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36 YEARS

W ES TE DI TIO N

AUTOBODY AK / CA / HI / ID / MT / NV / OR / WA / WY

New CA Assembly Bill, AB 2276, Looks a Lot Like AB 1679, Now Has Co-sponsors, CAA Opposes by Ed Attanasio

When the insurance lobby can’t get a bill to gain traction, it rewrites it and tries again and again, hoping that some form of it will pass. The theory is that by plugging away, eventually the lobby will wear everyone down to the point where both sides of the aisle will agree enough to make it a law or regulation. Assembly Bill 2276 is the successor to Assembly Bill 1679, which was opposed by both the California Department of Insurance and California Autobody Association last

year. It’s identical to the bill that was introduced last year by Assemblywoman Autumn Burke, D-Inglewood. Unlike AB 1679, AB 2276 has co-sponsors. Assembly members Frank Bigelow, R-O’Neals; Phillip Chen, R-Diamond Bar; Kansen Chu, D-Milpitas; Tom Daly, DAnaheim; Timothy Grayson, DConcord; Chad Mays, R-Yucca Valley; Randy Voepel, R-Santee, have all joined Burke on the bill. The California Autobody Association, which in January examined problem spots in the draft-revised AB See AB 2276, Page 10

Fully Autonomous Cars Will be on California Roads by April Despite Fatal Crash in AZ California will allow fully autonomous cars without safety drivers to test on public roads for the first time. The state’s Department of Motor Vehicles announced the change Feb. 26, which outlines a permitting process for companies wishing to deploy driverless vehicles without anyone behind the wheel. The new rule will go into effect on April 2. This announcement occured before the Uber self-driver with a safety operator on board caused a fatal pedestrian collision. See adjacent story.

Robot cars have been allowed on the state’s public roads for testing since September 2014, but a safety driver behind the wheel has been required. A form of backup will still be mandatory, for a time. “Under these regulations, driverless cars being tested on public roads must have a remote operator monitoring the car, ready to take over as needed,” Recode reported Feb. 26. “That remote operator— who will be overseeing the car from a location outside of the car—must See Autonomous in CA, Page 68

AUTOBODYNEWS.COM

Vol. 36 / Issue 4 / April 2018

Non-OEM Parts Legal Battle, Begun in 1997, Set for Trial in May 2018

A federal judge in February declined in rejecting State Farm’s calls for to dismiss a $9 billion class action dismissal of the suit that whether or racketeering lawsuit against State not the Avery judgment should have Farm over the insurer’s alleged role been overturned, the vehicle owners in the election of an Illinois Supreme involved deserve to know they lost fairly. Court judge—setting the “Plaintiffs seek to vindistage for the latest trial in a cate their right to be judged decade-long battle involvby a tribunal that is unconting the insurer’s use of nonaminated by politics,” Judge OEM parts. Herndon wrote. The lawsuit claims The suit is seeking triple State Farm helped secure the damages of the Avery the 2004 election of Justice Lloyd Karmeier suit plus more than a dozen Lloyd Karmeier, and that Karmeier improperly participated in years of interest—a total of about $9 the reversal of a $1 billion judgment billion—for the 4.7 million vehicle against the insurer in 1999 in the owners represented in the original Avery vs. State Farm class action Avery suit. Trial is set to begin May 7. lawsuit. Without passing judgment on How did we get here? the merits of the current case, U.S. So how does a non-OEM parts lawDistrict Judge David Herndon said See Legal Battle, Page 48

Uber Halts Autonomous Car Testing After Pedestrian is Killed in AZ, First Known Fatality by Self Driver

ter: “Our hearts go out to the victim’s family. We are fully cooperating with A woman has died after being struck local authorities in their investigation by a self-driving Uber vehicle in of this incident.” It is believed that Elaine Tempe, Phoenix, AZ. The Volvo XC90 was operating Herzberg, 49, is the first pedestrian in autonomous mode when it hit the to be killed by an autonomous car. The incident occurred between Mill Avenue and Curry Road on the night of March 18. Police said the victim was crossing the road outside of a crosswalk at the time of the collision. The woman was taken to The autonomous Volvo XC90 struck a pedestrian as she the hospital, where she died crossed the road. Credit: ABC15 from her injuries. The National Transportation woman as she crossed the road, police said. A vehicle operator sat be- Safety Board said in a tweet that it is hind the wheel at the time of the “sending a team to investigate” the incident, but the car was carrying no incident. Uber had been testing its auother passengers. Uber said in a statement on TwitSee Uber Halts Car Testing, Page 22 by Alistair Charlton, GearBrain

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APRIL 2018 AUTOBODY NEWS / autobodynews.com


Design and Format Changes at Autobody News

CONTENTS 1st Driverless Bus Deploys in CA After Rules Update . . . . . . . . . . . . . . . . . . . . . . . . 6 2 Auto Body Shop Employees Hospitalized During Armed Robbery in Hawthorne, CA . . 18 55 Wrecks in Northern Nevada Still Clogging Shops. . . . . . . . . . . . . . . . . . . . . . 12 8 Cars Stolen at John Hine Mazda. . . . . . . . . . . 6

Approach to Foster New Talent in NM . . . . . 42 Phillips - I-CAR CEO, President Says Industry Is Embracing Training, More Stepping Up Needed . . . . . . . . . . . . . 58 Sisk - In-House Money Makers: ASA Partners With Bosch for 2nd Webinar in Series . . . . . 44 Yoswick - OEM Info Websites Have Existed for 15 Years . . . . . . . . . . . . . . . . . . . . . . . . 38

CAWA Hosts YANG Regional Meet-Up, Feb. Leadership Days . . . . . . . . . . . . . . . . . . 9 CIF Raises Big Again at 8th Annual Gala Fundraiser in CA . . . . . . . . . . . . . . . . . . . . . 18 Fully Autonomous Cars Will be on California Roads by April Despite Fatal Crash in AZ . . . . 1 Las Vegas-Area Auto Insurance Costs Rise Above National Average. . . . . . . . . . . . 16 Merkley to Introduce Bill to Invest in Career, Tech Education in OR . . . . . . . . . . . . . . . . . 12 Mike Mohler Elected as 2018 Secretary to CAWA Board of Directors. . . . . . . . . . . . . 16 Mike's Auto Body Adds 2nd Aluminum Annex in San Ramon, CA. . . . . . . . . . . . . . . . 8 New CA Assembly Bill, AB 2276, Looks a Lot Like AB 1679, Now Has Co-sponsors, CAA Opposes. . . . . . . . . . . . . . 1 OR DEQ Permit Needed for Painting Facilities . . 12 San Franciscans Are Attacking Driverless Cars . 61 SF Motors Deploys Advanced Research, Test Vehicles Across Silicon Valley, CA . . . . . . 6

NATIONAL

Attanasio - Do OE Certifications Really Provide Accountability, Transparency? . . . . . 40 Attanasio - Teresa Aquila Just Won’t Quit... Ever! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Attanasio - When Was the Last Time You Updated Your Website? . . . . . . . . . . . . . 50 Ledoux - OE Shop Certification Programs: Assured Performance Network . . . . . . . . . . 26 Ledoux - The 1930s – New Products and an Insurance Company’s Realization . . . . . . 52 Phillips - Emotional Intelligence Is a Key Element for a Successfully Run Body Shop . . 66 Phillips - Father-Son Team Take Unique

AUTOBODYNEWS

4 Tips to Setting Labor Rates in the New Year . . 4 A Tale of Two Paints: A Visit to Axalta’s Training Center in Concord, NC. . . . . . . . . . . . . . . . . 34 AMi Hires Michael Cassata as Director of Collision Industry Outreach . . . . . . . . . . . . . 60 Artificial Intelligence Coming to Auto Glass—and Insurance, Mitchell Uses Image Recognition to Confirm Repairs . . . . . . . . . . . . . . . . . . . . 4 AT&T 4G LTE to Power Ford SYNC Connect . . . 51 Career in Sales to Body Shops Ends in Car Crash . . . . . . . . . . . . . . . . . . . . . . . . 24

Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Contributing Writers: John Yoswick, Janet Chaney, Toby Chess, Ed Attanasio, Chasidy Sisk, David Luehr, Stacey Phillips, Victoria Antonelli, Gary Ledoux Advertising Sales: Joe Momber, Sean Hartman, Bill Doyle, Norman Morano (800) 699-8251 Office Manager: Louise Tedesco Digital Marketing Manager: Bill Pierce Art Director: Rodolfo Garcia Graphic Designer: Michelle Lucas Online and Web Content Editor: Rochelle Beckel Accounting Manager: Heather Priddy Editorial/Sales Assistant: Randi Scholtes

Serving Alaska, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington and Wyoming. Autobody News is a monthly publication for the collision industry. Permission to reproduce in any form the material published in Autobody News must be obtained in writing from the publisher. ©2018 Adamantine Media LLC. Autobody News P.O. Box 1516 Carlsbad, CA 92018 (800) 699-8251 (760) 603-3229 Fax www.autobodynews.com editor@autobodynews.com

Anchorage Chrysler-Dodge-Jeep-Ram . . . 26

Hyundai Wholesale Parts Dealers . . . . . . . 54

Audi Wholesale Parts Dealers . . . . . . . . . . 59

Insta Finish Car Care. . . . . . . . . . . . . . . . . 13

AutoNation Chrysler-Jeep-Dodge-Ram-

Kearny Mesa Subaru-Hyundai. . . . . . . . . . 47

Fiat. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Kia Motors Wholesale Parts Dealers. . . 56-57

Axalta Coating Systems . . . . . . . . . . . . . . . 2

Launch Tech USA . . . . . . . . . . . . . . . . . . . 71

BMW Wholesale Parts Dealers . . . . . . . . . 65

Matrix Automotive Finishes . . . . . . . . . . . . . 5

Bob Smith BMW . . . . . . . . . . . . . . . . . . . . 46

Mazda Wholesale Parts Dealers . . . . . . . . 60

Bob Smith MINI. . . . . . . . . . . . . . . . . . . . . 46

Mercedes-Benz. . . . . . . . . . . . . . . . . . 36-37

Capitol Subaru . . . . . . . . . . . . . . . . . . . . . 72

MINI Wholesale Parts Dealers . . . . . . . . . . 64

ChemSpec USA, LLC. . . . . . . . . . . . . . . . . . 8

Mitsubishi Wholesale Parts Dealers. . . . . . 62

Chevrolet of Anchorage. . . . . . . . . . . . . . . 41

MOPAR Wholesale Parts Dealers . . . . . . . . 39

Chrysler-Dodge-Jeep-Ram of Seattle . . . . 61

Moss Bros. Chrysler-Jeep-Dodge . . . . . . . 19

Classifieds . . . . . . . . . . . . . . . . . . . . . . . . 70

Nissan/Infiniti Wholesale Parts Dealers . . . 53

Colortone Automotive Paints . . . . . . . . . . . 18

Original One Parts™. . . . . . . . . . . . . . . . . 17

Cutter Auto . . . . . . . . . . . . . . . . . . . . . . . . 35

Penske Hyundai . . . . . . . . . . . . . . . . . . . . 32

Dave Smith Motors . . . . . . . . . . . . . . . . . . 45

Polyvance . . . . . . . . . . . . . . . . . . . . . . . . . 23

DCH Auto Group Temecula . . . . . . . . . . . . 28

Porsche Wholesale Parts Dealers . . . . . . . 50

Del Grande Dealer Group. . . . . . . . . . . 20-21

PPG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Dent Magic Tools . . . . . . . . . . . . . . . . . . . . 6

Puente Hills Subaru . . . . . . . . . . . . . . . . . 38

Downtown Motors of LA (Audi, VW) . . . . . . 15

Riverside Kia. . . . . . . . . . . . . . . . . . . . . . . 48

Lawsuit Against Progressive . . . . . . . . . . . . 14

ECS Automotive Concepts . . . . . . . . . . . . . 24

Robaina Industries, Inc . . . . . . . . . . . . . . . 27

State Farm, I-CAR Insurance Gold Class Status . 16

EMS Automotive . . . . . . . . . . . . . . . . . . . . 12

SATA Dan-Am Company . . . . . . . . . . . . . . . 7

Enterprise Rent-A-Car. . . . . . . . . . . . . . . . 42

Shingle Springs Subaru . . . . . . . . . . . . . . 51

Equalizer Industries, Inc. . . . . . . . . . . . . . . 34

Sierra Chevrolet-Honda-Subaru . . . . . . . . 69

First Auto Group . . . . . . . . . . . . . . . . . . . . 44

Spanesi Americas . . . . . . . . . . . . . . . . . . . . 9

Ford of Kirkland . . . . . . . . . . . . . . . . . . . . 61

Subaru Wholesale Parts Dealers . . . . . . . . 63

Ford Wholesale Parts Dealers . . . . . . . . . . 49

Symach . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Galpin Motors . . . . . . . . . . . . . . . . . . . . . . 43

Tacoma Dodge-Chrysler-Jeep-Ram . . . . . 33

Glenn E. Thomas Dodge-Chrysler-Jeep . . . 11

The Bay Area Automotive Group . . . . . . . . 25

Consumer Watchdog Calls for National Moratorium on Robot Car Testing After Self-Driving Uber Kills Arizona Woman . . . . . 4 Diamond Standard 40 MPH IIHS Moderate Overlap Test . . . . . . . . . . . . . . . . . . . . . . . . 69 Factors Affecting Vehicle Sales, Insurance, Repairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 How Do the U.S. and Canada Differ in Their Fight Against Insurance Fraud? . . . . . . . . . . 68

COLUMNISTS

less dense and more ‘eye-inviting.’ We’ve also made the type a bit larger for both our national and regional stories. We hope this provides a bit of relief for tired eyes. There is more whitespace around AUTOBODYNEWS.COM the text colums makREGIONAL & NATIONAL COLLISION REPAIR NEWS YOUR SHOP NEEDS! ing a slightly bigger margin on the page. Regular readers will likely have We’ll be making some logo already noticed some look and feel and format changes in our online, changes to our print news magazine social media, and newsletter forthis month. mats as well. The masthead on top of the Stay tuned and please let us know cover page has been updated to be what you think.

INDEX OF ADVERTISERS

REGIONAL

No magazine can go 36 years in print without some updates and changes to freshen its appeal from time to time. We’re no exception at Autobody News.

New Women’s Group Focuses on Attracting Students to Collision Repair Industry . . . . . . 23 PA Shop Owner Files Nearly $713,000

Today’s Vehicles Driving Change Within the Collision Repair Industry . . . . . . . . . . . . . . . 64 Uber Halts Autonomous Car Testing After Pedestrian is Killed in AZ, First Known Fatality by Self Driver . . . . . . . . . . . . . . . . . . 1 Welcoming the Next Generation of Collision Repair . . . . . . . . . . . . . . . . . . . . . . 32 Yoswick - Non-OEM Parts Legal Battle, Begun in 1997, Set for Trial in May 2018 . . . . . . . . . 1

GM Wholesale Parts Dealers . . . . . . . . . . . 67

Valley Auto Dismantlers Association, Inc.. . 22

Haddad Dodge-Kia . . . . . . . . . . . . . . . . . . 40

Vintage Flatz/Cumberland Products . . . . . 29

Honda-Acura Wholesale Parts Dealers . 30-31

Volkswagen Wholesale Parts Dealers . . . . 55

Hyundai of Kirkland. . . . . . . . . . . . . . . . . . 61

Volvo Wholesale Parts Dealers . . . . . . . . . 58

Hyundai of Seattle . . . . . . . . . . . . . . . . . . 61 autobodynews.com / APRIL 2018 AUTOBODY NEWS

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Consumer Watchdog Calls for National Moratorium on Robot Car Testing After Self-Driving Uber Kills Arizona Woman

by Consumer Watchdog

Consumer Watchdog has called for a national moratorium on robot car testing on pubic highways, after an Arizona woman was killed by a self-driving robotic Uber in Tempe, Arizona. See story on cover this issue. ‘There should be a national moratorium on all robot car testing on public roads until the complete details of this tragedy are made public and are analyzed by outside experts so we understand what went so terribly wrong,’ said John M. Simpson, the nonpartisan, nonprofit group’s Privacy and Technology Project Director. ‘Arizona has been the wild west of robot car testing with virtually no regulations in place. That’s why Uber and Waymo test there. When there’s no sheriff in town, people get killed.’ According to the Tempe police, the deadly incident happened Sunday night at approximately 10:00 pm, when the car hit a pedestrian. The vic-

tim later at the hospital. The robot car was in autonomous self-driving mode at the time of the collision and had a human supposedly ready to take control of the wheel in the car, the police said. Consumer Watchdog said the tragedy underscores the difficulty robot cars have in interacting with pedestrians and cyclists, as well as human driven vehicles. Such shortcomings in the robot technology were made clear in the so called ‘disengagement reports’ that companies are required to file when they are permitted to test in California. The reports, which document when a test driver had to intervene, are filed annually with the Department of Motor Vehicles’ website. No such disclosures are required in Arizona. Although this is the first known death caused by a robot car on public roads, this tragedy is unsurprising given the information revealed in the disengagement reports about the ‘au-

tonomous’ capabilities of these vehicles, said Consumer Watchdog. Earlier this year twenty companies released ‘disengagement reports’ showing robot cars cannot go more than 5,596 miles in the best-case scenario without a human test driver taking over the wheel. In most cases, the vehicles cannot travel more than a few hundred miles without needing human intervention, Consumer Watchdog noted. Despite the information revealed in these reports, the California DMV gave robot cars the green light to hit the road without a human driver ready to take control next month. ‘If robot cars are already killing people even with the presence of a human driver in the car, how lethal are these technologies going to be next month when they will roam public roads without a human onboard ready to take control?’ asked Sahiba Sindhu, a consumer advocate at Consumer Watchdog.

Consumer Watchdog said all data from the Arizona fatal crash should be made public so it can be analyzed by outside experts. The group said Uber has demonstrated a concern about rushing robot vehicles on to the road, not a concern about safety. An email exchange between former Uber CEO Travis Kalanick and then lead robot car developer Anthony Levendowsk, revealed in the recent Waymo-Uber lawsuit, makes clear the corporation’s lack of concern for public safety. ‘I just see this as a race and we need to win, second place is first loser’ read one text from Levandowski in March, 2016. ‘We do need to think through the strategy to take all the shortcuts we can find,’ said another from the engineer on the same day. ‘Uber simply cannot be trusted to use public roads as private laboratories without meaningful safety standards and regulations,’ said Simpson. Visit them at www.consumerwatchdog.org

Artificial Intelligence Coming to Auto Glass—and Insurance, Mitchell Uses Image Recognition to Confirm Repairs by Tara Taffera, glassBYTEs.com

Artificial Intelligence (AI) is coming to the auto glass and insurance industries. Case in point, Mitchell International is exploring a computer vision application that uses image recognition to confirm repair vs. replace decisions. This is according to the company’s 2017 Third Quarter Industry Trends Report. Computer vision researchers at Carnegie Mellon demonstrated the ability to detect and understand small movements. Mitchell said in its report, ‘Instead of an automotive repairer just getting guidance on the next step in a given repair procedure, they could get real-time evaluation of ancillary

problems detected by computer vision.’ In fact, in February 2018, glassBYTEs reported that Autoglass, a vehicle glass repair and replacement company based in the UK and owned by Belron, tested the latest AI technology to assess the severity of vehicle glass damage. The company said this can be used to determine whether customers require a repair or a full replacement. An article written by Olivier Baudoux, vice president, Global Product Management, auto physical damage solutions, authored an article in the Mitchell Report, saying that AI will be used in the future of auto glass claims workflow. First, the concept has to gain traction.

4 Tips to Setting Labor Rates in the New Year

by Sam Valenzuela, National AutoBody Research

It’s the New Year, and many body shops use this time to consider changes to their labor rates. But for collision repairers, 2018 is distinctively different from prior years. A new reality of advanced, high technology vehicles has arrived and dramatically changed the collision repair landscape forever. More than ever, proper labor rate pricing is crucial for body shops to sustain long-term profitability, growth, 4

and prosperity. At NABR, we’ve been actively surveying, studying, and analyzing labor rates for quite some time now, enhanced through our Variable Rate System (VRS) software. After communicating with thousands of body shops and seeing first hand how they make decisions about pricing their labor, we have some basic steps to share for anyone who wants to take action on their labor rates for 2018. First, let me provide some context. About 4,650 individual body

APRIL 2018 AUTOBODY NEWS / autobodynews.com

‘With rapidly changing conditions that put more drivers and more complex cars on the road, it’s no surprise that auto claim value and loss costs have increased substantially in recent years,’ said Ryan Mandell, director of performance Consulting for Mitchell Auto Physical Damage Solutions. He added that AI is ready to tackle these increased workloads with specific solutions. Baudoux’s article went on to say that ‘once the meaningful data is identified, AI can help to elevate the right information in a way that assists and expedites workflow processes. By leveraging AI and visual computing to analyze photos for example, AI-enabled workflow solutions can use machine learning technology to

shops nationwide have submitted labor rate surveys to us. From that survey data, posted rates for body labor range from $57 (national average) to $88 (+2 standard deviations). New surveys submitted within the last twelve months range from $63 to $98 (avg to +2 std dev). Doing a comprehensive labor rate analysis for your shop can be complex and quite involved, so instead, we offer here 4 simple steps to help get you on the road to finding the right price for your individ-

minimize estimate errors and maximize review efficiency.’ In that vein, Mitchell launched the Mitchell Assistance Review Project 18 months ago to accomplish this goal. ‘By utilizing millions of damaged vehicle photos, computers are ‘trained’ to recognize vehicle damage and use computer vision to double check repair versus replace decisions. This will help carriers achieve better estimate consistency, maintain estimate quality and be more selective about sending appraisers into the field, all while improving cycle times and productivity.’

We thank Tara Taffera and glassBYTEs .com for reprint permission.

ual shop.

1) Consider your market’s overall cost of living. This can serve as a simple sanity check to help ensure your labor pricing is within a reasonable range for the area you operate in. While there is no official US government cost of living index that compares the cost to live in different cities, there are some online resources that do. One is AreaVibes.com, which can give you a See Your Labor Rates, Page 62


autobodynews.com / APRIL 2018 AUTOBODY NEWS

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SF Motors Deploys Advanced Research, Test Vehicles Across Silicon Valley, CA

SF Motors announced it has begun test-driving autonomous technology on the streets of Silicon Valley after receiving a permit from California’s Department of Motor Vehicles to test autonomous vehicle technology on public roads. With two manufacturing plants and four R&D offices across three continents, SF Motors is aggressively pursuing state-of-the-art intelligent and connected vehicle technologies. “On the heels of receiving our autonomous vehicle test permit in California, we believe this is the ideal time to begin putting our research to the test as we prepare to unveil our intelligent electric vehicles equipped with advanced autonomous and connectivity systems,” said John Zhang, CEO of SF Motors. “To compete in the global EV market, we’ve placed a considerable investment in research and development and because our technology is at the core of our vehicles. We’re humbled to see our technology be deployed in our backyard and see the future of our advanced systems as exceptionally bright.” SF Motors finalized a multi-year $2.5 million agreement with the Uni-

versity of Michigan in late 2016 to conduct proprietary joint research on advanced automated driving systems. This investment has led to groundbreaking progress in autonomous technologies, such as heterogeneous

sensor fusion, multi-object detection and tracking, and high-performance vehicle motion control. These technologies and breakthroughs are supporting new product development and extensive testing validation at SF Motors, focused on delivering reliable, safe and affordable products to customers. Test drives are being conducted in California and Michigan, with further research expected to continue to advance the technologies. “Looking ahead, SF Motors targets to achieve protected autonomy in

1st Driverless Bus Deploys in CA After Rules Update

by Ryan Johnston, StateScoop

California, long a hotbed for autonomous vehicle development, is taking even more steps to sustain its industry leadership. On March 6, the Contra Costa County Transportation Authority (CCTA), in partnership with research facility Gomentum, debuted the first self-driving bus to operate on public roads in California. The bus, manufactured by EasyMile, contains no steering wheel, brakes or accelerator—though it does have a button to push in case of emergency, and an attendant to ride inside for the time being. The 12-seat bus’s short venture onto public roads this March 6 marked the third phase of the CCTA’s pilot program. After receiving permission from the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) in October 2017 and permission from the California DMV in January 2018, the bus will begin to pick up commuters in parking lots at Bishop Ranch, a 585-square-acre office park in San Ramon, CA, on April 6

27. The bus has previously been tested at the site. “We are excited to celebrate this milestone with CCTA and Bishop Ranch,” said Department of Motor Vehicles Director Jean Shiomoto. “The California DMV has been working for years to bring this groundbreaking technology to California’s roadways while ensuring safety of the motoring public.” The project follows approval by the California DMV in February of new regulations for autonomous vehicle operations. The DMV released a public notice on its website on March 2, kicking off a 30-day public comment period on the new rules. AV manufacturers have been able to test their self-driving cars with a human as a back-up driver since 2014, but the new regulations will allow companies to apply for permits to test autonomous vehicles remotely and with the public, beginning on April 2. Each permit will have different requirements, according to the DMV. We thank StateScoop for reprint permission.

APRIL 2018 AUTOBODY NEWS / autobodynews.com

2020 through fast innovations and iterated developments in multiple technology areas, such as deep learning, sensor fusion, path planning, human machine interface, safety and redundancy, vehicle electronics, to name a few,” said Yifan Tang, CTO of SF Motors. “We will utilize our strength in system integration as well as supplier partnerships to overcome the many challenges in bringing autonomous driving to the global markets.” SF Motors is also testing autonomous driving vehicles on the roads in China. The company plans to publicly announce and unveil its intelligent electric concept vehicle for global markets at an event scheduled for late March in Silicon Valley.

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8 Cars Stolen at John Hine Mazda

by Staff, WiredFocus

Eight Mazdas were stolen from a popular car dealership in Mission Valley, CA, the morning of March 10, police confirmed. Police were investigating the break-in that happened sometime before 7 a.m. that Saturday at John Hine Mazda car dealership, off Camino del Rio South near Westfield Mission Valley. A team of thieves worked together and drove the cars away, according to the manager. The stolen cars were in the back of the shop being serviced, he said. The thieves also took computers and tools. Police said at least one person is suspected of breaking into the lot and stealing the vehicles. John Hine, the car dealership’s owner, told NBC 7 surveillance video caught the theft on camera. The video was handed over to police. No other information was immediately available. We thank WiredFocus for reprint permission.


autobodynews.com / APRIL 2018 AUTOBODY NEWS

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Mike’s Auto Body Adds 2nd Aluminum Annex in San Ramon, CA

by Ed Attanasio

To be more effective at repairing Ford F-150s and Ford F-250s, Mike’s Auto Body in Northern California recently added its second aluminum facility in San Ramon, CA. It is a 13,000-squarefoot building located near their existing shop.

Mike’s Auto Body’s new aluminum annex in San Ramon, CA, will allow the MSO to repair Ford aluminum trucks in a separate facility that is strategically located in relation to its 15 Bay Area locations

MSOs all over the country are establishing standalone aluminum repair facilities in strategic locations to accommodate the growing influx of aluminum vehicles. A few years back, many shops were calling the

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Ford F-150 a “Sasquatch” because they had heard a lot about it, but hadn’t seen one. But in 2017, Ford sold nearly 900,000 F-Series trucks in the U.S. with bigger numbers forecasted for this year, so MSOs are getting ready to deal with what could be an avalanche of Ford aluminum trucks through the end of this year and into 2019. Mike’s Auto Body CEO Brennan Rose has played an instrumental role in establishing both aluminum annexes from day one, and sees great value in adding a second location. “We can load level, so that if we get a large amount of Ford F-150s at one location, we can adapt quickly and seamlessly, so that it won’t impact our cycle times and keep our production going,” he said. “Now in conjunction with our original aluminum annex in Lafayette, we’re prepared for when we get any increase in Ford aluminum trucks.” With a growing influx of Ford aluminum vehicles in all of its 15 locations, the two annexes are strategically located and conveniently situated about 16 miles apart. “We looked at a lot of other places, but decided that San Ramon is

APRIL 2018 AUTOBODY NEWS / autobodynews.com

an ideal solution for us,” Rose said. “If we’re going to be shuttling vehicles from shop to shop, we don’t want to spend a lot of time transporting them back and forth. The San Ramon location was chosen because it’s ideally located and the building is well-suited for aluminum repairs.”

With more and more F-Series trucks entering their shops, a second aluminum repair facility was a necessity for Mike’s Auto Body

Rose has his eye on the future as well as his bottom line when it comes to OE certifications—such as this aluminum one with Ford. “We want to build on our current market and expand without having to staff up or increase our overhead, and this is an ideal way to do that. This industry is changing literally every day, so we have to change in order to stay up with it,” he said. San Ramon’s manager, Joe Drago, is a veteran of the collision

repair industry, so he has experienced the aluminum evolution first-hand from the very beginning. “About a decade ago, car designers started looking at new materials to make vehicles lighter without sacrificing their integrity, while improving gas mileage overall,” Drago said. “Our second aluminum annex is much-needed because we’re getting more and more Ford F-Series trucks, and since they’re very popular in the East Bay, we’re confident that we’ll be seeing them in increased numbers from now on.” To be able to work on today’s highly sophisticated aluminum vehicles, Mike’s Auto Body has to acquire special tools and equipment as well as Ford-sponsored training offered by Ford Motor Company. “The equipment involves special welders, rivet tools and a laboratorylevel clean room,” Drago said. “We have two A-Techs that are Ford aluminum-trained and Platinum I-CAR working here in San Ramon, and there are another two in Lafayette. They’ve received the best OE aluminum training available, so we know that they’re better than adept at repairing these vehicles.”


CAWA Hosts YANG Regional Meet-Up, Feb. Leadership Days

very much met our expectations. “The importance of hosting On Feb. 16, CAWA hosted a Napa YANG events is to promote industry Regional Meet-Up for the Young opportunities, education and networking to the younger professionals in the aftermarket. As a trade association in the aftermarket industry, it’s imperative that CAWA promote the industry’s interests and contribute to the education of people employed in the industry. “As such, CAWA’s mission statement supports our efforts with industry education and a commitment to YANG. CAWA The Feb. 16 event attracted more than 15 YANG members represents auto parts jobas well as about 85 CAWA members bers, retailers, warehouse Auto Care Network Group (YANG) distributors, manufacturers, manufacin conjunction with CAWA’s Febru- turer representatives and program ary Leadership Days and Educational groups. Forum. “The mission of CAWA is to According to CAWA President provide communications, education, and CEO Rodney Pierini, “The legislative and regulatory advocacy event went very well, and we had and group purchasing of services for over 15 YANG members in atten- its members while promoting the audance and approximately 85 mem- tomotive aftermarket industry. It is bers of CAWA representing the one of the largest trade associations automotive parts industry. The event of its kind in the United States and by Chasidy Rae Sisk

recognized as a leader in the auto care industry.”

tions. Aaron Lowe, Senior Vice President of Regulatory and Government Affairs for the Auto Care Association, presented “A National Update on the Auto Care Legislative Agenda in the 115th Congress,” and Parts Tech CEO Greg Kirber discussed “E-Commerce and the Changing Needs of the Repair Shop.” “Warranty Rights— CAWA hosted a Napa Regional Meet Up for YANG in conWhat You and Your Cusjunction with CAWA’s February Leadership Days and Edutomer Should Know” cational Forum was covered by Gary CAWA’s Educational Forum in- Conover, CAWA’s California Legcluded four informative presenta- islative Advocate, while Carolyn Coquillette, CEO of Shop-Ware Inc., presented “A New Standard for Auto Repair Software.” Pierini concluded, “CAWA has made a commitment to support the mission and efforts of YANG and has hosted previous Regional Meet-Ups. In fact, CAWA will host another Meet-Up on June 22nd in Newport Beach, California. Watch for details as registration materials will be distributed in April. Parts Tech CEO Greg Kirber discussed “ECommerce and the Changing Needs of the For immediate information, however, Repair Shop.” contact programs@cawa.org.”

autobodynews.com / APRIL 2018 AUTOBODY NEWS

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Continued from Cover

AB 2276

1679, opposes AB 2276 as well. “AB 2276 continues to allow insurers to conduct ‘alternative labor rate surveys’ that would effectively replace the new CDI regulations,” the CAA wrote in a recent email. “The bill eliminates important standards set forth in the CDI regulations that produce consistent, accurate and reliable labor rate results and instead allows insurers to skew the results in a manner that will suppress market rates. “The CAA remains opposed to AB 2276, as introduced. The bill may be heard as early as March in the Assembly Insurance Committee. We request that CAA members contact their assembly member and express opposition to this measure as soon as possible. The CAA will continue meeting and working with assembly member Burke and other stakeholders to address concerns with the bill.” CAA lobbyist Jack Molodanof believes that AB 1679 had huge holes in it and that AB 2276 has some of the same problems. “From a body shop perspective, AB 2276 offers improvement over the original AB 1679, but concerns are still present regarding geographical areas and methodology,” he said. “For instance, the bill also seems likely to promote more disputes between repairers, insurers and customers by replacing the CDI’s survey questions about aluminum, fiberglass and carbon fiber labor rates with a vague line that says ‘specialty repair rates shall be handled on an individual basis.’” Molodanof has been in conversations with Assemblywoman Burke about the bill. Both sides are listening, but they’re still far apart, he said. “AB 2276 allows for an alternative labor rate survey, but eliminates important standards and guidelines that were set in the CDI regulations that produce consistent, accurate and reliable labor rate results,” he said. “We’re currently trying to work with Assemblywoman Burke on this bill, by pointing out issues... She is trying to address our concerns, but there are a lot of stakeholders, so we still oppose the bill, even though we’re keeping the dialogue open. “AB 1679 had so many problems. AB 2276 is admittedly a little better, 10

but it still contains flaws. One of the major issues in this bill pertains to the geographical area. Under the bill, insurers can use an artificially large geographical area—such as an Assembly District—that does not reflect the local market, resulting in a statistically invalid survey. Market areas for body shops are small and local to their customers. For instance, in Marina del Rey, which is a high-income area (and in Assemblywoman Burke’s district), labor rates will be higher than in nearby Lawndale, which is a less affluent area. They’re completely different markets, and so shops in Lawndale charge less. Assembly districts are too large; the average prevailing rate that the insurance companies set will act as a “de facto cap”; the shops in Lawndale get a windfall and then the shops in Marina del Rey get paid less—It’s just not fair. There needs to be something to address that issue and to allow for the shops in Marina del Rey to get paid the rate they regularly charge.” Molodanof indicated that Assemblywoman Burke was open to the idea and suggested as a compromise that if a shop is charging at a higher rate and can prove it through their final invoices, for example, they should get paid at their regular charge rates. Another bill on the CAA and Molodanof’s radar is AB 2392 (Vehicles: Towing and Storage), authored by Assemblyman Miguel Santiago (DL.A.). Under existing law, when a vehicle has been towed and stored, the legal owner may only be charged a storage fee during the first 15 days of possession, and beyond the first 15 days, only for any time after three days have elapsed after written notification has been made to the legal owner, as specified. This bill would shorten this period to the first five days, and beyond the first five days, only for any time after three days have elapsed after written notification has been made to the legal owner, as specified. The bill would also require notification to be made to the insurer of the vehicle if notification of the legal owner is not successful and that insurer is known. Existing law makes an insurer that is responsible for reasonable towing and storage charges liable to the person providing those services, as specified. Molodanof does not believe that auto repair shops, both mechanical and collision, should be included in the bill. “We still haven’t taken a position on this bill yet, but it really will change

APRIL 2018 AUTOBODY NEWS / autobodynews.com

the way insurance companies will compensate shops for incidental storage,” he said. “It captures towing and storage companies, and we have no issues with that. But, it also includes auto repair facilities, [which] we do have problems with. Our shops repair cars; they’re not in the business of storage. There are instances when a shop has to store a vehicle for whatever reason, but that’s not the business they’re in. This bill tries to address some of the abuses in the towing industry and most of them relate to price gouging by standalone storage facilities, and we agree with that part of it. But, those are different situations and this bill captures our industry in the same net. That should not be the case.” The Assembly Education Committee, Budget Subcommittee and Select Committee on Career Technical Education (CTE) held a lengthy joint hearing in Sacramento to discuss the future of CTE in California. Molodanof said. “The committee supports continued CTE funding in the budget and through AB 1743 (CTE $900 million incentive grant funding ends 2017–18), but the main question is how the money is going to be deliv-

ered to the local CTE programs. The Governor wants it to flow to local consortiums (limited to those that participate) and the legislature wants the money to flow through the state so all the schools receive a portion of the CTE funds.” Molodanof testified before the committee, thanking them for conducting the hearing and providing member support for CTE. “I stated that auto shop programs provide hands-on learning, problemsolving skills and employability skills that lead to good-paying automotive jobs, but there are challenges with these programs,” he said. “Many automotive instructors are retiring and not being replaced, and the only solution is to close down the auto shop programs where teachers [are] not available. Auto shop programs need funding for teachers, updated equipment, tools and curriculum to continue to support these important programs and for the future of our workforce. We appreciated committee members’ help and support for CTE and will work with them to support AB 1743.” CAA will be hosting its Legislative Day on April 24 at the Capitol.


autobodynews.com / APRIL 2018 AUTOBODY NEWS

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Merkley to Introduce Bill to Invest in Career, Tech Education in OR

Senator Jeff Merkley announced meaningful hands-on instruction Feb. 21 at Lane Community College that career technical education prothat he will introduce the BUILD vides is critical to overall student (Building Understanding, academic success and inInvestment, Learning and creasing graduation rates Direction) Career and that result in building the Technical Education Act of workforce our community 2018, which would proneeds,” said Dr. Susan vide grants to support state Rieke-Smith, superintenefforts to restart career and dent of Springfield Public technical education proSchools, which has ingrams in middle and high Sen. Jeff Merkley, vested in career and techschools. nical education at its D-Oregon “Carpentry, automomiddle and high schools. tive, welding and other classes help “Springfield Schools could not be broaden students’ perspective on more pleased by the Senator’s long possible professions and keep them history of support for education. The engaged in school. Yet these impor- introduction of this bill gives distant classes continue to be reduced or tricts such as Springfield the fiscal eliminated as public school budgets support needed to ensure these proare stressed,” Merkley said. “In high grams are available in systematic school, I was fortunate to receive a and sustainable ways across our dispublic education that exposed me to trict.” different skills and career paths. Merkley said career and techThrough the types of programs sup- nical education broadens and inported by this bill, students in Ore- forms student attitudes on a variety gon and across the nation will be of education paths and potential empowered to choose the education professions, such as construction pathway that will lead to success in technology, welding, automotive, high school and beyond.” industrial automation, visual and “Engaging students in the graphic arts design, and manufacbreadth of career options through turing engineering.

55 Wrecks in Northern Nevada Still Clogging Shops

by Ryan Curry, News 4 On Your Side

Dozens of cars involved in two massive accidents are still being repaired after a week. Donnie Thiessens owns Liberty Auto Collision. He said the win-

ter had been mild until the wrecks. “We’re not so much overloaded—We just knew we had some work coming,” Thiessens said. “We really haven’t had any bad weather until just recently. We are probably a week behind.” Two major crashes involving 55 cars blocked traffic for hours. Thiessens received a couple cars from those wrecks, one of which was irreparable. The ones he could repair will take him close to a month to fix. 12

“It can sometimes take up to a month to fix some of them,” Thiessens said. “The hill is closed right now because of the weather, so we can’t get any parts over the hill.” Nevada Highway Patrol said winter weather was a contributing factor to the accidents. NHP wants everyone to remember to drive slowly during hostile road conditions. “Slow down and reduce your speed,” trooper Matt McLaughlin said. “If you don’t feel comfortable driving on the interstate, on 580 or 80 or whatever it might be, take the surface streets.” We thank News 4 On Your Side for reprint permission.

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APRIL 2018 AUTOBODY NEWS / autobodynews.com

The BUILD Career and Technical Education Act of 2018 provides $20 million in new federal funding to establish a two-year pilot grant program supporting career and technical education exploration programs in middle schools and high schools. Unlike many existing grant programs, the application process established by this legislation explicitly takes into account the relative resources and capacity of each school district, so small and rural applicants won’t be at a disadvantage in the selection process. Additionally, grants established through the legislation would go directly to school districts, allowing a significant amount of flexibility to ensure the programs under their authority are rigorous, innovative, sustainable and will truly prepare students to explore careers and develop skills required to enter in-demand careers, the senator said. Merkley announced the BUILD Act of 2018 at a Lane County town hall in Eugene. It was his 336th town hall as a senator. We thank KTVZ News Channel 21 for reprint permission.

OR DEQ Permit Needed for Painting Facilities

The AQB-001 Basic Air Contaminant Discharge Permit is required for businesses that paint 25 or more automobiles in a 12 month period and are located in the Portland Air Quality Management area. Come and ask the DEQ staff your questions!! Who: Kieran O’Donnell, David Kauth, Dan Defehr, Dan Murphy, Michael Orman Oregon Department of Environmental Quality Staff What: Businesses that meet certain criteria are required to obtain a permit from DEQ. Cost: $20 for lunch/meeting When: Wednesday, April 11, 2018 11:30am—1:30pm Lunch Included Call the NATA office to register at 503-253-9898 Meeting at: 7931 NE Halsey Suite 300 NACM Banfield Office Plaza

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13


PA Shop Owner Files Nearly $713,000 Lawsuit Against Progressive by Stacey Phillips

Across the country, “insurers aren’t fully reimbursing consumers so they can have proper and safe repairs done,” according to Ron Perretta, owner of Professionals Auto Body in Pennsylvania. “It’s impossible for the shops to fix these cars properly [while] being paid what they are being paid,” said Perretta. “Their hourly rates are being suppressed and the repair operations that are needed to fix these cars properly have been suppressed.” He said insurers continue to “bully” shops into lowering their rates and not performing operations required to bring the vehicles back to their pre-loss condition. After experiencing this firsthand for many years at his two Pennsylvania locations in Altoona and Duncansville, Perretta filed a lawsuit against Progressive in 2017. According to court documents, “Progressive had a contractual duty to the insureds and third-party claimants to compensate Professionals for the

14

reasonable and necessary costs to return the covered vehicles to their preloss condition. But rather than agree to reimburse Professionals for the cost of making reasonable and necessary repairs, Progressive directed Professionals to ‘utilize inferior parts and/or to perform inferior service.’” When Autobody News asked Perretta if Professionals was asked to use inferior parts, the body shop owner replied, “Yes, as they always do… as they do all shops. We refuse to use inferior parts. The years of tracking the return of those parts have led us to not use them anymore.” Perretta said he has also found that these parts are not crash-tested or safe. Therefore, when working on customers’ cars, Professionals “perform[ed] all reasonable and necessary repairs to place the vehicles in their pre-loss condition[s],” according to court documents. When the body shop asked to be reimbursed from Progressive, Perretta said the insurance company paid a fraction of the cost of the repairs.

APRIL 2018 AUTOBODY NEWS / autobodynews.com

The $712,972.90 Professionals is seeking in damages represents “unpaid balances, ‘delay time costs,’ and administrative costs.” Insureds and third-party claimants signed what is called an “Assignment of Proceeds” that authorized the body shop “…to recover any unpaid balances for Professionals’ services and repairs,” court documents stated. “The body shop has a contract with the consumer and the consumer has a contract with the insurance company,” explained Perretta. “The Assignment of Proceeds allows the body shop to ‘step into the consumers’ shoes to secure a fair and reasonable reimbursement.” As a result, Professionals is allowed to seek damages from Progressive under the insurance company’s contractual obligations to the insureds and third-party claimants. “Progressive had a duty to compensate the consumer for a reasonable repair,” he added. The case was originally filed on August 23, 2017 in the Court of Common Pleas of Blair County, PA.

Twenty-five insurance companies were named as defendants. A month later, the Court of Common Pleas removed Progressive from the larger case and the insurance company moved the case to the United States District Court for the Western District of PA. On December 4, 2017, the body shop filed an amended complaint and brought four counts against Progressive: breach of contract; bad faith; intentional interference with business relations; and quantum meruit. Progressive attempted to dismiss the amended complaint. According to court documents in February 2018, the court denied Progressive’s motion to dismiss Professionals’ claims of breach of contract, bad faith and unjust enrichment claims. However, the court granted the insurance company’s motion to dismiss the bad faith claim in regard to third-party claimants and the causes of action that accrued before August 23, 2015 due to the statute of limitations. The court also granted Progressive’s motion to dismiss Pro-


fessionals’ tortious interference with business relations claim. “This all really just comes down to one thing—the insurance company has a contract with their customer to bring their vehicle back to its pre-loss condition and they are breaching that contract,” said Perretta. “Because of that, that’s where this judge [Judge Kim R. Gibson] looked at this and said ‘Yes, these counts are true. They are accurate.’ We’ve proven that.” He said the other pertinent issue is that insurers want to pay one rate in the market. “It has been proven over and over again that a rate is not one number. The rate is a range of numbers,” said Perretta. “In a market, the range could go from $50 an hour to $120 an hour.” He said that shops that aren’t trained and don’t have the proper equipment or facilities to repair cars are paid the same rate by the insurance company as the shops that have the proper facilities, training and equipment. “That makes no sense,” said Perretta. “Any judge who looks at this

whole situation is going to apply the law based on the contract… as this judge mentioned in his opinion.” Breach of Contract According to the court documents, Progressive argued that Professionals did not state a plausible breach of contract claim because it didn’t plead the existence of a contract, the terms of the contract and damages. The insurance company also stated that the body shop did not have standing “… to pursue a breach of contract claim on behalf of third-party claimants who, by definition, are not parties to any agreement with Progressive.” Professionals alleged that the insurance company had contracts with the insureds and liable third-parties, which required Progressive to pay for “reasonable and necessary expenses.” In addition, the body shop said its customers assigned their claims against the insurance company. The court affirmed that Professionals pleaded a breach of contract claim and stated, “Professionals sufficiently alleged each element of breach of contract under Pennsylva-

nia law.” The court also concluded that Professionals has standing to purse breach of contract claims on behalf of third-party claimants. Bad Faith Claim Progressive asked the Court to dismiss Professionals’ bad faith claim for three reasons, according to court documents. First, it said that the body shop lacked standing to bring a bad-faith claim on behalf of thirdparty claimants. Second, Progressive stated that Professionals failed to plead a bad faith claim on behalf of insureds because it did not show that the insurance company violated the Motor Vehicle Physical Damage Appraiser Act; the insurance company paid part of the claims due; and the body shop did not establish that Progressive acted unreasonably. Third, Progressive said that the body shop’s bad faith claims that were based on repairs prior to August 23, 2015 are barred by the statute of limitations. Professionals, in response, conceded in court documents that “Pennsylvania law does not recognize bad faith claims asserted by ‘third-party of intended beneficiaries

of insurance contracts.’” It also argued that Pennsylvania law doesn’t require a complete denial of a claim to state a claim for bad faith. In response to the statute of limitations argument, Professionals “concedes that the Pennsylvania Supreme Court determined that a two-year statute of limitations applies to statutory bad faith claims.” The Court dismissed the body shop’s bad faith regarding thirdparty claimants and stated in court documents that “Under Pennsylvania law, the third-party claimant cannot have a cause of action for bad faith.” It also ruled that Professionals pleaded a bad faith claim in regard to the insureds. “Professionals alleges that Progressive failed to reimburse it for the full amount of the reasonable and necessary repairs without a valid justification,” according to court documents. “Furthermore, Progressive knew of or recklessly disregarded this lack of a reasonable basis because itfailed to fully reimburse Professionals despite Professionals informing Progressive on several ocSee Progressive Lawsuit, Page 18

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Las Vegas-Area Auto Insurance Costs Rise Above National Average

miums across the valley have risen 31 percent since 2011. Local insurThe population of unincorporated ance premiums are about 10 percent Clark County, which includes those higher than the national average, areas, not in any city and the largest which has risen about 20 percent. Unlike some cities that may have weatherrelated issues, one of the valley’s biggest issues is auto theft. Michael Geeser with Nevada Insurance Council said fraud gets built into the insurance rate, so if fraud is limited, policy owners could also see a reduction in some of Auto insurance premiums on the rise in the valley (MGN: these exorbitant insurState Farm / CC BY 2.0) ance policies people are part of the Las Vegas Valley, has ex- paying. ceeded 1 million people for the first time, according to the County’s De- According to The Zebra, the folpartment of Comprehensive Plan- lowing Las Vegas area zip codes ning. pay the most for car insurance: Officials say the countywide • N. Las Vegas – 89030 – $2,768 population is up 2 percent, to 2.25 • Las Vegas – 89101 – $2,757 million. This likely means Las • Las Vegas – 89102 – $2,753 Vegas Valley is seeing more traffic, • Sunrise Manor – 89104 – $2,743 more crashes and other factors that • Las Vegas – 89106 – $2,741 influence auto insurance rates. • Las Vegas – 89146 – $2,732 According to the insurance • Las Vegas – 89107 – $2,706 search engine The Zebra, auto pre- • Paradise – 89121 – $2,699 by Christy Wilcox, News 3 Las Vegas

Mike Mohler Elected as 2018 Secretary to CAWA Board of Directors

At its February leadership meeting, the CAWA Board of Directors elected Mike Mohler of the Automotive Parts Services Group as its 2018 Secretary to the Board of Directors. Mohler is Executive Vice President, Vendor Relations and Product Strategy, at the Automotive Parts Services Group, a collaboration between the National Pronto Association and Federated Auto Parts Distributors. In his current position, Mohler is responsible for the overall management of The Group’s vendor relationships and overall product/brand strategy. “We are pleased to have someone of Mike’s caliber step up to an officers’ position within the Association and we look forward to his many years of service and contributions to CAWA,” commented Jack Gosnell, Chair of the Board of Directors upon Mohler’s election. “I am honored to have been selected as Secretary to the CAWA Board of Directors. I am delighted to continue my service, as Secretary, in the Association’s continued race for member and industry relevance—not only for today, but for all of the to16

morrows yet to come,” Mohler commented upon his election. In other election news, the CAWA Manufacturers Advisory Council (MAC) elected Jeanette Lorenzo of NAME, Inc. as 2018 Chair and Bob Leone of ADVICS NA as the Vice Chair for the year. “These two individuals have served in the past and do an excellent job facilitating the MAC’s agenda and work,” commented CAWA President & CEO Rodney Pierini. “We look forward to the participation and contributions of all our volunteer leadership and anticipate a stellar year for CAWA.” CAWA is an automotive aftermarket trade association, which represents auto parts jobbers, retailers, warehouse distributors, manufacturers, manufacturer representatives and program groups. The Association provides educational, legislative and business support to the industry and its membership. It is one of the largest trade associations of its kind in the United States and recognized as a leader in the automotive aftermarket industry.

APRIL 2018 AUTOBODY NEWS / autobodynews.com

• Las Vegas – 89110 – $2,694 • Spring Valley – 89103 – $2,691

And these pay the least: • Bunkerville – 89007 – $1,482 • Mesquite – 89027 – $1,498 • Jean – 89026 – $1,585 • Moapa Town – 89025 – $1,585 • Laughlin – 89029 – $1,636 • Cal-Nev-Ari – 89039 – $1,646 • Moapa Valley – 89021 – $1,695 • Boulder City – 89005 – $1,717 • Searchlight – 89046 – $1,742 • Indian Springs – 89018 – $1,818 In July 2018, Nevada’s insurance minimums will change when set minimums increase. Geeser said people who have to adjust their policy will expect to pay a few more dollars each month. This will give car owners more insurance coverage in the future as car repair and other costs continue to rise. Geeser recommends shopping for insurance to ensure you have the best policy at the best insurance rate. We thank News 3 Las Vegas for reprint permission.

www.autobodynews.com

State Farm, I-CAR Insurance Gold Class Status

I-CAR® has awarded Insurance Gold Class® business recognition at the corporate level to State Farm®, an achievement reserved for insurance carriers that are committed to improving the performance and quality of auto collision repairs. State Farm’s appraiser staff has completed the Platinum Auto Physical Damage Appraiser (APDA) training requirements in I-CAR’s Professional Development Program (PDP), therefore achieving corporate Insurance Gold Class. State Farm’s Select Service® Program also recognizes I-CAR’s Welding Training & Certification™ as part of its network education, equipping each of its network technicians with the necessary information, knowledge and skills to perform quality welds. “State Farm’s enthusiasm and encouragement for its appraiser staff to adopt APDA training and as a result, become a corporate Gold Class organization, confirms a dedicated commitment to training throughout the organization,” said Brad Gutcher, I-CAR manager, segment development - insurance.


autobodynews.com / APRIL 2018 AUTOBODY NEWS

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Continued from Page 15

Progressive Lawsuit

casions that it had failed to pay the full cost of all reasonable necessary repairs on each of the vehicles that Professionals serviced… “The fact that Progressive has a long history of failing to fully reimburse Professionals supports Professionals’ argument that Progressive acted in bad faith.” Accordingly, the court denied the insurance company’s motion to dismiss the bad faith claim in regard to the insureds. Regarding the statute of limitations, the Court granted Progressive’s motion to discuss the bad faith claim for those that occurred before August 23, 2015. Intentional Interference With Business Relations Progressive also tried to dismiss the intentional interference claim by Professionals and said the body shop “…fails to allege that any of its contracts with its customers were breached or not fully per-

formed because of Progressive’s alleged breach, emphasizing that Professionals admitted that it ‘completed the terms of its contract with each vehicle owner.’” Professionals responded that it suffered actual losses due to the conduct from Progressive. The Court ruled that Professionals did not plead a plausible tortious interference claim, which requires “purposeful action on the part of the defendant, specifically intended to harm the existing relation,” according to court documents. As a result, it granted the insurance company’s motion to dismiss the intentional interference claim. In the Court’s opinion, “The facts alleged in the Amended Complaint do not give rise to a reasonable inference that Progressive specifically intended to interfere with Professionals’ contracts with its customers; rather, they give rise to a reasonable inference that Progressive sought to underpay Professionals for the repairs that Professionals performed on covered vehicles.” See Progressive Lawsuit, Page 22

CIF Raises Big Again at 8th Annual Gala Fundraiser in CA

For the eighth time, the Collision Industry Foundation (CIF) held its annual Gala Fundraiser in Palm Springs, CA. Continuing the well-known tradition, the Foundation again hosted a lively cocktail party, complete with delicious Asian fare hors d’oeuvres and cocktails at the renowned Lulu California Bistro. A total of 117 attendees from the collision industry set a new record for the fun event. The gala guests were able to participate in a raffle and silent auction featuring many items. Items were donated by companies and individuals, and included high-end electronics, custom artwork, a Chip Foose-signed picture, a NASCAR® package as well as vouchers for I-CAR and AMI training classes. The gala was successful and CIF was able to raise more than $59,000. The foundation’s major focus has been the Collision Industry Relief Fund to assist collision repair professionals who have lost their livelihoods from a natural disaster or other catastro-

phe. Most recently, this has included flood victims in Houston, TX, and Florida as well as those who suffered from the wild fires in California. “Our sponsors—companies and individuals—continue to see the value of the Foundation and have supported us significantly,” said Cheryl Boswell, CIF trustee and treasurer. CIF’s vision is to bring awareness and emergency relief to collision repair professionals. If you know of someone in need, please direct them to the CIF website www.collisionindustryfoundation.org. To donate at any time or to learn more about CIF’s current projects, please also go to the CIF website.

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2 Auto Body Shop Employees Hospitalized During Armed Robbery in Hawthorne, CA by Beverly White, NBCLA.com

Four gunmen ambushed and attacked employees of an automobile body shop Feb. 28 in Hawthorne,

Four armed men beat and robbed several employees at an automobile body shop in Hawthorne. Beverly White reports for the NBC4 News at 11 on Wednesday, Feb. 28, 2018

CA, during a robbery, resulting in the hospitalization of two workers. The Hawthorne Police Department received a call of an armed robbery approximately 5:15 p.m. on Prairie Avenue. “We found out it had been a takeover robbery at a business,”

www.autobodynews.com 18

Lt. Goetz of the Hathorne Police Department said. “Some of the workers had been beaten.” Police went door-todoor at surrounding areas in search of the attackers. “We did door knocks of residences we came across and made sure nobody’s being held hostage or that they got into an empty bedroom,” Goetz said. K-9 units were deployed during the search, as was a helicopter, but the robbers remain at large. It is unknown what the four gunmen took during the attack. Police were able to find surveillance footage that shows one suspect leaving the scene. Anyone with information on the robbery is encouraged to contact the Hawthorne Police Department at 310-349-2700. We thank NBCLA.com for reprint permission.

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accepted and retained the benefit because it failed to fully compensate Professionals. Furthermore, it would be unjust for Progressive to retain this benefit,” court documents stated. Progressive also argued that “… the doctrine of res judicata bars Professionals’ claims for intentional interference with business relations and unjust enrichment because Professionals asserted identical claims against Progressive in previous litigation in the Middle District of Florida.” (link to MDL article) In response, Professionals asserted that the individuals it is representing in this case are not included in the MDL. The court agreed and ruled that Progressive did not establish res judicata. The legal information included in this article is based on court documents. Autobody News reached out to Progressive for comments, but none were provided. Autobody News will continue to report on this case.

Continued from Page 18

Progressive Lawsuit Unjust Enrichment Claim Progressive attempted to dismiss this claim for three reasons. First, it said the body shop did not confer any benefit on the insurance company. Second, the body shop didn’t accept any benefit allegedly conferred and third, Progressive said that express contracts govern the repairs that are at issue. Professionals alleged that it conferred a benefit on the insurance in which Progressive accepted, which was to repair the vehicles covered under the insurance policies without being fully paid for the work. In court documents, the body shop also said it “properly pleaded unjust enrichment in the alternative to its breach of contract claims.” The judge ruled that Professionals stated a plausible unjust enrichment claim and denied Progressive’s motion to dismiss this claim. “Professionals conferred a benefit on Progressive by discharging Progressive’s obligations to pay for repairs under its policies. Progressive

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2017, one of its autonomous Volvos was knocked onto its side at an intersection. Although the car was driving itself at the time of the collision, it was ruled that a human-driven vehicle had failed to give way at a traffic signal, thus causing the crash. Tempe Police Department said: “On March 18, 2018 at approximately 10 p.m., Tempe PD responded to a traffic collision on Curry Road and Mill Avenue in Tempe, Arizona. The vehicle involved is one of Uber’s self-driving vehicles. It was in autonomous mode at the time of the collision, with a vehicle operator behind the wheel. The vehicle was traveling northbound just south of Curry Road when a female walking outside of the crosswalk crossed the road from west to east when she was struck by the Uber vehicle. The female was identified as 49-year-old Elaine Herzberg. Herzberg was transported to a local area hospital where she passed away from her injuries. Uber is assisting and this is still an active investigation.”

Continued from Cover

Uber Halts Car Testing

tonomous vehicles on public roads across Arizona, giving rides to a small number of customers. A safety operator sits in the driver’s seat of all of these vehicles. Uber said it has suspended its autonomous car operations in Phoenix, Pittsburgh, San Francisco and Toronto. Company chief executive Dara Khosrowshahi said on Twitter: “Some incredibly sad news out of Arizona. We’re thinking of the victim’s family as we work with local law enforcement to understand what happened.” The company began testing its autonomous vehicles on public roads in California in 2016. However, within hours of the trial commencing, the vehicles were caught running red lights. California then revoked Uber’s license to operate self-driving cars in the state, claiming it had not paid for the correct permit to test its vehicles. Uber moved its testing to Arizona, but soon after that, in March

We thank GearBrain for reprint permission.

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New Women’s Group Focuses on Attracting Students to Collision Repair Industry

“It’s hard for me to believe the response that this group is getting,” Women in Auto and Collision (WAC) Jones said. “Women are being reis a new industry group formed this ferred to us by other industry groups, year, and while you may not have by paint suppliers, by parts suppliers heard of it yet, the group is gaining mo- and by word-of-mouth. It’s amazmentum quickly as it seeks to spread ing.” awareness of the many industry opporWAC’s current mission is “passiontunities available. ate women in the automotive industry collaborating and leading members to create industry career awareness with middle school students and their parents.” The female-led group plans to teach students about the opportunities in the automotive and collision industries from a young age as they seek to attract the next generation into the industry. With only two meetWAC’s first meeting was held on Jan. 10 with 10 industry ings under its belt, WAC professionals who started discussing the concept of the has already generated group and established a mission statement support from MV-TAP and AASP-MO, and it WAC is focusing on middle has begun planning activities to school students all the way up to post- generate awareness of career opporsecondary students. tunities in the industry, such as caShelly Jones of ABRA Auto Body reer fairs, mentoring programs and and Glass had taken the reins prior to fundraising campaigns, among oththe election of officers. ers. by Chasidy Rae Sisk

WAC’s first meeting took place on Jan. 10 when eight women and two men gathered to discuss the concept of a women-led industry group and to establish its mission. They

group. WAC also held a small group set-up team meeting on Feb. 20 to compare establishing itself as a nonprofit organization to the alternatives. WAC will hold its next meeting on March 13 at ATI. Two members of the group, Sheena Wagner and Jess Crump with Meramec Heights Collision, have volunteered to provide dinner for this meeting. According to Jones, “We will determine the organizational structure, elect officers, discuss a WAC’s first meeting was held on Jan. 10 with 10 industry trivia night fundraiser and professionals who started discussing the concept of the talk about making a small group and established a mission statement change to our mission next met on Feb. 6 at ATI in Fenton, statement. I’ll propose that we reMO, for the group’s official kick-off move the words ‘middle school’ to meeting, at which time 13 people avoid limiting ourselves—knowing discussed the technical aspects of that 6th–8th grade students will still forming the group and started build- be our primary focus.” ing teams to accomplish the tasks identified. The group’s official name RSVP to SJones@abraauto.com by and logo were unveiled, and they March 6 for WAC’s next meeting, or also shared their Facebook group, visit Women in Automotive and ColWomen in Automotive and Colli- lision on Facebook to get involved sion, as they discussed branding the with the group.

autobodynews.com / APRIL 2018 AUTOBODY NEWS

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Career in Sales to Body Shops Ends in Car Crash by John Prince, Villages-News.com

People working in auto body shops don’t mess with Gail Santoro. She can sand, polish and paint with the best of them. In her early 30s, as a single parent with two young sons, she made an odd choice of employment. She signed on with a private distributor to sell supplies to auto body shops in Florida—typically a career pursued by a man—and ended up making a career of it across the country.

Gail Santoro receives a sales award trophy. The original trophy had a man on the top. Her supervisor rushed out and had it replaced with a woman

“Knowing nothing about the automotive business, I needed to learn, and the only way I could learn was by talking to the body man. Men in a body shop just look at you as a pretty face. They’re happy to talk, but they don’t give you any sales orders. They don’t take you seriously,” Santoro remembers. But not getting orders meant she had plenty of time to ask questions and learn the business. “They gave me the knowledge I needed to be successful when I eventually joined 3M,” she said. Santoro was born in Brantford, Ontario, and in her early teens, her parents divorced. She ended up in Ohio where her mother, a fierce entrepreneur, opened a beauty parlor and cosmetology school. “So, all of my summers were spent going to beauty school and learning how to be a cosmetologist,” Santoro said. “By age 16, I had more hours than were required by the state to take the state licensing exams. I passed them, became a managing cosmetologist and started teaching cosmetology.” The students in her first class ranged from a 15-year-old to 64-yearold twins. 24

Several years later, while starting her career in auto body shop sales, Santoro heard that 3M, the giant research, manufacturing and sales firm, was actively seeking women in their sales force. She applied, was interviewed, hired and went through the company training. Her first posting, in 1976, was to Green Bay, WI. “I’d been living for years in Hollywood, Florida. Going to Green Bay was a bit of a shock,” she said. Santoro sent out cards to the body shops announcing that she was their new 3M representative, signing with her initials and last name, and started making calls. One typical call went like this: “I introduce myself to the owner. He shrugs his shoulders. His hands fall to his sides and his eyes roll up in his head. He says, ‘Oh my gosh, first they send me a black man and now a woman!’ And he turns around and walked away. He wouldn’t even talk to me.” She persevered. “My mother had taught me a lot of things about business and how to win people over,” she said. “She could’ve taught business at Harvard—she was so good at it. She gave me the confidence to be able to do just about anything I set my mind to. I set my mind to do this and be successful at it.” She increased sales in her territory by 250 percent during her first year. The body shop that had originally dismissed her later became a good customer. She successfully argued that her territory be enlarged. She developed special promotions that increased sales. For the next 20 years she continued her sales successes in a succession of territories, often winning sales awards and prizes. Her photo albums are filled with pictures of 3M sales groups in Hawaii and other exotic locations—Santoro the only woman among dozens of men. But being an attractive woman in a male-dominated business required some smart counter measures. She was regularly propositioned by her customers and co-workers. “I knew I needed to help my customers to save face. I didn’t want to make them feel bad. I bought myself

APRIL 2018 AUTOBODY NEWS / autobodynews.com

an engagement ring and invented a fiancé. That was my excuse for turning down drinks or dinner. It allowed them to save face and at the same time avoided a lot of complications for me,” she said.

Gail Santoro and son Bryan in Hawaii at a 3M sales convention

Her professional attitude, deep knowledge of the business and ability to demonstrate products to skeptical body shop owners and workers gained her respect and increased sales. “I can actually cut down Bondo filler or polish a car,” she said. She also credits the quality of 3M products for her success.

“3M is an absolutely wonderful corporation because they build their products on research and development and they’re always the most innovative company, ahead of everybody else,” she said. Santoro’s career with 3M ended suddenly in an eight-car pileup. “I heard the crash behind me, turned around see what was happening and was hit. Because of a shoulder injury from the accident, I couldn’t lift my 70-pound sample cases any longer,” she said. She had several choices for life after 3M, and chose real estate in Midland, MI, where her soon-to-behusband, Neil, had taken a new position. A few years later, they moved to Jacksonville, FL, where Santoro’s son and three granddaughters lived at the time. After a long illness, Neil died and Santoro needed to reinvent her life again. “I was planning a trip to south Florida and got a call from a friend,” Santoro said. “She said, ‘Why don’t you visit me. I’m living in The VilSee Way to Succeed, Page 35


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OE Shop Certification with Gary Ledoux

Gary Ledoux is an industry veteran with 48 years’ experience in the automotive and OEM collision parts industry. His column appears exclusively in Autobody News. He can be reached at YesterWreck@yahoo.com

OE Shop Certification Programs: Assured Performance Network This month, we’re looking at the Assured Performance Certification Network, representing Ford, Nissan, FCA, Infiniti, Hyundai and Kia (Ford was handled in a previous profile.) For this interview we caught up with Scott Biggs, industry icon and CEO of Assured Performance.

Does your program have a specific name? When was it started?

Q:

The Assured Performance Certification Network was formed starting in 2003, and has since grown to include joint-effort collaboration with several OEMs. Now, Assured Performance Certified Repair Providers have the option of multiple OEM Certifications and Recognitions through one centralized and managed

A:

program, saving redundancy and extraneous costs. The joint effort program includes the following OEMs:

1. “FCA Certification Collision Care” Program launched in 2012. 2. “Ford National Body Shop Network” Program launched in 2014.

3. “Nissan-Recognized Collision Care” Program launched 2012. In 2014, Assured Performance took over administration of the program.

4. “Infiniti-Recognized Collision Care” Program launched in 2012. In 2014, Assured Performance took over administration of the program.

5. “GT-R Certified Collision Repair Network” Program. Assured Performance took over administration of the program in 2017.

6. “Hyundai-Recognized Collision Care” Program launched in 2015

7. “Kia-Recognized Collision Care” 26

Program (most recent partnership) launched in October 2017.

Q: A:

What is the main purpose of the program?

To identify and officially certify and/or officially recognize collision repair providers that possess the proper tools, equipment, training and facilities required to properly repair automobiles to manufacturers’ specifications—ensuring the fit, finish, durability, value and safety of the vehicle and to assist consumers and insurers with locating and connecting with those Certified Repair Providers.

Q:

What are the program requirements?

There are 36 major requirements that shops must meet, and an additional eight if they wish to be aluminum-certified for the Ford program. Edited for brevity, here are some of the main requirements:

A:

General Business Requirements: • Be in business for at least five years • Provide proof of Garage Keepers liability insurance • Provide a limited lifetime warranty on all work performed Customer Service Requirements: • Measure customer satisfaction through a third-party provider • Have a professional and wellmaintained customer reception, waiting and restroom area • Utilize a preferred rental car provider General Technical Repair Capability: • Meet I-CAR Gold Class or equivalent with proof of ongoing training • Subscribe to current OEM repair procedures and have the ability to provide documented proof of compliance • Utilize a frame rack or dedicated/universal fixture bench with ap-

APRIL 2018 AUTOBODY NEWS / autobodynews.com

propriate vehicle anchoring and pulling capabilities • Utilize an electronic, three-dimensional vehicle measuring system Advanced Materials Repair Capabilities: • Must have a 220 volt, 3-phase Inverter STRW welder • Must have a 220 volt MIG/MAG welder • Must have a dent removal/pulling system for steel panels Aluminum requirements include but are not limited to: • Isolated aluminum work area • Tools designated for aluminum work only include all special tools, as specified by Ford Motor Company • 220 Pulse MIG welder specifically for use with aluminum • Utilize a special SPR rivet gun, as specified by Ford.

Q: A:

What are the program benefits?

The Assured Performance Network of dealer-owned and independent Certified Repair Providers benefits includes the following:

• Official certification and recognition by more than 63 percent of the OEMs under one program, including Ford, Nissan, Fiat, Dodge, Jeep, Chrysler, Lincoln, Infiniti, Hyundai, GT-R and Kia.

• Leverage the OEM brands: Use of the official OEM-certified signage, OEM logos and badges to promote and market the shop through use in marketing, advertising, social media, online and recruitment. • Listing on online shop locators and smart apps with appointment set-


autobodynews.com / APRIL 2018 AUTOBODY NEWS

27


ting. Certified shops are listed on multiple online shop locators with the exclusive ability to set appointments directly with a certified shop. These sites include the following:

♦ Consumer-Facing Certified Shop Locator ♦ autobodylocator.com ♦ Insurer-Facing Advanced Repair Capable Certified Shop Locator ♦ advancedrepaircapable.com ♦ OEM Branded Certified Shop Locators ♦ nissancertifiedshop.com ♦ fcacertifiedshop.com ♦ fordcertifiedshop.com ♦ hyundairecognizedshop.com ♦ infiniticertifiedshop.com ♦ crashrepairinfo.com ♦ mopar.com/collision

• Marketing and collateral materials provided by all of the OEMs to promote their official status with the OEMs.

• Multi-media in-shop system (eLOBBY) for consumer awareness and shop promotion, including lobby area electronic signage and

full-length videos as well as revolving OEM messaging. • ShopOps operational process management system that includes a full library of processes, procedures, checklists and job descriptions, a turnkey HR management system, KPI reporting, business development and planning tools, data management and safeguarding, customer relations management, training management and tracking.

• Electronic Quality Assurance Program (OE-QC) that enables the shop to efficiently document using OEM repair procedures and the adherence to a quality control checklist electronically, including the use of smart devices at the technician level. • On-demand, data-driven marketing for various OEMs, based upon the shops own historical customer base.

• Collision Care Marketing Tools: Access to a suite of Collision Care marketing materials to differentiate Certified Collision Repair Businesses

from local competition; includes press releases, eLOBBY, eLISTINGS and On Demand Marketing.

• OE Owner Referrals: OEM Direct Consumer Marketing, as OEMs send millions of consumers direct emails and letters throughout the years to their vehicle owners promoting the Certified-Recognized Collision Repair Programs

Q: A:

What shops are eligible?

Any dealer-owned, independently owned body shop or MSO that meets the certification’s combined requirements as published. Some OEMs have additional requirements, e.g. Ford Certification requires additional aluminum-specific [requirements].

• Manufacturer Collision Consumer Education: consumer education marketing and multi-media videos and commercials that highlight the importance of using OEM parts and a FordCertified Collision Repair location.

Must an independent shop be sponsored by a dealer? If so, has that caused any problems?

• OEM Repair Procedures: Various OEMs subsidize the cost of the subscription to their OEM repair procedures for the Certified Collision Repair Centers.

Q: A:

• Business Improvement: Turnkey system to assess and chart improvements and performance throughout the business. The system is supported by independent consultants to assist as desired, optionally.

Q:

There are requirements to have a dealer sponsor the shop for some of the OEMs, but dealers are NOT limited to how many and which of their body shop customers they can sponsor, eliminating the opportunity for unethical practices in pay-to-play and extorting for access.

A:

Which OEs do you represent?

Assured Performance is the partner and administrator for Nissan, FCA, Hyundai, Infiniti, Ford

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and Kia.

What is the fee for the program? Does the program run on an annual basis?

Q:

$2,950 per year is the base certification fee for independent shops, plus various optional marketing and signage fees specifically for each OE certification-recognition the collision repairer elects to enroll in. All programs combined are approximately $6,300 annually total, but there is no cost for the ShopOps or Quality Assurance systems. This total cost represents less than 40 percent of the full overall costs of all of the programs. The shop’s annual fees are subsidized by the participating OEM by as much as 60 percent. Yes, the program runs on an annual basis.

A:

Q:

tions?

Do you inspect every shop and if so, who does the inspec-

Yes, every collision repairer is inspected and audited onsite on an annual basis. The results are

A:

documented, electronically published and posted online for additional internal auditors to review and approve. Assured Performance maintains a national network of onsite inspectors/ auditors that use smart apps with GPS location tracking to ensure integrity. Is there an optimum number of shops you want to have and if so, how close are you to reaching that number?

Q:

Yes, our overall objective is to maintain 100 percent demographic and geographic coverage of all urban, rural and suburban market areas and have adequate coverage to meet the repair needs for all units in operations for all of the brands represented. This requires approximately 3,000–3,600 certified repair providers across North America.

A:

Q: A:

Have you had any shops drop out and if so, why?

So far, only about 2/3 of all of the shops that apply are able to eventually become certified and remain in the program. The annual

renewal rate is nearly 90 percent because most of the collision repairers have continued in the program, unless they sell out to a consolidator or go out of business.

What has been the biggest challenge in establishing the network?

Q:

Our initial challenge was getting the industry to understand its value and importance. However, once we established a national footprint of well over 1,000 shops, the momentum changed. Getting to 3,000 is now a matter of shops re-investing to improve their business. While approximately 10–15 percent of the industry is well on its way to becoming OEM- certified (3,500 to 5,000 shops), the rest remain fixed on the past. Many collision repairers claim they have a great reputation in their market and generate plenty of work without the cost of compliance and certification credentials. There are also many shops that elect to operate outside of the mainstream and don’t feel they’re part of the equation. A massive per-

A:

centage of the market focuses on cosmetic repairs and/or low-cost, consumer-paid repairs and wrongly assume they don’t have to have the OEM-required tools, equipment and training to still be able to repair the next generation of vehicles.

Q: A:

What is you biggest challenge in maintaining the network?

The biggest challenge in maintaining the network is keeping all of the moving parts focused on the big picture and overall vision of a “proper and safe repair while consumers receive an exceptional treatment.” There are always people popping up with a new idea and metoo program that look shiny and exciting that can distract the market. With any program, there is always the challenge of keeping the shop engaged and using certification correctly to differentiate them and have them stand out from the non-certified shops in their market. We have continuously added more OEMs and more value to the program to ensure that the shops see and gain value. See Assured Performance, Page 54

autobodynews.com / APRIL 2018 AUTOBODY NEWS

29


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autobodynews.com / APRIL 2018 AUTOBODY NEWS

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Welcoming the Next Generation of Collision Repair Job titles matter to millennials, but in a different way than typically understood. A lot has been made of Over my 30 years in the automotive the millennial tendency to change industry, I’ve seen a number of gen- jobs. Certainly, evidence indicates erations enter the workforce. Each millennials don’t see themselves as wave arrives with its own expecta- long-term in any role. Increasing an tions and work habits. Our industry employee’s ability to move —uptoday is the result of adaptation made ward or laterally—is reason to conwith each new generation. Sure, it’s sider introducing intermediate titles the responsibility of any newcomer to an operation, and backing them up to learn and support the longstanding with added responsibility. Keeping values of a new environment. But it’s employees feeling valued and enalso important to embrace the new gaged transcends generational differideas and fresh perspectives that ences. Studies have widely shown that milcome with new talent. With college debt at record levels lennials are constantly on the lookout for their next job. This and tuition growing higher should be motivation for each year, many young peoemployers to ensure they are ple are choosing to explore offering competitive pay, exblue-collar career options. perience and opportunity. As Blue-collar fields often pay any collision repair shop better and are less saturated owner knows, finding and than the roles typically marretaining employees who keted to high school stuMike Lanza perform with excellence, are dents. Compensation has grown as a reliable and trainable, and bring a concept over the years. No longer is high-level skill set is a difficult chalit just about pay—Compensation lenge. That’s why capitalizing on milstrategies today center on creatively lennials entering the workforce is developing talent and motivating in- such a strong opportunity for a shop dividuals for results. As employers, willing to make the right cultural adwe have a valuable advantage for justments. right-sizing our cultures for millennials: Thanks to numerous studies and Considering Compensation a large volume of research, we know Compensation has grown as a cona great deal about what millennials cept over the years. No longer is it want and expect out of the workplace. just about pay; it’s about creatively developing talent and motivating inHere are a few insights based on re- dividuals for results. To create and porting from Millennial Mindset: implement innovative and balanced benefit and compensation design— with an eye toward retaining talent Shop Culture Though flexible work schedules are and maximizing productivity—takes most important to millennials, most a carefully considered strategy. Ideindicate they prefer working in an of- ally, each element of the incentive fice environment, as opposed to from plan drives business goals of customer satisfaction, revenue and profhome. An overwhelming majority, 98 itability. percent, say a company’s vision and values are important to consider when For a compensation strategy to work, choosing an employer. They need to four elements must be in place: feel like what they do and who they • Fit the financial reality of the work for matter beyond a paycheck. by Mike Lanza, Sherwin-Williams Automotive Finishes Business Consulting Manager

Call orwww.autobodynews.com Email Now for Rates:

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APRIL 2018 AUTOBODY NEWS / autobodynews.com

business

• Encourage and reward the right individual behaviors

Inspire and reward teamwork

• Provide a clear picture for individual opportunity

Instead of making the common mistake of overpaying employees and hoping they stay, developing a career path that rewards employees for their contributions while protecting the margin is the key to sustainable results. Transparent, easily understandable and simple goals are critical for employee productivity and retention. This has been true for every generation. I’ve seen the SMART matrix work for countless organizations. Employees need to know what they are being measured on, what the measuring instrument looks like and how it is used, agree that their goals are attainable and—most importantly for millennials—understand

how it serves the organization’s strategy. Naturally, many millennials entering collision repair will be on the front lines, engaging directly with customers. Therefore, it’s critical that they not only are given the tools they need to provide outstanding customer experience, but are also rewarded for doing so. Importantly, rewarding employees does not have to be about cash. Millennials show a strong value for spending time with friends and family. This down time is equally—if not more—important than cash. It ultimately comes down to understanding what motivates the employee, and right-sizing bonus plans and incentives accordingly. By 2025, 75 percent of the workforce will be millennials. As millennials enter—and many more consider entering—the collision repair industry, we need to be doing what we can to ensure our industry is a rewarding career path for the best talent. That begins with understanding the employee.

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A Tale of Two Paints: A Visit to Axalta’s Training Center by Barbara Davies, Autobody News

On Feb. 22, I arrived at the Axalta media event on behalf of Autobody News expecting a tour of Axalta’s training center in Concord, NC. Little did the other media participants and I know, we would also be getting a chance to spray two of Axalta’s premier basecoats: Cromax EZ and Spies Hecker Hi-TEC. Before the hands-on spraying took place, Harry Christman, Axalta’s North America Cromax Brand Manager, gave an overview of Axalta’s history, the collision repair market and the target audiences for both the Cromax EZ and Spies Hecker HiTEC waterborne basecoats.

Christman outlined the top three market trends: 1. The insurance market continues to consolidate and the top 10 insurers, led by State Farm and GEICO, continue to push direct repair programs to lower costs and improve CSI. 2.

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Top insurers will continue to

drive DRPs and reward MSOs with more work, fueling MSO segment growth. As of 2014, over 30 percent of DRP workflow is allocated to MSOs.

“Big insurers, State Farm, etc., are becoming more influential,” Christman said. “The big are getting bigger and

nel with insurers. “The MSOs are all about growth, repeatable processes and strategic relationships. These are large-scale operations, many with hundreds of locations across the country. They want to grow and standardize every process and KPI, and narrow down the variables. Their culture is standardized in order to meet company growth goals. They are all about productivity.”

3. Despite all the consolidation fueled by the “Big 4” MSOs’ growth, the nonMSO (e.g. independent shop) market size is still sizable at $23.3 billion or 72.1 percent of the total market (Romans Axalta media event participants spray two of Axalta’s premier Report 2015)

basecoats, Cromax EZ and Spies Hecker Hi-TEC, at Axalta’s training center in Concord, NC, on Feb. 22

they have extensive DRP programs. The insurers are partnering with MSOs for efficiencies and are laserfocused on productivity and CSI. MSOs streamline their processes and productivity to ensure their DRP chan-

APRIL 2018 AUTOBODY NEWS / autobodynews.com

Hence, the Tale of Two Paints: Spies Hecker Hi-TEC and Cromax EZ.

Axalta launched Spies Hecker Permahyde Hi-TEC waterborne basecoat about 10 years ago. It was designed to

provide a faster process to help improve cycle time and CSI. Hi-TEC’s streamlined process was a great fit for the MSOs in that it only required 1.5 coats wet on wet application with no flash required between coats. Fewer coats provided increased productivity and capacity with higher spray booth throughput. “Spies Hi-TEC requires about seven minutes of application time vs. 30+ minutes for a traditional paint process,” Christman said. “It gives shops the capability of pushing through more cars for greater profitability—something the MSOs are keenly focused on.” “When Axalta came out with Spies Hecker Hi-TEC, they thought that all shops would move away from the traditionally applied basecoats since Spies Hi-TEC required fewer base coats and less drying time in between coats. “We were wrong! Many of the independent shops liked using the traditional basecoats that they had great expertise with, and didn’t want to switch to Spies Hi-TEC. These


shops may have some DRPs, but they are not driven solely by insurance companies and DRPs. They have more latitude to select the processes, and paint, that they want to use. “An analogy I like to use is getting a notification that a piece of software you use constantly (for example, software version 1.0) has a new version, 2.0, that the software company wants you to upgrade to. You know how to use version 1.0, and even though you know the new version 2.0 is probably better, you resist upgrading. “This is what Axalta experienced when they launched Spies Hi-TEC. Some painters have been using a particular paint process for 20+years. They understood that Hi-TEC might be better, but it required a different spraying technique and they didn’t want to give up their current painting process.” To continue the analogy, many painters who loved version 1.0 (Cromax) didn’t want to go to version 2.0 (Spies Hi-TEC). “Axalta realized after 7+ years of trying to get all painters to switch to Spies Hi-TEC, some painters just

didn’t want to give up the way they had been painting for years,” Christman said. “Axalta listened to these painters and came up with a new Cromax, Cromax EZ, in late 2017.”

Axalta media event participants speak with Steffen Apollo (r), Brand Manager, Spies Hecker, Standox at the Axalta training center

As Christman explained, Cromax EZ is “waterborne made easy.” It was designed to be simple and incorporated the same spray and blending techniques that independent shops have been using for years.

Cromax EZ’s new basecoat is all about simplicity: • Easy to mix: No agitation toners, eliminates need for traditional

mix machine. • Easy to match: Intuitive Fan Deck with 5,500 color chips sorted chromatically as well as digital Acquire Quantum EFX and Colornet Web 2.0. • Easy to apply: Coat-flash technology. Familiar wet on dry application process, similar to solvent borne. No wait time before applying clearcoat.

Continued from Page 24

My takeaway: Two paints are better than one.

We thank Villages-News for reprint permission.

To experience these paints first hand, all Media Day attendees were suited up and invited into the booth to spray each brand and experience each paint process first-hand. After spraying both paints, I certainly appreciated the speed and efficiency of spraying Spies Hecker Hi-TEC paint, but there was something compelling about the artistry of spraying the Cromax EZ, even though the process did take longer.

To learn more about Axalta’s Cromax EZ and Spies Hecker Hi-TEC, go to axaltacs.com.

Way to Succeed

lages.’ She takes me all around—rec centers, to play bridge, music and line dancing at Sumter Landing. After two days I fell in love with this place.” She moved into her home in the Village of Polo Ridge in June 2017. She finds the location to be a good jumping-off point for visits to her two sons and grandchildren in places like Newark, NJ, Boise, ID, various locations in Michigan and nearby Jacksonville. One of Santoro’s main projects now is writing a young adult fantasy book, which she calls The Book of Fairie. “Think of The Hobbit or Lord of the Rings. And, actually,” she said with a smile, “it’s not about fairies. It’s about elves.”

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Historical Snapshot with John Yoswick

—John Yoswick is a freelance writer based in Portland, Oregon, 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.

OEM Info Websites Have Existed for 15 Years 20 Years Ago in the Collision Repair Industry (April 1998) Roger Wright of Integon Insurance agreed that the existence of nonOEM parts may have resulted in higher prices for some OEM parts for which there is no non-OEM version. “That’s why moldings are $200,” Wright said. “It’s interesting: When you look at the gross parts dollars combined [for OEM, non-OEM and salvage], it’s still about the same part of the estimate as it was before nonOEM and salvage parts were used extensively. But what if we say, ‘Okay, let’s not use non-OEM; let’s just use OEM.’ What’s going to happen to parts pricing then? We’re just scared of that as an industry.”

In 1998, Roger Wright said insurers recognize that non-OEM parts help hold prices of some OEM parts in check while resulting in higher prices for parts without a non-OEM alternative

He said insurers do have some other leverage regarding parts pricing by informing vehicle manufacturers how the choices they make affect insurance premiums for a particular vehicle. He said insurers contacted one manufacturer about higher claims cost for vehicles that didn’t have break-away mirrors. “We said if you want to continue to have this as an insurable vehicle, you have to put the break-away mirrors on, and they did,” Wright said. “Can we do the same thing if they start raising the price of parts? Can we make the car uninsurable from a customer stand-point? Yes. So there is a little leverage there.” – As reported in The Golden Eagle. Wright was speaking during a panel discussion regarding nonOEM parts during an Automotive 38

Service Association annual meeting. Wright later worked for other insurers (including AIG) and collision repair chains (CARSTAR and Sterling Auto Body) before forming Vector Squared, an independent consulting firm, in 2014.

15 Years Ago in the Collision Repair Industry (April 2003) Accessibility to OEM repair information continued to be a topic of discussion within the industry and at the Collision Industry Conference (CIC) in Phoenix in April. In a presentation for the CIC “OEM Committee” on how Ford Motor Company takes collision repairs into account when designing vehicles, Steve Nantau, collision repair supervisor for the automaker, said his company now has repair manuals available for many of its models and expects to have manuals for all models by the end of this year. Bill Haas of the Automotive Service Association pointed out that 22 automakers currently have service and repair information available to shops via website. Subscriptions for access average about $20 a day and offer shops immediate access to the specific information they need. He cited an example of a shop that had replaced a door on a 2002 Nissan Altima but couldn’t get the power window to open or close completely. “There’s a relearn procedure that’s necessary for the power window,” Haas said. “That procedure is available on the Nissan website. So the technician was able to access that service information immediately, go back to the vehicle, perform the relearn procedure and make that car deliverable.” – As reported in Autobody News. Nantau retired from Ford, and Haas is now an independent consultant and trainer. Links to OEM information websites for more than three dozen automakers can be accessed via www.OEM1stop.com. 10 Years Ago in the Collision Repair Industry (April 2008)

APRIL 2018 AUTOBODY NEWS / autobodynews.com

Mitchell International and CCC Information Systems say they will continue to operate independently for the next 2–6 months until the merger the two companies have announced is approved by regulators and final-

In 2003, Steve Nantau said Ford Motor Company was expanding the amount of collision repair manuals it was making available to the industry

ized later this year. At that time, CCC’s CEO Githesh Ramamurthy will become CEO of the new “CCCMitchell, Inc.,” and current Mitchell

CEO Alex Sun will become president of the new company. Termed a merger-of-equals, its new board will have equal representation from each of the two private equity firms that currently back CCC and Mitchell. Longer-range plans reportedly being discussed within the companies include creation of a new common electronic estimating platform that will use Mitchell’s database. One side note to the CCCMitchell announcement: Sources say that just such a merger was something Tony Aquila unsuccessfully worked to make happen while chief operating officer at Mitchell in 2003– 04. After leaving Mitchell, Aquila founded Solera, now the parent company of Audatex, which now must compete against the merged CCCMitchell. See OEM Info Websites, Page 51

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39


National News

Ed Attanasio is an automotive journalist based in San Francisco, California. He can be reached at era39@aol.com.

with Ed Attanasio

Do OE Certifications Really Provide Accountability, Transparency? If you mention the John Eagle case to anyone in any body shop, anywhere in the country, they will likely know exactly what you’re referring to. It’s a landmark case that has caused ripples throughout the entire industry and elicited conversations about how to make sure that it doesn’t happen again. Curtis Nixon is the president, CEO and co-founder of UpdatePromise in Chino Hills, CA. As a former second-generation body shop owner, he has been creating technology to help collision repairers and dealership service departments improve their customer experience since 2009, when he sold his family’s shop and co-founded UpdatePromise. The company has grown at a tremendous rate within the last nine years, and today UpdatePromise and its ancillary companies communicate with millions of consumers and services

throughout North America. In a recent conversation, Nixon posed this question: Who should assume the lion’s share of responsibility for making sure that repairs are performed based on OE guidelines? How do we know that an OE-certified shop is actually performing OE repairs? Nixon sees definite value in third-party certification companies and isn’t critical of the role they perform in the collision repair industry. But he also strongly believes that the time is right to open a conversation about expanding these roles for the betterment of the industry, he said. “John Eagle was a ProFirst Honda shop when they glued that roof on that Honda Fit, so obviously they weren’t adhering to OE procedures in that case. So, my question is: Does there need to be another level of accountability required for shops with

manufacturer certifications? If you’re a shop with one or more third-party certifications and there’s no ongoing accountability, how can the consumer or the insurance company be certain that you’re performing OE repairs?” Nixon questioned whether certification companies are doing their due diligence. “Most third-party certification companies do onsite random inspections, but many of them will admit that they only inspect less than 1 percent of all repairs,” he said. “Some others inspect facilities, but never check out a tech’s work for quality or to make sure that they’re adhering to OE procedures. If a shop has a technician who has been identified for having low CSI scores, is there any type of accountability while that tech is still working on car after car?” Nixon believes that the data is already there, and that all we need to

do is collect it and use it to monitor repairs. “When we collect data, it often deals with the customer experience, but we also ask about the quality of the repair and if the car came back for whatever reason,” Nixon said. “If we can see that those scores are consistently low, there is a problem at that shop and something needs to happen to rectify it. If we can use the data that is already available to us, combined with inspections and then aligned with accountability, it’s the next level. If the data is there or can be gathered easily and it helps the industry as a whole, why not at least take a close look at it?” If a tech is consistently producing sub-standard work, he needs to come off the line to protect the shop and ultimately, the consumer, Nixon said. “There’s no direct certification

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of that tech that really comes with any ramifications. If you go to a surgeon and he does a bad surgery, his license is in jeopardy and he is accountable for his shoddy work,” he said. By using technology, the job of vetting every tech is easier than you might think, Nixon said. “In today’s age, we should be able to use things like predictive modeling, artificial intelligence and machine learning in conjunction with all of the data that we’re already extracting to find those shops that need frequent monitoring and more than just a few random inspections every year,” he said. Once the data tells them what to do, they need to inspect the work of a particular painter or tech and determine if they should still be fixing cars, he said. “Just because a shop has the right equipment and training, how do we really know if a tech knows how to use it?” he said. “We don’t have an accountability program in this industry right now, but we need one. If we can provide a new level of transparency and show the consumers that the per-

son fixing their car is truly skilled and experienced to do the job, that’s the goal. Could we have predicted that John Eagle Collision would have encountered the problems that they did, which eventually led to their demise? Who knows, but if we can develop a program where an under-trained or inept tech isn’t allowed to work on vehicles until they’re back up to speed, that could prevent a lot of these mistakes before people get hurt and everyone ends up in court again.” Industry veteran and former OEcertified shop program administrator Gary Ledoux also has some definite ideas about the topic. “The car manufacturers, especially those that make non-luxury, mainstream brands have spent a lot of time and effort to get their networks built and have done a great job doing that,” Ledoux said. “And if the collision repair landscape was the same today as it was when they started building their networks, they might be able to ride that business model a while longer. But things changed dramatically on October 2, 2017 in the wake of the John Eagle decision. The stakes are higher today for everyone.

It’s time to kick things up a notch, and hold certified shops accountable. “Most shops joined OE-certified programs for the right reason,” Ledoux said. “Their hearts are in it, and they want to do a proper and safe repair for their sake, the sake of the OE and most importantly, for the sake of the customer. Others joined only because they thought an OE certification was just another DRP, but with a different flavor. They may have taken the training and bought the requisite welder, but it did not change the improper way they repair cars. These shops need to be identified and removed from the certified rosters, and there are several ways to do that. It’s just a matter of finding the right way.” Michael Anderson from Collision Advice believes that the OEs are going to step up and assume more of the responsibility and accountability after the John Eagle case and tap into a lot of new technology to help them achieve their goals. “I can tell you that through my interactions with the OEMs, I have learned that their two main concerns are first safe repairs, and [second] pro-

tecting their brand,” Anderson said. “They recognize a need for oversight and absolutely feel as though there needs to be some meat on their programs, including an auditing process. So, they’re all cognizant of that and some OEs will lead the way, but they all know that it’s a necessary progression to make this industry better as a whole.” Anderson believes that you will see a time in the very near future where if a shop is certified, the manufacturers will start to monitor how often the shop researches their repair procedures. “For example, if you’re repairing Hugos, they are going to monitor how often you pulled the OE procedures on a Hugo—What did you pull, what did you review and how long [did] you review,” Anderson said. “I also believe that the OEs will demand that all of their certified shops be required to show proof that [they] scanned the vehicle with an OE scan tool so that [they] can verify that all of the car’s safety and comfort features were working before that vehicle gets released back to the consumer.” See OE Certifications, Page 51

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41


Shop Strategies with Stacey Phillips

Stacey Phillips is a freelance writer and editor for the automotive industry. She has 20 years of experience writing for a variety of publications, and is co-author of “The Secrets of America’s Greatest Body Shops.” She can be reached at sphillips.autobodynews@gmail.com.

Father-Son Team Take Unique Approach to Foster New Talent in NM Jim Guthrie and his son, Sean, have always had a passion for cars— whether that has been repairing them, restoring them or racing them. Currently operating Car Crafters in Albuquerque, New Mexico, the father -son team’s mission is “to be the body shop of choice for customers, insurance companies and employees, while providing the highest quality and safest repairs available today.” As a teenager, Jim spent his free time repairing cars in his parents’ twocar garage. They eventually told him to either focus on college or open a body shop. Jim opened Car Crafters in 1982. When Sean was old enough, he

very, very large 80,000-square-foot single location earning $16 million a year. At the time, we were in the process of building a second location when we had the opportunity to acquire three additional facilities, which were owned by our closest competitor in the market. We opened those stores on April 1, 2015. Everyone thought it was an April Fool’s joke when we walked in and said that Car Crafters was acquiring them. By the end of 2015, we finished construction on the shop we had already started, so within eight months we were operating five stores. Over the next year and a half, we added two additional locations—one in July 2016 and the other in January 2017. There was a lot of growth very quickly. Five stores are in Albuquerque and two are in Rio Rancho. We don’t have any plans to open additional ones at this time. Since opening our most Employees at Car Crafters’ main location in Albuquerque, recent facilities, we’ve foNew Mexico cused on organic growth, behelped out at the shop—sweeping coming more efficient at what we do floors, throwing out the trash and and improving our cycle time. working on vehicles. He began working there full-time during high school How did the company adapt and is currently the director of operafrom operating one location to tions, overseeing all seven of the com- seven in such a short period? pany’s locations. This includes managing operations, handling insurIt was a challenge. Before the ance company relationships and cooracquisition, I was managing dinating OEM certifications. our original location with one of our Sean said he and his father al- long-term employees, Kevin Weldon. ways had a great working relationship, When I look back, it seemed easy with Jim working on the business and to operate that store. Although we had Sean working in the business. Auto- a large staff of 80, it was like a big body News spoke to Sean about the family because we had grown together company’s recent growth and the for so long. It was a huge change for unique program they offer that has us to gain 50-plus employees sudhelped the body shop attract and retain denly. new talent. Instantly, I took over the largest store we acquired and began impleWhat prompted the decision to menting our company process and expand Car Crafters after so culture. The others were managed by many years? my father and I as well as another long-term employee, Jim Snelson. Over the years as the business We spent the first few months grew, my father kept buying cleaning the shops and reorganizing larger buildings. By 2015, we had a our staff. This included hiring new

Q:

A:

Q: A:

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APRIL 2018 AUTOBODY NEWS / autobodynews.com

employees and training. There has been a lot of personnel movement. First, we did it out of necessity; eventually we made changes because we

stayed successful through it all and now all of the locations are run very well. In hindsight, I would say we did it right, but I can’t tell you what the magic sauce was. It was just a lot of hard work.

With this exponential growth, how have you staffed your business?

Q:

We’ve developed a good training program—the Car Crafters’ Training Program—to bring Car Crafters operates seven locations in New Mexico in kids from high school. If realized certain employees live closer they don’t have money to spend and don’t know what they want to do— to one of the locations or different personalities work better together. We’ve but like cars—they can come in as a done some of the moves for the better detailer or floor sweeper and sign up of the business, and some moves for for training. I developed a process that takes them step-by-step through the better of the employees. It was a whirlwind. I don’t know the very early stages of dumping if we did it right or wrong, but we See Father and Son, Page 54

A:


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National Associations 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 crsisk@chasidyraesisk.com.

In-House Money Makers: ASA Partners With Bosch for 2nd Webinar in Series On Wednesday, Feb. 21, the Automotive Service Association (ASA) partnered with Bosch to present “In-House Money Makers,” the second webinar in its series about pre- and post-repair scans, at 1 p.m. EST. ASA Vice President Tony Molla welcomed attendees by mentioning the industry’s interest in pre- and postscans with modern vehicles. He introduced the presenters, Bosch Technical Trainer Duane “Doc” Watson and Bosch Technical Instructor Steve Zach, who addressed pre- and postrepair scanning in-house over the following hour. Expressing his hope that these webinars were useful, Watson encouraged participants to provide feedback before noting that the industry needs a powerful tool because the dash lights do not tell the complete story. “More systems are coming every year, and newer vehicles have up to 100 modules that need to communicate with each other to work properly. The pre- and post-scan procedures covered will help get a damaged vehicle back to its safe, pre-accident condition,” he said. Watson pointed out that many OEMs require, or at least recommend, pre- and post-repair scans. When answering when a scan tool is required, he admitted that it’s not a simple answer because it’s based on the age of the vehicle, options available and both the type and extent of damage. For example, Fiat listed conditions that could trigger DTCs prior to or during repairs, leading to improper vehicle performance. While there is not yet an industry standard for receiving payment for scans, shops get paid for approximately 70 percent of scans. However, Watson noted that having a printed scan report is vital to getting paid, negotiations may be necessary with some insurers and rates can vary. It’s important to know what OEMs recommend. The equipment and training required include a quality scan tool, a battery maintainer or high-end battery jump box and copies of OEM position statements. Bosch

44

supports scanning to identify DTCs in alignment with OEM position statements, and the company offers two scan tools: the Encore and the Evolve. Watson stressed, “It’s more than just buying a scan tool. There’s test prep to follow for the best results. The battery must have 12.6 volts, or you can get an inaccurate test. Use a fully charged battery booster or maintainer,

but don’t use a battery charge because this can cause erroneous codes and is a poor choice when diagnosing.” Providing a demonstration of the Encore, Watson explained that it begins by connecting the cable to the Vehicle Data Link connector and turning the key to the start position without starting the car. Then, users would set up their scan report by scrolling to the bottom of report options where they can alter settings, such as removing uncommunicative systems, prompting for extra fields, and include shop information. When it comes to vehicle entry, auto ID works with most 2006 and newer vehicles, or users can choose Manual Entry to select a vehicle by answering a series of questions, such as year, make and model, in order to show all modules on the vehicles that are available for diagnostics. Watson instructed attendees to touch ECM/PCM and choose “All system DTCs” to check all modules. All DTCs found on each module will be listed, and touching “code assist” under the DTCs will provide suggested repair information, also allowing users to access Direct Hit, Google, Mitchell or AllData for additional information based on the program with which they have an account. The DTC scan can also be emailed or printed through the share option—Both actions require set-up when used for the first time. The scan can also be saved to the scan tool itself, using the save function.

APRIL 2018 AUTOBODY NEWS / autobodynews.com

In order to clear DTCs, users can touch “clear codes.” Watson recommends choosing “clear and reread,” which involves cycling the key off and on in order for the Encore to rerun the DTC test, but he warned that it may be necessary to manually clear specific modules. After hooking the tool to the battery and selecting “test,” users can “select vehicle” in the lower lefthand corner of the screen, start Auto ID, and follow the prompts to allow the scan tool to communicate with all of the vehicle’s modules. The time it takes to pre- or post-scan depends on the number of modules and the scan tool processor speed. Watson reiterated, “After selecting the green arrow on the right for a complete report, users can save the report or select ‘Share’ to email or print it. It’s also possible to link to additional resources for information about

codes and how to correct issues.” Back on the list of modules, choose the correct module and data stream, and select “All data items” to test. Users can review saved reports by scrolling to the left on the next page and choosing “View saved scans,” which allows them to select a report from a list. The saved reports also indicate if it was a pre- or post-scan, the time and date, the repair order number, the VIN and the mileage. As the webinar concluded, Watson and Zach fielded questions from attendees and announced that they will demonstrate the Evolve scan tool in their next webinar. The third webinar in this series is titled “The Right Scan, the Right Way: Key Scan Tool Procedures for Collision and Mechanical Repair” and will be presented on Wednesday, March 21. For more information on ASA, visit www.ASAShop.org.

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Old School Know How

Ed Attanasio is an automotive journalist based in San Francisco, California. He can be reached at era39@aol.com.

with Ed Attanasio

Teresa Aquila Just Won’t Quit... Ever! To say that Teresa Aquila takes life by the reins is the understatement of the century, because ever since she can remember, she’s been doing it all without slowing down.

chanic, shot as a reserve cop and marginalized by men in the automotive industry at every turn, but she keeps coming back with more fervor and determination than ever before. As a renowned mechanic, columnist, teacher and the producer of a popular auto repair radio show for women, not to mention a policewoman, Aquila isn’t afraid to take chances and follow her dreams. Her mechanical career has spanned more than four decades, working on everything from Porsches to heavy equipment, including her personal fleet of classic Teresa Aquila owns a fleet of 13 classic vehicles, all of vehicles—all of which she which she completely restored herself restored herself. Aquila’s weekly radio show, At age 63, Aquila doesn’t have a pause button—only forward, and “Teresa’s Garage Radio Show,” is that’s the way she prefers it. She has broadcast on 1180 AM KCKQ every been injured on the job as a me- Tuesday at 2 p.m. PST. Her show’s

tagline is “Empowering Women One Wheel at a Time,” dedicated to women who dare to be different and desire to become more knowledgeable of car care.

“We’ve presented topics like how to find a good body shop, the differences between aftermarket and OE parts, the telltale signs of a bad body shop, and recently we interviewed Rocco Avellini, the founder of Wreck Check Centers about how to avoid shoddy collision repairs,” she said. “The show’s overall theme is to educate women about cars and how to repair them, in order to protect them as consumers.” Aquila’s career in mechanical repair started right after high school graduaAquila recently celebrated her 41st year as a Washoe tion, she explained. County reserve sheriff “I got a job working on Aquila’s show deals primarily a fleet of ice cream trucks, and I with mechanical repair, but occa- learned a lot by observing their mesionally includes various topics that chanic,” she said. “He taught me are related to the collision repair in- about brakes, engines and carburetors, and later how to prep and paint dustry.

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a car. It gave me a good start in the industry, but after that it was a battle, because no one wanted to work with a woman.” Today, there is the “Me Too” movement, but back when Aquila was working in the automotive repair industry, there seemed to be an “Anybody But You” movement. Her career as a mechanic taught her a lot of valuable lessons, and the main one was “Never quit...ever!” “I worked for 10 years at a place where I was the only female mechanic and the guys never accepted me,” Aquila said. “They sabotaged my work or gave me ridiculous jobs to do that were demeaning. When they saw that I wasn’t going to quit, they threw all of my tools on the roof and told me that I was taking money out of a man’s pocket.” Now celebrating her 41st year as a Washoe County reserve sheriff, Aquila serves and protects the community without collecting a paycheck. It’s an arrangement she is happy with, because it allows her to dictate her schedule and participate in a lot of programs that are dear to her heart.

report came over the radio that told me that a high-speed chase was coming my way,” she said. “Here comes a vehicle at 120 mph coming right at me. It swerved and missed me by 20 feet, and I can still see the driver with his window cracked and a gun in his right hand. He smiled at me like he was saying ‘You’re dead,’ and then I heard a loud crack. I thought I had blown a tire, but then there was blood everywhere.” Still in pursuit, Aquila became faint and had to pull over after traveling about “Teresa’s Garage Radio Show” is broadcast on 1180 AM eight miles. The chase evenKCKQ every Tuesday at 2 p.m. PST tually ended when the pertraining and was promoted to lieu- petrator committed suicide, and later tenant 10 years ago. I’m involved in it was discovered that he was wanted neighborhood watch efforts, coordi- on murder and drug charges. “I was lucky, because when he nate high-profile events, do public speaking and meet with the commu- shot at me, the bullet went through nity to hear their concerns. It’s a both of our car doors before going through my leg. Six months later, I great job and I love it!” One particular day definitely was back on the job. People thought I tested Aquila’s passion for law en- was going to quit, but I’m in it for the forcement—The day she almost lost long run,” she said. When she isn’t chasing bad guys her life. “I was at another call, when a or producing her radio show, Aquila

“When I first started, I got the graveyard shift and realized I could not do this,” she said. “So I retained my reserve status and work 30–40 hours weekly now. I receive the same

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is writing a book about her life and maintaining her fleet of 13 classic vehicles. “I love all of my cars, but I do have a special place in my heart for my 1954 Chevy Bel-Air, because I did all of the bodywork on that one myself. Every one of my vehicles is drivable and I still have [my] very first car—a 1963 Chevy Impala that I bought when I was 18,” she said. Even though her career as a mechanic hit its share of speed bumps along the way, Aquila still believes that women belong in the automotive repair industry. “I tell young women all the time that it’s still a male-dominated business, but if you stay focused and put your best foot forward in anything you do, you will be successful,” she said. “Don’t ever let anyone dissuade you on your journey, because we’re all on the same road—even though we’re in different cars.”

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Continued from Cover

Legal Battle

suit started back in the 1990s still remain embroiled in the judicial system? Back in 1999, a jury in the original Avery lawsuit found that the non-OEM parts installed on the drivers’ vehicles as part of their State Farm claim were inferior to OEM, and thus the insurer breached its contract to return those cars to “pre-loss condition.” It also found that State Farm had defrauded consumers by concealing known problems with the parts. The $1.2 billion judgment against State Farm was, at the time, one of the largest judgments ever levied against an insurer. The ruling changed the way many insurance companies dealt with non-OEM parts for years, and even today is seen as the basis for State Farm’s limited use of such parts. In 2001, in response to an appeal by State Farm, an appellate court affirmed the decision but lowered the damage award to $1.05 billion. State Farm then filed an appeal with the Illinois Supreme Court. In 2004, Judge Karmeier was elected to his first 10-year term on the Illinois Supreme Court. At that time, lawyers for the plaintiffs in the Avery case sought to have Karmeier recuse himself from participating in the Avery decision because they claimed his election campaign had received significant campaign contributions from State Farm. But Karmeier did not recuse himself. The next year, four of the six Justices on the Court—including Karmeier—voted to overturn the Avery ruling. The court ruled that the case should not have been approved as a national class action because State Farm uses different policy language in different states, and even within the same state. The Court found no breach of contract under any of the three different policy wordings related to the use of parts. It ruled that the plaintiffs in the case failed to

demonstrate damages. Additionally, the court pointed out that the plaintiffs did not contend that non-OEM parts are defective—only that they are not all as good as OEM parts. The decision emboldened insurers, some of which had curtailed calling for the use of non-OEM parts for some years after the 1999 Avery judgment, to return to pushing shops to use the parts. New findings, new lawsuit However, in 2011, lawyers for the plaintiffs in the Avery case filed a lawsuit claiming they had new evidence of State Farm’s involvement in the recruitment of Karmeier as a candidate and in financing the campaign that led to his election to the Illinois Supreme Court. That campaign shattered state and national spending records for a judicial seat, with the two candidates spending more than $9 million combined. The current lawsuit argues that State Farm “delivered ‘tremendous’ financial support (at least $2.5 million and as much as $4 million) to Justice Karmeier’s campaign.” The plaintiffs’ attorneys argue, for example, that State Farm attorney and lobbyist William Shepherd was on the executive committee of the Illinois Civil Justice League (ICJL), which recruited and endorsed Karmeier as a candidate for the seat on the court, and was involved with weekly conference calls with Karmeier’s campaign manager (the head of the ICJL). The money trail described in the court filings is a bit convoluted, indicating that the contributions largely came through intermediary organizations being influenced by State Farm. The ICJL, for example, through its political action committee made $1.1 million in direct and in-kind contributions to Karmeier’s campaign. Also at the time, the lawsuit argues, State Farm CEO Ed Rust was part of the U.S. Chamber’s leadership team that selected which judicial campaigns to target, and Illinois was identified as a “Tier 1” state to target. State Farm donated $1 million to the

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gument that the insurer controls such organizations as the U.S. Chamber and the ICJL. State Farm had asked Judge Herndon for summary judgment in the suit, essentially dismissing it based on a lack of basis for it to move forward. But Herndon in February declined State Farm’s request. Herndon wrote that State Farm couldn’t demonstrate that any issues in the current suit were identical to the issues decided by final judgment in the Avery lawsuit. “As the parties are well aware, Avery was about State Farm’s failure to equip its insureds’ vehicles with proper replacement parts, and this case is about State Farm’s alleged conduct in secretly recruiting Judge Karmeier, covertly funneling millions of dollars to support Judge Karmeier’s campaign and concealing and misrepresenting the degree and nature of its support of Justice Karmeier,” Herndon wrote. “Simply, [State Farm’s] actions in the two cases are entirely different and do not seek redress from the same wrong.” The legal battle that began over non-OEM parts back in 1997 has still not seen its final chapter.

U.S. Chamber’s judicial election efforts, the U.S. Chamber donated more than $2 million to the Illinois Republican Party, and that organization in turn bought $1.94 million in advertising for the Karmeier campaign. Attorneys say the new evidence should lead the court to reinstate the judgment against State Farm, or alternatively reconsider the case without Karmeier’s involvement. (Justice Karmeier in 2014 was narrowly reelected by Illinois voters to a second 10-year term on the state’s highest court, and in 2016, he was unanimously elected by his fellow justices to serve as the chief justice on the court.) State Farm has argued that overturning the Avery ruling would be “disruptive in the extreme” to the Illinois legal system because the ruling has been cited in more than 200 subsequent court opinions. The insurer argues the contributions to Karmeier’s campaign from State Farm employees and others connected with the insurer were “quite modest,” by their estimate about $350,000. And it says the notion of “State Farm-influenced contributions” relies on an unsubstantiated ar-

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Social Media for Shops

Ed Attanasio is an automotive journalist based in San Francisco, California. He can be reached at era39@aol.com.

with Ed Attanasio

When Was the Last Time You Updated Your Website? You maintain your vehicle on a regular basis to keep it running right and on the road. I’m sure we all have those friends who are constantly remodeling their houses and looking for that next project to work on, whether it’s building a deck or re-doing their kitchen. Changing and updating things is a part of life, so why haven’t you touched your shop’s website since 2008? A website with new content lives and grows on the Internet. Every up-

rithmic factors determined by the search engine company itself. Their rules change all the time, so that’s why you need a web wizard to navigate through what Google is doing today. For instance, there are several reasons why a site could be indexed, including incoming links, the number and type of subject keywords used and how frequently a site is updated. Every time you make a significant update to your website, the search engine notices it and rearranges your

date you make to your site enables your existing and potential customers, insurance partners and vendors to find you online more easily. On the other hand, a static website without updates is considered dead by every search engine out there, which means that it will eventually drop down the rankings and end up being buried behind your competitors’ sites over time. Search engines love fresh content and sources of new information for their search requests, so if you can create relevant high-quality content, you will be on page one before you can say “Google.” Because in the end, one of the main reasons why any shop should have an online presence is so that customers can find them easily via any web search. The more you consistently update your website with articles, downloads and new web pages, the more regularly a search engine will drop in to visit your website. When search engines look at your site recurrently, you have the opportunity to attain higher rankings based on the content you’ve provided. Search engines use web crawlers, also known as “Googlebots,” that are basically high-tech programs that scan the Internet at lightning-speed for websites. The web crawler will index a site based on a wide range of algo-

site’s ranking accordingly. So, if you want to increase the chances of your website moving up the ranks, updating your content often so that a search engine will reassess your position on its index is the best way to go. But please keep in mind, a gaggle of new content is not the solution here—quality is. So, yes, it is a smart idea to update often, but make certain to keep your content standards high. Too many shops blast their websites with an avalanche of lowquality articles stuffed with too many keywords. When the web crawlers notice it, they penalize your website and in many cases, knock you down a few spots as a result. By far, the most frequently used search engine is Google. As the king of all search engines, Google has tremendous influence on webmasters and how websites are constructed. Google expresses its love for websites that are updated frequently, so you should add fresh content to your website as often as you can. But also avoid making unnecessary changes to your site, because Google is a little smarter than that. Shops that have a strong online presence are usually updated at least two to three times a week, normally through a blog. The Googlebots that crawl the web are always watching and searching for

“The reasons for changing or updating a website are numerous, but the main one is that the site must have an overall look and feel that is contemporary,” — David Moore

50

APRIL 2018 AUTOBODY NEWS / autobodynews.com

web pages that are new or updated, and then add this fresh content to their Google index. If you update your content often with consistent and valuable information, you will have a better chance of Google ranking your site higher after each new update. It’s really not that difficult to add an article or a photo to your site to get noticed. The easiest and best way to stay fresh is to add a blog on your site and continue to add articles that will get noticed by your viewers. If they comment on those articles, it also counts as an update on your site. So, write something that will elicit some feedback from your customers and friends in order to gain some attention that will lead to frequent updates. David Moore, the CEO of Collision Websites, normally recommends completely updating a website

every 3–5 years depending on the initial quality of the site. “The reasons for changing or updating a website are numerous, but the main one is that the site must have an overall look and feel that is contemporary,” Moore said. “If it’s not mobile-ready, you’re running behind, so you need to change that immediately and if your site is using technology that isn’t supported by all browsers (e.g. Flash), you should update it right away as well. “If your site doesn’t have a clear call-to-action, it should be updated. Make sure that the ‘above the fold’ section is uncluttered and contains a clear and simple headline with your phone number [and] address in large bold letters. You have three seconds to capture people’s attention, so don’t confuse them and make sure that your navigation is simple and that everything is easy to find.”

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Porsche Fresno Fresno

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Boise

208-672-3494 Fax M-F 7:30am - 6pm


Continued from Page 38

OEM Info Websites

– As reported in CRASH Network (www.CrashNetwork.com), April 14, 2008. A year later, the two companies cancelled the planned merger after the Federal Trade Commission (FTC) moved to block it; the FTC said it had an “impressive body of evidence…demonstrating that the combination of these two competitors would substantially lessen competition, ultimately leading to higher prices and less innovation for consumers.” Ramamurthy, Sun and Aquila remain in their positions at CCC, Mitchell and Solera Holdings, respectively. 5 Years Ago in the Collision Repair Industry (April 2013) Because Arizona shop owner Dan Hunsaker had spoken negatively at several industry meetings about his experience with PartsTrader, he was asked why he stays on the State Farm program. “At this juncture, I don’t see the benefit of being a sacrificial lamb,

and then having them six months from now say, ‘You know, this isn’t working; we’re not going to continue with it,’” Hunsaker said. “I’m taking a wait-and-see attitude. If this thing goes national, then I’ll sit down and pencil it out, and I will make a very informed business decision.” Perhaps of more interest to shops often afraid to speak out negatively about an insurer’s mandate, Hunsaker was asked if his company had experienced any blow-back from State Farm because of his outspokenness about PartsTrader. “State Farm is entitled to their opinions, and the collision industry is, too,” Hunsaker said. “No, I’ve haven’t had any repercussions yet. Would I be surprised if it happened? After 40 years in this industry, no, I wouldn’t be surprised. So far I’m saying what I think and I share all this with State Farm, too. I’m very clear with them about how I feel.” – As reported in CRASH Network (www.CrashNetwork.com), April 1, 2013. Five years later, Hunsaker’s shop remains on the State Farm “Select Service” program.

Continued from Page 41

OE Certifications

New technology and pertinent data will help this evolution as well, Anderson explained. “In addition, I think that when a shop is writing an estimate, certain lines will trigger certain types of documentation that you will have to provide as a collision repairer,” he said. “For example, if a shop writes an estimate listing a setup and measure, it will trigger a response stating that the shop will have to take a photo to show how that vehicle was anchored to a frame machine. Also, the OEs will start carefully monitoring the CSI data about a shop to make sure they’re doing things right. So, if a shop has a lot of comebacks or surveys showing that the vehicles were not fixed properly, the OEs will audit that shop or technician’s work. If a shop does not make the standard (for example, if you work on 100 cars but only access repair procedures for 20 of them), then that will be grounds for dismissal from the certification program.”

AT&T 4G LTE to Power Ford SYNC Connect

Ford and AT&T are bringing highspeed connectivity to customers this year—with plans to connect more than 10 million customers to Ford SYNC® Connect within the next five years. With Ford SYNC Connect, Ford vehicle owners can: • Remotely lock and unlock doors from anywhere • Use the built-in GPS system to locate their parked vehicle on a map • Remotely start the vehicle or schedule a start time • View vehicle information, including fuel and battery level and tire pressure readings SYNC Connect debuts this spring on the new Ford Escape. After the initial rollout in North America, SYNC Connect is launching in global markets, adding another 10 million connected vehicles by 2020. “Connected car services are an important feature to consumers,” said Chris Penrose, senior vice president, Internet of Things, AT&T Mobility. “We’re thrilled to expand our relationship with Ford to deliver an enhanced connected experience to more Ford drivers.”

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51


In Reverse with Gary Ledoux

Gary Ledoux is an industry veteran with 48 years’ experience in the automotive and OEM collision parts industry. His column appears exclusively in Autobody News. He can be reached at YesterWreck@yahoo.com

The 1930s – New Products and an Insurance Company’s Realization The 1930s ushered in the biggest financial calamity of all time: the Great Depression. The Depression resulted in widespread unemployment and poverty in the U.S. and around the world. At the beginning of the 1930s, more than 15 million people, or roughly 25 percent of America’s workforce, were idle. President Hoover did little to alleviate the pain and despair and thus lost the 1932 election to Franklin D. Roosevelt and his New Deal. Between 1930 and 1932, more than 9,000 banks failed, taking with them more than $2 billion in assets. In the days before the Federal Deposit Insurance Corporation, many people were left with only the clothes on their backs. In the auto industry, new vehicle production was cut in half—from 5.3 million units in 1929 to just under 2.4 million in 1930. By the end of 1931, this number was cut in half again. Cadillac took such a beating that General Motors considered dropping the line. Soon, about 80 percent of the car-building capacity was idle and 25 percent to 30 percent of auto dealers went out of business. General Motors, Ford and Chrysler held 90 percent of the automotive market in the U.S. The remaining 10 percent was shared between Hudson, Nash, Packard, Studebaker and Willy-Overland. No one had yet heard of names like Toyota, Honda or even Volkswagen. But things weren’t all bad. Despite the sharp decrease in new car production, advances were still made in vehicle technology and safety features including safety glass, windshield washers and sealed beam headlamps. All were meant to either help mitigate auto accidents or protect vehicle occupants in the event of a crash. In 1934, curved windshields were introduced in limited numbers. But curved windshields and back glass would not be widely used until the mid-1950s. By this time, most car manufacturers utilized body-over-frame auto construction, a convention that would dominate the industry for almost 50

52

years when unibody construction became the norm. In the early 1930s, collision shops, as an industry, started to coalesce. Finally, there began a differentiation between mechanical repair shops and body and paint shops. Paint had been spray-able since 1926, and shop owners came to the realization that you could not get a decent paint job in a shop filled with dust and dirt. One of the earliest collision trade magazines, Auto Body Trimmer and Painter magazine, emerged. By 1939, the Auto Body Rebuilders Association of New Jersey, one of the earliest associations of its kind, was founded. Auto body associations would grow for the next 40 years, when finally, they started having a more profound effect on the industry. Auto paint manufacturers began paint distribution through what traditionally had been auto parts jobbers. Eventually, the business grew to a point where carrying only paint and body shop supplies became a financially viable business. By the early 1940s, Paint Body and Equipment (PBE) jobbers began to emerge. Paint application technology was also advancing. It was during this period that DeVilbiss introduced the model MBC spray gun featuring an entire spray head assembly that can be removed from the gun body with one bolt. The high-volume, lowpressure spray gun was also invented—but it would be 60 years before it would come into general use in the automotive refinish industry. The paint that was going into those guns was also changing. The 1930s saw the introduction of alkyd enamel, best known as DuPont’s Dulux and an acrylic lacquer, DuPont’s Lucite. Sikkens introduced AutoFlex paint and Rubbol A-Z, a synthetic lacquer. The earliest paint booths began to show up in the mid-1930s, consisting of three pre-fabricated walls, an open front and a fan on the back to eject fumes and overspray. In front of the fan was a crude filter made of burlap or some other fabric.

APRIL 2018 AUTOBODY NEWS / autobodynews.com

This was the best painters had to date, but the system had a couple of problems; the burlap material clogged very quickly, so filters had to be changed several times a day and the filters were not fire-retardant. To make matters worse, the paint booth was usually a wooden structure. A build-up of paint and solvent on the cloth, coupled with a wooden booth led to several fires in which the paint booth and the shop burned to the ground. A better solution had to be found. The 1930s wore on and despite a deepening recession, State Farm Insurance continued to grow, but certainly not at the rate it once had. The company had gone from selling 40,000 new policies per year to an average of a little more than 17,000. This bothered State Farm founder George Mecherle, but not as much as something else—rising loss costs. Since the inception of the company, Mecherle and his financial people had concentrated on sales dollars and the number of policies sold. Now, in the economic downturn and the overall lack of profits, they looked, for the first time, at loss costs. In his address to the State Farm employees at the State Farm annual meeting, Mecherle pointed out that cars were changing—They were being built for higher speeds, causing more accidents with a higher severity. He noted that new and different construction made repairs more expensive. The price of parts was increasing, along with labor costs. Company executives met to decide what to do about the situation. Their answer was to do a state-by-state analysis of each of their policy holders, noting premiums paid versus claims made and losses paid. What they discovered was certain geographical areas had an inordinate amount of losses. It was decided that State Farm would no longer sell insurance in those areas. They also found a few agents selling insurance to people who were known to be bad risks. These agents were eliminated and insurance policies for high-risk policy holders were can-

celled. Hereafter, company executives kept a close watch on losses. At the State Farm annual meeting held Feb. 21, 1939, Mecherle announced an ambitious plan called A Million Or More in ’44, meaning he intended to have 1 million auto insurance policies in force by 1944—a five-year plan. At the time, the auto policy count stood at 450,000—and it had taken 17 years to get there! It would take a lot of work and perseverance to meet the lofty goal. The home office began advertising like never before. Agents were supplied with printed materials, film strips and movies with projectors to tell the State Farm story. Field agents carried boatloads of promotional giveaways. Mecherle considered it only an acceleration of what the agents were already doing—but now they were in overdrive! At the same time, a “conservation department” was established, designed to reclaim policy holders who had cancelled their policy, or allowed it to lapse. This was the first time this was done by State Farm, and it was highly successful. State Farm also worked with lending institutions that were writing car loans. Innovative at the time, State Farm wrote a policy to coincide with the terms of the loan and made the lending institution the first payee in the event of loss. By 1942, more than 2,000 banks were cooperating with State Farm. To make the policy a little “sweeter,” State Farm started offering a medical rider, paying a maximum of $500 for medical, surgical or hospital expenses. Mecherle was determined to meet his goal, so he kept on pushing. In 1941, he had so much business that the home office had to add a night staff just to keep up. The growing collision repair business and Mecherle’s dreams all changed on the morning of Dec. 7, 1941.

www.autobodynews.com


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Easy installation, precise fit, finish and a limited warranty direct from Nissan / INFINITI — all the advantages of Genuine Nissan / INFINITI Parts. Visit your local Nissan / INFINITI retailer for all the parts you need.

autobodynews.com / APRIL 2018 AUTOBODY NEWS

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Continued from Page 42

Father and Son

trash to being a disassembly technician. From there, they can pick their desired path: estimating, painting, body repair, parts department, etc. We use a lot of I-CAR training to supplement the program and it takes two to four years to complete, depending on how quickly they learn and how much talent and drive they have. We’ve found that taking kids who are around 19–21 years old and letting them learn from the more experienced body men has benefited our business. Not only has it helped us staff some of our new stores, but it has addressed the problem this industry has—finding new talent while current employees keep getting older. We offer that program for the paint shop, body shop and the estimating staff. I believe it has been one of the big keys to our success. The average age at our shop is now well below 40. This is definitely below the industry average.

Continued from Page 29

Assured Performance

Our overall objective is to ensure our network is filled with best-inclass businesses performing at their peak potential. To achieve that, we have to invest several million into the IT and innovation with new tools for quality assurance, business improvement, consumer awareness, marketing, human resource management, customer service and data integrity. Certified Collision Care Providers are extraordinary and not the same as body shops. They need to look and operate differently by using the tools that are available to them to improve their business model. Based on the recent John Eagle decision, will you make any changes to your program?

Q:

We have already made the changes by introducing an OE-QC Quality Assurance program to enable shops to properly and adequately electronically document their

A:

54

How has using a consistent process throughout the locations helped you manage the stores?

Q:

All of the shops use the same set of Standard Operating Procedures (SOPs). Our customer service reps (CSRs) meet regularly and work very well together. The same holds true for our estimators. We hold manager meetings more frequently and we find they often call each other on the phone to discuss operations.

A:

Q: A:

What type of training have you implemented?

We are a firm believer in having our employees trained, and my dad is currently on I-CAR’s board of directors. All of our employees are I-CAR-trained and Car Crafters has been an I-CAR Gold Class Shop for more than 30 years. Our goal is to have our employees go through the first level of I-CAR training. Then we focus on having them concentrate on the Professional Development Program and become a Platinum Technician.

use of OEM repair procedures and help manage their technicians’ compliance to quality for 100 percent of their repairs. This is far superior to the spot check approach. NOTE: We are the only organization or certification program from any OEM with this tool, and it is offered at no charge to our Certified Repair Providers as an integral part of their certification.

What do you see for the future of OE certification programs?

Q:

The future of the OEM certification programs will be stronger, and more than ever, the backbone to ensuring vehicles are properly repaired to protect the consumers. With vehicles becoming more advanced in material and technology, coupled with the introduction of telematics, the OEM is going to be playing a bigger role in the collision business. Eventually, consumers will demand that their new generation vehicle only be repaired by a shop that is certified to repair their specific vehicle.

A:

APRIL 2018 AUTOBODY NEWS / autobodynews.com

As a result, we have seen an increase in the quality of the work that is performed. It also gives us comfort in knowing that all of our employees are as trained as they can be. The only I-CAR-trained instructor in the state of New Mexico happens to work for us. We often use our conference room at the main location to hold training sessions for our employees as well as those from neighboring shops.

honored to have received this award.

How has ongoing training helped you run your business more effectively and learn about employees?

Q:

If you had asked me several years ago, it would have been difficult to answer because we had been doing things for so long that it was just part of our business. When we took over the other stores, the new employees weren’t I-CAR-trained. We also hired additional employees through our growth that weren’t trained. When employees come back from class and are excited about what they learned, we know they enjoy the learning culRace cars built and driven by Jim and Sean. Jim’s is the ture and most likely are going blue 2012 Mustang and Sean’s is the orange 2003 Mustang to be with us for a long time At the SEMA show in Las Vegas because their morals and thought this past year, we received the Russ process align with ours. On the other Verona Memorial Award from I-CAR hand, we find that those who grumble at the inaugural Collision Industry about it, more times than not, just don’t Red Carpet Awards Breakfast hosted fit our culture. It has been good for us to see the by The Society of Collision Repair Specialists. We are very proud and personality of the individual. It lets us

A:

The RIGHT

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800-469-9731 858-300-3331 Fax

Mon-Fri 7am - 6pm; Sat 8am - 5pm cguth@hyundaisubaru.com www.kearnymesahyundai.com


know that we’re doing as much as we can to train our people to make sure they fix cars correctly, and that’s what is important—getting cars back to preloss condition. You have required a substantial number of OEM certifications. What is the main benefit of doing this?

Q:

We currently have 15 different OEM certifications. We started acquiring them about four years ago. In our market, we have a pretty low income per capita. There are not a lot of high-end cars that require certifications, so it’s difficult for us to say what the ROI is as far as fixing an Audi or Porsche. However, what the certifications have allowed us to do is completely understand all of the new technology that is now in these vehicles. The high-end cars might have certain technology years before more common vehicles do. All vehicles are going to have it eventually and it’s helpful to have that floor knowledge and know what to expect. It’s also good for our marketing to be able to showcase that we’re cer-

A:

tified in so many different makes, and gives the customer peace of mind knowing that if we can fix high-end cars, we can fix anything.

In addition to collision repair, what other services do you offer at Car Crafters?

Q:

All of our stores have mechanical capabilities, alignment machines and tire machines. Some have a full mechanic who can

A:

repair. By employing people who focus on these jobs, it helps our cycle time, which of course helps the insurance company relationships and customer satisfaction. It has also increased our profitably because we have access to individuals who do the work in-house rather than subletting it.

How has intergenerational knowledge enabled your business to grow?

Q:

From the top-down, there has been intergenerational learning at Car Crafters. We have a lot of father-son teams and uncle-nephew teams. Over the years, I’ve learned a lot from my father, Jim. We’ve always done a ton together and have a really close relationship. Growing up, I raced professionally with him. He was a team owner and we were traveling 20-plus weeks out of the year through the early 2000s. Then I was working for him on top of that. At one time, we lived together, worked together and raced together. He was best man at my wedding. We just

A:

Over the last four years, the company has acquired 15 OEM certifications

do electrical diagnostics. A couple of the smaller stores don’t have someone with a full background, so we have one guy who floats among those shops and helps out where needed. We do the same for glass

work really well together. Sometimes, we don’t see eye-to-eye but we’re not afraid to discuss it---heatedly, if needed. We have considerable respect for each other and know that we have the same goals in mind. Sometimes, we just have to figure out how to accomplish those goals either together or from separate ends, attacking it toward the center.

Q: A:

What are Car Crafters’ future goals?

We focus on being a little bit better every day and we encourage input from any of our employees. It doesn’t matter if they have been with us for a week or years; if they have an idea, we want to hear it. I think that has been a huge portion of our success. We’re also a family of believers, and that’s my family as well as a good majority of the people who work for us. We pray before our company meetings and our dinners, and we definitely feel like we’ve been blessed and we’re not afraid to give back and to let people know what we have is a blessing.

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autobodynews.com / APRIL 2018 AUTOBODY NEWS

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56

APRIL 2018 AUTOBODY NEWS / autobodynews.com


Contact These Dealers For Your Kia Genuine Parts Needs Car Pros Kia

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autobodynews.com / APRIL 2018 AUTOBODY NEWS

57


Industry Training with Stacey Phillips

Stacey Phillips is a freelance writer and editor for the automotive industry. She has 20 years of experience writing for a variety of publications, and is co-author of “The Secrets of America’s Greatest Body Shops.” She can be reached at sphillips.autobodynews@gmail.com.

I-CAR CEO, President Says Industry Is Embracing Training, More Stepping Up Needed More than half of all the collision repair professionals in the industry are likely not participating in training, according to John Van Alstyne, CEO and president of I-CAR. At the end of 2017, there were an estimated 33,500 total body shops in the United States.

“About 14,000 of those shops are doing some level of training, which we equate to 42 percent of the industry,” said Van Alystne. “The remaining 58 percent are likely not training at all.” He said the good news is that the numbers are getting better. There were 2,000 more shops training with I-CAR in 2017, which was up 25 percent from the previous year. There was also a 27 percent increase in Gold Class shops, bringing that number to 5,570 nationwide. The Gold Class recognition is the highest rolerelevant training achievement recognized by the industry. “As an industry, we’re stepping up,” said Van Alstyne during a presentation he gave highlighting ICAR’s initiatives during the January CIC conference in Palm Springs, CA. “But more stepping up is required.” In response, the Inter-Industry Conference on Auto Collision Repair, commonly known as I-CAR, is dedicated to providing the information, knowledge and skills required to perform complete, safe and quality repairs for the ultimate benefit of the consumer. “We take that seriously and it shapes our work,” said Van Alstyne. “One industry—one goal. That statement sums up what I-CAR is all about and it’s really about performing complete, safe, quality repairs. That’s the sole focus of what we do.” Established in 1979, the international not-for-profit organization represents the six segments of the 58

collision repair industry it serves: collision repair; insurers; original equipment manufacturers (OEMs); education, training and research; tools, equipment and supply; and other related industry services. In addition to providing training in the United States, I-CAR training is licensed for distribution in Canada, Australia and New Zealand. Looking back about six years ago, there were three key phases of I-CAR’s strategy. First, the organization set out to improve everything it does regarding its products, services and operations. The second phase was a focus on growth by serving the industry and the third was being relevant and responding to the needs of the industry.

those that are vehicle/technical-specific are all currently being offered. Nine new courses were launched in 2017, including “Using Vehicle Maker Repair Procedures.” “That course should be taken by everybody in the industry because it explains how to utilize best practices on OEM procedures,” said Van Alstyne. Fourteen new courses in electrical/diagnostics were introduced as well as two new hands-on courses in skills training: plastic repair and squeeze-type resistance spot welding. Van Alstyne shared information about I-CAR’s focus for 2018, which was determined with the assistance of I-CAR’s Industry Segment Advisory Councils (ISAC). The first ISAC for education was set up in 2011 to facilitate independent industry feedback and help provide direction to the organization’s strategy and future program enhancements. Van Alstyne said the initiatives are indicative of some of the benefits I-CAR delivers to the industry. This includes making sure I-CAR’s leadership team (l to r) Nick Notte, senior vice vehicles are repaired proppresident – sales and marketing; Ann Gonzalez, vice president – strategic development; John Van Alstyne, erly, reducing liability and CEO and president; and Elise Quadrozzi, vice president increasing brand loyalty. – education and technical services “I think it also contributes “Back at that time, we weren’t to talent attraction and retention,” he talking about technology,” explained said. “Shops that invest in their emVan Alstyne. ployees attract and retain talent.” Now, he said the industry is experiencing a “Technical Tsunami™” I-CAR’s 2018 Initiatives: where vehicle technology is changing rapidly, and shops are seeing an In-Shop Knowledge Assessments™ increasing number of cars coming in Launched in 2017, I-CAR’s In-Shop that are complex and costly to repair. Knowledge Assessments™ entail Over the last several years, I- going into body shops and conductCAR has focused on three key pro- ing face-to-face interviews with techgrams to help meet these issues: core nicians to assess whether or not their foundational training programs, weld- knowledge meets ProLevel® 1 staning programs and contract training, dards. If successful, they qualify for which encompasses custom training credit. If they don’t possess that solutions. knowledge, Van Alstyne said they are “We’ve listened to the needs of going to learn what gaps they have. the industry and responded with what “This is a major innovation for they asked us to do,” said Van Al- I-CAR and highly valuable for the styne. Classes such as industry basics, industry,” he said. hands-on skills development and Not only does this procedure

APRIL 2018 AUTOBODY NEWS / autobodynews.com

eliminate redundant training, but it also helps shops with time efficiency. I-CAR has found that, on average, the shops that participate in these assessments achieve Gold Class status in approximately one-quarter of the time.

Update to Entire Core Curriculum During the last two years, I-CAR has worked on updating its core curriculum. It is expected to be complete by 2019. Van Alstyne explained that courses, which are referred to as “Purpose-Built,” are no longer three hours long. Instead, the type of courses now offered dictate their format, whether that’s live, online or virtual. “In general, courses are going to be shorter,” he said. “We want them to be succinct and deliver value.” In addition, all core foundation courses will be offered in Spanish by 2019. See Embracing Training, Page 61

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Factors Affecting Vehicle Sales, Insurance, Repairs by Patricia L. Harman, Property Casualty 360

Artificial intelligence, emerging technologies and changing consumer expectations are just some of the issues impacting auto sales, insurance and repairs, according to the 2018 Crash Course study from CCC Information Services, Inc. With 17.25 million vehicles sold in 2017, slightly down from 2016, the 2 percent increase in average vehicle prices to $36,113 meant it was still a strong year for manufacturers. Higher vehicle costs also mean increased insurance premiums, leading insureds to opt for higher deductibles should they be involved in an accident. According to the CCC report, 19 percent of all collision claims had a deductible of $500 or more, although the average repair generally costs significantly more than the deductible. Auto Technology Improves Manufacturers are working toward greater “vehicle connectivity, vehicle autonomy and vehicle electrification, powered by advancements in computer power, machine learning and artificial intelligence,” said Susanna Gotsch, Crash Course author and lead analyst for CCC. “Our industry has never moved faster or been so exciting. Advances in digitization, artificial intelligence, the internet of things, and sensor and camera technology are driving dramatic changes and improvements in automotive technology.” Connected vehicles are enabling vast amounts of information about a vehicle’s health, driving data (the vehicle and driver’s), performance, as well as vehicle-to-vehicle data to be collected by manufacturers, insurers and other parties. Some of the information can help insurers

with more accurate policy underwriting. SMA research anticipates that 70 percent of all auto insurers will be using telematics by 2020. The benefits include a shorter delay in filing the first notice of loss with an insurer, since crash data could conceivably be sent to the insurer, first responders (in the event of bodily injuries) and to the repairer. Technology usage in other areas has affected policyholders’ expectations for the insurance industry. Like online retailers who provide constant updates when packages have been dispatched, are en-route and will be delivered, insurers and repairers are expected to provide similar information to policyholders about their claims. Recognizing the importance regular communication has on customer satisfaction ratings, multiple insurers are utilizing programs to provide policyholders with regular updates on their claims status.

The Ups and Downs of Ride-Sharing As the use of ride-sharing increases, so does the number of vehicles on the road and miles driven. The Institute of Transportation Studies at UC Davis studied ride-hailing in seven U.S. cities and found a 6 percent drop in the use of public bus transportation and a 3 percent drop in light rail use. In New York City, increased ride-sharing usage accounted for declines in the use of taxi and private car services. For business travelers, ride-sharing now accounts for 65 percent of the ground transportation costs, according to the Center for Automotive Research, while taxis only account for 7 percent and car rentals for 28 percent. Even airports are reporting a major drop in fees

from parking, car rental companies and taxis. Auto Repair Costs Climb While Collision Severity Drops The increased use of advanced driver assistance systems (ADAS) such as front crash prevention, blind spot detection, lane departure warnings, park assist, obstacle detection and back-over prevention is having a positive impact. While these technologies are not mandated by the National Highway Traffic Safety Administration (NHTSA), the Insurance Institute for Highway Safety (IIHS) and NHTSA announced in 2016 that 20 major auto manufacturers had voluntarily committed to making front crash prevention systems standard on most models (approximately 99 percent) by 2020. Studies by the Highway Loss Data Institute (HLDI) and IIHS have found that vehicles equipped with forward collision warning systems have reduced rear-end collisions by 23 percent, and accidents involving vehicles with automatic emergency braking dropped by 40 percent. The CCC report finds that in addition to fewer accidents, these systems may also help reduce the number of incidents involving cyclists and pedestrians. While these technologies have shown promise in reducing the number and severity of accidents, the cost to repair vehicles continues to rise. CCC said the average cost for a repair increased by 2 percent in 2017, to $2,927. Repair costs for non-comprehensive losses ran 2.3 percent higher in 2017 than the previous year, with costs for current model vehicles running slightly higher at 3.7 percent. Costs to repair vehicles that were 1 to 3 years old increased by 3%. However, there is a significant

AMi Hires Michael Cassata as Director of Collision Industry Outreach

The Automotive Management Institute (AMi) recently announced that Michael Cassata has joined the organization in the newly created role of Director of Collision Industry Outreach. Cassata recently retired from Amica Insurance, where he held positions as National Repair Assistance Program Manager (DRP), National CAT Manager and Salvage/Recovery 60

Manager. Since his retirement, Mike has offered consulting services through his company, Hammer Insights. He was the founding member of the ICAR Rochester Committee and continues to serve on numerous industry advisory committees. “I have been supportive of AMi's new, relevant programs and now look forward to playing a role in the orga-

APRIL 2018 AUTOBODY NEWS / autobodynews.com

nization's future growth and service to the industry. I believe we must continue to grow, evolve and learn in every aspect of our lives. This is a perfect fit for the AMi message, and I am so happy to be working with Jeff and his staff to promote this to our industry,” Cassata said. Cassata may be contacted at mcassata@amionline.org.

difference in repair costs depending on the age of a vehicle. Average repair costs for new vehicles compared to older ones increased from 47 percent to 69 percent over the last five years. “Dollars for replaced parts as a share of total repair costs and the average number of replaced parts per claim have increased—particularly for newer vehicles,” said Gotsch in her report. The increased use of driver assistance technologies can help mitigate or even prevent accidents, but like cell phones and other technology, they will also change driver behaviors. For insurers, this could also mean changes in liability and the types of insurance coverage required for a vehicle. The actual repair costs, while higher, could be offset by fewer overall accidents, which would have a long-term impact on parts suppliers and repair shops as well. The changes for all are probably coming more quickly than anyone expects. We thank Property Casualty 360 for reprint permission.

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Continued from Page 58

Embracing Training

Official Live Training Sites There are currently more than 260 training locations across the country, which include career and technical schools and other industry partner locations. Van Alstyne said these neutral fixed locations ensure consistency and effective course delivery as well as provide a better learning environment. New class scheduling is also being planned, similar to college scheduling where students will be able to view a listing of classes months in advance. “We want the industry to have visibility on class schedules, so they can plan their training rather than being reactive,” he said. Sustaining Partner Program I-CAR launched its Sustaining Partner program in January. The program provides the organization’s partners with access to information, course content and marketing opportunities. “Our sustaining partners contribute to funding and in exchange, they get access to our portfolio of

products and services,” said Van Alstyne. “This allows us to simplify and streamline our relationships with our partners.” Over time, Sustaining Partner program funding is expected to help reduce increasing education cost demands on the collision repair and education segments. I-CAR’s first Sustaining Partners include Chief Automotive Technologies, Car-O-Liner and CCC, which have been I-CAR Industry Training Alliance partners for years. New Learning Management System Another project that I-CAR has been working on is an overhaul of its learning management system. It will be piloted this year and is expected to be launched in 2019. Not only is it being designed to improve ICAR’s course delivery system, but Van Alstyne said it also will simplify training management, tracking and reporting and allow for an easier user experience. For more information about I-CAR and its programs, visit https://www .i-car.com/.

San Franciscans Are Attacking Driverless Cars

by Joe Kukura, SF Weekly

Not everyone is welcoming the robot technology that brings us self-driving, autonomous vehicles. According to reports from the California Department of Motor Vehicles, the month of January 2018 saw two separate incidents in which San Francisco residents physically “slapped” or “struck” an autonomous vehicle. San Franciscans will be either proud or ashamed to learn that San Francisco is the only city in California in which a human has been reported to commit an act of violence against an autonomous vehicle. By DMV law, every collision involving a driverless car has to be reported, no matter how minor. The Los Angeles Times reports that there have been six collisions with autonomous vehicle cars so far in 2018. Two of them were people playing Rock ‘Em Sock ‘Em Robots with the high-tech vehicles they love to hate. One Jan. 2 incident report describes an attack on a General Motors Cruise autonomous car at Valencia and 16th streets. A pedestrian “ran across Valencia Street against the ‘do

not walk’ symbol, shouting, and struck the left side of the Cruise AV’s rear bumper and hatch with his entire body. There were no injuries, but the Cruise AV sustained some damage to its left rear light. The police were not called.” Then on Jan. 28, another GM Cruise vehicle was slapped—yes, slapped—by a taxi driver on Duboce Avenue. “The driver of the taxi exited his vehicle, approached the Cruise AV, and slapped the front passenger window, causing a scratch.” No one was hurt and the police were not called. In both cases, the “driverless” cars did actually have a human being behind the wheel, as mandated by law. That law is set to change April 2, when driverless cars will be allowed to drive without people behind the wheel. It is unclear whether the cars in these incidents were in autonomous mode or manual mode. It’s also unclear whether the assailants even realized these were driverless cars, or whether this was just typical San Francisco crazy behavior. We thank SF Weekly for reprint permission.

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Continued from Page 4

Your Labor Rates

pretty good idea. For this index, the national average is listed as 100. The index number for your market represents the cost to live there as a percentage of that national average. For example: the cost of living index for Honolulu, Hawaii is 181, meaning that it costs 181% of the national average to live in Honolulu. Based on the cost of living index alone, we might expect to see body labor rates in Honolulu in the $103 to $159 range (that is, $57 times 181%, and $88 times 181%). Yet the survey data for posted body labor rates in Honolulu is in the $55 to $75 range, below the national average, and far below the cost-of-living-adjusted rates. As you can see, labor rates there appear misaligned with that geography’s cost of living.

2) Consider general consumer price inflation. This is simply the overall increase in prices of typical household expenditures. Inflation also erodes the purchasing power of money, as your dollars don’t go as far as they used to. In the US, inflation is measured by the Consumer Price Index (CPI) and is often used for cost of living adjustments (COLA), such as social security benefits. Last year in 2017, the CPI rose 2.1%, driven largely by energy costs, especially fuel oil and gasoline. To help maintain purchasing power and keep up with the overall increase in cost of goods, a shop could consider making an inflation adjustment to its labor rates. For example: if a shop currently charges $57 per hour, adjusting the labor rate for last year’s approximate inflation would yield a price of $58.20 (that is, $57 times 102.1%). Overall, our observation is that most body shops’ labor rates do not keep up with inflation over time, which puts those shops farther and farther behind every year, eroding their profits and purchasing power and risking their sustainability. Instead, we see body shops’ costs increasing at faster rates than inflation; paint costs alone could increase 3% to 8% per year, sometimes multiple times per year. We suggest shops think of keeping up with inflation as a mini62

mum requirement, not a real solution to choosing their proper labor rate.

3) Consider what makes your shop different, especially training, equipment, facilities, and OEM certifications. Shops are not alike, and those that have made more investment in these items likely have greater repair capabilities than shops that haven’t. And they likely require a higher labor rate to pay back and earn a return on those investments. Use the VRS to find apples-to-apples comparisons for your shop and what price ranges are for shops similar to yours around the country. For example: our national survey data shows I-CAR Gold Class shops have body labor rates in the $56 to $84 range; Assured Performance shops are in the $58 to $84 range; while Audi OEM authorized collision repair facilities range from $65 to $104 and Mercedes certified collision centers are in the $64 to $100 range. (All ranges quoted here are from that group’s average to plus 2 standard deviations. There is some overlap in these groups, and some shops are priced higher or lower.)

4) Consider what investments you need to make this year. How much money do you need to invest to improve your repair capabilities (especially for high technology vehicles), such as training, equipment, or earning OEM certifications? In general, your current labor rate only covers your current business. You likely need a new labor rate to cover new investments because your current rate was never priced to pay for them. Most body shop investments such as tools, equipment, and training are intended to make repair labor more skilled and effective. Equipment can’t repair a car by itself; it needs labor to put the equipment to use. The same goes for tools, facilities improvements, and certifications. Therefore, labor activity has the burden to pay off those investments plus earn a return. Let’s look at an example shop and investment: A shop needs to make a $5,000 training investment for a technician. The shop currently charges $57/hour for labor, has a 50% gross profit margin on labor, and wants to earn a 15% return on investment in one year for this train-

APRIL 2018 AUTOBODY NEWS / autobodynews.com

ing investment. The technician bills 2,000 hours per year and operates at 100% efficiency. The 15% return on investment is $750 (that is, $5,000 times 15%). So the shop needs to earn back $5,750 (the $5,000 investment plus the $750 return) in one year. The shop decides to spread that cost evenly over the tech’s 2,000 billable hours, which calculates to $2.88 per hour. This is the additional amount per hour the shop needs to earn to pay back the investment in one year. Because the shop earns a 50% gross profit margin on labor, we divide the $2.88 by 50% to get $5.75. This is the additional amount that needs to be billed for each hour (via the labor rate) so that the shop earns the $2.88/hour profit it needs to pay off the investment and earn the return. Therefore, the shop’s current $57/hour labor rate plus the additional $5.75 equals $62.75, which is the new labor rate the shop needs to collect to pay for this $5,000 training investment and earn a 15% return. A similar analysis is needed for all the other investments in equipment, facilities, certifications, and ongoing training. It can add up quickly. But shops that don’t adjust their rates to fund these investments quickly eat into their profits. Given the rapid increase in technology in this industry, we can expect a large and continual investment required to keep up with the training and equipment necessary to repair these hightech vehicles properly and safely. Mathematically, the industry’s current labor rates will only take a shop so far down that road before they are simply unable to afford the necessary investments. This leads to three major risks to shops: 1) lacking the knowledge to repair new high-tech vehicles, 2) putting consumer safety in jeopardy, and 3) putting themselves at legal risk by performing improper or unsafe repairs. None of these four tips are intended to be the only thing you do to compute labor rates. Think through all of these, look at the results, and then decide what price to choose. You can also go deeper with a more thorough cost of doing business analysis, examining competitive wage levels in your market, and determining your profit goals then backing into the labor rate needed to

hit that goal. These require having a good handle on your financial statements and a good spreadsheet or calculator to help with the calculations. Also keep in mind that as unemployment in the US continues to drop, wage levels will increase, and it could become more expensive to acquire new employees and retain good ones. Shops need a labor rate that can support paying competitive wages. If you find yourself choosing between two rates, we suggest erring on the high side to help stay ahead of the increasing wage curve. Remember, there is no rule that says you can only set your labor rates once per year. Prices can change at any time for any reason, and because markets and businesses are dynamic, labor rates can and do change continually throughout the year. We advise shops to consider their labor prices several times per year as their business evolves, cost structure changes, and investments are made. They can change rates as often as they need to. And very importantly, shops can freely report their new rates to the independent See Your Labor Rates, Page 69

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Today’s Vehicles Driving Change Within the Collision Repair Industry by Susanna Gotsch, Director Analytics, Product Management, CCC; Property Casualty 360

With newer vehicles accounting for a growing share of repairable volume again, the industry is seeing a reversal in some of the trends experienced during the recession.

Specifically, newer vehicles tend to have more parts replaced, lower alternative parts utilization and a lower repair percent of total labor spend. Add to this the fact that vehicles overall have become more complex, and these trends accelerate even further.

Fig 1

Growth in electronic vehicle content—items added to address vehicle safety or convenience also add to the overall cost and complexity of repair and the need to understand

Fig 2 64

OEM-recommended repair procedures. Not only are more parts per claim required, but additional labor not included in the labor for part replacement is needed for calibration, reset and scan operations. Repairers, insurers and OE manufacturers managing certified collision repair networks know the importance of managing repair cycle time, and actively monitor the differences between the planned and actual events for key process steps such as vehicle in, repair start, repair complete and vehicle out. The primary goal? Shave wasted time from the claim and repair process and streamline communication among all parties. Over the last five years, the average days between vehicle in and repair start, and the average days between repair complete and vehicle out have remained the same or seen moderate improvement, yet remain an opportunity for the industry to further streamline check-in and check-out. But it is the full repair time, the average number of days from the date the vehicle is brought into the shop to the date it is picked up (a 24hour / 7-day measurement), or “keys to keys”, that has seen the most change, growing from 8.5 days in CY2013 to 9.5 days in CY2017 (see Figure 1). The improvement in “vehicle in” to “vehicle out” days average between 2016 and 2017 may be driven most by the slight drop in the volume share that were both non-drivable and the highest appraisal cost (see Figure 2). Yet despite the drop in non-drivable and the repairs costing more than $10,000, volume overall has shifted into the higher dollar brackets, just as we saw with appraisal volume overall. With more parts and labor cost per claim, both the overall repair cost and the repair time have risen. Figure 3 illustrates how repair cycle times grow as do repair costs, with repair costs $0.01 to $500 taking 2.5 days, versus 20 days-

APRIL 2018 AUTOBODY NEWS / autobodynews.com

Fig 3

plus for vehicles in highest repair cost ranges. Unfortunately, as repair costs rise, both efficiency of repairers (see Figure 4) and customer satisfaction with the repairer and the insurer fall (see Figure 5). A comparison of the ‘kept informed’ CSI score shows much less variation among repair cost dollar ranges, but the fact that there is a

Fig 5

Fig 4

lower score for the higher cost repairs suggests those customers may need additional hand-holding and updates throughout the repair process (see Figure 6). Prior analysis of customer satisfaction data conducted by CCC shows quality repairs and few returns lead to

scores; yet if the shop wants positive customer recommendations, it needs to make sure the service is great and customers are kept informed. In other words, quality is table stakes—Service gets repeat business. With “Previous Experience”

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and “Recommendations” chosen as key reasons why an individual selects a specific collision repairer, capturing business is as important as keeping it. As repairers look to load balance among locations and specialize work, understanding the impacts to cycle time and productivity will become increasingly important. A shop handling non-drivable, higher-cost repairs could see significantly different results; factoring these differences in repair mix and performance assessment will be increasingly important. The collision repair industry is challenged with repairing a broad range of vehicles, where vehicle complexity has grown dramatically for the youngest vehicles that have seen a resurgence in volume share on the heels of several years of record new vehicle sales. The next several years will be challenging as automakers compete to position themselves for the changing world of personal mobility, introducing more technology that is complex and expensive to repair, but may not immediately deliver on all

its promises in terms of accident prevention. Now more than ever, it is essential for the automotive claims and collision repair industries to stay current on new technologies, tooling and training. All increase the operating costs in a professional facility.

Fig 6

Completing a vehicle repair in a manner that follows recommended repair procedures can help head off any potential unplanned returns of the vehicle, and keeping the customer well-informed throughout the process will help keep the ever-more demanding customer satisfied with their repair experience.

Technology plays a key role in a company’s ability to quickly assess and respond to consumer feedback and other information on market conditions. It also holds great potential for improving communication and collaboration with customers

and business partners. Knowing how to use technology to cater the claims and vehicle repair experience to each distinct customer will lead to higher levels of customer satisfaction, retention and growth. The information and opinions in this publication are for general information only, are subject to change and

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are not intended to provide specific recommendations for any individual or entity. Although information contained herein has been obtained from sources believed to be reliable, CCC does not guarantee its accuracy and it may be incomplete or condensed. CCC is not liable for any typographical errors, incorrect data and/or any actions taken in reliance on the information and opinions contained in this publication. Note: Where CCC Information Services Inc. is cited as source, the data provided is an aggregation of industry data related to electronic appraisals communicated via CCC’s electronic network or from total loss valuations processed by CCC. Where AIS is cited as source, the data provided is an aggregation of industry data collected from claims data communicated via AIS’s electronic network. We thank Property Casualty 360 for reprint permission.

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Tips for Busy Body Shops with Stacey Phillips

Stacey Phillips is a freelance writer and editor for the automotive industry. She has 20 years of experience writing for a variety of publications, and is co-author of “The Secrets of America’s Greatest Body Shops.” She can be reached at sphillips.autobodynews@gmail.com.

Emotional Intelligence Is a Key Element for a Successfully Run Body Shop Whether a body shop is looking to success is emotional intelligence.” ence in life,” she said. increase productivity, enhance team Marino explained that this is reIn a worldwide study of what performance or foster better leaders, ferred to as a person’s “EQ.” companies look for in hiring employAdrianna Marino said emotional Throughout her decade of expe- ees, Marino said 67 percent of the intelligence can help achieve such rience studying emotional intelli- most desired attributes were found to business goals and be a key factor in gence, which includes a certificate in be EQ competencies. running a successful company. The North American sales train“The link between EQ and earnings is so ing leader at AkzoNobel spoke to a direct that every point increase in emotional group of body shop owners and manintelligence adds $1,300 to an annual salary,” agers about the benefits of emotional intelligence during an AkzoNobel — Adrianna Marino Acoat Selected performance group meeting in San Diego, CA. EQ, Marino said she has found that a By being aware of emotional in“Emotional intelligence is a way better understanding of a person’s telligence, Marino said employees of recognizing, understanding and emotional intelligence has numerous will increase the likelihood of improvchoosing how we think, feel and act,” benefits for the workplace. These in- ing their communication and problemsaid Marino. “It shapes our under- clude enhanced employer/employee solving skills, decision-making skills, standing of ourselves and interactions relations, an improvement in company leadership, sales skills, teamwork and with others.” culture and a decrease in employee team performance. Someone who has low emotional turnover, burnout and absenteeism. “Productivity improves, as well intelligence may feel misunderstood Marino has found that most peo- as relationship satisfaction, customer and unappreciated, blame others for ple aren’t comfortable talking about service, conflict management and their problems and is subject to emo- their feelings. overall effectiveness,” she said. tional outbursts and moodi“All human beings, reIn 2016, entrepreneur.com stated ness. In contrast, Marino gardless of gender, have that people with a high EQ make more said those with high emofeelings and emotions they money—on average $29,000 more tional intelligence learn and bring to the workplace,” she per year than those with a low EQ. adapt to audiences and situsaid. “We don’t work with “The link between EQ and earnations, assume responsibility robots and machines every ings is so direct that every point inand take control of their perday. We work with human crease in emotional intelligence adds formance and productivity. beings. Whether we like it $1,300 to an annual salary,” said Adrianna Marino, North American During her presentaor not, we have to talk about Marino. “These findings hold true tion, “Applying Emotional sales training leader feelings and emotions.” across all industries, in all levels, in at AkzoNobel Intelligence for Personal She said the key word is every region of the world.” and Professional Success,” Marino “choosing.” Marino outlined the four areas explained to attendees how emo“We get to choose our thoughts, of emotional intelligence: self-recogtional intelligence can shape interac- behaviors and feelings every day,” she nition, self-management, social mantions with others, define how people added. “We’ve all heard the adage: agement and social recognition. She learn, help set priorities and deter- “Leave your stuff at the door when you then shared tips on how to incorpomine the majority of a person’s daily walk in. Well, it’s not possible. The rate these competencies into a peractions. good news is you can learn how to ma- son’s personal and professional life. She shared information from Dr. neuver that. That's what emotional inMichael Rock, a specialist in this telligence is going to teach you.” Self-Recognition: area, who designed and taught “EQ Numerous studies have shown Self-recognition involves self-awareand the New Workplace.” that managing emotions is something ness and understanding, personal ac“People typically attribute the that can be learned and directly influ- ceptance and an overall understanding lion’s share of their success person- ences a person’s professional and per- of personal psychology. Marino said it ally and professionally to their men- sonal success. is foundational to social awareness and tal intelligence or IQ,” said Rock. Marino cited a study from UC self-management. Some of the meas“Research in psychology and human Berkley PhDs that showed EQ was ures include learning styles, strengths performance over the last 20 years in- four times more powerful than IQ in and weaknesses, self-esteem and temdicates that mental intelligence does predicting who achieved success in perament. contribute to success, but the far their field. more significant intelligence that ac“It may be responsible for up to 5 ways to build self-recognition: counts for personal and professional 80 percent of the success we experi1. Accept emotions without judg-

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APRIL 2018 AUTOBODY NEWS / autobodynews.com

ment. 2. Self-monitor; take time to reflect and review. 3. Accept advice without becoming defensive. 4. Analyze strengths and weaknesses fairly with an eye toward growth. 5. Create realistic personal expectations.

Social Recognition: Social recognition reflects awareness and consideration of the feelings and responses of others. Marino explained that it’s the ability to empathize and maintain sensitivity to the moods and emotions of others, which allows for superior intuition and connection. These include factors such as empathy/understanding, service, listening, rapport and adding value. 5 ways to build social recognition: 1. Actively look for opportunities to help others. 2. Actively listen; pay attention. 3. Take in feedback and critiques from others. 4. Follow through on promises and commitments. 5. Be positive and open when responding to new people and ideas. Self-Management: Self-management measures self-evaluation coupled with self-regulation. The awareness and discipline needed to control and harness feelings directly impact the ability to achieve personal objectives and develop an inner resolution, according to Marino. Satisfaction, happiness and contentment are results of self-management. Some of the factors might be restraint, discipline, flexibility and stress management. 5 ways to build self-management: 1. Set and monitor a specific course and path for each day. 2. Act with focus and intensity. 3. Take time to evaluate and critique personal performance. 4. Avoid fatigue and burnout. 5. Remain accountable for your actions.


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Social Management: Social management includes interpersonal skills and focuses intelligence on generating results. Marino said that social intelligence fosters collaboration and connection. Some of the measures include encouragement, collaboration, conflict management and negotiation. 5 ways to build social management: 1. Take an active interest in others

and their agendas. 2. Develop persuasion and rapport. 3. Be assertive, engaged, enthusiastic and involved with others. 4. Maintain poise and calmness. 5. Look for positive, constructive answers that help everyone improve. When adopting emotional intelligence skills in a person’s day-to-day routine, Marino said a good reminder

is the computer command “ControlAlt-Delete.” “Control yourself, look for alternate solutions and delete situations that give you tension and negative energy,” she said. “We can’t get rid of everyone in life who gives us anxiety, but if there is a toxic relationship, try to maneuver around that or remove that person.” She also recommended that employees note their triggers and then

How Do the U.S. and Canada Differ in Their Fight Against Insurance Fraud? by Bethan Moorcraft, Insurance Business America

Fraudsters will always find a way to cheat the system. All lines of business are vulnerable to the crime, including insurance, and organizations worldwide face the sometimes cumbersome task of continuously fortifying their operations to keep the tricksters at bay. Some countries are more active in their response to insurance fraud than others, according to Dan Gumpright, product manager, Global Insurance Solutions, BAE Systems Applied Intelligence. The issue is “significant” across North America, but the response mechanisms differ between Canada and the U.S. “While Canada suffers similarly to the U.S., there are considerably more central initiatives to combat fraud, such as the data sharing model adopted by CANATICS, an anti-fraud consortium in Ontario, which is poolContinued from Cover

Autonomous in CA

also be able to communicate with law enforcement as well as the passengers in the event of an accident.” Arizona and Michigan already allow completely self-driving vehicles. In October, Waymo started testing autonomous cars without a driver in Phoenix, Arizona. Waymo intends to launch a commercial service there this year. Nevada and Michigan have also allowed fully driverless vehicles, while other states have run localized pilot programs. However, the development in California is important because it leads the US in terms of the number of companies testing autonomous cars on its highways. “This is a major step forward for 68

ing data in a single system and detecting organized fraud across multiple insurance companies. The majority of insurance companies in the province have signed up for the service and are actively using it,” Gumpright told Insurance Business. “British Columbian government-run auto insurer ICBC insures all vehicle owners in the province and has adopted the same technology to combat fraud. A recent PWC report indicated success in early detection of opportunistic fraud, which will lead to prevention over time in the case of ICBC, as consumers become aware of the detection models in place and the risk associated to defrauding their insurer.” U.S. insurance fraud solutions also differ dramatically from the models working in the UK, Gumpright added. While the concept of P&C insurance remains the same in both countries, the insurance models are significantly differ-

autonomous technology in California,” DMV Director Jean Shiomoto said in a statement. “Safety is our top concern and we are ready to begin working with manufacturers that are prepared to test fully driverless vehicles in California.” Last October, the California DMV issued revised regulations governing the safe deployment of autonomous vehicles on public roads. Among their many provisions, the new rules would allow autonomous cars without steering wheels, foot pedals, mirrors, and human drivers behind the wheel to be tested on its roads starting in 2018. A public notice went up on the DMV’s website on March 2nd, which starts a 30-day clock before the first permits can be issued on April 2nd. Companies can apply for three types of permits: testing with a safety driver, driverless testing, and

APRIL 2018 AUTOBODY NEWS / autobodynews.com

ent, therefore prompting different types of fraud. “The UK purchasing model of car and home insurance in recent years has massively increased through aggregators or price comparison websites rather than direct, with fewer policies than ever before being written directly,” Gumpright explained. “In the U.S., however, much of business is still direct, with a large number of consumers still purchasing through the traditional broker model. While internal policy and claims management systems have advanced in the US, the route in for the customer is very different.” Some UK insurance lines, such as car insurance, are slightly more simplistic than the comparable offerings in the U.S., where coverage understanding is sometimes limited. Add to that significant differences on a state-by-state basis in the U.S., and the chances for fraudsters to slip

deployment. California is an obvious target for autonomous vehicle testing, so changes made to the state’s rules governing these tests are followed closely by companies like General Motors, Waymo, and Uber that are developing fleets of self-driving cars for public use. There are currently 50 companies testing nearly 300 autonomous vehicles that are licensed with the DMV, officials said. Nearly 1,000 safety drivers are licensed to test those vehicles, but after the state’s rules go into effect, companies would be allowed to de-

focus on small changes to strengthen EQ. “Emotional intelligence takes practice; it’s a journey,” she said. “Take it one day at a time. Identify at least one area where you want to make a change and stick with it. You will see changes, though they may be gradual.”

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through the cracks continue to grow. “The state of collaboration is another significant difference,” Gumpright added. “The UK’s data sharing model is significantly more advanced than most places in the world. For example, the UK market has the Insurance Fraud Bureau (IFB), Insurance Fraud Register (IFR) and a dedicated insurance police task force, with almost all insurance companies collaborating to detect insurance fraud hitting the industry at large. “Collaboration is more complex in the U.S., often due to how states operate and their various rules. Datasharing capabilities exist, but they are significantly less advanced than that of the UK at this point in time. Indeed, some states in the U.S. don’t even count insurance fraud as a specific criminal offense yet.” We thank Insurance Business America for reprint permission.

ploy cars without any human behind the wheel. Congress is currently considering legislation that would allow companies to manufacture and deploy cars without traditional controls like pedals and steering wheels. The proposed bills would also preempt states from establishing their own laws overseeing autonomous testing, which could clash with California’s well-established system. But the bill is stalled in the Senate, with several lawmakers expressing concern about the amount of leeway offered to the private sector.

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Diamond Standard 40 MPH IIHS Moderate Overlap Test

On February 21, 2018, MGA Design Research Corporation of Burlington, Wisconsin, performed a 40 MPH moderate overlap test to strict IIHS

2009 Honda Fit with 81,704 miles compared to IIHS 2009 Honda Fit test on a new vehicle tested on October 2, 2008 is graphed below.

Protocol on a 2009 Honda Fit with a Diamond Standard CAPA Certified reinforcement bar.

MGA Research Corporation purchased the vehicle / Set up the testing to IIHS Protocol. Diamond Standard Reinforcement Bar installed by a local ICAR Technician at MGA’s Request. Test was witnessed in person by a current ICAR Board Member. Of Note: MGA Research Corporation purchased the vehicle / Set

The results of the Diamond Standard reinforcement installed on a

SIERRACHEVROLET

Continued from Page 62

Your Labor Rates

up the testing to IIHS Protocol. Diamond Standard Reinforcement Bar installed by a local ICAR Technician at MGA’s Request. Test was witnessed in person by a current ICAR Board Member. MGA tested 20 different reinforcement/absorber components of OEM and Diamond Standard in Quasi Static and multiple speed Dynamic Sled tests prior to the IIHS protocol test for Diamond Standard. “Here causality was isolated in a true scientific test protocol. Component testing for Diamond Standard was designed by the late Jim Hackney, Former NHTSA Director of Crashworthiness and Father of the 5 Star Crash Rating System still in use worldwide to this day” said Michael O’Neal, President of Diamond Standard.

VRS Labor Rate Survey at LaborRateSurvey.com. Pricing transparency is essential for free markets to function efficiently, so your survey participation is critical. In conclusion, pricing your labor can often be more complex and more involved than this, especially considering all the investment needed to repair high-tech vehicles, but these simple four steps can help get you in the right range and closer to the right price for your individual shop. For a deeper analysis of your labor rates, greater access to more independent labor rate data, or help with any of these topics, contact National AutoBody Research for more information. www.nationalautobody research.com

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“As a final note, one couldn’t help but notice the toughness of a 10 year old Honda Fit in a violent 40 mph test.”

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April 2018 Western Edition  
April 2018 Western Edition