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Q&A With Calif. BAR Chief John Wallauch by Ed Attanasio
As a follow-up to our interview of April 2012, Autobody News sat down with John Wallauch, Chief of the Bureau of Automotive Repair (BAR) recently, to find out about what he has learned and achieved during his first 15 months on the job.
Q: Legitimate collision repairers are very concerned about sketchy shops that are getting away with sub-par work and committing outright fraud. How can you respond to that? JW: We have several body shops that are going through the courts all the
time, but you rarely hear about the settlements once these cases are settled. It’s difficult to respond to this question, because most of these violators work under the radar, late at night and early in the morning. If we BAR Chief John don’t know about Wallauch says he’s quickly learned them or see them in action, I don’t much about the collision industry in know how anyone his first 15 months can expect us to do in the position something about See Q&A with Bar Chief, Page 26
ASCCA/CAA Lobbies California Capitol in Sacramento during Joint Legislative Day by Ed Attanasio
It was a beautiful day to change the industry, one meeting at a time. On April 16, the Automotive Service Councils of California (ASCCA) partnered again with the California Autobody Association (CAA) to convene in Sacramento and meet ASCCA/CAA Lobbyist Jack Molodanof (left) and ASCCA with their California legisla- President Jack Crawley (right) spoke to the ASCCA/CAA tors to have their concerns members attending Legislative Day heard. More than 80 shop owners, both and push legislation that benefits both mechanical and collision, were on groups. hand to represent both organizations See ASCCA/CAA Lobbies, Page 28
VOL. 31 ISSUE 6 JUNE 2013
CIC Continues Discussion of Alternatives to Existing Paint and Materials Calculations by John Yoswick
A consultant whose study indicated that the vast majority of the industry finds the current way that paint and materials compensation is calculated is a poor methodology is now saying more accurate and fair calculation systems exist, are being used by some shops and are being accepted by some insurance companies. “The most important message here is that by properly presenting itemization and documentation using a paint material calculation system, we are actually able to resolve these conflicts,” consultant Steve Lanza of Richfield Associates said at the Collision Industry Conference (CIC) held in Phoenix in April.
Lanza’s firm in 2012 released its findings that compensation for paint and materials has not kept pace with increases in the costs of these products, and that 64 out of 68 industry participants interviewed think the current way paint and materials compensation is calculated is a poor methodology. Only four people (including representatives of three repairer operations and one estimating system provider) rated the current system as “adequate” or “good.” The study concluded the current system is flawed in part because on smaller jobs, repairers do not receive adequate compensation, and for large repair jobs, insurers believe materials charges become excessive. It also found that while average See Paint and Materials, Page 30
Florida Shop Owner Files 53 Lawsuits to Counter Short Pays by Insurers by Melanie Anderson
In Delray Beach, FL, Eddie Quintela, 42, owner and operator of Collision Concepts, recently spent $10,450 on filing fees for 53 separate lawsuits against insurers for short pays. Quintela says he’s not worried about the money. He will recoup court Eddie Quintela costs and attorney’s fees when he wins his cases, plus recover the compensation he should have received in the first place for properly repairing the vehicles. To date, he and his customers have won every single case they’ve filed against insurers. According to Quintela, his plan to get insurers to pay for underpayments is pretty simple and easy to do. “If we cannot get an agreed price
with an insurance company to properly repair a vehicle, we engage the customer,” said Quintela. “We give our customers a couple of options: 1) they can pay the difference, or 2) the customer can sign an Assignment of Benefits or Assignment of Proceeds and I will go after the insurance company on their behalf. I’ll step into their shoes. Every customer I’ve discussed this with agrees to take the second option.” Currently, Quintela has 80 customers he is representing in court. In one week alone, he filed 53 cases. The insurance companies he’s currently in litigation with include State Farm, GEICO, USAA, Travelers, Bristol West, Infinity and others. Collision Concepts, a 10,000square-foot shop, currently has seven DRPs. Quintela and his staff of 11 work on 80–100 vehicles per month. He’s been in business since 2002. See 53 Lawsuits, Page 25
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2 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
NATIONAL 16 Arrested in Multi-State Car Theft and Fraud Conspiracy, Dealerships and Individuals Targeted . . . . . . . . . . . . . . . . . . 58 1Collision Adds Illinois Shop. . . . . . . . . . . . . . 30 ABRA Awarded Farmers MSO of the Year . . . . 58 ABRA Grows in Michigan . . . . . . . . . . . . . . . . 29 ABRA Has Acquired 23 WA Precision Collision Centers . . . . . . . . . . . . . . . . . . . . 61 AkzoNobel Opens its FIT Awards for Nominations . . . . . . . . . . . . . . . . . . . . . 58 AL to Start Producing its First Acura Models . . 37 Allstate’s Profit Dips 7.4%, Expands Esurance . . 61 AMI Accepting Applications for Cosette/Westerlund Award . . . . . . . . . . . . . 56 ASA Business Meeting Emphasizes Unity, Transparency, Inclusion & Collaboration . . . 56 Automaker, OEM and Recall News . . . . . . . . . 34 Avery Names New CIC Standards Cmte Leaders. . . . . . . . . . . . . . . . . . . . . . . 44 Axalta Coating Partners With Optima Automotive. . . . . . . . . . . . . . . . . . . . . . . . . 37 Axalta Coating Systems Launches Rival™ Economy Brand . . . . . . . . . . . . . . . . . . . . . 58 BASF Names Micro Auto & Paint Distributor of Year. . . . . . . . . . . . . . . . . . . . 37 BLS Stats Show Increase in Number of Body Shops . . . . . . . . . . . . . . . . . . . . . . 58 CARFAX Hit by $50M Federal Lawsuit Filed by 120 Automotive Dealerships . . . . . . . . . 61
wife Marcy assisted countless collision repair businesses with services covering mergers/acquisitions, strategic planning, litigation management, succession planning and more. In recent years, Ohrnstein traveled the world to share his experience and knowledge with industry participants as a featured presenter at events such as the NACE MSO Symposium, the International Bodyshop Industry Symposium (IBIS) in Europe, the Canadian Collision Industry Forum, and many others. A memorial service was held May 6 at University Synagogue in Irvine, CA. In lieu of flowers, the family asked that donations be made to Rady Children’s Hospital’s Heart Institute in care of Dr. John Lamberti. Dr. Lamberti conducted five heart surgeries on Ohrnstein’s son Steven. Erick Bickett, CEO of Fix Auto USA, a longtime friend and business associate, said, “Matt was a great man, father and husband. I can think of only a few people who have had the kind of positive impact for collision repairers in our industry with the heart, integrity and depth of knowledge that he possessed.”
Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Assistant Editor: Melanie Anderson Contributing Writers: Tom Franklin, David Brown, John Yoswick, Rich Evans, Janet Chaney, Toby Chess, Ed Attanasio, Chasidy Sisk Advertising Sales: Joe Momber, Sean Hartman, Jay Lukes (800) 699-8251 Sales Assistant: Louise Tedesco Art Director: Rodolfo Garcia
Audi Wholesale Parts Dealers . . . . .46 Automotive ID . . . . . . . . . . . . . . . . . .24 Axalta Coating Systems . . . . . . . . . . .5 BASF . . . . . . . . . . . . . . . . . . . . . . . .15 Bill Luke Chrysler-Jeep-Dodge . . . .18 Bill Luke Fiat . . . . . . . . . . . . . . . . . . .18 BMW Wholesale Parts Dealers . . . .43 Bob Smith BMW . . . . . . . . . . . . . . . .40 Bob Smith MINI . . . . . . . . . . . . . . . .40 Buerge Chrysler-Jeep-Dodge . . . . .17 Car-Part Pro . . . . . . . . . . . . . . . . . . .39 CCC Information Services . . . . . . . . .7 Certified Automotive Parts Association (CAPA) . . . . . . . . . . .11 Champion Pneumatic . . . . . . . . . . .21 Chief Automotive . . . . . . . . . . . . . . .23 Classifieds . . . . . . . . . . . . . . . . . . . .62 Downtown Motors of LA (Audi, VW, Porsche) . . . . . . . . . . .31 Drew Hyundai . . . . . . . . . . . . . . . . .36 East Bay BMW-MINI . . . . . . . . . . . . . .8 Elk Grove Toyota . . . . . . . . . . . . . . .26 Enterprise Rent-A-Car . . . . . . . . . . .20 Equalizer Industries . . . . . . . . . . . . . .6 Ford Wholesale Parts Dealers AZ, CA, & NV . . . . . . . . . . . . . . . .51 Galpin Motors . . . . . . . . . . . . . .28, 37 Garmat USA . . . . . . . . . . . . . . . . . . .16 GM Wholesale Parts Dealers . . . . . .53 Honda-Acura Wholesale Parts Dealers . . . . . . . . . . . . . . . . . .32-33 Hyundai Wholesale Parts Dealers . .44 Innovative Tools & Technology, Inc .35 KBS Coatings . . . . . . . . . . . . . . . . . .10
Serving California, Nevada and Arizona, Autobody News is a monthly publication for the autobody industry. Permission to reproduce in any form the material published in Autobody News must be obtained in writing from the publisher. ©2013 Adamantine Media LLC. Autobody News P.O. Box 1516, Carlsbad, CA 92018 (800) 699-8251 (760) 721-0253 Fax www.autobodynews.com Email: email@example.com
COLUMNS Attanasio: Google+ Is an Emerging Star for Media-Savvy Body Shops. . . . . . . . . . . . . . 20 Franklin: The Power of Persistence in Marketing . . . . . . . . . . . . . . . . . . . . . . . . 24 I-CAR Tech: Dressing GMA (MIG) Welds. . . . . 38 Yoswick: Repairer-Only Meeting Focuses on Shops’ Response to Key Industry Issues at April CIC Phoenix Meeting. . . . . . . . . . . . 14
Carlyle Group to Sell 50,000 Share Stake in Hertz . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Car-O-Liner Names Peter Richardson to Management . . . . . . . . . . . . . . . . . . . . . 50 CARSTAR to Support “Hire Our Heroes” Campaign . . . . . . . . . . . . . . . . . . . . . . . . . 56 CIC Attendees Overwhelmingly Support BMS Data Standard Over EMS . . . . . . . . . 60 CIC Continues Discussion of Alternatives to Existing Paint and Materials Calculations. . . . 1 Collision Repair Education Foundation and Partners Announce First of $300,000 in Student Scholarships . . . . . . . . . . . . . . . 57 Colorado Auto Dealers Find Support in State Legislature. . . . . . . . . . . . . . . . . . . . . 56 CREF Seeks Employers For Summer Students . . 61 Dan Risley Appointed Interim Executive Director of ASA, Outlines ASA Position on PartsTrader . . . . . . . . . . . . . . . . . . . . . . 53 DEG Received 1,300 Inquiries in 2012, Up 30% from Previous Years . . . . . . . . . . . 21 First Southern Automotive Repair Industry Conference Held in Biloxi, MS, April 26–27 . . 40 Florida Shop Owner Files 53 Lawsuits to Counter Short Pays by Insurers . . . . . . . . . . 1 Ford Adds 38 New Parts to Collision Program . . 58 Ford to Donate $1 Million . . . . . . . . . . . . . . . . 30 Former Florida Body Shop Bookkeeper Sentenced to 3 Years . . . . . . . . . . . . . . . . . 36 GCIA Completes 2013 Collision Labor Rate Survey . . . . . . . . . . . . . . . . . . . . . . . . 39 GEICO Foundation Donates to CREF in CA, FL, DC & NY . . . . . . . . . . . . . . . . . . . . 58 Hermanek and Ricciotti Join CREF Board of Trustees . . . . . . . . . . . . . . . . . . . . . . . . . 61 IABA Invites Ray Gunder to Hit the Road in Indiana . . . . . . . . . . . . . . . . . . . . . . . . . . 24 I-CAR Announces Keynote Speakers Reginald Modlin and John McElroy for Boston July Meeting . . . . . . . . . . . . . . . 46 I-CAR Plans New-Format Industry Conference in July in Boston . . . . . . . . . . . 49 IL Body Shop to Close for Subway Franchise . . 42 Industry Demonstrates Early Confidence in SEMA Show with 6% Exhibitor Increase . . . 52 LIABRA Joined NYSACTA for Lobby Day in Albany, New York on April 16 . . . . . . . . . 22 Maine Legislature Holds Hearings on Right to Repair . . . . . . . . . . . . . . . . . . . . . . 48 Mercedes-Benz Plans $70M Expansion, 600 Jobs in AL. . . . . . . . . . . . . . . . . . . . . . 37 MID Issues Bulletin to Insurers: Cover, Feather, Prime and Block for Hail Damaged Cars . . . 44 Minnesota Senate Passes New Paint, Materials Tax Law. . . . . . . . . . . . . . . . . . . . 58 MS Legislature Lures Auto Parts Plant . . . . . . 39 Mississippi’s Attorney General Hood Tells Insurance Companies to Cover Feather, Prime & Block, Etc. . . . . . . . . . . . . . . . . . . 45 Mitchell ITR Says Collision Parts Index Declined Last Year For First Time in Ten Years . . . . . . 52 NJ Cracks Down on Fraud . . . . . . . . . . . . . . . 18 Ohio Body Shop Owner Convicted of Stealing Custom Cars, Even From a County Prosecutor. . 42 OK Court Reverses Finding on Ford and Dealership . . . . . . . . . . . . . . . . . . . . . . . . . 44 Only Two Small 2014 SUVs Performed Well in Front-End Crash Tests According to IIHS . . 46 PartsTrader Announces New Feedback Function Release . . . . . . . . . . . . . . . . . . . . 49 Progressive Sues Other Insurers For Alleged Patent Infringement . . . . . . . . . . . . 62 Rhode Island Industry Attorney: “Body Shops Suffer From an Image Problem” . . . . . . . . . 54 Safelite Named in New Lawsuit Alleging Windshield Separation . . . . . . . . . . . . . . . . 46 Safelite Opens Chicago Store . . . . . . . . . . . . . 39 SEMA Show Enhances Services for Collision Repair Market. . . . . . . . . . . . . . . . 50 Stacy Bartnik Joins Team PRP as Executive Director . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 State Farm’s Campus Project in TX is Growing . . 44 Texan Charged with $3.5 Million Dollar Fraud . . 59 TX Franchise Bill Passes House and Moves to Senate . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Two More Insurers Require Inspections for Glass Repair . . . . . . . . . . . . . . . . . . . . . 50 U.S. Supreme Court Rules Against Towing Company . . . . . . . . . . . . . . . . . . . . 54 uParts Gets $2M in Financing. . . . . . . . . . . . . 60 VeriFacts & Airbag Solutions Create Restraint Systems Clinic . . . . . . . . . . . . . . . . . . . . . . 60
Matthew Ohrnstein, managing director of Symphony Advisors and cohost of the Collision Repair Executive Webcast (CREW), and formerly Caliber Collision Centers CEO, passed away suddenly on April 30 while jogging near his home in southern California. He was 57. Ohrnstein is survived by his wife of 19 years, Marcy Tieger, who was his business partner with Symphony Advisors, and sons Michael and Steven and daughters Jessica and Rose. Prior to founding his consulting firm, Symphony Advisors, Ohrnstein served as chairman and CEO of Caliber Collision Centers from 1997 until October 2004. Under his leadership, Caliber added 68 stores in California and Texas with annual revenues of more than $200 million and more than 1,600 employees. He was a featured speaker at many industry events both in the U.S. and internationally. He was a co-founder of the Collision Repair Executive Webcast (CREW), an every-other-month webcast that features a guest speaker and focuses on collision repair topics. As managing director of Symphony Advisors, Ohrnstein and his
REGIONAL Almost Everything Autobody in Fremont Voted Best . . . . . . . . . . . . . . . . . . . . . . . . . 18 ASCCA/CAA Lobbies California Capitol in Sacramento during Joint Legislative Day. . . . 1 Auto Body Shop Opens in Old Firehouse in Utah . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Benefit Held for Burned Montana Shop Owner. . 4 CAA San Diego Hosts Flat-Rate Wage Meeting. . 4 CAA Santa Clara Golf Day to Benefit Operation Comfort . . . . . . . . . . . . . . . . . . . . 4 Caliber Collision Surprises Three Struggling Tucson Families . . . . . . . . . . . . . . . . . . . . . 19 California Court of Appeal Upholds Authority of Insurance Commissioner Dave Jones . . . . 8 Collision Industry Leader Matthew Ohrnstein Passes Away at Age 57 . . . . . . . . . . . . . . . . 3 Father-Son Bodywork Bandits Team Con Seattle Seniors with Bad Body Repairs . . . . . 8 FinishMaster Customer Appreciation Event Held in Cathedral City, CA . . . . . . . . . . . . . . . 9 FinishMaster to Host Free Airbrush Seminar June 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Frank Embree Passes at 84 . . . . . . . . . . . . . . 10 Glendale/Foothill CAA Meets June 12 on Blueprinting . . . . . . . . . . . . . . . . . . . . . . . . . 4 J’s Auto Body in Barstow Suffers Damage from Fire . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Los Angeles Auto Parts Owner Killed . . . . . . . . 6 Military Veterans Receive Recycled Rides in Southern California . . . . . . . . . . . . . . . . . 16 Nevada’s Collision Authority Expands in Las Vegas . . . . . . . . . . . . . . . . . . . . . . . . . 10 Paramount Collision Center Franchises with Fix Auto . . . . . . . . . . . . . . . . . . . . . . . . 4 Q&A With Calif. BAR Chief John Wallauch. . . . . 1 Santa Clara CAA Hosted Mike Anderson of Collision Advice . . . . . . . . . . . . . . . . . . . 18 Seidner’s Collision Opens 14th Location in LA Area . . . . . . . . . . . . . . . . . . . . . . . . . . 4 SEMA Hails Proposal to Save OHV Area at Twentynine Palms in California desert . . . . . 10 Spokane Shop Busted for Selling Drugs Near School . . . . . . . . . . . . . . . . . . . . . . . . 18 Stolen Pulp Fiction Car Found Two Decades Later . . . . . . . . . . . . . . . . . . . . 6 Teen’s Classic ‘65 Mustang Gets a Makeover from Make-A-Wish . . . . . . . . . . . . . . . . . . . . 6 Victorville Body Shop Workers Snuff Out Car Fire . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 WIN Wins Big with 2013 Education Conference in Phoenix . . . . . . . . . . . . . . . . 12
Collision Industry Leader Matthew Ohrnstein Passes Away at Age 57
Kearny Mesa Subaru-Hyundai . . . . .52 Kia Motors Wholesale Parts Dealers .55 Levan Group, Inc. . . . . . . . . . . . . . .14 LKQ . . . . . . . . . . . . . . . . . . . . . . . . .63 Los Gatos Luxury Cars . . . . . . . . . .29 Maita Subaru . . . . . . . . . . . . . . . . . .30 Malco . . . . . . . . . . . . . . . . . . . . . . . . .9 Mazda Wholesale Parts Dealers . . .61 MINI Wholesale Parts Dealers . . . . .42 Mitsubishi Wholesale Parts Dealers .60 MOPAR Wholesale Parts Dealers . .47 Moss Brothers Chrysler-Jeep-Dodge .13 Nissan/Infiniti Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . .48 North County Kia . . . . . . . . . . . . . . . .9 Power Chrysler-Jeep-Dodge of Arizona . . . . . . . . . . . . . . . . . . .25 PPG . . . . . . . . . . . . . . . . . . . . . . . . . .2 Preval Spray Gun . . . . . . . . . . . . . . .64 Replica Plastics . . . . . . . . . . . . . . . .38 Riverside Metro VW-Honda-HyundaiNissan-Mazda . . . . . . . . . . . . . . .22 SATA Spray Equipment . . . . . . . . . .19 Shingle Springs Nissan-Subaru . . .45 Sierra Chevrolet-Honda-MazdaSubaru . . . . . . . . . . . . . . . . . . . . .41 Sonnen BMW . . . . . . . . . . . . . . . . . . .4 Subaru Wholesale Parts Dealers . . .59 Timmons VW-Subaru . . . . . . . . . . . .49 Toyota Wholesale Parts Dealers . . .50 VIM Tools . . . . . . . . . . . . . . . . . . . . .56 Volkswagen Wholesale Parts Dealers .57 Volvo Wholesale Parts Dealers . . . .54 Weatherford BMW . . . . . . . . . . . . . .27
www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 3
CAA San Diego Hosts FlatRate Wage Plan Meeting
Glendale/Foothill CAA Meets June 12 on Blueprinting
The San Diego chapter of the California Autobody Association hosted an “emergency” meeting for members only on May 22 at the Hilton on Harbor Island. In March, the California Court of Appeals in Los Angeles affirmed a 2011 trial court decision that changed the face of the flat-rate compensation forever. An appeal to the California Supreme Court is expected, but shops paying employees on a flat-rate system must make changes now to protect themselves. Owners and managers only were invited to this meeting. Guest speaker was Cory King, partner with the San Diego office of Fine, Boggs & Perkins LLP, who presented a 90-minute seminar called “Flat-Rate Wage Plan Solution.” King and his firm serve as labor and employment counsel for the California Autobody Association, as well as the California New Car Dealers Association. He explained how the industry ended up in this situation, and provided a number of proposed solutions for shops to consider. For membership questions, contact Cindy Shillito, southern California representative, at (714) 944-4028.
The Glendale/Foothill chapter of the California Autobody Association will meet June 12 to discuss blueprinting and to host a fundraiser for chapter president Linda Holcomb who is battling breast cancer. This meeting was originally scheduled for May 15 but has been changed to June 12. Featured guest speaker is Daniel Panduro of J&L Body and Paint Shop, located in the Los Angeles area. Panduro will discuss blueprinting, what it is and how it can help improve your business. He is a second-generation shop owner and is an economics and business management graduate from the University of California, Irvine. Panduro is in his 11th year as president of business operations at J&L. The second featured guest speaker is Brian Erkstand from Alldata who will be discussing their new estimate compliance software. Social hour begins at 6 p.m. with the meeting starting at 7 p.m. Cost is $40 for members or $100 for nonmembers. The meeting will be held at Brookside Country Club in Pasadena. RSVP to Cindy Shillito at (714) 9444028 or at firstname.lastname@example.org.
Paramount Collision Center Franchises with Fix Auto
Benefit Held for Burned Montana Shop Owner
Fix Auto recently announced that Paramount Collision Center of Paramount, CA—now Fix Auto Paramount—is the latest body shop to franchise with the national collision repair organization. Fix Auto Paramount owner Peter Bakhtar enrolled his business into Fix Auto’s Collision Repair Experts (CRX) program, a solution designed to help a shop manage its reputation, enhance the customer experience and evaluate and ultimately improve operational efficiency and profitability. “As an independent shop owner, there’s little accountability to anything beyond your own business,” said Bakhtar. “It’s easy to get stuck in your ways. Once I made the decision to seek improvement, and with the assistance of Fix Auto’s CRX program, which offers comprehensive reports and peer accountability, I recognized the opportunity to realize a number of very real improvements in my business. “Then, when the time came to transition to franchise, the process was smooth because I’d already engaged in the organization through my CRX affiliation,” he added.
Friends and co-workers of Rod Hessler recently held a benefit to help him cover medical costs at a Colorado hospital, where he has been recovering from burns on 40% of his body after his auto body shop in Billings, MT, caught fire on Feb. 28. The event, “An Evening With Friends: A Benefit for Rod and Cindy Hessler,” was held at the Shrine Auditorium, and included happy hour, appetizers, a silent auction, dinner and music. Tickets were $75 and all proceeds went to the Hessler’s. Hessler was injured while welding too close to combustibles at his shop, Al’s Body Shop, when nearby materials caught fire and caused an explosion. The fire destroyed the shop. Hessler was flown to the University of Colorado Hospital’s burn unit, in Aurora, CO, where he was in critical condition with burns over 40% of his body. Since then, he has undergone 10 surgeries. While he is insured and could return home soon, the costs of the extended stay continue to mount and his wife, Cindy, has taken off time from her job at Rocky Mountain College to be by his side.
4 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
Seidner’s Collision Opens 14th Location in LA Area
CAA Santa Clara Golf Day to Benefit Operation Comfort
Seidner’s Collision Centers recently acquired its 14th collision repair location in Ontario, CA. Seidner’s new facility, previously known as Wally and Jim’s Body Shop, is its second shop opening this year for the California-based multi-shop operation. “Wally and Jim’s has had a long tradition of excellent service to the local area,” said Rick Seidner. “Their long history and commitment to customer service made this acquisition a natural fit within the Seidner model.” All of the company’s 14 locations are located in the San Gabriel Valley and Inland Empire regions near Los Angeles. “As always, our focus remains on customer service, cycle time and cost control. Expanding our footprint within the Inland Empire is an integral part of our overall growth strategy and our unparalleled commitment to customer service,” said Steve Seidner, vice president of Seidner’s.
The Santa Clara chapter of the California Autobody Association will hold its 30th annual golf tournament on June 19 at Cinnabar Hills Golf Club in San Jose, CA. Proceeds
from the tournament will benefit Operation Comfort, a non-profit founded to put wounded war veterans back to work by teaching automotive repair skills. Registration begins at 11 a.m. Format is best ball scramble with a shotgun start. Event fees are $225 per player and include green fees, GPS Cart, range balls, box lunch and banquet dinner. Tournament hole events include hole-in-one for a car, longest drive and closest to the pin. Cost for dinner-only attendees is $60. For questions, call Tabias Padilla at 408-406-7903 or Rudy Solorio at 408-876-3050.
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www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 5
Teen’s Classic ‘65 Mustang Gets a Makeover from Make-A-Wish the very first wish granted by MakeA-Wish. Through a partnership of the Northeastern California and Northern Nevada Make-A-Wish Chapter and Les Schwab Tire Centers and Golden State Collision Repair Centers, the transformed Mustang was revealed to Michael on Make-A-Wish’s World Wish Day, at the Golden State Collision Repair Center, in Elk Grove, CA. Golden State Collision Repair Centers was contacted by Make-A-Wish in the winter of 2012 to ask for assistance in granting this wish for Michael. Golden State Collision Centers collaborated with numerous From left, Rick Hunter, Golden State Collision; Tricia businesses in order to comLitts, Make-A-Wish coordinator; Michael Inong, Golden pletely restore the vehicle. ReState Collision painter; recipient Michael Lua with his mom and dad; Eric Sims, Golden State Collision Centers pairs included a complete paint body technician; and Dave Finkelstein, Director of Marcolor change, body work, new keting, Golden State Collision upholstery, new sound system, The wish was coordinated through glass installation and new wheels. “We were approached by volunGolden State Collision Repair Centers teers of the local Make-A-Wish chapter and Make-A-Wish Northeastern Calito help out on Michael’s wish to refurfornia and Northern Nevada chapter. bish his ‘65 Mustang Fastback. As a Michael Lua, 18, was presented with his renovated ’65 Mustang on company, we are always in search of April 29, the 33rd anniversary date of ways to help our community and its
A teen from Sacramento, CA, saw his wish come true when the Make-AWish Foundation and Golden State Collision Repair Centers presented him with his fully repaired and renovated 1965 Mustang Fastback. The 1965 Mustang Fastback had been the teen’s father’s car and it was his wish to restore it to its original condition.
Stolen Pulp Fiction Car Found Two Decades Later
Two decades after it was stolen, California police have found the iconic red Chevrolet Chevelle Malibu used in the movie “Pulp Fiction.”
According to the San Bernadino Sun, police ran a vehicle identification number for a Chevrolet Malibu being stripped in a school parking lot and found the VIN had been cloned and registered to two vehicles, including one in the Bay Area. That clue led police to Oscarwinning director Quentin Tarantino’s missing Malibu. The missing vehicle had been registered in the Bay Area for many years under the fraudulent VIN, but police do not suspect the owner is involved in the theft of the iconic movie car. The car was driven by John Travolta’s character Vincent Vega in “Pulp Fiction.” It was found days after Tarantino’s 50th birthday.
Los Angeles Auto Parts Owner Killed
In late April, an unidentified suspect entered an auto body parts store in south Los Angeles and allegedly confronted the owner. According to authorities, an argument ensued and the suspect fatally shot the victim multiple times before fleeing through the alley. The victim was identified as Rigoberto Dupre, 54, of Los Angeles. Police say Dupre was well-known in the area and had no gang affiliation. Investigators are trying to identify the suspect, described as a 22year-old black male. He was last seen wearing a dark hooded sweatshirt and carrying a small handgun. “Wallet was there, money was there, he didn’t pat him down, nothing, he just shot him and left,” said Luis Dupre, Rigoberto’s son. Luis Dupre last saw his father alive that morning at his dad’s shop. “We have not established any motive,” said LAPD Lt. Jeff Nolte. “We have no witnesses to the homicide at this point, so we have not been able to establish a motive at this point. But we do believe that there is people on Florence or Cimmaron or in the area that saw things that will be important to us.”
6 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
families. When we heard about this wish, we jumped on board to spearhead the renovation of Michael’s vehicle,” said Dave Finkelstein, marketing di-
rector of Golden State Collision Repair Centers. “We are delighted to be able to present this wish on the anniversary date of the very first wish granted by Make-A-Wish. Once the word got out on our World Wish Day project, other local businesses readily stepped up to the plate to help out. This is truly a community coming together to help make a wish come true,” he said. “We are very grateful to Les Schwab Tire Center for adopting Michael’s wish, and for Golden State Collision Repair Center who quarterbacked the refurbishment,” said Jen-
nifer Stolo, CEO of Make-A-Wish Northeastern California and Northern Nevada. “What makes this wish unique is that Michael has worked on his car alongside the Golden State Collision crew during the preliminary refurbishment. He will surely be surprised when he finally sees the finished product!” “Michael worked alongside both painter Mike Inong and body technician Eric Sims on the work done to the vehicle,” said Rebecca Endres, VP Customer Relations with Golden State Collision Repair Centers. “He was really passionate about the entire wish and developed an amazing relationship with both our technicians. There was amazing journey along which Michael was really educated on the entire renovation.” Local vendors, including Les Schwab Tire Centers, American Mustang, Windshield Pros North, LKQ/Keystone Corporation, Upholstery Tech, Genesis Window Tinting, Acme Tops & Tunes, Leland Insurance, and employees of Golden State Collision Repair Centers donated their time and services as part of this program.
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Where Where it all comes togethe together. r.® www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 7
Father-Son Bodywork Bandits Team Con Seattle Seniors with Bad Body Repairs
A father-and-son team nicknamed the “Bodywork Bandits” face felony theft charges for intimidating and scamming elderly Seattle-area drivers with bad auto body repairs. King County prosecutors say Robert Mitchell and son Bryan Miller scammed 10 drivers they targeted around Seattle during the past two years, as reported by SeattlePI.com. They are alleged to have intimidated drivers, mostly elderly men, into accepting bodywork, and then demanding large payments for poor repairs. Mitchell, a 46-year-old also known as Johnny Mitchell and Robert Charmack, and his son Bryan Miller, 26, often held tools as they demanded money from drivers they approached in parking lots. They’re alleged to have made hundreds of dollars through the scam, which they’re alleged to have used across Washington and Oregon. Usually, the men approached their intended victims near their parked cars and offered to repair body damage at a low price, Seattle Police Det. Chris Young told the court. Miller and Mitchell would then apply wax or paint to disguise the damage
and request payment. “They insist the repairs are worth hundreds of dollars and the victims are intimidated into paying for the fraudulent repair,” Young said, noting that they sometimes held crowbars as they demanded money. Most of the victims were in their 60s or 70s. One 70-year-old man is alleged to have been conned out of $760 after Mitchell and Miller “fixed” his car. Both men now face a host of theft-related charges related to the scam. Mitchell has been charged with four counts of second-degree theft and one count of second-degree identity theft, as well as six other felony and misdemeanor counts. He is a fugitive from Clackamas County, OR, where he’s said to have scammed an elderly woman following a car repair. The younger Miller has been charged with one count of second-degree identity theft and five other theftrelated counts. Miller also currently faces a forgery charge filed against him in Cowlitz County, OR. Both men were arrested April 9 and confined at the King County Jail in Seattle.
8 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
California Court of Appeal Upholds Authority of Insurance Commissioner Dave Jones On April 26, 2013, the California Court of Appeal upheld a Los Angeles Superior Court ruling that dismissed Mercury Insurance Company’s lawsuit challenging the insurance commissioner’s authority. “I am pleased that the Court of Appeal recognized that Mercury’s lawsuit lacked merit and must be dismissed,” said Commissioner Dave Jones. “The Court of Appeal clearly affirmed the insurance commissioner’s exclusive authority to adjudicate disputes between the Department of Insurance and insurers in an administrative p forum and that insurance companies such as Mercury must wait until I render a final deciDave Jones sion before seeking judicial intervention.” Mercury’s lawsuit sought to undermine the insurance commissioner’s authority in administrative hearing decisions by asking the Superior Court to intercede in this case before the commissioner could render a final decision. Instead, the Court of Appeal affirmed the insurance commissioner’s
exclusive authority to fully adjudicate issues presented in an administrative forum before an insurance company can contest the commissioner’s decision in a Superior Court. Mercury’s attempt to prevent the Department of Insurance from presenting evidence in an administrative proceeding regarding allegations that Mercury charged improper fees and rates to policyholders was rejected by the Court of Appeal. “This appellate court ruling supports the consumer protections and authority of the insurance commissioner provided for under Proposition 103, and I look forward to rendering a final decision once the administrative process is completed,” said Commissioner Jones.
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Victorville Body Shop Workers Snuff Out Car Fire
Employees at a Victorville, CA, body shop jumped into action when a car fire disrupted business as usual in mid April. The fire department praised the body shop workers who put out the fire before the engines arrived. Employees had recently participated in safety training. Workers grabbed fire extinguishers to snuff out a vehicle fire before firefighters arrived, according to San Bernardino County Fire Department officials. The call came in to Fire Dispatch at 12:29 p.m. of a car on fire at Sonshine Auto Body on Jasmine Street in Victorville, officials said. Two fire engines, one from Victorville and the other from Hesperia, were dispatched to the scene, according to Hesperia Battalion Chief Richard Campos, who also responded to the incident. When Campos arrived, the auto body shop was full of black smoke and the car fire had been put out, he said. “I was very impressed by the way the employees reacted,” Campos said. “They called 911, put out the fire and gave direction for all employees to leave the structure and everyone was accounted for.”
A full commercial fire response was dispatched to the business, and then canceled once Campos realized the fire had been extinguished. Employee Matt Mena, who was working on a car nearby, heard a popping sound and looked up to see a 2010 Jetta on fire nearby, he said. Mena remembered PASS, a fire extinguisher method that stands for point, aim, squeeze and sweep, that he learned during the company fire training program. “We knew where the fire extinguishers were because of the training,” Mena said. “I remembered to aim at the base of the fire.” Arson investigator Hector Trevino was also called to the scene because the cause of the fire was not known and it is under investigation, Campos said.
FinishMaster Customer Appreciation Event Held in Cathedral City, CA
The annual FinishMaster Coachella Valley Customer Appreciation and Trade Show event was held at the FinishMaster location in Cathedral City, CA, on April 27. Approximately 100 customers attended throughout the day and 50 t-shirts were given away to shop employees within the first two hours of the event. Customers were able to get a hands-on look at new products and enjoy a great barbecue
(l to r) Hop Sanchez, FinishMaster, Tim Barker , McGeez Auto Body, and Joanna Murrieta, 3M
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Nevada’s Collision Authority Expands in Las Vegas
Nevada-based Collision Authority recently held grand openings for its 20,000-square-foot North Las Vegas Greenfield site and their newest 37,500-square-foot Fremont Street facility. The MSO now operates six collision repair centers and one satellite office in the greater Las Vegas, area. CEO Michael Spears noted that Collision Authority’s locations are among the few shops in the state licensed as Class A facilities under the Nevada DMV licensing program. Of the eight total Class A licenses granted by the DMV to date, six of them are Collision Authority locations. “The Nevada Class A shop program drew its inspiration from Collision Industry Conference (CIC) standards, with requirements that in many ways align with aspects of the CIC recommendations, and was thoughtfully designed with consumers and their safety in mind,” said Spears. Class A is the highest level of body shop licensing obtainable from the Nevada DMV. It is a distinctly higher level of licensing than common body shop licensing. In addition to meeting proper equipment requirements, Class A certified shops are required by the state to provide ongoing training—including I-CAR Gold Class qualifications
or an ASE Blue Seal of Excellence. “Given the significant complexities and safety issues surrounding today’s collision repair processes, we’re very proud to have been the first collision repair organization to have taken the necessary steps and applied efforts to be recognized and certified by the state of Nevada with the Class A designation in all of our locations,” Spears said. “And, we sincerely hope others will step up and make the same commitment to excellence Collision Authority has. It’s good for our loyal customers, consumers in general, and the automotive collision community as a whole,” he added. Vicki Dessaints, Collision Authority COO, said, “As we continue to broaden our footprint and deepen the strength of the Collision Authority brand in Nevada, we will always ensure each of our facilities is Class A certified and thusly licensed by the DMV, to the benefit of our customers and valued business partners alike.”
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SEMA Hails Proposal to Save OHV Area at Twentynine Palms in California desert The Specialty Equipment Market Association (SEMA) has endorsed a proposal by Rep. Paul Cook that would end a five-year debate on how to expand the U.S. Marine Corps (USMC) base at Twentynine Palms, CA. Under the compromise, the Marines would have access to the adjoining Johnson Valley Off-Highway (OHV) Recreation Area for up to 42 days a year for training exercises but the OHV area would be otherwise preserved in perpetuity. “SEMA thanks Representative Cook for crafting legislation that addresses the needs of local residents, the OHV community and the Marine Corps,” said SEMA President and CEO Chris Kersting. “It represents a common sense, shared-use compromise that fairly protects the interests of all stakeholders.” Johnson Valley is the largest OHV area in the U.S., totaling nearly 189,000 acres. It is managed by the U.S. Bureau of Land Management (BLM). The land is used year-round by OHV enthusiasts, as well as mountain bikers, equestrians and hunters. The area is also home to numerous motorized events that draw thousands of
competitors and spectators to the area every year, including the famous King of the Hammers event. The legislation protects OHV activities by establishing the “Johnson Valley National Off-Highway Vehicle Recreation Area” under the continued management of the BLM. The legislation also provides for public participation in determining the dates for military activities that will be the least disruptive for OHV activities. SEMA and its SEMA Action Network (SAN) is urging lawmakers to adopt the solution and enact the legislation into law. SEMA represents thousands of companies that market products for OHV vehicles and, through the SAN, millions of enthusiasts who buy and operate these vehicles. Before being elected to Congress, Rep. Cook served a 26-year distinguished military career in the Marine Corps before retiring as a colonel. He has lived for years in the area that includes Johnson Valley and the Twentynine Palms base and represented those communities at the local level, in the California state legislature and now in Congress.
10 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
J’s Auto Body in Barstow Suffers Damage from Fire
In Barstow, CA, a May 15 fire at J’s Auto Body Shop caused damage to interior office space and charred much of the West Main Street business’ street-facing metal exterior. The fire was reported to Barstow Fire Protection District officials at 7:37 a.m. and under control by 8:30 a.m., Assistant Fire Chief Sal Corrao said. “It looks worse than it is,” Corrao said, adding that damage was only the office area and that flames spared vehicles inside the body shop. As officials from the San Bernardino County Sheriff’s Department Arson/Bomb Detail conducted their investigation, paramedics also stood by in case of injury, Corrao said. Two engines and one truck from the BFPD received assistance in extinguishing the fire from two Marine Corp Logistics Base engines, Corrao said. No injuries were reported, according to Corrao. The cause of the fire is under investigation.
FinishMaster to Host Free Airbrush Seminar June 29
A free Charles Armstrong Airbrush Seminar will be held for FinishMaster and PPG customers on Saturday, June 29 at PPG’s Training Center, 11276 5th Street #500, in Rancho Cucamonga, CA, from 10 a.m. to 2:30 p.m. Lunch will be served. To sign up, contact Hop Sanchez at email@example.com.
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Frank Embree Passes at 84
Frank P. Embree, 84, of Sunnyside died May 1 in Yakima, WA. He was born in Grants Pass, OR, and attended school in Zillah. He worked for auto body shops in the Yakima Valley and also farmed mint. In 1971, he established Frank’s Auto Body Repair in Sunnyside, WA, and operated it until retiring in 1993. Survivors include his wife, Flora; daughters Pam Burton of Sunnyside and Deanna Holroyd of Vancouver, WA; brothers Ray Embree of Yakima, Jesse Embree of Idaho and Earl Embree of Selah; sister Ethel Fuller of Texas; and three grandchildren.
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www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 11
WIN Wins Big with 2013 Education Conference in Phoenix Promise of Optimal Motivation.” In her speech, Fowler discussed how motivation can be taught, learned and nurtured as a skill. She said that instead of relying on others to motivate us, we can take responsibility to motive ourselves, and in the process, improve the quality of our work, relationships and life experiences. One of her key points was that it’s the quality of the motivation that matters most. Fowler’s research is based on 6 levels of motivation: 1. Disinterested (lowest level, we’re not even participating) 2. External Motivation (risky, because they can be taken WIN women participate in Cinco de Mayo welcome away) reception team building exercises 3. Imposed Motivation (we The theme of the 2013 WIN Edu- do something because we have to) cation Conference held on May 5-7 4. The Aligned Motivational Outlook was “Empower the Leader Within.” (tied to important and meaningful The focus of the conference centered goals) on leadership development, technol5. The Integral Motivational Outlook ogy, industry trends, hiring and career (part of who we are, fulfills sense of progression. deep purpose) 6. The Inherent Motivational Outlook (it’s fun and enjoyable; at this level our competence is in sync with the task at hand and we’re “in the zone”) The afternoon session on “Recruiting, Hiring & Careers” was a panel discussion with Marie Artrim, The Women’s Industry Network (WIN) kicked off its three-day Education Conference at the Ritz Carlton Hotel in Phoenix, AZ, with a Cinco de Mayo welcome reception that included teambuilding games and events.
other word of advice was to follow-up with the company after submitting a resume (via email or phone) and show interest and initiative. Ask for the job if you want it.
Emerging Technology Trends Panelists (l to r) Rick Leos, Jim Muse and Gina Pingitore
Day two of the conference started early with a WIN Scholarship Industry Walk. Over $3,000 in donations were raised for the WIN Scholarship Fund. The May 7 keynote speaker, Barb Moses, VP of Discover Leadership Training, presented “Empowering the Leader Within by the Observer becoming the Observed.” The afternoon panel session on “Emerging Technologies & Trends” included panelists Rick Leos of Toyota, Jim Muse, Director of Industry Relations with Axalta, and Gina Pingitore of JD Powers & Associates. The panel was moderated by Liz
Emcees (l to r) Petra Schroeder and Yolanda Sandor
According to Margaret Knell, 2013 WIN Incoming Chair, the event was well attended by over 160 women in the collision industry, including shop owners and employees, manufacturers and service providers to the industry. “We’re very pleased by the attendance at this year’s conference,” Knell said. “The WIN conference provides a unique opportunity for women to network with other women in the industry and learn how to be forward thinking in a dynamic and changSusan Fowler ing industry.” On May 6, keynote speaker Susan Fowler with The Ken Blanchard Companies, presented “The
Recruiting, Hiring and Careers Panelists (l to r) Marie Artim, Kathy Mello and Stacee Royce
VP Recruiting with Enterprise, Kathy Mello of TGIF Body Shop, and Stacee Royce of 3M. The panel was moderated by Denise Caspersen of ASA. Topics covered included what hiring managers are looking for, how to attract the best talent, and how to keep your employees engaged and committed to your company’s success. One of the key takeaways from all three panelists was that interviewees need to have the basic job qualifications, but “attitude is everything.” An-
12 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
ber of body shops since 2006 to 36,800 shops, the larger shops with strong operating procedures are doing very well. According to his research, the top 2,000 shops bring in 21% of
the total revenue. “Why would private equity invest in a flat industry?” he asked. “For the ability to improve the process and be more efficient.” Muse described the future state of the supply chain as: 1. Increased consolidation of the Distributor 2. Elimination of Waste 3. Improved Service Level Agreements After lunch, the following breakout sessions were offered: 1. “Predictive Estimating” with Rick Leos of Toyota 2. “Cash Through Clarity” with Lisa Cherney of Conscious Marketing 3. “Laugh Yourself Healthy” with Norma Richardson, The Body Knows Best After two full days of networking and learning opportunities, Christy Jones, of R Jones Collision in Des Moines, IA, said, “The conference was well worth every cent. It was a great way to get out of the shop, re-energize and meet other women in the industry.” To find out how you can become a member or support WIN, please visit the website at www.womensindustrynetwork.com or contact Margaret Knell at firstname.lastname@example.org.
Stein of Assured Performance. Panelists discussed the rapidly changing auto industry (projection of a driverless car in 2020!) and the importance of training and access to auto repair information. Jim Muse from Axalta spoke about private equities’ interest in the collision repair business. He stated that even though there has been a significant decrease in the num- Representatives from WIN Sponsoring Companies
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www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 13
Industry Insight with John Yoswick
—John Yoswick is a freelance writer based in Portland, Oregon, who has a body shop in the family and has been writing about the automotive industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). Contact him by email at jyoswick@SpiritOne.com.
Repairer-Only Meeting Focuses on Shops’ Response to Key Industry Issues at April CIC Phoenix Meeting
Insurer-mandated parts procurement systems, and I-CAR’s decision not to follow through with its plans to work with automakers to identify and close the gaps in existing collision repair procedures, dominated discussion at a repairer-only meeting held in Phoenix in April. Aaron Schulenburg, executive director of the Society of Collision Repair Specialists, led the “Repairer Roundtable” meeting, but said it was less tied to any one organization than to an over-arching goal of providing repairers a place to discuss and establish objectives without the influence of other industry segments. “I think our industry has become well-informed,” Schulenburg said. “There is a great network of information going in and out of the associations, and from the trade press. But just being informed isn’t enough. We need to be able to strategize as an industry and have a plan. Being informed without having a plan won’t get us there. That’s part of what this meeting is, to formulate our voice.” I-CAR’s decision, announced just the week prior to the meeting, was widely criticized by those in attendance. In late 2011, three national trade associations (later endorsed by more than two dozen state and regional groups) asked I-CAR to take on the task of communicating with the automakers in an effort to increase the amount and availability of OEM repair procedures. As recently as late January, I-CAR CEO John Van Alstyne said his organization was moving forward with a planned roll-out this summer of a 5-pronged approach to the issue, but the members of I-CAR’s board in attendance at a March meeting voted unanimously to halt the program. The request from the trade groups had indicated such an effort would support their statement that OEM repair procedures are the industry “standard” for repairs. Meeting attendee Tony Passwater, executive director of the Indiana Auto Body Association, said based on his past involvement with ICAR, he believes it was the word “standards,” more than the concept of
expanding the availability of OEM procedures, that led to the decision. “That’s where they all cringe, especially on the insurance side,” Passwater said. Meeting attendee Dusty Womble, an I-CAR board member and an operating partner in Roger Beasley Collision Center in Austin, TX, said the I-CAR vote would not have been unanimous had it not taken place at the first board meeting he’d missed in four years. Meeting attendee Barry Dorn, a VirDusty Womble ginia shop owner, said he felt it was important that people ask I-CAR what led to the decision. “I implore all of you to talk to the folks at I-CAR about what happened, ask them to explain why they voted the way they did,” Dorn said. “To me this is inexcusable. In my opinion, I-CAR has been hijacked by special interests.” But meeting attendee Scott Biggs of the Assured Performance Network, which joined the national associations in their 2011 request to I-CAR, noted that it was a decision made by the ICAR board, not staff. “It should be noted that the staff did a huge amount of work in the last 18 months to address a lot of the things that we wanted them to do,” Biggs said. “Most of those things they’re going to continue to do.” What won’t continue, Biggs said, is I-CAR’s planned creation of a “council” to help facilitate and filter the communication between automakers and the industry. Biggs and Schulenburg each said the conceptual solutions for the council was one aspect of I-CAR’s plan they hadn’t been “entirely comfortable with.” “I-CAR seemed like a good fit at the time. But any organization that isn’t willing to publicly and clearly state that the OEM repair procedures are the standard for repair probably isn’t a good partner for what we’re looking to accomplish here,” Schulenburg said. “So while there’s not a lot of detail I can give, what I can share is a large subset
14 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
of the original requesters do intend to create an industry council to address collision repair procedural standards. The primary mission of this council will be to gather feedback and provide input to the OEMs to address deficiencies in the library of procedures and issues or question that arise form the industry dialog. It’s about communication.” Meeting attendee Dan Risley of the Automotive Service Association, which also was among the organizations requesting I-CAR’s involvement in 2011, said communication will be important because there “are some instances where the OEM repair procedure probably may not apply.” He noted, for instance, that Honda calls for replacement of sun visors after airbag deployment. “And you can’t even use the same screws. You’re supposed to have brand new screws, otherwise you’ve
just deviated from the standard procedures from Honda,” Risley said. Similarly, he said, Toyota calls for the complete replacement of some seats after airbag deployment. “And if you meet with Toyota and you ask them, ‘Why can’t I just replace a seat back,’ which was the procedure at one time, their response is a little bit different than you might think,” Risley said. “Most people assume it’s a safety issue. In this particular case, the reason they want you to replace the full seat is the impact on customer service. The material on the seat back wouldn’t match the seat bottom and customers were dissatisfied.” Schulenburg acknowledged that the goal is not to give “automakers carte blanche” in terms of procedures but to have two-way communication with them and to have mechanisms in place to ensure it is a collaborative inSee Key Industry Issues, Page 48
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www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 15
Military Veterans Receive Recycled Rides in Southern California Two military veterans, David Rose of Downey, CA, and Melanie Morales of Long Beach, CA, were the recipients of refurbished cars, a gift from the National Auto Body Council’s Recycled Rides program. Through the program, vehicles involved in accidents are completely refurbished and given to those who need reliable transportation.
tion for me and my family,” Rose said. “It’s a blessing.” Rose spent 11 years in the U.S. Army and five years in the forest service. The recycled rides were donated during a ceremony at Terranea Resort in Rancho Palos Verdes, CA. Both cars were refurbished after being declared total losses following collisions. Melanie Morales, who spent three years in the Navy, received a Dodge Avenger. Like Rose, Morales made long bus commutes with her son, attending her classes at Long Beach City College, and getting to the baby sitter and her job working the graveyard shift at a nursing home. The trip on the bus, she David Rose climbs into his refurbished Toyota. (Steve said, was the worst part of McCrank /Daily Breeze Staff Photographer) her day. “I don’t like taking the bus late at Prior to receiving his new latenight with my son,” she said. model Toyota Camry, David Rose Both former service members spent hours on the bus getting to and from his job at Disneyland, the Daily were entered into a lottery to receive cars by U.S. Vets, which partnered Breeze newspaper reported. “I finally have reliable transportawith Recycled Rides to match needy
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Esurance and the Automobile Club of Southern California donated the cars that went to Morales and Rose. Caliber Collision in Torrance and LC Automotive’s Ramona Auto Body in Hemet refurbished the vehicles. “Instead of demolishing the cars ... we are of part of this community effort to recycle them,” said Marie Montgomery Nordhues, a spokeswoman for the Auto Club. “The body shops donate their labor and donate their parts to put the car toMelanie Morales receives a refurbished car from Recycled gether.” Rides. (Steve McCrank/Daily Breeze Staff Photographer) At the ceremony, which “A car can make a difference in coincided with an annual conference of collision repair companies and auwhether a family can take that next tomobile insurers, Rose and Morales step to stable employment,” said Kim Kimbriel, a spokeswoman for Recypopped the trunks to their new cars cled Rides. “Here in southern Califorand found more gifts donated by the nia, public transportation is not that body shops—diapers, a stroller and reliable and you are limited in your car seat for Rose; and gift basket filled employment without a car.” with goodies for Morales’ son. Since its inception in 2007, Recycled Rides has donated more than 800 cars to needy families across the country. veterans with cars. The mission of U.S. Vets is to help veterans transition from the military back to civilian life.
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Auto Body Shop Opens in Old Firehouse in Utah
In Emery County, UT, Castle Country Auto Body and Paint LLC opened May 7 with a ribbon cutting. The new business is located in Huntington and is owned by Jason Ward. Castle Country Auto Body and Paint is located in the old firehouse of Huntington. The owner is leasing the old firehouse from Huntington City and plans to purchase the building from the city in the future. The old firehouse is a large building with room for several cars. Ward is experienced in auto body repair, restoration of automobiles and custom painting. He has been working in the auto body and paint business for the last 15 years. He started out working at Ward’s 4X4 in Huntington and then worked for his brother at Joey’s Body and Paint in Price. Ward will be offering auto collision repair and restoration and custom auto painting. Ward installed a special large metal ventilated painting booth with interior illumination for painting automobiles. This special room has several safety lights in the ceiling and in the walls to illuminate all sides of the vehicle being painted.
Almost Everything Autobody in Fremont, CA, Voted Best
Almost Everything Autobody in Fremont, CA, has been voted the Best Bodyshop in the San Francisco Bay Area for 2013. They have been voted the Best Bodyshop every year since 2009 and won the 2011 ABC7 San Francisco A-List Award for Best Body Shop and placed second in 2012. Almost Everything was voted the best of 118 auto body shops in the San Francisco Bay Area. In Fremont, they have been voted “Best of Fremont” by readers of the Argus and Fremont Bulletin five years running. Almost Everything Autobody’s collision center utilizes a state-ofthe-art auto body repair and car paint facility to ensure the highest quality. Almost Everything Autobody specializes in repairing fading and chipped paint, environmental damage, rust, clear coat damage and more at its collision center. Whether the car is need of a minor touch-up or a complete overhaul, Almost Everything Autobody provides expert painting services to ensure the vehicle shines like new. Almost Everything’s team of painting experts has comprehensive experience providing a smooth finish.
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Spokane Shop Busted for Selling Drugs Near School
A body shop located in the Perry District of Spokane, WA, was served a search warrant in mid May. Three adults males at Lonnie’s Auto Body Shop were arrested for selling meth and oxycodone. The business is located directly across the street from an elementary school. According to a press release from the police, the arrests marked the end of a long, coordinated effort by Spokane Police to rid the district of a chronic nuisance problem. Spokane Police received numerous complaints recently of drug activity at the repair shop. SIU together with Neighborhood Conditions Officers and Code Enforcement coordinated their efforts to shut down the business. About a month ago the business was closed by Code Enforcement due to safety violations. Employees were allowed in the business, only to make repairs to get the business up to code. On May 15 the owner and two employees were booked into jail on felony drug charges. Spokane Police thanked all the citizens that called in suspicious activity.
Santa Clara CAA Hosted Mike Anderson of Collision Advice
The Santa Clara chapter of the California Autobody Association met May 22 in San Jose. Guest speaker was Mike Anderson with Collision Advice who presented “The State of the Collision Industry in 2013.” Anderson is the former owner of WagonWork Collision Centers in Alexandrai, VA. He is an accredited automotive manager (AAM), past director of the ASA Collision Operations Division and has also served on the board of directors for WMABA and the VA Automotive Legislative Committee.
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In a 76-0 vote April 29, New Jersey assembly members voted to crack down on insurance fraud. Democrats Wayne P. DeAngelo and Celeste Riley sponsored the bill, which targets residents who fraudulently obtain automobile insurance in another state. “Insurance fraud is not only wrong, but it costs honest drivers money through higher premiums,” said DeAngelo. “We’ve made a lot of progress in controlling auto insurance rates, but we still have a long way to go and cracking down on fraud needs to be a big part of that continuing effort.”
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Caliber Collision Surprises Three Struggling Tucson Families Three Tucson, AZ, families who had been struggling and coping with daily transportation challenges were presented with Recycled Rides in a surprise presentation by Caliber Collision in April.
by GEICO and refurbished by Caliber Collision associates who volunteered personal time to repair the vehicles as a community service project. “The response to our call for nominations was overwhelming,” said Patrick O’Neill, Vice President of Operations for Caliber Collision. “We are happy to partner with GEICO to donate three vehicles, but it was difficult knowing that so many more people struggle every day simply to get to work and take care of their families without reliable vehicles.” Earl Chittum, Regional Back row from left, Michael Quinn, NABC; Earl Chittum, Auto Damage Director for GEICO; Amanda Saffer, Recycled Rides. Front row, from GEICO, added, “We hope left, Apollonia, Alvaro, Alejandria, and Elena Rascon these vehicles will ease the The three recipients were selected burden of transportation and serve as from more than 400 nominations sub- the catalyst that helps the three semitted by the Tucson community. An lected recipients get through their challenges and back on the road toindependent review committee comprised of community leaders made the wards a positive future.” final selections. The three Recycled Rides recipiAll three vehicles were donated ents were:
dez have seven children. The youngest was born with chronic renal failure and received a kidney transplant last June. He still requires regular trips to the hospital for follow-up visits and therapy. With all of the medical bills, the family The Caliber Collision team poses with recipient Angel Alvarez, cannot afford to buy a secthird from left ond car. Arranging trans• Elena Rascon is a single mother of portation with one car and a large three. She and her children have gone family can be tricky, and often inthrough divorce, homelessness and a volves borrowed vehicles, buses and serious car accident in the last few car pools. Despite that, the children years. Lingering effects from the acare involved in school and extracurcident make walking painful for Ras- ricular activities. con. • Angel Alvarez is a landscaper and handyman. He often has to ride the bus to get to his various part-time jobs, which he relies on to help support his family of five children and 10 grandchildren. With a reliable car, he will be able to take a fulltime job offer with a landscaping company. The Hernandez family received this van thanks to Recycled Rides • Chris and Terry Hernan-
www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 19
Social Media for Shops
Ed Attanasio is an automotive journalist based in San Francisco, California. He can be reached at firstname.lastname@example.org.
Google+ Is an Emerging Star for Media-Savvy Body Shops with Ed Attanasio
“What’s this Google+ thing I’m hearing about?” or “Should my business have a Google+ page?” and “We just figured out this Facebook thing and now we have to worry about doing Google+?” are among the comments I’ve heard recently at CAA meetings. I’ve been paying close attention to Google+ for more than a year now, watching it to see how it evolves and grows and reading blogs about it. The consensus is that Google+ is quickly becoming a go-to site for companies of all sizes. People and businesses like it because it offers exposure and interactivity without sacrificing security and privacy. Instead of Facebook which has “likes,” Google+ allows the user to create “Circles,” which can be broken down into separate groups. You can create as many Circles as you desire, including your college classmates, softball team members, co-workers, or relatives, for example. Each message or interaction can be focused and tailored to each Circle. It’s more targeted and more importantly, you’re not bothering people with news or photos of things that probably won’t interest them. Google+ also has an interesting feature called “Sparks” which are essentially a list of the user’s favorite hobbies, activities or organizations that interest them. Once these Sparks are selected on the user’s profile, Google+ will automatically suggest appropriate content to the user. These include links to pertinent and timely articles, videos, photos, podcasts and sound files that are directly related to the individual’s or company’s particular interests. Google+ also has a very popular video chat feature called “Hangouts” that enable the user to conduct video chats within their Circles. There are also “Huddles,” an online chat feature similar to what you might find on AOL or Skype. All of these features work together to engage people and keep them involved, which is the main goal of social media in general. To find a body shop that used Google+ extensively, I found Marina Auto Body, with two locations in Los Angeles. When I talked to the owner Tom Williamson, he had nothing but
positive things to say about his experience with Google + and his results. He told me about Pixel Motion, a company in Orange County, CA, that he contracted to do his web and social media work. Pixel Motion is a boutique digital agency that does marketing and web development with a focus on the automotive industry. Most of their clients are automotive manufacturers and car dealerships, but they also work extensively with a select number of collision centers and body shops. I contacted the agency’s Director of Social Media Natalie Ricker to pick her brain about social media and Google+ for automotive companies and body shops specifically. “My mentality when approaching any form of social media always is the same—will it keep people’s attention?” Ricker said. “So, I post what people want to know, which can include anything from the weather, local events happening in their area, links to articles that are related to car safety, quotes of the day, or maybe just a picture of an adorable dog. My posts vary, so the fans never see the same thing every day. When fans come across the page, they will want to like it because of how people-friendly it is. We aren’t pushing promotions. We’re showcasing the fact that we love our customers and employees; we love to have fun and keep you informed and entertained. That’s the message we want to convey.” With people getting into accidents every nine years on average, social media like Google+ is valuable for body shops that want to stay in their customers’ minds when the unfortunate does occur. “When the next collision does happen to them or someone they know, what shop do you think will be the first to pop in their head?” Ricker said. “We use this same approach with Google+. If a potential customer is searching on the web for a premier collision center near Los Angeles, will they choose the one that has a complete profile with pictures and fun posts, with people in their Circles, or will they choose the one that has an incomplete profile that didn’t bother
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to personalize their page?” It’s all about the presentation with any type of social media, Ricker explained. “Body shops need to have an attractive Google + page, no question. Organically, they will rank next to other business listings that have Google places, so they need to stand out. If someone sees a picture of just a map, they move on. They want to see a picture of the body shop. It makes it feel more legitimate and professional. “One of the biggest differences between Facebook and Google+ is Google Hangouts,” Ricker said. “Body shops can use this tool to their advantage with other Google users. Let’s say a customer wants to see the progress of the repair of their vehicle. With Google Hangouts, they can email an invite to their technician to “hangout” or video chat with them. They can then see the friendly smile of the technician and interact with them face-to-face. Should the techni-
cian have time, he can also even give them a virtual tour of the progress of their vehicle with a company laptop.” Another great thing about Google is they offer amazing data that can help body shops to find out what’s working and what isn’t. “We recommend that our clients keep track of their Google+ page’s progress through Google Analytics,” Ricker said. “It’s easy to track where their visitors come from, (cities, search engines, social sites, etc.), how long they are staying on the site and which pages are the most popular. We track these analytics every month and send a report to our clients with screenshots of different data. We then provide an in-depth analysis with recommendations on how to improve. We also recommend Google Webmaster Tools, which is also full of insightful data and metrics. A lot of this information can be overwhelming, so we simplify it and explain it to our customers.”
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DEG Received 1,300 Inquiries in 2012, Up 30%, Expects More than 1,500 in 2013
In 2012, the Database Enhancement Gateway (DEG) received more than 1,300 inquiries, an increase of approximately 30% from the previous two years, DEG Administrator Arthur Harris reported. This year, DEG expects to receive more than 1,500 inquiries. The DEG was built to help address individual estimating database issues on specific vehicles. As a free service, those who use estimate systems may submit inquiries to the DEG when they encounter questions or concerns relative to estimating data. The DEG acts as a go-between for shops and information providers— CCC, Mitchell and Audatex—to improve the quality and accuracy of the data used to generate collision repair estimates and to provide feedback to information providers. As an advocate, the DEG will process all submitted database inquiries to information providers until a conclusion is reached. All issues and responses are posted on the website and visible to all. Through feedback by repairers, the DEG can help fix footnotes, inaccurate labor times, missing parts, incorrect part numbers, and substrate identification. Upon receiving an inquiry, Harris said the question is posted on their website and forwarded to the information provider within 24 hours. Many inquiries are resolved and responded to within 2-3 days, depending on the complexity of the inquiry and responsiveness of the information provider. Response times are posted directly on the website database for clear transparency into the process times for each of the three information providers. The DEG database is a valuable tool for the collision repair industry as it provides valuable feedback on missing, unclear or potentially inaccurate data within the estimate systems, Harris said. Often, an inquiry can result in changes to the database or P-Pages. Shops are also encouraged to submit pictures or short videos with technicians performing the task in question or related to the problem. The DEG public database has been available for five years, said Harris, who has been with the nonprofit for over two years. As the administrator, Harris is responsible for daily operations of processing inquiries and is assisted by a joint oper-
ating committee. With 25 years in the industry, Harris’ background includes managing a collision center at a dealership in Rochester, NY, and in another position, working as a training and education director and liaison between the collision repair shop and insurance companies to resolve issues. “We are really excited about the 30% increase of inquiries because it means the industry is taking advantage of the resource, and that it is providing a necessary and useful tool for collision shops,” Harris said. “That said, we know we are only scratching at the surface. If you look at the number of body shops in the U.S. (approximately 35,000), 1,300 to 1,500 inquiries in a year is probably not representative of the full spectrum of data corrections that need to be addressed. We think there are more areas within the databases that can be resolved if more people were exposed to how easy it is to communicate with IPs through our process, and how effective that communication is when estimators submit issues.” In December 2012, the DEG launched a redesigned website (www.degweb.org) that is easier to navigate. Users can jump right into the inquiry process with an easily visible “Open Inquiry” button located on the home page. The most significant addition to the website is the addition of a “Top 10 List” for each of the three information providers. These lists are generated by the most frequent issues posted by users or enhancements users would like to see. In the Top 10 Lists for all three information providers, the top user concern listed for each is “Feather, Prime and Block”—users would like to see the systems generate a pop-up to add feather, prime and block labor to the estimate. The user would create the time, but the system needs the option to add it, without creating a manual entry. Another top concern is adding an option—“add for prep raw part”—for preparation time for plastic parts (in addition to bumpers) that are shipped raw or in an unprimed state. In addition, the newly designed website continues to includes links to estimating guides or “P-Pages” for each estimating system. “We are really excited about the See DEG Inquiries, Page 23
www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 21
LIABRA Joined NYSACTA for Lobby Day in Albany, New York on April 16 According to Hancock, the group met at 8 a.m. to get organized. Pam Madeiros distributed lobbying packets to the members with a schedule of meeting appointments. Each packet contained all the bills of concern and supporting documents, as well as talking points. Each member also received similar packets to be given to each legislator they visited. Madeiros disHank Hancock, Senator Lee Zeldin and Ed Kizenberger Jr cussed each bill and gave the members lobbying advice. Long Island Auto Body Repairmen’s LIABRA/NYSACTA Executive Association (LIABRA) members Director Ed Kizenberger reviewed the joined New York State Auto Collision aftermarket parts bill that requires inTechnician Association (NYSACTA) surers to disclose to consumers what members for its annual Lobby Day held on April 16. LIABRA members Ed Kizenberger, Hank Hancock and Ed Kizenberger Jr. visited the state capitol in Albany, NY, with more than 30 NYSACTA representatives from all over the state, along with lobbyist Pam Madeiros and staff from NYSACTA’s lobby law firm, Greenberg Traurig, LLP. Pam Madeiros and Ed Kizenberger
type of parts they are paying for and may only use OEM parts on current year cars or for two succeeding years thereafter.
tive members and their staff to educate them on the inner workings of the collision industry and how support for several pending bills—from counter-
NYSACTA and LIABRA lobbying group met in Albany, NY, for legislative day
Bob Caprara, Greg Coccaro, Mike Orso, Ed Kizenberger and Pam Madeiros met with leaders of the Assembly and Senate as well as the Attorney General’s Office and the new Financial Services Department, formerly the Insurance Department. All other members were scheduled to meet with their local legislative representatives. The purpose of Lobby Day was to provide an opportunity for LIABRA and NYSACTA members to meet face-to-face with local legisla-
feit air bags, capping of labor parts and materials, and aftermarket parts—would affect the day-to-day lives of shops and consumers. In other LIABRA news, the association met May 21 at Huntington Hilton in Melville, NY. The meeting included a business development seminar by Sherwin Williams. Topics covered included key basic KPIs, branding your business, the state of the industry, and measuring your business for success in a consolidating industry.
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new design of the website,” Harris said. “It gives the user the opportunity to get to a few key areas right away.” The DEG is equally funded by the Society of Collision Repair Specialists (SCRS), the Automotive Service Association (ASA) and the Alliance of Automotive Service Providers (AASP) as a free service to the industry. Sponsors include industry organizations such as Automotive Body Repair News, PPG, Washing-
ton Metropolitan Auto Body Association (WMABA), DuPont, Sherwin Williams and Keenan Auto Body. “While the service is free to use, we really rely on financial support from the industry, both in the form of sponsorships and donations from satisfied end-users. This support lessens the ongoing financial reliance on the primary funding associations, allowing them to redirect funds to new resources that help the industry in other ways,” Harris said. “All the services that we do are free.” For more information or to submit an inquiry, go to www.degweb.org.
Texas Franchise Bill Passes House and Moves to Senate
The Texas Franchise Tax Bill, Substitute House Bill 500, that will help resolve independent repairer franchise tax issues recently passed the House and moved to the Senate. Currently, automotive service and collision repair shops owned and operated by new or used car dealerships are taxed at half the rate used to tax the independently owned businesses doing identical work. The Texas state tax code classifies dealership sales as “retail” and allows their service and repair business to be included under that banner.
Once passed in the Senate, this bill will allow automotive repair shops to be taxed the same amount that dealers, parts stores and tire stores are now taxed. ASA requests that Texas members send a letter to their legislators urging them to support this bill. Visit ASA’s legislative website at www.TakingTheHill.com. According to Charles Parker, executive director of ASA-Texas, “This legislation is critical in helping the independent repair shops of Texas by correcting the unfair taxation of independent repair shops throughout Texas.”
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www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 23
On Creative Marketing
Tom Franklin has been a sales and marketing consultant for fifty years. He has written numerous books and provides marketing solutions and services for many businesses. He can be reached at (323) 871-6862 or at email@example.com. See Tom’s columns at www.autobodynews.com under Columnists > Franklin
The Power of Persistence in Marketing with Thomas Franklin
One rule you’ll find in many sales and marketing books is that the average sale is made after the sixth visit or call, but the average sales person gives up after the third visit or call. This information provides a reliable way to increase sales power. The usual sale in a collision repair shop is just getting the owner of a vehicle who brings it into the shop is leave the keys and let the shop do the repairs. But generally a shop also works to sell dealerships, fleet management companies, insurance companies and more on referring business to the shop. While these sales efforts involve direct calls and visits, perhaps the most common violation of this rule is the sale to the vehicle owner who comes in for an estimate. Back in the ‘90s, I visited a shop where the owner said he had a nearly foolproof method of capturing prospects that came in for an estimate and didn’t leave the vehicle. He had a series of postcards he sent out after the prospect left. The first simply invited the prospect to come back and emphasized the shop’s superior cycle time, paint quality, customer satisfaction and more. The next offered some freebees, like a detail or wash. And the next offered a financial consideration, like a lower rate if it was self-pay or perhaps a rebate on insurance jobs. He said he captured nearly half of those he lost when they came in. In today’s
digital world where snail-mail is viewed as too slow to be of value, an immediate e-mail or Facebook or Twitter message might be more effective. But how many shops stop after the first, second or third message, if they send anything at all. And of those that follow up with a phone call, how many even go to a third call? A lot of guys might say six calls would be ridiculous. But might there be a good reason to make those six calls? Last year I wrote about the lifetime value of a repeat customer. I figured that in 15 years a driver might have a reason to visit the shop threeto-five times and generate at least $5,000 worth of business. In a shop that depends heavily on repeat business, this should be reason enough to make the calls or send messages. When it comes to making the calls, the old nemesis of sales people might come into play. It’s well-known the biggest obstacle to persisting in sales is fear of rejection. An estimator may feel that fifth or sixth call will just annoy the prospective customer and do more harm than good. If the follow-up calls are just repeats of the ones before and lack any new reason to call, indeed, the prospect could get annoyed and hang-up the phone. It’s true. No call at all is better than a totally unplanned call with no strategic reason in mind. To make the six-call
IABA Invites Ray Gunder to Hit the Road in Indiana
Ray Gunder has been invited by the Indiana Auto Body Association to share his legal journey with the state’s collision repairers. Tony Passwater, Executive Director for the Indiana Auto Body Association, has invited Ray to spend a week traveling with him around the state to share Ray’s legal journey with groups of collision repairers. The daily meetings will be held in the mornings and evenings throughout one week in July. “We are excited about getting Ray to come up here because shop owners need to see and hear from a
shop owner just like themselves that can take back control of their independence, and not compromise their business’ future,” said Passwater. Ray said, “I’ve never been away from my business for such a long time but my son and daughter, along with our exceptional staff, will have things well in hand. I am usually accompanied by my wingmen, attorney Brent Geohagan and Barrett Smith of ADE, but this time I’ll be flying solo. I am proud and humbled to have been asked to share our legal journey with others and I hope my investment of time and resources will help others.”
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strategy work, every one of the calls must have a specific purpose that rings true to the prospective customer. Like the shop owner that sent follow-up postcards, the first few calls should follow the same pattern: emphasizing the shop’s superior cycle time, paint quality, and customer satisfaction. The next call could offer some freebees, like a free rental car, a detail or wash. And the next could offer a financial consideration. But at this point, if there is still no sale, the next calls have to take the push to an entirely new level. Once again, in my previous article, I quoted marketing guru Jay Abraham who says: “Until you identify and understand exactly how much combined profit a client represents to your business for the life of that relationship, you can’t begin to know how much time, effort and ... expense you can afford to invest to acquire that client in the first place.”
At some point you have to ask yourself, how much would it be worth to get this customer for a lifetime? Some shops buy jobs from tow-truck drivers. Some shops pay dealerships a monthly fee to get their work. How much would you be willing to pay the customer to get his or her business for life? That fourth, fifth or sixth call can’t be just another “canned presentation.” At this point there has to be enough on the table to really capture the prospect’s attention. For example, you might ask him or her if someone at work or among family and friends also needs body work on a vehicle. If so, it could be feasible to offer this prospect half price or less if one of the other vehicles also comes in for repair. Here is shot at getting several lifetime customers. Once you’ve gone beyond the basic three calls, these next three calls must be creative and build on the prospect’s ego or desire for the best possible deal.
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Prior to owning his shop, Quintela was an estimator for State Farm from 1994–2002. His family owned body shops while he was growing up. Over the past year, Quintela—inspired by shop owner Ray Gunder of Lakeland, FL—has been taking action against insurance companies on behalf of his customers. “The insurance companies always try to steer my customers away from me anyway, no matter what, even if I wasn’t doing this. Now that I have to fight to keep my customer to begin with, I feel like I don’t have any reason why I shouldn’t go after the insurance companies for everything they owe,” said Quintela. The business of making insurers pay what body shops feel they are owed is well worth the effort, time and expense, said Quintela. “If you were to look at this effort just as a business itself, the return on investment is great because not only am I recovering the money I should have been paid in the beginning (for properly repairing a vehicle), I’m re-
covering my court costs and my attorney’s fees as well. At the end of the day, I’ve recovered my investment, plus I got paid what I should have got paid to begin with.” All he said he’s spending is time, and after one or two cases, the legal steps became easy and are hardly time consuming. “Once you do one or two cases, it becomes really easy because you know how it works. It’s very routine,” said Quintela. “The file gets put on my desk once the work begins on the car and I scan the file over to my attorney and that’s it. If it takes me more than 15 minutes, it takes a lot of time. And the best thing about it is, we fix the car right away. We write our estimate, and we don’t care what the insurance writes. Whatever the difference is is what we are suing for.” For example, Quintela and his legal counsel, Brent Geohagan of Lakeland, FL, (also Ray Gunder’s legal counsel), recently levied a lawsuit against Infinity Insurance Company on behalf of a customer for the insurer’s short pays of “reasonable and necessary” repair costs. The lawsuit claims an underpayment of $611 for the insurer’s arbitrary discount on
parts, failure to provide ample consideration for numerous necessary repair processes, related materials, labor rates and quality replacement parts. Recently, Quintela received a State Farm estimate sheet that states the shop is responsible for conducting safety inspections and checks. “How can State Farm tell us that we’re responsible for conducting any necessary inspection and safety checks, but refuse to reimburse their customers for the cost of us doing them?” Quintela and Geohagan have already settled numerous short-pay cases and have won them all. What Quintela finds somewhat amusing is that the insurance companies will settle one day and the very next day, refuse to pay for the same things they just settled in a previous lawsuit. “We just settled with State Farm. They just paid me, plus my attorney fees and their attorney fees and court costs, and the next day they come back and do the same thing. They are still fighting it. And, I just got a check from another insurance company and the next day I am suing them for the same exact things. These insurance
companies go to court, they lose, they settle, but the next day they are out doing the same exact thing. They won’t give up. They try to wear you out, hoping that one day you just go away, or they make it so hard to discourage other shops from doing it,” Quintela said. However, Quintela believes it is important for body shops to stand up for themselves and feels his efforts are helping the collision repair industry move in the right direction.
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Q&A with Bar Chief
them. We like to work with the organizations, such as the California Autobody Association (CAA) and the Automotive Service Councils of California (ASCCA). When they see something that they believe is not proper, they call us and let us know, and then we can investigate those cases.
Q: So, is it really as simple as a phone call? JW: Absolutely the best way to do it is to contact the local office near you and tell us exactly what you’ve seen and what you believe. If you want to do it anonymously, we have no problem with that. We really don’t need to know who you are. It’s a tip and we appreciate every one, whether it’s about unregistered activity going on or something like that—sure, we’d love to hear about those. We do go out and see the potential violator in every situation, to follow up the tip and cite if necessary. We do what’s called “cite and fine.” First, we cite them and tell them they need to be registered. If they don’t want to do that, the next thing is the fine. We’ve been doing it this way for over a year now and it’s been very successful. When we get a tip, we always start looking at it that same week. If there’s a shop that’s operating late at night and early in the morning, we obviously have to make arrangements to get people scheduled. But, if the violations are occurring during business days, we’ll be out there right away.
Q: What types of fraud are you encountering in the collision industry? JW: Body shops seem to get into trouble by doing incorrect things with parts they install on customers’ vehicles. Within the last 11 months, we’ve received 1,400 auto body-related complaints and there are a total of 5,400 shops registered within the state. Currently 36 of these complaints are going into formal filings, which might lead to the revocation of their licenses or possible fines associated with them. But, to get back to your question, what shops are getting into trouble typically in the collision field? A good example that came up the other day was involving a body shop that installed a subassembly that
is used to hold a bumper on. You can only buy this part by name and with a specific part number. So, this body shop purchased the part and cut pieces off of it to attach to the vehicle they were repairing, so that the bumper would fit. Unfortunately, then the shop’s paperwork indicated the entire subassembly was used. They probably saved the customer’s money in the end, but they did not disclose the information on their invoice. If they had stated it as a “partial use,” the shop would have been covered and the consumer would have been informed. It’s normally those types of activities that we encounter. As far as installing inferior parts, we don’t usually get into that. You might find out that people said, “I bought a new quarter panel and then later it turned out to be a used panel.” Those types of things will also get you into trouble. Or if you say you replaced the panel and didn’t do it, then there’s an issue there. If you bondoed it together and just knocked it out and then sold it as a new part, that’s obviously not a good honest repair. That’s another transgression that can get body shops into trouble. Anyone who knows body work and inspects vehicles containing those types of issues is fairly easy to find. In the end, it’s all about just being careful in what you fill out on your invoice. You must disclose all the facts and document everything you’re doing on a car. Full disclosure to the consumer is important and if it’s done right, the paperwork will protect the body shop and the customer as well.
Q: So, the only way to really catch these violators is to have the consumers turn them in? JW: That’s typically how it happens. Yes. In mechanical repair, you fix something like an alternator, wiring harness, suspension, and if it does not work, you get a complaint. In collision, you fix a dent and paint it, and shine it up, and if it fits well, the consumer is happy. There may well be some things under all that paint and glitter that weren’t done correctly, but if the consumer doesn’t know it, we’ll never find out about it. We tell all the shops that full disclosure is the only way to go. You list what you install, specifying whether it’s original equipment or aftermarket. Shops run into trouble where they buy an aftermarket or used quarterpanel and then list it as new. But, if the consumer doesn’t
26 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
know, we can’t do anything about it. It all comes down to “the eye of the beholder” with quality. If the customer is happy, the car looks good and the doors open and close correctly, we won’t hear about it.
Q: Some body shop owners have suggested that the BAR should do impromptu surprise inspections of body shops. Do you think that would be an effective deterrent? JW: To perform ongoing random inspections of body shops would be a horrendous chore. If we suspect that a body shop is doing incorrect things, we will actually build cars and send them to the shop in question. These are called “undercover operations,” and it takes a pretty severe situation to warrant an operation like that. We actually damage the cars a specific way to see how these shops will respond. And we’ve caught offenders using this technique, so it definitely works. This would be a shop that’s regularly charging for operations that they do not perform and to the point where they’re a menace to society and giving the industry a black eye. But those cases are few and far between, because the vast majority of the body
shops out there are clean operators and follow the law.
Q: You came more from the smog/mechanical side of the industry, so what have you learned about the collision side of the business? JW: If you had asked me a year ago what I-CAR stood for, I couldn’t have told you. So, my exposure to the collision industry has been vast over this past year. I’ve learned a lot about it, but I have a lot to learn. I have a great team around me, which makes it easier. We’ve got people here with lots of experience, so it’s not difficult to just let them do their jobs. You asked me before, “How do I manage the activities of 600 people?” I really don’t because it’s not possible. You have to have a good team to succeed, and we have some of the best here across the Bureau, and I’m very pleased with them. I told you last time that I would have an open door policy and that’s always going to be the way I do things. My employees, consumer groups, collision industry leaders, and body shop owners—anyone can take advantage of this policy and I look forward to meeting them.
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Continued from Cover
Prior to meeting with their local senators, congress people and assembly members, the ASCCA/CAA met for a continental breakfast and to devise a strategic approach to the day’s list of deliverables. First, the two groups listened to a presentation made by Deputy Chief of the Bureau of Automotive Repair (BAR) Patrick Dore. Dore outlined all of the newest developments concerning the California Smog Program and how the changes will affect primarily the mechanical repair industry. ASCCA President Jack Crawley also spoke and CAA Executive Director David McClune welcomed everyone to Legislative Day 2013. Last year at Legislative Day, the hottest potato on the table for the collision industry was Senate Bill 1460, known as the Automotive Repair: Replacement Parts Bill, introduced by Senator Leland Yee. It attempted to create a new legal presumption that all certified crash parts will be deemed sufficient to return a vehicle to its preloss condition. The CAA opposed the
if it’s true,” Molodanof explained. “That’s kind of tacky. Also, never tell them that you’re a taxpayer. Get their business cards and don’t get distracted. Be brief, stay on point and move quickly, because they’ll respect that and remember your conversation later. Give reasons why you support or oppose a specific measure and tell your personal story if it’s applicable. And don’t forget your ABCs (Always Be Closing). Seek a commitment and ask for their support and never, ever mislead a legislator.” With scheduled appointments throughout the CapiASCCA Vice President Mary Kemnitz and CAA Board Member Gigi Walker were on hand to lobby for both tol’s offices all day long, organizations at the ASCCA/CAA Joint Legislative Day ASCCA/CAA members asin Sacramento on April 16 sembled into small groups to But before members were off to cover as much territory as possible. Although body shops and mechanical take on Sacramento, Jack Molodanof shops have different perspectives, all briefed everyone about the proper protocol to be used while encountering three of this year’s bills on the their local representatives or members ASCCA/CAA list deal with issues of their staff. For veterans it was not that can greatly impact both businew information, but for first-timers it nesses. was valuable advice. The first bill of concern to both “Don’t ever mention that you do- organizations is an attempt to extend nated money to their campaign, even sales tax to include services. The bill and CAA members lobbied to kill it, because it asked more questions than provided answers, according to Jack Molodanof, who represents both the ASCCA and CAA as its legal advocate.
ASCCA/CAA both strongly oppose this bill, because they feel that a sales tax on services will negatively impact the economy and put an unhealthy burden on taxpayers. It also discriminates against small businesses by increasing costs, thereby making it more expensive to own and operate any type of business in California that markets its services. In addition, ASCCA/CAA’s stance is that by implementing a sales tax on services, working families would also be negatively impacted and lower-income people would have to pay a larger portion of their income than higher-income earners would for taxes on services. In addition, sale taxes on automotive repair services could eventually lead to more do-ityourselfers and impacting repair shops throughout the state, while compromising safety. “This bill keeps coming around, because California needs the money,” Molodanof said. “But it could backfire, because if it passes, we could be a state that produces products but not services. There is absolutely no upside to his bill and in any reincarnation it’s something we need to strongly oppose.”
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said. “Workers with families or other obligations outside of work should have this flexibility, we believe. The main problem with these bills is that they require a ton of paperwork and coordination, which might make it not feasible for smaller shops, especially those that can’t afford a human resources person on staff.” The third bill on the table is SB 540, the Career Technical Education (CTE) bill (Wyland). It is once again in play after many previous failed attempts and both the ASCCA and CAA support Fred Gebert (left), vice president for Martin Auto Color, the bill for many reasons. Esand Allen Sutfin, owner of Golden Valley Auto Body in sentially, SB 540 would Yuba City, were at ASCCA/CAA’s Legislative Day 2013 allow a school district or county office of education to award a non-exempt employee to request an student a Career Technical Education employee-selected flexible work (CTE) certificate if specified condischedule providing for work days up tions are met. These include the parto 10 hours per day within a 40-hour ticipation in a structured, work-based work week without warranting overlearning experience related to CTE time compensation. Current laws prohibit this flexibility and both the courses, completing a minimum of four CTE courses and also completing ASCCA and CAA strongly support a project related to their CTE classes. both bills. “This bill will affect the future of “We like this bill, because our members want to be able to accom- this industry, but it has stalled in the modate their employees,” Molodanof past due to funding problems,” MoloTwo other bills of interest to both mechanical and collision repairers are SB 607 (Berryhill) and AB 907 (Conway) that deal with the issue of working hours and work week flexibility. These bills would allow an individual
danof explained. “We need to tell our legislators that this is important to us and we strongly support it. Our public school system here in California used to be well-known for providing students with the opportunity to acquire technical training that would lead to jobs in the automotive repair industry. Unfortunately, the former vocational model is falling apart because it’s been neglected for 40 years. It’s time to re-ignite these programs and provide a viable career alternative for students without a college education.” After the legislative appointments, the ASCCA/CAA members met for lunch, where they listened to presentations from Betty Jo Toccoli, president of the California Small Business Association and ASCCA’s Legislative of the Year Senator Ben Hueso, SD 40. After the luncheon, ASCCA/CAA members were invited to again meet with their legislators or attend committee hearings.
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ABRA Grows in Michigan
ABRA Auto Body & Glass added a new franchise collision repair shop location in Holland, MI. Previously known as Chrispell Auto Body Repair and independently owned by Nate Yonker, this is ABRA’s second location in Michigan. “We are committed to increasing our presence in the markets we serve and are fueled by an operational excellence philosophy that gives us a competitive edge,” said Tim Adelmann, executive vice president of business development for Brooklyn Center, MN-based ABRA. “Opening the Holland repair center is a tremendous opportunity to increase our presence in the Great Lakes region and provide a superior customer experience.” The company now operates a total of 173 collision repair centers throughout 17 U.S. states—49 independently owned franchises and 124 company-owned locations. “Our growth strategy is ambitious and we are laser-focused on our goals,” said Duane Rouse, president and CEO of ABRA. “We are in the process of delivering on our promise to better serve our customers and insurance partners across the country.”
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Continued research More recently, Lanza’s firm was retained by Highway CARSTAR Collision in Chagrin Falls, OH, a shop owned by Lanza’s father, Frank, to do more research into the alternative methods of calculating paint and materials compensation. The current system, while certainly the easiest, is probably the least fair and accurate, Lanza said. Use of a paint scale with a ratio factor for other types of materials
was seen as being less easy to use, but somewhat more accurate and fair. Use of a paint and materials calculator also seemed more fair and accurate and yet easier to use. But, Lanza said, not all paint and materials calculators are the same. “We took a look at over 1,000 estimates from more than 20 different shops,” Steven Lanza said. “We looked at various size jobs with various paint lines. We determined there are differences between alternative paint and materials calculation systems.” Some of the calculators take the surface area of the panels being refinished into account, for example, Lanza said. Others are still based on refinish hours or some other system. Frank Lanza said he has researching the topic for more than three years, with data comparing the various systems on more than 3,000 estimates. He said he has tried five calculation systems, “finding different flaws in each one of them,” but that some are better than others in terms of offering a “a fair and accurate solution.” For his own shop, he said, he chose a system that uses list (or “user”) prices for paint and materials. What shops actually pay can vary based on many factors, he said, but list prices are published and consistent nationwide. “The major issue that I found with the calculators that I didn’t (choose) is they were based on cost and allowed the shop to put their own mark-up on it,” Frank Lanza said. “Well, I bet if I asked, everyone in here has a different
1Collision Network announced that Community Auto Body in Carol Stream, IL, is the newest member of the Midwest group of independently owned collision repair businesses. Community Auto Body owner Ed Zuniga said, “In looking for a group of shops to affiliate with, I chose the 1Collision Network because they offered practical and affordable solutions to the marketing and operating aspects of my business.” The 1Collision Network includes 21 locations throughout Illinois, Wisconsin and Iowa.
The College of Creative Studies (CCS) recently announced that Ford Motor Co. will donate $1 million over the next five years to provide educational opportunities to Detroit youth. The funds are being used to establish the Henry Ford Academy: School for Creative Studies, College and Career Transitions Office, and start a Blue Oval Scholarship fund for graduates of the academy to attend CCS. The academy is the public charter middle and high school created as a partnership between CCS and Henry Ford Learning Institute.
Continued from Cover
Paint and Materials
costs for paint and materials have grown by 50% since 2005, the average compensation rates paid by insurers have risen by only 23%. Lanza said that even some repairers he spoke with who don’t currently have a problem with the system are concerned about the future given this continuing disparity in the growth of costs versus compensation. “Of the individuals I spoke with, 78% agreed that in order to keep up with industry standards and keep pace with future cost increases, we need to do something, and they agreed that a alternative calculation system has to be implemented,” Lanza said. The study, commissioned by ComputerLogic (which produces the PMCLogic paint and materials costcalculation system), included interviews (each 30 minutes or longer) with shops, insurers, suppliers, association executives, consultants and trade publication editors.
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cost depending on your volume and who your distributor is and what kind of products you’re using. And everybody has a different idea of what the mark-up should be. So what I tried to do was to be consistent, and so that’s the reason I use the list price as opposed to cost.”
Benefit to insurers He said one thing that works in insurers’ favor with paint and materials calculators is that the system can distinguish which items have sales tax that must be charged to the insurer by the shop and which do not. “In our state, the shop has to pay sales tax on certain items that do not leave with the car,” Frank Lanza said. “What happens is if you group paint and materials all together into one item, and then it’s taxed, that is really double taxation. The insurance company might care about that.” In one example shown at CIC, for example, separating out taxable and non-taxable paint and materials would reduce by $9.25 the amount the insurer would have paid under the current system of just multiplying labor hours by a materials rate. One shop owner at CIC said the
paint and materials calculators are probably a more accurate and fair way to determine compensation, but in his experience insurers won’t accept the itemized invoice the systems produce. Frank Lanza disputed that assertion. “There are parts of the country, where the calculator is the prevailing competitive price. Insurance companies are accepting it,” he said. “So it’s up to us to prove to the insurance companies this is what we need. I’ve been in business for 41 years. I have never had an insurance company that cheated me. Never. I would rather work with an insurance company than a customer-pay any time. Because you know with the insurance company, you’re going to get paid. If you can prove (the costs) to them, they will pay you.” John Yoswick, a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). He can be contacted by email at: jyoswick@SpiritOne.com.
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AUTOMAKER, AU A UTO OM MA M AK AK ER O OEM EM AUTOMAKER KE R,, OEM, M,, AND AND RECALL RE R E C AL CA ALL LL EC Autobody News
Subaru Recalls 10,000 + Forester Wagons
Subaru is recalling just over 10,000 of its 2014 Forester wagons because the floor mats can interfere with the clutch, brake or gas pedals. The recall affects Foresters made from January 2013 through March. The company says the floor mats can curl when exposed to heat. The problem was discovered in cars arriving at a port in Vancouver, WA. The National Highway Traffic Safety Administration says the mats could distract the driver or interfere with operation of the car. Subaru traced the problem to improperly manufactured backing on the mats.
Honda Recalls Nearly 46,00 Fit Sport Small Cars
Honda is recalling nearly 46,000 Fit Sport small cars in the U.S. and Canada to fix a problem with the electronic stability control system. The recall affects cars from the 2012 and 2013 model years. Honda says the stability control system can let the car tilt too far before it applies the brakes to prevent a crash. The defect was discovered in government testing of models with a particular type of tires. Honda says it doesn’t know of any crashes or injuries from the problem.
Porsche 911 Coolant Leaks
U.S. safety regulators are investigating coolant leaks in Porsche 911 sports cars that could cause roadway spills and send vehicles careening out of control. The probe by the National Highway Traffic Safety Administration affects about 10,000 models with the GT1 engine from the 2001 through 2007 model years. The agency that a hose fitting can fail and cause rapid coolant leaks without warning. The coolant can cover the road and cause drivers to lose control of their cars. The agency says it has 10 complaints of coolant leaks.
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Nissan Recalls 2013 Altimas for Spare Tire Inflation
A pressure regulator that over or underinflated spare tires for five days earlier this year has led to a recall of 123,308 units of the 2013 Nissan Altima. Sedans that were manufactured from March 21-26 are those possibly affected by the temporary tire snafu. Those notified of the issue can take their sedans to their local Nissan dealer, who will check the tire pressure and correct it if necessary.
NHTSA Investigates Ford Police Vehicles
The National Highway Traffic Safety Administration is upgrading an investigation into steering assembly failures on 195,000 Ford Crown Victoria police cars, the Detroit News recently reported. NHTSA said it is upgrading an investigation it started in September to an engineering analysis for the 2005-08 Ford Crown Vic Police Interceptor vehicles after six complaints and 15 total reported incidents. Ford said in a letter to NHTSA in November that it was investigating whether a prior crash or vehicle service may have an impact on the steering system issues. The Dearborn automaker began investigating after it was contacted by the Ontario Provincial Police in March 2012 after the steering system failed during routine driving. Police in Montgomery County, MD, contacted Ford about two other police vehicles that had steering system failures. Ford noted one of the vehicles had been in four previous crashes. NHTSA said the mechanical connection between the steering wheel and rack and pinion steering assembly consists of the steering column and an upper and lower intermediate shaft. Allegations of a loss of steering control are mostly related to a separation of the upper and lower shafts within the steering the column. The incident rate involving subject vehicles is 7.7 per 100,000 vehicles.
34 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
Ford to Add 2,000 Jobs at Kansas City Plant for F-150
Ford Motor Co. recently announced it would hire an additional 2,000 workers at its Kansas City Assembly Plant in Missouri to meet increased demand for F-150 pickups and for the upcoming production of the new Transit family of commercial vehicles. The increases will come in two phases. Ford will add 900 jobs and a third work crew in the third quarter to build F-150s. Starting in the fourth quarter, Ford will hire an additional 1,100 workers to gear up for production of the Ford Transit commercial van, which begins in 2014. About half the 2,000 workers will be new hires. The other half will be workers who were laid off temporarily in the second quarter of 2012 when Ford moved production of the Escape crossover from Kansas City to Louisville. The Kansas City plant is Ford’s largest in the United States and includes two separate body shops, two separate paint shops and two final assembly lines. Ford is spending $1.1 billion to retool and refurbish the Kansas City plant. The expansion includes a 437,000-square-foot stamping plant, which was completed in 2012, and a 78,800-square-foot paint shop.
480,000 Chrysler Units Involved in Recall
More than 480,000 Chrysler Group vehicles either are being recalled or are under investigation, according to the NHTSA. The recall involves the Jeep Grand Cherokee from 2005 through 2010 model years manufactured from Feb. 11, 2004 through March 9, 2010, as well as the Jeep Commander from the 2006 through 2010 model years manufactured from Jan. 31, 2005 through March 10, 2010. NHTSA officials indicated a transfer case electrical failure may result in an unintentional shifting of the transfer case into the neutral position.
Chrysler Recalls Ram Trucks for Windshield Defogging
The National Highway Traffic Safety Administration (NHTSA) announced Chrysler is recalling 532 Ram 1500 pickups to ensure the windshields are being properly defrosted and defogged. Chrysler engineers observed a fault code linked to the coolant system function. The NHTSA said in the affected vehicles, the coolant bypass valve may stick in a position that does not allow coolant to flow into the heater core. Thus, these vehicles fail to conform to the requirements of the Federal Vehicle Motor Safety Standard No. 103, ‘Windshield Defrosting and Defogging Systems.’ The models were manufactured June 25, 2012, through December 12, 2012, according to NHTSA. The recall campaign impacts 498 vehicles in the U.S. and 34 in Canada, according to a Chrysler statement. More than one-third of the vehicles are still with dealers.
Suit Says Fords Prone to Unintended Acceleration
A lawsuit claims that unintended acceleration incidents are endangering owners of Ford, Mercury and Lincoln vehicles manufactured between 2002 and 2010. The suit, filed in Huntington, W. Va, charges that Crown Victoria, Escape, Taurus, Thunderbird and other models can surge out of control and alleges that they lack a failsafe mechanism to stop the vehicle. The suit targets Ford vehicles equipped with electronic throttle control and says the control can malfunction, sending the vehicles out of control. The suit claims Ford has received “hundreds if not thousands” of complaints from owners, including police departments, about the problem. Ford said it has worked with the NHTSA to address the problem, an approach it says is “far more scientific and trustworthy than work done by personal injury lawyers.”
Infiniti Launches FactorySponsored Towing Service
Infiniti North America has launched a factory-sponsored towing service to shops participating with the Infiniti Certified Collision Repair Network. Infiniti said its new towing service delivers damaged vehicles directly to Infiniti Certified Collision Repair Network shops. The purpose of the towing program is to provide Infiniti vehicle owners with confidence that the repair will meet the company’s standards. Infiniti owners can call a toll-free phone number, 800-662-6200, to initiate the towing service following an auto accident. The vehicle will be transported to any Infiniti certified shop within a 50-mile radius. Infiniti said becoming an Infinity Collision Repair Network facility offers key marketing advantages for collision shops. Infiniti said certified shops have direct access to OEM technical information, specifications, resources and tools to ensure consistent and quality repairs. Infiniti North America established the Infiniti Certified Collision Repair Network to reward and distinguish body shops that meet and exceed Infiniti standards for training, equipment, customer service and quality repair work.
Nissan Cuts Prices on Seven U.S. Models
Nissan is cutting prices on seven of its 18 models in the U.S., hoping its cars and trucks will show up in more Internet searches by shoppers. The price cuts vary with the amount of equipment on each model and will run from 2.7% or $580 on the top-selling Altima midsize car to 10.7% or $4,400 on the Armada big SUV. Other models getting price cuts include the Sentra compact car, Juke small crossover SUV, Murano midsize crossover, Rogue small crossover and the Maxima full-size car. Jose Munoz, Nissan senior vice president of sales and marketing for the Americas, said the vehicles getting the price cuts account for 65% of Nissan’s U.S. sales. The sticker prices, he said, were higher than some competitors for similar models, and that kept Nissan vehicles out of some Internet searches. “In some of the customer searches we may not appear,” Munoz said. “This is an indication that we certainly want to be on the shopping list and we want to be considered by as many customers as possible.” The company plans to reduce rebates and other discounts to offset some of the price cuts.
Nissan Gives Free Towing Service to Certified Shops
Nissan North America will deliver vehicle owners directly to the shop door. Nissan is offering a factory towing service to Nissan Certified Collision Repair Facilities, ensuring repairs are performed to Nissan’s high standards. The towing service is offered at no charge to the Nissan owner or the collision shop. For the Nissan owner, a simple toll-free phone call to 1-800-NISSAN-1 initiates the towing service. The vehicle will then be transported to a Nissan Certified Collision Repair Facility within a 50-mile radius.
Chrysler Reports First Quarter Net Income
Chrysler Group LLC reported its preliminary 2013 first-quarter results, including net income of $166 million on revenue of $15.4 billion. As anticipated, the quarter was negatively affected by the reduced vehicle shipments that resulted from key product launches, namely the 2013 Ram Heavy Duty trucks and the 2014 Jeep Grand Cherokee, as well as preparation for the second-quarter production launch of the all-new 2014 Jeep Cherokee.
Mercedes-Benz Selects SCI for Certified Repair Program
Mercedes-Benz has selected the automotive consulting firm SCI to develop and manage its Certified Collision Repair Program. SCI will ensure certified collision centers meet or exceed Mercedes-Benz’s strict set of repair standards in terms of shop training, customer handling and repair quality. SCI will help certified collision repair centers meet the standards, including ongoing audits to ensure that participating shops keep knowledge and skill sets current. SCI will also lead program management and communication. Said Bob McDonald, president of SCI, “The program will not only help shop personnel more effectively serve customer needs, but it will increase operational productivity and create an opportunity for shops to realize sustainable growth.”SCI has managed the BMW Certified Collision Repair Center Program since 2003 and has also been the administrator for the Lexus Certified Collision Center (LCCC) Program since its inception in 2006.
www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 35
Former Florida Body Shop Bookkeeper Sentenced to 3 Years Angela Wray, 36, a former bookkeeper for Celico Auto Body in Bunnell, FL, was recently sentenced to three years in prison and Circuit Judge J. David Walsh told her she was responsible for paying back $58,964 she stole from Celico Auto Body. The owner of the business, Carlos Celico, had noticed his business was low on cash flow but he originally chalked it up to the poor economy, he said. Wray’s body went limp after the verdict was read and two bailiffs caught her before she fell to the floor. “I do not find this to be a ridiculous or a silly charge,” said Walsh. “It’s a very serious charge.” While the defendant sat in a chair, Walsh noticed she was having trouble sitting up and told bailiffs to let her lean over and place her head between her knees. By then, a third bailiff entered the courtroom to assist. All three pulled her out of the chair and allowed her to lie down on the carpet with her feet elevated. The shackles on her wrists and ankles remained. On March 28, a six-panel jury unanimously agreed Wray had stolen
from her employer and used the money to take trips, pay off credit card debt and go dining and shopping. Jurors reached their verdict in 12 minutes. Wray’s employment at Celico Auto Body ended in the fall of 2010. By the summer of 2011, authorities were notified of some discrepancies in the business’s bookkeeping. Later that year, she was arrested by the Florida Department of Law Enforcement. In a separate case in New Jersey, Wray had pleaded guilty in June 2011 in a New Jersey Superior Court to a theft charge and was sentenced to 45 days in jail. She was convicted of stealing $44,000 from a landscaping company she had worked for from 2004 to 2006. The story of that arrest was brought to Celico’s attention and he decided to review his company’s accounting. He soon contacted law enforcement with his discoveries. “(The sentence) should’ve been a little bit longer, but it’s OK,” Celico said. Walsh also sentenced Wray to 15 years of probation to be served after
she is released from prison. The judge said she could cut that probationary period in half if she pays the restitution in full by then and commits no violations. During closing arguments, Assistant State Attorney Jennifer Dunton said Wray “made the conscious decision” to steal from Celico 127 times during a 3½-year period. “She knew what was being checked and what wasn’t,” said Dunton. “No one was (checking) behind her and she knew it. She blamed Mr. Celico, attacked his business practices and then said it was a loan. There’s been no acceptance of responsibility in this case,” Dunton told the judge. Celico received $25,000 in insurance as a partial reimbursement. He said he borrowed another $35,000 from a private individual. He said he did so in order to save his business. He still owes money to that person, he said. Six people testified on Wray’s behalf, including her husband, Flagler County Sheriff’s Deputy Christopher Wray, who said he always let his wife handle the family’s finances. He said
he never noticed changes in lifestyle —even though the family took regular trips to Disney World and SeaWorld—and said he believed his wife never stole anything from Celico Auto Body. “How could she be convicted when there’s nothing to show for it?” he said on the stand. During his testimony, Christopher Wray said his wife told him not to testify during her trial. He said she advised him not to do so “for fear of retaliation.” Defense attorney Regina Nunnally asked him about Celico’s “connections” within the Sheriff's Office and whether he or his wife worried that was where the retaliation would come from. “(My wife) didn’t want anyone pointing fingers at me,” Christopher Wray said. “(She) didn’t want the sheriff coming after me in any shape or form.” Angela Wray will be credited for the 65 days she has spent in jail. She will spend the remaining time in the custody of the Florida Department of Corrections.
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This article first appeared in the I-CAR Advantage Online, which is published and distributed free of charge. I-CAR, the Inter-Industry Conference on Auto Collision Repair, is a not-for-profit international training organization that researches and develops quality technical education programs related to collision repair. To learn more about I-CAR, and to subscribe to the free publication, visit http://www.i-car.com.
Dressing GMA (MIG) Welds There’s a lot of information in the field on making and testing GMA (MIG) welds, but not too much on dressing the welds after they’re made on a vehicle. Any GMA (MIG) usually requires dressing the top surface of the weld.
Does Dressing Reduce Strength? There is a belief by some, that dressing a weld reduces the strength of that weld. If you look at a cross-section of an undressed plug weld, it looks similar to the shape of a blind rivet, with the crown of the weld the head of the rivet (see Figure 1). Once the weld is dressed, it would be like grinding off the head of the rivet. Is the joint as strong? With a rivet, the answer is no, but then again a rivet is not fused to the metal around it. A good plug weld is fused to the metal around it.
We made several plug welds on identical size coupon strips so we could pull them on our tensile testing equipment, some dressed flush and undressed. In general, there was an insignificant difference in tensile strength between those that were undressed and those that were dressed flush. Some of the dressed welds started failing on the top piece, rather than starting to pull a nugget out of the base metal. These welds had porosity or some other inclusion that was revealed after dressing and we don’t believe the dressing to be a factor. The Process So how far do you dress a weld? The short answer is so that it is flush with the surface.
It’s important to not reduce the thickness of the base metal, because that will weaken the structure. The only way to prevent that is to use light pressure and check your progress often. As far as tool selection, a common initial tool to use is an angle grinder, with a 36 or 50 grit disc depending on the size of the bead or nugget (see Figure 3). The disc is lightly applied to the weld and moved slowly back and forth. If there are multiple welds, like a row of plug welds, they are ground one at a time. On a butt joint, again use a light touch and slow movement. It doesn’t matter if you move the grinder across the weld or lengthwise down the weld, whatever works best for you. The important part is always being conscious and careful to not grind into the base metal.
Another tool that can be used is a cutoff wheel, but this tool is not as precise a tool as an angle grinder (see Figure 4). There’s a temptation to use this tool exclusively because it’s aggressive, as in fast, but it’s difficult to control, especially when you get close to the base metal. If used at all, it should only be the first step, then followed with an angle grinder. When using a cutoff wheel, just like the angle grinder use light pressure. Hold the tool with two hands for better control. Start at a high RPM and walk the edge slowly across the surface of the weld, like you’re planing off the surface of the bead. Stop when
An undressed plug weld (left) and a dressed plug weld (right) being pulled with tensile test equipment
38 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
there is still a slight profile left on the weld. Do not touch the base metal surrounding the weld at all. This should keep you out of trouble. Again, follow this up with an angle grinder to get flush with the base metal.
You can finish the dressing with a hand file, maybe progressing through a couple different threads until the surface is flush as it needs to be.
Still another tool that can be used is a carbide rotary file. There are a couple different profiles available (see Figure 5). This is used when the plug weld is in a recess or access won’t allow access for a disc. This tool is difficult to control, so use extreme caution or you could damage an adjacent area.
Conclusion Nearly all GMA (MIG) welds require dressing. The goal of dressing GMA (MIG) welds is to make the surface flush. Gouging below the surface of the base metal not only looks bad, it weakens the steel. Keep this in mind whenever doing this process. For comments or suggestions on the Advantage Online, please contact I-CAR at firstname.lastname@example.org.
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GCIA Completes 2013 Collision Labor Rate Survey
The Georgia Collision Industry Association (GCIA) recently completed their 7th Annual Labor & Materials Rate Survey for Metro Atlanta and Georgia. The Survey was conducted by CSi Complete to ensure unbiased data collection. CSi Complete is a provider of customer satisfaction indexing to collision repair, insurance companies and other service industries and you can learn more information about the company by visiting their website at www.csicomplete .com. GCIA’s goal in conducting this annual survey and sharing the results is twofold: ►To utilize an impartial company to identify and communicate statistically valid figures representing the prevailing labor and material rate for collision repair services offered in Georgia, and ►To communicate the results of the research to both collision repair facilities, insurance carriers and the appropriate parties involved in serving the consumer in the repair and claims handling process. The GCIA encourages all Claims Managers and insurance company executives to thoroughly review the 2013 GCIA Labor Rate Survey Re-
sults and urges you and your company to join the GCIA in our efforts to alleviate the variances between the actual prevailing rates (as shown in our survey) versus the rates some carriers are currently compensating collision repair shops for materials and labor in Georgia. The GCIA has conducted this survey for seven (7) consecutive years. No other industry association in the US has collected this amount of accurate data on collision materials and labor rates. This year, 305 shops participated across, and the results clearly demonstrate the actual prevailing rate in the Georgia marketplace. It is the GCIA’s intention that the information offered, be used to ensure your company is fulfilling its obligation to the policyholder, by reimbursing for the actual prevailing rates in Metro Atlanta and Georgia. If you have any questions about the GCIA, or the results of this survey, contact GCIA Executive Director, Howard Batchelor, at email@example.com. For complete survey results go to gcia.org/about/labor-rate-survey/. Autobody News will summarize the data in our next Southeast issue (July, 2013).
Mississippi Legislature Lures Auto Parts Plant
Gov. Phil Bryant called the Mississippi Legislature back into special session in late April to consider economic incentives for what lawmakers say is a tire manufacturer that wants to open a plant near West Point. He and other leaders are trying to keep a lid on details of the project, including what incentives—or how much—they want taxpayers to fund, the Clarion Ledger recently reported. “This is an exciting project and a great testament to the quality of our workforce,” said Bryant. Despite the efforts at secrecy, lawmakers have been talking about a potential auto supplier project near West Point for weeks. Rep. Gary Chism, R-Columbus, whose district includes part of West Point, said he’s heard a Japanese tire manufacturer wants to locate in a “megasite” created just outside West Point in Clay County. He said he’s also heard the project would bring
600-800 jobs to an area that badly needs them, with unemployment at more than 18% after a meat plant closed six years ago. House Ways and Means Chairman Jeff Smith said, “Let’s just put it this way, the Nissan project had a $363 million incentives package from the state, counting everything. This request (for incentives) is much, much smaller, but the overall investment is almost as much as Nissan.” About $1.4 billion to date has been invested in the Nissan plant near Canton, Smith said. Smith said state taxpayers ended up investing about $78,000 per job created at Nissan. He said this project would be “much, much less than $78,000 per job.” “We learned a lot from Nissan,” Smith said. He added that with Nissan and Toyota plants, plus expansions on the horizon, “We’ll soon be the Detroit of the South.”
Safelite Opens Chicago Store
Safelite AutoGlass recently opened a new store located at 6538-40 Ogden Avenue in Berwyn, IL. Safelite now has a total of 10 locations in the Chicago area.
The 4,000-square-foot facility houses up to 200 auto glass products, according to the company. Hector Perez serves as the store manager.
www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 39
First Southern Automotive Repair Industry Conference Held in Biloxi, MS, April 26–27 The Mississippi Collision Repair Association (MCRA) and the Alabama Automotive Repair Industry Society of Excellence (ALARISE) co-spon-
John Mosley with Aaron Schulenburg
sored the first Southern Automotive Repair Industry Conference and Exhibition in Biloxi, MS, on April 2627. Presenters included Aaron Schulenburg of SCRS, Rick Leos with Toyota Motors, Ray Gunder and his attorney Brent Geohagen. The inaugural event was held at the Beau Rivage Casino and Hotel in Biloxi, MS, and kicked off Friday night with a reception and exhibition featuring more than 18 vendors
demonstrating their products and services to over 200 attendees from collision repair shops from across the Southeast. “The event can be best described as an unqualified success, both in terms of information presented and the impressive number of attendees from seven states,” said Bill Fowler, MCRA member and president of Bill Fowler’s Bodyworks Inc. in Southaven, MS. On Saturday morning, vendors and collision repair shop owners and managers participated in classroom presentations specific to their respective segments of the industry. While the vendors discussed various approaches to effectively marketing their products, collision repairers enjoyed presentations by Tony Nethery, Business Development Manager for Colormatch, and Mike Ganske, Regional Business Development Manager for PPG. Fowler reported that Nethery presented information designed to assist the shop in increasing their bottom
line by recognizing many of the seemingly insignificant operations and parts that have been referred to as “the forgettables.” Items like re-setting electronics, tinting colors, masking interior surfaces, and many other commonly overlooked labor operations, as well as parts typically not considered significant enough to document, like clips, bulbs, and seam sealers, can contribute substantial amounts to sales figure when consistently invoiced. Blueprinting repairs before they commence, instead of simply writing the typical estimate, can streamline the repair process, allowing for increased volume in workload. Mike Ganske’s discussion, “Leading Change 2013,” gave useful statistical information that made shops more keenly aware of recent changes in the industry as well as some that are coming in the near future to help shops be up-to-date and competitive. According to Ganske, there is currently a $16 billion over capacity in the collision repair business, meaning there are too many shops vying for the same dollar, which will lead to even more shops leaving the marketplace in
the near future. Using a figure of $1 million to represent average gross annual sales per shop, 16,000 shops will have to close in order for shops that manage to remain in business to maintain that average. Given that there are currently fewer than 40,000 repair shops in business today, that is an alarming figure and a difficult reality to face. Add to that the increasing complexity of materials and collision avoidance systems being inTony Nethery corporated into vehicles currently under design, and the picture is even bleaker. There will be considerably fewer vehicles that qualify as candidates for repair, resulting in substantially fewer repairs to go around. In addition, substantial investments will have to be made in equipment, training and business management in order for any collision repair shop to remain competitive and viable. After lunch, Aaron Schulenburg, Executive Director of the So-
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ciety of Collision Repair Specialists (SCRS), reported on topical issues currently in the industry. The first topic was an overview of concerns surrounding insurance mandated parts procurement programs, such as PartsTrader. Schulenburg spoke to feedback the association has received on how the various programs have been received in various markets. Schulenburg pointed out that, despite being in place for over a year in some markets, there has still been no evidence presented that the PartsTrader program is providing any of the suggested benefits to collision repairers. Schulenburg’s presentation gave an overview of communications from a variety of carriers utilizing different procurement platforms to repair facilities operating under their program, further demonstrating how cumbersome and intrusive these mandated programs can be into the repair business when it comes to managing vendors and parts. In one instance, the carrier recognized the “frustration” repair facilities experienced from being obligated to order a variety of parts from different suppliers in different states.
Schulenburg also addressed the ongoing dialogue between I-CAR and repairer organizations regarding the recognition of OEM published repair procedures as the industry’s standard of repair. His presentation demonstrated the importance of such discussion as Schulenburg pointed to contrasts between “standard” programs in the U.K. and the U.S. In light of recent legislation filed in the U.S. House and Senate seeking to repeal parts patent laws, he additionally gave a slide show presentation illustrating common problems shops experience when procuring both used and aftermarket parts that lead to parts returns. From the audience perspective, the demonstration was very effective at exposing the incredible waste of time and money shops are subjected to when attempting to incorporate unfit parts into the process. Rick Leos, Toyota Motor Sales Collision Repair Program Developer, previewed the Predictive Estimating Program that could prove to revolutionize the way estimates are written. Under development for years, the program is much more comprehensive in presenting labor operations and parts that have traditionally been over-
looked. Leos said additional information is scheduled to be released in June, with a possible roll-out at the end of the year. Interest in the program has been expressed by several other manufacturers and it could prove to be a real game changer in the way estimates are prepared in the future by increasing efficiency and decreasing cycle times. Steve Lanza with Richfield Associates, and his father Frank gave a joint presentation that focused on improving negotiating skills and the urgent need to change the way shops collect for collision repair materials. Steve has extensively studied the paint and material billing method currently in use and gave the audience solid reasons why a change is needed. He cited the fact that since 2005, shops have experienced a 61.9% increase in the cost of materials while only managing a 27.1% increase in compensation. Steve stressed the need to incorporate one of the material calculating programs currently available and predicted that failure to do so could ultimately lead to the demise of one’s business. Frank Lanza, a repair facility owner from Chagrin Falls, OH, gave a colorful lesson in negotiating skills
and related several personal stories about negotiating with insurers. He stressed the importance of never losing one’s temper and being professional at all times. He shared one of his “Frankisms”—when negotiating with insurance personnel, always keep in the back of your mind: “I love you, but I love me more.” Ray Gunder, with his attorney and friend Brent Geohagen, were the last speakers of the day, addressing a crowded room about taking back the
Brent Geohagen, attorney for Ray Gunder and Eddie Quintela
industry. They discussed their journey in taking on the insurance industry in a modern day David-and-Goliath battle to get fair and reasonable resolution to industry wide problems—short pays, steering and rate suppression. Gunder
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spoke of his days of desperation that led him to believe he had but two choices—take a stand and fight back or close his doors once and for all. Geohagen told the audience of his original skepticism with Gunder’s story and observed that few people outside the collision repair industry would believe such an incredible story, one that is all too familiar to people in the industry. “Gunder’s successes are the stuff of legend and he serves as an inspiration to the rest of us. Despite overwhelming adversity, it is possible to prevail. It just takes determination,” said Fowler. “It was a perfect ending to a perfect conference.” John Mosley, President of MCRA and owner of Clinton Body Shop in Richland, MI, said the firstever southern industry event was a big success with outstanding speakers and a great turnout. He especially enjoyed Rick Leos’ presentation about the Toyota predictive system and urges all body shop owners and managers not familiar with the new program to do their research, as the new program will be a “game changer.” He hopes next year’s event will be twice as large. Steve Plier, acting president of ALARISE, was extremely pleased that the first southern conference turned out to be such a huge success, with repairers coming from Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee. “Not only were the attendees from repair facilities pleased and enthused about the conference, but we
also received great comments from our participating vendors,” said Plier. “To be the first joint effort between two state organizations resulting in a turnout that represented six southern states I feel speaks volumes that repairers are understanding issues must be addressed and the route to change is through awareness and education within and of the industry.” Without the sponsors, Plier said the conference would not have been able to take place. “I would like to very much express my gratitude to the sponsors for their participation for without them the conference would not have taken place.” Sponsors included: Edwards Chevrolet, PPG (Rozars and Automotive Paint Supply), Automotive Color, Gray Daniels, National Coatings Supply, Overnights Part Alliance, Advance Equipment Solutions, All Star Auto Lights, Byrd’s Automotive Inc., CARS, ComputerLogic/PMC Logic Inc., DuPont Performance Coatings and O’Reilly’s Auto, English Color and Supply, Enterprise, LKQ, Mitchell, The Clip Man, and Urethane Supply Company. Plans for the 2014 conference are being made for April 11–13 with state organizations in Georgia, Alabama, Mississippi, Tennessee, and possibly Florida, working together to coordinate the second annual Southern Automotive Repair Industry Conference in Biloxi, MS. Special thanks to Bill Fowler for providing summary information for this article.
Illinois Body Shop to Close for Subway Franchise
A gas station in Bucktown, IL, was approved for a business permit to completely renovate the space and eliminate the body shop located at 2357 W. Fullerton Ave. The gas station owner confirmed a structural overhaul will start soon to expand its market selections, get rid of its auto body shop and add a Subway restaurant. The BP gas station is slated for a complete makeover estimated to
cost roughly $80,000, according to the Chicago business permit. BP’s owner said he doesn’t plan to increase the footprint of the building, but remove the auto body shop on the east side of the business completely. Crews will then have room to make the food market larger and add the Subway restaurant. Construction is estimated to take about two months to complete.
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Ohio Shop Owner Convicted of Aggravated Theft, Including from County Prosecutor
Keith Shellhouse, 46, owner of Independent Autobody in Shelby, OH, was convicted May 7 of aggravated theft, a third-degree felony, and theft of a motor vehicle, a fourth-degree felony, at the Richland County Courthouse. Shellhouse was arrested on April 11, 2012, under more than a dozen customer complaints from as far back as 2002, claiming that customers were swindled out of nearly $300,000 in payments for the restoration of their hot rods. Shellhouse will be sentenced on May 20. Gary Bishop, a Richland County assistant prosecutor, was one of several victims who reported losing thousands of dollars to Independent Autobody owner Keith Shellhouse. Bishop dropped his 1967 Mustang GT Fastback at Independent Autobody and Pro Restorations in August 2006 along with a $3,500 down payment. It was the first car he had ever owned, since the age of 16. “These weren’t just cars to many of us,” he said. “These were our dream cars. People were taking in their classic cars that meant the world to them, paying thousands, only to
have them set out in the weeds and exposed to the elements.” Because of Bishop’s position, the attorney general’s office was called in to handle the case. In December 2012, local officials say they were prompted by complaints from 17 customers who claimed that combined they lost more than $300,000. Richland County Sheriff’s Major Dale Fortney said there were more than 30 victims, but only 17 cases were brought to a grand jury. A number of other people have civil judgments outstanding against Shellhouse. Several victims reported that Shellhouse continually dodged their calls and visits. Bishop said he even volunteered in Shellhouse’s garage for months to speed up the process. “I was helping him on a daily basis, just hoping that eventually we’d get to mine,” he said. Bishop said he did finally get his car back, in worse condition than when he dropped it off, and now has it at a restoration shop. “I’m very happy with the outcome today,” Bishop said. “But a real professional would have never treated people the way Shellhouse did.”
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www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 43
State Farm’s Campus Project in Texas is Growing
State Farm Insurance is building a big regional office campus in Richardson, TX, near State Hwy. 190. It is reported to become the largest office development in the Dallas-Fort Worth area. Late last year, developer KDC said the State Farm office complex would be about 1.5 million square feet. But in the almost six months since word of the project came out, the office complex has grown by almost another 1 million square feet, real estate sources say. That will make it one of the largest corporate office projects ever built in the Dallas area–on par with the huge Electronic Data Systems headquarters built in Plano starting in the 1980s. A campus that size can easily house somewhere up to 8,000 workers. General contractor Austin Commercial is building the State Farm project, the first phase of which will be ready in the fall of 2014. The almost 10-acre project is being financed by J.P. Morgan Chase. Looking around Texas, only Exxon Mobil’s new Houston campus is bigger than the State Farm project.
OK Court Reverses Finding on Ford and Dealership
An Oklahoma appellate court rejected a trial court’s decision that had found Ford Motor Company “vicariously liable” to disgruntled customers of a now-defunct dealership. The case involved an Oklahoma dealer that closed its business only seven months after Ford approved its purchase of the dealership. During its operation, the dealer’s employees executed bogus checks and failed to deliver vehicles, title certificates, or to pay balances on trade-in vehicles. The disgruntled customers sued, and the trial court found Ford vicariously liable under an agency theory and directly liable for approving the transfer of the business to an inexperienced and undercapitalized dealer. The appellate court reversed, holding that Ford’s reasonable control over its trademark did not create an agency relationship that rendered Ford liable for the dealer’s bad acts. The appellate court relied on decisions that a “manufacturer/franchisor may exercise some control or protect its national identity, reputation, and trademark from abandonment without creating an agency relationship with its dealer/franchisee.” The appellate court decided that Ford owed no duty to the disgruntled customers under Oklahoma law.
Avery Names New CIC Standards Cmte Leaders
George Avery, chairman of the Collision Industry Conference (CIC), has appointed several new individuals to oversee the organization’s Standards Committee in a final effort to research possible solutions for the development of industry repair standards before the committee is permanently shut down in November. Michael Quinn, senior vice president of business development for uParts Inc. and past CIC chairman, has been named chairman of the committee. Mike LaVasseur, president and chief operating officer of Keenan Auto Body, and Paul Krauss, president and CEO of Craftsman Autobody, have been named vice chairs of the committee. Brett Bailey, owner of A&B CARSTAR, will also play a key role on the committee. George Avery provided an overview of the work that the CIC Standards Committee has been charged with for the remainder of 2013 during the most recent CIC meeting in Phoenix. “The Standards Committee members have worked hard over the past few years and I don’t want that good work to go to waste. I would like to thank those who worked hard to get us this far and encourage anyone who has a passion for the subject to join the committee,” Avery said. “Having past CIC chair
Michael Quinn step in as committee chair, as well as Mike LaVasseur and Paul Krauss as vice chairs, is exciting. They bring the repairer’s perspective and overall understanding of all stakeholders in the auto body repair industry.” Avery said key issues that the Standards Committee will research include examining shop equipment and capabilities requirements, OEM repair procedures and recommendations, and possible facility inspection and verification processes. The Standards Committee will make a report on shop equipment and capabilities requirements, and will clarify issues surrounding OEM repair procedures during the next CIC meeting, which is scheduled for July 23-24 at the Westin Boston Waterfront hotel in Boston.The committee will finalize its standards work this fall. It will present findings on the research it has completed and suggest possible repair standards solutions for the future during CIC’s November meeting in Las Vegas. “After November, the committee’s work will conclude,” Avery said. “We’re not going to ‘saw sawdust’ any more with the topic because, as the CIC Mission states, ‘the forum [communicates] findings and possible solutions, and when it comes up to that point it stops.”
44 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
MID Issues Bulletin to Insurers: Cover, Feather, Prime and Block for Hail Damaged Cars
April saw some unprecedented hail damage due to near record size hailstones in parts of Mississippi, especially metro Jackson, and Louisiana that Autobody News wrote about in our May issue. On May 10, the Mississippi Insurance Department (MID) issued a bulletin to insurers regarding labor and materials associated with feather, prime and block, in particular. MID reinforced a similar bulletin coming from Attorney General Jim Hood on the same subject (see p. 45, this issue) which was issued on April 19. The MID bulletin reads in part: “After the March 18, 2013, severe hailstorms hit the Jackson metropolitan area, an unusually large number of automobile claims were filed with insurance companies. The Mississippi Insurance Department (MID) has received complaints from some policyholders and auto body repair shops concerning issues related to the repair of insured vehicles. Therefore, MID is issuing this Bulletin to provide insurance companies and their adjusters with information regarding the han-
dling of these automobile claims.” “MID has become aware that there have been issues between adjusters and auto body repair shops regarding specific repairs that are considered necessary by these manuals. Specifically, there have been issues regarding the coverage of feathering, prime and block of damaged vehicles. Currently, this repair is considered necessary by these manuals, and it is the opinion of MID that, when necessary in view of the damage, this is a repair that should be covered by insurance companies.” “Therefore, MID directs insurance companies to inform their adjusters to review billing statements and approve any repairs and charges necessary to indemnify policyholders, including appropriate charges for feathering, prime and block of damaged vehicles, whether discovered as part of the written estimate or as part of the repair process. With respect to feathering, prime and block procedures, appropriate charges should be approved whether included in the paint/materials rate or broken out as a separate charge.”
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“In addition to ensuring that policyholders are treated fairly with respect to the payment of claims, MID also has the duty and responsibility to ensure that insurance rates remain fair and reasonable for all Mississippi policyholders. Consequently, MID wishes to make clear that by issuing this Bulletin, it is not encouraging payment for repairs that are not necessary, appropriate or covered by the insurance contract.” To download the full story go to www.autobodynews.com and search “Mississippi Insurance Department Memo.”
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Mississippi’s Attorney General Hood Tells Insurance Companies to Cover Feather, Prime & Block, Denib and Finesse, Masking of Jambs, Glass Clean Up, Etc. In the wake of a hailstorm that created havoc for Mississippi residents left with damaged homes and cars, Mississippi Attorney General Jim Hood sent a letter to all insurance companies on April 19 instructing them to cover specific procedures onvehicles damaged by the hailstorm. In the letter, Hood asks all insurance companies conducting business in the state to pay for necessary procedures to restore recently damaged vehicles to their pre-accident conditions. After the recent hailstorms left numerous Mississippi residents with damage to their businesses, homes and vehicles, Hood’s office received reports that some insurance companies were not including certain procedures that would restore vehicles to pre-accident condition in their estimates. Essentially the same message was given by the Mississippi Insurance Department (see cover story.) The body shops have stated that they will not make these repairs without payment from the insurance companies. The letter from Jim Hood is addressed to “General Counsel of In-
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surance companies” and reads as follows:
A recent hail storm in Mississippi caused significant damage to many Mississippians’ businesses, automobiles, and homes. Our office has received reports that some insurance companies are issuing estimates that do not include certain automobile repair procedures specified by the insurance companies’ own manuals and/or software as necessary to return vehicles to their pre-accident condition. Furthermore, our office has survey responses from over thirty autobody repair shops. The survey results indicate that claims for certain repairs specified as necessary by the insurance companies’ own manuals and/or software, such as feather, block and prime, denib and finnese, masking of jambs, broken glass clean up, and more are not being included in estimates issued to the insureds. These auto-body repair shops have not agreed to make these required repairs without payment by the insurers. The refusal to include in an estimate the work required by the insurance companies’ own manuals and/or
software to return vehicles to their pre-accident condition has created an environment for companies potentially to take unfair advantage of insureds and/or auto-body repair shops. The inconvenience and financial damage to property caused by the hail storm should not be compounded by the shift of covered expenses onto the automobile owner or auto-body repair shop. All insurance companies should be aware that such practices could subject the companies to civil or criminal penalties. Therefore, I am asking you to take whatever steps are necessary to correct this inconsistency in your business practices. Please communicate to your staff the necessity to consult the procedure pages provided by your chosen manual and/or software and your responsibility to pay for repairs according to the labor allowances provided by your databases. Your cooperation in protecting Mississippi individuals and businesses is greatly appreciated. If you have any questions, please contact the Consumer Protection Division at 601-359-4230. Sincerely yours, Jim Hood, Attorney General
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Safelite Named in New Lawsuit Alleging Windshield Separation Due to Poor Installation
A woman who says she lost both her husband and young daughter in a rollover crash in which the windshield allegedly separated from the vehicle has filed suit against Safelite, whom she claims replaced the windshield in the vehicle. The suit was filed in U.S. District Court in Clark County, Nev., according to court documents obtained by glassBYTEs™ . The suit was filed by Iwona Patnaude, who is listed as the surviving spouse of Jason Patnaude and Victoria Patnaude, and Nancy Patnaude, Jason’s mother. The suit alleges that on December 27, 2011, Jason Patnaude was driving a Toyota Tundra westbound on I-94 in North Dakota when he began to “slide upon contacting a patch of snow and
ice on the roadway.” Both Iwona and Victoria Patnaude were passengers in the vehicle at the time of the accident. “Directional control of the subject Tundra was lost and could not be regained,” attorneys write in the court documents. “The subject Tundra crossed the highway’s median and rolled over across the eastbound lanes and off the roadway. During the incident, the windshield of the subject Tundra separated from the vehicle. During the incident, the roof of the subject Tundra collapsed. Jason R. Patnaude and Victoria Patnaude sustained fatal head injuries in the crash. Jason R. Patnaude and Victoria Patnaude died at the scene.” During the incident, attorneys allege “the windshield separated from the
rest of the vehicle, contributing to the degree of crush sustained by the subject Tundra’s roof structure. … The Safelite defendants’ negligent installation of the windshield on the subject Tundra resulted in its failure in the rollover incident.” In addition to the Safelite Group and its third-party administration arm, Safelite Solutions, Anthony J. Stark is listed as a defendant in the suit. His address is listed as Safelite AutoGlass, 62 Spectrum Blvd., Las Vegas, NV 89101. Patnaude’s attorneys allege that “as a direct and proximate result of the incident addressed in this complaint, plaintiff Iwona Patnaude sustained severe nervous shock and emotional upset secondary to her close proximity
to and observation of her fatally injured and suffering husband and daughter.” The claimants are seeking a jury trial and reimbursement for injuries as well as damages in excess of $50,000. Safelite PR manager Melina Metzger has confirmed the company performed a windshield replacement on the vehicle six years prior to the accident, but decline to comment further. Other defendants listed in the lawsuit include Toyota Motor Corp., Toyota Motor Sales USA, Toyota Motor Engineering & Manufacturing North America, Toyota Motor Manufacturing of Indiana, AutoNation USA Corp., Desert Scion/Toyota, Steve Romeo and Lisa Armstrong, as well as Centennial Toyota.
I-CAR Announces Keynote Speakers Reginald Modlin and John McElroy for Boston July Meeting
I-CAR® announced that Chrysler Group LLC Director of Regulatory Affairs, Reginald R. Modlin, will serve as keynote speaker during the I-CAR InterIndustry Conference in Boston. As Director of Regulatory Affairs, Modlin is responsible for all aspects of product safety and environmental compliance. His key responsibilities include policy development to guide reaction of legislation and regulations in the NAFTA regions vehicle emissions certification,
fuel economy strategy and reporting, and vehicle safety compliance demonstrations and resolution of compliance issues with EPA and NHTSA. Reginald Modlin has been serving in this capacity for 14 years and has been with Chrysler for 38 years. Reginald Modlin
On July 24 and 25, renowned Autoline TV host and author John McElroy will serve as moderator leading the I-CAR Conference attendees through the fastpaced, comprehensive “30,000-ft view” agenda on “The Changing World of Vehicle John McElroy
Only Two Small 2014 SUVs Performed Well in Front-End Crash Tests According to IIHS
Subaru’s 2014 Forester was the only vehicle to get the top “good” rating in the results released by the Insurance Institute for Highway Safety (IIHS). The 2013 Mitsubishi Outlander Sport was rated as “acceptable.” But fast-selling models such as the Ford Escape, Honda CR-V and Jeep Wrangler received only “marginal” or “poor” ratings from the IIHS. Small and midsize SUVs, which get decent gas mileage and have the cargo and passenger space of larger SUVs, are among the fastest-growing segments of the U.S. auto market. Sales grew 50 percent from 2005 to last year, when U.S. consumers bought more than 2.5 million of them, according to Ward’s AutoInfoBank. The IIHS ratings are influential because many auto shoppers find them while researching vehicles on the Internet. The group says its crash tests and ratings are designed to get automakers to improve crashworthiness of their vehicles. The ratings are for the institute’s “small overlap” crash test that covers only 25 percent of a vehicle’s front end. The test was added to the IIHS evaluations last year, with the institute aiming to push automakers into bolstering the
crash resistance of their vehicles. The group’s tests are more stringent than the U.S. government’s fullwidth front crash test. The institute says that in many vehicles, a crash affecting one-quarter of the front end misses the main structures designed to absorb the impact of a crash. Yet such crashes account for nearly a quarter of the collisions that cause serious or fatal injuries to people in the front seats, IIHS said. The new Ford Escape, the topselling small SUV so far this year, got a “poor” overall rating, while Honda’s CR-V, the No. 2 seller, got a “marginal” rating. Toyota’s RAV-4, another big seller, hasn’t done the testing yet because Toyota asked for a delay to improve the vehicle’s structure, the IIHS said. Other SUVs getting “poor” ratings were the Jeep Patriot, Buick Encore, Kia Sportage and Hyundai Tucsons, the institute said. The BMW X1, Nissan Rogue, Mazda CX-5, Volkswagen Tiguan and Jeep Wrangler twodoor all got “marginal” ratings. The Forester and Outlander Sport each received the IIHS’ coveted “Top Safety Pick Plus” award because they performed well in multiple tests including the small offset crash.
46 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
Technology & What it Means to You.” The conference concludes with a panel who will discuss the repair and business impacts associated with today’s rapidly evolving vehicle technology landscape. I-CAR speakers include technical leaders from NHTSA, IIHS, the Center for Automotive Research (CAR), vehicle OEMs, and OEM suppliers.
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Continued from Page 14
Key Industry Issues
dustry effort. “I think the key take-away is that the industry can be assured that there will be solutions for you,” he said. “Where we go is predicated only on the needs of the repairers who are using these procedures.” The discussion of insurer-mandated parts procurement system also focused on potential ways to address what one Arizona shop owner termed “the death knell of the industry.” Several attendees discussed existing or proposed state legislation that could limit such programs. A bill introduced earlier this year in Maryland, for example, would prohibit an insurer from requiring a shop to use a specific vendor or process for the procurement of parts or materials necessary for repair of a vehicle. A number of attendees also discussed the importance of shops educating their local parts vendors. Although several attendees said that based on their conversations with State Farm they felt it was now inevitable that the insurer will move
ahead with PartsTrader, Schulenburg said he’s not so sure. “I think ‘resistance is futile’ would be a position I would want to take, too, if I wanted to get people who were resisting to stop resisting,” Schulenburg said. “‘We’re moving forward with it regardless…’ is a great approach to encourage people to stop questioning it. I just don’t know that that’s true. I would caution anyone hearing those messaging points to take it with a grain of salt.” Schulenburg ended the meeting by saying he looks forward to eventually having hundred of repairers in the room for future meetings. “I see the discussion in the industry moving to more proactive strategy versus just a reiteration of war stories and gripes and complaints,” he said. “That’s really healthy for our industry to make that transition.”
John Yoswick, a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). He can be contacted by email at: jyoswick@SpiritOne.com.
Maine Legislature Holds Hearings on Right to Repair
The Maine legislature recently held a hearing on LD 788, Right to Repair legislation, titled “Vehicle Owners and Repair Facilities.” The hearing was held in the Joint Committee on Labor, Commerce, Research and Economic Development. Ken Boyce, the owner of Ken’s Auto Repair Inc. in Buxton, ME, presented testimony on behalf of the Automotive Service Association (ASA). He has 29 years of experience in auto repair. Boyce made arguments in opposition to the Right to Repair legislation throughout his testimony. He said: “There are lots of conflicting opinions about the right to repair issue. In my opinion, this legislation has no purpose. All it would do is codify an agreement that was reached over a decade ago at the behest of the U.S. Congress after they expressed their desire to not inject themselves into the middle of the situation. “The existing agreement between automakers and the aftermarket was reached in 2002. It has been around so long that some of the original manufacturers involved—such as Pontiac, Mercury, Saab, Saturn and Suzuki—no longer even exist. With the formation of the National Automotive Service Task Force (NASTF),
and the introduction of the Secure Data Release Model (SDRM), the agreement is strong and in a state of continual improvement. The threat that the manufacturers might take away the information is the last-ditch cry of the flat world, yet the manufacturers’ support for NASTF has only strengthened over the past decade. There is no evidence of that ever changing. All evidence points to their continued support.” Boyce concluded his testimony with strong remarks: “I see nothing positive that will come from this legislation. It will do nothing to compel the flat world to subscribe to information or purchase tooling that the OEs already have to offer, nor will it compel any technician[s] to get the training they need. Instead, all that I can see it has to offer, through unintended circumstances, is to flatten out the round world of shops like mine. I don’t want that and my customers don’t want that. The key is proper education, proper tooling, and support of the agreement that is already in place, not legislation. If our voluntary, industry service information process fails, we will be the first in line asking for the state of Maine’s help. We see no signs of failure to date. ASA opposes ME LD 788.”
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I-CAR Plans New-Format Industry Conference in July in Boston
PartsTrader Announces New Feedback Function Release
I-CAR has re-engineered its annual event to focus on topics relevant to the entire Inter-Industry including repair organizations, vehicle OEMs, insurers, educators, suppliers and related services providers. The conference will be held at The Westin Boston Waterfront in Boston, MA. I-CAR’s July 2013 Inter-Industry Conference theme is: Driving Excellence… In Technology: The Changing World of Vehicle Technology & What it Means to You. The conference is designed to benefit industry leaders who recognize that vehicle technology changes are significant, moving quickly and broadly, and represent significant changes for the collision repair industry. To this end, I-CAR is inviting technical leaders from NHTSA, IIHS, the Center for Automotive Research, vehicle OEMs, and OEM suppliers to share their knowledge on the vehicle technology developments coming soon to the collision repair industry. According to I-CAR CEO & President, John Van Alstyne, “Our focus for the conference is to help our industry better understand the impact associated with rapidly evolving vehicle technologies such as collision avoidance, telematics and CAFE driven ve-
PartsTrader LLC announced April 23 that its latest release includes a new feedback function which allows repairers and suppliers to provide feedback on the performance of their trading partners. In meeting with PartsTrader users across the initial five markets, repair facilities and parts suppliers consistently requested the capability to provide measurable feedback within the product. “It’s critical for us to deliver the ability to provide real-time feedback on performance,” said Dale Sailer, PartsTrader’s Vice President of Business Development. Within the ordering functionality of the PartsTrader application, each party will—on randomly-selected transactions— provide quantitative feedback on how well the other party performed. Users may also provide proactive feedback on a business partner, if desired. In a future release of PartsTrader, this feedback will be utilized to present a star-based rating on each repairer and supplier.
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hicle lightweighting and architecture changes, and to learn about these directly from the technologists that are helping to create the future.” This fast-paced conference begins with a luncheon on July 24 at 12:30 p.m., and then proceeds into a general session with speaker presentations and a recap panel until 5 p.m. That evening, attendees will have the opportunity to attend the I-CAR Networking Reception and Sponsor Showcase Event. Day Two kicks off at 8 a.m. with I-CAR Business over Breakfast, where four national awards will be presented along with presentations from John Van Alstyne, I-CAR CEO & President as well as I-CAR Board of Directors Chair, Bill Brower. The Day Two general session follows at 9 a.m. with more technical insights and concludes at 11 a.m. following an Inter-Industry panel that will discuss the impact vehicle technology changes will have on industry repair and business practices. Those interested in attending may register, and reserve a room at The Westin Boston Waterfront by going to: www.i-car.com/events&meetings. I-CAR’s goal is to provide the Inter-Industry important information
related to automotive technology trends that impact vehicle design and ultimately repairability. It is critical for the Inter-Industry to gain insights directly from those engaged with the future of vehicle technology to better understand where the vehicles of tomorrow are going and when, so that as an industry, we are properly prepared. I-CAR has invited technically focused leaders from organizations such as NHTSA, IIHS, Center for Automotive Research (CAR), vehicle OEM’s and OEM suppliers, who will discuss topics such as advancements in integrated vehicle safety systems, evolving vehicle-to-grid and vehicle-to-vehicle communications, occupant and pedestrian safety, the impact of CAFÉ on vehicle design, and the potential for autonomous vehicles. Additionally, an Inter-Industry thought leader panel will discuss the repair and business impacts associated with today’s rapidly evolving vehicle technology landscape. Given the technical focus of this conference, only one conference hour, over Thursday’s breakfast, will pertain to I-CAR business with speeches from I-CAR CEO & President, John Van Alstyne and I-CAR Board Chair, Bill Brower, including presentation of four traditional I-CAR national awards.
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3940 Cherry Ave., Long Beach, CA 90807 www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 49
SEMA Show Enhances Services for Collision Repair Market, Adds Up to 20,000 Sq. Ft. for 2013
The 2013 SEMA Show will include enhanced features for the Collision Repair & Refinish market, including an expanded show floor area, targeted activities both inside and outside the Las Vegas Convention Center, and an unsurpassed educational program. The upgrades come as a result of the fastgrowing interest from both exhibitors and buyers in the collision market segment. “As interest grows and the landscape changes, we continue to evolve and are excited about the plans for 2013,” said Peter MacGillivray, SEMA VP of events and communications. Last year’s SEMA Show featured 330 exhibitors in the Collision Repair & Refinish area and the Tools & Equipment area, the two sections where many exhibitors feature products for the collision market. These exhibitors were housed in over 88,000 square feet in North Hall of the Las Vegas Convention Center. For 2013, the Collision Repair & Refinish section will expand into an adjacent area of the LV Hotel, accommodating up to
20,000 square feet of additional space. “The expanded floor section makes it really easy and convenient for buyers to see all the products in the collision market within a defined area,” said MacGillivray. More than 20,000 SEMA Show buyers expressed an interest in collision repair products, and 87% of all buyers have buying influence. Those in the collision market are also able to network and expand their knowledge during several industry meetings and educational events taking place. The Collision Industry Conference (CIC), the National Auto Body Council (NABC) and the Society of Collision Repair Specialists (SCRS) are amongst the groups hosting meetings during the SEMA Show. A comprehensive Repairer Driver Education program is also presented by the SCRS. “From the impressive growth of exhibitors, to attendees who are reaching out to SCRS already looking to register and ask questions about our education, it is clear the collision in-
Car-O-Liner Names Peter Richardson to Management
Two More Insurers Require Inspections for Glass Repair
Car-O-Liner®, a leading global provider of collision repair equipment to the automotive aftermarket, hired Peter Richardson as a Key Accounts Manager. In his new role, Peter will work closely with the c o m p a n y ’s OEM and MSO partners across North America. “We are excited that Peter is joining the Car-O-Liner Peter Richardson family. He is a powerful addition to our team,” said Jeff Kern, Car-O-Liner President of the Americas. “Establishing a strategic partnership with our customers is of high importance to us. Peter’s knowledge of the industry is an asset to reinforce our relationships with key OEM and MSO partners.” Peter joins Car-O-Liner after 10 years at Shure Manufacturing where he was responsible for sales, marketing, and customer service. Before that, he spent 12 years at SBC Telecommunications in various sales and account management positions.
American Family Insurance and Encompass have joined the ranks of insurance companies requiring inspections prior to authorization given for auto glass repair and replacement claims via outside networks, according to reports. Dora O’Brien, owner of Long Star Auto Glass in Coolidge, AZ, says both American Family Insurance and Encompass are now requiring inspections prior to authorization of repair and replacement. She says Safelite processes claims for both American Family and Encompass. “It started with American Family Insurance with us and in the last eight or so months it now involves several other companies that Safelite processes glass claims for,” says O’Brien. “Most recently, our first Encompass insured was told he will need to have a random inspection. He has a vehicle that requires a windshield that is only available through the dealer,” she added.
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dustry is really excited about this year’s show,” said Aaron Schulenburg, SCRS Executive Director. Schulenburg says that the 2013 Repairer Driven Education program will include fresh and inspiring content, while continuing to remain relevant to collision repairers. “Each year we have taken feedback from past attendees and used it to amplify our upcoming offerings,” he said, noting that 2013 will be the group’s fourth year partnering with SEMA to present the educational program. “This year, we are adding to the format with designated tracks that can guide repair industry professionals through the week-long program based on their core interests in what they need for their business. Some want to better understand how to manage their business, and what makes it tick, while some are looking for ways to enhance and grow it through new business opportunities or untapped customer bases; others may be looking for ways to best position their business to make it more attractive when they wish to
sell it, or learn how to compete in a consolidating marketplace. Regardless of interest, there is something for everyone and the objective remains the same: to address real issues faced by collision repairers, while providing tangible information that they can directly apply to their business when they return home.” SEMA Show exhibitors began selecting the location for their booths during the Priority Booth Selection Process, beginning with exhibitors in North and Central Halls, followed by those in upper and lower South Halls. The 2013 SEMA Show is set for Tuesday-Friday, November 5-8, 2013, in Las Vegas, Nevada. The annual event typically attracts more than 130,000 individuals from 125 countries, making the annual show the premier automotive trade event in the world. Manufacturers come to the event to showcase products that enhance the styling, performance and functionality of cars, trucks and SUVs. For details, visit www.SEMAShow.com.
Stacy Bartnik Joins Team PRP as Executive Director
Team PRP has named Stacy Bartnik as its new executive director. Bartnik most recently served as VP of opera-
tions for CARSTAR. She is the immediate past president of the NABC and as a trustee for CREF.
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Industry Demonstrates Early Confidence in SEMA Show with Six Percent Exhibitor Increase
Nearly 2,000 exhibitors are confirmed to participate in the SEMA Show Priority Booth Selection Process taking place later this month. The number represents a six percent increase over the number of companies that participated in the process in 2012. “With the increased commitment exhibitors are demonstrating earlier in the year, it’s apparent the SEMA Show provides unmatched brand-building visibility and sales exposure in one venue,” said Peter MacGillivray, SEMA VP of events and communications. Manufacturers exhibit at the four-day event each year to showcase new automotive parts and accessories, and to connect with more than 60,000 buyers from throughout the world. Through programs and features such as the New Products Showcase, product demonstrations and sectionalized floor plan, exhibitors are able to connect with the most relevant buyers. “The earlier a company signs up, the more likely they are to take part in all the added-value programs we have available,” MacGillivray said. “We’ve seen direct connections
between the amount of planning a company does to the level of success they achieve.” Nearly 70 percent of buyers visit the SEMA Show with a plan and identify the exhibitors they want to meet with in advance, according to a 2012 SEMA Show survey. The most influential factors that buyers reported as having an impact on their decision to visit an exhibitor were participation in the New Products Showcase, the Show directory listing, and pre-Show contact from an exhibitor. Companies may still sign up to exhibit at the upcoming show at www.SEMAShow.com/buyabooth. Attendee registration will be available from the site in early May. The 2013 SEMA Show takes place Tuesday-Friday, November 58, in Las Vegas, Nevada at the LVH Conference Center.
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The average price paid for collision parts took a dip in the latter half of 2012—according to Mitchell’s Q2 2013 Industry Trends Report—the first time that the indexed price for parts has decreased in 10 years. “When we created the Mitchell Collision Parts Price index (MCPPI) in 2003, we wanted to track inflationary trends in parts use over a period of time,” said Greg Horn, Vice President of Industry Relations of Mitchell. His recent article provides the first 10-year-long review of inflationary trends in parts pricing. Mitchell developed the index by first creating a “market basket,” similar to how governments determine the Consumer Price Index of the commonly used goods and services. Mitchell created the market basket by selecting the 20 most frequently replaced collision parts. “Interestingly, for the first time, we saw a decrease in the indexed price for the market basket,” wrote Horn. “The 2012 decrease was not evident when we ran the index report early in 2012, so the decrease was in the latter half of 2012. That led us to the next question: what type of part or vehicle origin is driving the de-
crease?” Horn says that although there were moderate increases in the Asian and European market basket, the domestic vehicle parts market basket experienced such a decrease that it offset this. Estimates have a higher number of new, OEM parts on average than any other part type, such as recycled or aftermarket. “The decrease in the average OEM part price for domestic vehicles was a mere $6.33 ($245.12 for 2012 vs. $258.12 for 2011) but that drove a 0.14 decrease in the overall market basket index,” writes Horn. The expansion of the competition parts price matching programs from the domestic OEs is driving the decrease in the overall index because of the large number of domestic vehicles in the U.S.... and the overwhelming dominance of new OEM parts selected on the average repairable estimate.” Horn notes that whether or not the decrease will continue depends on a number of factors, such as whether the total fleet of repairable vehicle claims continues to age and whether the OEs continue to aggressively price match to retain market share in part sales.
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Dan Risley Appointed Interim Executive Director of ASA, Outlines ASA Position on PartsTrader On April 22 the Automotive Service Association (ASA) announced that Dan Risley had been named interim executive director. The announcement came a little over a month after Risley joined ASA as Executive Vice President. Risley began his 24 year career in his family’s collision repair business in Illinois, and has worked for Allstate Insurance for six years since leaving SCRS, an experience he says gave him “a completely different perspective” on insurers and how they operate, something that will benefit the association and ASA members. “My perspective on insurers is changed,” Risley told a trade industry media source recently, “I walked in there with my preconceived notions about what insurance companies do, why they do it, what influence they have, what they try to influence and what’s important to them. And some of those things were true, and a lot of them really weren’t. A lot of them were completely different than what I thought they would be. Risley’s most recent position with Allstate involved overseeing part of the insurer’s DRP network. “I was the market claim manager for the Good Hands Repair network. Basically, I had oversight [of the shops] in half of
the country and the staff that oversees them. Again, it was a very unique perspective that I was able to attain, because I got to see firsthand what was really important to insurance companies. “What motivates [insurers] with some issue, may be the completely the opposite of what you might read in the trade press or what you might hear from the industry in general. The broader perspective [I gained from working at Allstate], when we approach a particular issue, is going to allow me to maybe have a little bit different strategy and tactic in terms of how we might address that and maybe bring it to a resolve a little bit quicker.” One of those insurer related issues the association is currently engaged with is State Farm’s PartsTrader initiative. Risley believes there has been some confusion around ASA’s position on PartsTrader. He explained, “ASA does not support PartsTrader and, by the way, nor should we. As an association it’s not our role to support or endorse a given product. ASA does not support State Farm and nor should we.” “We view PartsTrader in a very similar vein as we do an estimating system or a CSI vendor. We didn’t
support any insurance company mandating those. So this falls in that same bucket. We don’t endorse or support any insurance company mandating the use of specific products.” Risley said. Risley said that members that have participated in the pilot have shared concerns about how the system works, and that while they have concerns, they are working with PartsTrader and State Farm to improve the system. Risley explained that the association has maintained an active dialog with both PartsTrader and State Farm on the issue and he believes this ongoing dialog has led to some confusion about ASA’s position. Risley said, “We’ve very clearly heard from our membership that this has been a product that has not been a value-add. It has actually cost them more in administrative time, it’s more of a burden.” Commenting on parts e-commerce generally, Risley believes the concept is here to stay regardless of the outcome of State Farm’s pilot with PartsTrader. “We’re not going to stop parts procurement. We’re not going to stop e-commerce. That stuff is going to happen. But we can play a role in mak-
ing it better,” explained Risley. Right now, though, there are concerns about the value these new products and processes bring to the collision repairer. “Someday could it be possible that those products are driving more value back down to the repairers? The answer is ‘yes.’ It will eventually get there. But when that does happen, repairers are going to adopt them all by themselves because it’s going to help them be more efficient,” explained Risley. “If it’s not helping them be more efficient today and we’re being told we have to use them, that’s a completely different context for us. Why would we support that?” Risley has also said that ASA views the use of Most Favored Nation (MFN) clauses in DRP contracts as a much bigger concern for repairers than PartsTrader. “We’ve heard a lot of noise on PartsTrader, and heard relatively nothing on the most favored nation clauses [but] the PartsTrader piece probably affects a smaller subset of the industry, when the most favored nation clause not only affects your State Farm business, but it has the possibility of impacting every job that comes through your shop.”
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www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 53
Rhode Island Industry Attorney: “Body Shops Suffer From an Image Problem” In Rhode Island, the annual State House auto body shop war has renewed, with an exasperated Jina Petrarca-Karampetsos telling weary senators — more than four hours into a late-night hearing: “Body shops suffer from an image problem. “And that image problem is perpetuated by individuals who don’t know the facts, who portray us as greedy thieves,” the sister of former Rep. Peter Petrarca — and lawyer for her father’s Providence Auto Body — told the Senate Judiciary Committee. “We’re body-shop people. We protect your second-biggest asset,” but “we are not doctors. We are not even carpenters. We’re body-shop people so we actually are, amazingly, people that make victims of insurance companies. “Some people actually feel bad for insurance companies when they compare them to us.” She suggested the senators see the insurers instead as “unreasonable” people who “refuse to negotiate.” However, the hours-long hearing and debate drew little attention outside the two affected industries. The hearing ran more than 5½ hours. It drew executives and lobbyists from Nationwide Mutual, PCI, Amica, the American Insurance Association, among others, and from the other side, the Auto Body Association of Rhode Island and a number of its members, including John Petrarca. The battle centered on this year’s version of the right-to-sue legislation that cleared the General Assembly at 2:58 a.m. in the final hours of last year’s session, which Governor Chafee ultimately vetoed. The bill co-sponsored by Senate Majority Leader Dominick Ruggerio and Majority Whip Maryellen Goodwin would require insurers to negoti-
ate payment rates with body shop owners and give the body shops the right to sue the auto insurance companies if these negotiations do not result in an “agreed price.” This year’s bill is not identical. For example, the rewritten bill would no longer require an insurer to pay the legal bills of an auto body shop that prevailed in court. But it is substantially the same. And so are the arguments pro and con. And people affiliated with the body shops gave at least $18,850 from Jan. 1-March 31 to the campaign funds of House Speaker Gordon Fox and Senate President M. Teresa Paiva Weed and their top deputies. Campaigning for a veto last year, the American Insurance Association (AIA) issued this statement: “No other state in the nation allows auto body shops to set non-negotiable rates and attempt to force them on third party payers under threat of litigation.” In his subsequent veto message, Chafee said: “While I understand the desire to ensure auto body employees are adequately compensated for their skills and attention to safety, I believe this bill would hurt Rhode Island consumers by raising their auto insurance rates and impairing their existing contract agreements with their insurance companies. “With many Rhode Island families continuing to struggle as our state economy recovers, I do not believe it is appropriate to pass on any unnecessary additional costs to consumers,” Chafee said. Rhode Island drivers already pay the fifth-highest collision insurance premiums in the nation, $351 here compared with $290 on average nationwide, according to a March 11 “Special Report” from the Property Casualty Insurers Association of
U.S. Supreme Court Rules Against Towing Company
The U.S. Supreme Court has ruled unanimously that federal trucking laws don’t preempt a state claim against a New Hampshire towing company. The court ruled in a Manchester case involving Robert Pelkey, who had to go to a hospital for an infection and then suffered a heart attack. He used a handicapped parking spot, and left his car parked there while he was hospitalized. The car was towed by Dan’s City Auto Body when it wasn’t moved during a winter parking ban and then sat in the
towing business’s lot for two months. The shop believed it was abandoned. It eventually took ownership of the car and traded it. Pelkey sued Dan’s City Auto Body under the Consumer Protection Act. The case ended up in the New Hampshire Supreme Court, which overturned a superior court’s finding and ruled in his favor. The attorney for the tow company appealed, citing federal trucking laws that were passed in the 1980s to unify trucking and tow regulations among all the states.
54 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
America. But Petrarca-Karampetsos told the senators that more than 70 of the 700 companies that write property casualty insurance in the state “pay much higher than $45 an hour. Much higher. They pay over $70 an hour.” “All it asks them to do,” she said of the legislation, “is negotiate. … It is beyond me how this is such an unconscionable controversial thing that makes us look like greedy thieves.” Goodwin is sympathetic. “I just believe [for] the auto-body industry, it’s a matter of fairness,” she said Tuesday. “These have been ongoing disputes for years and years and years between the auto-body industry and the insurance industry.” Asked why the state should intervene in a private dispute over how much repair shops should be paid, Goodwin said: “People have the right to sue all the time when they can’t come to some type of agreement. What is so wrong about going into court and having a court settle something that cannot be settled?” As for warnings that higher rates will follow, Goodwin said the insur-
ance industry “has some of the deepest pockets in America. They can battle back. … I am looking out for the small business owner, the little auto body shop and the consumer at the same time.” Added Ruggerio: “I am not concerned about it because, personally I think if the auto bodies have that leverage, then the insurance industry would deal a little more fairly if they had something like that hanging over their head.” In the weeks leading up to this year’s hearing, the Property Casualty Insurers Association of America launched a $30,000 radio ad campaign. “If you think this all sounds all too familiar, you’re right — the auto body shops are at it again!,” the ad begins. If passed, the bills “could be harmful to drivers by increasing the cost of having a vehicle repaired following an accident, potentially forcing you to pay even more for your insurance coverage.” “Let’s stop the auto body repair rip-off, once and for all,” the ad said.
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www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 55
ASA Business Meeting Emphasizes Unity, Transparency, Inclusion & Collaboration
The Automotive Service Association (ASA) held its annual business meeting April 19–20 at the Hurst Convention Center in Hurst, Texas. The themes of the meeting were: Unity, transparency, inclusiveness and collaboration. “The board is committed to not only working more closely with each other, but also with our affiliated associations. In fact, we shortened the open board meeting to accommodate an interactive session with the affiliates in attendance,” said Darrell Amberson, AAM, vice president of operations at LaMettry’s Collision, Minneapolis, and ASA’s new chairman. “We recognize the strength of a national association goes hand in hand with the strength of our affiliated associations.” “The changes that took place at the national business meeting show that ASA is a member-driven association, and the direction and excitement that came from this meeting demonstrate that ASA is headed in the right direction and the members are in good hands with the new board,” said Jeff Lovell, AAM, executive director of ASA-Northwest. “ASA-Midwest is pleased to have had the opportunity to meet with the ASA board and Dan Risley (interim executive director) during the annual business meeting. As a result
Carlyle Group to Sell 50,000 Share Stake in Hertz
The Carlyle Group is selling its stake in Hertz Global Holdings, Inc., approximately 50,000 shares held by investment funds associated with The Carlyle Group. Goldman Sachs will act as underwriter in a registered public offering of those shares. Hertz said the sale of stock by the investment firms represents practically the entire interest the funds held in Hertz stock. Reuters reported that prior to the sales, CD&R and Carlyle were the second and third largest shareholders in Hertz, respectively, according to Thomson Reuters data. The three investment funds bought Hertz from Ford Motor Co. in 2005 for $5.6 billion. Hertz operates its car rental business through the Hertz, Dollar and Thrifty brands from approximately 10,460 locations worldwide. The company claims to have the second largest market share in the off-airport car rental market in the United States. The Carlyle Group purchased DuPont’s Performance Coatings and Service King this year.
of those conversations, we are excited about the direction and opportunities presented by the new leadership,” said Sheri Hamilton, AAM, executive director of ASA-Midwest. ASA’s board of directors also emphasized the importance of the association’s governmental affairs efforts. ASA plans to increase its visibility as the industry’s leader in the development of public policy for independent automotive repairers. In addition to the existing tools in place for ASA’s membership—grassroots support, the ASA PAC and the Washington, D.C., office located on Capitol Hill—the board reviewed a new design for ASA’s public policy advocacy website, TakingTheHill.com, which will launch soon. “We finished building the foundation for a new era at ASA and now we will be aggressively pursuing those who want to be part of the future of the automotive repair profession. The board is eager to collaborate with our existing industry partners, and excited about the potential to build new relationships within the industry that will benefit the members of ASA,” said Ron Nagy, AAM, owner of Nagy’s Collision Centers in Ohio and ASA’s immediate-past chairman. “We also have laid the foundation for a radical new ASRW with positive changes in the works for both NACE and CARS.”
Colorado Auto Dealers Find Support in State Legislature
Colorado legislators voted to approve a bill that requires all automobile manufacturer franchise agreements to conform to current franchise law rather than to meet the legal requirements when the contract was signed, despite officials from the Alliance of Automobile Manufacturers (AAM) calling the measure an “extraordinary” and “shocking” shift of the balance of power. This is the fourth time in the past five years that the Colorado Automobile Dealers Association (CADA) has brought a bill to give dealers more power in their negotiations with the national and international companies that supply them their products. They included bills to bar manufacturers from requiring major dealership upgrades more than once every seven years and to require that auto makers that closed dealerships due to bankruptcy to give those dealers first right of refusal if they reopen a franchise in the area. The right-of-refusal bill resulted in a lawsuit against the state.
56 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
CARSTAR to Support “Hire Our Heroes” Campaign
CARSTAR Auto Body Repair Experts is supporting 3M’s efforts in partnering with the Collision Repair Education Foundation’s Hire Our Heroes campaign. The initiative provides scholarships and support for collision repair training, with a goal of driving employment in the collision repair industry for America’s veterans. Enrollment to win scholarship funds from the Collision Repair Education Foundation opened on Jan. 1, 2013, and remain open through May 15, 2013. The 3M Hire Our Heroes program also will help fund rehabilitation for the wounded veterans through Operation Comfort’s Automotivation program. It provides opportunities for wounded soldiers to channel their automotive skills, or learn new ones, to restore vehicles through the National Auto Body Council (NABC) Recycled Rides program for other military veterans. Participating CARSTAR shop owners throughout the U.S. will support the campaign. For every qualifying purchase of 3M products by a CARSTAR shop owner, 3M will contribute to the campaign to reach a $250,000 goal.
AMI Accepting Applications for Cosette/Westerlund Award
The Automotive Management Institute (AMI) is now accepting applications for the Richard Cossette/ Gale Westerlund Memorial Scholarship. The scholarship honors the contributions these individuals made to AMI, ASA and the collision repair industry. The scholarship recipient will receive $1,000 toward the recipient’s expenses to attend the 2013 International Autobody Congress & Exposition (NACE) in Las Vegas, Oct. 16–18. To be eligible for the award, the following requirements must be met: ► Applicant must work in the collision repair industry ► Applicant must demonstrate an interest in self-improvement through management education ► Applicant must own or work for a business that is an ASA collision division member in good standing ► If the applicant is not the business owner, he or she must be recommended by the business owner. To request a scholarship application, call AMI at (800) 272-7467, ext. 101, or online at www.amionline.org. Applications must be received by AMI on or before Aug. 23, 2013. Winners will be notified by Aug. 30, 2013.
Collision Repair Education Foundation and Partners Announce First of $300,000 in Student Scholarships, Will Be Announcing More Shortly
The Collision Repair Education Foundation (CREF) announced the first round of winners which are $300,00 in scholarships given out in May 2013 by the Foundation. The Scholarship is in its sixth year and is funded by the entire collision industry through the Collision Repair Education Campaign. The Scholarships offer students financial assistance with tuition and other costs. Winners of the GEICO national scholarships and tool grants are: Kyle Wright, Chantilly STEM Academy, Chantilly, VA; Olivia Barszczewski, Alfred State, Alfred, NY; Shannon Braswell, Sarasota County Technical Institute, Sarasota, FL; and Gerardo Olivera, Cerritos College, Norwalk, CA. Each receives $1,000 cash and $1,000 (retail) in tools. Winners of the Gerber Collision & Glass student scholarships and tool grant winners are: Lino Meraz and Asare Boatneg, both of Lincoln College of Technology, Melrose Park, IL. The students received $2,000 scholarship and $1,000 in tools. Winners of the PPG Industries Foundation scholarships are: Joseph
Crawford, Arkansas State in Marked Tree, Marked Tree, AR; Justin Furman, Washtenaw Community College, Ann Arbor, MI; Jessie Jensen, Bridgerland Applied Technology College, Logan, UT; and Ryan Stenzel,Ridgewater College, Willmar, MN. These students received a $5,000 scholarship. In addition, Jonathan Thigpin, Rolla Technical Institute, Rolla, MO, won $750 for the PPG MVP Industry Student Scholarship. Winners of the Service King spring tool chest grant are: Sierra Pellettieri, EVIT (Mesa, AZ); Matthew Adams, Universal Technical Institute, Belton, TX; Jovanny Jimenez, Texas State Technical College, Waco, TX; Sherdrick Russell, Universal Technical Institute, Houston, TX; and Andreass Berryman, EVIT Trade School, Mesa, AZ. These five students each received a 7-drawer roll cabinet and five-drawer top chest, valued at $2,00 each. Winners of the Alliance of Automotive Service Providers Massachusetts (AASP-MA) tool grants are: Paul Ballota, Shawsheen Valley Technical High School, Billerica, MA; William Clough, Shawsheen Valley
Technical High School, Billerica, MA; and Yscasia Cummings, Southeastern Regional Vocational Technical High School, South Easton, MA. Winners received $1,200 in tools. Winners of the CCC Michael Salvatore Memorial Student Repair Technician Scholarships: Brian Stevenson, Francis Tuttle Technology Center, Oklahoma City, OK. Brian won the top scholarship of $5,000; and two students won the $2,000 scholarships: Stephanie Franklin, Lansing Community College, Lansing, MI; and Diego Trujillo, Wiregrass Georgia Technical College, Valdosta, GA; Evan Scott, Pennsylvania College of Technology, Williamsport, PA. CREF also awarded several scholarships. The secondary student winner of a $5,000 award is Shelby Williams, Applied Technology Center, Rock Hill, SC. The post-secondary $5,000 award recipient is Shena White, Cape Fear Community College, Wilmington, NC. Three students won the Lon Baudoux Legacy Scholarship. Recipients of the $1,000 award are: Erick Escobar, Norwalk High School, Norwalk, CA; Tyler Hardin, OSU Institute of
Technology, Okmulgee, OK; and Antonio Fondren, Hennepin Technical College, Brooklyn Park, MN. The Lon Baudoux Legacy Scholarship was created to honor Lon Baudoux, I-CAR Development Manager, who passed away in 2008. Lon highly valued education, especially for secondary and post-secondary students. This scholarship is funded mainly by I-CAR staff and I-CAR instructors who worked with Lon at I-CAR. Additional scholarships include the Board of Trustees Scholarship. This $2,000 award went to secondary student Brian Stade, Applied Technology Center, Rock Hill, SC, and to post-secondary student Zach Reisner, Hennepin Technical College, Brooklyn Park, MN. The Domenic Bruscoâ€“Wyo-Tech Collision Repair Student Scholarship, a $850 award, went to Zachary Gullion, WyoTech, Blairsville, PA. The Domenic Brusco Scholarship is funded by Collision Repair Education Foundation Board of Trustee member Domenic Brusco. The Collision Repair Education Foundation will announce additional scholarship and tool grant winners.
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GEICO Foundation Donates to CREF in CA, FL, DC & NY
The GEICO Philanthropic Foundation recently donated $46,000 to the Collision Repair Education Foundation to provide $6,000 in collision student scholarships and $25,000 in special school grants in 2013. An additional $15,000 will go towards the general fund, the Collision Repair Education Campaign, which supports all Education Foundation activities including the Ultimate Collision Education Makeover grant. The scholarships and school grants will go to support students and schools located in the specific GEICO markets of southern California, southern Florida, Washington, D.C., and New York.
AkzoNobel Opens its FIT Awards for Nominations
AkzoNobel Automotive & Aerospace Coatings Americas is now accepting nominations for the 2013 FIT Sustainability Awards. AkzoNobel launched the FIT Program in 2009 in an effort to bring awareness and create a desire for change within the collision repair industry related to this critical global issue. FIT which is an acronym for Focus, Innovation and Talent, the three key criteria for the award, was established as an expansion of the Most Influential Women in the Collision Repair Industry Program. The FIT award is presented to organizations and institutions that are seeking to advance sustainable business practices within the collision repair industry. Past recipients have included the California Autobody Association, Enterprise Holdings and Keenan’s Autobody. Each of which have been forerunners in their respective areas of the industry pertaining to the issue of sustainability.Nominate by June 30, to email@example.com.
ABRA Awarded Farmers MSO of the Year Award
ABRA Auto Body & Glass has been awarded the Farmers Insurance National MSO Group of the Year. The award recognizes ABRA for its superior customer service, low cycle times, commitment to innovation, company cooperation, overall friendliness and staff professionalism, along with facility appearance. “We are extremely proud of our people, processes, and performance,” said Tim Adelmann, executive vice president of ABRA.
Ford Adds 38 New Parts to Collision Parts Program
Thirty-eight new parts were added to Ford Customer Service Division’s (FCSD) Collision Parts Truckload Program, with the list price reduction averaging 16 percent. Ford says the program plays a key role in helping collision repairers deliver “high-quality, cost-effective repairs” to their customers. The 38 part additions include eight tail lamps, six mirrors, two headlamps, four valances, four wheels, four grilles/GORs/GOPs, three isolators, three fascias, two parking lamps, one radiator and one bumper bracket. The Truckload Program currently covers more than a dozen replacement part types, including bumper fascias, steel bumpers, bumper bars, exterior lighting, mirrors, car and truck radiators, wheels, header panels, grilles/GORs/GOPs, isolators/impact pads/shafts and valances. Ford states that by offering Ford and Lincoln wholesaling dealers competitive prices on bulk purchases of high-volume collision parts, the Truckload Program allows them to compete more effectively against non-OEM copy parts and other parts specified by insurance customers. “The truckload program started 2013 with great sales momentum, after completing a record 2012,” said George Gilbert, Truckload Program manager for FCSD. “We’re competitive with the aftermarket imitation parts, which means more vehicles can be repaired with the parts that were exclusively engineered for their specific vehicle’s make and model.”
Minnesota Senate Passes New Paint, Materials Tax Law
The Minnesota Senate has passed an omnibus tax bill that includes a new section on sales tax for the collision repairers in the state. The Minnesota House passed the bill on April 24. The 354 page bill adds the sale of motor vehicle repair paint and materials to the definition of a taxable retail sale and would impose sales tax is on the gross receipts from the retail sale of paint and materials. The bill provides a long list of materials that would be considered taxable under the law including primer, paint, clear coat, thinner, abrasives, body filler, buffing pads, grinding discs, degreasers, masking tape, sealer, tack cloth, waxes, welding rods and more. If signed into law, the new tax law for collision repairers would begin on June 30.
58 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
16 Arrested in Multi-State Car Theft and Fraud Conspiracy, Dealerships and Individuals Targeted Sixteen people have been arrested on a federal indictment charging 21 defendants involved in a multi-state car theft conspiracy. The conspiracy is alleged to have utilized several different schemes to steal and misappropriate vehicles, commit bank fraud in order to obtain vehicles and obtain insurance proceeds by staging accidents and filing false theft reports, the Claims Journal reported on May 1. The indictment alleges that the defendants stole luxury vehicles, SUVs and pickups from individuals and automobile dealerships in the Eastern District of Missouri, Iowa, Illinois and Indiana, which they transported to the Eastern District of Missouri. They disabled any tracking systems, like OnStar, on the stolen vehicles so that they couldn’t be traced by law enforcement. In addition, it is charged that the defendants themselves, or “straw” purchasers, made false statements on loan applications and submitted fraudulent earnings statements in support to obtain loans to purchase typically high-end vehicles. The defendants used and then sold or disposed of the
vehicles, while the loan defaulted, either immediately or after a short payment history. According to the indictment, the defendants also practiced fraud related to the titling of vehicles, obtaining by false statements apparently legitimate ownership to vehicles they had stolen from individuals. On many occasions, the defendants falsely claimed to have done repair work which wasn’t actually performed on vehicles submitted to their businesses, inducing lien holders to pay the defendants money to avoid the issuance of a mechanics lien. Over 100 vehicles have been fully identified as being involved in the criminal activity, although investigators believe many more were actually involved. Charges include conspiracy, bank fraud, mail fraud and receipt of stolen motor vehicle. If convicted, these charges carry penalties ranging from 5 to 30 years in prison and/or fines up to $1,000,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
The Department of Labor’s Bureau of Labor Statistics (BLS) estimates that the number of shops in the country grew by about 130 shops each quarter since the beginning of 2012. The change appears significant because the number of collision repair facilities has not grown, year over year, in any quarter since the first quarter of
2002, when it was a mere 34 shops nationwide. The latest BLS estimates show that the U.S. industry grew by 402 shops in the first three quarters of 2012 alone and the trend projects more than 500 by the end of the year. The number of shops is still approximately 1500 less than it was in 2008, including the 400 new locations.
BLS Stats Show Increase in Number of Body Shops
Axalta Coating Systems Launches Rival™ Economy Brand
Axalta Coating Systems, formerly DuPont Performance Coatings, has introduced a new single stage polyurethane enamel called Rival™, formulated to provide just the right mix of price and value for the economy commercial transportation segment. Rival™ is designed for dealers, independent shops, fleets and municipalities who want a cost effective finish that features good performance, good color capability, and good appearance at a maximum applied VOC of 3.5 or 2.8 lbs/gal. Designed using mixing toners from an advanced technology platform, Rival™ delivers good hiding with one cross-coat for most colors. The breadth of the Rival™ color offering includes solid and metallic colors to provide the ability to match thousands of commercial fleet color positions. Rival™ is compatible with other Axalta commer-
cial finishes undercoats and offers a two-year warranty to AOQ-Commercial refinisher shops. “We have expanded our commercial finishes product line to give painters the flexibility to choose the best system needed for the job: from a premium quality Imron™ finish to our newest economy segment offering, Rival™, there’s a system specifically designed to deliver the performance and value they’re looking for.” said Fran Cassidy, Axalta Coating Systems commercial segment manager. In addition to providing highperformance products to the commercial segment for more than 40 years, Axalta Coating Systems products have earned more commercial and OEM approvals than any other paint manufacturer. See the website www.pc.dupont. com or call 1.800.438.3876.
Texan Charged with $3.5 Million Dollar Fraud A Duncanville, TX, man faces federal charges in an alleged multi-million dollar staged accident fraud scheme, the Insurance Journal recently reported. The U.S. Attorney’s Office for the Northern District of Texas reported that Leroy Nelson was arrested by federal agents on felony charges, outlined in an indictment returned by a federal grand jury in Dallas. The indictment charges Nelson with six counts of mail fraud and six counts of engaging in illegal monetary
transactions, according to the announcement by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. The indictment alleges that from at least 2005, Nelson and others devised a scheme to defraud multiple insurance companies by submitting false claims for fictitious automobile accidents. As part of the scheme, Nelson promised cash payments to individuals he recruited for them to falsely report to their automobile insurance company that, while driving, they damaged a piece of
equipment that was on the road or that was being hauled by a trailer, according to the federal prosecutors. Nelson provided scripts to these individuals that instructed them on how to report the damage to their insurance company. The U.S. Attorney’s Office alleged that Nelson fabricated the written claims and submitted them to insurance companies. The damaged equipment was described as very technical in nature, such as: a “Remote Aircraft Landing Marker,” a “chemical Pipeline Exam-
iner” or a “Seismographic Probe.” The claims would include a fictitious repair estimate and a photograph of the equipment. The claimed repair expenses would usually be from $16,000 to $19,000. When insurance companies paid the claims, checks would be mailed to a warehouses he owned in Duncanville or to private mail boxes he had opened in Minnesota, Missouri, Mississippi, Washington, Arizona, Connecticut and See Texan Charged, Page 62
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www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 59
CIC Attendees Overwhelmingly Support BMS Data Standard Over EMS but Some Vague on the Differences, EMS is Functionally Obsolete Estimate Management Standard (EMS) is the open, non-proprietary system for electronic communication that was first deployed in 1994, and is now the non-proprietary estimate format used by the three major estimating systems. EMS is analogous to the old dial-up modem communication, and is obsolete. The newer Business Messaging Specifications (BMS) standard is poised to replace the over-extended EMS. It can communicate massive amounts of data in a secure and efficient manner. BMS offers collision businesses the ability to control what data is made available to the recipients. BMS utilizes the very flexible XML (markup language), which provides a consistent internet communication standard, vs. the more limited scope of EMS. As Fred Iantorno, Executive Director of CIECA, has said in the past: “Implementing the BMS will make everyone more efficient and will save the industry money.” BMS offers shops three primary benefits to the Collision Repair industry, according to Michael Lloyd, CIECA’s Vice Chairman: Security—BMS allows users to control data exchanged between its trading partners. Businesses can transmit only the data needed by its suppliers, thereby retaining the confidentiality and security of the data that is in their possession. Scalability—In the same way that the internet was designed to support the communication needs of all users, BMS simultaneously supports the needs of both small and large busi-
VeriFacts & Airbag Solutions Create Restraint Systems Clinic VeriFacts Academy has announced that AirbagSolutions and VeriFacts Automotive have joined together to create three new educational clinics in Restraint Systems. The clinics are now available through the VeriFacts Academy for $29 each. The clinics are designed to give technicians, damage assessors and managers the understanding of how the systems work and the skills necessary for safe repair of restraint systems. Said VeriFacts CEO, Farzam Afshar, “The worldwide recall of airbags demonstrates the importance of safe installation and repair of Safety Restraint Systems.”
nesses. As a result, BMS allows all businesses to exchange data using common data fields or definitions. Regardless of size, BMS can meet the needs of any business. Efficiency—Since BMS follows the XML standard, BMS can operate in any environment—server, mainframe, Microsoft Windows, MAC, etc. BMS eliminates the expense and inefficiencies associated with re-keying data. Once data is part of the BMS record, it does not need to be re-entered. All transaction history is retained, which allows the re-creation of an estimate from a prior time period, according to Fred Iantorno. BMS is “backward and forward” compatible, meaning that new releases and maintenance are easily implemented, providing a lower cost of operation. Participants at the April Collision Industry Conference (CIC) expressed a clear opinion that it’s time for information providers and others accessing shop estimate data to convert from the EMS standard to the BMS standard. A poll of more than 200 CIC attendees at the Phoenix meeting found that 84% supported such a move, however a similar poll at the CIC meeting in January found only one in three CIC attendees said they actually understood the key difference between the two standards. Education participants about the two standards has been led by Data Privacy Committee chairman Tony Passwater, who said the change could have significant impact for shops, insurers, parts suppliers and other industry vendors.
Passwater noted that while the older EMS standard transfers all data from the estimate—including customer, vehicle, parts and labor information—the BMS standard provides shops with more control over what data gets shared, thus making it easier for them to protect the privacy of data for customers, business partners and themselves. The current EMS standard can only transmit all the estimate data at once, no matter how little information is wanted or needed. The new BMS standard has the ability to transmit only the specific data necessary to get the particular task accomplished, such as order a part, or notify a car rental company. The BMS is also a more secure message which provides a confidential data exchange. A parts vendor, for example, can be sent just the vehicle information and parts list—not the customer’s name, address and phone number. A rental car company or CSI provider doesn’t need every line item of the estimate. Passwater said of the industry’s continued use of EMS, “There’s just
unnecessary personal and business data that is being transmitted and captured by other parties that’s not necessary.” He pointed out that EMS, which was developed in 1994 and not updated in over a decade, lacks standardized transfer of email addresses or cell phone numbers, which weren’t as ubiquitous back then. While some information providers have moved to BMS for some or all data transfer, the vast majority of transactions are still handled through EMS, Passwater said. By the end of Passwater’s presentation, 84 percent of CIC attendees said they had a better understanding of the key differences between EMS and BMS and that same percentage said information providers should move to BMS and eliminate EMS. That change, and the elimination of EMS entirely should happen quickly, according to CIC attendees; one-third said it should happen in the next six months, another third said it should happen in a year, and 22% said within two years seems reasonable. Only 10% said EMS should never be eliminated.
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uParts Gets $2M in Financing
uParts, Inc. an independent cloud-based company which indentifies, locates, and procures automotive parts, has announced completion of $2M in financing led by GRP Partners and other lenders. “It is astounding that in the year 2013, repair facilities are [still] placing their part orders using the phone & fax machine” said Alex Adegan, uParts’ Founder, President & CEO. “Can you imagine faxing a list of your destination cities to airlines, then waiting for them to call back with possible routes, pricing and availability? Our powerful and intuitive platform solves this problem by allowing all part orders to be placed with a single click.”
60 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
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CARFAX Hit by $50M Federal Lawsuit Filed by 120 Automotive Dealerships The owners of 120 auto dealerships have filed a federal lawsuit against Carfax Inc., alleging that the vehicle history reporting company engages in anti-competitive practices and violates antitrust laws. The suit, filed in U.S. District Court for the Southern District of New York, seeks damages of more than $50 million. It also alleges that Carfax, through exclusive agreements with auto companies and popular classified auto Web sites, is “monopolist in the sale of vehicle history reports.” Larry Gamache, a Carfax spokesman, said the company is “not able to comment” on the suit. Carfax is a unit of R. L. Polk & Co. In an interview with media last December, Gamache said Carfax draws customers because it works hard to build its brand and deliver a quality product. “We have to prove over and over again that the Carfax vehicle history report is the vehicle history report of excellence,” he said. “And if we don’t do that, our partners are free to choose alternatives.” The Automotive News article was about how some dealers were angered by Carfax’s success as the dominant used-vehicle history reports provider. The lawsuit’s plaintiffs include
dealership owners from California to Vermont. Their attorney, Leonard Bellavia, a partner at Bellavia Blatt Andron & Crossett in Mineola, NY, says more plaintiffs are expected. “I have about 25 or 50 more dealers that have sent paperwork expressing a desire to join the suit,” Bellavia says. The lawsuit alleges that Carfax provides “cash or noncash marketing support” to auto manufacturers and to classified sites Autotrader.com and Cars.com as part of exclusive agreements that shut out its competitors. The suit also alleges that Carfax charges dealers “a significantly higher price” for its vehicle history reports than other providers charge. Dealers typically pay $16.95 per report or a flat monthly fee for an unlimited number of reports per dealership location, the suit alleges. “The monthly fee ranges from $899 per dealership location for some dealers to $1,549 per dealership location for other dealers,” depending in the number of vehicles in the dealership’s inventory, according to the suit. It alleges that Carfax forces dealers to buy its vehicle history reports as a result of its exclusive agreements with 37 of 40 manufacturer certified pre-
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owned programs. Virtually all of the agreements require dealers to provide Carfax reports as a condition of participating in the programs, the suit alleges. Also at issue is that Carfax has exclusive agreements with Cars.com and AutoTrader.com. Those agreements stipulate that dealers who list used vehicles for sale on those sites can only post vehicle history reports from Carfax, according to the suit. Ten firms are approved on the National Motor Vehicle Title Information System, a national data base of vehicle title information to which 41 states contribute, according to the U.S. Department of Justice Web site. Carfax’s main competitor is AutoCheck, owned by Experian Automotive Inc. Mentioned, but not a focal point of the suit, is the alleged inaccuracy found in some Carfax reports. Bellavia says that is a concern of dealers and can be cured as a byproduct of a “free marketplace.” The lead plaintiff in the suit is Maxon Hyundai-Mazda in Union, NJ. Its dealer principal, Mike Ciasulli, who is allegedly furious with Carfax but subscribes to the reports as a condition of the Hyundai certified used-vehicle program in which he participates.
Hermanek and Ricciotti Join CREF Board of Trustees Sr. VP and Chief Client Officer Don Hermanek of Insurance Auto Auctions and National Sales Manager Renee Ricciotti of 3M have joined the Collision Repair Education Foundation Board of Trustees. The Board of Trustees consists of industry members who provide guidance in the organization’s efforts to support secondary and post-secondary collision students nationwide.
CREF Seeks Employers For Summer Students
Collision industry businesses seeking secondary or post-secondary collision students for summer employment are asked to contact the Collision Repair Education Foundation, who will communicate the employment opportunities to local collision instructors and students. Collision industry members seeking collision students for summer employment should email firstname.lastname@example.org with the position details, location, and contact person.
Allstate’s Profit Dips 7.4%, Expands Esurance
Allstate, the largest publicly traded U.S. car and home insurer, said firstquarter profit fell 7.4 percent as costs tied to the most expensive storms rose. Superstorm Sandy, which lashed New York and New Jersey six months ago, cost the industry $18.8 billion, according to trade group Insurance Information Institute. Chief Executive Officer Tom Wilson, 55, has been raising prices for some coverage and changing policy terms to improve underwriting profit at Allstate’s main unit, which sells residential and auto coverage under the insurer’s namesake brand. That’s helped boost returns as he seeks to generate better results at a life unit pressured by low interest rates and spends to expand online car-insurance seller Esurance. “The Allstate brand is starting to rebuild,” Wilson said. Premium revenue in Allstate’s property and liability business rose to $6.77 billion from $6.63 billion a year earlier as the company added customers at Esurance.
ABRA Has Acquired 23 WA Precision Collision Centers
ABRA Auto Body & Glass announced that it has acquired 23 Precision Collision Auto Body repair centers in the Seattle metro area and throughout Washington State. The deal marks the company’s entry into the Northwest region. Eighteen of the repair centers are centrally located in the Seattle metro area, with five additional centers in the cities of Burlington, Mount Vernon, Wenatchee, Kennewick and Spokane. “This is a game-changing acquisition for us,” says Duane Rouse, president and CEO of ABRA. “We have an extremely strong management team, a scalable integration platform, a fantastic brand, and extensive expertise and experience in the collision repair industry. Acquiring these repair centers is just one more step in ABRA’s ongoing growth strategy to better serve our customers and insurance partners.” Greg Wright, president of Precision Collision, will join the company and assume a leadership role in the region.
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Progressive Sues Other Insurers For Alleged Patent Infringement Progressive Insurance has filed patent-infringement lawsuits against State Farm Mutual Automobile Insurance Co. and Hartford Financial Services Group Inc. over auto coverage and premiums based on vehicle usage.
According to the lawsuit, the insurers are infringing three patents that relate to vehicle monitoring and ways the monitoring is used to determine insurance rates. Both complaints were filed in federal court in Cleveland.
Continued from Page 59
Louisiana. Nelson then directed that the mail be forwarded to his address on Explorer Street in Duncanville. If convicted, each of the mail
fraud counts carries a maximum statutory penalty of 20 years in federal prison and a $250,000 fine; each of the counts of engaging in an illegal monetary transaction carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine.
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