Autobody News Western Edition, April 2010 by Autobody News

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California’s SB 350 Reverts to Customer Notification, May Move Jurisdiction to CDI

California Senate Bill 350 reverted in the State Assembly on March 22 to requiring that the consumer be informed of the types of parts being used to repair their vehicle. In addition, the bill suggests moving law that covers aftermarket parts from the jurisdiction of the Department of Consumer Affairs to that of the Insurance Department. Existing California law prohibits (under the state's Business and Professions code) an insurer from requiring the use of aftermarket crash parts unless the consumer is advised before repairs are made that aftermarket crash parts will be used., SB 350, last ammended in the Assembly on Jan. 12, would in addition prohibit the use of nonoriginal equipment manufacturer aftermarket crash parts unless specified requirements are met, in-

cluding that those parts are at least equal to the original equipment manufacturer parts in terms of kind, quality, safety, fit, and performance; the insurer so warrants; the insurer pays the cost of any modifications to those parts necessary to effect the repair; and all original and nonoriginal equipment manufacturer aftermarket crash parts, manufactured on or after January 1, 2011, when supplied by auto body repair shops contain specified identification. Senate Bill 350 would now leave that provision intact and in addition would require any insurer specifying the use of aftermarket parts to warrant that they are "of like kind, quality, safety, fit, and performance as original equipment manufacturer aftermarket crash parts.”

Mopar® is joining forces on two projects with renowned custom-car builder and Autobody News columnist Rich Evans at the 5th Annual Chrysler Spring Festival in Irvine, CA. Evans will utilize Mopar parts and bring to life a customized Dodge Challenger for the 2010 Specialty Equipment Market Association (SEMA) Show in Las Vegas, Nev., Nov. 3–6, 2010. Evans will also serve as a judge in a newly-formed tuner category of Mopar’s “Top Eliminator” enthusiast recognition program. Well known to our long-term readers as the owner of Huntington Beach Bodyworks and Rich Evans Designs, Evans is a

master automotive fabricator, welder and painter. His custommade rides have appeared in numerous movies and television programs, including Rich Evans Pimp My Ride, Monster Garage, Man Cave and Chop, Cut & Rebuild. The Southern California native also recently debuted a new iPhone App, The Rides of Rich Evans. His one-of-a-kind Mopar-flavored ride for the 2010 SEMA Show will begin with a base 2010 Dodge Challenger.

See SB 350 AMENDED, Page 4

Mopar® Teams Ups with Custom-Car Designer Rich Evans at 5th Annual Chrysler Festival

VOL. 28 ISSUE 4 APRIL 2010

CRA Brings Bumper Reinforcement Bars to Insurance Commissioner’s Legal Counsel

The Insurance Commissioner’s office opened its doors for two bumper reinforcement bars for a 2009 Toyota Corolla, courtesy of the CRA board of directors, on March 4. CRA president and Autobody News columnist Lee Amaradio (owner of “Faith” Quality Auto Body in Murrieta) and treasurer John Tyczki (A M Auto Body, San Diego) hauled the bars into the Department of Insurance’s Sacramento headquarters to demonstrate the material difference between OEM and aftermarket parts. Observing was Peter Conlin, counsel to the commissioner. “I believe Conlin saw the difference between OEM and aftermarket,” said Amaradio, “ and he certainly understood the ramifications of a safety-related part that fails to perform during a collision. But

the question remains, will the commissioner take action, or will the collision industry continue to be given the stall by a regulator who wants to be govLee Amaradio ernor.” Also participating were CRA executive director Allen Wood and the association’s lobbyist, Richard Steffen. Wood noted that the CRA had delivered two written requests to Commissioner Poizner in February, both asking that he view a demonstration showing the structural inferiority of aftermarket bumper supports and that he also consider alerting claimants who have had their damaged vehicles repaired with aftermarket bumper See CRA IN SACRAMENTO, Page 4

See MOPAR AND EVANS, Page 20

Texas-based Col-Met Spray Booths ‘Refuses the Recession’

Sherwin-Williams’ Express Scratch Repair—A New Profit Center

3M’s New Dirt Trap System for Keeping Booths Clean and Productive Is Waterborne the Only Solution to Low-VOC Requirements?

PPG’s Green Belt Program Improves Profit at Atlanta’s Largest Shop

Service, Service, Diagnostic Diiagnostic D and an d Mechanical M e ch aniccal al NEWS nd Mec echanical Mech ech ec hanical ca

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Contents 2009 Total Miles Driven Up, But Miles Per

HB 2463 Arizona Auto Glass Fraud Bill Passes

AAA Releases Its Top Vehicle Picks for Commuters37

Hey Toby! - Taking a Good Look at your Shop’s

AkzoNobel Suggests Sustainable Business Model 16

Amaradio - Hang ‘Em in the Town Square . . . . . . 51 Arizona Auto Rates Increased 6% in Last

House—Update . . . . . . . . . . . . . . . . . . . . . . . . . 15 Welding Equipment . . . . . . . . . . . . . . . . . . . . . . 8

Homeland Security Company Carbon Motors

Partners with BMW Group’s Powertrain. . . . . . 48

Six Months . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Honda Against Aftermarket, Salvaged

Analysis Projections for Insurance. . . . . . . . . . 48

KMC on Demand™ and I-CAR Partner to Deliver

Audatex Directions Spring 2010 Includes Trend

Auto Glass Chain Guilty of Insurance Scam . . . . . 20

Structural Parts. . . . . . . . . . . . . . . . . . . . . . . . 24 Online Training for Auto Collision Industry . . . . 35

AutoTec® Launches Major Initiative to Stop

Large Texas Body Shop Uses Scan Tools for Profit

California Autobody Association Updates its

McClune - EEEC Team Presents to CAA. . . . . . . . 49

California’s SB 350 Reverts to Customer Notification,

McGee - It’s Still a Mustang®… But in Name Only –

Curbstoning (Illegally Flipping Used Cars) . . . . 47 Positions on Bills Before the Legislature. . . . . . 33

May Move Jurisdiction to CDI . . . . . . . . . . . . . . 1

in Diagnostics . . . . . . . . . . . . . . . . . . . . . . . . . 26

McClune - New Law Affects Body Shops. . . . . . . 49 PART 1 of 2 . . . . . . . . . . . . . . . . . . . . . . . . . . 50

CAPA Tracker Designed to Enable Part Tracing. . . . 5

Mobile Repair Operator Warns Against

CCAR Recognizes Sacramento Shop as a

Mopar® Teams Ups with Custom-Car Designer

CRA Brings Bumper Reinforcement Bars to Insurance

Nissan Position Statement on Wheel Repair . . . . . 30

“Greenlink Shop” . . . . . . . . . . . . . . . . . . . . . . 15

Commissioner’s Legal Counsel . . . . . . . . . . . . . 1

Evans - Finishing the Shelby Series 1 . . . . . . . . . 42 Express Scratch Repair™ Gives Fixed Ops New

Unlicensed in LA . . . . . . . . . . . . . . . . . . . . . . . 32 Rich Evans at 5th Annual Chrysler Festival. . . . . 1

PA Association Expresses Concern on Aftermarket 5

Parts for Profit—How to Manage Your Inventory

and Personel Profitably . . . . . . . . . . . . . . . . . . 14

Revenue Stream . . . . . . . . . . . . . . . . . . . . . . . 44

PPG Shares Environmentally Friendly

And Complexity. . . . . . . . . . . . . . . . . . . . . . . . 26

Safelite® Group Moves Distribution Center to

the Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Senate Banking Committee Passes Restoring

Fewer Bays In A Service Market Growing In Size Florida Autobody Collision Alliance Picks Up

Florida Hyundai Dealer Thrives in Tough Market

with Solid CPO Sales, Tight Inventory Control,

Auto-Refinishing Technology . . . . . . . . . . . . . . 11

Braselton, GA; Relocated from NC. . . . . . . . . . 47 Financial Stability Act, Creates National

Insurance Office . . . . . . . . . . . . . . . . . . . . . . . 34

and Strong ROI . . . . . . . . . . . . . . . . . . . . . . . . 46

Shop Showcase - Atlanta’s Collision Works

Against State Farm Began with Repair

Shop Showcase - Mississippi’s Larry King

Florida Shop Owner’s Ongoing Slander Suit

Procedure Disputes. . . . . . . . . . . . . . . . . . . . . 22

Fort Myers Hyundai Dealer Thrives in Tough Market with Solid CPO Sales, Tight Inventory Control,

and Strong ROI . . . . . . . . . . . . . . . . . . . . . . . . 54

Franklin - Make Secure Connections to Create

Indexof Advertisers

Causey - Concessions: Why give them to insurers?12

Improves Productivity with PPG’s Help . . . . . . 31

Looks Back at 44 years in the Business. . . . . . 53

Supporters of Access to Repair Parts Act Testify in

Favor of Exception to Design Patent Law . . . . . 32

Texas Congressman Wants Auto Recording

Devices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

a Better Future. . . . . . . . . . . . . . . . . . . . . . . . . 10

Texas-based Col-Met Spray Booths ‘Not

for Low VOC Requirements? . . . . . . . . . . . . . . 16

Tiny E-car Startup Wants To Keep NUMMI Open . 37

Gesterkamp - Is Waterborne Paint the Only Answer

GM in favor of Recording Devices in Cars . . . . . . . 5

Gonzo's Toolbox - “My ‘Regular Mechanic’ Says

You Didn’t Do a Thing” . . . . . . . . . . . . . . . . . . 30

Greenway Automotive Group’s Management

of $30 million in Parts . . . . . . . . . . . . . . . . . . . 40

Participating’ in Recession . . . . . . . . . . . . . . . 38

Toyota Addresses False Claims Regarding

2002 TSB . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Weak Economy Favors Auto Parts Stores . . . . . . 30

Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Contributing Writers: Tom Franklin, Dick Strom, John Yoswick, Lee Amaradio, Rich Evans, Janet Chaney, Toby Chess, Mike Causey, Tom McGee

Advertising Sales: Joe Momber, Christina Shubert (800) 699-8251 Sales Assistant: Stephanie Bowling Art Director: Rodolfo Garcia 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. ©2010 Adamantine Media LLC. Autobody News P.O. Box 1400, Oceanside, CA 92051-1400 (800) 699-8251 (760) 721-0253 Fax www.autobodynews.com Email: news@autobodynews.com

Western

Vehicle Down . . . . . . . . . . . . . . . . . . . . . . . . . . 4

AEGIS Tools Intl. . . . . . . . . . . . . . . . . . .16

Kia Motors Wholesale Parts Dealers . . . .13

Audi Wholesale Parts Dealers . . . . . . . .49

Matrix System . . . . . . . . . . . . . . . . . . . .19

Alldata Collision . . . . . . . . . . . . . . . . . .48

Autoland Scientech . . . . . . . . . . . . . . . .27

LKQ . . . . . . . . . . . . . . . . . . . . . . . . . . . .56

Mattei Compressors . . . . . . . . . . . . . . .20

BMW of Riverside . . . . . . . . . . . . . . . . .12

Mazda Wholesale Parts Dealers . . . . . .37

British Motor Car Distributors . . . . . . . .10

MOPAR Wholesale Parts Dealers . . . . .21

BMW Wholesale Parts Dealers . . . . . . .45

Buerge Chrysler-Jeep-Dodge . . . . . . .6-7

Classifieds . . . . . . . . . . . . . . . . . . . . . . .55

Completes Plus . . . . . . . . . . . . . . . . . . .20 Courtesy Chevrolet San Diego . . . . . . .41

Crevier BMW . . . . . . . . . . . . . . . . . . . . .25 Downtown Motors of LA

(Audi, VW, Porsche) . . . . . . . . . . . . .39

Enterprise Rent-A-Car . . . . . . . . . . . . . .51 Express Metal Recycling . . . . . . . . . . . .11

Ford Wholesale Parts Dealers

AZ, CA, & NV . . . . . . . . . . . . . . . . . . .17

Galpin Motors . . . . . . . . . . .24, 28-29, 33 Global Finishing Solutions . . . . . . . . . . .5

GM Wholesale Parts Dealers . . . . . . . .35

Mitsubishi Wholesale Parts Dealers . . .50 Nissan/Infiniti Wholesale Parts Dealers . . .22 Pacific BMW . . . . . . . . . . . . . . . . . . . . . 34

Performance Radiator . . . . . . . . . . . . . . .9

PPG . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

RBL Products . . . . . . . . . . . . . . . . . . . .10

Replica Plastics . . . . . . . . . . . . . . . . . . .41

SATA . . . . . . . . . . . . . . . . . . . . . . . . . . .23

SCA Appraisal Company . . . . . . . . . . .36

Sherwin-Williams . . . . . . . . . . . . . . . . . .15

Shoot Suits . . . . . . . . . . . . . . . . . . . . . .43

Soft-Sanders from Style-Line, Corp . . .42 Suzuki Wholesale Parts Dealers . . . . . .53 Timmons VW-Subaru . . . . . . . . . . . . . .18

Verifacts . . . . . . . . . . . . . . . . . . . . . . . . . .8

Honda/Acura Wholesale Parts Dealers 46

Volkswagen Wholesale Parts Dealers . . .38

Johnson’s Super Service . . . . . . . . . . .11

Weatherford BMW . . . . . . . . . . . . . . . . .32

Hyundai Wholesale Parts Dealers . . . .40 Kearny Pearson Kia . . . . . . . . . . . . . . . . .4

Volvo Crash Wholesale Dealers . . . . . .47

www.autobodynews.com | APRIL 2010 AUTOBODY NEWS 3

2009 Total Miles Driven Up, But Miles Per Vehicle Down

According to Jim Lang, Presdent of Lang marketing, annual mileage on U.S. roads by all types of vehicles climbed a meager 0.23% in 2009. While reversing the historic 3.43% plunge in 2008 driving, the weak 2009 gain did little to staunch the continuing drop in average annual miles per car and light truck in the U.S. Although miles driven is an important statistic, the real significance of mileage to aftermarket product use is annual miles of the typical car and light truck. Since 2004, the average light vehicle in the U.S. has been driven fewer miles each year. While total 2009 mileage for all vehicles failed to match 2004 levels, miles driven by the typical car and light truck in the U.S. during 2009 was lower than average vehicle mileage ten years earlier. 2009 Mileage Gain: A Symbolic Victory Following the historic 3.43% plunge in 2008 miles on U.S. roads by all types of vehicles, the modest 0.23% 2009 driving gain was a symbolic victory which reversed the largest annual mileage drop in over 60 years. What made the 2008 mileage reduction so unusual was its occurrence in the absence of gas shortages at the pump. The only other three years after World War II in which annual mileage failed to increase were during the first and second oil crises (1974, 1979,

Continued from Page 1

CRA in Sacramento

reinforcement bars. The March 4th meeting in Sacramento is the result of these two requests. Conlin told the CRA that staff had seen the Toby Chess demonstration as well as a video provided by CRA that shows the disastrous outcome when an airbag deployment is late by one-tenth of a second. The inference here is that the delay is linked to the use of replacement bars that are not OEM. “We wanted the commissioner’s top people to hold the truth,” stated Tyczki referring to the aftermarket bar and the OEM bar. “But I’m not certain that even seeing the difference will change this office’s love of the do-nothing status quo.” Steffen added that Conlin told the group that he would investigate whether or not the department had the authority to require insurers to inform claimants who have had aftermarket reinforcement bars installed on their vehicles. At a minimum the department could ask insurers to determine if they had the ability to identify those claims over a specified period of time that involved payment for aftermarket reinforcement bars, noted Steffen. “We want an effort made to protect consumers,” he added.

and 1980), when surging gas prices coupled with spot shortages at the pump. Unusual Circumstances While the 2008 driving plunge occurred under unusual circumstances, so too did the meager 0.23% 2009 mileage recovery. Despite 2009 gas prices averaging nearly 22% below 2008 levels, falling pump prices failed to ignite a 2009 mileage surge.

Two Key Factors As Lang Marketing noted in Aftermarket Insight™ Issue 169, U.S. Unemployment and Consumer Confidence are major forces determining the level of driving on U.S. roads. It will be difficult for mileage to increase significantly as long as Consumer Confidence remains low and the Unemployment Rate hovers at double digits (with “real” unemployment topping 16%).

Putting 2009 Mileage In Perspective Despite increasing 0.23%, 2009 driving failed to reach total miles recorded five years earlier in 2004. As a result, annual miles declined at a 0.2% average annual pace between 2004 and 2009.

Miles Per Vehicle Down While total miles on U.S. roads is an important statistic, the real significance of mileage to the rate of aftermarket product

When Conlin said that it was his understanding that insurers had stopped requiring the use of aftermarket bumper reinforcements, Tyczki was quick to point out that the insurers pullback from aftermarket parts was proof that the bars were questionable in terms of quality and performance. “If the bars are no good, the commissioner should do something to help those consumers who have them on their vehicle,” he said. The CRA has also been discussing the aftermarket issue with staff at the office of the State Attorney General. Steffen said the office was in the fact-finding mode. Amaradio added that the CRA was not going to back down on this issue and that efforts to go public with the problem would be increased if the commissioner failed to act.

Continued from Page 1

use is miles driven by the typical car and light truck. Over the past five years, since 2004, the average light vehicle in the U.S. has been driven fewer miles each year.

Mileage Per Vehicle Peaked In 2004 Annual miles for the average car and light truck in the U.S. peaked at 11.95 thousand miles during 2004. Since then, the typical car and light truck in the U.S. has traveled fewer miles each year. While total annual miles by all types of vehicles decreased between 2004 and 2009, the number of cars and light trucks on U.S. roads climbed more than 33 million. Consequently, the typical light vehicle in the U.S. traveled approximately 1,420 fewer miles in 2009 than five years earlier in 2004.

Fewer Annual Miles On Older Vehicles The reduction in annual mileage by the average car and light truck in the U.S. over the past five years has been partially offset, in terms of its negative impact on aftermarket product use, by the soaring average age of vehicles between 2004 and 2009 and the rising number of older vehicles in operation, especially those 12 years and up. For complete analysis of average annual miles per light vehicle in the U.S. since 1998, see the 2010 AAIA Factbook & Lang Aftermarket Annual.

SB 350 Amended

If the bill is approved, the applicable state code would be moved from Section 9875.1 of the Business and Professions Code, which the Department of Consumer Affairs is responsible for, to Section 790.20 (Unfair Practices) of the Insurance Code. The measure proposes additional stipulations to the use of aftermarket parts including:

● aftermarket parts specified must be equal to the OEM parts in terms of kind, quality, safety, fit, and performance, and the equivalency must be warranted by the insurer specifying the parts. ● the written estimate shall clearly identify each part with the name of its manufacturer or distributor.

The California Autobody Association said it is aware of the amendment. The bill, originally introduced by Senator Leland Yee (D-San Francisco), passed the Senate last year and is now awaiting approval of the Assembly Business and Professions Committee chaired by Mary Hayashi (D-Hayward).

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Texas Congressman Wants Auto Recording Devices

A Texas congressman, Rep. Gene Green (D-Texas), is planning to introduce legislation that would mandate electronic data recorders, also known as black boxes, in all new cars and trucks. These little devices that some are calling driving diaries would be placed inside your dashboard near another device thatâ&#x20AC;&#x2122;s already there called a data processesor. Black boxes have been used in airplanes for years, and they are available for automobiles right now, but as an optional feature. â&#x20AC;&#x153;Anything that helps create a safer car, create a safer environment inside the vehicle is whatâ&#x20AC;&#x2122;s really important.â&#x20AC;? Said Sewell Ford Assistant General Manager Wes Hunt. Hunt says these little black boxes have the potential to record key information from collisions, such as vehicle speed, the status of airbags and whether or not seatbelts are being used. Congressman Green from Texas says this legislation is especially relevant considering the massive Toyota recall saying, â&#x20AC;&#x153;As we witnessed in the Toyota hearing, there is a demonstrated need of detailed crash information.â&#x20AC;?

GM in favor of Recording Devices in Cars

General Motors has recently come out in support of whatâ&#x20AC;&#x2122;s being called the â&#x20AC;&#x153;black box legislation.â&#x20AC;? GM is in favor of legislation from Rep. Gene Green, D-Texas, that would mandate event data recording devices in vehicles, and additional â&#x20AC;&#x2DC;reasonableâ&#x20AC;&#x2122; legislation. Though not currently required by law, the devices are standard for certain automakers, including Toyota. Not all Toyota devices record pre- and post-crash data, but by the end of 2010 all Toyota vehicles will be equipped with devices that record both. By 2005, 64% of vehicles came with the devices, including all FoMoCo cars. Chrysler started using the devices in 2005, but GM had been using a predecessor to todayâ&#x20AC;&#x2122;s device in their light-duty trucks since 1995. â&#x20AC;&#x153;There can be a discrepancy in what a driver claims happened and what (the National Highway Traffic Safety Administration) concludes happened. This would mandate equipment that would remove any human emotion or bias to provide much more precise data,â&#x20AC;? Robert Ferguson, GMâ&#x20AC;&#x2122;s new VP for government affairs said. NTSB has recommended that OEMs and the NHTSA use on-board collision sensing and recording devices.

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PA Association Expresses Concern on Aftermarket

The Pennsylvania Collision Trade Guild has written to Insurance Commissioner Joel Ario of the Pennsylvania Insurance Department raising concerns about the safety and functionality of replacement crash parts. It also asks for immediate action to ensure the safety of vehicles repaired with non-OEM replacement parts. In a letter, the guild says results from recent tests have shown that structural crash parts manufactured by non-OEM part makers have been seen to be inconsistent in construction as compared to the OEM parts. These include bumpers, bumper brackets, energy absorbers and structure members. The letter says that citizens who are operating vehicles that have been repaired using untested and inferior replacement crash parts are putting themselves and their passengers in danger. It also states that various organizations including CAPA and ABPA, among others, have asked manufacturers and distributors of non-OEM parts to remove them from distribution.The guild asks the State of Pennsylvania to recall all vehicles repaired with inferior structural aftermarket replacement parts and re-repair them to return them to their pre-loss condition relative to safety and performance. To read the letter see www.pctg.org/documents/Joel-Ario-Letter.pdf.

â&#x20AC;&#x2DC;CAPA Trackerâ&#x20AC;&#x2122; Designed to Enable Part Tracing

The Capa Tracker is a free web-based program that connects the unique CAPA seal number to the exact vehicle on which it was installed. was developed in response to collision repairer concerns about tracing problem parts. In the event of a part recall, usage can notify every participating shop that installed one of the parts in question. The shop can then alert their customer and take any necessary action. This program was designed specifically for repairers who expressed concern that should a problem surface with a CAPA Certified part, it would be difficult for them to determine if they actually installed that part on a particular customerâ&#x20AC;&#x2122;s car. â&#x20AC;&#x153;The Capa Tracker effectively solves this dilemma for shops concerned about safety,â&#x20AC;? said Jack Gillis, CAPA executive Director. It provides repairers with far more control over the part identification process than they have with car company brand parts. The CAPA program is effective because of CAPAâ&#x20AC;&#x2122;s unique, individually numbered, part identification system incorporated in the CAPA Quality Seal, which enables positive identification of parts in the market.

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www.autobodynews.com | APRIL 2010 AUTOBODY NEWS 5

6 APRIL 2010 AUTOBODY NEWS | www.autobodynews.com

www.autobodynews.com | APRIL 2010 AUTOBODY NEWS 7

Hey Toby!

Toby Chess is an I-CAR program instructor, Welding specialist, and former salvage yard operator. Toby is universally known in the collision industry for his charitable works, worthy causes, and magic tricks. He can be reached at tcspeedster@yahoo.com

Taking a Good Look at your Shop’s Welding Equipment with Toby Chess

Hey Toby—Thanks for the conducting the SPS 05 (Required test for the Porsche Certification Program) for my techs. One of them told me that he needed a new welding helmet. I decided to get everyone in the shop new helmets. Can you recommend one I should buy? —Luis from Pan American Body Shop, San Jose, CA.

Hey Luis—I can’t recommend any specific brand because I make it a policy not to do that, but I will give you an honest assessment of products of which I have direct knowledge via in-shop use. I personally purchase all my own equipment (welders, gloves, helmets and jackets) that I use in the I-CAR Welding program and I receive no compensation from any welding manufacturer. This is my experience from conducting nearly 3000 welding tests and, I repeat, is not a paid endorsement. Let me start with some of the problems I’ve encountered in the shops. I have been teaching welding principles to students over the last 4½ years. I have conducted well over 2900 I-CAR MIG Qualification Tests and what I have encountered is a lack of welding knowledge in body shops. Recently I-CAR has adopted the same program that I have been using (Inhouse welding). I-CAR’s In-house program consists of filling out a questionnaire about the equipment in the shop (helmets, welders, power, etc.) It must be filled out prior to performing the in-house test. For this I bring in my own equipment, but I do go over the welding equipment in the shop with the owners and managers and point out any deficiencies that exist. What I have observed is that many, if not most, of the welders are in poor condition. Commonly the flow rate and volume gauges are not functioning. The covers are usually missing and the needles are bent or missing. The flow rate for Argon/CO2 gas should be set between 15–25 CFH. If you can’t tell what the rate is, than you are probably wasting gas. If you need a new meter, I would recommend a Victor Flow Meter. I have used this meter for my testing with only 2 problems in 4½ years and one was fixed under warranty. Most of the MIG guns that I have inspected are in poor condition. The neck

welding machine maintenance procedure is to take the gun off and blow air through the liner. Also checking the tension on the spool of wire. It should stop without unraveling when you let off the trigger.

and trigger area are usually wrapped in tape, because they are in need of repair. What happens is that the techs usually bang the gun against a hard surface to remove porosity from the nozzle instead of using a proper tool—MIG Pliers These pliers will clean the nozzle (for proper gas flow), tighten all the parts on the gun, cut the wire and remove the nozzle (it gets real hot during welding). The nozzle is another part of the gun that is underlooked. Nozzles are considered a consumable item and they do wear out. After a period of use, the nozzle end starts to curl under and this restricts the amount of shielding gas to the weld, which in turn, leads to more porosity. (Porosity in welding is a result of oxygen and water being released during the welding process, that is trapped in the metal when there is insufficient time to escape prior to solidification.) Porosity in a weld will lead to a weak weld or even a failure under stress. Sometimes the end of the nozzle wears away and a hole develops on the lip. As the gas passes over the hole, water and oxygen are sucked into the weld, which in turn leads to porosity in the weld. I have found during my welding machine inspections that the tension on the drive rollers is wrong.

The next item is what you asked about—the welding helmet. I carry 8 welding helmets in my trailer (4 Performance series and 4 elite) and, in virtually every welding test, they are used instead of the ones that each tech brings. I ask the question: would you go to a swap meet and buy the cheapest set of sockets? They respond—no. Then, why would you buy the cheapest welding helmet when you have the only two eyes you’re going to have, to protect?

There are two types of welding helmets: passive and auto darkening. The passive type you need to snap your neck so that the helmet comes down before the arc is struck. It usually comes with a shade 10 lens. As the name suggests, the auto-darkening helmet automatically darkens when the arc is struck and this type of helmet is recommended for the collision industry. Let’s look at some of the features that you should take in to consideration when purchasing an auto-darkening helmet.

This helmet (Lincoln Viking) has 2 sensors.

This unit (Miller Performance) has 3 sensors.

First is the number of sensors in the mask. There are between 2 and 4 sensors.

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To check the tension, I put the wire between my fingers and adjust the tension until the wire feed stops slipping. The wrong tension can lead to bird nesting (wire jambs in the rollers). Also a knicked or clogged gun liner can cause bird nesting too. Part of the

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As the number of sensors increases, so does the price. As the sensor number increases (3 & 4), so does the coverage especially for out-of position welds—when you’re on your back weldThis helmet (Miller ing in a rail, for exElite) has 4 sensors. ample —where a sensor could be blocked. Another consideration is viewing size. The helmets that I use have a 7 square inch screen (Miller Performance & Lincoln Viking Series) and over 9 square inches for the Miller Elite Series. Another feature to look for is the capability of holding a magnifying lens in the unit. Both the Miller Elite and Performance models have such a feature, as well as the Lincoln 700G. I have found that most of the techs in our industry need that additional magnification to help them see the welds. Having a magnifier is easier and better than wearing glasses when welding. A couple of other features that are necessary for today’s helmets are Adjustable Sensitivity control (the ability to adjust for different lighting conditions) and Adjustable Delay control (The duration

that the lens stays dark after the welding has stopped because harmful rays as still emitted until the weld has cooled). Let’s look at gloves next.

Nearly every tech that I have encountered uses the wrong type of glove for MIG welding. The above gloves are for Arc welding. They are heavy for heat protection, but they don’t have the flexibility that is necessary for MIG welding. I have tried over a half a dozen different types of MIG gloves, but the best ones have been the Tillman #42. Great feel and extremely durable, but that is just my opinion. Next I want to look at welding jackets. There are a number of different types of welding jackets. Full leather, half leather jackets, cotton jackets, and hybrid jackets. This is an excellent jacket. It protects the arms and has an add-on front chest protector. I prefer this type of jacket over the full leather because it is less restrictive than the full leather version.

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Another type to consider is a cotton jacket. It is lightweight and cooler than leather. It is fire resistant, but not resistant to hot molten metal, which will penetrate the material. I can show you some scars to attest to that fact. I think the best jacket for collision techs is a hybrid. It has leather sleeves with cotton construction. I have tried different brands, but the best one I’ve tried is the one made by Miller Electric. It is lightweight, comfortable, and it wears like iron. I love it. The last thing on my list for welding essentials is the welder itself. I have been in hundreds of shops and there is a myriad of different types of welders present. One of the things that we teach in I-CAR’s Cycle Time Reduction class is to standardize the equipment and have consumables (wire, tips, gun liner and nozzles) in stock to prevent down time due to equipment failure. A proponent of this defensive thinking is Tom Williamson of Marina Autobody Repair in Marina Del Rey, CA. Tom now uses only Miller 110 welders. He only has to stock 2 types of contact tips and 1 type of nozzle. I convinced him to buy Hobart’s 2 lb spools of ER70S6 wire (he orders it by the case). I have tried the larger spools (10 lb spools), but the windings have been inconsistent and they have a tendency to put a lot of pressure on the 110 volt machines. I have yet to have a wire problem in 4 years. I have used Miller 110 welders for the I-CAR steel welding qualification test and the Millermatic 350P with a 15A spool gun for the Aluminum welding qualification test. Every time I conduct the steel test, the welders run anywhere from 4 to 5 hours continuously and I had only one welder stop functioning (with a bad fan motor) in nearly 5 years of testing. I might add that Miller repaired it under warranty. Here is my recommendation—the Miller 140 with Autoset for most welding applications in the body shop. It works on 110 volts and the auto set feature is the best. You select the wire and thickness and the machine does the rest. I would recommend that you upgrade the cart.

The Miller 140 will handle .023 wire and .030 wire, but when welding on vehicle frames, you will need .035 wire. With the use of .035 wire, you need to increase the amperage of the machine and that can only be accomplished by switching to 220 volt units. Miller introduced last year the 211 welder. It works on both 110 volts and 220 volts. It has the auto set feature (.030 wire and .035 wire) and it will handle all three wire sizes from .023 to .035. The best of all is the price. Check with your local welding supplier for pricing. I would like to conclude the article with a little known I-CAR Welding Qualification Test, SPS 05 Structural Steel test. I started conducting this test because it is needed for the Porsche Certification Program. This test is not for everyone. It takes about 7 hours to complete and it does separate the men from the boys. The following pictures were taken a DC Autocraft in Burbank, CA (DC Autocraft is certified center for MB, Audi, Jaguar and BMW). The techs are given a detailed set of instructions and 2 rails. One rail to act as the original damaged part and the second as the replacement part. Thirty different welds are performed (plug welds, tapered fillet, flanged fillet and a butt weld with backer) in vertical, horizontal and overhead positions. The final rail is measured to plus or minus tolerance of 1 ½ mm before each and every weld is inspected. Here are some pictures showing the test. To take the test, a tech needs to have taken and passed the MIG Qualification Test. If your tech is requalifing, I would highly recommend that he/she take this instead. It really is a true test of one’s ability to read, follow precise instructions and perform to the highest level of performance. This is the ultimate test that the collision industry has for technicians. If you want more information on the test or you want to conduct the test in you shop, give me a call at 310-995-7909.

www.autobodynews.com | APRIL 2010 AUTOBODY NEWS 9

On Creative Marketing

Tom Franklin has been a sales and marketing consultant for forty 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 tbfranklin@aol.com.

Make Secure Connections to Create a Better Future with Thomas Franklin

I recently learned that a shop owner in my area had dropped a couple of DRPs, including Farmers and 21st Century (which had been absorbed by AIG). I heard that he had decided that between his Toyota and BMW dealership relationships plus his many-year prior customers, he no longer needed the hassle of increasingly onerous demands and low profits from the insurance companies. Naturally I applaud his courage in seeking to prosper without the insurance connections, but I had to wonder if he adequately considered the longterm ramifications of his decision. Over the years I’ve observed that body shop relationships with dealerships are often similar to marriages. Many end in divorce. I also thought about the rising role Farmers Insurance is playing in the industry. Since absorbing Bristol West and recently 21st Century with its prior AIG connection, I see Farmers becoming a much greater force to be reckoned with. Is it wise for a shop to sever a connection with Farmers at a time when it may become a source of far more business? Of course I can’t answer that question for this

shop owner. I don’t have access to his financial records and this move may make perfectly good sense financially. Several years ago I had the opportunity to speak with two very different kinds of body shop owners. One was bemoaning the past, saying that fifteen years ago the business was fun—there were fewer regulations and fewer forces nibbling away at profits at every turn. Today he said he was earning less and working more and the fun was gone. He was pessimistic about the future. The other owner was expanding, buying out a near-by shop and increasing his reach into a wider market. He was optimistic about the future! Today it’s harder to find shop owners who are that confident about a better future ahead. Which viewpoint will better serve a shop owner who wants to grow but also wants to hedge his bet in case the economy doesn’t bounce back very quickly? The creation of a desirable future is what inspires us to work, and especially to put out that extra effort to build the kind of future life we wish to arrive at. If we are

optimistic and believe it is possible to create that better future, it is easier to get up in the morning and to eagerly attack the tasks of the day, knowing that each day is bringing us closer to the better future we have envisioned. If we see the future as being doomed to continuous decline with diminishing returns for the efforts we make, it will become more and more difficult to make that effort. Remember, for a moment, where you wanted to go when you started your business. What were your goals? What kind of future did you want to create? Have you arrived where you intended? Have you gone farther? Or have you fallen short and lost sight of what it was you wanted to achieve? If so, when were things last going well? What shifted or changed? What could you do to get back on track? Try to recreate for a moment, those original intentions. How could your intentions be modified to fit the present? If you were just starting out today, how would you go about striving to reach your objectives? I come back to thinking about the shop severing that connection to Farmers Insur-

ance. In today’s world, more than ever, our forward thrust is determined by our connections. We’re much like our power tools that have to be plugged into an electric outlet to draw power to be energized. If we don’t connect to referral sources, reliable suppliers, informational databases, competent workers and numerous customers, we’ll find ourselves disconnected from the power sources we need to operate. It may be that this shop has sufficient connections to thrive without the insurance connections. But if I were to advise a shop owner who wanted to create a secure and growing future, my first advice would be to diversify his or her sources of business and to open up as many channels as possible for business to flow in. Connections in this economy can be fickle. Someone offering a little better price, better discounts and/or faster service may very well steal one source of business out from under you when you’re not looking. If you have enough other sources to survive the loss and keep growing, you may be able to continue to create the better future you have envisioned.

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PPG Shares Environmentally Friendly Auto-Refinishing Technology This article first appeared on the Pennsylvania College of Technology website. It is reprinted here with permission.

Technology with the potential to change the auto-refinishing industry—on par with the introduction of the spray gun 75 years earlier—is in the hands of collision repair students at Pennsylvania College of Technology, thanks to the generosity of a longtime corporate partner. PPG Industries Automotive Refinish, a major equipment and training contributor to the college’s School of Transportation Technology, recently donated an Envirobase High Performance waterbornecoatings system to the collision repair program in College Avenue Labs. “PPG is one of the premier industries in collision repair refinishing, and its generous donation of cutting-edge, waterbased refinishing technology will enhance our students’ overall learning to a profes-

sional level,” said Michael R. Bierly, a member of the college’s collision repair faculty. “Our students will be able to enter the workforce with a whole new technology and be ready to apply it.” Primarily used in Europe, Canada and California, where air-quality regulations require lower levels of volatile organic compounds (VOCs), the system replaces solvent-based paint with a waterborne latex basecoat that is as efficient as it is environmentally conscious. “We believe that, by January 2012, all body shops will be mandated to be waterbased,” said J. Todd Warren, a sales representative for PPG Automotive Refinish, whose sevencounty territory includes the Penn College community. “PPG is ahead of the crowd on this one, among the earliest adopters of this new technology.

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There’s a lot of loyalty among our customers. They know and trust PPG, and we’re making a huge impact on the industry.” Warren acknowledged that the switchover can be daunting for body shops, but he said the advantages—both for the environment and for business— transcend the learning curve. Some recognizable names, from the Blaise Alexander dealerships on the regional landscape to Penske Racing on an international level, already have made the conversion with no inclination to turn back. On the “green” frontier, the move to Envirobase High Performance saves more than 300 pounds of VOCs annually for an auto-body shop that mixes an average of one gallon of basecoat per week. “That is the equivalent of eliminating emissions from more than 1,000 vehicles per year,” said Warren, a member

of the school’s Collision Repair Technology Advisory Committee. There are economic benefits, too. “Customer service will be re-energized by this product,” Warren said. “It dries in two minutes. That’s 60 percent faster. I don’t have to calculate the drying rate of solvent on a cold day or on a hot day; it dries at one speed, consistently—without color-shifting or mottling —so I’m not standing around wasting time between coats.” Warren and Jim Kvatek, supervising instructor at the PPG Pittsburgh Business Development Center, returned to the collision repair paint bays for hands-on sessions with Penn College students and faculty, as well as with instructors in automotive programs at vocational high schools. And because 70 percent of the waterborne market is in Europe, PPG plans to take a group of Penn College collision repair students and faculty to Italy for a global perspective in the land of Ducati, Fiat, Ferrari and Lamborghini. For more information about collision repair technology and other majors within the School of Transportation Technology, visit online or call 570-327-4516. For more about Penn College, visit on the Web, e-mail or call toll-free 800-367-9222.

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The Right Cause

Mike Causey is a consumer advocate and lobbyist for the Independent Auto Body Association (IABA), in addition to Non-profits such as alternative healthcare groups (Citizens for Healthcare Freedom, NC Reflexology Association), Organic farming and Healthy Eating. Mike is a writer and speaker on numerous consumer issues and legislation. Mailing address: Causey & Associates, P.O. Box 16725, Greensboro, NC 27416 Email: gocausey@aol.com Phone: (336) 210-1947

Concessions: Why give them to insurers? with Mike Causey

According to a recent New York Times report on the national health insurance debate titled Many small businesses can no longer afford to cover their workers, employer-sponsored group health insurance plans are foundering because of “soaring premiums.” During the congressional hearings regarding national health insurance, insurers agreed to make some concessions. But only for individual private health insurance policies or the insurance plans of major corporations. The insurers “balked” at giving similar concessions to small business owners. The insurers offered key concessions to make it easier for individuals to buy health insurance. Furthermore, the insurers, during the congressional hearings, said they will “sell policies even to people with pre-existing medical conditions, and to stop basing prices on how healthy or sick someone is.” However, those same insurance companies “appear unwilling to give small employers the same break,” according to the NY Times. Businesses with fewer than 100 workers employ 40 percent of the labor force in the United States. Small business is the backbone of the US Economy. Yet, insurers won’t even consider “concessions” when it comes to helping the business owners with the high cost of group health insurance. Yet, insurers are quick to ask small business owners (body shop owners) to give them all sorts of concessions on parts, labor rates and any number of things.

Why Give Concessions to Insurers? Simple. It’s all about the money. If the shop is a Direct Repair Shop (DRP) it is a requirement of the contract. The insurer promises to “send” more business to the DRP shop when certain discounts are given to the insurer. For non-DRP shops, the insurer simply “refuses to pay” above the amount the DRP shops are getting paid from the insurer. Insurers are experts at “negotiating” DRP contracts and agreements that guarantee advantages and profitability for insurance companies. After all, the insurers write the terms and conditions, and the body shops can “take it or leave it” as far as the insurers are concerned. Insurers no doubt control the repair process today, but body shops can “stand their ground” and push back if they would just do so. When the insurer wants to get rid of their “labor-intensive clerical work” and

shift it to the body shop, they get away with it simply because the body shop owner “agrees” to do this in exchange for business being “steered” to their shop by the insurer. And in most cases the shop does get the business. But at what cost? Many insurers only consider body shops for DRP deals that agree to buy a specific computer system and software favored by the insurer. After that is set up, the body shop has the responsibility to post schedules and routine clerical updates to the computer during the repair process, so the insurer can “monitor” a repair without visiting the shop. When the claims adjuster does visit the DRP shop, they will be given that a “private office” and all sorts of office equipment, courtesy of the DRP shop. Today the stakes are higher than ever. Many body shops are going out of business due to the Great Recession and heavy insurer steering to preferred shops. The demands for concessions have escalated to levels never dreamed. Now, State Farm demands EVERY concession a shop gives to other insurers. Which insurer will top State farm in their concession demands? If the repair job in your shop is “delayed” for any reason, expect to pay the claimant’s rental car bill when the repair is finished. One more thing: body shops on some DRP programs are required to carry high limits of liability insurance, and sign an agreement to “hold-harmless and pay all legal costs incurred” on behalf of the insurer in the event of a dispute. What a contract! Because of the tough business climate and the desire to get more cars to repair, some body shops give concessions they normally wouldn’t accept. Concessions such as discounts on labor rates and parts. The insurance industry has an iron-fisted grip on the collision repair industry, and it shows no signs of easing up. A 2007 JD Power & Associates study, The Impact of ‘Customer Choice’ on Insurance Claims Experience, found the Progressive direct-repair program was “faster” in repairing vehicles than the industry average but had the second highest failure rate in the industry. According to some, repair quality can suffer under a direct-repair program. Why? Because insurers refuse to pay for certain costs, the body shops won’t fight back and the body shop “eats” those costs. The “costs” that the body shops “eat” are often little things that really add up over time. For example, $6 or $8 for flux additive for bumpers; If the shop does just 40

12 APRIL 2010 AUTOBODY NEWS | www.autobodynews.com

bumpers a month, that works out to about $3,000 a year on just one simple item. “Multiply the ‘simple items’ not paid for by insurers and it’s a significant amount of money that a body shop is losing every year,” says Neal Nuce of Precision Collision, Inc. of Raleigh, NC. Nuce says “Many body shops are being forced to cut corners in repairs” because the insurer refuses to pay for what is necessary to properly repair the damaged vehicle. “Giving concessions to insurer further empowers the insurers and harms the negotiating position of body shops,” says Nuce. If body shop owners continue on this path of giving in to insurer demands for concessions, where will we be in the future? What will be the ultimate concession that the insurer demands—to perform the work and pay the insurer for the privilege. What ultimate good can come from granting concessions to insurers? By saying “No” to insurers shop owners make it possible to compete on a level playing field. Some insurers cross the line of ethical and fair business practices to the side of

unfair and unethical behavior because of the willingness of some body shop owners to “get along” and agree to concessions. Of course it’s not enough just to say “no” to the insurer. After all, the insurer is the party holding the checkbook and the pen that writes the check. The shop owner must know what a proper repair calls for and know the P-Pages for the major estimating systems. As a State Farm adjuster once said, “Most shop owners don’t know how to get paid for all their work, parts and supplies because they don’t know how to document the requirements to show the insurer what is necessary to restore the vehicle to its pre-accident condition.” It is a safe bet that the insurer knows perfectly well what is required to restore the vehicle to its pre-accident condition. But the insurers’ goal is to pay out as little as possible. That’s why they want cheap parts and quick turn-around time. It’s a matter of survival for many body shop owners today. Ask yourself, “If not me, who? If not now, when?”

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www.autobodynews.com | APRIL 2010 AUTOBODY NEWS 13

Parts for Profit—Managing Your Inventory and Personnel Profitably by Larry Williams

This article is directed to dealership parts managers directly managing employees handling both mechanical and collision parts, however, the same principles Larry Williams apply to parts management in a body shop. Read on to see how to improve your parts and people management. Larry Williams is a former parts manager and consultant who has received national awards and over 40 years of experience in creating profitable departments. He can be reached at ljoew2@gmail.com.

Fact: The typical [dealership] parts department has more investment and returns less profit than any other department. Every other department can be financed, leased, depreciated, or leveraged. Automotive parts require cash—paid in full, every month. Many parts departments are sinkholes, sucking resources from the dealer, tying up capital in un-saleable inventory, maintenance, and personnel. This needs to change. Today’s parts department must be an asset to the dealership. Analyze your parts department’s profitability. Look at the ratio of net profit to inventory. A well-run parts department can generate annual net profit ratios of 50% or more, based on your inventory investment. Then show the dealer principal that your inventory is an investment, better than the bank when it comes to the rate of return. This should be your goal. Every inventory dollar working to produce more profit and every employee’s time managed to maximize their productivity. The first step is to analyze your inventory. You can easily check your monthend management report for stocking part numbers. I have found that an inventory of 1500 part numbers is all you need to cover your daily sales. This is based on a requirement that stocking parts should sell at least three times in a year, or for new models, two times, in six months. You can rationalize stocking dollars this way: After a part has sold three times, you have made enough profit to purchase the fourth part, effectively investing profit, not capital. A twenty-one day supply is more than adequate for all normal needs. All other parts should only be ordered when needed and when the sale is guaranteed. No money should be tied up in speculation. All excess inventory; all items unsold for twelve months or more, need to be converted to cash. Return them to the manufacturer as obsolescence if possible, or donate them to

the nearest tech school for a tax credit. All they do now is collect dust and absorb valuable resources. With today’s freight system you can balance inventory vs. freight. A small dealer will have smaller inventory with higher freight charges; a large dealer will have more inventory, but smaller freight bills. Never absorb all freight charges, do the paperwork necessary to recover charges from the manufacturer and always charge your special order customers for their freight. A flat percentage with a minimum starting charge will keep your costs at a minimum. Example: 10% with a $2.00 minimum. Remember, that is ten percent of your selling price, not your cost. This should allow you to make a profit on your freight. Find out what your manufacturer charges are and post your freight policy where your customers can see it. These simple guidelines will start you on your way to a department that is valuable to the dealer, and a steady source of needed revenue. Next, look at the physical layout of your parts department to make it more efficient and profitable.

Physical Efficiency is Essential A profitable parts department must be time efficient. Wasted time is wasted money. Reduce as much as possible the time required to go from the sales position to the part itself. Counter personnel must be able to go directly to the bin, find the proper location, and pull the correct part with a minimum amount of time and effort. Most basic of all, your efficient department must start with its physical design. Preplan your bin layout. Draw out a floor plan first. Know what your plan is and locate parts one time only. You must divide your inventory into fast and slow moving sections, not just large and small. Remember, only about 1500 numbers make up the bulk of your sales. These parts must be in your first section of bins. Use at least three sizes of bins in each section. You must be able to locate all fast moving parts in the bins closest to your counters. Make breaks in your rows; don’t force your people to walk the entire row before going to the next isle. No more than five bins between walkways. All isles must be perpendicular to the counter. All isles must be a minimum of 30” and a maximum of 36” wide. Do not crowd your walkways, no parts sticking out of bins. I found 18” deep shelves work better than 12” ones. Also, remove backs of bins and use struts for reinforcement. This allows more light on your shelves, and 20” parts are no problem. Vary your shelf spacing for small, medium, and large parts. “Front” all your

14 APRIL 2010 AUTOBODY NEWS | www.autobodynews.com

parts, it makes them easier to see and reach. Mark all part locations with movable tags, because your inventory is in a constant state of change. You want to be able to relocate parts easily. Leave bottom shelves empty, this is good for temporary storage of parts you will work into position later. Special attention needs to be made to the back counter area. Bins here must be used for fast moving filters, fluids, and other shop needs. You must also have a shelf here for your shop’s special orders, visible to your technicians. A separate special order section is also needed. These parts will also be moving out rapidly. Keep your special orders near your counters. Avoid stocking air. The biggest waste of stocking space is trying to follow the manufacturer’s numerical sequence on your shelves. Very few manufacturers keep like sized parts in sequence. With computer controls, you can mix parts, locations, size, etc. any way you want. The time spent creating the most efficient work area possible will be repaid ten fold in increased productivity.

Numbering and Location of Bins Quick and easy access to your 1500 fastest moving parts is your key to efficiency and profit. Bin numbers should be mental guides to the actual location, easy to visualize and travel to. Direct travel between bins and isles in easy to remember location codes, not just numerical sequence. Give your team a mental picture of exactly where the bin is and they only have to remember the part number. The best numbering system I have found is row, side, bin. Example: Bin “3L4” is isle 3, left side, bin 4 from the front. This gives a mental picture of exactly where this bin is located in the department. When necessary, use the shelf number also. 3L42 now indicates shelf number 2 as the part location. All parts on that shelf are in numerical order. Small parts need to be in 4” bin boxes with dividers. Don’t waste shelf space going wide when you can go deep. Again, logical bin numbering, 3L4D4 means drawer 4. Use logical letters to help locate parts, R,L,N,S,U,B,M, etc. means right, left, north, south, upper, bulk, molding, etc. Put like items together, tune-up section, cooling section, fuel section, etc. Make the job as easy as possible, the less time taken per sale means more sales per employee. The best floor plan possible is wasted, however, if you have sloppy housekeeping. Details are important! All parts must be in sequence, with adequate room for all like parts. Every location has a bin tag, magnetic ones are best. Every bin tag is printed in the same font. All tags legible

from a five feet away. Your employees must be able to scan a bin and find their part in seconds, not minutes. No multiple locations except for bulk overstock of extremely fast moving parts, filters and fluids, for example. After working out the main bin locations, parts locations, traffic patterns, sales patterns, do the individual work stations. Again, you are maximizing the selling time per counterperson. Every employee should have all the tools he or she needs within arm’s reach. If you have three employees working at the counter, and only two catalog stations, you are cutting one third of your sales potential. Custom-tailor each workstation to the individual. Right-handed persons need the phone on the left, calculator on the right. Left-handed people need the opposite! Cordless phones and headsets are good ideas. Buy the extra stapler. A physical layout plan: 1. Divide your inventory by movement 2. Divide your inventory by sales area 3. Create isles, bins, and bin numbers 4. Create work areas 5. Supply all tools for each individual

Profitable Inventory Control Philosophies Inventory control courses have always been promoted by the manufacturer, and inventory specialists know who signs their checks. Because of this, all inventory philosophies have naturally been biased in favor of the manufacturer. Stock order vs. special orders, designated stock order days and minimum percentages are good for the manufacturer, not the dealer. Extra days supply, inventory of new model parts, all are good for the manufacturer. None of these policies make the best use of the dealer’s dollars. However, a slight change of philosophy will result in better profits, the dealer’s main need. New philosophy… Lean and Mean!

Policy And Procedures Sample Parts For Stock: (tight control system) Part must sell at least 4 times in 12 months. Part must sell at least 1 time in last 60 days. Part must have no more than 30 days supply on shelf.

Parts For Stock: (normal control system) Part must sell at least 3 times in 12 months. Part must sell at least 2 times in 6 months. Part must have no more than 60 days supply on shelf. As I have said before, all these parts have permanent locations, in bins close to your sales counters.

Other Inventory Control Guidelines Keep all your controls as simple as possiSee PARTS FOR PROFIT, Page 18

HB 2463 Arizona Auto Glass Fraud Bill Passes House—Update by Kerry Soat. VP, Arizona Glass Association

With the extraordinary help from our lobbyists, Barry Aarons and Jimmy Hamilton, we were able to get the insurance companies and legislators to join us at a stakeholder’s meeting to discuss the issues of great concern in HB 2463. As you saw from my earlier comments, this bill was very vague and extremely threatening to the auto glass companies operating in Arizona. If this bill was passed in its original form, it could have subjected innocent auto glass operators to Class 6 felonies. It also could have become “poster child” legislation in other states. This bill needed to be written with input from the Auto Glass Companies, not just the insurance companies as it was originally.

Don Isaacson, representing State Farm Insurance; Don Hughes representing American Family Insurance; Kerry Hayden representing Farmers Insurance Group; Rep. Nancy McLain, Chairperson for the Banking and Insurance Committee and sponsor of the bill; Rex Altree, President of the Arizona Glass Association; Barry Aarons, Jimmy Hamilton, Lobbyists for the Arizona Auto Glass Association; and myself, Kerry Soat, Vice President of the Arizona Glass Association, were present at the table. We discussed many issues facing the insurance companies and the justification for this bill. Since fraud is present in the auto glass industry and we were not denying it, we also felt a “good” bill focusing on fraudulent practices would be good for the industry. By all the parties dealing in good faith and sincere honesty, we were able to arrive

at an amended HB 2463 that deals directly with the issues the insurance companies wanted to cover. Having said that, we all went through the bill line by line with diligence and collectively developed the bill language attached. As upset as we were when we found out about HB 2463, Don Isaacson, Don Hughes, and Kerry Hayden were very sincere in approaching the corrections needed in this bill. Without their sincere cooperation, we likely would have had a huge battle on our hands. They listened and we listened, and together we came up with a solid amendment to correct the language. We are pleased to have a bill that deals with the issues the insurance companies wanted addressed and in language auto glass companies can support in our daily operations. Fraud in our industry should be a rallying point, and we should

work to make sure our industry is policed properly and fairly. Insurance fraud does not benefit anyone. I believe we have reached a good starting point with HB 2463 in its amended form. I believe a more comprehensive auto glass and insurance company bill is needed to help alleviate the wide gaps in the operation of auto glass companies doing business with insurance companies and third party administrators. With the relationships we have built with the insurance company representatives through this process, I hope we can develop a more complete auto glass bill in 2011, addressing all of the aspects of concern in our industry. To do so, we hope to continue working with the insurance companies this summer to develop proposed legislation for next year’s session. Any honest auto glass company should not feel threatened by HB 2463, but should be aware of what kind of fraud it addresses. The Arizona Glass Association is willing to help any auto glass company understand and ensure they are compliant with HB 2463. If you have any questions regarding your operation and your compliance to HB 2463, please feel free to contact Rex Altree at 602-695-7191. Kerry Soat CEO, Fas-Break, Inc. 480-967-4884 Vice President Arizona Glass Association

CCAR Recognizes Sacramento Shop as a “Greenlink Shop”

The Coordinating Committee For Automotive Repair (CCAR®) announces that G&R Body and Paint of Sacramento, Calif., has been recognized as a “GreenLink Shop.” The GreenLink Shop status, an extension of CCAR’s CCAR-GreenLink® Environmental Compliance Assistance Center and S/P2 (Safety and Pollution Prevention) E-learning Program, is designed to promote consumer confidence in local automotive repair facilities’ environmental/safety awareness and stewardship. “Becoming a GreenLink Shop is exciting to us, and I am happy that we have achieved this status,” said Dave Picton, owner of G&R Body and Paint. “It is important to me that we do the ‘right thing’ not only for the environment, but also for our employees and our community. As all of us go home to our families at night, it’s important that we feel good about both the quality of our work and our role as good citizens; it’s not just about bringing in the paycheck.”

www.autobodynews.com | APRIL 2010 AUTOBODY NEWS 15

Paint Management

Stefan Gesterkamp is a Master Craftsman and BASF representative who has been in the automotive paint industry for 27 years. He started his career in a custom shop before turning to collision repair. Stefan graduated from the University of Coatings and Colorants in Germany and is the author of â&#x20AC;&#x153;How to Paint Your Show Car.â&#x20AC;?

Is Waterborne Paint the Only Answer for Low VOC Requirements? with Stefan Gesterkamp

In an Autobody News column last issue, the point was made that Southern Califoria shops can still use a VOC compliant solvent-borne basecoat systems rather than a waterborne basecoat system. Some of you may have read this and thought, â&#x20AC;&#x2DC;hey, wait a minute, I thought in Californiaâ&#x20AC;&#x2122;s Rule 1151 and other similar rules, water was the only game in town?â&#x20AC;&#x2122; Well, the rule asks for a 3.5 VOC basecoat. It does not specify that you have to use waterborne paint. How you get to 3.5 VOC is not important. Why would a shop want to go waterborne if they donâ&#x20AC;&#x2122;t have to? From my point of view, the answer is simple; it is the better choice for the vast majority of shops. After more then two years of using waterborne basecoats in Southern California, most painters tell me that they wouldnâ&#x20AC;&#x2122;t trade their waterborne basecoat back-in for their old solvent system. Although color matching in water required a bit getting use to in the beginning, the overall matches right out of the can have been better in water. This makes a lot of sense because the OEMs are using waterborne basecoats in increasing numbers. I truly feel that waterborne basecoat technology is the right choice for about 80% of shops in our industry. So what about the rest? The remaining shops are likely in one of the following categories: â&#x20AC;&#x153;mobileâ&#x20AC;? small damage repairer, custom, or restoration business, fleet service provider, RV builder or repairer, or otherwise challenged by environmental circumstances. For the mobile repair businesses, a solventborne solution like BASFâ&#x20AC;&#x2122;s Limco Supreme line has many advantages over water. Mobile repairers frequently do their work in the most unconventional areas and are exposed to weather and airborne particulates. Making waterborne basecoats work in these conditions is not impossible, but more challenging than it has to be. The initial flash-off time in water is slower compared to exempt solvent technology and it increases the risk for airborne particulates to get stuck in the paint while spraying in a parking lot. Another advantage to mobile repair specialists is that you have a better chance to get a color match dialed-in on the mixing stick, without having to spray a test panel. Not that I would recommend it, but some have made an art form out of it. Then there is the ever increasing cost issue. In the mobile repair business, margins are generally thin. With the exception of the rare specialty paint lines like â&#x20AC;&#x153;House

of Kolorâ&#x20AC;?, most other solvent based options on the market I am aware of are more accurately categorized as an economy product. In other words, it is likely translating into older technologies and much less R&D investment by the manufacturer for continuous improvements such as color match and other very costly performance attributes. This is precisely why fleet service providers also like this technology. Their end-user is generally less critical than the average collision repair client and warranties are rarely given or very short term. Custom and restoration shops have other reasons to consider the use of a solvent based basecoat. If the paint job involves intensive graphics and striping work, solvent based basecoats can be easier to use a times. This would also be the case and a driving factor for RV businesses. RVs are all about stripes. Please donâ&#x20AC;&#x2122;t misinterpret what I am trying to say, many great custom painters and RV shops alike are already using waterborne products very successful every day. It simply takes a new approach and different techniques to be successful. But I am not trying to knock the old school custom guys either; there are reasons, good reasons, why they are the hardest bunch of painters to move into a new paint technology. Custom shops have worked very hard to build a reputation for the unusual and unexpected. Unique and hard to copy craftsmanship is the name of the game in this specialized segment of our industry. They found unconventional ways to manipulate their paints to get just the right effect their clients are looking for. Giving up all the hard learned lessons, tricks and experiences going with it isnâ&#x20AC;&#x2122;t easy. There is great comfort in knowing what to expect when you push paint past the envelope a manufacturers designs its product for. Knowledge like that took decades to develop and having to do it all over again is highly time consuming. The other side of the coin is the period correct restoration work. Some shops are really critical in reproducing the old style metallic-flake look of the 50â&#x20AC;&#x2122;s or 60â&#x20AC;&#x2122;s. Producing that somewhat flat, a bit lusterless look in waterbase takes a lot of effort. Waterbase is by default cleaner more brilliant than solvent-based basecoats. The last group that would benefit from modified, older solvent based technology is shops that simply donâ&#x20AC;&#x2122;t have the ability or recourses to get their facility to a suitable condition. A shop that routinely does business in a cold & humid climate

16 APRIL 2010 AUTOBODY NEWS | www.autobodynews.com

and has no ability to control the spraying environment at all may be challenged to make it work. This may not always be driven by money either; some shops are in situations where the local government or other regulation would not allow for a new

booth, or booth upgrade permit. For the shops that have to, the technology is here for you to use. For the rest, be aware that there are tradeoffs and a potential price to pay for avoiding the change to modern times.

AkzoNobel Suggests Sustainable Business Model AkzoNobel says 160 attendees representing 140 businesses from both car and commercial sectors gathered Feb. 17â&#x20AC;&#x201C;19 in Ft. Worth, Texas, for the Sikkens Acoat selected Winter National Performance Group meeting (NPG). This meeting marked the 16th annual gathering. It is the first of two NPG events annually hosted by AkzoNobel. A number of shared business practice classes were conducted. A key focal point for the meeting was the issue of sustainability. Emphasis was placed on the growing importance of elevating awareness of business practices that can not only have an effect on the profitability of collision repair operations but also the environmental well-being

of both local and global communities. Other pertinent topics included using social media to market a business and an overview of the new HAPS VOC regulations detailing implications and actions required from shop owners pertaining to those regulations. In keeping with the â&#x20AC;&#x153;real worldâ&#x20AC;? focus of the Acoat selected program, two shop tours were conducted. Park Place Bodywerks of Dallas hosted the group for a tour of its 87,000 square foot facility, which generates in excess of $1.5 million in monthly collision repair sales. Representatives from International Truck Group toured the International Truck facility in Garland, Texas.

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www.autobodynews.com | APRIL 2010 AUTOBODY NEWS 17

Continued from Page 14

Parts for Profit

ble; a manager should not spend all his time on inventory reports. Use as few sources as possible, used not only for ordering, but also for pricing. Use the minmax, per job, and full bin fields to keep your parts at the proper levels. Watch out for phase-in parts, the computer has no idea of multiple part needs. Example: shock absorbers, spark plugs, etc. will phase in as a suggested order of one only. Manage your inventory by exception, use the hi/low value on reports, the middle will take care of itself. Other inventory control issues: Tape updates, part number changes, bin location changes, negative and zero on hand, phase in and out, should be weekly or monthly activities, with regular schedules. Missed sales and outside purchases are probably the second most important loss of dealer profits. You must have honest input of these parts in order to keep your inventory current. All shop purchases must be entered as missed sales. Every counterman must record every missed sale. If a man has to take the time to look up a part, it should be recorded. Buying a part from outside instead of taking it from your own supply is always a loss, a loss of time and manpower.

The many details of inventory control can take up thousands of words, but if you adhere to these principles, keep your inventory lean and mean, profit will be the natural result.

Managing Your People You now have your 1500 part numbers arranged in bins close to your counters, in easy to remember locations, correct quantities, and are ready to make some money. No, not yet. You’ve only done the easy part. After inventory-investment control, productivity is the next issue. Productivity is limited by time. Wasted time cannot be reclaimed. Every decision, every procedure, every plan should be based on time. Training your people will be the hardest, longest, and most frustrating part of your job. No one wants change in their life, especially not at work. Some are actually frozen in their patterns. Your ideas will be met with resistance of all kinds. You must not quit. You must be the unstoppable, irresistible force. Here are some guidelines to help you. Write it down. Verbal instructions are almost useless. We use our eyes first, our ears second, our memories last. When you write down your policies and procedures, you create a lasting effect, one that cannot be “forgotten”.

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Write it all down. When you are ready to start your program, do it all. Isolate yourself, start thinking about how a perfect department functions, and start writing. Don’t worry about priority, that will come later. Think about the position, not the person. Think about efficiency, volume, quick and easy procedures and how to provide them. Create plans. Break down overall plans into separate detailed plans. Give yourself time to brainstorm, and write everything down. Let your enthusiasm be your guide… if you start to overdetail one subject, continue. You can always go back to the beginning, if you have written it down. The important thing is to keep the ideas flowing. Stop writing only when you can’t think of anything else. Make your list. Now comes the time for priority. Sort all your ideas into groups. Sort all procedures by positions. List changes in order of priority, and list everything you want to do. This list will become your guide in the months to come. If you do not have a guide, you will become mired in routine, and be unable to remember the wonderful ideas you used to have, all the changes you wanted to make. Schedule your changes. People can only handle a maximum of three new ideas at a time. It takes twenty-one days to make or break a habit. Use these two facts to make up your schedule of changes. Take it

easy, one or two steps at a time. Wait until things have settled down before stirring the pot again. That is why you must have a list of all the things you want to change. Now you see why I say this is the longest and hardest part of your job. Change yourself first. Next come some guidelines to help you lead your people, but you must be the example they follow.

Employee Motivation Be a leader, a teacher, and a problem solver. Each person in your department must be as productive as possible. An unhappy employee is not a productive one. Do your people come to work with smiles? Do your people stay late to “BS,” or to finish jobs, or to prepare for the next day? If you answered yes, 90% of your work is going to be very easy. But if you have an unhappy workforce, the first thing you have to do is to change their attitude. Negative criticism is the worst tool you have. Use it as a last resort, when trying to save an employee from termination. The manager’s attitude will be the attitude of the employees. They look to their leader for clues about how to perceive their jobs. If the top man is unhappy, everyone else will follow him down the hole and so will your customers. You must be a positive leader. Smile, laugh, and joke with your people. Not enough to interfere with them, just

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enough to get them smiling also. Create positive feelings between employees and get them working together. A few simple ideas: Ask each one to fill out a short form once in a while about themselves or each other. A simple questionnaire: name, position, year’s experience, their own idea of a job description, their proudest accomplishment, suggestions for improvement of their job. Do not ask for criticism; ask positive or neutral questions only. Talk with each one in private about how they perceive and feel about their job and place in department. When presented with an opportunity to implement one of their ideas, do so and give them full credit for the idea. Encourage them to want to improve the department. Create a “pat on the back” award, one that the employees themselves contribute to. A simple form, with all employee names, and a check box for good, better, and best. Ask a simple question: Rate your fellow employees for most helpful, or most cheerful, or best problem solver, etc. Only one question, no possible negative comments, a take-home and mail in form with a stamped and addressed envelope. No ratings except for an award to the winner. Get your people thinking positively about each other. Post all department goals based on prior years and update daily. Make every effort to praise good work publicly, and when necessary to have a negative session

with an employee do it in private behind closed doors. Once you have fully developed a positive attitude in your department, changes will be easy to make.

Things to do: ● Establish inventory controls ● Establish training program ● Establish pricing policy ● Establish expense accounting ● Analysis of wholesale income ● Analysis of discount structure ● Check for maximum stock order discounts ● Check for dealer wholesale incentives ● Check fleet accounts and rebates ● Check for best part return policy ● Review possible promotions ● Review pay plans ● Create policy and procedure manual ● Establish schedules for inventory maintenance ● Schedule freight credits

The parts manager is the key motivator in the department. Also, he has the most complex job. You need all the help you can get, and it needs to be good help. Very few employees will train themselves. Most of the time they rely on “on the job” training, and when they have learned enough to keep up with the everyday flow of business, they stop. The problem with this is that “just enough” is not

good enough. You must institute an ongoing training program until everyone is as qualified as possible. The more your personnel know about the entire department, the better they will work with each other. Most manufactures have a certification program of some kind. Set a goal that every employee will get the highest certificate possible. Set aside time for training. For individual employees, afternoon sessions are best. Training for a group is best done after work. Group training is difficult. None of your people are going to be enthusiastic about staying after work. You must be firm. Let all of them decide on which day they want, except for Friday, no one should have to stay late on that day. After the day is decided, have a firm goal for each meeting. One manufacturer I worked for had short manuals, approximately thirty pages, with twenty questions at the end. Having a “classroom,” with each one reading and answering by themselves would have been a boring and painful experience. Instead, I passed out that evening’s manual, and immediately assigned one of the questions to each person. I instructed everyone to look through the manual for the answer, and when found to tell everyone what page the information could be found, and read it aloud. They then were given the next question to work on. All persons were given the same number of questions. This created a team ef-

fect. At the end of that session, everyone had all the answers, and all had contributed evenly. If one or two had not found answers by the end, all contributed to the effort. Although this would seem on the surface be shorting them on the complete course, in reality they had to read the manual, cover to cover, over and over to find the answer to their own question. Turning to the page, reading the answer to another person’s question, writing the answer down, gave them the knowledge without the “pain” of a structured class. All shared the work, the knowledge, and the reward. Here is a general training outline: 1) training on parts system, number system, group system 2) training on computer system-interface with accounting 3) training on posting, part number control, dollar control 4) training on customer relationswholesale, retail 5) training on accounting, expense and sales accounts 6) training on parts control-monthly obsolescence, parts ordered in error, part number changes, credits 7) Overall objective, have everyone know everything… and why. 8) Create a team

Comments? Contact Larry Williams at ljoew2@gmail.com.

www.autobodynews.com | APRIL 2010 AUTOBODY NEWS 19

Continued from Page 1

Mopar and Rich Evans

Evans will employ an array of Mopar parts, some modified with his own fabricated spin, in order to create a new automotive work of art. Rich Evans Exclusive Parts as well as products from numerous aftermarket suppliers will be utilized during the build, which will be documented in a series of podcast videos posted to Mopar’s YouTube channel. Evans will also pen exclusive blogs for posting on http://www.mopar.com and his own site, www.huntingtonbeachbodyworks.com. “Rich Evans has crafted some of the most remarkable customized rides on the street today,” said Pietro Gorlier, President & CEO, Mopar Service, Parts & Customer Care, Chrysler Group LLC. “This Mopar SEMA project will demonstrate to our customers what they can create with proven, quality-tested Mopar parts and accessories.” Evans will also act as a judge for the new tuner category of the Mopar “Top Eliminator” program. Now in its fourth year, the program highlights restyled or customized Chrysler, Jeep®, Dodge or Ram vehicles of Mopar enthusiasts. The new tuner category winner will be selected from enthusiast nominations based on creatively applying technology to a current-model vehicle while maintaining brand integrity and values. All

“Top Eliminator” winners, from the various categories, will be displayed in the Mopar Alley at the 2010 SEMA Show. “I’m pumped up to team up with a premier organization like Mopar on these thrilling new projects,” said Evans. “Together, I think we can seize the attention of the young Next-Gen crowd with the new ‘Top Eliminator’ tuner award and the SEMA-car build while still holding the at-

The pre-Rich Evans 2010 Dodge Challenger.

tention of today’s enthusiasts. You will see an amazing Mopar/Rich Evans creation in the Mopar exhibit at SEMA in November.” 5th Annual Chrysler Spring Festival. The 5th Annual Chrysler Spring Festival takes place March 20 in Irvine, CA. The event is the largest gathering of Chrysler LX/LC platform vehicle owners in the world, featuring current-model vehicles such as the Dodge Challenger, Dodge Charger and Chrysler 300. The Mopar Direct Connection rig will be on hand for show attendees to visit.

Show vehicles packed with Mopar parts will be on display at the rig, including the Dodge Challenger 1320 Street Pak, Dodge Challenger Mopar Edition and Ram 2500 ST Reg Cab w/8.0 box. Enthusiasts may also inspect Mopar engines on display, including the 426 HEMI engine with cutaways, 426 HEMI Crate Engine and a Mopar Dodge Challenger Drag Pak HEMI engine with a cutaway bell housing and transmission. When Chrysler bought Dodge in 1928, the need for a dedicated parts maker, supplier and distribution system to support the growing enterprise led to the formation of the Chrysler Motor Parts Corporation (CMPC) in 1929. Mopar (a simple contraction of the words MOtor and PARts) was trademarked for a line of antifreeze products in 1937. It also was widely used as a moniker for the CMPC. The Mopar brand made its mark in the 1960s—the muscle-car era. The former Chrysler Corporation built race-ready Dodge and Plymouth “package cars” equipped with special high-performance parts. Mopar carried a line of “special parts” for super-stock drag racers and developed its racing parts division, called Mopar Performance Parts, in order to enhance speed and handling for vehicles both on the road or at the track. For more visit www.mopar.com. For more on Rich Evans, huntingtonbeachbodyworks.com.

Auto Glass Chain Guilty of Insurance Scam

The owner and three employees of a national auto glass company based in Oakland, CA, have been convicted in federal court in connection with a scheme to overcharge insurance firms by installing cheaper windshields than they claimed on repair invoices, authorities said March 22. Mehrdad “Tony” Hakimian, 48, of Mill Valley, the owner of Glass Emporium of Marin Inc., was convicted by a federal jury Thursday of nine counts of wire fraud and one count each of conspiracy to commit wire fraud and obstruction of justice. He will be sentenced June 11. Hakimian directed employees at his business’ West Oakland headquarters and at its subsidiaries, Glass Pro and Glass Masters, to cheat insurance companies by misrepresenting the grade of windshields they were installing, prosecutors said. According to a federal complaint, Hakimian told a regional manager to “train (employees) like I want it done, to put in a cheap part and bill for a more expensive part.” The FBI began an investigation in 2005 when an employee of a Glass Masters shop in Tennessee came forward with paperwork showing 10 examples of billing irregularities, authorities said.In

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Florida Shop Owner’s Ongoing Slander Suit Against State Farm Began with Repair Procedure Disputes by Ed Attanasio, Special to Autobody News

What does a shop owner do when he’s up against the country’s largest auto insurer simply to get paid for work done, and then suffers what he sees as a slander campaign against him? For Ray Gunder, of Lakeland, FL, it started with saying ‘no’ to State Farm’s restrictions and it has escalated into a Federal Court case for defamatory statements and for interfering with a business relationship. “I can’t make State Farm stop slandering me by myself, but this great country we live in, and this fair legal system we have, can do something about it, and that’s why I’m countRay Gunder is suing ing on it,” Gunder State Farm for told Autobody News. defamation and for Ray Gunder interfering with his opened Gunder’s business. Auto Center in his hometown of Lakeland, Florida in 1969. It was a different world back then, but from the very first day, Gunder pledged

that he would provide quality above anything else. Over several decades, Gunder built his shop into a $3.3 million business employing 28 people. Things went well until about five years ago when Gunder said he ran smack into a roadblock called State Farm’s Service First program. In the early ‘90s, the program with State Farm was cordial until they began butting heads over the communication with other shops on Quality Repair Procedures in 2002, Gunder said. “State Farm came after me in a big way during a six-month period in ‘04,” he said. “They told me, ‘If you continue to communicate with other shops and write these procedures, we will remove you from our program.’ If my techs ‘dropped sweat’ for any of the procedure in the process of fixing the automobile, they deserve to get paid fairly for their efforts. This is how we feed our families. All I’m asking them is to be fair in the reimbursement for procedures that are prescribed for that repair.” Gunder quickly saw that State Farm was cutting their program out from under him as a direct result of his unwillingness to yield over procedures, and communications with local shops.

“From 2001 to 2004, I did $1.8 million with State Farm. From ’05 to ’09, I was down to $700,000. I saw it drop from 37% of my overall business to 4% and this year I’ve done maybe six cars with them.” The problems escalated when State Farm began rejecting more and more items previously included on his estimates, Gunder said. “They started re-iterating the fact that they weren’t going to pay for certain procedures and then their re-inspectors began rejecting items that were considered acceptable before.” These banned procedures included items like masking jams, denib, car covers for primers, and color, sand and buff, Gunder said. “In the beginning with the Service First program, we were actually writing the estimates, uploading them to State Farm and getting paid for them,” Gunder said. “Then, when we started writing procedures and when we started talking to other shops in the area about being paid fairly for procedures that are needed, they started to target me. That’s when I fell from grace.” Gunder won’t ever sacrifice quality to make a fast buck, he said, but State Farm doesn’t seem to share the same concerns.

“We’ve been doing things a certain way for 35 years, so why should I start chipping away at quality to keep an insurance company happy? I have to show my face in this town and I can do that with pride, because I’ve always run an honest, fair business. The database available to the collision industry in the late ‘90s helped Gunder to understand the right way to identify repair procedures as Included–Non Included. “Information is power,” Gunder said. “When the computer systems became more available, we were able to learn more and more about the proper procedures and the correct steps to identify them. Back when I started, I had to handwrite everything. We just looked in a big book and tried to understand it, and that’s how we did it. But then we started educating ourselves with the computers, and with the new technology and the information that became easily available, we started asking to be paid fairly for things that weren’t included.” But, State Farm wasn’t focused on adhering to these same procedures, Gunder said. “When I started asking to de-trim a door, they laughed at me and said ‘we’re not going to pay for that, because nobody else asked for it.’ It just evolved into a sit-

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Ray Gunder’s Auto Center in Lakeland, Florida, opened its doors in 1969.

uation where they put down their feet and told us to go pound salt. But, I stuck to my guns and State Farm didn’t like it one bit. It became ridiculous. “My goal with every repair is to adhere to all of the needed procedures to put a car back in pre-accident condition, as best as humanly possible. And they said things like ‘we’re not paying you because it’s not prevailing competitive pricing in your market.’ Or, ‘you’re the only one and

nobody else asks for that.’ If I had a dollar for every time I heard that, I’d have been a millionaire years ago.” What’s the main transgression State Farm has committed to cause Ray Gunder to sue the insurance company? “Slander,” Gunder said. “Their representatives made totally inaccurate, false statements about my shop to long-term customers and potential customers, whose respect I had earned over the years. They

told my customers that if they wanted to come to Gunder’s, they couldn’t. They said we’re not on their approved list. You’ll be paying a lot more than just your deductible if you go to Gunder’s, they told them. They said we overcharge. They said we don’t have the proper equipment and won’t pass their inspection. They said we do substandard work. And they also told customers that we take longer to fix cars than anyone else in this area, and any additional down time on rental would be their responsibility.” Once statements like these got back to Gunder via his customers, he was livid. “I didn’t go with their plan and I wouldn’t play nice, and they certainly did not like my communication with other shops, so they turned on me like a rabid dog and tried to take my customers from me. I’ve earned those peoples’ trust and I’m not going to let them taint that in any way.” State Farm has lightened up on Gunder recently to some extent, he said, but it’s a case of too little, too late. “They decided to stop torturing me late last year. They finally changed their word track and they’re not saying to the same degree negative things about my shop. Now they acknowlege, on a few occasions, that I have an excellent reputation in the community.”

But Gunder isn’t going to drop his case just because State Farm is playing nice right now, he said. “They realized that I’m not a cry baby throwing jelly beans and that I’m serious. They essentially tried to steal my customers and bankrupt me, and they’re not going to get away with it. I have no idea how long its going to take to rehabilitate my name because of the slanderous lies they have spoken about Gunder’s Auto Center in our community. They have made me “MAD”! Getting M.A.D. to me now means Make A Difference. Not just for Gunder’s but for our Industry!”

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www.autobodynews.com | APRIL 2010 AUTOBODY NEWS 23

Toyota Addresses False Claims Regarding 2002 TSB Toyota Motor Sales U.S.A., Inc., addressed false claims regarding a 2002 Technical Service Bulletin (TSB) published by Toyota, as reported by CNN's special investigations unit. On the CNN segment, plaintiffs' attorneys involved in litigation against Toyota and others, including Clarence Ditlow of the Center for Auto Safety, allege that the 2002 TSB proves Toyota knew of problems in its vehicles' electronic systems that could cause unintended acceleration, and that the company and the National Highway Traffic Safety Administration (NHTSA) conspired to keep this information from the public. Both claims are patently false. The 2002 TSB and software release in question were issued to remedy a drivability issue at speeds of between 38 and 42 miles per hour at light throttle. This condition was strictly related to a function internal to the transmission torque converter under certain throttle conditions. It manifested as a slight rocking motion, or surge, while holding steady throttle at the specific speed window. This issue was in no way related to any kind of sustained acceleration. The term surge has been used across the industry for many years to describe a condition where there is a very slight slowdown and speed-up perception (typically two miles per hour or less) while holding steady throttle at low to moderate speeds.

Powertrain software updates (typically released with TSBs) are designed to eliminate drivability concerns, including surge. Toyota's 2002 TSB software release was not issued to resolve any computer software concerns or problems with the electronic throttle control system and was not related to unintended acceleration. Drivability concerns related to momentary surges are not unique to Toyota, and nearly every major auto manufacturer has published TSBs to address this type of issue in their vehicles. In the last ten years, nearly 80 TSBs related to this issue with corresponding repairs and/or software updates have been released across the industry. Mr. Ditlow's claims that the 2002 Toyota TSB is a secret internal document that has not been made public are simply wrong, as are his allegations that Toyota and NHTSA kept this document from the public eye. Federal law requires that TSBs from every vehicle manufacturer be made available to independent service providers and the public. From the published date, the Toyota TSB in question was publicly available through Toyota at https://techinfo.toyota.com as well as through a number of independent and government portals. This 2002 Toyota TSB has also been previously reported on by other news outlets, and was also publicly discussed by Jim Lentz, President and COO of TMS, during recent Congressional testimony.

Honda Against Aftermarket, Salvaged Structural Parts

American Honda says it does not support the use of aftermarket, salvaged or recycled structural parts in collision repairs of its vehicles because the parts could compromise the way these vehicles absorb collision energy and put occupants at risk in future collisions. The company explained its reasoning in the following position statement: “Honda and Acura vehicles are engineered and manufactured to exacting standards and, as such, are designed to help protect vehicle occupants in the event of a collision. All elements of a collision-energy absorption system including but not limited to any structural components such as bumper reinforcement bars, bumper energy absorbers, frames, rails, fender aprons, Apillars, B-pillars and body panels must work in concert to protect the vehicle occupants and maintain cabin integrity. All elements of an occupant supplemental restraint system including but not limited to airbags, side-curtain airbags and airbag deployment sensors must work in concert

Toyota has sold more than 40 million cars and trucks with our electronic throttle control system with intelligence (ETCS-i), and the company is very confident that the system is not the cause of unintended acceleration. Toyota engineers have rigorously and repeatedly tested Toyota's ETCS under

with energy absorption components to provide proper timing for airbag deployment. Compromising any element of a collision energy absorption system or an occupant supplemental restraint system in the repair of a collision-damaged vehicle may have an adverse effect on occupant safety in any subsequent collision. Therefore, American Honda does not support the use of aftermarket, alternative, reverse-engineered or anything other than original equipment Honda or Acura parts for the collision repair of any Honda or Acura vehicle. Further, American Honda does not support the use or re-use of structural components that have been removed and salvaged or recycled from an existing vehicle that has been previously damaged. Although the parts may appear equivalent, it may be difficult to tell if the parts have been previously replaced with a non-OE part, or if the part has received collateral damage as the result of a prior collision. Further, the part may have been subjected to severe weathering, rust or other detrimental environmental exposure.”

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Service, Service, Diagnostic Diiagnostic D gnostic and an d Mechanical M e chanical ch aniccal al NEWS nd Mec echanical Mech ech ec hanical ca

www.autobodynews.com

Fewer Bays In A Service Market Growing In Size And Complexity Western Edition

by Jim Lang

The car and light truck service bay population in the U.S. shrank more than 50,000 over the past ten years. During this same time, the number of cars and light trucks on U.S. roads climbed by nearly 47 million units. Not only did the number of cars and light trucks increase over the past ten years, current vehicles are substantially more complex than those in operation just ten years ago. All these changes took place as the number of service bays in the U.S. shrank over 4%.

Big Decline In Dealer Bays The closing and cancellation of thousands of Dealers are dramatically changing the number and outlet mix of car and light truck service bays. Between 2009 and 2012, we at Lang Marketing expect over 36,000 Dealer service bays will be shuttered or converted into independent service bays. At mid-year 2009, there were just under 320,000 Dealer bays in the U.S. By 2012, this number will drop to fewer than 285,000.

CALIFORNIA • NEVADA • ARIZONA

From 27% of all service bays in 1999, Dealers will recede to only 24% of bays repairing cars and light trucks by mid-year 2012. Prior to 2008, Dealers annually accounted for an increasing share of car and light truck bays in the U.S. aftermarket. This trend was erased by Dealer closings during 2008. Between 1999 and 2012, the number of bays operated by Dealers will decline more than 55,000.

More Independent (non-Dealer) Bays While the Dealer service bay count will sharply recede between 2009 and 2012, the independent (non-Dealer) bay population is growing. Lang Marketing expects independent service bays will climb nearly 3% and expand their share from 73% to 76% of car and light truck service bays nationwide between 2009 and 2012.

Service Outlets Gaining Bays For the first time in nearly 30 years, Service Stations and Garages (primarily Garages) will add service bays between 2009 and 2012. During these three years,

Service Station and Garage bays will increase nearly 3%, a sharp contrast to the drop in Dealer bays.

Repair Specialists Repair Specialists (outlets focusing on a limited menu of vehicle service and maintenance) will record the greatest service bay gain between 2009 and 2012. During these three years, Repair Specialists will increase their bay population over 5% and generate nearly half of “independent” service bay growth.

Foreign Specialists Foreign Specialists concentrate on the repair of foreign cars and light trucks (imports and transplants). They will rank second in service bay additions and first in bay percentage growth from 2009 through 2012. During these three years, Foreign Specialists will increase their service bay population 8%, operating one-fifth more bays by 2012 than during 2000. Independent Outlets Gaining Bays Tire Stores will moderately increase their

April 2010

bay count between 2009 and 2012, about 1%; while Discount Stores/Mass Merchandisers with bays will expand their bay population approximately 3% during these three years.

Service Bay Losers Auto Parts Stores with bays will drop 11% in bay count between 2009 and 2012. The residual category of Other Outlets (which represents less than 1% of independent service bays) will recede approximately 3% in bay population.

Importance Of Bay Shift This significant shift in service bay count and bay share from Dealers to independent service outlets between 2009 and 2012 ensures the Service (DIFM) market share growth of independent repair facilities, reversing a long trend of Dealer Service market expansion extending back through the mid-1970s. From Aftermarket Insight™ by Jim Lang, President of Lang Marketing Resources, Inc., www.langmarketing.com.

Large Texas Body Shop Uses Scan Tools for Profit in Diagnostics by Ed Attanasio

Lynn Johnson is a mechanical technician working for Roger Beasley Collision Center in Austin Texas, a 54,950-square-foot body shop with 40 employees. Roger Beasley Collision is approved on Mazda, Porsche, Volvo, Saab and Subaru, but they can work on any type of vehicle. Every month, Johnson, a 15-year veteran, performs diagnostics on an average of 50 cars for a shop that’s fixing approximately 250 cars month. Since each car Johnson touches brings in roughly $300 on average, adding diagnostics to their list of capabilities represents approximately $180,000 in added revenue for the shop, Johnson said. When Roger Beasley Collision opened its doors in 2003, the owners made a decision to incorporate mechanical repair into their menu of capabilities. It’s been a smart move, because the shop avoids send-

ing cars out for diagnoses and also picks up a significant amount of varied mechanical repair business from its collision customers, Johnson said. Johnson credits a particular tool for the jump in diagnostics revenue—the purchase of an iSCAN II diagnostics tool from Autoland Scientech USA, a Texasbased distributor of leading automotive diagnostics systems sold worldwide. The shop encountered the company and its tools when co-owner Dusty Wombel met the Autoland Scientech representatives at NACE and was introduced to the product. “Dusty told me about it when he returned from Las Vegas,” Johnson said. “We saw a demonstration here at the shop and I could quickly see that it was going to get into things that we couldn’t do with our other machines. It made a big difference. It opened our eyes and we’re very pleased. It turned our world around really.”

26 APRIL 2010 AUTOBODY NEWS | www.autobodynews.com

Since they’ve purchased the iSCAN II, Roger Beasley Collision Center has seen an overall improvement to the bottom line because an undiagnosed and uncleared tripped engine light can delay the completion of a body repair.

Roger Beasley Collision has seen diagnostics on its customers’ cars become more profitable, efficient and productive since they opened their doors in 2003.

“This machine will allow us to work on a wide range of cars,” Johnson said.

“It offers more coverage than anything else we’ve seen on the market. We work on everything, but most of the cars in here are less than five years old and the things we can do on these cars is outstanding.” “Looking at the income side, the tool does generate revenue,” Johnson explained. “We get diagnostics time every time we touch a car. We save the time and money we’d otherwise have to spend taking it to the dealership, and we save a lot because we don’t devote people to take the vehicle to a dealership every time. If you can’t do the diagnostics here, it’s a hassle when the engine light or an airbag light comes on.” “It’s a common thing—we’ll just be finishing up the job and then we see that either the engine light is on or an airbag has tripped. If your customer gets in the car and it’s got an engine light on, that’s obviously not good.”

The iSCAN II has simplified Johnson’s life and increased his productivity. “If we see that light, we know we’ll make every effort to do the diagnostics inhouse. If we can’t do it here, we need to take the car to the dealership to let them do the work, which means we’ve lost control of the job. Then, if there’s a further problem, we have to order the necessary parts and now we’re waiting while the car sits. It messes up your CSI and delays your turnaround time. These insurance companies look at your turnaround times constantly. “Now, with the iSCAN II, we can bring the vehicle in, scan that car and find out what’s wrong with it fast. Then we can order the parts and, before the repair is complete, we have the parts in-shop and we’re not losing three days.” Sometimes it’s just as easy as simply clearing the lights, Johnson said. “There’s often nothing wrong with the airbag sensor, but you’ve got to clear that light. This iSCAN II machine will handle 85% of everything we touch. Most of the time, we can clear those lights and send the customer home without any problems. In that situation, we’ve already fixed the particular problem, so we just need to clear the light.” Avoiding trips to the dealership for diagnoses saves considerable time and

money, he said. “It makes life easier, that’s for sure,” Johnson said. “If you have to send a vehicle to the dealership, it’s going to cost you, say, $115 right off the bat. Then, you lose a day while you wait for it to come back to you. Not to mention the lost labor of two drivers to run the car out there and bring it back at the end of the day. Most of these dealerships are 15–20 miles from our location, so it’s not a quick drop-off and pickup.”

Roger Beasley Collision in Austin, Texas repairs approximately 250 vehicles per month.

Johnson said he also appreciates the support Autoland Scientech provides, he said. “Tech support is excellent. If we’ve got a problem, they’re just great. If I can’t figure something out, I can call and I’ll always get through to them with the initial call. If they don’t have the answers right away, they’ll definitely get back to me and in a reasonable time, usually within an hour.

Johnson said that upgrading his iSCAN II is simple and a no-brainer. “Upgrades were very easy to get. We plugged into the computer and the update was uploaded in about 45 minutes. We didn’t have to sit there [watching it], it just happened.” “Their service is very responsive. If we want something, we don’t have to wait on them, it just gets done. You don’t have to submit a work order or any paperwork—they’re very good at following through. “We’ve seen our productivity improve dramatically. We’re more efficient overall and our cycle times have decreased. On top of it, our overall sublet work has decreased as well since we’ve had the iSCAN II. It’s a win-win.”

Autoland Scientech USA, headquartered in Cedar Park, Texas, is the American division of one of the world’s leading producers of automotive diagnostic tools. Since its inception, Autoland Scientech has emerged as a prominent player in markets across the globe and has brought together an international sales force of over thirty of the world’s most selective automotive distributors. Its products are developing a solid reputation for bringing technicians and mechanics the latest in automotive diagnostics at highly competitive prices.

Richard Zenteno, the Marketing Director for the Americas for Autoland Scientech USA has seen numerous body shops embracing diagnostics just like Roger Beasley Collision Center has, and for many reasons. “I’m seeing a larger number of shops overall that are becoming more open to diagnostics,” Zenteno said. “They’re realizing they can’t run a body shop [profitably] without diagnostics. In many cases, the iSCAN II can help them clear lights in five minutes and they can charge their customer for at least one hour of labor. “Roger Beasley Collision Center undoubtedly paid for their machine within the first month they owned it. It’s a smart decision and it’s paid off big for this customer and many others.” Roger Beasley Collision Center 10420 Metric Blvd. Austin, Texas 78758 (512) 233-0460

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Excerpted from Scott “Gonzo” Weaver's Book, “Hey Look! I Found The Loose Nut”, which provides a Good Laugh for Mechanics of Any Age. The book is available at amazon.com. Contact Scott Weaver at Gonzosae@aol.com and see his website at www.gonzostoolbox.com.

Gonzo’s Toolbox

“My ‘Regular Mechanic’ Says You Didn’t Do a Thing” with Gonzo Weaver

Many specialists like me run into situations where the customer’s previous mechanic has referred the customer but hasn’t told the customer the whole story, including why he’s really referring the job to me. Many times the job does require a specialist but sometimes the “regular mechanic” just doesn’t want to look incompetent to the customer, and the customer doesn’t want to accept that their “regular mechanic” was incapable of fixing the problem. Even when you make the repair and the problem is solved, you can still be fighting a losing battle with the customer because of disinformation from the regular mechanic. Often the “mechanic” turns out to be a friend or relative or “Billy Bob” from next door. It’s when the mechanic is a supposed professional, but not acting like one, that I get a chapped hide. Here’s one of those situations. A Chevy pickup with the anti-loc brake light stuck on showed up at my shop one day. Not a big problem, but it can beexpensive to fix, as I explained to the customer. Replacement parts run from several hundred dollars to well over $1000 for certain vehicles. The customer told me his regular mechanic had already checked it out and told him it was going to be expensive and take time to fix. Better send it to an electrical expert to have it repaired. (At this point I liked this regular mechanic.)

After a lengthy conversation with the owner about how long it’s been like this... and how many different parts his regular mechanic had already tried… and how many times he checked the fuses… and that it had to be a ‘huge problem,’ otherwise his regular mechanic would’ve taken care of it. I put the truck in a bay and put it on the scanner. Huge problem or not, I’m the lucky guy who gets to follow up. The previous mechanic had left about everything that went to the ABS system unplugged. After getting all kinds of service codes stored in the computer, I had to go back in and reconnect all the different parts. Then I cleared the codes from the computer, and basically started all over again with the scanning and basic testing. (I was liking the regular mechanic a little less at this point.) After taking the truck around the block once, the ABS light came back on. Rechecking the codes led directly to a faulty ABS controller. (The controller is basically the brain box that makes the whole thing work.) I have changed several of these in the past, and, other than the part being ridiculously priced, it’s a simple repair. The trick to this one is that the unit is mounted under the car just below the driver’s area. If you unbolt the unit and tilt it slightly towards the center of the truck, you can get access to the screws that hold the controller to the mechanical part of the ABS unit. This

way you don’t have to undo any brake lines and bleed the brake system. Just install the new one, clear the codes, and do any “relearn” that needs to be done. Luckily, there wasn’t any “relearn” procedure on this year’s model and I had just saved the customer some labor time. Okay, job well done, but the customer is not happy with the cost. Like I told him, it’s not the labor that is expensive, it’s the parts. He left, somewhat satisfied. A few weeks later I get a call from the owner. The guy was furious. He wasn’t holding any words back. He definitely couldn’t care less if anyone else was listening. After he was done ranting and raving about the repair, it became obvious what was wrong. It wasn’t the repair. It wasn’t the cost. It was his “regular” mechanic. Seems he went over to see his buddy to have some sort of work done. That’s when his mechanic told them that it didn’t look like we had done anything and that he just paid for absolute absolutely nothing. “Hold on a minute buster!” I said, my blood pressure rising. “Let’s start over again. First off, is the ABS light off?” “Well, yeah, it is.” “And is the ABS system working?” I asked. “It’s working fine.” “Then what is the problem?” I asked. “My mechanic looked under there and said you guys never took the lines off

Weak Economy Favors Auto Parts Stores

In its recent research, Rothman cites two examples of stocks doing better despite the weak economy since last year—O’Reilly Automotive and AutoZone. Cost-awareness amongst automobile consumers has lead many to invest in servicing and repairing their current vehicles rather than buying new, due to the weakened global economy. And this means bigger gains to services sector stocks, says financial analyst Bradley McCoy of Rothman Research. O’Reilly Automotive Inc. is a publicly traded chain of auto parts stores that started with one store in Springfield, Mo., in 1957. It has since grown to more than 3,400 stores in 38 states. The corporate headquarters of O’Reilly is located in Springfield. The company nearly doubled in size and boosted its presence on the West Coast with the acquisition of CSK Auto in mid-2008. The growing base of stores resulted to strong sales and sent

profit soaring in the fourth quarter. O’Reilly earned $71.9 million or 52 cents per share, up from $42.7 million, or 32 cents per share, in the same quarter of last year. As the company expanded its operations from 3,285 stores and 18 distribution centers at the beginning of the year to 3,421 stores and 20 distribution centers by the end, O’Reilly’s sales grew by 36 percent to $4.85 billion. O’Reilly CEO Greg Henslee says, “As we are looking forward to 2010, we see consumer concerns over high unemployment and a challenging macro environment as signs that our customers will continue to maintain their current vehicles and, therefore, drive demand in our industry.” AutoZone, which operates as a specialty retailer and distributor of automotive replacement parts and accessories, has been reporting solid gains since last year. The company has seen double-digit EPS

30 APRIL 2010 AUTOBODY NEWS | www.autobodynews.com

growth for 14 consecutive quarters, which was propelled by a 565,000-share repurchase during the quarter. Over the long run, the continued improvement in operational performance has created tremendous value for shareholders, according to Rothman Research. Full research reports on both companies are available as free downloads from Rothman Research. Go to www.rothmanresearch.com.

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so you didn’t replace the controller like you charged me for,” was his answer. I told him that we most certainly did, because if we didn’t, his light would still be on, and the ABS system wouldn’t be working. “Furthermore,” I told him, “you don’t have to take the lines apart to put on the controller. The controller is the black electrical box above the thing you’re calling the lines. Not only that, it’s probably the cleanest part under the truck, since it’s only been on the car for a couple of weeks.” The customer called back later that day to complain some more, still not buying my explanation. Yes, he did see the new parts, and he was aware that everything worked, but “my mechanic knows you didn’t do anything, and you electrical guys know how to jack up the systems to make it look like you did something.” Exasperated, I asked him nicely to let me talk to his mechanic or bring the truck and the mechanic to my shop and I’ll show them both how the repairs were made. After the two showed up, I patiently went through the whole procedure.You could almost see the light bulb slowly brightening above their heads. They left somewhat satisfied. Later, when I thought about that ‘light bulb’ over their heads, I thought it should have been a neon sign instead, flashing “dumb ass”on and off.

Nissan Position Statement on Wheel Repair

Nissan North America does not approve of any repairs or the use of any repaired steel or aluminum wheel that involves welding, bending, hammering, straightening, re-machining, reforming, or adding new material as this can compromise the structural integrity of the wheel and safety of the vehicle. Any repair of steel or aluminum wheels must be strictly limited to minor cosmetic sanding or polishing that removes just the finish. Nissan North America factory warranty, replacement parts warranty or extended warranties do not apply to any part other than a Nissan Genuine original equipment replacement part. Nissan North America will not be responsible for any subsequent repair costs associated with the vehicle or part failure caused by the use of a steel or aluminum wheel that has been repaired.

Shop Showcase

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

Atlanta’s Collision Works Improves Productivity with PPG’s Help with Ed Attanasio

When I embarked on this series of interviews, I didn’t realize how much a body shop goes through in order to becoming leaner in its production. I also didn’t realize how much a paint company can do to help overall shop operations, not just the refinish aspects. It’s a story of commitment, persistance, and hard work —Ed Attanasio.

Steve Peek, owner of Collision Works in Atlanta, has incorporated cutting-edge production techniques in the operation of one of his two body shops by tapping into PPG’s expertise. Peek has kept his car count [deliberately] low, causing improved cycle times and making his shops profitable during difficult economic times. Peek is always poised and ready to adopt any new methods to increase his overall productivity and streamline his processes, and PPG was a perfect advocate to help him achieve exactly that. Collision Works has two locations in Atlanta—one in Buckhead/Midtown and another in Rosewell. The Rosewell location (11,250 square-feet) opened in 1977 and Peek purchased the shop from his former bosses in 1997. Peek opened the Buckhead/Midtown facility in 2003 and it spans nearly 31,000 square-feet.

Collision Works in downtown Rosewell thrives in a suburb of Atlanta, Georgia.

“I’m always looking for better ways to do improve our operations,” Peek said. with “In 2003 PPG presented the Green Belt program to us and analyzed our production processes, and once we implemented the changes, we’ve seen better results and improved cycle times. It’s working.” Peek is a former insurance adjuster, which means that he’s more understanding of the needs of insurance companies. “I’m acutely aware of what they want and expect from collision centers,” said Peek. “The majority of our business is based on our DRP’s, pure and simple,” Peek said. “We have 10-plus DRP’s, so it’s no secret that we’re DRP-driven. However, it’s a doubleedged sword, because the insurance companies can bring you significant revenue, but you have to bend over backwards to keep them happy, which can be a tough proposition in some cases. We are selective with the DRP programs we enter into. There are certain insurance companies that we haven’t targeted.

With some of them, you can end up churning business but not making any profit.” Peek has 30 people working for him, including 11 body techs fixing 300 vehicles per month. A large operation such as this one has to be constantly monitored to remain profitable, Peek said. “We’re on a lean journey right now, so we’re cutting out the waste and being more

“Paint and materials are less than 10% of my total expenses ... Labor cost is five times more than our paint expenses ...” productive at every level,” he said. “The recession in 2009 was actually beneficial to the overall health of the business. It gave us enough time to take a long look at the ways we could improve our production processes. With PPG’s help and expertise, we improved our processes and are now preventing fires before they start. PPG helped us open our eyes.” PPG Southeast Regional Manager Steve Barnes oversees the paint manufacturer’s region encompassing Georgia and parts of Florida and Alabama. He’s been with PPG for 14 years and supervises 11 territory managers while supporting approximately 1,200 body shops in his region. The MVP Business Solutions Team took Collision Works’ administrative department through a series of initial interviews and meetings before they presented a plan to Peek and kicked off the new Green Belt approach, a practical application incorporating Lean Six Sigma techniques, Barnes explained. “The business reveal process consists of process mapping and value-stream mapping,” Barnes said. “That’s when you take your entire staff, review the administration, and analyze the production process while constructing a business map that shows your current state. The value-stream map shows a timeline of everything from customer information entry, estimating, parts procedures, entry into production, body area, paint area, reassembly, cleanup and detail to delivery. You literally put it on the wall and review it. The timeline added to the value stream map allows you to clearly measure your cycle time for each department, which is critical to future improvements.” The next step was PPG representatives closely reviewing the findings with the owner of the shop, Barnes said. “We sat down with Steve so that he clearly understood what we’ve done. We had interviewed each employee in the front of-

fice at that point, because we wanted feedback from everyone who touches the estimate and the car. This was done in the first interview. It normally takes one or two days to complete the interview process, and then we met with Steve again to present him with what we’d uncovered. In most cases, revealing the current state is a real eye-opener for the owner, because in many cases, 40–45% of the total time spent on the vehicle takes place in the front office before a tech even touches the car.” When it comes to the benefits customers can derive by working with PPG, it’s more than just the products PPG manufacture, Barnes said. “The mapping process that we’ve performed at a wide range of shops proves to be invaluable once they get onboard. Shop owners sometimes buck change until they see how it will improve their business. Once they realize the value of what we’re offering, they will embrace and implement it. The implementation process starts with the technicians however; their buy-in is crucial to the success of the Green Belt program.” Peek sat down with PPG in 2003, outlining his specific goals and accessing where his shops were at that time in regard to productivity. “Working with a paint company isn’t just all about the paint, in my opinion. Paint and materials are less than 10% of my total expenses. I can beat that 10% to death all day long. Labor cost is five times more than our paint expenses. I wanted to make my labor more efficient; because that will impact my bottom line profits more than chipping away at paint costs,” Peek explained.

Collision Works in Atlanta keeps busy by implementing cutting edge production techniques with help from PPG.

Peek praises the PPG NEXA paint that his seven paint techs apply to every vehicle coming through his two shops, he said. “It’s top quality paint and the coverage is exceptional. There’s some trade-off, because it costs slightly more than what we have used in the past, but it requires using less paint to get the job done. Two coats maximum will finish the color, so it’s a better paint job and we’re getting them done faster.” Breaking old habits was a big part of the new equation for his shop, Peek said. “Shops will do things the same way, because they’ve

always done it that way. PPG’s advice and guidance had us asking why we’ve been doing it a certain way. They took us to a point where we started to re-evaluate our system and that’s really helped us.” Cutting the fat and optimizing his production timeline has resulted in a more attractive bottom line, but creating a better workplace for his crew is another benefit as well.

The Collision Works in Buckhead/Midtown touts is the largest collision repair facility in metropolitan Atanta.

“We love a lean environment, because it means we’re getting our customers’ cars out of the shop more quickly and efficiently. Everyone is happier—customers, insurance companies, and our staff. People are happier when they’re getting things done correctly and doing a superior job,” Peek said. Peek knows that PPG has been instrumental in improving his production system and he continues to be pleased by the company’s top-tier customer service. “PPG has done a great job in helping us to become leaner and smarter, but improving the job is never done. Everyone with PPG has been so excellent in every aspect of what they do for us. If we ask them or Single Source, my PPG jobber, we get it. They respond to me almost immediately in every case, which is incredible. That’s all you can ask from a vendor. PPG has played a very integral part in getting us to where we are now, so it’s been a great relationship.” By overhauling their processes, Collision Works is a better shop and a more productive company. The job is never done and it’s was an arduous process, but with help from PPG, Steve Peek has achieved his goals and is consistently hitting his numbers on a daily basis. Collision Works 2441 Cheshire Road NE Atlanta, Georgia 30324 (404) 320-7077

Collision Works 55 Oak Street Rosewell, Georgia 30075 (770) 992-1408

www.autobodynews.com | APRIL 2010 AUTOBODY NEWS 31

Supporters of Access to Repair Parts Act Testify in Favor of Exception to Design Patent Law The aftermarket industry showed up in force in front of the U.S. House of Representatives Judiciary Committee March 22. The committee heard from consumer and industry advocates on why the “Access to Repair Parts Act” (H.R. 3059/S.1368)—legislation that would create a narrow exception in the U.S. design patent law for purposes of repair—would guarantee access to affordable alternative replacement parts and curb car companies’attempts to monopolize the marketplace. The Quality Parts Coalition (QPC), founded by the aftermarket manufacturers and insurers, and claims to represent consumers, seniors, insurers, parts manufacturers and distributors and repairers, urged Congress to swiftly enact the “Access to Repair Parts Act.” QPC argued that Americans are likely unaware of the “looming threat that could send the costs of car repair and insurance premiums soaring: a car company parts monopoly.” They cite the history of more than 60 years of alternative parts to repair their vehicles instead of more expensive OEM parts. Alternatives are as much as 26–50 percent less than OEM equivalents. This translates into an estimated $1.5 billion in savings, primarily for insurers, the OEMs argue. Auto companies have secured an increasing number of design patents on crash

parts for cars (bumpers, fenders, hoods). When enforced, the patents give car companies control of the market for those parts. LKQ, for example, had to settle with Ford to provide crash parts for the F-150 last year. Insurers argue that this loss of competition will drive up the cost of insurance premiums by as much as $3 billion. Jack Gillis, testifying on behalf of CFA, Advocates for Highway and Auto Safety, Center for Auto Safety and Public Citizen, told legislators of the consumer cost of a car company parts monopoly: “The lack of competition for repair parts will result in high repair costs and more vehicles being ‘totaled’ because the price of repairing the damage exceeds the value of the vehicle. High repair costs will lead to higher insurance premiums. Furthermore, when faced with expensive repairs and a limited budget, consumers may simply not be able to replace their head light or a broken side mirror, items essential for safe driving.” Eileen A. Sottile, executive director of the Quality Parts Coalition added, “The Quality Parts Coalition thanks the House Judiciary Committee for hearing testimony on this vital piece of legislation and looks forward to its swift passage. Our members and supporters span the spectrum of motorist to aftermarket employee and from in-

surance agent to retired senior. At a time when our nation is just beginning to regain its economic footing, it is increasingly important that we put all safeguards in place to protect the cornerstones of competition and consumerism.” Bob Passmore, senior director of personal lines policy with the Property Casualty Insurers Association of America (PCI), a member of QPC, testified before the Judiciary Committee. Passmore noted: “At its core, this is a consumer issue. PCI supports the 'Access to Repair Parts Act' because it will preserve competition in the market for replacement parts and benefit consumers. Without it, consumers will carry the burden of a monopoly by way of increased premiums and higher autobody repair costs.” The “Access to Repair Parts Act” provides a narrow exception to the U.S. design patent law, paving the way for consumers to continue to have access to affordable alternative replacement parts for their vehicles. Identical legislation is pending in the U.S. Senate (S. 1368), sponsored by Sen. Sheldon Whitehouse (D-R.I.). Rep. Lofgren is joined by cosponsors Reps. Rick Boucher (D-Va.), Steve Cohen (D-Tenn.), William D. Delahunt (D-Mass.), Sheila Jackson-Lee (D-Texas), Charles A. Wilson (D-Ohio), G.K. Butterfield (D-N.C.) and Debbie Halvorson (D-Ill.).

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32 APRIL 2010 AUTOBODY NEWS | www.autobodynews.com

Auto body repairs performed by unlicensed and illegitimate, fly-by-night auto body repairmen are costing Los Angeles area residents hundreds or thousands of dollars. These gypsy repairmen wander neighborhoods in search of cars with dents or other damage and entice owners with promises of cheap, quick, onsite repairs. Joaquin Hernandez, owner of Collision on Wheels, a mobile auto body repair shop, provides valuable information for consumers to avoid rip-off with auto repairs. Given the convergent trends of consumer demand for convenience, the need for cosmetic repairs, and the prevalence of gypsy auto body repairmen, how can someone keep from being victimized? First, be wary of someone who shows up at your house in an unmarked vehicle or without business cards. Ask to see a current business license and insurance binder. All automobile repair businesses in California should be registered with the California Bureau of Automotive Repair (BAR). Ensure that any company servicing your vehicle provides a written estimate prior to commencing work. The estimate should include the company’s BAR number. Look for contact information on the invoice provided after work is completed.

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California Autobody Association Updates its Positions on Bills Before the Legislature 1) SB 350 (Yee) -Concerns- This bill purports to codify existing insurance regulations, which includes insurers to warrant that aftermarket crash parts are equal to OE in terms of like kind, quality, safety and fit, however, recent amendments deleted some exiting consumer protection language. The sponsors indicate that was a mistake and will correct. CAA will continue to work with Senator Yee on this important issue. Recently questions have been raised about possible safety concerns with certain aftermarket crash parts. CAA is in the process of meeting with stakeholders to discuss and further explore these issues, including whether these parts can be tracked and to develop possible solutions. 2) SB 427 (Negrete McLeod)Oppose- This bill would require a repair shop to provide disclaimer language on the first page of invoice indicating that installing parts other than a part described on the estimate is unlawful and provide an 800 phone number for consumers to call and obtain a free car inspection. CAA believes this bill is unnecessary and redundant of exiting law. The bill is similar to AB 1483 (Carter) and AB 2825 (carter) both vetoed by the Governor. CAA members have met with the Senator in her district and expressed concerns with the bill. CAA will continue to work with the Sena-

tor and seek amendments that will address concerns. 3) AB 496 (Davis)- Concerns- AB 496 requires tire dealers to disclose the manufacture date of each tire, require the customer to initial next to the date, provide disclosures to consumers regarding risks associated with tire age and provides for a civil penalty of $250.00 per violation. AB 496 is in the Senate Business and Professions Committee. The CAA will work with the authors of these measures to address any concerns. 4) AB 519 (Duvall) -Concerns. Vehicles and Towing Fees. The bill would require towing companies to provide consumers with a “Towing Fee and Access Notice” to codify the contents of that notice and require towers to provide itemized invoices of all towing and storage fees. As written the bill requires auto repair shops that pay for towing (and get reimbursed) to comply with all the notice requirements. CAA had been working with the author to amend the bill to exempt auto repair shops from the towing notice requirements. The bill is in the Senate Appropriations Committee. Since Assembly member Duvall has resigned his assembly seat it is not clear if this bill will move forward with a different author. 5) 3% Independent Withholding Tax. –Oppose. Due to the state budget deficit,

the Legislature is considering a proposal, which would impose new cost burdens on business to implement and administer a three (3%) withholding on payments to independent contractors. The CAA has joined other associations and groups in opposition to this proposal.

Labor Rate Issues The CAA has met with the insurance industry in an effort to address issues and concerns surrounding labor rate surveys. Addressing the labor rate survey issue is one of the highest priorities for CAA. The CAA is planning on continuing to meet with insurers in order to develop a possible solution and proposal that would prohibit insurers from “capping” labor rates. This approach would be similar to SB 1371 (Correa), sponsored by the CAA, which prohibited insurers from “capping” paint and material charges.

Department of Insurance (DOI) Mr. Peter Conlin is the new legal counsel for the Department of Insurance. He replaces Bill Gausewitz. We have met with Mr. Conlin and briefed him on the issues facing the auto body industry and have indicated CAA’s willingness to work with the Department on auto body issues. Bureau of Automotive Repair (BAR) In an effort to deal with unlicensed activity the

BAR is in the process of creating regulations to provide Cite and Fine authority for the BAR to be used against unlicensed auto body repair shops. The CAA will be working with the BAR in this effort and make sure that the Cite and Fine authority only applies to unlicensed auto body shops. Reasonable Storage Fees It has come to CAA’s attention that some insurers maybe attempting to limit storage charges to 15 days and relying on a law that applies to stolen vehicles/antitheft. The correct law that applies to insurer responsibility is Vehicle Code section 22524.5 (a), which states. 22524.5. (a) Any insurer that is responsible for coverage for ordinary and reasonable towing and storage charges under an automobile insurance policy to an insured or on behalf of an insured to a valid claimant, is liable for those charges to the person performing those services when a vehicle is towed and stored as a result of an accident or stolen recovery. The insurer may discharge the obligation by making payment to the person performing the towing and storage services or to the insured or on behalf of the insured to performing those services. Send feedback: contact@calautobody.com

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Senate Banking Committee Passes Restoring Financial Stability Act, Creates National Insurance Office

The U.S. Senate Committee on Banking, Housing and Urban Affairs quickly passed on March 22 Chairman Christopher Dodd’s, D-Conn., “Restoring American Financial Stability Act of 2010” along party lines. The bill now goes to the Senate floor where the bill is expected to be challenged with amendments by Senate Republicans. Highlights of the new bill reported by the committee include: ● Consumer Protections with Authority and Independence: A Consumer Financial Protection bureau will be housed at the Federal Reserve, where it will have the power to write and enforce the rules. ● Ends too Big to Fail: Ends the possibility that taxpayers will be asked to write a check to bail out financial firms that threaten the economy. ● Advanced Warning System: Creates a council to identify and address systemic risks posed by large, complex companies, products and activities before they threaten the stability of the economy. ● Transparency and Accountability for Exotic Instruments: Eliminates loopholes that allow risky and abusive practices to go on unnoticed and unregulated. ● Federal Bank Supervision: Streamlines bank supervision to create clarity and accountability and protects the dual banking system that supports community banks. ● Executive Compensation and Corporate

Governance: Provides shareholders with a say on pay and corporate affairs with a nonbinding vote on executive compensation. ● Protects Investors: Provides tough new rules for transparency and accountability for credit rating agencies to protect investors and businesses. ● Enforces Regulations on the Books: Strengthens oversight and empowers regulators to aggressively pursue financial fraud conflicts of interest and manipulation of the system that benefit special interests at the expense of American families and business. ● Office of National Insurance: Creates a new office within the Treasury Department to monitor the insurance industry, coordinate international insurance issues, and requires a study on ways to modernize insurance regulation and provide Congress with recommendations. Considerations shall be based on and guided by the following: ● Systemic risk regulation with respect to insurance ● Capital standards and the relationship between capital allocation and liabilities, including standards relating to liquidity and duration risk. ● Consumer protection for insurance products and practices, including gaps in state. ● The degree of national uniformity of state regulation.

● The regulation of insurance companies and affiliates on a consolidated basis. ● International coordination of insurance regulation. ● Costs and benefits of potential federal regulation of insurance across various lines of insurance (except health insurance). ● The feasibility of regulating only certain lines of insurance at the federal level, while leaving other lines of insurance to be regulated at the state level. ● The potential consequences of subjecting insurance companies to a federal resolution authority, including the effects of any federal resolution authority. ● Streamlining the regulation of surplus lines of insurance and reinsurance through state-based reforms. To view a summary of the legislation and the complete text, visit the Automotive Service Association’s legislative Web site at www.TakingTheHill.com. The Automotive Service Association is the largest not-for-profit trade association of its kind dedicated to and governed by independent automotive service and repair professionals. ASA serves an international membership base that includes numerous affiliate, state and chapter groups from both the mechanical and collision repair segments of the automotive service industry. ASA’s headquarters is in Bedford, Texas.

ASA advances professionalism and excellence in the automotive repair industry through education, representation and member services. For additional information about ASA, including past news releases, go to http://www.ASAshop.org, or visit ASA’s legislative Web site at http://www.TakingTheHill.com.

Arizona Auto Rates Increased 6% in Last Six Months

The median six-month auto insurance rate in Arizona has increased approximately 2 percent over the past six months to reach $829 according to InsWeb, an online insurance comparison provider. Among the other statistics the provider found were: * Men in Arizona have a median auto insurance rate more than 5 percent higher than women. * Drivers in Arizona 19 years of age or younger pay a median auto insurance rate that is over 100 percent higher than drivers age 50 to 59. An Arizona driver who pays the sixmonth median rate of $829 and earns the Arizona median annual income of $38,779 pays approximately 4.28 percent of his or her gross income for auto insurance. By this “affordability factor,” Arizona is the ninth most expensive state to insure a vehicle.

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KMC on Demand™ and I-CAR Partner to Deliver Online Training for Auto Collision Industry

KMC On Demand and I-CAR have announced a memorandum of understanding to establish a strategic partnership under which KMC will provide the training platform and I-CAR will provide technical course content to create a new online learning opportunity for the auto collision industry. “This collaboration brings together two industry leaders to seamlessly integrate the e-learning capabilities of KMC On Demand and the training expertise of I-CAR,” said Colm Keenan, V.P. of knowledge management for KMC On Demand.

“We are very proud I-CAR selected KMC to partner on this initiative. We share with I-CAR a similar vision that every person in the collision industry has the skills to achieve a complete and safe repair by increasing access to knowledge-based training directly related to his or her role in the field.” Currently, I-CAR offers individuals the opportunity for instructor-led classes that cover vehicle-specific collision repairs and general collision concepts. These classes are complemented by a limited offering of online training. KMC and I-CAR

will offer the automotive industry a broader curriculum of online learning modules with improved access and functionality. “Partnering on this initiative with KMC On Demand is a critical development in I-CAR's plans to deliver role- and segment-specific training in the both the classroom and online,” said John Edelen, president and chief executive officer of ICAR. “The KMC technology will enable I-CAR to bring more of our existing and future training to the industry, when, where and how the industry wants to receive it.”

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Collision repair professionals and insurance appraisers will benefit from improved performance in the field as the KMC On Demand platform provides tools and resources to directly support learning and performance, bridging from the learning environment to the work site. Individuals and collision repair facilities will be able to maintain their I-CAR training recognition status and state continuing education credits, as both CE credits and ICAR points will be awarded for completion of the appropriate coursework on the KMC platform.

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www.performancechevy.com www.autobodynews.com | APRIL 2010 AUTOBODY NEWS 35

Florida Autobody Collision Alliance Picks Up the Issues by David M. Brown, Special to Autobody News

Fragmentation, frustration and apathy once characterized Florida’s various collision industry associations. Regional groups were created but eventually withered; others started up briefly then stalled. A strong statewide group, fully supporting the individuality of its regional chapters, was unable to get traction. The Brevard Autobody Association is illustrative. It operated from 1989–2002, with approximately 35 active members. “We were probably the longest running association in the state of Florida at the time that we disbanded,” recalls Steve Long, whose Rockledge-based Long Wholesale Consultants has been serving the state since 1990. The Brevard association spun off from an Orlando association which operated approximately from 1989–1999. Today, dissolution and distrust in Florida is patiently being replaced by unity and a commitment to longevity. Long is the treasurer of the new Space and Treasure Coast Chapter of the growing Florida Autobody Collision Alliance (FACA). FACA comprises six state chapters centered by larger cities. Formed in August 2009, Long’s Space and Treasure Coast represents collision-industry members from Titusville south 100 miles or so to Stuart along the Atlantic Coast. The other chapters are FACA of Jacksonville, Mid-State (Lakeland), FACA of Tampa Bay, Central Florida (Orlando) and South Florida (Ft. Lauderdale). Approximately 200 members regularly attend regional meetings statewide. This year, FACA plans to open chapters in the Miami, Ft. Myers, Pensacola, and other areas. hold a first state convention and hire a full-time executive director, says Dave McBroom, president of FACA and the Jacksonville chapter. FACA is an affiliate of Prosser, Wa.based Society of Collision Repair Specialists (SCRS) and the National Auto Body Council, headquartered in Princeton Junction, N.J. McBroom notes that George Avery and Chuck Sulkala at NABC and Barry Dorn and Aaron Schulenburg at SCRS have been particularly helpful during the formative period. “We receive a lot of guidance and assistance from both those organizations,” he says. The association started about six years ago. “I walked into a restaurant about the same time as a dealership shop manager and another new shop owner and asked if they would mind if we sat together. Two hours later, we agreed to meet again the following week,” recalls McBroom, owner of Jacksonville-based Sunbeam Autobody since March 2000. A retired Army major and helicopter pilot, he had moved to nearby St. Augustine from

Colorado four years earlier and purchased Sunbeam. The group met weekly for several months, joined by a fourth member, Steve Carey, an insurance re-inspector and local I-CAR chairman. They decided to meet regularly and discuss topics of mutual interest, McBroom says. He had been an SCRS member for a few years and asked then current executive director, Dan Risley, to speak to the group about the advantages of unity. In Jacksonville at the time, shop owners and managers didn’t communicate or work together, he explained. “We sent out invitations and, wow!, we had over a hundred in attendance for that meeting.” For the next few years, the group met informally bimonthly. Vendors sponsored the meetings with meals, and McBroom secured speakers from the EPA as well as vendors, manufacturers and politicians. Two years ago, two shop owners from the Fort Lauderdale area, Eddie Quintela, owner of Collision Concepts in Boca Raton, and Mike Pierro, owner of Ideal Collision in Hollywood and currently chapter president of the 50-member-and-growing FACA South Florida, called McBroom. About six months earlier, they had heard about FACA during a meeting in Pittsburgh, PA. Inspired by the guidance on forming a local autobody association, they asked McBroom to visit and help them start a chapter. John Mattos, president of Pro Finishes Plus in Temple Hills, MA, Mike Anderson, owner of Wagonwork Collision, Alexandria, VA, and Aaron Schulenburg, SCRS executive director and treasurer of the Washington Metropolitan Autobody Association, also attended. “What a great meeting, with so many eager people wanting to be involved,” McBroom recalls. Then, two weeks later, another call came in from George Mantzaris and others from the Tampa Bay area. FACA vice president Mantzaris, collision center manager of Toyota of Tampa Bay, is today also the Tampa Bay chapter president. David Hesser, owner of Gulf Coast Collision in Port Richey, is the chapter’s vice president. In 2008, after contacting Risley at SCRS, McBroom invited the other two groups to meet in Ocala; they incorporated, wrote bylaws, elected a board, chose the FACA name and joined the national organization. “It has been fantastic to watch their growth and development throughout the state in a very short period of time,” saidSCRS’ Schulenberg. “I am continually astounded by how well they have done to bring together such meaningful and well-attended meetings, with members who are so driven to motivate positive change within the industry.”

36 APRIL 2010 AUTOBODY NEWS | www.autobodynews.com

SCRS has more than 39 affiliate associations across the U.S. and Canada, representing 6,000-plus collision repair businesses and 58,500-plus individuals employed within the industry. “Our chapter decided to join FACA because we felt we would have greater success being a part of a much larger state association rather than trying to go at it ourselves: Strength in numbers!” Piero says. He adds that this year’s chapter goals are to grow membership awareness about FACA and to promote regulations that will protect consumers when filing a claim. Representing consumers is also important at the Mid-State chapter, where Michael Meisner serves as president. Coming together as a group helps them, the chapter members and the industry, he says. “This is the best way for a customer to get the best repair possible,” says Meisner, whose Meisner Paint and Body in Lakeland is a third-generation collisionrepair business. In 1942, his grandfather started repairing vehicles on the same street the business is now on. “If shop owners are not ‘back-stabbing enemies’ but are instead associates, they are less likely to undercut each other

for the job and do inferior work on the consumer’s vehicle,” Meisner says. The shopowners benefit in various ways as well. For example, if the owner believes that an insurance company is not treating him or her correctly, the shop can call fellow members to see if they are being similarly handled. “This closes the gap that the insurance companies hold between shops,” he says. “There is still competition in our association, but healthy competition.” Ray Gunder, owner of Gunder’s Auto Center in Lakeland (see cover story), agrees. “FACA has opened up communication between shops that never existed before in our area. The amount of ‘knowledge’ that is shared with a phone call or email is tremendous. We are no longer on an ‘island by itself,’” explains Gunder, who started what is now a full-service collision and mechanical auto center 41 years ago. He is the sergeant at arms for the Lakeland chapter and, what McBroom calls, the “conscience of FACA.” “We can now visit each other’s shops and be welcomed—instead of being leery —looking at a demo of new equipment together,” Gunder adds, noting that the chapter holds monthly lunch meetings at different shops. “We have all gained a new respect for each other’s business and have been able to ‘bury the hatchet.’”

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AAA Releases Its Top Vehicle Picks for Commuters

AAA released its top vehicle picks for commuters today. Long commutes have become an increasingly common daily activity for many Americans, and having the right vehicle for those long drives is key not only to saving money and being environmentally-friendly, but also staying safe and comfortable during many hours on the road. The average motorist spends about 41 minutes a day traveling about 22.5 miles roundtrip to/from work in personal vehicles, according to the National Household Travel Survey. AAA Auto Buying's team of experts, who test drove and reviewed hundreds of vehicles for the AAA AutoMaker vehicle research web site (AAA.com/AutoMaker), have compiled a list of their top vehicles picks for commuters based upon practicality, safety, comfort, fuel efficiency and affordability. AAA's Top Picks for Commuter Vehicles Honda Insight: This car is among the ultimate in gasoline fuel economy while being reasonably comfortable for the driver and front-seat passenger. It's also less costly and more fun to drive than some of its hybrid competitors.

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Ford Fusion: Four-cylinder versions offer an appealing combination of power, riding comfort and handling competence. The Hybrid offers even more economy, but the fuel savings come with a major bump in the purchase price. Volkswagen Jetta TDI: Everything that you ever hated about diesels has been exorcised in this latest version of the Volkswagen diesel engine. It is quiet, with just a trace of diesel clatter at idle; peppy, especially when underway; and every bit as economical as the most miserly hybrids. It also is great fun to drive. Comfortable front seats are a plus. Hyundai Elantra: The new Blue edition is good for 35 miles per gallon. This fourth generation Elantra also is reasonably accommodating for a driver and three passengers with the interior nicely done. The 10-year/100,000-mile warranty suggests that you could keep this car in the daily commuting grind for years. Subaru Legacy/Outback: These new models with their horizontally opposed 4-cylinder engines perform very well, and with their redesign for 2010, they now offer much better fuel economy and enhanced rear seat leg room. And for commuters facing snowy rides to work, the all-

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wheel drive helps ensure they will make it to work every time. Honda Civic: Affordable, dependable, economical and comfortable, the Civic is one of the better performing compacts for a wide range of uses, including commuting. For drivers who want to enjoy the trip even more, the 197 horsepower Si sedan deserves a careful look. Chevrolet Malibu: Stylish inside and out, the Malibu also is a competent performer on the road. Four-cylinder models offer more than enough power for the daily commute and promise decent fuel economy. The passenger cabin is nicely finished and roomy, both in the front and rear, making it a good choice for carpooling. Honda Accord: Good for the commute and good for family transportation, the Accord is roomy, solid and economical when equipped with the four-cylinder engine. It also offers road manners that are beyond reproach. Mazda3: The body for 2010 may not be to everyone's taste, but there is no arguing with its crisp handling and above average power for the compact field. Fuel economy also is good. The ride can be a little flinty, so commuters facing long stretches of neglected urban highways may want to look elsewhere. However, for people who enjoy driving, the handling will more than make up for a few abrupt ride motions.

Commuters Vehicles Offering Efficiency and More Practicality is an important factor that many commuters look for when seeking the ideal vehicle for long commutes. However, AAA Auto Buying experts understand that some want a vehicle that can serve dual purposes such as an efficient commuter vehicle that addresses needs for family or recreation or desires for luxury or fun. Because of this, AAA offers their picks for vehicles that can help address consumers' secondary needs while still providing a smart choice for long commutes. Mini Cooper: A premium subcompact, the Mini is both sporty and economical with fuel. Few cars are as much fun to

drive. Commuters will be able to take one passenger only and the purchase price is higher than you might expect, based on size alone. However, few cars are as enjoyable on the road or offer as many safety features. Commuters might even choose to take the long way home. Chevrolet Corvette: Who says the drive to work has to be boring? The Corvette is anything but, and when driven appropriately, it can even return near-compact car fuel economy of around 26 mpg on the highway. Buick Enclave: Handling the commute for up to eight people, the Enclave combines an exceptionally quiet ride with competent handling and surprising room in all three rows. It makes for a smart choice for those seeking a large family vehicle on the weekends. Mercedes-Benz GL: Roomy seating for seven, unexcelled refinement, allwheel drive and the option of a surprisingly economical (for the vehicle size) diesel engine make this a highly desirable commuter for multi-adult carpools. Volkswagen GTI: Sporty, fun to drive and able to return mid- to upper-20 mile per gallon fuel economy results with the 200-hp turbocharged engine, the GTI is full of surprises. Even the rear seat is good for two adults and the cargo area is surprisingly roomy. Four workers can easily store large laptop carrying briefcases in the rear and then be quite comfortable for the ride to and from work. BMW 3-Series: The first sports sedan remains the best by many measures. What more enjoyable way to get to work and then return home? The engines are impressive for their power and refinement, the handling is top notch and the build quality is excellent, as would be expected for the price. As North America's largest motoring and leisure travel organization, AAA provides more than 51 million members with travel, insurance, financial and automotiverelated services. Since its founding in 1902, the not-for-profit, fully tax-paying AAA has been a leader and advocate for the safety and security of all travelers. AAA clubs can be visited on the Internet at AAA.com.

Tiny E-car Startup Wants To Keep NUMMI Open

Electric car hopeful Aurica Motors LLC is floating a plan to keep open a California joint venture between Toyota and General Motors by building zero emission vehicles there. Aurica has been negotiating the plan with New United Motor Manufacturing Inc. for the past three months, Aurica General Manager Matt Pitagora said. “We want to keep the plant open, and we believe we have a very viable plan to do so by manufacturing electric cars,” Pitagora said. “It's all about

keeping the lights on.” Aurica is a littleknown startup based in Santa Clara, Calif., with eight employees and unpublicized finances. But it proposes making electric vehicles within two years at Nummi, the Fremont, Calif., joint venture set up by Toyota Motors Corp. and GM in 1984. The factory is currently scheduled to shut its doors March 31. GM pulled out of the venture last year, and Toyota said it would follow suit because the plant isn't financially viable without GM.

www.autobodynews.com | APRIL 2010 AUTOBODY NEWS 37

Company Connections

Texas-based Col-Met Spray Booths ‘Not Participating’ in Recession

Col-Met Spray Booths is a major Texasbased manufacturer of paint booths, spray booths, finishing booths, powder booths, air makeup units, mixing rooms, batch ovens and accessories for industrial, automotive, wood finishing and other applications.

Booths are also available for construction equipment, recreational vehicles, and other large equipment applications, both custom and catalog. Col-Met is a “one stop shop” where paint booths are concerned. Autobody News conducted a phone interview with Vice President of Sales, Donnie Montgomery, and Regional Sales Manager, Billy Roche to learn more about spray booth sales and manufacturing and the current business environment, starting with some historical background.

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The company’s home is in Rockwall, Texas and it has state of the art manufacturing facility there comprising about 130,000 square ft, where it builds booths for an extensive array of auto, truck, bus, and boat refinishing operations. This is done in sizes from small 4’ bench booths to the largest finishing facilities designed for trains. Col-met’s ATR Commercial Grade

ABN ► How did Col-Met get started in the business of manufacturing Spray Booths?

DM/BR ◄ In 1996 Col-Met organized as a division of Collier Metal Specialties (a manufacturer of metal products since 1957). Col-Met Spray Booths Incorporated as a separate company Jan. 1st 1999. Eric Jones is the sole owner.

ABN ► What are the company’s specific areas of expertise?

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DM/BR ◄ Paint Spray Booths of all types for wet or powder coating: Industrial, Automotive, Truck/Equipment, Wood Finishing, Heated Air Makeup Units from 8,000 to 40,000 CFM that are specifically designed for the paint booth industry. ColMet has in-house Engineering that allows us to be very flexible in providing paint booths for our customers individual needs

ABN ► With the recent rulemaking coming from EPA, what are you seeing in terms of interest or concern from customers. For example, is there a waterborne demand in Texas and other states that are not mandated to use the lowest VOCs? Is there a lot of interest now or is it more of waiting-to-see what is going to happen?

ABN ► Does the company have related operations (that are not directly involved in spray booths) that support their booth technology?

DM/BR ◄ The answer is yes. There is a lot of interest but not necessarily because the mandates. It’s more for economic reasons. I think a lot of the coating suppliers are doing a really good job of educating customers on the return on investment. The interest is in buying the system and going to a waterborne system if it’s done right. We are getting a lot of response on that, but not necessarily because of the mandates from the gov’t.

DM/BR ◄ In addition to a full line of Paint Spray Booths, Col-Met manufactures Heated Air Makeup Units (AMU)

DM/BR ◄ Col-Met also manufactures Batch Powder Cure Ovens as well as Process (production) Ovens, Washers, and various related Finishing Systems components Col-Met’s Electrical Department is Underwriters Laboratories Certified (UL 508), primarily manufacturing Control

ABN ► I assume that anybody in these areas who is contemplating installing a

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new booth right now is thinking solvent but they are planning for an eventual waterborne transition. Is that fair to say? DM/BR ◄ Yes. We definitely see that. That’s why we are seeing so many of the conversion systems out there. At NACE this past November that was amply confirmed by customers, and we took multiple orders. A lot of questions were posed to us regarding all these new coatings. “We’re the ones that businesses call when they’re looking for

E S

a new method of refinishing - when they’re looking for a better automotive system altogether.”

“We’re working to create products specific to our customers needs - specific to their goals and concerns, and incorporating them into our leading systems. That’s what Col-met does.” —Eric Jones, President, Col-Met Spray Booths ABN ► What are the most unique aspects of Col-Met booths?

DM/BR ◄ What really makes Col-Met Spray Booths unique in the paint booth industry is Col-Met’s employees and our dealer network. Our customers have become accustomed to personalized service before, during, and after the sale.

Collectively our employees have several hundred person years of experience in the paint booth industry. We make a quality product at a fair price and offer outstanding service as an added value. ABN ► What is the major technology difference between your waterborne and solvent Spray Booths?

DM/BR ◄ Faster flash time with waterborne coating is all about increased air movement over the surface area.

Col-Met has 2 systems available: 1. In the two-speed system the AMU is oversized allowing as much as 30% increased airflow into the booth during Waterborne Flash-off Mode. 2. The corner tower fan system increases the surface airspeed to as much as

400 feet at the vehicle during Waterborne Flash-off Mode.

ABN ► Do they represent a distinct price point in the industry, or is pricing highly variable based on customization?

DM/BR ◄ Our EVO Waterborne Flash Systems range in price from around $3,000 to $8,000. Col-Met’s waterborne systems always represent a good value within their price point.

ABN ► What financing and other incentives might make Col-Met the best choice for a shop customer?

DM/BR ◄ Col-Met equipment offers an excellent return on investment (ROI) based on improved production and superior finishes.

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DM/BR ◄ They were upbeat. It was a promising show. One of the best NACE shows in the last 8 years. It was one of those where people were cautiously optimistic. Everybody is expecting 2010 to be a strong year in this market. We normally sell through the distributors, but we actually took at least 7 booth orders at NACE. It’s been years since we’ve sold more than one or two booths there. It surprised us. We’re not in denial but our saying all along has been “we are not going to participate in this recession.”

ABN ► We like that philosophy. If no one participated in the recession, we wouldn’t have one, would we?

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www.autobodynews.com | APRIL 2010 AUTOBODY NEWS 39

Distinctive Dealerships

with Ed Attanasio

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

Greenway Automotive Group’s Management of $30 million in Parts

Greenway Automotive Group, headquartered in Orlando, FL, owns and operates 14 car dealerships located in Tennessee, Florida, and Alabama, representing Ford, Chrysler-Jeep-Dodge, Hyundai, Mitsubishi and Honda. Overseeing the company’s parts departments is Brian Grady, 42, who’s been the group’s parts director since 2003. He supervises 70–80 employees, managing more than $30 million in parts inventory.

Greenway Automotive Group’s Parts Director Brian Grady met his wife Karen while selling parts to her father’s shop, Larry King Body Shop (see p. 33)

Having 28 years of experience in au- tage of,” Grady said. “With Web sites and under the belt. We’re constantly familiartomotive parts, Grady started his career at e-mail and all the information that’s avail- izing our crew with the new models and age 14, working in a parts warehouse for a able and easily accessible, we can contact familiarity grows over time. It builds condealership in Memphis, TN, and learning our customers quickly and follow-up al- fidence. We want our people to know what most instantly. Service to the customer is they’re talking about when a customer the industry from the bottom up. “I started back in 1982 working at by far the top priority we have here. Price calls in and it makes it easier if my counter people know the vehicle, including Pryor Oldsmobile for my father its assembly, and the parts inDan, who was the parts manager “we brought our sales reps volved.” there, and it was a great experiGrady said he’s always looking ence,” Grady said. “The business back in-house, but eventually it for top people to add to his crew. has changed on every level hurt our bottom line. They’re “We want folks who’ve been there. throughout the years, but in the We wouldn’t put someone inexpeend, most of the important aspects back out there ...” rienced on the counter, because it of this industry have remained the wouldn’t be fair to our customers. same. It’s still about the people, the details, and the problem solving. If you and availability are important and every- We’re always in search of people who can want to make it in parts today, you have thing works in conjunction, but if our serv- bring us value to our operation. We’ve had to be willing to do whatever it takes to ice isn’t the best we can offer, we’re not a lot of success getting great people from where we need to be. We know that other dealerships that have closed their doors for help your customers succeed.” Grady stresses service over every- companies have these same parts, so we whatever reason.” Knowing the collision repair industry thing else and constantly drills his crew have to do whatever we can to be different so well over many years on the front lines, about the importance of timely delivery and better.” Knowledge feeds the system and helps Grady to think like a body shop and finding the right parts for their cusstrengthens any parts department’s day-to- owner or a front office person, he said. “I tomers. “We have so much great technology day operations, Grady said. “Experience is always tell my people that we have to look at our fingertips that we can take advan- crucial and there’s no substitute for time at things from their perspective,” he said.

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“And that means getting the right parts on that delivery truck each and every time. In many cases, it comes down to communication. If there’s an issue, we want to know what it is so that we can remedy it. You don’t want to take an order from a customer and then ship them a partial order. That doesn’t work and we won’t likely retain that customer if we do it that way.” Grady prides himself on a consistently high fill rate in all his parts departments, he explained. “Each situation varies. It’s different based on the particular department, depending on how much they participate in the wholesale aspect of their business. But overall we’re better than 90%. If we don’t have certain parts in stock, we can get them typically Dennis Perkins is an within one day withoutside parts rep for out issues. Delivery Greenway Automoby the manufacturers tive Group. is so much better than it was even ten years ago. They’re so many different car models today that it’s literally impossible to have everything in our inventory all the time.” The ongoing question of using OE parts as opposed to tapping into the after-

market and used/re-manufactured parts, Grady’s position is clear. “The aftermarket is a reality, so we need to address it and figure out how we can happily co-exist. The quality of aftermarket parts has gotten better and their availability is significantly improved, so it’s harder to compete with them. We will price-match whenever we can, but only when we can still make money. “We’ve learned not to force our parts onto the insurance companies’ invoices, just because we want to get the business, because otherwise we’re spinning wheels and it’s a waste of everyone’s time. Pricematching can create a bookkeeping and paperwork nightmare too, so we have to weigh each situation before we’re cutting prices to make sales.” Greenway believes in reaching out to body shops to build strong and lasting wholesale relationships, achieved via print advertising, periodical mailings, constant phone contact and by utilizing the ongoing efforts of outside sales reps. “We know the value of employing these outside sales people and getting them out into the shops to get a bead on what they want and need,” Grady said. “When the recession hit, we brought our sales reps back in-house, but eventually it hurt our bottom line. So, they’re back out there again and we’re pleased with the

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results. Nothing can replace personal touch and using these reps is extremely valuable to our overall marketing strategy.” How have Florida body shops fared during this downturn in the economy?

didn’t recognize that simple concept when they should have and now they’re not around anymore.” What’s Grady’s sense of how wholesale dealership parts will play out for the remainder of 2010 and into next year? “We’re aligned with some great brands that are getting good response for building outstanding vehicles, so we anticipate good numbers that will get better as the economy improves. Our attitude is, if we keep doing things right, we’ll benefit and build loyalty with our body shop customers, regardless of their size or role Greenway Automotive Group manages $30 million in parts. in the market. It’s an ongoing en“Everyone is down maybe 30% in Florida. deavor, but we’re primed and prepared to Some shops have folded, but the ones keep plugging away.” who’ve survived will most likely be here for a long time. If I were to give advice to Greenway Automotive Group shops in our area, I’d offer them some 9001 East Colonial Drive common sense—keep your expenses Florida, Florida 32817 down and your grosses up. Many shops (407) 275-3200

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Custom Corner

Finishing the Shelby Series 1 with Rich Evans

I had a little detour from this project to film a pilot for a new TV show called Autoholics. For the pilot show, we built a ‘64 with Rich Evans Lincoln Continental convertible in a week so we hope you guys will be able to see that show in production shortly. I had fun and I met a lot of good people and we did it without pranks or yelling or anything like that.

everything out as we bagged everything when we did mock-up, so it should be fairly easy to put this vehicle back together. I always start with the basics, such as my Rich Evans’ panel alignment tools that are basically just 1/8” rods (described in previous column), used where I drilled the 1/8-inch holes in mock-up form. with Thomas Franklin We started with the rear deck lid. I used two dowels on each side, put the bolts in, tightened it down, pull the dowels out, and boom, it’s perfect. So after putting the deck lid on I’m moving to my doors. I put the strikers on the B-pillars. I usually get the door with Thomas Franklin latched in there, close the doors so I can have access to the front where the hinges are and allow my dowels to go in there. I put my four bolts in and tightened We are back on part three with the Ul- down, pulled the dowels out. The door’s timate Vodka Shelby Series 1 and we left right where it needs to be, first-time off with the 800 grit to 1000, thenStrom 1200, to around. with Dick 1500, to 3000, thanks to the Quick Cut Sanders™ and Soft-Sander™ blocks. After color sanding with 3000 we’re used the 3M® 1-2-3 system involving three different compounds: a heavy compound, and a polish, and then a final polish. By using 3M’s 1-2-3 with system we savedStrom a lot of Dick time especially if you take it down to 3000 grit. I’m also using a new tool called a ‘thumb gun’ that allows me to dispense my polish or my compound with the push No chipping paint, no worrying about of a button. You can see it at www.thum- my gaps. Now I move forward to the fendwith Lee Amaradio bguntool.com. It’s a phenomenal time- ers.Jr. I didn’t really dowel those out. I basisaver. cally I just wanted to get a good gap. I don’t have have too much movement on the front, so two bolts on the top, two bolts on the bottom, the rocker, and then one bolt on the front allows me to get my gaps. with Lee Amaradio So Jr. I get my gaps looking good on the left and right fender, then I’m going to move to the bumper.

Custom Corner

Rich Evans is the owner of Huntington Beach Bodyworks and an award winning painter and fabricator. He offers workshops in repair and customization at his facility to share his unique talents. For contacts and design samples visit www.huntingtonbeachbodyworks.com

a better alignment up front. So after installing the front bumper, we’re ready for the hood.

On Creative Marketing On Creative Marketing

Opinions Count Opinions Count Action Counts Action Counts Your Turn

with Loftus If anyone ever had Sheila those problems such as stopping when your wheeling up a panel and shaking your bottle, getting the compound to hit the end, and putting too much on, and wasting it. You save time, material, and product, so it all saves that mighty buck. I’m using a DeWalt and that alOn the bumper I put some nutserts bewithbuffer Sheila Loftus lows me to control the various speeds hind so I don’t have to reach around and when I’m wheeling this out, so after deal with a nut and a bolt. Now the nuts wheeling out all the panels, we’re ready are permanently molded to the bumper so for assembly so we roll roll the vehicle I’ve bettered that from the assembly line, over to the other side of the shop. I set which makes it easier for me and gives me

Your Turn

Shop Showcase

42 APRIL 2010 AUTOBODY NEWS | www.autobodynews.com

with Janet Chaney

We go back to the Rich Evans panel alignment tools again. I get the two bolts started on each side, find the holes, line them up, drop the dowel through it, tighten it up, drop the hood, we’re perfect. On goes the cowl from there and the seal that goes around the cowl and down left and right fenders gets the front completed, then I’m moving to the window. I’ve got a new window seal. I didn’t change too many of the other seals because

they’re not easy to get ahold of. You want to make sure when you’re taking things off that you clean them up and get prepared to put them back on, so you can move a little quicker. I got two days into putting this vehicle together. After the doors and door glasses that I marked out and put back in place. Put the belt moldings back on, the door panels back on. I did my homework when I took it apart, so I’ve got all the pieces that I need for assembly. I popped the two seats out, and had them repaired, just to better the project. This is a nice looking vehicle on the outside but had a couple of tears in the seats which I got stitched up. That allowed me to clean up the floor access and put the back panel in, which the seatbelts drop through. It’s got the rally stripes that run through where the center console is, so I got that all back together. I went to the rear door valance. I put the rear lower valance and left the rear tail lights out, so I get access to that rear valance.

There are a lot of plastic shims in this car and you have to put those back in because they’re there for a purpose. When the body’s being mounted, the mounting points for the rear valance are part of the frame. You don’t want it pulling the body down to the frame so they’ve got it gapped out evenly. So just an another tip to make sure you’ve got everything back the way it was. We talked about bagging, numbering, and labeling, earlier. It’s very important in this process. Otherwise you could be three, four, or five days extra, with repaints on nicks and chips, etc. So after that process, we’ll reinstall the seats.

We’ve got the convertible top dropped-in. Now we jack the car car up, get our rocker panels on, which are riveted in, so we’ve got everything pretty much riveted on. Then we’ll put our four wheel wells in. Those are the splash liners to

keep dirt from going up into the car. We drop the engine cover in and we can finalize with an inspection of the headline adjustments to make sure everything is right. All the gauges are working. All the turn signals are working and then we’ve got the louvers. Inside the fenders we painted the louvers silver and working to drop those. I had a deadline for Thursday at 11:30 and they showed up for the car at nine o’clock. I finished the car at noon, 30 minutes behind schedule. The guys are happy and are ready take it out on the road and show it off. I’m really happy with it. I put my signia on the right front lower bumper for Rich Evans designs. I didn’t want to dominate with the signia but it’s enough to let everybody know who did the job.

Hopefully they will have this car at SEMA so you guys can visit it. Just check

my website for the schedule. You can see it after following these three columns on doing it. Pictures really don’t do it justice.

Another great project under my belt. You’ll be able to see it on the Rides of Rich Evans iPhone app. You can Google it on iTunes or your iPhone, and play the game. I had a good time doing it. I can’t ever forget my sponsors. Thanks to Chicago Pneumatic™ for giving me the best pneumatic tools on the planet. MicroFlex™ gloves for providing me with it the safety part of my job. SATA spray guns has provided me with my spray guns in the the fresh air system that keeps me around longer. The Soft-Sander™ blocks. also Quick Cut Sanders™ or provide me with the equipment that I need and that the blocks that I need to get through the steps and processes. 3M provides me with all the product I need, be-

Christina Shubert

Phone: (360) 687-3451

Christina Shubert joined the Autobody News team in January, 2010, as an account representative. She moved to Encinitas (near the Autobody News’ office) in August 2009 to escape the cold winters of Northern Illinois. She grew up in the small town of Paddock Lake, WI, and is the youngest of four. Christina’s alma mater is Trinity International University, where she received her degree in Marketing and met her husband Shane. Before heading to the West she worked in the Chicago area at American Hotel Register Company as an Inside Sales Representative. Apart from working at Autobody News, Christina loves the beach, traveling, and trying out new foods. She also has more Facebook friends than anyone else on the planet! Call Christina about an ad or just to say ‘hi’ at 800-699-8251, or email: cshubert@autobodynews.com.

tween the compounds and their sandpaper and their “bondo gun” Visit them at 3M.com. To make sure I’m not forgetting anybody, please visit Huntington Beach Bodyworks and click on my link page and you can see all the different partners and the different products I use. If you need more information on doing a particular projec,t visit HuntingtonBeachBodyworks.com go to the store and pick up some videos. I have over 10 videos showing steps and procedures. Thanks to House of Kolor for providing with the great color choices that we had for this project.

I’m looking forward to next month to do something new and cool which I’ll share with you guys. As I always say, there are 100 ways to build a car. This is one way that’s working for me and hopefully some of the steps I’ve described will help you.

Joe Momber

Joe Momber rejoined the Autobody News team in February 2009 as a regional sales manager. Joe was instrumental in building Autobody News into the leading regional paper for collision repair and was with the company during the paper’s expansion into the southwest region Joe left the Marine Corps in 1979 and spent five years with Jorgensen Steel. He started working with Leta Amick (founder of Autobody News) in the spring of 1996. When the paper was sold in 1999, Joe stayed on until 2003, when he decided to try something new. Joe is a believer in giving back. He’s been donating blood for more than 20 years and donated a kidney a couple years ago. Joe stays so fit with racquetball and running he makes the rest of us sick. Call Joe about an ad or just to say ‘hi’ at 800-699-8251, or email: jmomber@autobodynews.com.

www.autobodynews.com | APRIL 2010 AUTOBODY NEWS 43

Company Connections

Express Scratch Repair™ Gives Fixed Ops New Revenue Stream by Nick Bartoszek, Sherwin-Williams

Company Connections

Recently published data from R. L. Polk & Co. show that the median passenger car age increased in 2008 from 9.2 years to 9.4 years. Looking at the glass half-empty, this means that consumers are delaying their vehicle purchases until their economic confidence level rises. When we look at the glass half-full, we can clearly see the opportunity this creates for the Fixed Operations side of the business. Due to the economic uncertainty, vehicle owners are now finding it more palatable to spend income on repairs to extend the life of an existing vehicle, rather that committing to ongoing monthly payments for a new vehicle. This means more brakes, tire rotations, radiator flushes, oil changes and collision repair. Wait a minute! Collision Repair… really? Well, not typical Collision Repair. Full Collision Repair is a great business for a dealer who is committed to that part of the business, but the vehicle owner is only involved in a collision on average every 6.25 years. That makes it a bit difficult to establish a repeat customer. What I am talking about is a different concept called Express Scratch Repair™ (ESR). Express Scratch Repair focuses on superficial, cosmetic repairs that can be fixed in one day or less and do not require the replacement of parts (aside from mirrors). ESR is newly perfected repair process that is in-between Paint-less Dent Repair (PDR) and the full fledge insurance claim, collision repair. ESR focuses on the bumps and bruises that happen to our cars each and every day. Parking lot dings, bicycle scratches, mail box encounters, and even the overly friendly neighborhood dog that jumps up on your car to greet you when you come home. These are all incidents that happen to us all, yet we live with them because of consumer perceptions of long repairs, rental car hassles and of course the dreaded insurance claim. Now, new technology in the paint industry allows for the ability to repair vehicle damage in about the same time it takes to perform an oil change and a tire rotation… without the need for a high temperature curing oven. Let’s take a closer look at this opportunity.

Company Connections find them and dealers are not asking for the Typical repair highlighted for this process.

sale. Dealerships have a great opportunity to market this service. Professional marketing brochures, posters, radio spots and waiting room videos make great tools to effectively communicate this new service. A marketing plan for a successful Express Scratch Repair would not be complete without tying into your CRM. Managing those relationships and transferring those warm leads are critical to success and a winning closing ratio. Internet based software is currently available to allow your customer to log on and obtain an instant evaluation on his or her repair 24/7 and allows you the ability to understand the repair and follow up the lead promptly. Whether your dealership has an existing collision center with excess capacity or a service department with available bays, ESR offers your dealership another great service to increase customer frequency and customer loyalty. Additionally, this type of repair process is also great improving the speed and cost control of reconditioning used car inventories.

Distinctive Dealerships

Marketing the opportunity Ever walk through a parking lot and take notice of all damaged vehicles? So much drivable damage is never repaired out of the absence of having an affordable, convenient solution to get it done. Consumers want these repairs, they just don’t know where to

Training Now that you’ve got them, what do you do with them? Easier said than done, but there are some great training programs out there that not only focus on the technical aspect completing the repair, but also the management and estimatics portion as well. Solid programs will not only focus on fixing the car, but also look at profitably writing the repair order, scheduling and managing customer expectations. The dealership model is a prime target area to harvest future ESR customers. In the service lane, each an every service advisor has the duty to perform a detailed walk around each vehicle that enters his department. Looking for add on sales in the service department is a great opportunity to grow this new revenue stream. You have already trained them to look for unrelated, previous damage to limit any potential exposure to the dealership. Why not take one more step to teach them how to

44 APRIL 2010 AUTOBODY NEWS | www.autobodynews.com

write a visual instant estimate to fix the vehicle and capture that new revenue. Simple tools exist to enable service advisors to be able to write ESR estimates that are fast, accurate and profitable. Since the repairs are limited to surface repairs, it is easy to distinguish between ESR repairs and full collision repairs. Who knows, you may even generate a few leads for your collision center. Customer service skill training for the service advisor should also be addressed. In collision repair, the introduction of the Direct Repair Insurance Program has hindered the attentive nature of the customer service advisors. We all too often focus on fixing the car, when quite often we forget that the owner needs fixing too. We forget that there has been a loss in pride of ownership since their vehicle has suffered a blemish. It is important to build a reliable process for providing an outstanding customer experience and be able to deliver a fantastic repair to a delighted customer. Combining these critical areas will be core to managing the success of the program. The training program should also focus on setting realistic goals and timeframes for defining success. A reputable paint supplier should be able to assist with facility design and layout if required. Whether it is just a few bays or tens of thousands of square feet, any up front cost will pay for itself in the end.

Sample repair in process. Can air dry without booth being fired up.

Facilities and Equipment If you are not equipped for success, how can you expect to achieve success? Facilities and equipment are the second largest reason more dealerships are not in the collision repair business, followed only by lack of adequate management to run the business. The prevailing perception is that it takes high-bake ovens and a huge facility to run a solid collision operation these days. That’s not the case for ESR. ESR needs only a small defined set of tools (fits tightly in a wheeled tool box) and an OSHA-approved ventilated spray area. This streamlined approach is because there

are new technologies on the market that do not require bake ovens and that significantly reduces the cost. Some systems even allow you to paint, polish and deliver a vehicle in less than an hour at ambient (70–75°F) room temperatures. That’s about the same amount of time some fluid change services take. Since some of the technology has advanced to air dry levels, not only is there a significant savings in equipment, you won’t get socked with a huge spike in energy or fuel to heat the building and make the process productive. Cost effective mixing machines are available to allow shop personnel to effortlessly match any finish and color of today OEM vehicles and produce a repair that is transparent to the vehicle owner. In an ESR repair, damSherwin-Williams’ breakthrough air-dry age repair area is clear, HPC 15 kept to a minimum, so material costs are also manageable. It’s simple, fast and profitable. Let’s face it, traditional collision repair has a lot a moving parts; insurance relationships, parts orders, accounts receivable, Work-In-Process (WIP) & rental car companies. Pretty ironic—all of those things that make traditional collision repair challenging, are not present in Express Scratch Repair. By looking at an Express Scratch Repair program for your dealership, you will be able to: ● Capitalize on unutilized capacity ● Satisfy a need in an untapped market segment ● Build Customer Loyalty ● Drive potential collision business ● Add a great process for reconditioning Used Car Inventory ● Add Revenue and Profits to your top and bottom lines

Express Scratch Repair programs are a great way to evolve your business into a consistent profit center that will grow revenue, profits and loyal, satisfied customers. Contact your local Paint, Body and Equipment Supplier to find out specifics on what types of program might be available to you. Nick Bartoszek is the Global Director of Product Management for the SherwinWilliams Automotive Finishes Corp. (SWAFC).

You only get one chance at the first repair.

Original Thought #78

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Distinctive Dealerships

Florida Hyundai Dealer Thrives in Tough Market with Solid CPO Sales, Tight Inventory Control, and Strong ROI

by Joe Overby, Staff Writer, Auto Remarketing

“We’re trying to do more with less.” That’s the motto by which O’Brien Hyundai has thrived, as of late, as the auto environment and a downtrodden economy continue to present challenges, said the store’s general manager, Gary Matern. “That’s what most manufacturers and businesses are trying to do,” he told Auto Remarketing in a recent interview. “Trying to get the most return-on-investment with less resources than we had a few years ago.” O’Brien Hyundai is situated in Fort Myers, Fla., which Matern said has had one of the highest per capita home foreclosure rates in the country. In fact, a recent report by RealtyTrac—an online foreclosure properties marketplace—indicated that during November, Florida’s Cape Coral-Fort Myers area had the fourth-highest metro foreclosure rate in the U.S. The market’s auto sales have also seen their fair share of hurdles, as well. According to Matern, the overall area has also seen a drastic drop-off on both the new and used sides of the auto market in the last three years, similar to what many others markets across the U.S. are experiencing. Nationally, the struggles on the newcar side may grab headlines and the attention of lawmakers, but the used-car market has challenges of its own. Matern has seen some of these firsthand at his store. But that hasn’t stopped O’Brien Hyundai from moving forward in the CPO segment. Dealer Reaches CPO Growth Despite Market Challenges Like many other dealers in the U.S., finding the right used inventory can be tough— Matern called it his biggest challenge—and sorting through the slim pickings of usedcar loans for consumers can often come up fruitless. Matern said his store talks to every bank possible and works with customers to get the right loan structure and terms, but finding the used-car financing can still be quite difficult. “Getting a used car financed today is tougher than it ever has been,” he said. “Credit is better today, but it’s not at its peak, where it was in ‘05 or ‘06.” But in the midst of these challenges and one of the toughest auto environments in history, O’Brien Hyundai has managed

to find success, particularly with its strong certified pre-owned sales. Matern attributes this success to “our focus and our attention to it.” “We’re better at it, we have more of it in stock, we’re emphasizing more on CPO because the new-car business is tough as it has ever been,” he added. Overall, O’Brien Hyundai—which has one showroom for new Hyundai models and a separate one for used cars and new Mitsubishi and Subaru vehicles—sells approximately 155 new vehicles per month, and 105 used. Typically, 37 or 38 of those used sales each month are certified Hyundai models. Matern credits his store’s success in the CPO segment to “the ease and quality of the program.” “It’s very easy to administer and it’s a very easy process for all areas of the dealership to participate,” he noted. “It’s a very simple process to administer from start to end.” Typically, Matern said his store stocks 50 to 60 certified Hyundai models at a time. The top way the dealership sources CPO models is through new-car trade-ins. He emphasized that O’Brien has 12,000 customers in its database, so trading for used Hyundai’s is the primary source for finding certified-worthy models. The store also leans on off-lease volume, which Matern said is the second largest inventory stream for the dealership. However, as of late, with the new-car sales volume softening the amount of available trade-in volume, Matern said his store has had to boost their sourcing from auctions. “That’s the toughest way to come by them because you have everyone bidding on them at one time,” he said. “Definitely, over the last 12 to 18 months, we’ve had to purchase more cars (from auctions) for the CPO program that we like to or are used to because of the newcar volume being down,” Matern pointed out during the December interview. And with new-car sales volumes down, there have been supply shortages on the used side, leading to the inventory acquisition challenges that many dealers like Matern face. “The biggest challenge is procuring the inventory,” he noted. “Not only (finding) inventory, but the right inventory.” Ideally, they like to go after two-, three- and four-year old vehicles, rather

46 APRIL 2010 AUTOBODY NEWS | www.autobodynews.com

than one-year old units because of the price points and affordability for the consumer. As far as the hottest certified units at his store, Matern said the dealership’s bestselling models “just follow the Hyundai line,” specifically citing the Santa Fe, Sonata, Tucson and Elantra. Emphasizing Turn Rates, ROI Moving on, when asked to give the best advice for dealers for thriving in today’s auto environment, Matern strongly stressed the importance of return on investments and establishing a quick turn rate. To accomplish this, O’Brien Hyundai keeps a “very tight inventory” on the usedcar side, stocking 35 to 40 days supply of used units and pushing to turn that inventory in the same time frame. “Whether it’s new car or used cars... the most important thing today is return on investment... how many times a year can

you turn your inventory and turn it into dollars?” Matern emphasized. “Turning that inventory and making the most profit on every (unit) is the most important thing to dealers in the country right now,” he continued He added that, like many other stores, Hyundai has also had to “re-assess” expenses. “We’re like almost every dealer... we’ve had to re-assess staffing levels and every expense (to ensure) that we’re getting the return on investment we’re looking for in every area,” he continued.

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Safelite® Group Moves Distribution Center to Braselton, GA; Relocated from NC Safelite® Group, an industry leader in vehicle glass repair and replacement, has announced the opening of its second new distribution center within the last year, and the company’s largest facility to date. The location will replace the current distribution facility located in Enfield, NC. “This move is a direct result of our company’s growth,” said Tom Feeney, president and CEO of Safelite® Group. “It is part of a detailed North American supply chain strategy that will support our continued expansion through 2015.” The new 357,000 sq. ft. facility, located in Braselton will support distribution of vehicle glass to the states east of the Mississippi River and has infrastructure that will support Leed-certification, which designates a building as environmentally friendly. It expands capacity from the company’s current Enfield, NC, facility by 36%, allowing for storage of 250,000 windshields and 90,000 other vehicle glass parts. It is expected to be operational by September 2010. As a result, the company’s current Enfield, NC, distribution center will restructure its operations when the facility opens. While the reorganization will result in some staffing adjustments, Safelite® will retain its manufacturing operations employing 288 people and the current Distribution

Center will be operated as a warehouse. A number of current distribution center employees will be absorbed into the company’s manufacturing operations. “We considered maintaining our east coast distribution center operations in Enfield, which are adjacent to the manufacturing plant, but because of the inability for us to further expand in that location we had to consider new options,” said Feeney. Company officials reviewed sites along I-85 between Atlanta and Charlotte in areas that would allow for more efficient and lower-cost transport of manufactured glass to points east of the Mississippi River before selecting the Braselton, GA, location. Last year as part of its supply chain expansion, the company opened a 282,000 sq. ft. distribution center in Ontario, CA, which serves points west of the Mississippi River, opened five warehouses, and expanded 12 facilities. In 2010, beyond the relocation of east coast distribution center operations, the growth of the warehouse operations continues with 12 targeted warehouse expansions. The new Braselton, Ga. distribution center, located at 1350 Braselton Parkway, will bring 92 new jobs to the area with the potential to grow to 120 jobs as volume increases.

AutoTec® Launches Major Initiative to Stop Curbstoning (Illegally Flipping Used Cars) Curbstoning is the repeated, unlicensed “flipping” of used cars for profit. It’s a nationwide scam that hurts consumers, cities, and local businesses. Automotive remarketing company AutoTec, the Birmingham, AL, privately-held company behind AuctionACCESS, has launched a major campaign to stop curbstoning, the unlicensed buying and selling of used cars for profit. “AuctionACCESS already helps stop curbstoners by keeping unlicensed dealers out of the auctions,” says Chuck Redden, president of AutoTec. “The ‘Stop Curbstoning’ initiative is a natural spinoff from that.” “For over ten years, we’ve been helping licensed dealers do business in the wholesale marketplace efficiently and securely,” Redden continues. “And for all that time, we’ve been hearing concerns about the effect curbstoners have on a retail level. We listened, and felt it was time to put forth a unified, coordinated call to action.” It’s not just licensed dealers who suffer because of curbstoners. Consumers who buy from curbstoners may find themselves with unsafe, cobbled-together vehicles that can’t be registered or insured like normal vehicles. In addition, such vehicles are typically ineligi-

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tising, as well as direct mail. Matern said the central message of the certified advertising is “the peace of mind (consumers) can have.” He continued: “They can feel comfortable because we’ve inspected the vehicle thoroughly and because of the backing of the factory warranty.” And the salespeople certainly embrace the benefits of selling certified, as it can help put shoppers at ease with buying a used vehicle. “We’ve been so successful with Hyundai as a new-car franchise, the certified comes easily because the processes are easily switched over to certified,” Matern pointed out. “They’re totally on board with the CPO because it’s an easier sale for the customer, because it puts them at ease with the warranty.” He added that some of the efforts to spread the word about CPO come naturally, since the store is the 10th largest Hyundai store in the U.S. “It’s a natural, easy advantage to advertise CPO because it mirrors the warranty of the new-car so closely,” Matern added. Additionally, he indicated that the store uses JM&A Group as its service-

ble for repairs under manufacturer recalls. “That makes sense, when you think about it,” Redden says. “After all, that particular used car wasn’t built by the manufacturer. It was put together by some salvage guy, using parts from two or three wrecked vehicles, duct tape, and chewing gum.” “Of course,” Redden continues, “by the time the buyer finds out that their just-bought used car has serious problems, the seller is long gone, and so is the money.” Redden points out that municipalities also lose out when curbstoners succeed. “Since curbstoners are unlicensed, they’re basically untraceable,” Redden says. “It’s all cash transactions, under the table, and it adds up to a lot of lost tax revenue for cities.” “This isn’t about the guy selling his old car. It’s about a multi-million dollar business based on fraud. Curbstoners pose as private parties. But they’re not,” Redden says. “Stop Curbstoning is a nationwide campaign to alert consumers about this fraudulent and potentially dangerous practice.” For more information, including things when buying a used car from a private party, visit www.stopcurbstoning.com.

contract provider, and it comes to the dealership to provide selling tips, as well. Hyundai’s varied model mix also helps in the specific market, Matern noted. The Fort Myers area has a wide range of demographics and interests, and Hyundai’s lineup variety fits in well. “We have a great mix of retired customers and people who are still working,” Matern suggested. “Hyundai appeals to both. It presents a great quality car for very good value that appeals to the range of demographics in our area.” It likely also doesn’t hurt that, nationally, Hyundai has become more of a player among the traditional larger automakers. “The brand awareness, that’s a big part of what led to its big step up in market share and penetration ... It’s a great quality car across all lines from Accent to Genesis. Every car (offers) great value against our competition,” Matern pointed out, emphasizing that neither quality nor value alone leads to success. You have to provide both and that is what Hyundai has done, he suggested. “You have to have a complete package and that’s what Hyundai brings to the table,” he added. This article appeared in the online edition of Auto Remarketing on Mar. 10, 2010. It is reprinted with permission.

www.autobodynews.com | APRIL 2010 AUTOBODY NEWS 47

Homeland Security Company Carbon Motors Partners with BMW Group’s Powertrain

On March 22, Carbon Motors Corporation and BMW Group jointly announced a strategic partnership in a press conference held outside of the 2010 Government and Security/U.S. Law Conference and Exposition. BMW will supply Carbon Motors with advanced clean diesel engines, complete with cooling and exhaust gas systems, and automatic transmissions for the Carbon E7, the world’s first and only purpose-built law enforcement patrol vehicle—designed by law enforcement, exclusively for law enforcement. “America’s largest, and most visible fleets of government-owned vehicles, now in excess of 450,000 units, deserve the most durable, efficient and reliable powertrain available,” said William Santana Li, chairman and chief executive officer, Carbon Motors Corporation. “The strength of BMW as a partner will allow us to provide our women and men in uniform with a diesel engine capable of the performance they desire along with the significant reduction in fuel consumption and emissions that U.S. taxpayers need.” It is estimated that the U.S. law enforcement fleet consumes an estimated 1.5 billion gallons of gasoline and emits an es-

timated 14 million tons of CO2 annually; the Carbon E7 will cut that by up to 40% using clean diesel technology. Clean diesel is the technically correct solution for law enforcement operations due to its inherent performance, safety, operational, fuel efficiency, and durability characteristics. “We are delighted to support Carbon Motors Corporation with our engine expertise,” said Ian Robertson, member of the Board of Management of BMW AG. “BMW Group diesel engines have a clear lead over the competition when it comes to fuel consumption, emissions and performance. Today’s agreement with Carbon Motors marks an important milestone in BMW’s 35-year commitment to the United States market.” Also in attendance at the announcement were U.S. Senator Richard Lugar (RIN) and Indiana’s Secretary of Commerce E Mitchell Roob, Jr. “Carbon Motors has exhibited relentless and unwavering determination in its efforts to put Hoosiers back to work,” commented Sen. Lugar. “Today’s announcement brings us one step closer to proving that America is back and is turning Indiana into the Silicon Valley of the auto industry.”

48 APRIL 2010 AUTOBODY NEWS | www.autobodynews.com

Audatex Directions Spring 2010 Includes Trend Analysis Projections for Insurance

Audatex North America, Inc. announced March 22 the release of its spring 2010 industry trends publication, Audatex Directions. This issue's cover story profiles Auto Body Speed Shop (ABSS), a global collision repair chain that places sushi bars, cafes and bistros in many of its 18 worldwide locations in an effort to redefine the collision experience. ABSS is also redefining what it means to “go green” in the U.S., relying upon wind spires and solar panels to drive down energy costs; and making use of innovative technologies—including a custom-built, vehicle steam-cleaning platform—to eliminate waste while improving overall quality and customer satisfaction. The new issue of Audatex Directions also examines the business case for adopting Lean practices in collision repair facilities to create more value for customers while minimizing waste. In addition, the publication reviews the trends that are projected to shape the U.S. Property & Casualty (P&C) insurance industry in 2010, including: ● Total loss trends (in automotive repair) are forecast to continue above historical levels and may decrease slightly compared to 2009. ● The trend of aging vehicles on the road is expected to continue, with owners taking

a closer look at their auto coverage and adjusting their personal level of risk relative to the cost of optional coverage. ● Miles traveled will likely continue to climb in 2010, increasing the probability of losses (both insurer and owner paid). ● Repairable appraisal values will likely rise in 2010 as total loss percentages improve slightly. For a free PDF copy of Audatex Directions or archived past copies, please visit http://www.newsletter.audatex.com/AudatexDirections_March2010.pdf “Even with early losses, insurers are seeing a return to profitability, evidenced by the data for the first nine months of 2009,” said Mike Salfity, Managing Director of Audatex North America. “Although signs of economic recovery are emerging, the industry's challenges will continue. It's therefore important for repair shops of all sizes to stay on top of industry trends and adapt their strategies accordingly.” Other articles inAudatex Directions explore: ● Understanding parts to drive better business results ● Regulatory update: New year brings new total loss requirements ● News from the Audatex Strategic Advisory Council

California Autobody Association with David McClune

New Law Affects Body Shops

As of January 1, 2010, the new California CAA members need to be aware that Health and Safety Code Section 25215.6 removing these weights warrants the old prohibits the manufacture, sale, or installa- weights to be properly disposed of. Lead tion of wheel weights that contain more wheel weights may be hazardous waste. It than 0.1% lead. Wheel weights are clipped is the generator’s responsibility to make the to the rims of automobile wheels to balance appropriate hazardous waste determination the tires and prevent excessive vibrations prior to disposal. Disposal options may inwhile driving. Historically, wheel weights clude returning the wheel weights to your have been made of pure lead. if you have some in stock, to see with JohnProtection Yoswicksupplier, The U.S. Environmental if it will exchange them for the type that Agency (EPA) estimates that 1.6 million comply with the new law. You can send pounds of lead is abandoned on U.S. road- them for recycling as scrap metal, which ways from weights that have fallen off exempts them from hazardous waste reguwheels. Lead from wheel weights is a po- lation. Also, you can dispose of them as tential contributor of lead in the environ- fully regulated hazardous waste. You ment. Lead wheel weights also can be should never discard them in the trash. abraded from traffic, creating lead dust and Enforcement of this new law will by contaminating the air. the Department of Toxic Substances ConThe law does not require that lead trol (DTSC). The law does not provide for wheel weights be replaced. However, if any a “grace period.” A person violating this work is done on a car’s tire that requires an law may be penalized up to $2,500 per day old lead wheel weight to be removed, or if per violation. with Steffen Additional information about this new a lead wheel weight fallsRichard off in the process of working on a tire, the old lead wheel law and how it may affect your business, is weight cannot be placed back on the tire. under the CAA website, www.calautoAny wheel weight installed on the tire will body.com or call the CAA state office 1need to comply with the new law. (800) 454-3368.

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EEEC Team Presents to CAA

The CAA San Diego Chapter held a special meeting on March 1st at Tom Ham’s Lighthouse in San Diego to host the EEEC Inspection Team and learn more about the spot checks that the EEEC is conducting on Auto Body Shops in San Diego County.

Jones stated that “underground” body shop businesses that don’t follow the law are able to operate at up to a 30% discount to those businesses that do follow the law, which creates the unfair competitive business advantage…not to mention unsafe

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CAA San Diego Chapter – EEEC Presentation meeting was well attended.

The EEEC presentation team included: Robert Jones, Deputy Secretary, Special Counsel, Labor and Workforce Development Agency. David Dorame, Director, Economic and Employment Enforcement Coalition, Labor and Workforce Development Agency. Wende Carleson, Regional Manager, Department of Industrial Relations, Division of Occupational Safety and Health. Justin Gill, EEEC Agent, Employment Development Department. The meeting was well attended with over 125 CAA attendees. The meeting started with Robert Jones introducing the EEEC and its mission:

EEEC Mission Statement: The EEEC (Economic & Employment Enforcement Coalition) is a partnership of state and federal agencies, each expert in their own fields. The EEEC Team collaborates for vigorous and targeted enforcement against unscrupulous businesses which helps to level the playing field and restore competitive advantage to law abiding businesses and their employees. The EEEC (Economic & Employment Enforcement Coalition) was founded in 2005 and is a government enforcement unit comprised of investigators and inspectors from several state agencies including EDD (payroll), OSHA (safety), Dept of Labor (employee rights), and more. According to Jones, this year the EEEC is targeting the Auto Body industry for compliance. Jones spent the first part of the meetings explaining that the EEEC mission is to identify businesses that aren’t complying with state and federal laws.

working conditions for employees. Jones explained that businesses that weren’t paying at least minimum wage, or paid their workers in cash, or didn’t have workman’s compensation policies, or had unsafe working conditions were hurting not only their workers but the state as well (in terms of uncollected tax revenues and uninsured workers). According to Jones, the EEEC Auto Body Sweep Teams would be target body shops through tips they receive from other shops or businesses, records review and surveillance. These onsite audits would be unannounced. The EEC on-site team would be comprised of the following:

1. 2. 3. 4. 5.

Deputy Labor Commissioner DOSH Safety Engineer EDD Tax Auditor BAR Investigator EDD Workforce Services Personnel

The remainder of the meeting was devoted to the various EEEC speakers explaining the topics that would be part of the audit and how shops should prepare, and the rights of shop owners during and after an audit. For additional information on the EEEC and their Auto Body spot checks, contact: Thelma Snowden Thelma.snowden@labor.ca.gov CA Labor & Workforce Development Agency 801 K Street, Suite 2101 Sacramento, Ca 95814 Ph: 916-327-9070 Fax: 916-327-9158.

www.autobodynews.com | APRIL 2010 AUTOBODY NEWS 49

with Janet Chaney

ALL OEM Information with Tom McGee and Jeffrey Webster

Tom McGee is National Account Manager for ALLDATA Collision. He has had a long career with I-CAR, including as President & CEO. Tom is an ASE certified Master Collision Repair/Refinish Technician. He has also run his own collision facility and been a career and technical school instructor. He can be reached at Tom.McGee@alldata.com. For other Tom McGee articles in Autobody News, go to: http://www.autobodynews.com/tom-mcgee/index.php — JEFF WEBSTER is an ALLDATA Technical Writer.

It’s Still a Mustang®… But in Name Only – PART 1 of 2

As I (Tom) visit many shops each month, I continue to hear many of the same comments from the body shop owners, manwith Tom McGee agers and staff. Some of the most common are: “I’ve been fixing cars since 1960something and we know how to fix them.” “They are still cars and nothing is really changing on them.” “My technicians are great and they with Ed Attanasio know how to fix cars.” Having heard similar comments many the window switch. times, I decided to see just what has • All front window components (winchanged over the years with a car most of dow glass, window regulator, window us are familiar with, the Ford® Mustang®. motor and glass top run) must be inThrough some research, I discovered that stalled/tightened and adjusted to specificathese were optionswith on the Ed 1965Attanasio Mustang: tion before carrying out this procedure. - Power steering • Excessive bounce-back (window re- Power brakes verses direction with no obstructions pres- Manual front disc brakes (V-8) ent) may indicate that a de-initialization - Deluxe retractable front seat belts procedure may need to be performed. - Rear seat belts • A battery disconnect does not require - Padded visors this procedure to be carried out unless the - Heavy-duty battery battery was disconnected while the win- Radio and antenna dow was operating. - Vinyl roof • The motor will only operate in the 9- Tinted glass with banded windshield 16 volt range. If the voltage drops below 9 - Air conditioning volts, the window will not function corWhat I didn’t find on the 1965 Mustang rectly or may stop moving. If the voltage was the need to de-initialize or re-initial- drops below 9 volts while the motor is opize the door glass. Here is the procedure erating, the motor will become de-initialfor the 2008 Ford Mustang. ized and will need to be initialized.

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WINDOW MOTOR INITIALIZATION NOTE: • Initialization is required to learn both the full up and full down positions and the profile of the glass as it travels through the glass channel. Once initialized, obstacle detection is enabled. The convertible rear window motors do NOT need to be initialized as they do not have one-touch up or one-touch down functions. • The LH or RH front window motor must be de-initialized, then initialized whenever the front window motor is removed from the window regulator, a new window regulator and motor is installed, a new window glass is installed or for any operation in which grease or lubricants are applied to the window regulator or glass run. • A new (original factory setting) or deinitialized LH or RH front window motor may allow one-touch down operation, but will not operate in one-touch up mode until initialized. If a new LH or RH front window motor has been installed, proceed to the initialization procedure. • If diagnosing a LH or RH front window switch problem, perform the window initialization procedure before replacing

De-initialization 1. The motor can be de-initialized in 2 ways: • Disconnect the battery cable from the battery while the window is operating. • Remove the window motor fuse while the window is operating. 2. After the motor has been de-initialized, reconnect/reinstall the battery cable or fuse and carry out the initialization procedure.

quarter glass must be in the closed and up position) in order for the door window motor to initialize. • The windows must be in the full open position for this procedure to operate correctly. 3. Press and hold the window control switch in the UP position at the second detent until the window glass stalls into the glass top run for at least 2 seconds. 4. Once the top run is reached, hold the window control switch in the DOWN position at the second detent until the window glass stalls at the bottom of its travel for at least 2 seconds. 5. Cycle the window glass up and down once more to set the window soft stop for the down position. 6. Test for correct window operation by carrying out the one-touch up and onetouch down features.

RESTRAINT SYSTEMS – 1965 vs. 2008 The ’65 Mustang offered “deluxe retractable front seat belts” as an option. The 2008 Mustang supplemental restraint sys-

tem (SRS) contains dual-stage deployment (advanced restraint system) driver and front passenger air bag modules. It is designed to provide increased collision protection for front seat occupants, in addition to the three-point safety belt system. This vehicle is also equipped with seat side air bag that deploy from the outboard front seat backrest upon a side impact. The ’65 sure didn’t See STILL A MUSTANG, Page 52

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WARNING: Keep objects and body parts clear of the glass panel when carrying out the initialization procedure. During the initialization procedure, the glass panel closes with high force and cannot detect objects in its path. Failure to follow this instruction may result in serious personal injury. NOTE: • If this procedure is only partially completed, the front window motor remains non-initialized and may allow onetouch down operation, but does NOT allow one-touch up operation. • The door MUST be closed during this procedure (for convertibles, the top and

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Action Counts with Lee Amaradio Jr.

Hang ‘Em in the Town Square

One of my favorite movies was the WestDid they hang him for taking part in the ern miniseries Lonesome Dove, starring murder of two sod-busters or for not doing Tommy Lee Jones and Lee Robert Duvall something with Amaradio Jr. to stop the murders? They hung along with Robert Urich and Danny him because he had breached their code of Glover. This was a story of the legendary honor and did nothing while watching two Texas Rangers and the old West. There innocent men die. To these men their honor were several great parts but a theme meant more to them then their own lives. throughout the entire movie was that these Jake knew this and excepted his fate. With men had a bond that was all about integrity the noose around his neck he spurred his and honor. There with is a scene that comes to own horse so his friends wouldn’t need to. Sheila Loftus mind where they were forced, because of The meaning was clear. He was saying ‘I their integrity, to hang one of their friends understand’ and ‘I’m sorry.’ He may have because he had stepped outside of the law been trying to alleviate whatever guilt they and, most importantly, he had breached may have felt. These are the kind of men their unwritten code of honor. that formed our country. Men that wouldn’t In a statement just before being stand for injustice. These men were men of hanged, Jake says to Gus, “Hey Gus, I was honor and integrity and valued their word with Sheila Loftus just trying to stay alive” and Gus replied, “I above all else. Today, we have drifted so far believe you, Jake but you know the rules. away from honor and integrity that unless ‘If you ride with outlaws you die with you are watching a vintage war movie we them.’ You stepped over the line Jake.” rarely even hear the words. Another movie comes to mind, starThe interesting thing is that Jake did know the rules and that was pretty much ring Sean Connery, called The Wind and the end of the discussion and so they the Lion. There was a scene at the end with Janet Chaney hanged their friend. In fact, Jake helped where Sean Connery’s counterpart says, them hang him by spurring his own “Great One we have lost everything,” and horse. Sean Connery smiles as he replies, “My

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Industry Insight

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Industry Insight with John Yoswick

Industry Interview

with Janet Chaney

Industry Interview

Lee Amaradio, Jr. is the president and owner of “Faith” Quality Auto Body Inc. in Murrieta, California. Lee is president of the CRA as well as an advocate for many other industry groups. He can be contacted at lee@faithqualityautobody.com

friend, have you found nothing in life worth losing everything for?” With that they both let out big smiles and were on their way. The meaning that I got was, yes, I have lost everything! But it was worth it, because they believed in what they stood for. It was all about their honor. Integrity and honor are priceless. They cannot be bought or sold. Either you have them or you don’t. Either you’re doing it the right way, or you’re not. It’s not about telling everyone how honest you are it’s about owning up to your mistakes and being accountable. My Dad taught me that my word was my bond and a handshake was something honorable and to keep my word because it is the most import thing I have. Somewhere we have gotten off track and most gang members have a better sense of honor than most businessman. If this were not true we wouldn’t need to put everything in writing. It’s because our honor has diminished to a point where a man’s word means very little. What I liked about the old west was that judgment was swift. They didn’t have child killers becoming celebrities with a ton of lawyers waiting in line to defend them. I liked it better when they would storm the town jail and drag the bad guy out and hang him in the town square. We were still under the same constitution and it was still the same America, except there was swift accountability that was driven by honor and integrity. I was telling my wife that because of the recession all of my efforts to help change the collision industry have been for nothing. I was complaining that nothing has changed, except now I have a giant bull’s eye on my back. She set me straight and told me what I accomplished wasn’t about everyone else. It was about me doing what I thought was right. I could lose everything and still hold my head up knowing that I did, or tried to do, the right thing. Everything isn’t always about money and “success is only a matter of one’s own perception.” I mean, no matter how successful I may think I am, there are many social circles where I would not be considered very successful. So everything becomes about who we are and what we stand for and how valuable our integrity and our honor are to us. I know that there are many people that say, “it’s just business,” or “I don’t make the rules.” Well, I have news for you. If you don’t make the rules who does? Does

this mean now there are no rules? No, there are rules and there is accountability and we will reap what we sow. Remember the ‘Golden Rule.’ “Do unto others as you would have them do unto you. “We want the buck no matter what” is just not right. Where did this all go wrong? We have all watched a subtle change throughout our financial world and we have come to accept the lack of integrity and honor as acceptable business practice. We need to wake up and go back to the Lonesome Dove days when our “word” not our “net worth” was what defined us. My Dad once said to me, “Hey son, it won’t do you any good to be the richest guy in the graveyard.” It took some time for me to understand what he was telling me. Were my priorities mixed up, or was I just working too hard? What he meant was I was working too hard for the wrong reasons. It’s not about our stuff, it’s about who we are, and money doesn’t make the man. It really doesn’t matter how much money you make, but it does matter, how you make it. What does it profit a man to gain the whole world and lose his soul? When we are required to sell ourselves out to stay in business then it’s time to get out of business. We need to regain our perspective and add honor and integrity to the way we repair vehicles. How much money will someone trade for their life? The answer, all of it. So when we start talking about safety and the safety of others excuses will not cut it. If there were a hospital director that hired a staff of doctors that continued to harm patients because neither he nor they had the proper training or equipment necessary, they would be removed from their positions. They could have the best intentions but intentions mean nothing without the training and equipment necessary to do the job. When it comes to collision repair, “safety” is a big issue and knowing the proper way to repair a collision-damaged car and using the proper equipment is a priority. There are too many shops that think they can remain in business with the “status quo” and really aren’t investing in their futures. It is “wrong” if you “fail to do what is right” when you repair your customers’ vehicles. We need to quit making excuses and give our customers the repair they trusted us for and start wearing our integrity like a badge of honor. Otherwise, when the victims say “get a rope,” and we’re under the tree, we’re going to have to spur our own horses.

www.autobodynews.com | APRIL 2010 AUTOBODY NEWS 51

Continued from Page 50

Still a Mustang

have the following list of SRS items to inspect and repair following a collision: WARNING: Remove restraint system diagnostic tools from the vehicle prior to road testing. If tools are not removed, the supplemental restraint system (SRS) device may not deploy in a crash. Failure to follow this instruction may result in serious personal injury or death in a crash and possibly violate vehicle safety standards.

NOTE: • After diagnosing or repairing a supplemental restraint system (SRS), the restraint system diagnostic tools (if required) must be removed before operating the vehicle over the road. • Deployable devices (such as air bag modules, pretensioners) may deploy alone or in various combinations depending on the impact event. • Always refer to the appropriate Vehicle System procedures prior to carrying out vehicle repairs affecting the SRS and safety belt system. • The SRS must be fully operational and free of faults before releasing the vehicle to the customer.

All vehicles 1. NOTE: Refer to the correct removal and installation procedure for all SRS components being installed. When any deployable device or combination of devices are deployed and/or the restraints control module (RCM) has the DTC B1231 (Event Threshold Exceeded) in memory, the repair of the vehicle's SRS is to include the removal of all deployed devices and the installation of new deployable devices, the removal and installation of new impact sensors, and the removal and installation of a new RCM. DTCs must cleared from all required modules after repairs are carried out.

Vehicles with occupant classification sensor (OCS) system 2. NOTE: After installation of new occupant classification sensor (OCS) system components carry out the OCS System Reset procedure. Refer to the appropriate Vehicle System for OCS system removal and installation procedure. When a vehicle has been involved in a collision and the occupant classification system module (OCSM) has DTC B1231 stored in memory, the repair Unibody Figure 1. of the OCS system is to in-

clude the following procedures for the specified system: • For rail type OCS system, inspect the passenger side floorpan for damage and repair as necessary. Install new OCS rails. • For weight sensor bolt type OCS system, inspect the passenger side floorpan for damage and repair as necessary. Install a new seat track with OCS weight sensor bolts. • NOTE: Most bladder type OCSM do not store a DTC B1231 in memory after deployment. The DTC B1231 is stored only by the RCM. For bladder type OCS system, inspect for damage and repair as necessary. If installation of an OCS system component is required, an OCS system service kit must be installed.

Item 1

Description

02501 LH / 02500 RH

A-pillar assembly – high strength steel

02509 LH / 02508 RH

A-pillar reinforcement – high strength steel

24301 LH / 24300 RH

B-pillar inner – high strength steel (part of 27791 / 27790)

28061 LH / 28060 RH

Quarter panel upper rear extension – mild steel

Wheelhouse inner panel – mild steel (part of 27791 / 27790)

02039B LH / 02038B RH

02505 LH / 02504 RH

3 5 6 7 8 9

52 APRIL 2010 AUTOBODY NEWS | www.autobodynews.com

Part Number

All vehicles 3. When any damage to the impact sensor mounting points or mounting hardware has occurred, repair or install new mounting points and mounting hardware as needed. 4. When the driver air bag module has deployed, a new clockspring must be installed. 5. New driver and/or front passenger safety belt systems (including retractors, buckles and height adjusters) must be installed if the vehicle is involved in a collision that results in deployment of the driver and/or front passenger safety belt pretensioners. 6. Inspect the entire vehicle for damage, including the following components: • Steering column (deployable column if equipped) • Instrument panel knee bolsters and mounting points

UNIBODY FIGURE 1

Cowl side panel – high strength steel A-pillar inner – high strength steel

27791 LH / 27790 RH

Quarter panel inner – mild steel

28059 LH / 28058 RH 02B67 LH / 02B66 RH 02733 LH / 02732 RH

Quarter panel lower extension – mild steel

Rocker panel reinforcement – high strength steel

• Instrument panel braces and brackets • Instrument panel and mounting points • Seats and seat mounting points • Safety belts, safety belt buckles and safety belt retractors. • SRS wiring, wiring harnesses and connectors 7. After carrying out the review and inspection of the entire vehicle for damage, repair or install new components as needed.

Unibody – 1965 vs. 2008 Besides both vehicles being referred to as a unibody, that is where the construction similarities stopped. The 2008 Mustang unibody contains a wide variety of steels and plastics.

Unibody Figure 2.

Part Number

10177 LH / 10176 RH

44210

on the ’65 without OE technical information, but you cannot work by memory on today’s version of the Mustang, or any other vehicle for that matter. You definitely need the proper OE technical information. Watch for Part 2 of this article in next month’s Autobody News. We’ll talk about sectioning the lower frame rail and the Mustang’s tire pressure monitoring system (TPMS).

UNIBODY FIGURE 2

Item 1

Gusset – high strength steel

Description

17D957

Bumper cover(front) – Thermoplastic polyolefin(TPO)

17K835

Bumper cover(rear) – TPO

Rocker panel moulding – TPO

Decklid spoiler – Acrylonitrile butadiene styrene(ABS)

It’s still a Mustang, but it has definitely changed since the 60’s There have definitely been changes in this vehicle since the ‘60’s. And we haven’t even touched the diagnostic trouble codes, changes in the drivetrain, or even the number of exterior colors available. We might have been able to set the points and timing

of ALLDATA LLC. All other brand names and marks are the property of their respective holders. Ford and Mustang are registered trademark names and model designations of Ford Motor Company. All trademark names and model designations are being used solely for reference and application purposes.

with Tom McGee

Shop Showcase

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

Mississippi’s Larry King Looks Back at 44 years in the Business with Ed Attanasio

Larry King is a 44-year veteran of the col- floors and pretty quickly I was doing it lision industry and a shop owner who has all.” In 1965, King started Larry King seen the businesswith changeEd in many ways. Attanasio He still believes in Body Shop in Corinth, Mississippi, a small running a clean oper- four-car shop with two employees. “Both my workers were helpers baation that’s focused more on customer sically. So, I did every job imaginable on service than pursuit my own from start to finish. We were of the almighty buck, getting three to four cars in there every he told Autobody week and business was good. It was a different business back then, without News. King, 66, began computers or even calculators. I kept his career in the col- everything in my head and all of the eslision repair industry timates were visual.” In 1976, King’s father, R.C. died after in 1958, when he began learning how running his own shop for several decades, Larry King, owner of to fix cars in a high he said. “For 11 years, we were competiLarry King Body shop school co-op study tors, but he was a great body man and he in Corinth, Missistaught me a lot. I followed his footsteps program. sippi, has seen the collision industry “I went to school and got into this business because of him.” change dramatically Larry King Body Shop today fixes half the time and the since he started his 20-25 cars per week, employing four body rest of the school day shop in 1965. I worked in a local men while his wife, Betty, and his son, body shop. I learned how to be a pretty de- Todd, run the front office. “Todd grew up working in body cent body man from my school learning and by just doing it. First, I was sweeping shops, so he learned this business by doing

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The struggle between insurance comit,” King said. “And my wife has been here working with me on and off for many panies and body shops when it comes to years. We’re three generations in the body wrestling over labor rates and the costs of shop business and, man, parts hasn’t changed in four decades, King said. we’re proud of it.” “The insurance companies are reHow has King achieved such longevity questing used parts more and more, bein a tough business? cause they’re trying to save money and I “How do I do it? It’s sim- realize that. But I also want to put out the ple. No drinking, no best work that I can, so it goes back and smoking and no cussing,” forth. I’ve had DRPs in the past, but he said. “I’m a Christian right now I don’t have any. We’re still and we run a family oper- busy, so it hasn’t affected my business ation. We’re fair with much. It’s more valuable to me to retain everyone that works with control of my shop and run the business us or comes in through the way I want to run it. We’re pretty Larry’s wife that door and that’s just close to full capacity right now, so we’re Betty helps run the way we do things. It’s fine.” the shop’s front King has hired many body techs over the way I’ve done it since office with their ’65, so why would I start the years, so he knows the qualities that son Todd. good ones possess,. “A good body guy is changing now?” King is a past customer of Brian like an artist really. Creativity is definitely Grady, King is a past customer of Brian the trait of a top-notch body person. A Grady, currently the parts director for the good one will also have a lot of pride in his Greenway Automotive Group (see p. 29). finished product. The best ones I’ve seen After ten years of King buying parts from are craftsmen who are really never happy him as the parts manager at Dobbs Pontiac with a finished job. They always want it to GMC in Memphis, Tennessee, Grady also be better.” acquired another one of the shop’s strongest assets—Larry’s daughter, Karen. It was a collision of love and—this time —insurance companies weren’t involved. “I introduced Brian to Karen and they got married in 1997,” King laughed. “I always stress good customer service, but that was more than I expected.” How has the collision industry changed since the late ‘60s? “PaintLarry King Body Shop fixes 20–25 cars per week and ing the cars was a lot harder and we employs four body techs. had to buff them out back then, which was time consuming,” King At 66, other people might be considsaid. “And back then those cars had actual frames on them. Now 95% of them have ering retirement, but Larry King hasn’t unibody frames, so it’s changed in many even stopped long enough to even think about it, he said. ways.” “What? Why retire? Don’t rush me. I One thing that has become more of an issue today is the question of using OE still feel great and my health is good, so parts in repairs as opposed to buying less they’ll have to pull me out of here before I expensive parts from the aftermarket, King retire.” said. “I will use the original parts from the Larry King Body Shop manufacturer in almost every case if I can. 2008 Corinth Street I’ll go that way, even if I don’t make as Corinth, Mississippi 38834 much money as I could by using an after- (662) 286-8011 market part. I’ve seen problems with aftermarket headlights that aren’t as good. And re-manufactured bumpers and some hoods have issues. If they don’t fit, I have to spend time fixing them and then I’m www.autobodynews.com losing money.”

CHECK IT OUT!

www.autobodynews.com | APRIL 2010 AUTOBODY NEWS 53

Distinctive Dealerships

Fort Myers Hyundai Dealer Thrives in Tough Market with Solid CPO Sales, Tight Inventory Control, and Strong ROI

by Joe Overby, Staff Writer, Auto Remarketing

Dealer Reaches CPO Growth Despite Market Challenges Like many other dealers in the U.S., finding the right used inventory can be tough—Matern called it his biggest challenge—and sorting through the slim pickings of used-car loans for consumers can often come up fruitless. Matern said his store talks to every bank possible and works with customers to get the right loan structure and terms, but finding the used-car financing can still be quite difficult. “Getting a used car financed today is tougher than it ever has been,” he said. “Credit is better today, but it’s not at its peak, where it was in ‘05 or ‘06.” But in the midst of these challenges and one of the toughest auto environments in history, O’Brien Hyundai has managed

to find success, particularly with its strong certified pre-owned sales. Matern attributes this success to “our focus and our attention to it.” “We’re better at it, we have more of it in stock, we’re emphasizing more on CPO because the new-car business is tough as it has ever been,” he added. Overall, O’Brien Hyundai—which has one showroom for new Hyundai models and a separate one for used cars and new Mitsubishi and Subaru vehicles— sells approximately 155 new vehicles per month, and 105 used. Typically, 37 or 38 of those used sales each month are certified Hyundai models. Matern credits his store’s success in the CPO segment to “the ease and quality of the program.” “It’s very easy to administer and it’s a very easy process for all areas of the dealership to participate,” he noted. “It’s a very simple process to administer from start to end.” Typically, Matern said his store stocks 50 to 60 certified Hyundai models at a time. The top way the dealership sources CPO models is through new-car trade-ins. He emphasized that O’Brien has 12,000 customers in its database, so trading for used Hyundai’s is the primary source for finding certified-worthy models. The store also leans on off-lease volume, which Matern said is the second largest inventory stream for the dealership. However, as of late, with the new-car sales volume softening the amount of available trade-in volume, Matern said his store has had to boost their sourcing from auctions. “That’s the toughest way to come by them because you have everyone bidding on them at one time,” he said. “Definitely, over the last 12 to 18 months, we’ve had to purchase more cars (from auctions) for the CPO program that we like to or are used to because of the new-car volume being down,” Matern pointed out during the December interview. And with new-car sales volumes down, there have been supply shortages on the used side, leading to the inventory acquisition challenges that many dealers like Matern face. “The biggest challenge is procuring the inventory,” he noted. “Not only (finding) inventory, but the right inventory.” Ideally, they like to go after two-, three- and four-year old vehicles, rather than one-year old units because of the price points and affordability for the consumer.

54 APRIL 2010 AUTOBODY NEWS | www.autobodynews.com

As far as the hottest certified units at his store, Matern said the dealership’s bestselling models “just follow the Hyundai line,” specifically citing the Santa Fe, Sonata, Tucson and Elantra.

Emphasizing Turn Rates, ROI Moving on, when asked to give the best advice for dealers for thriving in today’s auto environment, Matern strongly stressed the importance of return on investments and establishing a quick turn rate. To accomplish this, O’Brien Hyundai keeps a “very tight inventory” on the usedcar side, stocking 35 to 40 days supply of used units and pushing to turn that inventory in the same time frame. “Whether it’s new car or used cars... the most important thing today is return on investment... how many times a year can you turn your inventory and turn it into dollars?” Matern emphasized. “Turning that inventory and making the most profit on every (unit) is the most important thing to dealers in the country right now,” he continued. He added that, like many other stores, Hyundai has also had to “re-assess” expenses. “We’re like almost every dealer... we’ve had to re-assess staffing levels and every expense (to ensure) that we’re getting the return on investment we’re looking for in every area,” he continued.

Spreading the CPO Message As most know, consumer awareness of the benefits of buying certified can be critical for dealers’ success in the segment. To get the word out about what Hyundai’s CPO program can offer consumers, O’Brien Hyundai does a lot of radio and TV advertising, as well as direct mail. Matern said the central message of the certified advertising is “the peace of mind (consumers) can have.” He continued: “They can feel comfortable because we’ve inspected the vehicle thoroughly and because of the backing of the factory warranty.” And the salespeople certainly embrace the benefits of selling certified, as it can help put shoppers at ease with buying a used vehicle. “We’ve been so successful with Hyundai as a new-car franchise, the certified comes easily because the processes are easily switched over to certified,” Matern pointed out. “They’re totally on board with the CPO because it’s an easier

sale for the customer, because it puts them at ease with the warranty.” He added that some of the efforts to spread the word about CPO come naturally, since the store is the 10th largest Hyundai store in the U.S. “It’s a natural, easy advantage to advertise CPO because it mirrors the warranty of the new-car so closely,” Matern added. Additionally, he indicated that the store uses JM&A Group as its service-contract provider, and it comes to the dealership to provide selling tips, as well. Hyundai’s varied model mix also helps in the specific market, Matern noted. The Fort Myers area has a wide range of demographics and interests, and Hyundai’s lineup variety fits in well. “We have a great mix of retired customers and people who are still working,” Matern suggested. “Hyundai appeals to both. It presents a great quality car for very good value that appeals to the range of demographics in our area.” It likely also doesn’t hurt that, nationally, Hyundai has become more of a player among the traditional larger automakers. “The brand awareness, that’s a big part of what led to its big step up in market share and penetration ... It’s a great quality car across all lines from Accent to Genesis. Every car (offers) great value against our competition,” Matern pointed out, emphasizing that neither quality nor value alone leads to success. You have to provide both and that is what Hyundai has done, he suggested. “You have to have a complete package and that’s what Hyundai brings to the table,” he added. This article appeared in the online edition of Auto Remarketing on Mar. 10, 2010. It is reprinted with permission.

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