AASP-MN News April 2022

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CONTENTS Vol. 31 No. 4

AASP-MN News is the official publication of the Alliance of Automotive Service Providers, Minnesota, Inc. 1970 Oakcrest Ave., Suite 102 Roseville, MN 55113 Phone: 612-623-1110 Fax: 612-623-1122 email: aasp@aaspmn.org website: aaspmn.org. To keep its readers better informed, AASP-MN News allows its columnists to fully express their opinions. All views expressed are not necessarily those of the publication. AASP-MN News is published by Thomas Greco Publishing, Inc. ©2022 All rights reserved. Cover image www.istockphoto.com.

AASP of Minnesota is an association of independently-owned automotive service businesses and industry suppliers dedicated to improving the state’s automotive service industry and the success of its members.

AASP-MN BOARD MEMBERS 2022 - 2023

PRESIDENT Jesse Jacobson IMMEDIATE PAST PRESIDENT Tom Archambault SECRETARY-TREASURER Mike McLynn COLLISION DIVISION DIRECTOR Travis Doyle MECHANICAL DIVISION DIRECTOR Jeremy Nordgren ASSOCIATE DIVISION DIRECTOR Loren Feldkamp COLLISION SEATS Lee Schlosser Aaron Swanson MECHANICAL SEAT Dan Gleason

STAFF

PRESIDENT'S MESSAGE..................................................................4 The Road Ahead

by Jesse Jacobson, AASP-MN President LEGISLATIVE UPDATE.....................................................................5 Strength in Numbers

by Sam Richie & Shannon K. Mitchell, AASP-MN Lobbyists LOCAL NEWS..................................................................................6 D.E.G. ESTIMATING TIPS .................................................................7 COMPLETE HEALTH, ENVIRONMENTAL AND SAFETY SERVICES (C.H.E.S.S.) .....................................................................................10 OSHA Won’t Ask for a Credit Card

by Janet L. Keyes, CIH and Carol A. Keyes, CSP FEATURE.........................................................................................14 Don’t Let “Prevailing Rates” Stop Your Shop From Being Profitable!

by Chasidy Rae Sisk AASP-MN ASSOCIATE MEMBER DIRECTORY ..................................18 CASH IN ON YOUR MEMBER BENEFITS! .........................................22 Aramark: The Partner You Need to Do Your Image Proud AASP-MN MEMBER BENEFITS ........................................................22

EXECUTIVE DIRECTOR Linden Wicklund OFFICE ADMINISTRATOR Jodi Pillsbury PUBLISHED BY: Thomas Greco Publishing, Inc. 244 Chestnut St., Suite 202 Nutley, NJ 07110 PHONE: 973-667-6922 FAX: 973-235-1963 PUBLISHER Thomas Greco | thomas@grecopublishing.com SALES DIRECTOR Alicia Figurelli | alicia@grecopublishing.com

UPCOMING EVENTS April 19 "Shop Housekeeping and its Effects on Your Business" Webinar Visit aaspmn.org to register

May 11 "Common Paint Booth Exposures" Webinar Visit aaspmn.org to register

June 15 27th Annual AASP-MN Golf Outing Majestic Oaks Golf Club Ham Lake, MN

ADVERTISERS’ INDEX A-Con Recycling........................................... 6

Morrie’s .......................................................... 21

EDITORIAL & CREATIVE COORDINATOR Alana Bonillo | alana@grecopublishing.com

Aramark.......................................................... 11

MPA.................................................................. IBC

CBIZ.................................................................. 17

Proven Force........................................................ OBC

MANAGING EDITOR Chasidy Rae Sisk | chasidy@grecopublishing.com

Dentsmart....................................................... 16

Reliable Automotive Equipment..............12-13

Inver Grove Honda/Inver Grove Toyota.... 5

Rosedale Chevrolet...................................... 9

Jack McClard................................................. 9

Spanesi............................................................ 20

Keystone......................................................... 7

Straight & Square....................................... 4, 19

Maplewood Toyota...................................... 19

Toyota Group................................................ 21

Mopar Group ................................................ 11

Valspar Refinish............................................ IFC

OFFICE MANAGER Donna Greco | donna@grecopublishing.com PRODUCTION COORDINATOR Joe Greco | joe@grecopublishing.com www.grecopublishing.com

AASP-MN News

April 2022 | 3

PRESIDENT'S MESSAGE

The Road Ahead

By Jesse Jacobson, AASP-MN President

2022 will be a busy year for the Alliance and the automotive industry. By now, you’ve probably read about and have possibly met the new executive director, Linden Wicklund. Before we start talking about the present, I would briefly like to take a step back to last year when Judell notified the Board of her retirement.

We knew that Judell set a high standard and it would be hard to find someone to fill her shoes. I’ll admit, I was a bit anxious. We know about hiring staff for our trades, but not an executive director for an association. Being the planner that Judell is, she had the succession plan, timing and budget all laid out for the Board. She was wise to advise us to form a hiring committee and hire a consultant. There were many meetings to select a consultant, create the requirements, review applications, first round of interviews, personality assessments, second round of interviews and final selection. Through all of that, Judell kept us and her retirement on track. Those of us who were on the Executive Director Search Committee last year and current Board members got a good understanding of all the different tasks that the executive

director and the Alliance, as a whole, are responsible for.

We strongly feel that Linden is the right fit for the job. She embodies all of the Alliance’s core values: appreciation, collaboration, commitment, connection, focus, integrity and professionalism. Those of you that know me know I love spreadsheets. Linden started her second and final interview by handing out a spreadsheet that laid out what the first six months would look like under her leadership. As you can imagine, we were impressed. The search committee was a tremendous learning opportunity that only being involved in the Alliance could have provided.

Now, to the present. Linden is getting up to speed on the internal workings of the Alliance. She is fully immersed in committee meetings, strategic planning, race for education, the annual conference and the golf outing. She will be looking forward to meeting you at one of these upcoming events or meetings, so please make plans to attend!

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AASP-MN News

LEGISLATIVE UPDATE

Strength in Numbers

by Sam Richie & Shannon K. Mitchell, AASP-MN Lobbyists

The 2022 legislative session is now in full swing with a lot of debate over the (recently updated) $9.25 billion projected surplus. Over 5,000 bills have been introduced this biennium, and few will receive hearings before the end of March (the deadline for non-finance bills to be heard).

As a reminder, AASP-MN is laying the groundwork for legislation that would require insurance providers to accept or reject a submitted claim within three days. This will likely be a two-year campaign.

Alongside the work at the legislature, AASP-MN is monitoring the issue of “short-pay,” which is becoming a more frequent and severe occurrence for members.

Insurance companies not fully reimbursing for the repair and collision work necessary to ensure vehicles are safe has always been of concern, but recent factors have exacerbated the problem. There are slow supply chains and workforce shortages coupled with wage increases that are driving up costs. To make matters worse, insurance companies are increasingly refusing to cover repairs that were previously covered (or countering with significantly smaller amounts).

There is strength in numbers and action AASP-MN members can take! We will be putting out a best practices

sheet for documenting and handling these challenging issues on a case-by-case basis. Also, we encourage members to consider investing in BillableGenie to best capture the necessary cost of repairs. BillableGenie is the newest preferred provider in the AASP-MN member savings program line-up.

We also want to tackle the problem more systemically, which requires documenting the frequency and severity of this practice. To that end, we are asking that you share your stories with AASP-MN by filling out the short-pay form or contacting AASP-MN’s Executive Director Linden Wicklund at (612) 623-1110 or linden@aaspmn.org.

Establishing that this is a pattern is a critical step to address it. Collecting and synthesizing these trends also provides shop owners with anonymity and strength in numbers. If you are not a member, becoming a part of AASP-MN is another way to help fight this, as we are dedicating time and resources to pursuing a solution that will benefit all shops.

See how documentation and strength in numbers can bring out a win - bit.ly/MNDOC_GEICO

AASP-MN News

April 2022 | 5

LOCAL NEWS AASP-MN Announces 2022-2023 Board of Directors April marks the beginning of service for the 2022– 2023 AASP-MN Board of Directors. The Alliance is pleased to welcome new board members Dan Gleason (Pro-Tech Auto Repair, Corcoran) and Aaron Swanson (LaMettry’s Collision, Carver). They join other members of the Board, which include: • Jesse Jacobson, Heppner’s Auto Body, Woodbury – President • Tom Archambault, BLVD Autoworks, St. Anthony – Immediate Past President • Mike McLynn, Automotive Electric, Grand Rapids – Secretary/Treasurer • Loren Feldkamp, Lube-Tech & Partners, St. Paul – Associate Division Director • Travis Doyle, Arrowhead Auto Body, Duluth – Collision Division Director • Jeremy Nordgren, Nordgren Automotive, Medina – Mechanical Division Director • Lee Schlosser, Autoworks Collision Center, Rockford – Collision Seat

For additional information, see page 8 or visit the association’s website, aaspmn.org. You may also email the Alliance office at aasp@aaspmn.org or call (612) 6231110 or (800) 852-9071.

Sponsorships Support Alliance Educational Programs & Other Activities in 2022 Recently, AASP-MN asked for program sponsorships from its Associate members and other industry vendors to help support educational programs and other activities in 2022. Sponsorships help the Alliance deliver quality programming at an affordable price to members.

To date, the following companies have made sponsorship commitments: Platinum Sponsors LKQ Minnesota Lube-Tech Gold Sponsors AASP National Auto Value /APH CBIZ Elite Worldwide FinishMaster United Fire Group

AASP-MN also extends a sincere thank you to this year’s outgoing board members: • Matt Feehan, Fix Auto, Brooklyn Park • Tony Newman, Dale Feste Automotive, Hopkins

Silver Sponsors 3M Automotive Aftermarket aaa Auto Parts Aramark Axalta Coating Systems Colonial Life Dentsmart PDR Enterprise Rent-a-Car Heartman Insurance NCS/Single Source O’Reilly Auto Parts PAM’s Auto PPG Sherwin-Williams Shop Monkey Suburban Chevrolet

Volunteers are the heart and soul of the Alliance and we appreciate the leadership and commitment of these dedicated members.

27th Annual AASP-MN Golf Outing Announced The 27th Annual AASP-MN Golf Outing will be held Wednesday, June 15, 2022 at Majestic Oaks Golf Club in Ham Lake. All collision repair and auto service industry professionals and suppliers are invited to attend the event to enjoy a day of golfing and socializing with industry peers.

Play will begin at noon, followed by dinner and an awards presentation. The cost to participate is $100 per golfer or $400 per foursome. Golf holes are also available to sponsor for $350 each.

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Bronze Sponsor C.H.E.S.S

Minnesota Careers in Auto Repair & Service (MNCARS) MNCARS is a non-profit organization established in 2016

by AASP-MN. Its sole purpose is to promote careers in the automotive industry, recruit young people into the state’s college-level automotive service and collision repair programs and, ultimately, into industry workplaces.

Take advantage of the resources in the MotorMouth toolbox at carcareers.org/ motor-mouth/. Get out and get active in your local community promoting industry careers!

AASP-MN News

ESTIMATING TIPS OEM Electronic Parts Catalogues (EPC) Links – The DEG has compiled a free list of online OEM Electronic Parts Catalogues. This reference tool can assist repair planners to locate OEM part schematics, part numbers and pricing for parts missing from the estimating database.

Please note, this is NOT a substitution to verify actual parts, availability and pricing from your local authorized OEM dealer. https://degweb.org/oem-parts-epcs-free Systems: Masking and Protecting High Voltage Components – The following DEG inquiries from each of the information providers responds to masking/capping/ protecting High Voltage components.

CCC Inquiry 19475 • Wrapping components that are removed from vehicle would be considered Not Included.

• Capping/Plugging and/or Securing of disconnected Tubes, Lines, Hoses and/or Wiring is an OEM recommendation and is Included in the estimated work time for the related operation.

Audatex Inquiry 19474 The labor time to mask and/or protect electrical components is not included in our labor times. If labor time is needed for this, it must be considered manually at

user discretion. No change warranted at this time.

Mitchell Inquiry 19476 After review of available information, the requirement to mask HV Electrical Components is not outlined in the manufacturers’ service procedures and has not been accounted for in the labor allowance.

Audatex: Refinish Time on Welded Panel Seam – Page 172 in Audatex DBRM Section 5-2 FAQs… “Question: Does Audatex include time to refinish the welded areas?

Answer: Audatex refinish labor provides a refinish allowance for the entire panel selected. This includes refinish of the welded seam. Any refinish to adjacent panels is not included. Additionally, the welded area is referred to as the immediate seam area. We do not define the immediate seam area with a linear measurement. Anything beyond the immediate seam area falls under the Labor exclusions.”

CCC/MOTOR: Rear Body Panel Trim NOT Included with Quarter Panel Replacement – DEG Inquiry 19739 response from CCC/MOTOR states, “Rear Body Trim would not be included with R&R of Quarter Panel.”

Note: The estimating databases are all intended to be used as a GUIDE ONLY - it is important to remember that the auto body professional performing the repair is in a position to thoroughly inspect, diagnose and identify the methodology and their unique cost of the vehicle damage repair. You can view these tips and others on the DEG website, DEGWEB.ORG.

AASP-MN News

April 2022 | 7

Registration deadline Registration June 5!

Deadline June 5th!

Fees Include: • • • • •

18 Hole Green Fees Golf Carts Prizes Social Hour & Dinner Contests ⇒ Closest to the Pin ⇒ Longest Putt ⇒ Longest Drive ⇒ and MORE!

27th Annual AASP-MN Golf Outing Wednesday, June 15, 2022 Majestic Oaks Golf Club 701 Bunker Lake Blvd.

Ham Lake, MN 55304

Four Person Scramble Check-in 11 - 11:30 am 12pm Shotgun Start

$100 per golfer/$400 per team

-------------------------------------------------------------------------AASP-MN 27th Annual Golf Outing Registration June 15, 2022 – Majestic Oaks Golf Club Name:

____________________________________Company:

Address:

_________________________

_________City: __________________________

Phone:____________________________ Fax:

____________________

Zip:____________

__

Email: ____________________________

1st Player:

Company: __________________________________________

2nd Player:

Company: __________________________________________

3rd Player:

Company: __________________________________________

4th Player:

Company: __________________________________________

Payment Options: _____Check enclosed. Payable to AASP-MN _____Credit card (Visa, MasterCard, Discover & American Express accepted)

Note: We add a 3% surcharge to all credit card payments. This surcharge is not greater than our total cost of accepting credit cards. Surcharge does not apply to debit cards.

Credit card #___________________________________________Expires___________CVC #_________ Billing address:________________________________________________________________________ Return by June 5 to: AASP of Minnesota, 1970 Oakcrest Ave., Suite 102, Roseville, MN 55113 Phone (612) 623-1110 - Fax (612) 623-1122 – email: aasp@aaspmn.org

8 | April 2022

AASP-MN News

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AASP-MN News

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COMPLETE HEALTH , ENVIRONMENTAL & SAFETY SERVICES (C.H.E.S.S.)

OSHA Won’t Ask for a Credit Card

by Janet L. Keyes, CIH and Carol A. Keyes, CSP

You get a letter in the mail: “If you don’t have this year’s OSHA posters up, you could be fined thousands of dollars.”

A package arrives for you: “OSHA will fine you thousands and thousands of dollars if you aren’t in compliance. But you can prevent that by using our OSHA compliance program. There’s absolutely no risk. If you don’t like it, return it in three days for your money back.”

An email: “We make OSHA compliance easy. Save yourself thousands of dollars in fines by subscribing to our OSHA compliance service.

A phone call: “I’m with the Minnesota Occupational Safety and Compliance Office, calling to provide you with OSHA’s required written hazard communication program.

The cost is $1,000. We can accept credit card payments.

If you don’t pay, OSHA can inspect you, assess heavy fines and even shut down your shop.”

In person: “I’m with OSHA Government Services, and I was just in your shop to do a compliance audit. I found some problems. If you agree to fix them, we’ll give you a significant reduction in the penalty if you pay it now. If you don't pay it in time, penalties will increase tenfold.”

Scams. All of these are scaremongering scams.

All of them have a kernel of truth embedded in their coatings of lies.

You are supposed to post certain labor posters, including OSHA’s Safety and Health on the Job poster.

The purpose of the posters: to ensure employees know their rights. But the posters are available for free from the Minnesota Department of Labor and Industry. They don’t change often – the only one that may go out of date pretty often is the minimum wage poster.

Want to know how many companies were cited for not having the Job Safety and Health poster in Minnesota in the last 22 years? Nine. The penalties: $0 to $1,000.

The most recent was 13 years ago, an inspection because of a complaint. Yes, you should have the poster. But to get them, go to dli.mn.gov, not to your wallet. There is also a link to posters in the Resource Library of the Alliance's website, aaspmn.org.

OSHA does require certain written compliance programs. For instance, you need to have a written hazard communication program, describing how you will ensure employees are trained on chemical hazards, how you will make sure containers are labeled and how you will handle safety data sheets. A manual that you purchase won’t train your employees or keep your safety data sheets. At best, it may offer an easy-to-read version of the standard. But OSHA offers that, available at no

10 | April 2022

cost by looking for the A-Z index on OSHA.gov and on the Free Resources page of the Safety and Health at Work section of Minnesota OSHA’s website, dli.mn.gov.

OSHA will never offer to sell you any type of safety and health program. They just aren’t in the business of doing that. The OSHA and MNOSHA websites will provide you with free guides and templates from which you can develop your own programs. But asking for payment? No. OSHA will do enforcement inspections. They don’t call them compliance audits and it would be rare for an inspection to be as in-depth as the term audit implies. But the safety and health compliance officers will not start the inspection by wandering around your shop. They will show up at the front door, ask for an owner or manager, present their credentials and describe why they are there.

If compliance officers find problems, they will usually tell you what those were before they leave your shop.

But they will never ask for penalty payment then. They will discuss penalties in general during this closing conference, but any penalties won’t be levied until you receive the citation by registered mail. They don’t accept credit card payments – penalties have to be paid by check or money order payable to “Minnesota Department of Labor & Industry, MNOSHA.” OSHA penalties can be steep. An Ohio paint company is currently contesting $709,960 in penalties. But they had one employee killed and nine injured in an explosion.

OSHA believes the company knew the hazard and knew how it should have been controlled, but willfully chose to ignore OSHA’s requirements. The big guns come out for willful and repeated violations or for violations that are not abated. Penalties for those can go as high as $70,000 per violation or, for failure to abate, up to $7,000 per day per violation. But those are uncommon.

Serious violations, those that could cause death or serious harm, can carry penalties of up to $7,000 in Minnesota. But MNOSHA reduces the amount up to 95 percent for small companies that have shown an effort to provide a safe workplace and don’t have a recent history of violations. For small companies, penalties are more likely to be less than $1,000 than in the thousands of dollars.

OSHA can go to court to compel a company to stop hazardous activities. But they can’t shut down your shop completely. In 2019, Minnesota OSHA asked the court to order Water Gremlin to stop lead casting work because employees were bringing lead dust home, harming their children. When the remedial action wasn’t complete

AASP-MN News

within three days, OSHA had to go to court again, to extend the order.

Simply telling a shop to shut down?

It doesn’t happen.

It's in your best interests to comply with OSHA requirements.

A safe workplace is more efficient and costs you less in the end. But the requirements can be confusing for someone who doesn’t speak the language – just as the language of car repair is confusing to me.

Keep your credit card in your pocket. Check credentials. If you get an odd call from someone claiming to be from OSHA, ask for their number to call them back.

Then check with us. And if you think you were scammed, report it to ftc.gov/complaint, so you help the next business owner avoid your mistake.

AASP-MN News

April 2022 | 11

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FEATURE

Don’t Let “Prevailing Rates” Stop Your Shop From Being Profitable!

A customer drops off their vehicle to be repaired.

After disassembling, scanning and/or blueprinting the car, the shop writes a thorough estimate that accurately portrays the work that needs to be performed to safely and properly restore that vehicle to its pre-accident condition. It’s time to begin the repair…or is it?

In many instances, shops encounter delays and problems in the process through the interference of the third-party bill payer who rebuts that estimate, refusing to pay for certain procedures or even arguing that the shop’s hourly rate isn’t in line with the market’s “prevailing rate.”

Repairers then face several options: • Explain why the remainder of the repair is needed and bill the customer, • Neglect to perform the work and contend with future liability issues or • Absorb the costs of properly repairing the vehicle and subsequently sacrifice profitability.

Insurers consistently use the idea of “prevailing rate” to suppress Labor Rates around the country and underindemnify consumers, but what is a “prevailing rate,” how does it affect safe repairs and how can shops combat this concept to protect their customers and their businesses?

“The ‘prevailing rate’ is an insurance term that is supposedly a snapshot of the existing rates in a specific marketplace at a particular time,” explains Aaron Schulenburg, executive director for the Society of Collision Repair Specialists (SCRS). “Insurers are only

14 | April 2022

able to set market rates through acceptance. If repairers establish – and stick with – their Labor Rates based on a solid understanding of the true costs of labor, supplies, specializations and so forth, that’s how prevailing rates should be determined; however, if the majority of shops in that market accept externally dictated rates, carriers perceive that as the prevailing rate instead.”

“Nobody has a clue what a ‘prevailing rate’ is,” states attorney Erica Eversman (Vehicle Information Services). “Insurers have been able to self-define this term generally, typically setting them based on a survey conducted in a particular geographic region of all shops. Unfortunately, over time, insurers have routinely utilized their negotiated DRP rates to determine what they consider to be the prevailing rate. In actuality, the prevailing rate should be determined based on the ‘fair market rate,’ which is the rate that an ordinary consumer would pay to repair their vehicle without using insurance to pay, so prevailing rate calculations should be based on retail or posted door rates, NOT contract rates which are given at wholesale price in exchange for that unspoken promise to direct more work to the shop.”

Dave Luehr (Elite Body Shop Solutions) agrees: “Honestly, there’s probably more mystery than answers around this topic since they refuse to share information on how they came up with that data, making it difficult to identify which factors go into that determination. The most obvious of those factors is the inclusion of DRP shop rates; insurer surveys specifically ask shops about the rate you charge ‘us’ which implies

AASP-MN News

by Chasidy Rae Sisk

that they are unfairly including contracted rates in their determination of prevailing rates. That negatively impacts the entire market.”

Despite the fact that collision industry experts typically recognize the artificial nature of “prevailing rates,” some shops not only permit a third-party entity to mandate their prices - they also allow insurers to dictate which processes are performed based on payment; however, at the end of the day, the shop is still liable for the safety of those repairs, regardless of whether an insurance company decides to fully indemnify the vehicle owner.

“The shop’s job is to safely repair that vehicle and to get paid for it, and the insurer’s job is to pay for that repair,” claims Sam Valenzuela of National AutoBody Research (NABR). “Insurers reject payment based on whether something is a common practice in your market, but who cares what the shop next door is doing? Yes, some shops repair cars correctly anyway and then try to figure out how to get made whole, but that’s not sustainable. It’s not the shop’s job to pay for the repair.”

Acknowledging that “the economic influences insurers hold over repairs creates a terrifying situation,” Eversman observes, “While some shops insist on performing the procedures necessary to restore the vehicle to its pre-accident condition and ensure it’s safe for the customer to drive, shops that feel beholden to an insurer often neglect to adhere to every required process merely because the insurer refuses to pay for it. Often, that results in unsafe vehicles returning to the road, endangering not only its occupants but everyone else that encounters them while driving.”

Luehr takes a more assertive stance on the matter of “prevailing practices.”

“I want to put this idea to rest: There should be no correlation. If you’re being influenced by Labor Rates or anything else to perform an unsafe and improper repair, you shouldn’t accept the job! The idea that the insurance company made you do something is a bunk idea. Shops need to take personal responsibility – either take the job or don’t. There’s no excuse for not repairing a vehicle correctly. We can’t blame the insurance company.

Unless the shop participates in a DRP, they’re under no obligation to perform the repairs at the so-called prevailing rate. We live in a free enterprise country where we can charge what we want. Repair contracts are between the shop and the customer; the insurer merely pays the bill.”

“Vehicles today are highly sophisticated with complex safety systems, and the manufacturers’ engineers provide explicit instructions on how they must be repaired,” Schulenburg contributes. “There is a right way to fix the vehicle, and if the vehicle isn’t repaired according to those instructions, it may in fact be repaired the wrong way. Of course, a range of practices exists within any market, but if the most common approach to a repair doesn’t adhere to the engineer’s specifications, the wrong way doesn’t become right simply because it’s the prevailing practice in that marketplace. Insurers cannot

apply that concept to repair practices and procedures because there’s often only one way to correctly perform a repair.”

Once a shop commits to the practice of properly repairing vehicles according to those OEM recommendations and requirements, they must then decide how to recover the investment they’ve made into the repair for which the consumer was not fully indemnified.

“If the customer’s insurance carrier doesn’t cover the full cost of a proper repair, something suffers, whether it’s the shop’s profitability, the customer’s wallet when they cover the difference or the customer’s safety,” Valenzuela points out. “None of those options are acceptable because either the shop or the consumer (or both) ultimately bear the burden. Shops need to receive adequate compensation, or there won’t be an industry left to fight for!

“The Labor Rate topic has reached the crisis stage, worsened by the recent massive inflation,” he continues.

“Costs and expenses have increased, but since body shop rates aren’t growing as fast, those problems are being magnified, and shops are at the point where they just can’t keep charging or accepting low, unprofitable rates. Real adjustments have to be made so they can continue safely and correctly repairing cars for their customers.”

Record-high inflation is exacerbating these concerns and creating even more problems for shops that simply want to do the right thing for their customers.

“Every market is facing this downward pressure on Labor Rates, and it’s even more exacerbated today due to the excessive inflation of material costs, utilities, even commercial business insurance,” Schulenburg shares. “All businesses, not just those in our industry, are struggling with inflation, but in most industries, the business passes the cost along to the customer. Collision repair shops are in a strange position where the bill payers put pressure against the normal process of adjusting for increasing costs.”

Well, what can shops do to ensure they are being properly compensated (and consumers are being fully indemnified)?

“Labor Rates shouldn’t be determined whimsically; shops need to work with their CPA to determine their true cost of doing business, post their rates based on that data and stand by their decision,” according to Schulenburg. “Far too many businesses are limited by what they believe they can’t accomplish. They think that they have to accept what the carrier proposes because they fail to realize that others don’t, but in reality, other shops operate under a business model whereby they insist on completing the repair properly and reject work that doesn’t fit into that model. These shops have invested the time and energy into developing consumer education initiatives, and they are armed with the knowledge to help their customers receive adequate

AASP-MN News

continued on pg. 16

April 2022 | 15

FEATURE continued from pg. 15

reimbursement. It isn’t easy, but shops that have done this successfully prove it’s possible. Stop believing you’re the ‘only one.’”

Eversman encourages “anyone who is dissatisfied with how a claim is resolved to use Right to Appraisal as a way of gathering substantiated evidence that demonstrates the insurer’s deliberate attempt to underpay the claim and serves as proof that insurers are treating consumers unfairly.”

Reiterating that “prevailing rates” is not a measure of shops’ posted rates, Valenzuela stresses, “Shops are just playing the carrier’s game when they adhere to that language. In 2022, it’s time to change the game by thinking and talking in terms of ‘market rates:’ the amount a customer will pay out of pocket to repair their car without the involvement of an insurance company. That’s the best indication of what the marketplace will accept or reject.”

In order to understand what the marketplace will accept, pricing transparency is imperative.

“We created LaborRateHero.com so shops can show the world what their labor price is, just like a gas station on the corner shows everybody what their price of gas is,” Valenzuela says. “Shops need to start thinking differently and determine customer-driven Labor Rates, instead of insurance-driven rates. Although filling out Labor Rate surveys alone won’t directly solve the underpayment issues, it does provide a clear indication of market rate which shops can use to demonstrate to the customer that their rate is fair and reasonable, that the insurer isn’t covering the full cost of an adequate repair and to help the customer get reimbursed for any additional out of pocket expense. The best protection is to do the job right and get paid for it. Many benefits will flow from there. Shops need to stop paying for repairs

16 | April 2022

out of their own pocket and start demanding to be paid what’s necessary to fix the car, even if the customer needs to pay the balance. If the insurer won’t pay and the customer won’t pay, then the only one left to pay is the shop, and that’s just not sustainable nor is it protecting anybody.”

Unfortunately, shops often don’t know how to determine what they should be charging.

“Begin by understanding your true costs and determining what your Labor Rate should be based on overhead expenses, cost of labor, etc.,” Luehr recommends. “What Labor Rate is necessary in order to correctly conduct your business? Next, look at your shop efficiencies and remove wasteful activities from your system. Our industry needs to get better at repair planning, and providing accurate documentation will help with obtaining adequate payment. Incorporate OEM repair procedures and utilize estimate-scrubbing software that reminds you to include the items that are often forgotten. I typically find that shops leave $200-$400 on the table per RO, yet they only complain about the Labor Rate. Our industry needs to stop getting so distracted by our problems that we neglect to see the opportunities.”

We’ve established that “prevailing rates” are a fallacy and that consumers deserve proper indemnification from insurers and safe repairs from shops. Additionally, shops should be compensated for the work performed, and their rates should be based on the cost of doing business.

Isn’t it time for shops to pay attention to the numbers and stop allowing insurers to inhibit their profitability?

AASP-MN News would love to hear how your shop collects fair and reasonable rates for the valuable work you perform. Shoot me an email: chasidy@ grecopublishing.com.

AASP-MN News

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AASP-MN News

April 2022 | 17

Shop Here First!

AASP-MN Associate Member Directory 1 Collision Network - Milwaukee, WI 3M Center - St. Paul, MN aaa Auto Parts - Rosemount, MN aaa Auto Parts - East Bethel, MN AASP-MN BankCard Program - Minnetonka, MN A-Con Recycling/A-Condition Wheel Service - Prior Lake, MN Action Auto Parts of St. Paul, Inc. - St. Paul, MN AkzoNobel - No. St. Paul., MN American Glass & Mirror, Inc. - Prior Lake, MN Arcon Solutions, Inc. - St. Paul, MN Assessment Associates International - Minnetonka, MN Auto Color & Industrial Supply, Inc. - St. Joseph, MN Auto Electric of Bloomington, Inc. - Bloomington, MN Auto Nation Parts Department - White Bear Lake, MN Auto Plus Auto Parts - Hopkins, MN Auto Plus Auto Parts - Blaine, MN Auto Plus Auto Parts - Brooklyn Park, MN Auto Plus Auto Parts - Bloomington, MN Auto Value Parts Stores - St. Cloud, MN Automotive Recyclers of MN - Fridley, MN Automotive Training Institute - Linthicum, MD Autoshop Solutions - Apex, NC AutoZone - Memphis, TN Axalta Coating Systems - New Richmond, WI BASF Corporation - Savage, MN Benco Equipment - St. Cloud, MN Blue Rock Refinishing Solutions, LLC - Roseville, MN Boulay Financial Advisors, LLC - Minneapolis, MN Buerkle Honda - White Bear Lake, MN C.H.E.S.S. - West St. Paul, MN CARS Cooperative - Perkins, MN CBIZ - Minneapolis, MN Cintas - Minneapolis, MN Colonial Life - Princeton, MN Cottens' NAPA - Anoka, MN Crow River Glass, Inc. - Hutchinson, MN Dent Impressions - Rogers, MN Dentsmart - Isanti, MN Dorman Products - Colmar, PA Dynotec Industries, Inc. - Jordan, MN Elite Worldwide, Inc. - Rancho Santa Fe, CA Enterprise Rent-A-Car - Eagan, MN Factory Motor Parts - Eagan, MN FinishMaster - Fridley, MN FinishMaster - St. Cloud, MN FinishMaster - Duluth, MN Fix Auto - San Diego, CA Heartman Insurance - Fairbault, MN Heartthrob Exhaust - Litchfield, MN IDENTIFIX - Andover, MN Johnson Supply Co. - Duluth, MN 18 | April 2022

Kukui Corporation - Roseville, CA LKQ - Keystone Automotive - Fridley, MN LKQ - Minnesota - Albert Lea, MN LKQ - Viking Auto Salvage - Northfield, MN Lube-Tech & Partners - St. Paul, MN Maguire Agency - Roseville, MN Mark's Towing, Inc. - Eagan, MN McClard & Associates - Hopkins, MN Mitchell International - San Diego, CA Mitchell1 - Ellisville, MO Morrie's Automotive Group - Brooklyn Park, MN Motor Parts & Equipment - Winona, MN NAPA Auto Parts - Northfield, MN NAPA Distribution Center - St. Louis Park, MN NAPA Distribution Center - Owatonna, MN O'Reilly Auto Parts - Brooklyn Park, MN P.P.G. Automotive Finishes - Stillwater, MN P.P.G. Automotive Finishes - Mitchell, SD PAMs Auto, Inc. - St. Cloud, MN Podium - Lehi, UT Proven Force Clutch and U Joint/Midwest Trans. Maple Grove, MN Radco Bismark/Mandan - Mandan, MN Radco Blaine - Blaine, MN Radco Burnsville - Burnsville, MN Radco Cedar Rapids/Hiawatha - Hiawatha, IA Radco Duluth - Duluth, MN Radco Fargo - Fargo, ND Radco Oakdale - Oakdale, MN Radco Plymouth - Plymouth, MN Radco Sioux City - Sioux City, MN Radco Sioux Falls East - Sioux Falls, SD Radco Sioux Falls West - Sioux Falls, SD Radco St. Cloud - St. Cloud, MN Radco/Accessory Pro Warehouse - Baxter, MN SATA Spray Equipment - Spring Valley, MN Schmelz Countryside - Maplewood, MN Sherwin Williams Automotive Finishes - Andover, MN Shop Monkey - San Jose, CA Smart Express - Burnsville, MN Southern Minnesota Auto Supply Co. - Rochester, MN Straight & Square Distributing, LLC - St. Cloud, MN Suburban Chevrolet - Eden Prairie, MN Sunbelt Business Advisors - Minneapolis, MN The Flasher Scope & Scan Diagnostics - Prior Lake, MN Twin Cities Auto Glass - White Bear Lake, MN United Fire Group - Hugo, MN Valley Imports - Fargo, ND Wakeman Equipment Sales, Inc. - Jackson, WI Wipers & Wipes, Inc. - Minneapolis, MN Wirthco Engineering, Inc. - Edina, MN

AASP-MN News

AASP-MN News

April 2022 | 19

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AASP-MN News

April 2022 | 21

CASH IN ON YOUR MEMBERSHIP BENEFITS!

The Partner You Need to Do Your Image Proud In the automotive service and collision repair industry, trust is earned. You work hard to earn it from customers every day. When your business features branded work uniforms and floor mats, and clean restrooms and bays, customers trust that you’re doing things right. This helps you stand out from the shops down the street and keeps customers coming back.

Aramark offers AASP-MN members a towel, rug and uniform rental program with: • Discounted pricing • 10 percent annual rebate • Free installation • Free emblems • No deposits • And, no set-up charge With a uniform and facility care product program from Aramark you’ll save: • Time – Aramark will manage the details, so you don’t have to. A customer portal with online billing and payment adds convenience and ease.

• Space – Your Aramark representative will stock the exact quantities your business needs, leaving you with the extra shelf space.

• Money – Weekly inventory monitoring means you’ll only spend on what you need. And, you will receive an annual 10 percent rebate for your purchases with Aramark. Last month, nearly $96,500 was distributed to 206 participating members!

Local support keeps this program running smoothly.

Aramark knows that service is more than just doing the job.

Excellent service is the result of going above and beyond— and earning your trust. That’s why you’ll see the same familiar face at every delivery to your shop. Service is more than a 1-800 number. Service is showing up every day, no matter what.

For more information, visit aramark.com or call: Minneapolis (612) 331-1600

Hibbing (218) 263-3611

Bemidji (218) 751-5150

St. Cloud (320) 251-2525

Mankato (507) 345-1039

Fargo (701) 232-7484

AASP-MN MEMBER BENEFIT PROGRAMS PROPERTY/LIABILITY AND WORKERS’ COMP INSURANCE CBIZ AIA Contact: Brad Schmid 763-549-2247 / bschmid@cbiz.com CBIZ AIA and United Fire Group (UFG) have created a program for members that includes a special premium discount, exclusive coverage and potential safety group dividend. CBIZ AIA can present quotes from multiple carriers and, as an added bonus, offer members an exclusive 10% discount on their property/liability insurance premiums.

WEBSITE AND INTERNET MARKETING SOLUTIONS Autoshop Solutions Contact: Tony Mercury 919-267-1731 / tony@autoshopsolutions.com Autoshop Solutions has developed the most cutting-edge marketing platform for AASP members. Really Powerful Marketing (RPM) is an all-in-one program that bundles your website, pay-per-click, search engine optimization, social media, and much more! With five levels of RPM to match your budget, goals, and competition, it’s built to drive your shop forward!

EMPLOYEE BENEFITS Business Planning Professionals Contact: Dennis Begley 612-308-6577 / dennis@begley-group.com Business Planning Professionals will provide AASP-MN members with quotes from multiple carriers for life insurance, health insurance, long-term care and disability insurance.

REPAIR SHOP PRODUCTS/SERVICES DISCOUNTS CARS COOPERATIVE Contact: Stephenie Sheppard 405-547-4077 / membersupport@cars.coop Members receive discounts on a variety of products and services they use every day! From discounts on paint and rental cars to office supplies and phone services. Over 50 programs available!

EMPLOYEE VOLUNTARY BENEFITS Colonial Life Contact: Deb Ferrao 612-600-4135 / deb.ferrao@coloniallifesales.com or Tracy Bailey 612-801-0139 / tracy.coloniallife@gmail.com Dedicated representatives can help members transform their benefit package with competitive rates, value added services at no cost and complimentary legal document preparation service. Colonial Life has the tools and flexibility to create a plan to fit everyone’s needs.

UNIFORM & LINEN SUPPLIES Aramark Contact: Rick Krenz 612-616-5290 / krenz-richard@aramark.com Discounted pricing to members on rental of uniforms, entrance mats, shop rags, etc. Purchases are also discounted.

Members receive annual rebate equal to 10% of their business with AmeriPride/Aramark each year.

CREDIT CARD PROCESSING Association BankCard Services Contact: Mac Hardin 952-933-2026 / mach@retailfinancialservices.biz

Competitive rates for AASP-MN members. Terminals and printers sold at cost. Monthly rental of equipment is also available.

LEGAL CONSULTATION Fryberger, Buchanan, Smith & Frederick 800-496-6789 Members receive free, over-the-phone legal assessment and consultation (some restrictions apply) with an attorney who specializes in the area of law that is the subject of the call.

22 | April 2022

INFORMATION PROVIDERS Mitchell 1 Contact: Mitchell 1 Representative 888-724-6742 Mitchell 1 offers AASP members special discounts on the Mitchell 1 family of integrated software tools.

Mitchell International Contact: Mitchell International Representative 800-238-9111 AASP members receive a 15% discount on any Mitchell RepairCenter TechAdvisor package. Visit ww.w.mitchell.com/ products-services/collision-repair-shop-solutions/cloudestimating for more information.

TECHNICAL INFORMATION HOTLINE IDENTIFIX 800-288-6220 Members enjoy discounted prices on the industry’s #1 technical information hotline, Direct-Hit. CHECK GUARANTEE SERVICES Certegy Check Services 877-520-2987 Discount rate of .75% to AASP-MN members. Use existing credit card terminal. Fast claim payments.

AUTO EMPLOYEE ASSESSMENT Assessment Associates International Contact: Nate Page 952-854-6551 / nate@aai-assessment.com Designed to help facilitate and enhance hiring decisions. AASP-MN members receive 50% off retail price, starting as low as $15 per assessment.

AASP-MN News

BUSINESS FORMS/CALENDARS AASP-MN Contact: Jodi Pillsbury 612-623-1110 / jodi@aaspmn.org Discounted rates on printed business forms and calendars.

PAYROLL PROCESSING CBIZ Payroll Contact: Carrie Hobrough 612-436-4620 / chobrough@cbiz.com Members receive 20% discount off standard payroll products and services (excluding 401k).

SAFETY COMPLIANCE Complete, Health, Environmental & Safety Services Contact: Carol Keyes 651-481-9787 / carkey@chess-safety.com AASP-MN members receive a 20% discount on Safety Data Sheet Management (SDSLinks), Right to Know(RTK)/ Hazard Communication program customized for your facility and monthly safety reminders, and other safety, OSHA or environmental assistance.

LIVE-ONLINE & ON-DEMAND TECHNICAL TRAINING AUTOMOTIVE SEMINARS Contact: Tim Houghtaling 920-866-9813 / tim@automotiveseminars.com

Discounted pricing to AASP-MN members on all liveonline events, as well as on-demand training videos.

Automotive Seminars specializes in diagnostic training that provides automotive technicians with knowledge, testing techniques and data interpretation skills needed to diagnose today’s vehicles. The live-online events and ondemand training videos focus on automotive electronics and engine management systems and are written and created by some of the industry’s leading diagnostic technicians.

BUSINESS COACHING 180BIZ 540-833-2014 / info@180biz.com Members receive a 20% discount on one-on-one sales and management coaching programs (covering financial planning & analysis, strategic marketing, leadership and personnel development) without long-term commitments.

Members also receive a 20% discount on monthly sales & management webinars as well as a 20% discount on all 180BIZ advisor training programs.

AASP-MN News

April 2022 | 23