact meet the legal requirements for the receipt of benefits and comply with the legal obligations of an insured,” Canady wrote. “The EUO [examination under oath] provision of the policy is simply designed to ensure that the ‘swift and virtually automatic’ payment of benefits is made only to those who are entitled to those benefits under the law.” Florida lawmakers in 2012 revamped the state’s PIP laws and specifically included a provision that customers’ auto policies could require examinations under oath. But the Supreme Court majority said that change does not apply to cases that arose before the new laws took effect on Jan. 1 of this year.
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as long as the aggregated annual increase was less than 12 percent. But the new amendment would enable insurers to obtain “unlimited increases as often as they want” that the insurance commissioner would be powerless to stop, Goodwin said. Under the proposal, he continued, insurers would be able to use national data, rather than North Carolina-specific data, to justify their rate hikes. That would in effect guarantee that he couldn’t prove the rate hike was excessive and overturn it, Goodwin said. “North Carolina has the lowest rates in the Southeast,” Goodwin said. “National data would most certainly drive rates up.” The coalition led by Nationwide also argues that the amendment would “cripple” the commissioner’s ability to control rates. Bob Rosser, a spokesman for FAIR NC, insisted that nothing in the amendment would undercut Goodwin’s authority to regulate rates. “There is no chance of rates going down or up without his approving them,” Rosser said. Rosser also said that the proposal was designed to placate critics of the legislation that the House rejected in the spring.
Florida Pays Rewards For Tips on Insurance Fraud
Rewards totaling $35,000 were given to four Floridians who provided key information that led to arrests and convictions in several major insurance fraud cases, according to an announcement by Florida Chief Financial Officer Jeff Atwater. The tipsters helped uncover almost $3.7 million in fraudulent financial activity leading to 17 convictions. Rewards issued include: ● $20,000 to a Ft. Myers individual whose assistance led to the conviction of 12 individuals in a personal injury protection (PIP) fraud ring and the closure of 12 unlicensed accident clinics with $3 million in potential insurance fraud losses. ● $10,000 to a St. Petersburg individual whose assistance led to the conviction of an annuity scammer who defrauded nine elderly victims out of more than $580,000. ● $5,000 divided between two Tampa individuals whose assistance led to the conviction of four PIP fraudsters and the closing of a PIP accident clinic. These cases were investigated by the Division of Insurance Fraud, the law enforcement arm of the Department of Financial Services responsible for investigating all insurance fraud in Florida.
www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 11
NC Teenagers Given Second Chance by Fixing Cars at Southside Rides Fndn by Meghann Evans, Winston-Salem Journal
On many weekday mornings Dave Moore can be found teaching lessons about life and cars to his latest group of students at his Winston-Salem auto body repair shop.
David Moore, head of SouthSide Rides Foundation, poses in his office on Hope Street on July 5, 2013, in Winston-Salem, N.C. For several years, Moore has opened his shop up to those in need of a second chance. Young men and women pass through his garage throughout the year as he works with the court system to get them community service hours and auto-body repair training or access to other career training opportunities. He even offers customized training at his body shop through a Forsyth Technical Community College program. Photo: Winston-Salem Journal, Melissa Melvin-Rodriguez
The teens, ranging in age from 14 to 19 years old, spend three mornings a week at Southside Rides as part of the Reclaiming Futures Juvenile Drug Court Program overseen by CenterPoint Human Services and Insight Human Services. The program offers substance abuse services to youth entering the court system, which includes special summer activities to keep them focused. Southside is one of the sites offering summer training, and though the program is new, it is not unfamiliar territory for Moore. For several years now, Moore— the founder of Southside Rides Foundation—has opened his shop up to those in need of a second chance. Young men and women pass through his garage throughout the year as he works with the court system to get them community service hours and auto-body repair training or access to other career training opportunities. He even offers customized training at the shop through a Forsyth Technical Community College program. Six teens are participating in the summer program at Southside Rides. Moore said the program has been a success so far, but now he is encouraging the community to get involved.
Moore is asking community members to bring their cars by the shop to let the teens wash them. A $5 or $10 donation will go toward a stipend Moore will disburse at the end of each week for the students to spend on items such as clothes or school supplies in preparation for the fall. But Moore also sees it as a way to engage his students with the community. As they wash people’s cars, Moore hopes they can chat with folks and make positive connections. He is also encouraging police officers to stop by and meet the teens to “bridge the gap.” The teens can be found near the shop on Hope Street from 9 a.m. to noon Monday, Wednesday and Friday. They begin their sessions with an hour of exercise at the nearby Better Body Training Facility. The owner is Henry Gray, who has a law enforcement career spanning 28 years. One of their trainers is Derrell Springs, a former gang member who has turned his life around. Springs said, “I needed a chance. If I can change, they can change.” After spending time at the gym, the teens come back to the shop for a class about auto body work and detailing.
“Now I’ve got a skill and a trade,” said Williams. Williams said he never envisioned himself attending college, but
Bryant Williams, left,, with help from Chris Edwards, wet-sands a run in the clear coat after painting his mother’s car at SouthSide Rides on Friday, July 5, 2013, in WinstonSalem, N.C. Williams was released from prison in December 2010, and by the following March, started Dave Moore’s program at SouthSide Rides. Currently Williams is enrolled at Forsyth Tech and is working on a degree in collision repair and refinishing. Photo: Winston-Salem Journal, Melissa Melvin Rodriguez
thanks to what he learned at Southside, he is now a student at Forsyth Tech working on his degree in collision repair and refinishing. He said of Southside: “It gives you a lot of doors to open up. It’s up to
you. Are you gonna turn the knob or not?” Jermeka Fulton speaks with young women at the garage about her life story. She tells of how she got in trouble at age 19 and spent several years in prison. Now she has been home for eight months and has a job, a car and her son back. Fulton talks about how she could have given up but she didn’t, and she praises the encouragement Moore provides. The summer program will continue until Aug. 10, when Moore plans to have a car show fundraiser and a graduation ceremony for the students. But his work will not end there. For Moore, the work to change lives is never done. For more information, visit: www.southsideridesfoundation.org.
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2013 Third Quarter Training Schedule
Dominic Moore, Bryant Williams, Tacayla Edwards, and Boris Miller watch as Chris Edwards buffs a car at SouthSide Rides on Friday, July 5, 2013, in Winston-Salem, N.C. Photo: Winston-Salem Journal, Melissa Melvin Rodriguez
“I think the world of Dave and his program,” said Kathi Perkins, system of care coordinator for CenterPoint and Reclaiming Futures treatment fellow. “I think the community really benefits from someone like him in the community and doing the type of work that he does.” Bryant Williams is a testament to Moore’s training. He was fresh from prison when he began participating in a Southside program in March 2011. With his criminal record, Williams had a hard time finding a job.
12 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com
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ASRW 2014 pair Education Foundation Golf Outing Thursday & Friday, July 31–Aug. 1 – NACE Education & Expo Saturday, Aug. 2 – Education & Hosted Industry Tours “Co-locating NACE with the ICAR and CIC conferences in July and creating Industry Week represents the beginning of a new era for our industry, and this is extremely exciting. Professionals in the industry can now truly take ONE week and participate in all the meetings they need involving the industry’s most influential individuals and organizations, attend all
the conferences, walk the show, network, and receive the education critical to their business success,” said Risley. “Beyond the events already mentioned, there will be innumerable opportunities for attendees and exhibitors because it’s located in Detroit, the heart of the automotive industry. Additional announcements will be forthcoming in the ensuing months but suffice it to say, if you are a ‘car person’ you will not leave the city disappointed.” John Van Alstyne, I-CAR CEO & President, shared his enthusiasm, “Industry Week is an opportunity to bring more of the industry together and simplify coordination of scheduling for all events, which we believe will be valued by the industry.” He
added, “Industry Week will present attendees with excellent educational, knowledge–building, and networking opportunities; and I-CAR’s longstanding July Conference, which has been aligned with CIC for many years, will remain an independent event that will now take place under the new umbrella of Industry Week. Additionally, the annual fund–raiser for the Collision Repair Education Foundation will continue to be held the same week, offering a fantastic social networking opportunity while raising money for a great cause that helps us to sustain the future of our industry.” “The Collision Industry Conference looks forward to meeting during this time when all groups come to-
gether,“ stated Jeff Hendler, Founder, Collision Industry Conference. “The more often that all entities attempt to share the calendar with the varying functions of meetings, educations, trade displays, and networking opportunities, the better it is for those who attend. Everyone and every entity stands to benefit.” “The Collision Industry Conference looks forward to building upon our longtime alignment with I–CAR to welcome ASA into the fold and offer our collision industry stakeholders the opportunity to attain even more industry knowledge, make even more valuable industry connections, and conduct even more business,” said George Avery, CIC Chairman. “Better yet, Industry Week lets them do it all in one week, under one roof, and in the heart of the Motor City to enable everyone to maximize their time and travel.” Additional details on each event taking place during Industry Week 2014 will be released by each organization in the coming months. Hotel details will be available in the near future. More information will soon be available at http://www.naceexpo .com, http://www.i-car.com, and http://www.cic.com.
ASRW Will Have Main Stage with Rotating Speakers
ASRW 2013 will have a brand new area on the show floor called the ASRW Main Stage. Located prominently on the expo floor, the ASRW Main Stage will showcase a different industry speaker every hour during show hours. ASRW will take place Thursday and Friday, Oct. 1718, with education beginning Wednesday, Oct. 16, at the Mandalay Bay Convention Center in Las Vegas. A total of 12 speakers will comprise the ASRW Main Stage, with six speakers on Thursday and six speakers on Friday. The ASRW Main Stage presentations will take place each hour between 10 a.m. and 3 p.m. “The powerful slate of speakers and topics planned for the ASRW Main Stage make it the first of its kind,” stated Dan Risley, ASA executive director. “Attendees won’t find these speakers in one place at any other event.” Seating will be on a first-come, first-served basis as tickets/registration will not be required. Additional details, including the full schedule of ASRW Main Stage speakers and topics, will be announced in coming weeks.
www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 13
On Creative Marketing with Thomas Franklin
Tom Franklin has been a sales and marketing consultant for fifty years. He has written numerous books and provides marketing solutions and services for many businesses. He can be reached at (323) 871-6862 or at email@example.com. See Tom’s columns at www.autobodynews.com under Columnists > Franklin
Still Using a Quota System For Consumer Sales? I was surprised recently to learn of a shop that still uses sales quotas. As a professional in marketing and sales, I am very familiar with quotas, and the pros and cons of the practice. It’s likely that the various sales reps that call on collision repair shops, selling everything from computer systems, estimating software and spray booths to frame machines, are expected to meet sales quotas. It’s also likely that at the end of the month when a rep is still way under his or her quota that some drastic measures will be taken to force yet one or two more sales. That’s just the nature of using a sales quota system. But I had to ask what a collision shop sales person could do to close more business for the shop at the end of the month? Earlier in the month he or she could have gotten on the phone and called prior customers, or placed more follow-up calls to prospects who brought in their vehicle and didn’t leave it to be repaired. Or when the shop has dealership connections, the sales rep could push hard on the dealership service drive for collision work. But at the end of the month, the story would only be told with closed tickets. What could he or she do to push that up to meet a quota? I talked to one rep who said the game begins when a customer brings in a car to be repaired. The aggressive rep on quota barely waits until the cus-
tomer is out the door before he or she is on the phone to the customer’s insurance company to get an adjuster out to look at the car. If the company says five days, he or she immediately contacts the customer to call and push his or her insurance company to get out to see the car in three days or less. The rep also pushes for a quick teardown to expedite the parts orders and avoid supplements. If the end of the month is coming quickly and some of that rep’s vehicles have still not been completed and closed out, the rush is on to find out why not. Delayed delivery of parts is a hard problem to overcome, but supplements are a different story. I was surprised to learn that a shop owner willing to work with this kind of quota pressure would permit a rep to go the customer to approve a supplement if the insurance company is holding back on it. When the job is completed if the insurance company hasn’t paid for the supplement, the customer will get the bill. Now the aggressive rep has to convince the customer that he or she will be able to collect back from the insurance company eventually. So here we arrive at why few shops allow this kind of last minute quota pushing. A customer who is pushed to authorize supplements and collect back from his or her insurance company may not choose to use this shop again. It was obvious this shop
ASA Meets with Administration Re MFN Clauses
Automotive Service Association (ASA) leaders recently gathered in Washington, D.C., to meet with administration and Capitol Hill officials to discuss Most Favored Nation clauses contained in some direct repair program (DRP) agreements with insurance companies. ASA wrote administration officials in 2012 asking that they also consider the impact of MFN clauses on parties involved in property and casualty insurance. Testimony by administration officials on Capitol Hill to date have reflected more interest in health insurance agreements. ASA maintains that the anti-competitive nature of the clauses puts both consumers and collision shops at a disadvantage. In 2010, the U.S. Department of Justice filed a suit against Blue Cross Blue Shield of
Michigan regarding the use of MFN clauses. In 2012, the commissioner of the Office of Financial and Insurance Regulation of Michigan issued an order, which prohibited the use and enforcement of any MFN clause in a health insurer provider contract that has not been previously reviewed and approved by the commissioner. The Michigan legislature followed with a ban on MFN clauses in health insurer contracts. The North Carolina legislature approved House Bill 247, a bill that restricts MFN use by allowing health providers and health insurers to freely negotiate reimbursement rates by prohibiting contract provisions that restrict rate negotiations. The bill has been signed into law and will become effective Oct. 1, 2013.
14 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com
an aggressive sales type will thrive on it and draw on a depth of ingenuity to bring in or close business that otherwise could have slipped away. After this conversation about quotas, I asked a few other shop people whether or not they used quotas in their shops. No one else I spoke to used them, but there was often a greater emphasis on targets and team closing. It seemed to me that individual quotas could be difficult to manage in most collision shops, but given the new emphasis on lean processes and team production, I think there is definitely a place for some sort of target or quota system. At first glance this might not seem applicable to a small, independent shop but perhaps that’s where it may be needed most to “light a fire” under sometimes complacent estimators and owners who now have to compete in a much more ruthless collision repair marketplace.
owner put the highest value on quotas and profits, while another might do everything possible to not irritate a customer. I could see that this shop is highly profitable and capable of bringing in plenty of jobs without worrying about retaining every customer in the long run. I could also see why many shop owners would shy away from using quotas, but might there be a way to do it without irritating and possibly losing customers? A long history of successful companies using sales quotas says they serve an important purpose. Sales reps are strongly motivated by sales contests, sales bonuses, commissions and more. Even the mention of quotas when hiring a rep will tell an owner whether or not this person can work with that kind of pressure. Many cannot and it’s best to determine this as soon as possible. The pressure of having to meet a quota will probably drive a laid-back employee crazy but
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VISA and Mastercard Owe About $7.25 Billion to Merchants Who Have Taken Cards Since 2004, Fairness Hearing on Sept. 12 Could Change Amount Owed the Eastern District of New York, represents two separate classes in the settlement. Members qualifying in the first class, “which includes all persons, businesses, and other entities that accepted any Visa or MasterCard cards in the U.S. at any time from January 1, 2004, to November 28, 2012,” according to a notice, will see $6.05 billion given in cash refunds. The second class, according to the notice, “which includes all persons, businesses, and entities that as of November 28, 2012, or in the future accept any Visa or MasterCard cards in the U.S.,” will see a ten basis-point reduction in interchange rates for 8 months which is equivalent to a $10 savings for every $10,000 processed. Cherney says, “An article from the April 22 Green Sheet says industry experts may receive from the first fund anywhere from $400 to $600 for every $100,000 spent” in Visa/MasterCard purchases. Merchants can determine a rough estimate of the settlement amount they may receive by multiplying the aver-
If you’ve accepted MasterCard and Visa payments from consumers within the past nine years, you may have some money coming your way. Notice of a settlement was recently filed in the amount of $7.25 billion with merchants who have accepted MasterCard and Visa payments since 2004. According to David Cherney, vice president of Digital Financial Group (DFG), a merchant service group in Carson City, NV, the suit was filed in 2006 and has had more than 50 million pages of documents and 400 witnesses to date. “Basically [MasterCard/Visa was] violating anti-trust laws, which you would call price fixing,” says Cherney. “I have made my living in the merchant service industry so indirectly Visa and MasterCard put my kids through college… but I have no problem in being candid about what they’re being accused of. I’ve seen it. They wouldn’t be agreeing to a $7 billion settlement if there wasn’t [cause].” The class action settlement authorized by the U.S. District Court for
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age monthly Visa/MasterCard volume by 12 (the number of months in a year), then multiplying that figure by nine (the number of years eligible in the settlement). Divide that figure by $100,000 then multiply by $400 to see a conservative estimate of the potential amount your company could receive. A fairness hearing has been scheduled for 10 a.m. September 12, 2013, at the courthouse for the United States District Court for the Eastern District of New York. “After the hearing, a claim form will be submitted to the court for approval and a claim deadline will then be set … Big box stores are currently contesting the $7.25 billion figure; the final amount, which could increase or decrease, will be finalized at the September hearing,” says Cherney. “Until this hearing, when the final [amount] is decided, unless you’re going to opt out of the settlement there is nothing you need to do at this point,” he adds. “After the hearing, claim forms will be available.”
Interested merchants can receive more information on the settlement and potential claims by visiting https://www.paymentcardsettlement.c om/en. This is the official website for this settlement. Please do not rely upon other sites that may provide different and unauthorized information. If the Court grants final approval of the Class Settlement, Claim Forms will be sent to all known Class members. Claim Forms will also be available at the website or by calling the Class Administrator at the toll-free number shown below. Preregistration is optional and does not affect your rights under the settlement. Merchants with multiple locations and/or franchise locations as well as single location merchants are encouraged to Preregister. The information you provide will be used to assist the Class Administrator in the preparation of your Claim Form. In case of questions, call 1-800625-6440 or send an email to: info@PaymentCardSettlement.com.
Body Shop Foreman in Las Vegas Charged with Shooting
A fight between co-workers at an auto body shop in Las Vegas resulted in both with gunshot wounds and one of them charged with attempted murder after an altercation on June 24. Las Vegas Metro police released an arrest report describing an incident that resulted in charges against 47-year-old Kevin Montalvo. Both the shop foreman and the employee sustained gunshot wounds as a result from their altercation. When police arrived at the S&M Body Shop in the 5100 block of Dean Martin Drive in Las Vegas, NV, they found shop foreman Kevin Montalvo holding an ammunition magazine for a semi-automatic pistol, but not the gun, according to his arrest report. Montalvo told police that he was attacked by two of his employees and shot one of the men in self defense. Shop employee Bryan Jackson had been shot four times. Both men fled the scene. While talking to officers, Montalvo complained of chest pain. When medical personnel discovered he had been shot in the chest, he was transported to University Medical Center trauma unit for emergency surgery. The third man involved, who had not been shot, drove Jackson to UMC, according to the arrest report. Police found the gun in Jackson’s car. Video footage at
the body shop showed Montalvo approached Jackson and Jackson reacted by beating him, according to police. The footage also showed Montalvo with a pistol and he appeared to be firing at Jackson before the two struggled for the gun. Both men were in stable condition after surgery. According to the witness in the report, Montalvo went to the business and confronted victim Bryan Jackson, who was on the job at the time. The witness said that Montalvo was at odds with Jackson about his work performance. Montalvo was arrested in absentia because of his injuries. He faces charges of attempted murder with a deadly weapon, battery with substantial bodily harm, and discharging firearm into occupied structure. Police said that surveillance video indicated the physical confrontation was intiated by Jackson. That was when, according to the witness, gunshots were fired. The witness told police he saw Montalvo with a gun aimed at Jackson, who was charging at the suspect. A struggle ensued, the witness described between Montalvo and Jackson. The witness told police he was able to seize the gun out of Montalvo’s hands, allowing both he and Jackson to flee to the hospital in the victim’s car, the report said.
www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 15
Carlisle and Company Blogs About PartsTrader Carlisle and Company is a consulting firm, not to be confused with Carlyle Group (an American-based global asset management firm active in acquiring collision MSOs, such as Service King recently), which develops market strategies that help OEMs manage risk and optimize performance. Carlisle and Company is known for its data benchmarking, both in service and parts, designed to help member companies improve dealer service support, and service quality to vehicle owners. One of their groups, the North America Parts Benchmark (NAPB, formerly NASPC) has been analyzing the parts supply chain since 1993, so it’s interesting to read the company blog, which recently addressed the ongoing PartsTrader controversy. The text following comes directly from the Carlisle blog (www.carlisle-co.com): If you’re involved with the collision repair industry, you’ve no doubt heard the hullaballoo regarding State Farm and PartsTrader. For those who haven’t, here’s a brief summary:
PartsTrader rollout plan
State Farm recently launched PartsTrader, a mandatory online parts ordering platform for their Select Service (Direct Repair Program (DRP)) shops. These Select Service shops receive State Farm’s collision customers in return for ceding some control to the insurer. The parts ordering platform is meant to capitalize on all the efficiencies of e-commerce, reducing the cost of parts by requiring suppliers to submit competitive bids. PartsTrader is undergoing a gradual rollout throughout the United States. It’s clear that State Farm isn’t just interested in an efficient online order-
ing platform. Otherwise, they could just mandate that their Select Service shops use any online platform for parts ordering, and do this at no cost to themselves. Instead, they’ve spent millions of dollars on a brand-new online ordering platform. Why?
Eventually, this concept is going to be implemented in such a way that it takes off. It may not be this goaround with PartsTrader, but the competitive online parts marketplace will happen. The industry is consolidating, and there’s even more incen-
pricing. Right now, OEMs have access to tremendous quantities of data through estimating platforms and CollisionLink. OEMs also have relatively sophisticated pricing systems and access to robust analytical platforms. Together, pricing systems and data enable
The collision parts market in the United States is about $16 billion. At present, insurance carriers pay about $10 billion dollars of that total, but have little influence over the parts procurement process or pricing. State Farm’s competitive online parts marketplace provides leverage by pitting suppliers against each other to offer the best price on parts. Even a one percent reduction in parts cost represents a $100 million savings for insurance companies. There are two significant negative impacts for OEMs. Loss of market share: A wider reach throughout salvage yards and aftermarket suppliers in the United States for parts sourcing will eventually mean that more alternative parts are used. This impacts OEM profitability and customer repair quality. Financial harm to dealers: A competitive marketplace means that dealers will have to offer even greater discounts. Parts suppliers, including dealers, will also be required to pay a fee to participate in PartsTrader. Unfortunately, even if OEMs and IRFs band together and manage to kill State Farm’s PartsTrader, Nationwide or GEICO will almost certainly come out with a similar program. The business case is far too compelling and the stakes far too high for insurance carriers to leave parts cost in the hands of the parts supplier, the shop and the claims adjuster.
tive for large multi-store operators to follow the insurance companies’ policies in return for repairs. After all, keeping the doors open at a big shop requires a healthy volume, and the easiest way to a healthy volume is through DRP.
surgical precision on parts pricing far in advance of what aftermarket parts providers can manage. Separate out collision parts pricing from the rest of your pricing rules and strategies, and get down into the details. This means creating strategies for pricing specific part numbers and car models. Although OEMs do pursue pricing strategies and aging curves, this is usually done at a broad, part-type level. In other words, your strategy for pricing
It’s clear that State Farm isn’t just interested in an efficient online ordering platform. Otherwise, they could just mandate that their Select Service shops use any online platform for parts ordering, and do this at no cost to themselves. Instead, they’ve spent millions of dollars on a brand-new online ordering platform. Why?
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If the concept is here to stay, what strategies should OEMs explore?
Adopt, use and manage smarter
a bumper for a full-size pickup truck should not necessarily be the same as your pricing strategy for a bumper for a midsize sedan. And the key to the success of pricing strategies is dynamic management of strategies, rather than “set, forget and revisit in 510 years.” Promote price competitive programs and alternative online ordering tools. Insurers may have leverage over behavior for their DRP shops, but OEMs have first-mover advantage here. CollisionLink has been in the market for nearly a decade, and combines online ordering with OEM price-competitive capabilities. In contrast, PartsTrader is only in a few markets, but more are sure to follow, and other insurance carriers will jump in the game shortly. An aggressive push by the OEMs to get their tools embedded in the market at the dealer and shop level before the insurance carriers enter will make the road harder for insurance companies and promote OEM market share. Your price competitive programs have to be integrated into your smart pricing strategy, or you’ll be working at cross-purposes. Expansion of advanced techni-
cal training. Factors such as CAFE, safety regulations, and the natural order of progress—that is, advanced materials and design—have made parts more complex, and more expensive. That complexity works to OEMs’ advantage. 95% of body shops
of cores and salvageable parts using core return charges and total-loss buyback programs, they can starve the network of salvage parts. Of course, this comes at a cost, but salvage parts are the fastest-growing segment and the most risky for OEMs. After all, it
leverage away from insurance carriers. When combined with advanced training and access to OEM tools, equipment and techniques, certified body shops are in a position to capture more of the high end of the increasingly complex repair market.
in the United States can’t competently complete repairs on structural aluminum. 99.9% of body shops in the United States can’t competently complete repairs on structural carbon fiber or CFRP. If OEMs can control the training associated with advanced materials, they can make sure that vehicles get repaired at shops which use more OEM parts. Core returns and salvage leakage. How does a part wind up in an LKQ yard? If OEMs can control the spread
is easy to argue that an aftermarketproduced part does not meet or exceed OEM standards. It is more challenging when that part came from the OEM at some point. Many OEMs are already active in this area – but they need to dial up the breadth of parts covered and the aggressiveness of the programs. Certified Body Shops. A certified shop network provides the OEM with additional input into the repair process and helps take some of the
OEMs may lose the battle on covers and similar nonstructural parts, but there are opportunities to make up ground in structural, safety, and specialized parts. The bottom line: Expect insurance companies to increase their involvement in the parts procurement process, and expect it to have a significant negative impact on OEM market share. Just maintaining current market share will require a tremendous amount of additional effort.
Unfortunately, even if OEMs and IRFs band together and manage to kill State Farm’s PartsTrader, Nationwide or GEICO will almost certainly come out with a similar program. The business case is far too compelling and the stakes far too high for insurance carriers to leave parts cost in the hands of the parts supplier, the shop and the claims adjuster.
www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 17
Inside Insurance with The Insurance Insider
The Insider is a corporate-level executive with a Top 10 auto insurer in the U.S.. Got a comment or question you’d like to see him address in a future column? Email him at Auto.Insurance.Insider@gmail.com
Insurers Hate to Admit It, But Our Success Depends On You and Your Estimators
Every insurance company knows that their profitability and loss cost expense relative to auto claims has many independent variables. We often have no control over them. For an obvious example, we can’t ask Mother Nature to reduce the number of hurricanes that ravage areas bordering the ocean. And we have no control over the number of accidents that our policyholders are involved in. On the flipside, there are some variables within our control—to varying degrees, to be sure, but within our control nonetheless. I’m referring to our staff adjusters. If our staff is well trained, if we maintain strict operating procedures, and if we provide proper oversight of our employees, we can reduce our overall loss cost expense. Therefore, most insurance carriers spend a lot of time and money to train and supervise their staff. In addition, they regularly make large capital investments to purchase or develop tools to automate an additional level of oversight. The challenge is that even the best electronic tools can’t replace the effectiveness of a human being. Several insurance carriers have made a especially significant commitment to education. Allstate is one example. They are the largest insurer that requires their staff to be I-CAR Platinum. That’s quite an investment for a company that was recently reported as being on the verge of dropping into the third spot among the largest carriers in the United States. (Oh, how the mighty have fallen. Not so long ago, Allstate was a lock solid No. 2 and looking for ways to knock State Farm off its pedestal. Instead, Allstate finds itself being pulled
down by an otherwise benign Englishaccented lizard. Er, I mean gecko. At any rate, I’m sure it’s creating mayhem within Allstate.) One thing is for certain: When a company begins losing market share, it causes them to ratchet down on expenses. Let this serve as your advanced warning: Allstate likely will be stingier than ever. What makes Allstate’s investment in educating their staff even more interesting is the fact that other large carriers (including several I’ve worked for) don’t require any training. Some may wonder if they are taking an opposite strategy, sort of a “survival of the dumbest.” As Forrest Gump famously said, “Stupid is as stupid does.” If you don’t know how to properly write an estimate, nobody can blame you for trying to cheat them. There are dozens of other independent variables that impact loss costs, but let’s focus on “dependent variables.” A dependent variable is loosely defined as those things that insurance companies depend upon a collision repair shop for. I never thought I’d say that we depend upon shops but we do. Most of you are probably guessing that we depend on you for proper part selection or cycle time. Although both of those are critically important to controlling loss costs and improving profitability, there is one even more key variable. An insurance company’s loss costs have less to do with your standard operating procedures or part type selection than they do with your estimator. Your profitability and our loss cost expense ultimately are based on
Car-O-Liner Gets Honda Approval As Official Supplier
Car-O-Liner has announced participation in American Honda’s Tool and Equipment Programs as an official approved supplier of collision repair products. The programs offer the advantage of one-stop shopping for all service tool and equipment needs. Equipment has been selected for these specific manufacturers in order to enhance collision centers’ productivity and efficiency while properly returning the vehicles to factory specifications.
“Car-O-Liner is pleased to be a part of Honda’s and Acura’s Tool and Equipment Programs,” said Peter Richardson, key accounts manager for Car-O-Liner. “Adding Car-O-Liner to their approved equipment offering means greater flexibility, accuracy and efficiency. Our complete solutions will provide Honda and Acura collision centers with the products they need to maximize their repair potential.”
18 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com
your estimator’s ability to write an accurate estimate, manage a claim and follow our guidelines. If you have an experienced estimator that understands a particular carrier’s program guidelines, you are better off than 90 percent of the people reading this article. You should make sure that he or she is well compensated. The skills they have are about as rare as you receiving labor time for prime, block and fill on a repaired panel. That individual can turn a company around and make a historically unsuccessful shop successful. I’ve seen shops that have performed at a high level for years fail miserably when their lead estimator left. Collision repair shops that have the most astute owner, ironclad operational procedures and long-tenured technicians have come to a screeching halt when they lose the glue of the operation provided by a good estimator.
I’m sure it is going to cost some shop owners money when their estimator realizes he’s worth far more than you are paying him. Great technicians are probably more difficult to replace, but you can overcome the loss with an average technician and strong estimator. I’ve been in meetings where shops beg to remain on a program after a few months of poor performance. They are quick to indicate that they have lost their best estimator. Without trying to sounding heartless, I don’t care about that. My job isn’t to help you manage your operation. Our goal is to make sure that the best shops are repairing our customer’s cars. If you can’t do it, we’ll gladly take our work to the shop owner that realizes that having only one All-Star on your team is poor planning. So do you have a contingency plan? If you don’t, today would be a good day to start making one.
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Repairer-Only Rountable Airs the Issues Important to Repairers awareness and education; distributing a common message to association members who would, in turn, relay the information to their customers seemed to be the most viable option for disseminating this important message. As options for educating consumers were introduced and debated, one suggestion was to distribute a na-
sized the need for a joint effort between national and local associations For the sixth time since the Repairer’s as well as shops to promote the mesRoundtable began over a year ago, sage, noting “insurer steering is easy collision repairers from across the nabecause consumers just don’t know.” tion gathered for three and a half hours In addition to utilizing social on Tuesday, July 23 at the Westin media, the group endorsed the effecBoston Waterfront. The exclusive tiveness of Public Service Announceevent intended only for representatives ments as consistent with the way of collision repair businesses was consumers obtain their informahosted by AASP-MA, but while tion, directing them to associaAaron Schulenburg, Executive Dition websites for further rector of the Society of Collision Reinformation. Ferraiolo acknowlpair Specialists (SCRS), was present edged that there are no simple to kick off the meeting, he repeatedly solutions, “but we can do a better told the attendees that the “goal here job of educating consumers” is to have discussion from everyone in through the vast array of techthe room,” stressing the concept of nology not being utilized cur“your agenda, your meeting.” rently. Over forty individuals gathered to Seeing a parallel between (l to r): Tony Ferraiolo, Peter Abdelmaseh & Tony discuss current concerns with the colconsumers and repairers when it Lombardozzi at Repairer’s Roundtable lision repair industry and possible socomes to the distribution of inlutions. The dialogue began with a formation, Schulenburg noted that lots tionally consistent message through local shop owner objecting to the fact of information intended for collision social media, on either a weekly or that Massachusetts has the lowest monthly basis. Another suggestion repair shops is never utilized, asking labor rates in the country, a travesty he was made to provide and disseminate what the key to inspiring the use of partially attributed to steering. Repre-packaged material for social these resources could be. One attendee garding a possible solution, it was media consumption. Tony Ferraiolo, noted that OEMs will be funding Pubsuggested that there could be a nalic Service Announcements this fall to President of the Auto Body Associational campaign to promote consumer explain that new vehicles which are tion of Connecticut (ABAC), emphabeing released cannot be safely repaired the same way as older vehicles, but the message has nothing to do with selling more OEM parts. It’s about maintaining the safety and value of the vehicles. It also stresses that modern repairs require specific educational and equipment components and that the fact that the industry is changing. The conversation turned to the issues surrounding manufacturer certifications with some repairers seeing the value of becoming certified while others, such as Tony Lombardozzi, President of the Coalition for Collision Repair Excellence (CCRE), took a Equus more skeptical view. Lombardozzi asked “what good is a certification? It’s just a piece of paper that says you have knowledge, but you can have knowledge without that paper.” He suggested that this issue may create Tameron, your trusted automotive wholesale parts supplier, is now crises in the industry as a shop can delivering Genuine Hyundai replacement parts to your area. have all the proper training and equipment and still not complete the repair Please call your salesman for details! correctly. www.tameronhyundai.com This debate led to a general question: do repairers trust OEMs? Several Parts Department: clarified that their issues with manufacturer certifications are less related 1-800-467-0699 to trust than ‘pecuniary inequalities,’ 205-443-7651 Direct especially in the MA market where 205-443-7656 Fax 1595 Montgomery Highway • Birmingham, AL 35216 labor rates are so low, making it diffiby Chasidy Rae Sisk
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cult to pay the costs associated with the certification. Several attendees then engaged in a conversation about OEMs offering training to independent repair facilities because they’re interested in vehicles being repaired properly. The ideas that shops are expected to invest in additional training without expecting any return on their investment led Schulenburg to ask, “is this really an issue of whether or not we should invest in training and equipment, or is the model of how we do business broken?” As participants discussed which issues to tackle later in the meeting, one participant compared the collision repair industry to a sinking ship; though there may be many leaks, the first step is to find the biggest hole and plug it up. Many participants pointed to the low levels of local collision repairer business representation in the room. Lombardozzi immediately concurred, citing an overarching apathy in the industry as the biggest obstacle faced. Most repairers see the problems, but they assume that someone else will fix them. This apathy allows others (insurers, OEMs and so forth) to assume control of the industry, but Lombardozzi insists, “we don’t need anyone [else] to tell us where we’re headed; the experts in our industry need to determine where we’re going.” Peter Abdelmaseh, former Executive Director of AASP-MA, added that there is a huge distrust of associations within the industry, and it is necessary to look outside the associations to understand their limitations. They can’t do everything repairers want them to do unless they are strengthened. Another repairer pointed out that it is impossible to overcome this distrust if those repairers are not in the room. In addition to the difficulties in getting away from their businesses and spending money to attend events and meetings, low self-esteem is a major contributing reason that many repairers opt against participating in associations and industry events, according to Lombardozzi who believes “the only way we can change that is to bring the message to them.” Nearly all of the attendees agreed that too many third parties are inserting themselves into the collision business, so repairers must be very See Repairer Roundtable, Page 25
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20 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com
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www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 21
AUTOMAKER, AU A UTOM OM MA AK AK ER O OEM EM AUTOMAKER KE R,, OEM, M,, AND AND RECALL RE R E C AL CA ALL LL EC Autobody News
FLORIDA • GEORGIA • ALABAMA • MISSISSIPPI
Chrysler Issues Recall on Air Bag Modules
GM to Recall Four 2012 Volts
Japan’s Toray Buys Stake in Plasan Carbon Composites
Ford to Hire 3000 Salaried Workers in 2013
Chrysler is recalling certain model year 2013 Town & Country and Dodge Grand Caravan vehicles manufactured June 11, 2013, through June 12, 2013. The occupant restraint control module (ORC) has incorrect software installed which may adversely affect air bag deployments in collisions. Thus, these vehicles fail to conform to the requirements of Federal Motor Vehicle Safety Standard No. 208, “Occupant Crash Protection” and No. 214, “Side Impact Protection.”
Japan’s Toray Industries Inc. has taken a minority stake in U.S. auto carbon fiber supplier Plasan Carbon Composites Inc. in a move underlining the potential growth for carbon fiber parts. The 20 percent stake comes as Plasan begins to launch its biggest and highest profile project —making two body panels for the 2014 Chevrolet Corvette Stingray. The companies did not disclose financial terms of the deal. Tokyo-based Toray has been establishing development centers globally to help speed the use of carbon fiber in the auto market. The investment in Plasan takes Toray’s involvement further, and helps to ensure a distribution channel to U.S. automakers and to establish Toray as part of a vertical integration system for the material.
Nissan Plans Major Reforms in Buying, Shipping, Building
Nissan Motor Co. is attempting to pare U.S. operating costs by rethinking the way it buys parts, builds cars and moves cars and components around the continent. U.S. executives are looking for the cost reductions to help Nissan meet CEO Carlos Ghosn's "Power 88" business plan, which calls for a global consolidated operating profit of 8 percent by March 2017.
General Motors Co. said it will recall four 2012 Chevrolet Volts because of an electronic glitch that could increase the risk of a crash — the first recall of the Detroit automaker’s plug-in hybrid electric vehicles. GM says the electronic stability control may not work as intended and increase the possibility of a crash in an emergency braking incident. GM is unaware of any crashes or injuries associated with this condition. This is the first recall for the Volt since late 2010.
Ford Motor Co. said it will hire 3,000 salaried workers this year—800 more than previously announced. Ford said 80 percent of the new employees will be technical professionals with “new skills.” The company expects 85 to 90 percent of those hires will be placed within the state of Michigan. Ford said it also plans to increase hourly employment by 12,000 by 2015. “Engineers and technical professionals are in as much demand as our cars, trucks and SUVs,” Felicia Fields, Ford’s group vice president for human resources, said in a statement. “Global demand and increasing capacity in North America and Asia requires that we aggressively seek out technical professionals in order to continue our growth.” The vast majority of the technical hires will be engineers in purchasing, manufacturing and product development. About 200-300 will be hired in IT-related fields. Fields said some of the hires are attrition replacement, but more than two-thirds of the hires will be new jobs. As a result of the recession, Ford reduced its workforce by 13,000 salaried employees between 2006 and 2009, she said. “There are some people that we did lose during that downturn that have skills and capabilities that we absolutely welcome back into Ford, and some of those employees have returned to Ford,” Fields said, adding that there are still many “new,” advanced skills that require fresh talent.
22 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com
Ford to Recall 13K Vehicles over Door Latches
The Ford Motor Co. said June 27 it will recall about 13,100 vehicles for door latches that may fail and cause child safety locks to deactivate. The Dearborn automaker will recall three 2013 model-year vehicles — the Explorer SUV, Taurus sedan and Lincoln MKS sedan — built at Ford’s Chicago Assembly Plant. Upon opening or closing a door, the child safety lock may change from “activated” to “deactivated.” Ford said that no accidents or injuries have been reported. As part of the recall, dealers will test rear door latches and child safety locks, and replace the latch if necessary. The affected vehicles, sold in the U.S., Canada and Mexico, were built between Nov. 29 and Dec. 12, 2012. The problem was first discovered on Dec. 6 during a routine audit, the latch supplier identified a latch with lower-than-expected child safety lock retention torque. On Dec. 7, Ford’s Chicago Assembly Plant was notified of the condition and a stop-ship was issued. Ford spent months testing the issue, using accelerated testing on each vehicle line. This is not the first time that Ford has recalled model year 2013 Explorer, Taurus and Lincoln MKS vehicles.
Japan’s Diamond Electric to Pay $19M Price Fixing Fine
A Japanese manufacturer of ignition coils that were sold to Ford, Toyota and Subaru parent Fuji Heavy Industries Ltd. has agreed to plead guilty and pay a $19 million fine for its role in a conspiracy to fix prices of automotive components, the U.S. Department of Justice said. The plea agreement with Diamond Electric Manufacturing of Osaka, Japan, marks the first time that the Justice Department's broadening automotive parts price-fixing probe has involved parts sold to an automaker headquartered in the United States, the government said in a statement.
GM and UTI Partner to Help Grow Supply of Auto Techs
Universal Technical Institute has formalized an agreement with General Motors Co. (GM) to develop a 12week elective training program for UTI students. The program will first be available at UTI’s Avondale campus. “The availability of qualified, trained automotive technicians is and will continue to be a critical area of importance for GM,” said Mike Durkin, Director Dealer Service and Warranty Operations, at GM. “When looking at UTI’s industry leading curriculum, facilities and student and employer support services, we knew we had a solid partner to build something great with, supporting a growing need for technicians at our dealerships across the country.” The curriculum for the GM elective program will be developed in partnership between UTI, GM and Raytheon Professional Services. For more follow UTI on Facebook at www.facebook.com/UTI, or on Twitter at @UTITweet.
Rearview Cameras Delayed
The Obama administration is again delaying regulations on whether new cars and trucks must come equipped with rearview cameras to protect against drivers backing over people in blind spots behind their vehicles, a victory for automakers who say requiring the cameras is too costly. Transportation Secretary Ray LaHood said Thursday in letters to three members of Congress that more research is needed. He set a new deadline of January 2015 for the regulations. An average of 228 people are killed and 17,000 injured each year because of back-over accidents. Nearly half the deaths involve children under age 10. The elderly also frequently are victims. Congress passed a law in 2008 requiring the government to issue final regulations aiming at protecting against backover accidents by Feb. 28, 2011, and that the changes be in place for model year 2014 vehicles. But the regulations have been delayed repeatedly.
Honda Reponds to Amended Class Action Complaint
Honda has filed a response to an amended class action complaint, which alleges some of the automaker’s vehicles have defective window regulators. In the case, Grodzitsky versus American Honda Motor Co., the plaintiffs argue the window regulator defect results in the sidelite falling into the door frame or becoming stuck in the fully-open position. Phyllis Grodzitsky, owner of a Honda Odyssey, and Jeremy Bordelon of Tennessee, owner of a Honda Element, alleged in the original complaint that they reported repeated failures of window regulators in their vehicles. Grodzitsky further claims that she contacted her local Honda service manager and was told, “all [Honda Odysseys] have that problem.” In its response to the amended complaint, the automaker’s attorneys write, “Honda expressly denies that ‘all Honda Odysseys have that problem.” Honda’s attorneys deny most of the allegations. Honda admits that within some, but not all, vehicles that are part of plaintiffs’ putative class definition, side windows are moved up and down by a window regulator that operates with a central track, a shuttle and a cable, attached to a motor.
Volvo: Six State Class Action Should Not Be Certified
Citing a recent U.S. Supreme Court decision, Volvo has filed a motion requesting that the U.S. New Jersey District Court reconsider certification of a six-state class action over an alleged sunroof defect. In March, Judge Dennis Cavanaugh granted plaintiffs’ motion for certification of statewide classes in Massachusetts, Florida, Hawaii, New Jersey, California and Maryland. “In doing so, the court rejected Volvo’s argument that certification of plaintiffs’ statewide classes was improper because, among other reason, plaintiffs had offered no proof that class-wide damaged could be proved with common evidence,” Volvo’s attorneys argue in the motion. “Rather, the court relied on the allegations of the second-amended complaint to conclude that the relief sought by the plaintiffs applies to all members of the certified classes. The United States Supreme Court issued its opinion in Comcast Corp. versus Behrend... [which] makes clear that the court’s decision to certify a class without any showing that damages can be proved on a class-wide basis was in error. The court should reconsider and reverse its decision,” the attorneys write.
Future Looks Bright for U.S. Auto Industry, Hiring, Sales
The auto industry is about to go on a hiring spree as car makers and parts suppliers race to find engineers, technicians and factory workers to build the next generation of vehicles. The new employees will be part of a larger, busier workforce. From coast to coast, the industry is in top gear. Factories are operating at about 95 percent of capacity, and many are already running three shifts. As a result, some auto and parts companies are doing something they’ve been reluctant to consider since the recession: Adding floor space and spending millions of dollars on new equipment. “We’re really bumping up against the edge,” says Michael Robinet, managing director of IHS Automotive, which forecasts auto production. “So it really is brick-and-mortar time.” The auto industry’s stepped-up hiring will help sustain the nation’s job growth and help fuel consumer spending. The government said U.S. employers added 175,000 jobs in May, roughly the monthly average for the past year and a sign of the economy’s resilience. U.S. consumer confidence has reached a fiveyear high. The auto industry’s outlook is bright. Vehicle sales for 2013 could reach 15.5 million, the highest in six years.
OEMs, CARE, and AAIA Seek Solution to Right to Repair
At a hearing on New Jersey Right to Repair bill, representatives of AAIA and CARE along with auto OEMs said they want to develop a national solution on the right to repair issue. Hope to conclude an agreement by the end of July. ASA believes its 2002 deal with manufacturers is working. After more than a decade of effort to pass legislation, first at the Federal-level, then at the statelevel, some of the organizations supporting Right to Repair legislation appear to be seeking a negotiated solution with automakers. In testimony before the Consumer Affairs Committee of the New Jersey State Legislature on Assembly Bill 352, the Motor Vehicle Owners Right to Repair Act, Aaron Lowe, with the Automotive Aftermarket Industry Association (AAIA) stated that while they remain strong supporters of right to repair legislation in the states, nationally, they are in discussions with auto manufacturers on a national solution. Lowe said that after the passage of Right to Repair legislation and the success of a later ballot measure in Massachusetts, AAIA and CARE began to seek a national solution with OEMs.
www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 23
SCRS Board Meeting: Partial Panels, Labor Rates, SkillsUSA by Chasidy Rae Sisk
In the midst of the CIC and I-CAR conferences being held in Boston during the week of July 22–26, the Society of Collision Repair Specialists (SCRS) also held their board meeting. The 2hour meeting was held in the Hancock room of the Westin Boston Waterfront, located at 425 Summer Street in Boston, MA. Led by thirteen board members, including Ron Reichen making his debut as Chairman, the meeting was to convey updates from SCRS staff and committees to outline current and future work initiatives. Approximately twenty attendees gathered to listen to these updates. The SCRS Education Committee, led by Toby Chess, offered a presentation focused on repairing aluminum, stud welding and dent-pulling equipment technologies. Moving on to a pressing industry issue, Executive Director Aaron Schulenburg addressed partial panel finishing and dissatisfactory compensation from insurers, noting that this problem which was seemingly corrected back in 2007-8 is returning. SCRS has seen a drastic increase in the number of queries about this issue since the beginning of 2013. Even more disheartening, this issue is not geographically isolated, occurring throughout the country. SCRS issued letter to six different carriers in May 2013 to enquire about their guidelines. Surprisingly, the overwhelming response was that carriers have not made any changes to their policies, with many of the carriers saying that their expectations for reduced refinish time on repaired panels are based on receiving a mutual agreements with individual repairers based on the repair needs. Additionally, no company has provided or admitted to any corporate position or policy which specifies any precise reduction in time, although some examples of such documentation have been received by SCRS. The association is continuing to work with these carriers to address the issue and hopefully resolve what has become a pattern of practice for some in 2013. Schulenburg’s said his concern arises because SCRS has received complaints from repairers who don’t agree to a reduction in time yet are being told that it is a matter of company policy. The question he now poses to insurers is how to respond to claims
that this is company policy when, in fact, it is not. Schulenburg emphasized that such conflicts benefit neither collision repair shops nor the relationships between repairers and insurers. SCRS will continue to seek answers to this dilemma and will provide an update on the situation at SEMA in November. SCRS Past Chairman Barry Dorn reported that over 6000 inquiries
tively. Currently, AASP-MA is trying to get the Auto Body Labor Rate Bill approved into law. Since 2008, the state has seen a free market resurgence with new insurers writing new policies, however, there have been no changes to labor rates in fifteen years, leaving Massachusetts with some of the lowest rates in the nation. The Auto Body
(l to r): Ron Reichen, Aaron Schulenburg & Andy Dingman at SCRS Board Meeting
have been received through the Database Enhancement Gateway (DEG)— but while the number is a milestone accomplishment for the free industry resource, that number should be significantly higher. Collaboratively supported by national associations, the DEG is funded by SCRS, AASP and ASA who monitor the received inquiries through a full time administrator. Though the DEG has seen an increase in the number of inquiries received, there are over 30,000 collision repair shops nationally, suggesting that the number of submissions from repair facilities who have experienced issues with estimating data could significantly increase if more in the industry became aware of the tool, and how easy it was to use. The industry as a whole benefits from each inquiry, as they are publicly posted into a database. Next, Schulenburg introduced representatives from their local SCRS Affiliate Association to talk about local industry efforts. SCRS represents 40 state and regional Affiliate Associations across the U.S. Molly Brodeur, Vice President of AASP-MA, provided updates on current industry activities in Massachusetts as well as an overview of her association’s efforts. The association has hired a management firm, Lynch Associates, as of May 2013, and with that addition came new Executive Director Jillian Zywien (see my interview with her this issue p. 35) who was excited to attend the week’s events and looks forward to her increased involvement within the industry. Through their partnership with Lynch Associates, AASP-MA hopes to create a stronger presence, especially legisla-
24 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com
Labor Rate Bill proposes an increase in labor rates to reach a more competitive level, combined with a review and possible increase of rates every three years. AASP-MA has also redesigned their website recently to enhance their member benefit packages as they strive to increase membership. Since there is not much I-CAR influence in Massachusetts, the association is also work-
ing to change that by focusing on acquiring Gold Class certifications for local shops. Through their work with the Collision Repair Education Foundation (CREF), AASP-MA awarded the first recipient of their tool grant at their 2012 golf outing. As Brodeur concluded, Schulenburg turned the meeting’s focus toward the future as he assured attendees that SCRS’s plans for SEMA are coming along well. He encouraged collision repairers to attend the November event, claiming it is a great environment where a shop can learn how to market itself, add revenue or just learn more about the industry. SCRS is most closely involved with the Repairer Driven Education series at the SEMA Show, and this year’s development of different learning tracks will allow individuals to choose the focus of their education. SCRS has engaged compelling industry speakers for the vents, and Schulenburg believes, “the program hits home for repairers and will provide tangible benefits.” The show floor at SEMA promotes enthusiasm for the collision repair industry, due in large part to the
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vast array of exhibiting corporations, with attendees groups coming from as far away as Australia and New Zealand. Several SCRS board members proceeded to talk about their involvement with Skills USA, emphasizing the importance of reaching out to young people who “truly are our future,” according to Reichen. Schools with students participating in the competition received a free SCRS membership, and student competitors received individual recognition from SCRS, letting them know the industry supports their efforts to become the best in their field, and is watching their accomplishments. The overall consensus was that an amazing energy surrounded the event which deserves to be supported and promoted; SCRS is excited to be a part of it and plans to continue their involvement. As always, SCRS emphasizes the importance of continuing education.
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Repairer Roundtable cautious when deciding who to partner with. As the roundtable continued, many topics were broached without being pursued in great depth. There was some discussion about repair standards, and several attendees expressed concern with the domineering growth that multi-shop organization (MSOs) are taking in the industry and how this will affect smaller shops’ competitive abilities. However, one opposing view suggested that the recent interest of private equity firms and their decision to invest in MSOs could see these firms taking a stand to demand the right to establish their own pay rates which could, in turn, benefit the entire industry. Schulenburg’s inquiry regarding how to take the voices of those in attendance and present it at larger forums, led to an impassioned discussion about CIC’s agenda and significance to actual collision repairers. Several expressed belief that CIC has abdicated their role as a leading organization in the collision industry. Some expressed sentiments that they feel CIC has been
“overtaken” by special interests and no longer works. The discussion of third-party interference led back to repair standards and who should be involved in the process of establishing and implementing them. Most attendees agreed that the creation and establishment of repair standards has nothing to do with insurers and should be left to OEMs and repairers, yet there were some dissenting views about whether insurers should play a role in the implementation of the standards since they do possess their own areas of expertise that may be important in this part of the process. Many of the attendees agreed it was necessary to walk away from the meeting with at least one unified position that could be shared as a consensus of the repairers represented at the meeting, and this particular topic was chosen by the audience participants. The repairers in attendance represented as wide a diversity as exists in the collision industry—single location and both regional and national multi-shop operators, DRP and independent shops, family-run business and dealerships—but even in the diversity, there was commonality in their beliefs. The discussion con-
cluded that nearly all in attendance felt it was important to convey that any formulation of standards for the collision repair industry should be developed and managed by the collision repairer, inviting in expertise in certain areas when needed, but never relinquishing control of the standard. As the Repairer’s Roundtable’s time drew to a close, Schulenburg announced that the next gathering will be held at SEMA in November, and he asked what can be done constructively to result in meaningful action and to be certain that something relevant comes out of the meeting. Everyone agreed that the most important way to improve these meetings is to encourage everyone in the industry to attend. The take home message to repairers is ‘So what are you waiting for?’ As Martin Luther King Jr. once said, “change does not roll in on the wheels of inevitability, but comes through continuous struggle. And so we must straighten our backs and work for our freedom. A man can’t ride you unless your back is bent.” Don’t let anyone bend your back! Join associations. Attend meetings. Support and institute change today for a better industry tomorrow.
www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 25
NASCAR’s Carl Edwards Drives ‘Sweepstakes’ on Henry Ford’s 150th Birthday Celebration in Honor of Ford’s One and Only Race When NASCAR superstar Carl Edwards hopped aboard Sweepstakes, the 1901 race car built by Henry Ford, he wasn’t exactly sure what to expect from the ride. But much like it did for Ford in his victory over Alexander
of Henry Ford, invited Edwards out to Greenfield Village to learn more about the history of the vehicle, meet with Sweepstakes Engineer Glenn Miller, and eventually learn to drive the 1901 machine. “This is the coolest car I have ever driven, no doubt about it. There isn’t even a close second,” said Edwards on the grounds of Greenfield Village at The Henry Ford. “It may not look like much standing here, or on video, but I am telling you that is one of the scariest things I have ever done. Coming around that turn back Ford Racing NASCAR superstar Carl Edwards was given there, there are no brakes. I don’t the honor of driving the legendary Sweepstakes race car know how those guys did that built and raced to victory by Henry Ford in his one and because we were only going only race in 1901 what, eight miles per hour? They Winton, the time spent at the wheel of drove this thing near 70 mph back in the historic vehicle changed his life 1901. That is just insane.” forever. Sweepstakes carried Henry Ford to victory in the first and only race he Edwards joined Hall of Famer ever drove — the race against AlexanDale Jarrett as the second NASCAR der Winton on October 10, 1901, in driver allowed behind the wheel of the Grosse Pointe, Michigan. Since Ford car, when he took it for a spin June 13, was the underdog, and the local fa2013. Edsel B. Ford II, great-grandson
vorite who defeated one of the best and most successful racers in the country, his victory was popular and widely publicized. In fact, Ford’s win changed everything for him, and ultimately the
“To think that this car is what started this whole thing is just amazing.” Edwards reflected. “If it weren’t for this, there might not be a Ford Motor Company, there might not be a Ford Racing, and a lot of people’s, including my own, paths would be very different.” Henry Ford’s 1901 Sweepstakes race car is part of the Racing in America collection at Henry Ford Museum and is on display daily. “Sweepstakes is one of the key, paradigm-changing cars in our collection at The Henry Ford,” said Christian Overland, Edwards drove the car around the grounds of Greenfield executive vice president of The Village at The Henry Ford, under the guidance of Sweepstakes Engineer Glenn Miller and the watchful Henry Ford. “To be able to eye of Henry Ford’s great-grandson, Edsel B. Ford II have someone like Carl come out and experience what Mr. Ford felt history of the auto industry. Several when he drove Sweepstakes back in people watching that day came forward with offers of financial support, 1901 is important in helping others understand the challenge he was facwhich set him on the road to establishing Ford Motor Company in June ing that day going against the best driver in America. The result of that 1903. Ford went on to prove his belief race changed the automotive world as in low-cost production with the Model we know it.” T, the car that put the world on wheels.
Steve Belknap, Illinois Shop Owner, Restores 1947 Ford Pickup Found Roadside Three years ago, Steve Belknap, owner of Belknap Auto Body Inc. in Lake Barrington, IL, spotted a wornout 1947 Ford pickup sitting for sale at the side of the road. He paid $4,000 for
it, and resisting the urge to restore it to a gleaming, sparkling show piece, Belknap spent about $2,000 and a few hours to make some basic safety upgrades, like brakes. With its original paint, Belknap took his relic to the 2012 Barrington Concours d’Elegance and won Most Coveted Vehicle Award. Belknap opted to keep his highway find as original as possible with its intact glass, floorboards and untouched engine. He didn’t want to do anything more necessary than fix what was falling apart. Belknap drove the 66-year-old truck home and within a week, was
driving it everywhere. If the weather is nice, he drives it. “Nothing makes me happier than driving the truck” in its well-used condition, he said. “It was built for work and I don’t think a pristine restoration on an old truck is appropriate.” Belknap’s story was featured in the local paper, the Daily Herald, and he described the modifications he made: “I rebuilt the brakes because only one wheel cylinder was working, and replaced the carburetor,” Belknap said. Other maintenance items included a rebuilt distributor and fuel pump, new fuel lines and replacement tubes in the tires. The only upgrade is a set of dual exhausts.
“The heat riser in the exhaust manifold seized and snapped off while I was working on it. Nothing would seat right with it gone,” he said.
26 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com
Undeterred, Belknap located a vintage set of Fenton exhaust manifolds, allowing for the dual pipes. “It ended up being a great modification. The V-8 runs better and sounds better, too.” While very little has been added, there are some things that have been removed. “A previous owner had installed incorrect seat belts and turn signals, which I took off,” Belknap said. He also added a new covering for the bench seat. “I didn’t want to reupholster but the original material had been patched too many times, dried out and became brittle. It was beyond uncomfortable,” he said. The dented and battered body only received a few welds to keep the fenders from vibrating off. “I avoided extensive body work to preserve the original paint, which still covers the majority of the truck,” he said. Unfortunately, the previous owner couldn’t pass on many details regarding the Ford’s history, but Belknap has uncovered several clues. “I found 1953 registration in the glove box from northern Wisconsin.” In addition, Belknap found a 1947 mimeo-
graphed movie bill caught in a crevice on the underside. In its earlier days, the Ford pickup was worked hard. “It clearly grew up on a farm, acquiring reasonable dents here and there. By looking at a couple of the makeshift repairs on the truck, you can tell when a farmer needed to get it back on the road,” he said. For example, when a bolt broke on the tailgate, it was simply welded shut.
Belknap, who has owned his shop for 19 years, had the doors custom painted with lettering that resembles an old-time look, right down to the shop’s phone number, which reflects an early Barrington area code. Steve can be reached by phone at: (847) 382-9433 or email: firstname.lastname@example.org
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CAA Urges Shops To Monitor Insurer Compliance with New Aftermarket Parts Regulations The California Autobody Association (CAA) is asking shops in the state to asking them to report any insurer violations of the new insurance regulations which took effect this year. Insurance Regulation Amended Section 2695.8, took effect in March this year. The new regulation addresses issues including aftermarket parts and procedures for adjusting shop estimates. The CAA has been working with the department to assist in clarifying the areas of aftermarket parts usage and claims settlement and the new regulations are, in part, a result of CAA discussions with the CDI. In order to assist the CDI, the CAA is now asking shops that are aware of noncompliance by an insurance company related to the new regulations, to submit an Autobody Complaint Form to the CDI. The new regulation addresses a number of issues in the collision repair industry. The regulations: 1) Require the current insurer’s warranty of aftermarket parts be expressly stated in the estimate of repair generated by the insurer; 2) Require an insurer to cease use of a part known to be non-compliant, and notify the part distributor within thirty (30) days. 3) Require an insurer to pay for an
Risley Added to AMI Board
The Automotive Management Institute (AMI) says Dan Risley, executive director of the Automotive Service Association (ASA), has assumed a permanent position on its board of trustees. “AMI has a long, storied history with ASA and I’m glad to continue building upon that relationship,” Risley said. “AMI’s ability to continually deliver high quality education and content that is relative to today’s business is a testament to their reputation in the industry. I’m grateful to be able to contribute.”
AudaExplore Makes AudaVIN Available to Collision Shops
AudaExplore announced that it is making AudaVIN, its patent-pending vehicle identification technology, available to collision repair shops for the first time. Long available to insurance carriers, AudaVIN utilizes VINs to provide complete vehiclespecific information, accurately identify parts and options packages and maximize customer satisfaction. AudaExplore data shows that use of AudaVIN leads to a 10 percent reduction in supplemental estimates. AudaVIN is priced on a per-use basis and supports most OEM brands.
amount to repair the damaged vehicle to its pre-loss condition in a good and workmanlike manner, based upon the repair standards required by auto body repair shops licensed to the BAR; 4) Require an insurer to pay for the costs associated with returning a defective part and the cost to remove and replace the defective part with a compliant non-OEM part or an OEM part; 5) Insurers’ estimates cannot deviate from the standards, costs, and/or guidelines provided by the estimating software used by the insurer. In January the Association of California Insurance Companies (ACIC) had complained that the new regulations “essentially require insurers to pay whatever auto repair shops demand” and that insurers “no longer have the ability to negotiate the most effective, less costly repair.” Armand Feliciano, ACIC vice president, said in a published interview at the time that, “Auto repairers have resorted to legislation via the regulatory process. We feel that some of these regulations that have been put into place are outside of what the CDI has the authority to do.” To read the full text of the regulation:www.insurance.ca.gov/0400news/0100-press-releases/2013/upload/ nr001AftermarketPropAmend.pdf.
EPA Reduces Regulatory Burden of Wipe Use Recently, the U.S. Environmental Protection Agency (EPA) modified the hazardous waste management regulations under the Resource Conservation and Recovery Act (RCRA) to exclude solvent-contaminated wipes from the EPA’s hazardous waste regulations, under condition that businesses clean or dispose of wipes properly. This comes as EPA’s final risk analysis, published in 2009, concluded wipes possessing certain hazardous solvents do not pose significant risk to human health and the environment if properly managed. The EPA noted that wipes are used in conjunction with solvents for cleaning and other purposes by tens of thousands of facilities in numerous industry sectors including automobile repair shops. According to Mathy Stanislaus, assistant administrator for the EPA’s Office of Solid Waste and Emergency Response: “Today’s rule uses the latest science to provide a regulatory framework for managing solvent- contaminated wipes that is appropriate to the level of risk posed by these materials … I’ve heard directly from stakeholders about the benefits of this rule and the need to finalize it. The rule reduces costs for thousands of businesses, many of
CARSTAR Adds Southern California Location
CARSTAR Auto Body Repair Experts recently added Browning Collision CARSTAR in Cerritos, Calif., to its national network of collision repair shops. Browning Collision, which has been in business for more than 25 years as a member of the Browning Automotive Group, is independently owned by Kent Browning and managed by Jim Hanson. “CARSTAR provides the expertise to build a solid organization and the tools to improve cycle time and CSI,” Hanson said. “CARSTAR also allows us to have the national exposure required in today’s everchanging auto collision marketplace.” As a member of the CARSTAR network, Browning Collision now has access to the company’s management system, business resources, 19 corporately managed direct repair programs and 45 corporately managed purchasing programs. “We are excited to have Kent Browning join the CARSTAR network,” said David Byers, CEO of CARSTAR. “We are thrilled to expand our presence in the southern California region.”
28 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com
which are small businesses, while maintaining protection of human health and the environment.” This ruling excludes only wipes that are contaminated with solvents listed as hazardous wastes under RCRA that are properly cleaned or disposed of. To be excluded, solventcontaminated wipes must be managed in closed, labeled containers and cannot contain free liquids when sent for cleaning or disposal. Additionally, facilities that generate solvent-contaminated wipes must comply with certain recordkeeping requirements and may not accumulate wipes for longer than 180 days. The EPA first proposed modified regulations for solvent-contaminated wipes Nov. 20, 2003, and published a revised risk assessment for public comment Oct. 27, 2009. Once the final ruling has been published, it will be accessible through ASA’s legislative website, www.TakingTheHill.com.
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Oregon Body Shops Grade Insurance Companies State Farm and two smaller Northwestbased auto insurers continue to be among the best at taking care of their customers after an accident. And some of the other larger, best-known insurers—including GEICO, Safeco and Farmers Insurance—are among the worst. That was the finding of the latest survey of businesses that interact with auto insurers on behalf of vehicle-owners every day: Oregon collision repair shops. “Just as medical providers see how health insurers take care of patients, collision repair shops interact with auto insurers on a daily basis, so we feel it’s worthwhile to ask how those insurers treat Oregon drivers after an accident,” said Barbara Crest, executive director for the Northwest Automotive Trades Association (NATA), which conducted the survey of Oregon shops. “We believe their views will be helpful to insurance companies and consumers.” More than 500 collision repair shops throughout the state received the survey, which asked them to grade the Top 20 auto insurers in the state in terms of how well each company’s
“policies, attitude and payment practices ensure quality repairs and customer service for Oregon motorists.” This is the seventh time the association has conducted such a survey since 2004. Crest pointed to a number of items of interest in the findings of the latest survey: ● Repairers have consistently given the same three companies a grade of B or better all seven times the survey has been conducted. State Farm has continued to hold on to the top spot, receiving an overall grade of B+ again this year. But a Northwest insurance company, Oregon Mutual, nudged up from a B last year to also receive a B+ in the latest survey. Mutual of Enumclaw once again ranked third with a B. State Farm is the largest auto insurer in Oregon: Mutual of Enumclaw and Oregon Mutual are ranked 12th and 13th, respectively. ● In addition to Oregon Mutual, six other insurers saw their grades improve from the 2012 survey. Travelers became the fourth-highest graded insurer by earning a B- (up from a C+ last year). Progressive, Ameriprise and Country Companies each moved up
half a grade to C+. ● Although the same four insurers were on the bottom of the rankings for the third straight year, the order amongst them changed because Allstate improved to a C (from a C-) and Geico brought its D+ in 2012 up to a C- this year. ● Progressive’s improvement is notable given that it had a D+ or worse (and the lowest or second-lowest ranking) in every survey between 2004 and 2009. Even last year it was ranked 16th on the list with a C, but this year moved to 8th with a C+. ● Although Allstate still only receives an average grade, that’s an improvement over the D or D+ it received in each survey between 2008 and 2011. ● Three insurers saw their grades drop. USAA, which ranked fourth last year, dropped behind Travelers and Kemper/Unitrin when it received a C+ rather than the B- it did last year. American Family and Liberty Mutual also dropped half a grade. ● Farmers and Safeco received a “F” from about one-in-four shops, the most failing grades received by any insurer. (By comparison, GEICO, the
third-lowest graded insurer, received about half as many Fs as Farmers.) State Farm received an “A” from well over half of shops. ● In most cases, the grades given a particular insurer from shops involved in that insurer’s direct repair program (DRP) were higher than those given by shops that are not part of that insurer’s program. This was particularly true with USAA and The Hartford; their DRP shops gave them grades of A- or better while non-DRP shops gave these same insurers grades of C or C+. But even American Family and Farmers Insurance direct repair shops gave those insurers only average grades of C. “Collision repairers say the insurers receiving the highest grades—which includes both larger and smaller insurance companies—do the best job of taking care of Oregon drivers after an accident,” Crest said. “We hope consumers will take these ratings into account when choosing an auto insurer, and that insurers that received lower grades will work to improve their performance.” More than 70 shops throughout Oregon responded to the survey.
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This article first appeared in the I-CAR Advantage Online, which is published and distributed free of charge. I-CAR, the Inter-Industry Conference on Auto Collision Repair, is a not-for-profit international training organization that researches and develops quality technical education programs related to collision repair. To learn more about I-CAR, and to subscribe to the free publication, visit http://www.i-car.com.
OSHA Hazard Communication Standard Revision The Occupational Safety and Health regarding the hazards of a chemical, carcinogens, reproductive toxins, and Distinctive Dealerships Administration (OSHA) is requiring the label should be revised to the new other toxins that target a specific
that all employees be trained, by De- standard within six months of becomwith Williams cember 1st of 2013, on Larry the revision to ing aware of the new information. its Hazard Communication Standard. With products that have not changed, The revision to the 1994 standard product makers have between June more closely aligns with the Globally and December of 2015 to convert their Harmonized System (GHS), an interlabels and safety data sheets to the national approach to labeling and clasnew standard. sifying hazardous products. Why the December 1st 2013 Lee Amaradio Jr. requirement for employees if Why the with change? Credit the training global marketplace. The U.S. is both the product makers have until 2015 to a major importer and exporter of implement the new standard requirechemicals. American workers often ments? OSHA believes that American see labels and material safety data workplaces will soon begin to receive sheets (MSDS) from the U.S. and labels and SDSs that are consistent from other countries. The diverse and with the GHS, since many American sometimes conflicting national and in- and foreign chemical manufacturers ternational requirements can create have already begun to produce GHSconfusion among those who seek to compliant labels and SDSs. It’s imuse hazardous material information portant to ensure that when employees effectively. begin to see the new labels and SDSs in their workplaces, they will be familiar with them, understand how to Major Changes The Hazard Communication Standard use them, and be able to access the inregulates identification and communiformation effectively. cation of hazardous products in the workplace. The major changes include: Label Requirements The supplier must provide at least the ■ Hazard classification: There are following on every hazardous material now specific criteria for classification label: of health and physical hazards, to help ensure that evaluations of hazardous ■ The product identifier (name) effects are consistent across product ■ A signal word, indicating the relamakers. tive level of severity of the hazard, eiwith manufacturers Dan Espersen ■ Labels: Chemical ther “Danger” (more severe) or and importers will be required to pro- “Warning” (less severe) vide a label that includes the product ■ Hazard statements assigned to each name, supplier identification includ- applicable hazard class or category, ing an emergency phone number, the such as “Flammable” or “Carcinogen” word “Warning” or “Danger,” pic- ■ Pictograms, eight to choose from tograms, and hazard statements for and one environmental hazard option each hazard class and category. Pre- ■ Precautionary statements stating cautionary statements must also be what should be done to protect the provided. worker from the hazard, such as “Res■ Safety Data Sheets: The word “Ma- piratory protection required” or “Keep terial” has been dropped, and there is away from open flame” with Mike Causey a specified 16-section format. The ■ Name, address, and telephone numprevious standard had a nine-section ber of the product maker or importer material safety data sheet, but product or other responsible party makers could generally deviate from that as long as the information was The eight pictograms are shown on there. Now all safety data sheets will page 24. be 16 sections. Note that the pictograms are all within a red diamond. There are two If manufacturers, importers, dis- new pictograms, one indicating tributors, or employers become newly “Health Hazard” and one indicating aware of any significant information “Explosive.” Health Hazards include
Amaradio Explains CRA
organ. Explosives have been separated from flammables. The Environment pictogram is non-mandatory, as OSHA does not oversee environmental hazards.
Workplace Labels Workplace labels are mentioned in the revised standard, but nothing has really changed. The minimum requirements for a workplace label are still the product name and indications on the specific hazards of the product, using pictograms, phrases, or words, whatever is available and applicable. If pictograms and phrases are used, they should be consistent with the revised standard. Sources for the label can be as complicated as using labeling kits from a safety catalog, or writing the information directly and legibly on the container in permanent marker.
National Fire Protection Association (NFPA) labels, with the diamond shape and the color and numbering system, can be used as workplace labels, but there’s an important difference in the numbering system used by the NFPA compared to the GHS. With the NFPA system, the higher the number the greater the hazard, so a “1” is the least severe hazard. With the GHS, it’s just the opposite, the lower the number the more severe the hazard, so a “1” is the most severe hazard. When using the NFPA label as a workplace label, use the GHS numbering system. The numbers are often included in the SDS.
Safety Data Sheet (SDS) The information required on the SDS remains essentially the same as that in the 1994 standard, except that the information must be presented using 16 specific headings in a specified sequence.
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The format of the 16-section SDS should include the following sections: ■ Section 1. Identification ■ Section 2. Hazard(s) identification ■ Section 3. Composition/information on ingredients ■ Section 4. First-Aid measures ■ Section 5. Fire-fighting measures ■ Section 6. Accidental release measures ■ Section 7. Handling and storage ■ Section 8. Exposure controls/personal protection ■ Section 9. Physical and chemical properties ■ Section 10. Stability and reactivity ■ Section 11. Toxicological information ■ Section 12. Ecological information ■ Section 13. Disposal considerations ■ Section 14. Transport information ■ Section 15. Regulatory information ■ Section 16. Other information, including date of preparation or last revision. Note that although the headings for Sections 12–15 are mandatory, OSHA will not enforce the content of these four sections because these sections are within other agencies’ jurisdictions.
• Carcinogen • Mutagenicity • Reproductive Toxicity • Respiratory Sensitizer • Target Organ Toxicity • Aspiration Toxicity
• Gases Under Pressure
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Employer’s Responsibility Repair facility owners and managers need to become familiar with the standard revisions and train their employees on recognizing the new labels and reading the new SDS versions by December 1st. OSHA has some downloadable “quick cards” available for help with this training. Go to www.osha.gov. Besides the general information, it’s even more important that repair facility owners and managers explain how the hazardous communication procedures will change in the specific facility. If OSHA makes a visit, that is what they will be looking for; if employees know how to find and read the information on hazardous materials that they work with.
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Conclusion OSHA recently updated its Hazard Communication Standard, which covers requirements for labels, safety data sheets, and hazard material classifications. Several product makers have already begun using the new labeling and SDS system, so OSHA is requiring employees be trained to recognize the new label and SDS format by December 1st, 2013. Even more important than general information is for shop owners and managers to inform employees about how hazard communications will change in the repair facility. For comments or suggestions on the Advantage Online, please contact I-CAR at email@example.com.
RI Governor Signs Total Loss Bills Rhode Island Governor Lincoln D. Chaffee signed bills into law that require an insurance company to obtain the owner's consent before declaring a vehicle a total loss if the cost to repair the vehicle is less than 75 percent of its value. The Auto Body Association of Rhode Island (ABARI) said in a statement, "We are grateful to the Governor and the Legislature for recognizing that consumer protection is the true purpose of this law. For too
many years, consumers across this State, many at the lowest economic levels, have been subjected to the heavy hand of insurance companies that seek only to increase their profits. “Many consumers have lost their second largest asset, because an insurance company could save more money if they totaled a safely repairable vehicle. This practice is now prohibited thanks to Governor Chaffee,” ABARI said.
www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 31
Wisconsin Moves to Reform its Lemon Law Known for Excessive Awards Wisconsin is notorious among automobile, motorcycle, truck, and recreational vehicle manufacturers as having the worst lemon law in the country. The law places unreasonable and unworkable requirements on OEMs that allows lawyers like selfproclaimed “Lemon Law King,” Vince Megna, to win exorbitant awards that have no apparent relationship to the underlying goals of the law. For example, in Marquez v. MercedesBenz, a vehicle that cost $56,000 resulted in a $618,000 award, with over $300,000 in attorney fees. (See article p. 4 this issue.) Wisconsin is the only state in the nation to provide for mandatory double damages under its unique lemon law. Under Wisconsin law, if the manufacturer fails to provide a comparable vehicle or refund for a “lemon” within 30 days of the vehicle owner’s request, the the courts are required to award him or her double any pecuniary loss, together with costs, disbursements and reasonable attorney fees. The courts have interpreted “pecuniary” loss to include the vehicle’s purchase price.
Caliber Completes Another Successful Food Drive
In one of the largest food drives in the collision repair industry, Caliber Collision employees collected a record amount of food and cash donations in June that resulted in more than 275,000 meals for at-risk children in five states. Caliber Collision locations in California, Arizona, Nevada, Texas and Oklahoma participated in the company’s 2nd annual Rhythm Restoration Food Drive from June 3rd through June 21st. The company-wide program is aimed at providing meals for at-risk children who may go hungry during summer months without regular school lunches. This year’s food drive resulted in 40% more meals than last year’s effort, significantly exceeding company-wide goals. In addition to the food items collected, Caliber Collision also provided a corporate donation of $10,000. “We are very proud of the way our associates routinely set and exceed goals that help restore our customers and the communities we serve to the rhythm of their lives,” said Steve Grimshaw, President & CEO of Caliber Collision.
Assembly Bill 200, currently in front of the legislature, would repeal the nondiscretionary double-damage requirement, but the fundamental obligation that a manufacturer provide a comparable vehicle or refund remains unchanged. The law will still allow a consumer to bring an action to recover any pecuniary loss (including the cost of the vehicle), along with costs, disbursements and reasonable attorney fees, and any equitable relief the court determines appropriate, if the manufacturer fails to provide the vehicle or refund within the specified deadline. Thus, manufacturers still have every incentive to provide a timely refund or vehicle, but lawyers will have less incentive to delay resolution of the dispute. The bill makes other changes that bring WI law more in line with other states: Clarifying Out of Service. Under existing law, a vehicle is considered a lemon if within one year of delivery the vehicle is subject to repair at least four times for the same problem or if the vehicle is out of service for 30 days or more due to nonconformities with the
Body Shop Burn Camp Donor Recalls His Own Burn
Downtown Niles, IL, was inundated with motorcycles for the Burn Run July 13-14. Registation proceeds will send children who are burn victims to Great Lakes Burn Camp, in Jackson, MI. For one donor who works at Precision Auto Body Shop in Chicago the burn run has special meaning. Jeremy Clanton said, “I was lighting a firework in a tube and it misfired and hit my hand... It was very painful but it’s only my hand, so I can’t imagine if it was more than that.” He said the pain was excruciating and he won’t be able to ride his motorcycle this weekend in the Niles Burn Run. “We’ve always thought it was a great cause so we’ve always tried to be the number one donor of the burn run but since I’ve hurt my hand... I had a situation where I got burnt as well... and you have a different appreciation for what a burn means.” Jeremy’s devotion to the race runs deep. Jodi Curran, Board member for Niles Burn Run, said “He’s been very helpful to the Burn Run. They’re also following our route this year in case a motorcycle breaks down so that they can tow it back for them.” The Niles Burn Run trailer was stolen but returned a few weeks ago, which Curran said was a pleasant surprise.
32 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com
warranty. The bill clarifies that “out of service” means that the vehicle is unable to be used for its intended purpose. Providing Comparable New Vehicle. The bill provides a more reasonable time period to provide a comparable vehicle – 120 days for commercial vehicles and 45 days for others. In addition, the bill requires the manufacturer exercise due diligence in locating and providing a comparable new vehicle within the applicable time period. However, if no comparable new vehicle exists, or is otherwise unavailable for delivery within the applicable period, the manufacturer must provide a refund within that timeframe. Changing Election. If the consumer makes a change in his or her choice of refund or new comparable vehicle, the applicable time period to deliver the refund or vehicle is reset. Providing Needed Information. The bill requires a consumer requesting a refund to provide the manufacturer needed information on a form approved by the Wisconsin Department of Motor Vehicles. The manufacturer must provide the refund 10
days after receiving the information or 30 days from the refund request, whichever is later. Allowing Negotiated Settlements. As an alternative to a refund or comparable new vehicle, the bill allows for negotiated settlements. Establishing a Statute of Limitation. A vehicle can only be a lemon under the law as a result of problems arising while under the term of the warranty or within a year after first delivery, whichever is sooner. Thus, waiting six years to file a claim, as is currently allowed, is an unnecessary delay. The bill’s 24-month statute of limitations is consistent with other states where the limitation periods range from 12 to 24 months. Read the full text of the bill at https://docs.legis.wisconsin.gov/2013/ related/proposals/ab200. See adjacent story on MB-USA.
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MB-USA Pays Out Another $260K in Long-Running WI Lemon Law Case as Legislature Hears Revised Law
Mercedes-Benz USA LLC has paid out another $260,000 in a long-running lemon law case. Attorney Vince Megna (known locally and self-identified as the ‘Lemon Law King’) sued the company in 2005 on behalf of a Waukesha businessman who purchased what was deemed a defective E-series sedan. The state Supreme Court last year upheld a $482,000 judgment against the company. Megna argued the company owed interest that had accrued during the case’s court journey and MercedesBenz paid $618,000. A Waukesha County judge has now ordered the company to pay attorney fees and costs totaling $259,536. The company cut a check dated the same day. According to court documents, Marquez purchased a $56,000 E320 from a Milwaukee dealership in April 2005. Almost immediately, the car wouldn’t start and a number of repair attempts failed. In October 2005, Marquez had Megna send Mercedes-Benz a lemon law notice, demanding a refund. Under the law, the company had 30 days to comply. Marquez and the company spent most of those 30 days discussing a replacement vehicle in lieu of a refund. Ultimately, Marquez said he wanted a refund five days before the compliance window closed.
Wisconsin law provides that “if a new motor vehicle does not conform to an applicable express warranty,” and the nonconformity is not cured after a “reasonable attempt to repair,” then the consumer may return the vehicle and elect to receive either: 1) a new comparable vehicle, or 2) a refund. If the auto manufacturer fails to provide a refund or replace the vehicle within 30 days, the law provides harsh penalties. The plaintiff is also entitled to pre- and post-judgment interest, which can be large in cases like this that take years to wind through the court system. After Mercedes-Benz was alerted that the car was a lemon, it began working with the owner and his attorney to provide the owner the proper remedy. Originally Marquez sought a new vehicle, but instead of seeking a similar Eseries he requested an S-series, which had not yet been released to dealers. The car company argued it wasn’t liable because Marquez didn’t give one of its employees the information they needed to grant a refund. The case started in Waukesha County Circuit Court, where a judge ruled in favor of the owner. The case was appealed to the court of appeals, which reversed the lower court. The court of appeals held that a consumer
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who intentionally thwarts a manufacturer’s efforts to provide a refund within the 30-day statutory period cannot recover the Lemon Law’s stiff remedies. The court remanded the case back to the circuit court for the jury to determine whether the owner intentionally thwarted Mercedes-Benz’s attempt to provide a statutory refund within the 30-day period by failing to provide the requisite bank information. On remand, the jury found in favor of Mercedes-Benz. The jury determined that the owner and his attorney, Megna, acted in bad faith by failing to call the bank so that Mercedes-Benz could access the bank account information. The circuit court judge, however, overturned the jury’s verdict by issuing a directed verdict in favor of the owner. The judge determined there was no credible evidence that the owner (or his attorney) intentionally thwarted Mercedes-Benz’s efforts to provide a refund. The case went straight to the Supreme Court, which affirmed the judge’s directed verdict in favor of the owner. Chief Justice Shirley Abrahamson, writing for the majority, found the lemon law is designed to force large, well-funded auto makers to compen-
sate customers for their losses. Expanding the manufacturers’ defenses would undermine the law’s purpose, Abrahamson wrote. No evidence suggested Marquez intentionally tried to block the refund, Abrahamson said. She found the initial refund demand provided MercedesBenz authorization to contact Marquez’s bank and his loan officer, noting Marquez called the loan officer the day he reaffirmed he wanted a refund and authorized him to release the account information to the car maker. Therefore, Mercedes-Benz had all the information it needed to deliver the refund before the deadline, Abrahamson said. In addition, the company’s employee never tried to contact the loan officer, never clearly asked Marquez to contact the bank and didn’t leave a number or express any urgency when he contacted Megna’s office later that afternoon, she found. Justice Patience Roggensack wrote in dissent that she didn’t believe Marquez acted in good faith and the decision deprives auto manufacturers of a valid defense. Republican legislators have recently introduced a Wisconsin bill that would cap damages at actual losses. See story previous page.
Demand is High and Growing for Auto Techs in Michigan As with many other skilled trades fields these days, automotive technicians are in high demand—and there’s a talent gap between jobs posted and available workers to fill them. In Southeast Michigan, employers such as car dealerships and body shops have posted 777 open jobs in the first six months of this year, and this time last year were seeking more than 1,200 mechanics and technicians. That’s according to data tracked by the Detroit-based Workforce Intelligence Network. As is the case with industrial jobs like machining and welding, for at least a generation parents have discouraged their children from entering the auto service world, pushing them toward white-collar jobs even though many technical degrees yield better salaries than many college degrees, said Tony Molla, vice president of communications for the Leesburg, Va.based National Institute for Automotive Service Excellence, which certifies technicians. Demand will grow in the future; about half of all technicians will be eligible to retire within 15 years. “If there is such a thing as job security, it’s in the trades,” said Molla, also noting that garages compete for mechanics not just with each other, but
also the aerospace industry. The mean annual salary for automotive technicians, according to the U.S. Bureau of Labor Statistics, is about $39,000, and Molla said that’s on the low side compared to industry numbers he’s seen. Al Lecz, director of employer strategies at WIN, said all nine community colleges in the Southeast Michigan Community College Consortium have automotive service training programs, with Macomb Community College’s Center for Advanced Automotive Technology premier among them. The nine colleges in the consortium are Macomb, Mott Community College, Oakland Community College, St. Clair Community College, Wayne County Community College District, Henry Ford Community College, Monroe County Community College, Schoolcraft College and Washtenaw Community College. Other resources include the National Automotive Technicians Education Foundation and NATEFaccredited schools; the Automotive Training Managers Council; and automotive manufacturers, which operate internal training programs. General Motors Co.’s is called the General Motors Automotive Service Educational Program.
www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 33
Historical Snapshot with John Yoswick
—John Yoswick is a freelance writer based in Portland, Oregon, who has a body shop in the family and has been writing about the automotive industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). Contact him by email at jyoswick@SpiritOne.com.
A Look Back at this Month in Collision News History This month we begin a new type of column that takes a look back at this month in collision history 20, 15, 10 and 5 years ago. You may be surprised how many issues we think of as recent concerns were in the news back then. Keep in mind that these stories may have turned out differently than the way they were reported at the time. Where they did, we attempt to clarify the later outcome.
20 years ago (August 1993) Collision repairers may soon be hearing about EXACT, a Colorado-based foundation that wants to see body shops take part in an early trial of its autobody repair standards. So far, the foundation’s executive director, Phil Freeman, has sent out applications for membership to repairers in Rochester, NY, and Chicago. If they take part, shops pay $3,160 after undergoing extensive training, testing and certification. While shops may balk at paying yet another fee for another organization that’s supposed to bring them success, EXACT wants to establish comprehensive industry standards that will be for autobody work what building codes are for building contractors. “One of the things we’re trying to do is keep it out of the hands of lawmakers,” Freeman said. “A legislator could come in and try to establish something for an industry he’s not too familiar with.” Already EXACT has spent three years writing up 140 pages of repair standards that Freeman expects to become even more refined over the years. Called the Uniform Autobody Repair Code, the standards will have to be approved by the collision repair industry. “They’ve been through a technical committee of 27 shop owners,” Freeman said. “We anticipate approval around the first of the year.” ►The EXACT Foundation sub-
sequently reached an agreement with I-CAR under which that organization would continue to develop, manage and market the code under the name Uniform Procedures for Collision Repair (UPCR)
15 years ago (August 1998) I-CAR also made two significant announcements about its Uniform Procedures for Collision Repair (UPCR) at its annual meeting. First, Toyota Motor Sales USA, Inc., has agreed to provide its Toyota and Lexus collision repair manuals for inclusion with the UPCR. Beginning with the January update to the UPCR, subscribers will have access to the same collision repair technical information made available to Toyota and Lexus dealers. I-CAR’s Tom Mack said he hopes Toyota is just the first of many vehicle manufacturers to make their collision repair manuals available to UPCR subscribers. The second announcement about the UPCR made at the meeting was that 20th Century Insurance Company has become the first insurer to purchase the UPCR for widespread use by its employees. John Bierer of 20th Century said he was charged earlier this year with improving the consistency of the estimating, adjusting and reinspection efforts of the insurer’s staff. He said after reviewing the UPCR with his claims office management, he presented it to his superiors as the solution they were looking for. “Each one of our adjusters, our quality control reinspectors, our supervisors and mangers will have a copy of UPCR on their laptops to use in their adjusting, inspecting and quality control,” Bierer said, adding that he hopes other insurers will follow 20th Century’s lead. ”I think it’s what we’ve been looking for for quite some time.”
► I-CAR one year later shelved its UPCR product, which included collision repair procedures as well as vehicle and product manufacturerspecific information, saying sales were “reasonably underwhelming,” but a revival of UPCR has been raised by some during more recent discussions of collision repair standards.
10 years ago (August 2003) (From Autobody News): Aftermarket parts manufacturers and CAPA are likely vexed by the newly-released “Crash Parts Certification Study” published by the California Bureau of Automotive Repair (BAR). The report blasts the parts certification process, concluding that “certification has no value to the customer…If there are problems with the certified product, the certifying entity does not stand behind their own certification process.” Legislation enacted in 2001 authorized $125,000 to be spent by the BAR, a sub-agency of the California Department of Consumer Affairs, to study the best process for certifying crash parts, and to designate the agency to bear responsibility for overseeing crash parts certification. For two-and-a-half years, the BAR held meetings with repairers, insurers, OEMs and aftermarket parts certifiers. It sent out surveys to auto body repair shops and conducted field test on crash parts. In the end, the BAR reached several conclusions, most notably: ● Elimination of non-certified aftermarket crash parts is not a viable option. Outlawing non-certified aftermarket parts (as suggested by CAPA) would make the market less competitive and leave a shortage of such parts. ● Certification does not protect consumers from poor quality parts… If the certifying entity warranted their certified parts it would provide ‘added value’ to the certified part, and protect
FIX Auto Relocates Headquarters to San Diego Fix Auto recently announced the consolidation of their Orange County and San Diego administrative offices into a new San Diego-based headquarters. The move is a response to Fix Auto’s recent growth, as the new state-of-theart facility will allow Fix Auto to best
serve their growing membership through improved organizational efficiencies. “This development is significant in a number of ways,” said Fix Auto President and COO, Paul Gange. “While a major driving force behind
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the decision is securing a modern facility to accommodate our rapidly expanding staff of professionals, relocating the majority of our corporate staff under one roof will improve communications, create cross-departmental synergies and foster innova-
consumers against poor quality parts. The study compared the CAPA Quality Seal to the well-known Good Housekeeping Seal of Approval. The Good Housekeeping seal carried a limited warranty stating that if any product bearing the seal proves to be defective within two years of the date of purchase, the product will be replaced or the purchase price refunded. “If CAPA or Global Validators feel their certification parts fit the criteria of their certification program, why don’t they stand behind their certified parts?” the BAR report asks. 5 years ago (August 2008) The Progressive Insurance fraud lawsuit against Greg Coccaro and his New York shop, North State Custom, was dismissed. When Progressive concluded presenting its evidence and testimony, Coccaro’s attorneys moved for a directed verdict (a standard practice in many cases) and Judge Mary Smith granted the motion, dismissing the case, saying Progressive had not presented sufficient credible evidence for the trial to continue. Coccaro issued a press release saying he was “elated with the Judge’s decision” and “extremely grateful and touched by all of the support and encouragement shown by fellow members of the collision repair industry.” “We are disappointed by the court’s decision, and we plan to appeal,” spokeswoman Cristy Cote of Progressive Insurance. ► Progressive indeed appealed and the case was retried, only to have a jury find Coccaro not guilty in 2010; Coccaro earlier this year reached an out-of-court settlement with the insurer just days before trial was set to begin in his tortious business interference lawsuit against Progressive (terms of the settlement are subject to a non-disclosure clause).
tion on an unprecedented scale.” Fix Auto’s new street and mailing address is 11555 Sorrento Valley Road, Suite 201, San Diego, CA 92121. Their new corporate phone number is (858) 433-3963. Toll free numbers are unchanged.
Chasidy Rae Sisk is a freelance technical writer from Wilmington, Delaware, who writes on a variety of fields and subjects, and grew up in a family of NASCAR fans. She can be contacted at firstname.lastname@example.org.
Executive Director Jillian Zywien Contributes Expertise in Public Relations to AASP/MA with Chasidy Rae Sisk
implement electronic and social media Recently, the Massachusetts chapters of the Alliance of Automotive Service contacts. The members will find this Providers (AASP/MA) named Jillian with Chasidy Rae provides Sisk a growing stream of industry Zywien to the position of Executive related information at their fingertips.” In recent months, a large part of Director. Zywien is honored to be chosen to represent the association’s best AASP/MA’s attention has been focused on education. Having instituted interests, and she looks forward to implementing new programs to benefit a variety of training options during her career, both industry-specific and gentheir members. Despite the time demands of her new duties, she was eral business topics, Zywien notes that eager to take time to share her plans “Education is a primary focus of the for the association. services professional associations proAs a senior account executive for vide… For example, we recently began providing Lynch Associates, Zywien’s experieducational opporence is primarily based in the Public tunities through Relations and Communications fields, webinars for ease and she believes that her work in assoof delivery to ciation management consulting across members. These a broad spectrum of industry organizaprograms provide tions will benefit AASP/MA as she members with the steps into her new role. Jillian Zywien opportunity to ac“During my tenure, I have applied my skills to broaden communications cess educational content at any time to members; to enhance marketing of that is convenient to them. We would love to hear what members think and events and benefits to members, and to
how we can better cater to their needs.” AASP/MA has also spent a considerable amount of time in filing complaints about insurance companies with the Auto Damage Appraiser Licensing Board (ABALB). Zywien believes these efforts are yielding fruit, and it’s important to attend these hearings on members’ behalf because “In order to continue to influence the regulatory process, we must build a robust and ongoing relationship with the Board of governance over this industry. Relationship building and strategic interaction are two of the goals we have for AASP members with the ADALB Board. Demonstrating that an issue is a frequent reoccurrence allows us to approach remedies from the broader viewpoint, as such, we will continue prior practices relative to the ADALB board.” One of AASP/MA’s largest projects in 2013 has been the re-filing of the Labor Rate Bill. Zywien is taking an active role in this process; “Having just come into the position in the last few days, our first goal will be to meet with our legislative committee and formulate a long-term strategic plan that addresses all of the public policy objectives the association is confronting. Issues include the labor rate, insurance company practices with consumers, and matters brought before the ADALB. For the mechanical side of the industry, we will remain vigilant on the implementation of the recently enacted Right to Repair initiative. It is our goal to take an expansive view of both statutory and regulatory initiatives affecting the automotive service industry, and develop remedies that may occur in a variety of governmental bodies.” Additionally, Zywien feels it is imperative to educate consumers on their rights under the policy and with regard to repairs in particular. “One of our many goals is to ensure that the AASP/MA is a resource, not only for the industry, but also for our consumers. It would be our hope that providing this education would begin to overcome the misimpressions often left by insurance companies and empower consumers when it comes to their own vehicles.”
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Though it’s no surprise that many AASP/MA members are discouraged by the past failures in passing the Labor Rate Bill, Zywien remains optimistic. “A new broom sweeps clean. Each industry advocate comes to the table with different perspectives on how issues can be addressed. Our relationship with the association provides for an opportunity to rebrand and expand the arguments used on policy debates. We would ask that the members remain open to new strategies and informational delivery systems. Clearly the reason people join associations is to enhance their own business environment. We are keenly aware of that and will work to build the members’ confidence for new strategies. We will provide members with informational content they can use to advocate on their own behalf with elected officials and regulators. I would ask the members to give us a chance to change the dynamics and reinvigorate advocacy efforts regarding their issues.” As Zywien strives to implement improvements throughout the association and the industry as a whole, she believes that now is the perfect time to join AASP/MA. By contributing many new, innovative ideas, she hopes to continue strengthening the foundation created by the current leadership of the association. Additionally, her involvement with Lynch Associates provide beneficial resources as the firm consists of many long-term professionals in the association consulting market, and they’ve already outlined several new programs to the Board, making it easier for members to access benefits, participate in programs, and receive timely communications. Zywien’s enthusiasm and energy makes her an idea choice for Executive Director of AASP/MA, and she’s diving right in to her new responsibilities. “This provides an exciting opportunity to grow AASP/MA and we are ready to roll up our sleeves and share the enthusiasm we have for the organization. Look for new branding, look for new benefits, look for new educational opportunities, and please provide feedback. We serve the members, and we want to do it with excellence.”
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NOLA Shop Owner Implicated in Cover-Up of Hit and Run, Fourth Suspect Sought The owner of the New Orleans body shop at which police found the car allegedly involved in a fatal hit and run of an officer bonded out of jail the morning of July 11. Best of the Best Auto Shop owner Bill Cager, 33, was booked with obstruction of justice and accessory after the fact to manslaughter. His bond was set at $100,000.
set at $100,000 for charges of accessory after the fact to manslaughter and obstruction of justice. But he was being held without bond for parole violation. New Orleans police are searching for a fourth suspect in the fatal hit-and-run of NOPD officer Rodney Thomas, according to NOPD spokesman Frank Robertson. Police released a grainy photograph of the suspect on July 10. According to police, the photo was taken from surveillance video inside the Best of the Best of the Best Automotive and Collision Center, at 2635 Gravier St., and was recorded the morning Thomas was killed. Anyone with information on the whereabouts of this man Rosalyn Thomas, far right, the wife of New Orleans Police is asked to call Crimestoppers Department Officer Rodney Thomas, looks at a photo of at 504.822.1111 or toll-free at her husband, far left, on the hood of a NOPD car during a 1.800.903.7867 vigil at 2nd District Police Station on Magazine Street in New Orleans on Thursday, July 11, 2013. (Photo by Chris McKey turned himself in Granger, Nola.com) at 3:30 p.m. July 8, told poOfficer Rodney Thomas was lice where to find the Porsche, and fatally struck by a Porsche Panamera, admitted he was behind the wheel which was allegedly being driven by when he hit Officer Thomas on the Justin McKey, 25. McKey was Interstate 10 high rise around 12:45 booked on manslaughter and felony a.m. July 7, said court records. hit and run charges, as police said Before the hit and run, Thomas that he was behind the wheel of the was involved in a minor traffic acci2013 Porsche Panamera that hit Offi- dent in a personal vehicle on the way cer Thomas on the High Rise at home from his night shift in the secaround 1 o’clock the morning of July ond district, and began directing traf7. Orleans Parish Sheriff’s records fic while in his uniform and reflective show McKey posted $50,000 bond at vest. 7:39 p.m. July 9. While Thomas was directing A third suspect in the case, Ken- traffic, witnesses said the Porsche neth Halley, 28, remained jailed as of side-swiped Thomas’ truck before July 11. Halley is accused of taking striking Thomas, carrying him on the the damaged Porsche to Cager’s Best hood of the vehicle before he fell to of the Best Automotive and Collision the ground. The Porsche then sped Center, at 2635 Gravier St. Bond was off.
McKey told investigators he was driving the “car in and out and it was dark and he didn’t see him.” McKey’s neighbors said he and his mother have lived in the neighborhood for years, and they have never before seen a white Porsche on their street, raising questions about who owns the car. Court documents confirm, Halley was previously cited for driving the Porsche erratically near the Mercedes-Benz Superdome around 9 pm on July 6, hours before the fatal hit and run. Police have not yet said who owns the Porsche. When the car was discovered at Cager’s shop, he and another man allegedly involved in the cover up, Kenneth Halley, were arrested. Halley has a previous felony conviction according to court records.
City inspectors closed an Ellis Street auto body shop recently during a code enforcement crackdown that left car repair and body shop owners grumbling about City Hall turning a blind eye to their problems. Enrique Batista shuttered Enrique’s Auto Repair at noon after acknowledging that he had let his annual business certificate, license to store flammables and other city-required credentials expire. Lead code enforcer and city Assistant Parking Director
day’s Alley and Ellis street checks. “It has to do with quality of life and public safety—fire apparatus can’t get down streets if cars are double parked,” Stilian said. Stilian and eight police officers, fire and building inspectors fanned out on Bennett Street Monday morning, quickly irritating Crystal Diamond Auto Body shop owner Jose Grullon. “Every year you have to give me a hard time,” he said as Fire Department inspector Norman Bourque and
shattered. According to court documents, Halley picked up a friend and drove the Porsche to the body shop within an hour of the crash. Surveillance cameras inside and outside the business showed the vehicle arriving at the business, and the subsequent attempts to clean the car, said prosecutors. McKey has a January arrest in which he pled no contest to criminal trespassing (domestic violence) and was sentenced to 30 days, a $350 fine including court costs, and one year inactive probation. Halley has a lengthy criminal record, which includes multiple arrests, including charges for second degree murder and heroin distribution. He was arrested multiple times in 2008 alone, resulting in convictions for distribution of heroin and cocaine and attempted possession of a firearm by a felon. Halley was released on good behavior in 2011, serving only two years of a five-year sentence that would have been up in 2014. Shop owner Cager was New Orleans Police have arrested Justin McKey, left, arrested in 2002 for unauKenneth Halley, center, and Bill Cager, right, in connection with the fatal hit-and-run accident that took the life of thorized use of a motor veNOPD Officer Rodney Thomas early the morning of July 7. hicle, illegal possession of a (Orleans Parish Sheriff's Office) stolen auto worth over $500, According to court documents, and altering or removing an auto Cager used towels to wipe blood off VIN number, all of which were rethe car. NOPD technicians found fused. Cager also had a 2002 municblood stained rags in garbage cans in ipal court charge for disturbing the and around the business the next day, peace. as well as hair on the car’s windThomas’ funeral services were shield. held morning of July 12 at Franklin The vehicle had extensive dam- Avenue Baptist Church. The cereage to the front end and passenger’s mony was conducted with full police side, and the windshield had a mas- department honors, described by the sive indentation where glass had local media as a “sea of blue.”
City of Lynn, MA, Orders Shops to ‘Clean Up’ During Code Enforcement Crackdown Robert Stilian also ordered Batista to clean up trash around his shop and stop water possibly contaminated by transmission fluid and oil from flowing out of his business. “If you don’t keep it clean, I’ll be back once a week,” Stilian warned Batista. Stilian said complaints from neighboring residents and observations by city inspectors and police officers trigger unannounced code enforcement inspections like Mon-
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building inspector Tom Kench walked through his shop. Bourque told Grullon to park fewer cars in his garage and warned that cars parked in an alley next to the shop impeded use of a side door. Kench said the cars parked bumper to bumper also presented an attraction to rats who nest in the chassis. Kench ordered employees in Caribbean Auto Body, located across Alley Street from Crystal, to not park cars they are repairing on the street.
Northeast News with Chasidy Rae Sisk
Chasidy Rae Sisk is a freelance technical writer from Wilmington, Delaware, who writes on a variety of fields and subjects, and grew up in a family of NASCAR fans. She can be contacted at email@example.com.
Auto Body Association of Connecticut Supports Members’ Concerns and Fights Unfair Legislation Since 1968, the Auto Body Associa- Through proposing and monitoring tion of Connecticut (ABAC) has been legislation, the ABAC endeavors to fighting for the collision repair induswith Chasidy Rae protect Sisk the best interests of contry. While their sumers, its members and the collision focus has changed repair industry.” ABAC has many ongoing goals many times over the past 45 years, and projects in 2013. One of their priABAC is still ded- mary focuses is on education. They icated to preserv- strive to educate their members on ining the integrity dustry-related issues and training, as and independence well as promoting education on and Tony Ferraiolo of repair specialists throughout their state. Because there are currently so many important issues facing the industry, Tony Ferraiolo, President of ABAC, took time to share the association’s goals and stances with Autobody News readers. Regarding their mission, Ferraiolo states, “ABAC continuously protection of consumer rights. ABAC educates and trains their members on strives to educate the motorists of Connecticut and to enhance the abili- proper repair procedures, including ties and knowledge of its members, the latest information from OEMs. through education, to provide safe and Additionally, they protect the driving dependable repairs to the public. public with consumer advocacy
groups which provide the necessary tools to allow the average driver to make informed decisions about their repair needs. Another important goal for ABAC is related to legislation. In addition to supporting class action lawsuits when necessary, the association monitors current legislation, serving as a watchdog to expose insurers for violating fair trade practices and to
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combat legislation attempts seeking to limit the independence of collision repair facilities. Beyond education, ABAC’s current projects focus on ongoing legislative reforms by maintaining and improving communications with local, state and federal officials. They are currently in the process of pushing two class-action lawsuits. When asked about the biggest challenges facing the industry today and possible ways to overcome these issues, Ferraiolo lists “the influence that insurance companies have in the auto body industry. Actions to overcome these influences include lawsuits (class action and individual), legislative reforms, and consumer education.” ABAC does not approve of the PARTS Act because “the OEMs should have the same protection that’s given to any other parts manufacturer. We defer to the OEMs because it’s the safest, best way to repair the vehicle. The research and development that is put into the OEM parts should not be undermined. The PARTS Act will hamper innovative new designs and cause costs to be amortized over a short period of time, driving costs up. Therefore, we reject the PARTS Act.” They also reject the Right to Repair. Ferraiolo notes, “We believe all information should be given out to everyone so as not to discriminate against any repairers. Information
should be shared so that vehicles can be safely and properly repaired.” Ferraiolo also believes “PartsTrader is bad for our industry.” In their press release on PartsTrader from September 2012, ABAC notes, “the endeavor is a wolf in sheep’s clothing. It is bad for repairers, part manufacturers, and most importantly, consumers. The only two enterprises in place to profit- and profit handsomely- are State Farm Insurance and PartsTrader.” It is clear that PartsTrader does not benefit repairers or consumers as PartsTrader’s model shows insurers collecting more premiums only to find ways to pay less on claims, which “is fundamentally corrupting both industries,” the press release continues. Even worse, ABAC predicts that it is only a matter of time before other insurers institute similar programs to the detriment of the collision repair industry. This is the reason that ABAC refers to PartsTrader as “an embodiment of what’s wrong with the auto body industry and a harbinger of what’s to come,” which is why they encourage their members (and collision repairers nationwide!) to become educated on the program and stand up for themselves. “In light of the long-term damage this program will likely cause our industry, we are respectfully encouraging those of you who have not yet weighed in on this debate, to carefully examine the pilot program and voice your opinions.” ABAC was formed in 1968 when around seven independent organizations joined together to form one association: the Auto Body Association of Connecticut. At that point, ABAC was comprised of two officers from each individual organization who gathered for monthly meetings, but each organization continued to operate separately as well until around 15 years ago when all of those individual organizations joined together to strengthen ABAC. According to Ferraiolo, “because individual groups consolidated and became one, the organization runs more efficiently. The locals were able to concentrate on See ABAC, Next Page
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Your Driving Costs—AAA Study Finds Vehicle Ownership Costs are Rising If you own your car outright, you might not think it costs you that much to own it, but AAA’s 2013 Your Driving Costs study shows that costs range from nearly $7,000 to more than $11,000 for the average American, depending on the kind of car driven. What’s more, the cost of owning a car is rising, which means it’s costing more to drive your car year after year even though it’s worth less and less.
Different car types equal different costs AAA calculated the average costs for six different car types based on the ownership costs in the study. It found that the average cost of all sedans— the majority of cars on the road—is 60.8 cents per mile or $9,122 annually, based on 15,000 miles of driving. Small sedans cost the least—$6,967 annually. Four-wheel-drive sport utility vehicles cost the most—$11,599 annually—largely due to the fuel costs of those cars. Perhaps surprisingly, large sedans cost almost as much— $11,248—as four-wheel-drive SUVs, while minivans, which often have about the same amount of passenger and cargo-carrying capability as many SUVs, averaged just $9,795.
Depreciation doesn’t compensate In last year’s study, depreciation rates had slowed significantly, making cars worth more and partially offsetting the increases in ownership. According to the 2013 Your Driving Costs study, depreciation rose 0.78 percent to $3,571 annually on average. AAA attributed this to an increase of used cars available, which has softened resale values.
Maintenance costs see big rise In terms of car-maintenance costs, the AAA study found that there were significant increases in the cost of labor and parts over the past year. As a result, average maintenance costs are up by 11.26 percent on average for sedan owners, the largest percent year-over-year increase, to 4.97 cents per mile. Included in that figure are the labor and parts costs to maintain and repair the car for five years and 75,000 miles as well as purchasing an extended warranty. AAA noted that figure also has increased due to increases in extended warranty prices—the result of high losses by underwriters. Car insurance costs more, too While AAA notes that auto insurance
Collision Industry Makes Gains at SEMA Show
With warm summer months still ahead of us, collision repairers have already been hot to book their fall travel plans to attend the 2013 SEMA Show in Las Vegas, Nevada. Since 2010, the Society of Collision Repair Specialists (SCRS) has provided the acclaimed Repairer Driven Education (RDE) series during the Show, attracting record breaking attendance numbers with each year. As of July 1st, SCRS reports an attendee registration increase of over 250% (YTD), in comparison to the same time period last year. With more than four months remaining until the Show opens on Tuesday, November 5th, the pace at which the program is gaining registrations is a tremendous indicator that the 2013 SEMA Show will be the destination for professionals in the collision repair industry. “We are extremely proud of the series we have developed this year, and still have some additional programming we are working on to even further amplify the experience this fall,” shared SCRS Chairman Ron Reichen. “Attendee reaction to our events is always the best indicator of whether or not we are delivering what the industry is looking for in our series. Based on the feedback we have received so far, and the extremely com-
pelling numbers, we are confident that the varied content is going to provide very tangible value to all involved.” The RDE series isn’t the only area of the Show where the collision industry is demonstrating early spikes in activity. Show management numbers through the end of June indicated an increase in collision industry exhibitor counts, square footage occupied by exhibiting collision industry companies and both overall and collision-focused attendee registration. While the primary activities for the collision repair industry take place in the Collision Repair & Refinish section of the show in the North Hall of the Las Vegas Convention Center, industry meetings, forums and newly expanded show floor space also extend into the Las Vegas Hotel & Casino (LVH). In addition, many collision industry companies take advantage of space that is available in virtually every area of the show. Areas such as Tools & Equipment (North Hall), Restyling & Car Care Accessories (North Hall), Racing & Performance (Central Hall), Hot Rod Alley (Central Hall) and at the First Time & Featured Exhibitors (LVH) all feature companies that have a strong collision repair focus.
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rates vary widely due to numerous factors, car insurance is rising 2.76 percent to $1,029 annually for the average sedan owner over 2012. To arrive at its average, AAA used a hypothetical low-risk driver with a clean driving record and obtained quotes from five AAA clubs and insurance companies representing seven states.
committees and, therefore, accomplish more for the association. There is strength in numbers.” While keeping their busy repair members engaged in the forefront of the industry, by participating in the latest developments, is always a challenge, ABAC rises to the occasion repeatedly. Other benefits of membership include group discounts, educational meetings and quarter meetings which allow members to stay up-to-date on the latest trends to maintain national awareness. Though ABAC has over 400 members, including honorary members, shops and vendors, they still strive “to grow and strengthen our membership to create a stronger association.”
Fuel costs rise marginally While gas prices have continued to rise, fuel costs are up only slightly, partially offset by improvements in car fuel economy. The average cost for regular unleaded gasoline is up 3.84 percent, but due to miles-per-gallon improvements, fuel costs have risen just 1.93 percent to 14.45 cents per mile on average for sedan owners. For its calculation, AAA uses the national average for regular, unleaded gas in the fourth quarter of the prior year. Tire costs stay stable After an increase in the 2012 study, tire costs have remained stable this year, as manufacturing and shipping costs for tires have leveled off. The average sedan owner pays one penny per mile for tires.
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