Autobody News February 2014 Great Lakes Edition by Autobody News

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VOL. 3 ISSUE 5 FEBRUARY 2014

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14 Fort Wayne, IN, Shops Opt Out of State Farm’s Select Service Citing PartsTrader by Chasidy Rae Sisk

In December 2013, State Farm experienced a dramatic reduction in the number of shops participating in Select Service (their direct repair program) in the Fort Wayne, IN, area due to the implementation of PartsTrader. Of the 22 local shops participating in the DRP, 14 (over 60%) opted out of the program, though Todd Bonecutter some of these

shops had been on the program for decades. Several shop owners and managers were willing to discuss their reasons for being removed from the Select Service. Todd Bonecutter, General Manager at Glenbrook Collision at 100 W. Coliseum Blvd in Ft. Wayne, said he opposes PartsTrader as a mandated tool. “We don’t like being told where we can buy our parts or being prevented from buying parts from our usual vendors. This is just a stepping stone for the insurers to dictate other things in the collision industry. They See Shops Opt Out, Page 12

Shops Weather All Kinds of Winter Weather Disruptions but More Polar Vortex Coming? by Chasidy Rae Sisk

Projections for Late January

west and East and drought to build in California and the West. Impact from the another surge of very cold air may include the already familiar risks from below-zero temperatures including life-threatening conditions and frostSee More Polar Vortex?, Page 10

Change Service Requested

P.O. BOX 1516, CARLSBAD, CA 92018

This January added another new meteorological term to collective vocabulary even though the phenomenon it describes has been known since 1853. January 2014 started off with a frigid slow-moving cyclone known as a polar vortex that wrought havoc throughout the midwest and eastern parts of the country with recordbreaking low temperatures and icy winds. Worse news perhaps is that the polar vortex will get stronger and move farther south later in January, causing cold to intensify in the Mid-

Industry Observations from Collision Attorney

ERICA EVERSMAN If you’ve been paying the least bit of attention to legal issues in the collision repair industry over the past decade, you probably know of Erica Eversman, an OH-based attorney and consumer advocate who specializes in understanding collision repairers’ issues and their impact on consumer safety. A noted authority and frequent speaker on the topics of diminished value, DRP networks and the influence insurers attempt to exert over repairers, Eversman serves as a consultant to the industry, assisting repairers to analyze proposed regulations and laws affecting collision repair. In addition to creating “AutoMuse”, an award-winning blog, she is chief counsel for Vehicle Information Services, Inc. and the founder of the Automotive Education and Policy Institute, a non-profit organization geared towards educating consumers. Though Eversman is obviously busy playing so many roles, she took time from her hectic schedule to talk to Autobody News readers about some of the major concerns plaguing the collision repair industry today. As a consumer advocate, Eversman stresses that consumer education is vital; “first and foremost, consumers are the people in charge of their vehicles, but if they don’t have the proper information, they can’t stand up for themselves. They are the only ones who can effect meaningful change because it is their vehicles and their contract with the insurance company.” Furthermore, collision repairers must comply with consumer protection laws, so they are the ones at risk of noncompliance when insurer interference promotes a situation where repairers are asked to do as the insurer requests, which is always focused on cost and saving money rather than on providing a quality repair. The shop can only do so much, and if the consumer doesn’t help, they are essentially saying that the repair is good enough, even if it’s not actually safe.

INTERVIEW by Chasidy Rae Sisk

continued on page 20

Presorted Standard US Postage PAID San Bernardino, CA Permit #2244

2 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com

REGIONAL

14 Fort Wayne, IN, Shops Opt Out of State

Chrysler Files Suit Against LKQ on RAM Design Patents

Beware Hole-in-One Golf Insurance Scams . 31

CCC Acquires Auto Injury Solutions Inc. . . 29

Farm’s Select Service Citing PartsTrader . 1

Chrysler Files Suit Against LKQ on RAM

Illinois . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Chrysler Seeks Registration of Diagnostic

Dies at 55 . . . . . . . . . . . . . . . . . . . . . . . 6

CIC in Brief, More Next Issue . . . . . . . . . . 25

Snowstorms in Indiana . . . . . . . . . . . . . 4

Website for OEMs . . . . . . . . . . . . . . . . 25

ABRA Acquires X2 Collision in Southern

Bill Wright, MI Dealer and Philanthropist,

Body Shops and Towing Backed Up During

Design Patents. . . . . . . . . . . . . . . . . . . . 3 Software . . . . . . . . . . . . . . . . . . . . . . . 29

CIC Roundtable Launches Consumer

Former State Farm Employee Wins $200K

Daydreaming Tops List of Crash-Causing

Industry Observations from Collision

Ford Rep Paul Massie on Repairing the

MI Gov Snyder OKs Self Driving Vehicles

Ford’s Best Selling F-150 Gets Lighter

MN Media Reports Increased Body Shop

Hyundai, Kia Expect to Top 2013 Global

New Cellphone Law Requires Hands-Free

I-CAR President Van Alstyne Talks Welding

Shops Weather All Kinds of Winter

Insurance Companies Manipulate Repair

Attorney Erica Eversman . . . . . . . . . . . . 1 on Roads. . . . . . . . . . . . . . . . . . . . . . . . 7 Traffic . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Device in Illinois. . . . . . . . . . . . . . . . . . . 6 Weather Disruptions but More Polar

Vortex Coming? . . . . . . . . . . . . . . . . . . . . 1

Transportation-Training Ctr Begins

$45M Project. . . . . . . . . . . . . . . . . . . . . 6

COLUMNISTS

Distractions . . . . . . . . . . . . . . . . . . . . . 31

2015 F-150 . . . . . . . . . . . . . . . . . . . . . 25 and Tougher. . . . . . . . . . . . . . . . . . . . . 31

Vehicle Sales . . . . . . . . . . . . . . . . . . . . 29

and Training at CIC. . . . . . . . . . . . . . . . . 7

Costs Says Shop-Sponsored Complaint

in Mississippi . . . . . . . . . . . . . . . . . . . 15

K&M Collision of NC Files 6 Shortpay

Cases . . . . . . . . . . . . . . . . . . . . . . . . . . 8

LKQ Responds to Chrysler Design

Patents Suit . . . . . . . . . . . . . . . . . . . . . . 3

Attanasio - How to Improve Your Success

Mobileye Integrates with Accel Connected

Chess - Honda’s Repair Instructions Need

NHTSA Moves Ahead on Backup Camera

with Google in 2014. . . . . . . . . . . . . . . 28

to Be Read and Followed . . . . . . . . . . . 18

Franklin - Re-Think Your Marketing For

The New Year . . . . . . . . . . . . . . . . . . . 24

Yoswick - Shops Can Put News and Trends

Related To Auto Insurers To Good Use . 26

NATIONAL

14 States to Increase the Minimum Wage

in 2014 . . . . . . . . . . . . . . . . . . . . . . . . 29

AAIA Releases 67 page 2013 Digital

Collision Repair Trends Report with

Analysis of Whole Industry . . . . . . . . . 23

Car Technology . . . . . . . . . . . . . . . . . . 24

Legislation. . . . . . . . . . . . . . . . . . . . . . 14

North American Car & Truck Production

Hits 16.6M Units . . . . . . . . . . . . . . . . . 29

OSHA Implements New Internet Resources to Encourage Safer Practices: Toolkit

Options and PEL Tables . . . . . . . . . . . . 30

Other Lightweights at the Detroit

Auto Show. . . . . . . . . . . . . . . . . . . . . . 31

State Farm to Exit Canadian Market,

Credit Union Buying . . . . . . . . . . . . . . . 14

Study Estimates 9% of Cars will be

Self-Driving by 2035 . . . . . . . . . . . . . . 29

LKQ Corporation confirmed that a complaint has been filed against it by Chrysler Group LLC in the U.S. District Court in the Eastern District of Michigan. The lawsuit contends that certain aftermarket parts LKQ sells infringe Chrysler design patents relating to the Dodge RAM pickup truck. LKQ says it believes that the lawsuit is without merit and will defend it vigorously, “Moreover, the parts we sell that allegedly relate to these design patents represent an immaterial amount of our revenue. They represent less than one-tenth of one percent (0.001) of our estimated 2013 total revenue and less than onehalf of one-tenth of one percent (0.0005) of our estimated total revenue for all the years since the first patent was granted (2009 through 2013).” LKQ says it has forged mutually-beneficial business relationships with other auto manufacturers and cites its license arrangement with Ford, in place since 2009. The license arrangements allow the company to sell aftermarket parts covered by certain patents in exchange for a license fee.

Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Contributing Writers: Tom Franklin, John Yoswick, Janet Chaney, Toby Chess, David Brown, Rich Evans, Ed Attanasio, Chasidy Sisk Advertising Sales: Joe Momber, Sean Hartman, Bill Doyle (800) 699-8251 Sales Assistant: Louise Tedesco Art Director: Rodolfo Garcia

Indexof Advertisers

Judgment . . . . . . . . . . . . . . . . . . . . . . . 6

Chrysler has filed a patent infringement action against LKQ and Keystone Automotive, saying the companies are producing and/or selling parts that infringe on 10 of its patented designs, specifically related to the Dodge RAM brand. Chrysler noted that LKQ's regulatory filings have the company stating that one of the risks of manufacturing aftermarket parts is patent infringement. The filing, which was made with federal court in Detroit, MI, Jan. 17, has Chrysler looking for a ban on the parts that infringe on the patents and damages “adequate to compensate Chrysler for the infringement, including the infringers’ profits, Chrysler’s lost profits, and/or no less than a reasonable royalty... Damages alone will not be a sufficient remedy under the law, and Chrysler has been and will continue to be irreparably harmed by Defendants’ infringement of the Ram Design Patents. Only a permanent injunction against Defendants will be adequate.” The suit seeks attorneys fees, a jury trial, and an award tripling the damages found at trial. LKQ has responded (next story.)

LKQ Responds to Chrysler Design Patents Suit

Great Lakes

Contents

Serving Illinois, Indiana, Michigan, Ohio, Wisconsin and adjacent metro areas, 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. ©2014 Adamantine Media LLC.

Autobody News

Box 1516, Carlsbad, CA 92018; (800) 699-8251 (760) 603-3229 Fax www.autobodynews.com Email: news@autobodynews.com

Audi Wholesale Parts Dealers . . . . 28

Jake Sweeney Chevrolet . . . . . . . . 14

CCC Information Services . . . . . . . . 5

Lexus Wholesale Parts Dealers . . . 26

Association (CAPA). . . . . . . . . . . . 9

Mazda Wholesale Parts Dealers . . . 31

BMW Wholesale Parts Dealers . . . . 25 Certified Automotive Parts

Classifieds. . . . . . . . . . . . . . . . . . . . 30

Creative Metal Manufacturing. . . . . 15

Equalizer Industries, Inc . . . . . . . . . 10

Laurel Auto Group of Westmont . . . 13

Martech Services Company . . . . . . . 4 Mitchell International. . . . . . . . . . . . 11 MOPAR Wholesale Parts Dealers . . 21

Morrison’s Auto Parts . . . . . . . . . . . 10

Erhard BMW of Bloomfield Hills . . . 19

PreFab Ads . . . . . . . . . . . . . . . . . . . . 8

Ganley Auto Group, Inc . . . . . . . . . 18

Rare Parts, Inc. . . . . . . . . . . . . . . . . 12

Erhard BMW of Farmington Hills . . 19

GM Wholesale Parts Dealers . . . . . 25

Graham Auto Mall . . . . . . . . . . . . . . . 6

Griffin Automotive Group . . . . . . . . 23 Honda-Acura Wholesale Parts

Dealers. . . . . . . . . . . . . . . . . . 16-17

Hyundai Wholesale Parts Dealers . 27

I-CAR . . . . . . . . . . . . . . . . . . . . . . . . 30 Jake Sweeney BMW . . . . . . . . . . . . 14

Preval Spray Gun . . . . . . . . . . . . . . 32

Subaru Wholesale Parts Dealers . . 24

Toyota of Grand Rapids . . . . . . . . . 22

Toyota Wholesale Parts Dealers . . . 27

U.S. Body Products . . . . . . . . . . . . 15

Valspar Automotive . . . . . . . . . . . . . . 2 Volkswagen Wholesale Parts

Dealers . . . . . . . . . . . . . . . . . . . . 29

West Bend Mutual Insurance . . . . . . 7

www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 3

Body Shops and Towing Backed Up During Snowstorms in Indiana Winter weather travel advisories have lifted and shops are seeing increased traffic in Ft. Wayne, Indiana. For Kelley Auto Group Collision, technicians have just begun to receive these vehicles, according to Nathan Nix, manager of body shops at 500 E. State Blvd. and at 633 Avenue of Autos in the 14/69 Auto Mall in Ft. Wayne. Since the company services drivable and nondrivable vehicles, technicians have worked hard to get drivable vehicles finished in order to begin work on the nondrivable vehicles. “The question is, how soon can we get to them without giving someone an expectation that’s too great?” Nix asked. Besides dealing with insurance companies, Nix said nondrivable cars take time to move into the shop from the lot. “We use state of the art equipment to move the vehicle inside without creating additional damage,” Nix said. “We dissect the damaged parts of the car thoroughly. This shortens the repair time and ultimately provides a better service to the customer.” With tow services two days behind schedule, both locations will con-

tinue to receive vehicles steadily the remainder of this week. Nix said technicians were working overtime and weekends. Nix also said Hertz and Enterprise, two car rental agencies with which Kelley works, are pulling cars from other cities that are not affected by the snowstorm to help customers in need. Mark Muntzinger, owner of Mark’s Body Shop, also reported an increase in business that he expects to last the next few weeks. “We’re here to serve the community to get them back on the road,” Muntzinger said. “We smooth out the bad situation.” People who have had trouble starting their cars have also flooded Gouty Service Center Inc. with calls. Owner Ron Katt said he was backed up about 8–10 hours because wrecker companies were backed up. The lag time body shops were experiencing in receiving vehicles is directly related to towing services that are experiencing heavy call volume from distressed drivers and police. Blue Eagle Towing’s operations manager said the company usually receives 60 calls in a 24-hour period, but was receiving 80 to 100 calls by noon.

MN Media Reports Increased Body Shop Traffic

Freezing rain and low temperatures turned Northland roadways into a skating rink causing many accidents. “Black ice happened, it's a real thing,” Duluth resident Bridgette Baker told NNCNow.com. According to Duluth Police, 56 crashes happened Sunday, Jan. 12 between 9:30 AM and 3:30 PM from icy roads. “A lot of cars were going sideways down the hills, ya know, nothing real heavy as far as hits go,” said Steve Nelson, owner of Twin Ports Collision Repair. Local auto body repair shop workers say although these types of slippery road conditions cause headaches for many, they boost repair shop business. “I do make my living on other peoples' misfortune, but everything is going good, we're getting as many cars as we can done so it's a great year,” said Nelson. A great year for repair shops... but for drivers, slippery roads only create headaches. “I've been trying to get it into a auto body shop and they're all very busy,” said Baker, Some shops are fully booked through the next month, because of accidents like these.

“I was skidding on the freeway, just trying to get up to freeway speed, and hit some black ice and collided with another vehicle,” said Baker. For Baker, the collision means a dent in her pocket financially, and unanticipated time and energy spent searching for a way to fix her vehicle. “Most of them are just smaller jobs. When it was real cold the bumpers would just shatter, so we're doing a lot of that, too,” said Nelson. Local repair shop workers urge everyone in the Northland to drive slowly during these slippery times. Although there were 56 crashes in a six hour time span in Duluth Sunday, none were fatal. Of the 56, 34 were off-road vehicle crashes, while statewide offroad crash statistics were 111.

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ABRA Acquires X2 Collision in Southern Illinois

The company, which services light-duty (cars) and heavy-duty (trucks) vehicles, has especially seen an increase in heavy-duty calls—from five to 10 calls a day to almost 150 calls a day. Dan Parker, who owns Parker Service Inc., Kelley Wrecker, Hinsey’s Wrecker Service, Dan’s Towing and Allen County Towing, has doubled business because of the latest snowstorm. The 24-hour towing service, which averages 250–300 tows a day, now is towing 500–600 vehicles daily, according to Dan Parker, third-generation owner of Parker Service Inc. “The first two days we were getting 100 calls an hour,” Parker said. “Now we’re scheduling for Friday.” Among the five towing services, Parker said, 80 employees using 55 trucks are doing their best to jump start and pull out stuck cars, tow vehicles and assist disabled semis. “This is the busiest we’ve seen it in 20 years,” Parker said, adding that tow services are usually busy for about a day or so after a snowstorm – but not four days. “So far everybody’s been pretty understanding,” Parker said. “We’re working through it as fast as we can.”

ABRA Auto Body & Glass announced the acquisition of X2 Collision in Southern Illinois, just outside St. Louis, MO. Terms of the deal were not disclosed. ABRA’s portfolio now includes 132 company-owned locations and 48 independently-owned franchises for a total of 180 collision repair centers in 17 states. “This deal is another important step for us and strengthens our position as an industry leader,” said Duane Rouse, ABRA’s president and chief executive officer. “This acquisition builds on our increasing success in the region and helps meet the demand of our customers and business partners. This is an exciting time for the company and the next chapter in ABRA’s aggressive growth strategy.” The new ABRA location is at 2727 Maryville Road in Maryville, IL, and will serve the Metro East, surrounding communities, and the city of St. Louis, MO. X2 employees will join ABRA’s staff and continue servicing long-time customers in the area. “For many years our repair center has been a trusted part of the community,” said Scott Jennings, owner of X2 Collision.

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Transportation-Training Ctr Begins $45M Project

New Cellphone Law Requires Hands-Free Device in Illinois

Former State Farm Employee Wins $200K Judgment

Bill Wright, MI Dealer and Philanthropist, Dies at 55

Structural work on a $45 million transportation-training center will begin soon at Chicago’s Olive Harvey College. Chicago Mayor Rahm Emanuel joined City Colleges Chancellor Cheryl Hyman to break ground on the $45 million project. The Transportation, Distribution and Logistics Center will be at Olive-Harvey College and will be the first of its kind in Illinois. It is designed to prepare students for more than 100,000 jobs expected in the Chicago area over the next decade. The construction project itself will create 150 jobs. The center will have space for training students in automotive technology and training, collision repair, diesel engine technology and aviation mechanics. It will also have an area for supply chain management, including a warehouse and simulation labs; and taxi, truck driver and forklift training. Gov. Pat Quinn announced that $4.6 million from the Illinois Jobs Now! capital program for structural work. The building should be completed by fall 2015. The center is being funded by $31 million in state funds, $13 million from the City Colleges of Chicago and $1 million from the Illinois Community College.

Starting Jan. 1, motorists can talk and drive only if they use a handsfree device to conduct cellphone conversations in Illinois. That will dramatically change the day-to-day routine for millions of Illinoisans, or force them to shop around for yet another high-tech device for the car. The uniform ban supplements the state’s current ban on texting and replaces assorted local laws on cellphone use that vary from town to town, including Chicago, where a cellphone ban has been in place since 2006. Violators face fines starting at $75, and repeat offenses bring the possibility of a suspended license. State Sen. John Mulroe, a Chicago Democrat who sponsored the law, said witnessing several nearaccidents during trips to Springfield convinced him that “hands on the wheel and eyes on the road are the way to go.” While he says the law won’t eliminate distractions, he hopes it’ll cut down on accidents.

On Tuesday, December 10, a jury verdict was returned for $200,000 against State Farm Insurance Company and in favor of a man who had been employed by State Farm for 25 years (Dennis L. Brady v. State Farm Mutual Automobile Insurance Company, Hamilton County Circuit Court). The plaintiff’s attorney, Mike Stephenson, said his client, a former Indiana Mr. Basketball (1964), was satisfied with the outcome. “Unfortunately, although the case took only two days to try, it was at significant expense to the plaintiff, who had been willing to settle for a reasonable amount,” Stephenson said. According to the complaint, Stephenson’s client was in a car accident in 2007 and thereafter made an underinsured motorist claim under his policy; he requested that State Farm, his insurer as well as his employer, allow him to arbitrate the matter and not be required to take the matter to a jury. “This request was denied,” Stephenson said, “and so we filed a civil case and let a jury decide the damages.”

Bill Wright, an auto dealer and philanthropist in Kalamazoo, MI, died suddenly in Fort Myers, FL, on Dec. 28. He was 55. A family member, quoted by local news, said the cause of death was believed to be heart failure. Wright sold his stake in the Seelye-Wright Automotive Group in October, of which he had been a partner since 1989. The group owns and operates six dealerships in western Michigan and has since shortened its name to the Seelye Automotive Group. He was known in western Michigan for his slogan “Yes We Can,” which he would use to end every commercial and emblazoned billboards in the area. He also founded the Wright for Kids foundation, which raises money to help abused and neglected children in the Kalamazoo area. His business partner, Mike Seelye , says in a statement, “Obviously I have a long history with him. We have worked together and been partners for 30-plus years. So it’s shocking to me and a sad situation. It’s hard to believe that a guy who was as big as life as him is dead.”

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6 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com

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MI Gov Snyder OKs Self Driving Vehicles on Roads

Gov. Rick Snyder has approved Michigan to join California, Florida and Nevada in allowing self-driving vehicle research on the state’s streets and highways. Snyder has signed legislation allowing the testing of automated or self-driving vehicles on Michigan’s roads, but that doesn’t mean state residents will see cars with empty drivers’ seats anytime soon. The laws, approved by the state Legislature, allow carmakers, auto suppliers and developers like Google to test automated vehicles. But they they require a human to be in the driver’s seat at all times to monitor performance and take control if necessary. At least one auto supplier— Continental Corp—which has facilities in Auburn Hills and the Sault Ste. Marie area, had considered moving some autonomous vehicle testing to Nevada, according to state Sen. Mike Kowall, R-White Lake, who introduced the legislation in the state Senate. Nevada has permitted testing of autonomous cars on state roads since 2012. California and Florida also allow testing. Test cars will carry an “M” license plate to identify them.

I-CAR President Van Alstyne Talks Welding and Training at CIC I-CAR® CEO & President, John Van Alstyne, addressed I-CAR’s leading initiatives for 2014 and reviewed 2013 milestones during a speech at the Collision Industry Conference (CIC) meeting in Palm Springs on Jan. 16. The 2014 initiatives highlighted by Van Alstyne will have a significant impact on the industry and will deliver on I-CAR’s commitment to education, knowledge and collisionrepair solutions. Van Alstyne honed in on enhancements to I-CAR’s industry-recognized Welding Training & Certification™ program and the Repairability Technical Support initiative in 2014. Van Alstyne stated, “Today, as the major provider of welding training to the collision repair industry, ICAR estimates that at least two-thirds of technicians who weld lack formal welding training.” He added, “I-CAR has beefed up its welding programs and significantly reduced pricing to encourage repairers to more broadly invest in the training that makes perhaps the biggest difference in complete, safe and quality repairs for the ultimate benefit of the consumer. To effectively navigate the vehicle technol-

ogy tsunami our industry is facing, repairers today need technicians that are trained and certified with up-todate welding skills in order to perform the complex structural repairs that are now required.” Major insurers, such as State Farm, and OEMs, including GM, have already committed to partnering with I-CAR in 2014, encouraging or requiring their networks to participate in I-CAR’s Welding Training & Certification. Van Alstyne also provided an update on the Repairability Technical Support initiative. Van Alstyne shared details on the launch of the dedicated “technical knowledge” website, upcoming plans and key milestones that have been achieved. This initiative launched in 2013 and is designed to provide technical repair knowledge, address gaps in repair procedures and enhance industry technical communication with OEMs. “I-CAR thanks the industry for its support in 2013. Through your commitment, I-CAR is well positioned to deliver on its vision in 2014 and beyond,” explained Van Alstyne. Key 2013 accomplishments that Van Alstyne shared were the mile-

stone $200,000 donation to the Collision Repair Education Foundation on behalf of the industry, no price increases for the third consecutive year, the introduction of Gold Class™ program enhancements, a $2.6 million investment in a new learning content management system (LCMS), the expansion of network partner programs and new Professional Development Program™ training. Van Alstyne further renewed ICAR’s commitment to hold all pricing flat again in 2014, except the Welding reductions mentioned. He also announced that an estimated $165,000 donation will be made by I-CAR to the Collision Repair Education Foundation in 2014, representing $1 for every class the industry took with I-CAR in 2013.

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K&M Collision of NC Files 6 Shortpay Cases by Chasidy Sisk

On November 27, 2013, Michael Bradshaw, VP of Operations at K&M Collision in Hickory, NC, filed six shortpay lawsuits on his customers’ behalf. Of the six cases filed, three were against GEICO, two were against Nationwide, and one was filed against Allstate, with amounts ranging from $680.95 to $5749.64. Some of the claims included in the lawsuits were Breach of Contract, Bad Faith, and Unfair/Deceptive Trade Practices. K&M Collision is being represented by attorney William E. Morgan of Morgan Law PLLC in Hickory, NC. According to Bradshaw, “These claims stem from the insurers’ continual refusal to pay for factory correct repairs according to manufacturer repair specifications and guidelines. Not all insurers are bad; what we’re finding is that many of these companies are doing the right thing and paying for manufacturer correct repairs; however, there is a select group of insurance companies that show complete disregard for manufacturer specified repairs, procedures and safety checks on a consistent basis. Unfortunately, those insurers put us in the position of either performing the operations for free, making the customer responsible for the additional costs or resorting to legal action.” While the six shortpay cases Bradshaw is currently pursuing encompass a little bit of everything, “the most consistent problem is the failure to recognize and reimburse customers for manufacturer recommended repairs and safety checks.” This is particularly the case when only a few shops are performing the operation as it leaves the insurance company uninterested in the manufacturer’s documentation showing the need for the repair, and they will refuse to pay for something which other shops don’t charge, even though the absence of the charge is due to the fact that it is not being done. Bradshaw fears that these insurers are “basing their repair standards on sub-standard repairs being performed.” An example of this is seen with a BMW recently brought to the shop. Because the manufacturer’s facility is only 45 minutes away from K&M Collision, Bradshaw toured the facility and learned about a procedure they use to correct any imperfections

in the paint; however, Nationwide refused to pay the shop to perform this procedure, though manufacturer guidelines indicate it is required and should be billed separately without being included in the paint time. The insurer insisted they have to do what the market dictates, and because most shops don’t perform this requirement, K&M Collision cannot perform it either (or at least they won’t be paid if they do). K&M Collision has been in business since 1991, and though Bradshaw did not begin working there officially until 2006, he has always been around this family-owned and operated business. Despite their decision to refrain from participating in any DRPs, the shop repairs a high volume of vehicles, grossing just over 1.3 million this past year. When questioned about the importance of pursuing shortpay lawsuits, Bradshaw explains, “in order to maintain our 12 manufacturer certifications, pay employees, and make a profit, it’s really a necessity; either we do it, or we don’t make money. The shortpay amounts are usually our profit margins on these jobs.” Though Bradshaw just won a shortpay lawsuit against Nationwide this past summer, he has not seen any improvements in their behavior since the victory; “they seem to change the way they handle claims, in terms of what they will and won’t pay, every few months.” He also notes the oddity of how Nationwide handles appraisals; they usually send at least two people to the shop, one of whom is generally a supervisor, and these individuals will engage in a review of their findings before making a decision about what they’ll pay. It is not uncommon for Nationwide representatives to be at the shop for four hours or more to process just one claim. Additionally, Bradshaw recently ran into a case where Nationwide did not believe certain repairs were necessary, and even after K&M Collision proved the necessity by performing measurements and providing this evidence, the insurer only paid for a portion of the repair. In contrast, Bradshaw notes that he is seeing some improvements from some other insurers. For example, he filed a claim against one insurer for refusing to pay his labor rates because

8 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com

they claimed the rates were too high. Since the lawsuit was filed, this same insurer has not contested four new claims that were processed with higher labor rates than the first case which caused K&M Collision to lodge the complaint. Though Bradshaw believes that the majority of insurance companies are changing their behavior due to the recent influx in shortpay cases being pursued, for some insurers “this is the way it is and the way it’s going to be. Some of these insurers fear paying one shop more than the others because they have the mistaken belief that it’s necessary to pay all shops the same.” This is especially untrue as it pertains to shops that are certified by rare manufacturers, such as Porsche which only has around 50 certified shops in the nation, making it logical that these shops should receive increased compensation when performing the more difficult repairs that these cars call for. Bradshaw believes there will be “fewer cases being filed in the future due to a combination of factors.” “As always, our main concern is

that our customer’s vehicles are repaired safely, as close as humanly possible to their pre-accident condition. The costs involved in having the proper equipment, training, facilities and staff to repair today’s vehicles continues to escalate. But the reimbursement rates have moved very little in the past several years. I think the problem is many times an insurer is attempting to base payment on the lowest cost in the market and not the cost of proper repairs in the market. Based on our conversations with other shop owners around the country, this is a situation I believe is occurring nationwide. I remain hopeful that someday these actions will no longer be necessary as all insurers will choose to do right by their customers.” Bradshaw is fairly confident and optimistic about the outcome of these pending lawsuits. “We put a lot of research into this, and we believe these cases will be decided in our favor.” Trial dates for these six lawsuits have not yet been set, but they are expected to occur sometime during the first half of this year.

www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 9

Continued from Cover

More Polar Vortex?

bite. The new invasion of frigid air will produce lake-effect snow downwind of areas of open water. While much of Lake Erie has frozen over, most of the other Great Lakes are still open. Some areas immediately downwind of Lake Erie may get colder with a late January outbreak (compared to the last) as a result. Beginning on Thursday, January 2nd, the polar vortex spewed snow and freezing rains throughout the country until about Tuesday, January 7th. Over two dozen states from the Midwest to the Northeast and even the Southeast were impacted by this cold front, so it’s no surprise that this unusual event also affected many businesses nationwide, including collision repair facilities. Tiger’s Body Shop in Chicago fortunately did not suffer many ill effects, according to Greg Yonan, a member of the family that owns the facility. “It was really cold, and though there may have been an increase in accidents related to the icy road conditions, we haven’t seen the

effects yet. Monday, Jan. 6, was so cold that we had several appointment cancellations because people didn’t want to leave their homes.” Though their equipment worked fine since the inside of their shop was well-heated, the water coming in from the street froze, and they had to wait for the city to come out and solve that problem. Overall, though, Yonan notes that it has been business as usual. Mike Hartman, owner of Hartman Auto Body Inc. in Waterloo IN, noted some effects from the weather because “when a major storm is forecast in advance, people heed the warning and stay off the streets. It also impacted volumes quite a bit. We have had a couple of cancellations each week for the last three weeks because customers do not want to get out in the snow or extremely cold temperatures.” In terms of operations, Hartman experienced several cold-related technical difficulties; “our paint booth quit working when it was -18 degrees Fahrenheit and -40 degrees Fahrenheit on the wind chill. I had to go on top of the roof, which had 12 inches of snow on it, to reset the main computer mod-

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ule. What a trip! It’s also harder to write a very accurate estimate when customers bring their car in and it is covered with snow, ice and salt. We would really like to have the vehicle for half a day so we could wash it and let it thaw out.” Debbie Ross, Office Manager at Route 1 Auto Body in Fairfield, CT, their shop was lucky enough that the unprecedented low temperatures didn’t really have a negative impact on their business or their equipment. “We have been able to service all of our customers. Other than wearing more layers of clothes, we have been lucky… We did have a few new customers whose collisions were a result of sliding on black ice but not many. I think that because the worst weather was on a weekend, there were less people on the road because they didn’t have to be.” For Don Mallon Chevrolet in Norwich, CT, the Polar Vortex generated more business, according to Collision Manager, Dawn Barden. “It has actually brought us more business, more front and rear bumper covers cracking upon a minor impact, instead of flexing. One of the customers said that a shopping carriage rolled into her

front cover, and it left a hole in it . They are breaking like ice or glass shattering… I do not think that it has affected our business in a negative way here in the collision center; however, in our service department, it has definitely slowed them down; people do not want to drive out in the colder weather unless they have to!” Don Mallon Chevrolet did suffer some technical inconveniences due to the weather, though. “Our paint booth sprinkler heads froze and broke, leaking in the booth and making us two days behind on paint after repairs were made. My painter says that it is taking more time for the bake cycle now, and we have added an additional heater in the paint mix room as we have water-based paint which is at a greater risk of freezing now with the low temperatures. The heater in our office has not been able to keep up with the colder weather either, plus my customers’ cars are having issues with the lift gates freezing because the gate shocks grease probably froze,” Barden said. Craig Camacho, Marketing Director at Keenan Auto Body Inc. in Clifton Heights, PA, notes that their volumes have increased by 25%

across the board. “Claim volume has increased in our entire servicing footprint, directly related to the recent low temps, snow and ice… Our tooling and machinery was not affected one bit, but our locations were hindered by the snowfall and the need for snow plows and salt.” Though Keenan Auto Body experienced some delays due to their technicians being unable to work, Camacho looks upon this dilemma graciously. “As they say, family first. Many of our employees and techs were home taking care of their own driveways and walkways, ensuring their families’ safety and the safety of others as their primary focus. Our customers were made aware by our staffs that, due to the low temperatures, heavy snowfall and ice developing, there may be delays in completing their vehicles on time.” Rich Tornetta, Marketing Communications Manager of eight CollisionMax Auto Body and Glass Centers in PA and NJ, notes quite a few issues caused by the Polar Vortex. “Customers sometimes would not show up for their scheduled estimate appointments or repairs. This could be due to cars not starting, being buried in snow

or the roads not being adequately plowed and salted for safe travel. The weather has delayed our technicians who’ve had issues making it in to work on time due to unsafe driving conditions, cars not starting or being plowed in by passing trucks. We’d spend time digging out vehicles to be repaired and then gaining access to the parts in the storage facilities which are commonly located outdoors. Some mornings were spent plowing and shoveling outside bays to get cars in. Once the vehicles got into the shop, we’d sometimes use heat guns and/or air hoses to melt and remove the remaining snow/ice. The time spent cleaning the storage facilities is time not spent repairing vehicles, so this had a negative effect on production.” Tornetta said that CollisionMax had to postpone valet delivery of vehicles to their customers because of the unsafe driving conditions, and there were also delays with parts deliveries which, in turn, caused delays in repairs. He adds, “below freezing temperatures made mobile auto glass repair and replacement difficult for our technicians both due to unsafe travel conditions and because their fingers would get numb within min-

utes of being outside.” There were also some technical difficulties as “the spray booth and older equipment tend to fail during cold streaks because they’ve been working overtime,” Tornetta explains. On the positive side, Tornetta notes that “collision workflow is up about 15% compared to what we normally run. Our glass business saw a spike in volume as well, due to the extremely low temperatures which caused many windshields with small chips to crack. In some instances, increased non-drivable volume has caused extended scheduling on drivable repairs.” As we move further south, we see less impact from the cold weather. According to Assistant Manager Walt Link, at Nalley Collision in Doraville, GA, suffered few effects caused by the abnormally cold weather. A few employees were delayed due to the snow, but the cold weather did not impact volumes or cause any problems with equipment. “We had a bit of ice in the parking lot, but we didn’t have an issue.” Link is uncertain whether volumes were affected as business seems to be picking up as usual after the holidays, with numbers appearing to be consis-

tent with last year. Alysia Hanks, Office Manager of Lakeway Collision in Mandeville, LA, states “the weather didn’t really affect us in anyway, except that our guys hate working in the cold, so production slowed down a lot!” The Polar Vortex is a regular circulation of strong winds surrounding the Arctic Pole, but normally, these winds keep the coldest air trapped in the Arctic regions of the Northern Hemisphere. Occasionally the vortex can become distorted, permitting this super cold air to travel further south. Though it is inconvenient and certainly unpleasant, the Polar Vortex of early January 2014 seems to have had little long-lasting impact on most shops’ operations. However, meteorologists say the during the third and fourth weeks of January, more changes will take place. The high amplitude pattern is forecast to get more extreme.pattern will gradually change the current mixture of Pacific and Arctic air in the Canada Prairies and the North Central U.S. to all Arctic air. The air will get significantly colder over the Canada Prairies and the much of the eastern half of the nation as a result.

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Continued from Cover

Shops Opt Out

starts with parts, but it’s only a matter of time before they move on to paints and other materials.” Jeff Rice, Estimator at Koester Body Shop at 6818 SR 930 East, also in Ft. Wayne, agrees that the changes to the Select Service program are a bad thing which is why his shop opted out when use of PartsTrader became mandated. He also notes that since being removed from the program, there have been big delays in getting State Farm to get out to the shop to look at new jobs.

The owner of Dan T. Gratz Body Shop, Dan Gratz, said PartsTrader is “just another way of keeping us under State Farm’s thumb and having them dictate how we run our businesses. They are looking for a way to make more money off the little guy, the collision shops… Insurer interference is getting worse and worse. If we don’t take a stand now, when will we? State Farm needs to learn that there are shops who will take a stand for the right thing.” Since the removal of these shops, State Farm has been using small, sometimes uncertified, shops that don’t have the proper training and equipment, according to Gratz who sees this as a “lawsuit waiting to happen… State Farm doesn’t seem to realize that they are running shops out of business by doing things like implementing PartsTrader which reduces our profits. If we can’t make money, we will have to close our doors. Who is going to repair cars then?” Eric Knipscheer, owner of Knipscheer Collision Center at 747 W Superior St in Fort Wayne, opted out of the Select Service because PartsTrader did not offer parts from any local suppliers. He prefers buying locally for the benefit of his local econ-

omy and “really doesn’t appreciate someone telling [him] where to buy his parts.” All four of these shops currently participate in four to six total DRPs, and the consensus seems to be that the Select Service program wasn’t particularly problematic until the use of PartsTrader was enforced. All of these gentlemen agreed that they’d be willing to renegotiate their DRP contracts with State Farm if the insurer ceased to mandate the use of PartsTrader. When asked about the advice they’d give to shops on the Select Service in areas where PartsTrader is not yet mandated, everyone agreed that whether a shop should remain on the program after PartsTrader is implemented is a personal decision each shop must make. Bonecutter suggests that “you understand the ins and outs of the program so you can evaluate your options and make an educated decision in the best interests of your business.” Gratz believes that shops should also consider contacting some of the shops in Fort Wayne that opted out to learn more about the program and why they made the decision to withdraw from the Select Service. Knipscheer cautions that if PartsTrader is not resisted, “other insurers will adopt similar programs if we allow it, and shops will lose the freedom to choose their suppliers and to make a profit.” Mike Hartman, former president of the Indiana Auto Body Association (IABA), is also paying close attention to this situation. Though Hartman Auto Body still participates in Select Service since he is located in an outlying rural area where Part-

sTrader is not yet mandated, once this changes, he will “probably bail out. My sign says Hartman Auto Body, not State Farm Auto Body! I’m not willing to be forced to use PartsTrader because I see no benefit to it whatsoever, especially if there are no local vendors on the system.” From his conversations with some of the shops that chose to opt out, Hartman has found “the shops are

12 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com

not opposed to using parts procurement systems, but they are opposed to having it shoved down their throats. Owners don’t like someone coming in and telling them how to run their shops.” Another problem cited is that since parts vendors in Fort Wayne are not participating in PartsTrader, shops

since it wasn’t on PartsTrader, and they didn’t like the loss of control in choosing their parts, particularly in being unable to supply their own body shop. Yet another criticism of PartsTrader is that it cuts the collision repair facility out of the parts profit. In New Zealand, the parts procurement

Todd Bonecutter (center) with Glenbrook Collision Staff

have to order parts from outside their area, from suppliers they don’t have relationships with. This negatively impacts the shops’ cycle times as they’re forced to wait to receive their parts, and this affects their scorecard with State Farm. One Fort Wayne dealership opted out of Select Service because the program forbade them from purchasing parts from their own parts department

program has progressed and expanded to include paints and materials also, and Hartman fears this happening in the U.S. because “you can’t sustain your business on labor rates alone.” Hartman also notes that the shops that opted out are seeing State Farm take longer to write estimates, sometimes taking as long as a week to even visit the shop. Because of this, longtime customers are being steered to

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shops on the Select Service where estimates are being written immediately. In one such instance, a shop waited eight days for an appraiser to come out to view a claim; meanwhile, several appraisers from State Farm visited the shop for supplements, yet they refused to write an estimate on the new job, according to Hartman. Though State Farm is making it difficult on the shops that opted out, Hartman believes these shops are doing a fabulous job with explaining the reasons for the delays and educating consumers on their right to choose. Customers have been pretty understanding, and some even dropped State Farm because they were displeased with how the insurer is treating the shops and their customers. The 14 shops, many of them larger facilities and dealerships, which opted out of Select Service were doing approximately 80% of State Farm’s business in Fort Wayne before PartsTrader was mandated. The shops that remain are struggling to keep up with the increase in volumes while State Farm presumably seeks new shops in the Fort Wayne area to join Select Service.

IABA continues to monitor the situation closely. In October, Mississippi’s John Mosely and Lloyd Bush attended IABA’s meeting to discuss PartsTrader, and this topic will certainly be pursued at the association’s next meeting. Members of IABA include shops that opted out, as well as those who stayed on Select Service. Hartman thinks “it’s really cool to see so many Fort Wayne shops sticking together. This is a really competitive area, and it’s amazing to see these shops supporting one another. I’ve never seen such solidarity.” State Farm’s has issued the following response: “Repairers who want to leave our Select Service program can inform State Farm and remove themselves. We are aware that some repairers in the Ft. Wayne area have recently done that. Our priority is to continue to meet the needs of our customers in the Ft. Wayne area, and we continue to do all we can to do that.”

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State Farm to Exit Canadian Market, Credit Union Buying

State Farm Insurance is getting out of Canada. The Bloomington-based insurance giant is selling its Canadian unit to Desjardins Group, Canada’s largest credit union. State Farm, Desjardins and its French partner Credit Mutuel, will invest $1.5 billion in the combined business. State Farm is now the fourth largest auto insurer in Canada, though it’s business is largely concentrated in three provinces. The new business to be run by Desjardins under the State Farm brand for some years would become the second largest Canadian property and casualty insurer with a larger geographical reach. The deal is expected to close in January of 2015. At that point, State Farm’s 1,700 Canadian workers and 500 Agents would work for Desjardins. State Farm Chairman Ed Rust says the agreement allows future cooperative ventures in Canada. Rust told Canadian workers in a letter that the regulatory and political response to the great recession and the company’s US-centric approach limits State Farm’s ability to respond and adapt to changing Canadian markets. Rust calls the decision to sell “difficult” but good for the new operation.

NHTSA Moves Ahead on Backup Camera Legislation

After several delays, the Obama administration is reviewing a revised rule that could push automakers to install backup cameras in more of their cars and trucks. The reworked regulation, submitted to the White House on Dec. 25, would set new rear visibility standards for light vehicles sold in the United States, according to a White House database that tracks the rulemaking process. The standards are aimed at keeping children from being run over and killed by vehicles moving in reverse. Automakers might decide to install backup cameras in all of their models. The standards may also allow automakers to comply by making less costly changes, for example, by redesigning a car’s mirrors to reduce the odds that a child behind the rear bumper will go undetected. The administration intends to release the final rule by January 2015. But that’s not soon enough to satisfy auto safety advocates. Consumers Union filed a lawsuit in September with the goal of compelling the Obama administration to make them a standard feature across the U.S. fleet.

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Insurance Companies Manipulate Repair Costs Says Shop-Sponsored Complaint in Mississippi A host of body shops has alleged in Mississippi federal court that a group of insurance providers, including State Farm Mutual Automobile Insurance Co. and GEICO General Insurance Co., of conspiring to manipulate car repair costs in order to reduce their payments. The complaint was filed in the U.S. District Court for the Southern District of Mississippi, Northern Division-Jackson. Defendants named included: State Farm; Progressive; Allstate; Nationwide; GEICO; United Services Automobile Association; USAA; Safeco; Shelter Mutual Insurance Co.; Direct General Insurance Company of Mississippi; Mississippi Farm Bureau; and Shelter General Insurance Co. The repair shops are represented by John Arthur Eaves Jr. of John Arthur Eaves Attorneys At Law in Jackson, MS. The suit named 16 separate insurance firms as defendants, but repeatedly alleges that State Farm largely orchestrated the scheme, which the body shops said involves the artificial suppression labor, re-

pair and material costs and the enactment of harsh punitive measures against noncooperating repair providers. One of the main cogs of the alleged scheme is the abuse of direct repair program agreements under which the body shops agree to certain price concessions in favor of preferential treatment from the insurers, according to the complaint. “The concessions demanded by the individual in exchange for remaining on the direct repair program were not balanced by the purported benefits,” the suit alleged. “The defendants, particularly State Farm, have utilized these agreements to exert control over plaintiffs' businesses in a variety of manners, well beyond that of an ordinary business agreement.” “The entire collision repair industry is caught between a rock and a hard place," said Eaves. “On one hand, they're trying to maintain the safety and quality of repairs for the customers in a time when the manufacturers are trying to develop more sophisticated, more fuel efficient and

safer cars, but yet the insurance industry is trying to force them to cut corners on their repairs. So Mississippi repairers have felt like they have been backed into a corner, and now they have to start to reclaim some of these costs and send a message to the insurance industry." Eaves said the complaint is currently being modified for use in seven other states. Meanwhile, 22 other states are preparing to join the fight. While his law firm is leading the effort, it's also partnering with “talented” attorneys in each state who have experience in asbestos, tobacco and natural disaster litigation. “We're looking to go to all 50 states," Eaves said. “What we need is a few committed shops in each of the 50 states that are willing to take the industry back and join us." Collectively, insurers named in the suit control nearly 70 percent of the automobile insurance business in Mississippi, a dominant position they have used to create a vertical conspiracy in violation of the Sherman Act, the complaint said. The suit accuses State Farm and

the other companies of employing various tactics to artificially set rates for repairs, labor and parts used in the restoration of vehicles damaged in accidents, such as refusing to compensate shops for replacement parts when repair is possible though strongly not recommended based on the shop's opinion. Insurers have also routinely engaged in the practice of “steering” in order to punish noncompliant shops, the suit said, elaborating that insurers will urge customers not to seek repairs from a certain shop because quality or customer service issues have cropped up. Used/recycled parts are also mentioned in discussing the insurers going against the repairers’ expert opinions and therefore “compromising the safety of both the driver and passengers as well as other members of the traveling public.” Another count in the complaint references “quantum meruit,” a concept that states that a party is not allowed to enrich itself at the expense of another. See Insurers Sued, Page 27

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Hey Toby! with Toby Chess

Toby Chess is an I-CAR program instructor, Training specialist, and former salvage yard operator. Toby is universally known in the collision industry for his work with first responders and advocacy for body shops and consumers. He can be reached at tcspeedster@yahoo.com

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2012 Honda Accord

2013 Honda Accord

Question: What is the major difference between the two Honda Accords for repairers? Answer: The 2013 “A” Pillar reinforcement, “B” pillar reinforcement and Rocker panel reinforcement are constructed of one of the highest strengths steels seen in passenger cars. They have an 1500 MPa steel rating. Question: What does Honda say when these parts are damaged from a side impact? Answer:—Plenty

1,500 MPa (HOT STAMP) STEEL LOCATIONS

1,500 MPa steel stronger than ordinary steel, so it can help protect vehicle occupangts while reducing overall vehicle weight to improve fuel efficiency. The numbered parts in the diagrams below are constructed of 1,500 MPa steel:

1 2 3 4

4-door Models

Front Inner Upper Pillar

Center Pillar Upper Stiffener Side Sill Stiffener

Inside Sill Reinforcement

First and Foremost—Honda states “No body repairs should be attempted without first referring to the appropriate body repair manual for complete information”. I find it amazing how many collision repair shops in this country will repair/replace structural components on today’s vehicles without having the appropriate procedures when the vehicle is estimated and repaired. I also find in appalling that many insurance adjusters will estimate a vehicle without having repair data before writing their estimate. Furthermore, why do body shops have to prove that they need a certain procedure for a OEM stated position, when they should have this information as well. Just the other day, A shop owner called me for information to justify why the shop could not use heat on repairing a 2010 Toyota Tacoma frame that was damaged in the rear. Moreover, I feel that there should be a charge on the estimate for data retrieval. It cost me $300.00 for a one year subscription to the Honda web site and I don’t have a shop or write estimates anymore. (Sorry for getting off the subject, but I needed to get it off my chest.) Use of Heat for body straightening and repairs. What does Honda say? “When you are doing body straightening and repair procedures: DO NOT apply heat to any body part during straightening. This may compromise the internal structure and strength of high strength steel parts. Moreover, any part that has heat applied to it during straightening MUST be replaced with new parts. Ignoring these instructions, may significantly reduce occupant protection in any subsequent collision.” Let’s look at what Honda says about sectioning. “Because of body structure improvements for collision safety and rigidity, the materials, steel thickness and internal reinforcements have become very specific. Follow these guidelines to avoid an unsafe repair: avoid sectioning (cut and joint) except for outer panels and floor panels unless a specific procedure is provided in the body manual (As I stated previously, how do you repair todays

18 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com

vehicles without having the repair data) and relace body structural components as assemblies that match the replacement parts configuration. Honda dedicates 3 pages in their guide lines for replacement and welding, but I will address this later on in the article. Honda states in their body repair news about seats with airbags “ damaged front seat covers should be replaced and not repaired. Furthermore, Do not install non-factory seat covers, because they may alter the airbags intended deployment.” Honda also states “NEVER attempt to modify, splice or repair airbag system wiring. If airbag system wiring is damaged, replace the wiring harness(es). What does Honda say about their Tire Pressure Monitoring System (TPMS). “TPMS calibration must be started every time you: Adjust the pressure in one or more tires; Rotate

the tires; Replace one or more tires; Replace or update the VSA-modulator control unit. A couple of other items that should be noted when estimating and repairing a 2013 Honda Accord. Honda now sells replaceable headlamp brackets that get broken in an accident. It should noted that they only work if the following criteria is met: No damage to the headlamp assembly and sealing of the headlamp lens and housing is maintained. Some models may be equipped with one or more of the following systems the require aiming after collision repairs (special tools are required to complete the aiming procedures). Lane Watch—Lane Watch uses a camera and center dash display for blind spot detection. The camera must be aimed if the following operations are performed in the repair process: The camera is removed or replaced,

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Door mirror is removed and/or replaced, door panel is removed or replaced or the door is repaired. It should be noted that DTC will not be displayed on the dash, but will be stored in the control module. Forward Warning: The camera must be re-aimed if the FWC camera unit is removed or replaced. If the windshield is removed or replaced, the unit must be re-aimed. Note a dash light will illuminate if the system is inoperative. Adaptive Cruise Control (ACC). The millimeter wave radar of the ACC must be re-aimed if the radar unit is removed or replaced. If damage occurs in the unit’s mounting area, the system needs to be re-aimed. A malfunction of the unit will be displayed in the multi-unit dash. Let’s look at welding and repairing the 1500 MPa steel on the Honda Accord. Honda states when repairing and welding 1500 MPa steel parts as follows: ● NEVER attempt to straighten damaged 1500 MPa steel ● 1500 MPa steel parts MUST be replaced at factory seams using squeeze type resistance spot welds ● MIG weld braze joints should

be used ONLY in locations that can not be reached with STRS welders. ● To maintain adequate weld tensile strength, always set the spot welder to specifications in the body repair manual. ● NEVER perform MAG (aka MIG) welding on 1500 MPa steel parts ● MIG brazed joint locations are specified in the body repair manual ● A single or double hole MID braze may be specified in the body repair manual depending on tensile strength of the parts being joined. ● A pulsed MID welder MUST be used. You can convert most MIG welders to weld bronze silicon, but you have better heat management and control with a pulsed welder. More on this a little later on in the article. ● Parts made of Ultra High Strength Steel (UHSS) must be installed as complete part. No sectioning allowed. FAILURE TO USE THE PROPER EQUIPMENT OR FOLLOW THE PROPER PROCEDURES CAN RESULT IN AN UNSAFE REPAIR. Honda specifications for repairing and welding steels with 590 to 980 MPa ratings: Parts made of High

Strength Steel (590-980 MPa) must be installed as a complete part. No sectioning is allowed unless a procedure is provided in the body repair manual. Plug welds using a MIG welder may be done joining body parts with 590980 MPa steel ratings. MAG (MIG) butt welding may be done only steel parts with a tensile strength of 590 MPa and lower. You will need to print out the diagram showing the locations of the different strengths of steel from the Honda web site. Here is what Honda specifies for welding 1500 MPa steel on the 2013/2014 Honda Accord. You will need to go to the web site for pictures on the welding procedures.

required depending on the damage to the side panel. Take notice that spot welding conditions for welding the replacement parts differ from the normal welding conditions. MIG brazing must be used where spot welding cannot be done. NEVER perform MAG welding.

MIG brazing welding method To ensure adequate joint strength, use a pulsed MIG welder with specified wire and the following brazing technique. This will create a capillary action in order to liquefy the solder so that it can penetrate into the upper and lower plates: • Begin brazing about 5mm (0.20in) before the holes(s). • Move the torch across the hole in a zigzag pattern as you close the holes(s). • Continue the brazing operation about 10mm (0.39 in) past the hole(s).

2014 Accord

1500 MPa Parts Welding Specifications ______________________________ High-Strength Steel (1500 MPa) Parts Welding Specifications The high-strength steel (1500 MPa) material is used for the front pillar area, the roof side area, the center pillar area, and the side sill area of the vehicles. Parts replacement for the reinforcement and/or the stiffener may be

Spot welding specifications

• Current: 9000 A • Pressure: 3432 N (350 kgf, 772 lbf) • Welding cycle: 40 NOTE: When spot welding is performed, make sure that the following See Hey Toby!, Page 22

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Continued from Cover

Erica Eversman

According to Eversman, consumers possess the power in relation to shops and insurers, so they must demand what they are entitled to or the insurance companies will steer them to low-cost shops that may not be performing quality repairs. These con-

helping to alter insurers’ behavior. Additionally, it “sheds light on how much you can trust insurance company ads that promise to take care of you but don’t explain how they intend to do so,” Eversman explains. Eversman hopes these shortpay cases will cause insurance companies to reevaluate their attitudes. Though collision repairers can’t control insurer’s behavior, this type of litigation

provides them with an opportunity to be fairly compensated for their work which, in turn, allows them to acquire the training necessary to branch out to other vehicles. Still, this concern is detrimental to consumers, and it should be resolved by the Departments of Insurance who insist this only involves collision repair shops and insurance companies due to their failure to understand that most of these shops that are being shortchanged are non-DRP facilities that have no contracts with or obligations to the insurance companies. Eversman is “appalled it has come to this because the Departments of Insurance are not doing their job

a state statute prohibiting repairers from installing salvage parts on a vehicle unless those parts were removed by an Ohio licensed salvage dealer. Eversman fears that the mandate requiring the use of parts procurement systems, especially PartsTrader, will lead repairers to violate these types of statues, creating a dangerous situation which could potentially lead to consumer protection-related lawsuits. Eversman feels that these issues could be rectified easily; “State Farm should withdraw their mandate requiring the use of PartsTrader. Then, PartsTrader would be like other parts procurement systems, and it would have to compete on its own merits, allowing repairers to have more power in choosing parts, ensuring those parts come from a legitimate source, and adhering to the law.” Eversman sees the PARTS Act as “an absolute example of the extremes to which any industry will go to get what it wants without consideration for other industries. The patent laws focus on rewarding companies that spend money and produce or design something unique, protecting them for a designated period of time. Aftermarket parts manufacturers and insurers are trying to obtain an exemption for imitation crash parts from the application of the patent laws, but if Con-

which is to protect the consumers since insurance companies are not properly and fairly paying these claims.” Another example of insurer interference in the collision repair industry is seen in State Farm’s mandate for shops on their Select program to use PartsTrader. Eversman insists, “anything which is imposed on collision repairers from an outside entity is inherently a bad thing. There are other parts procurement systems that shops use, but it is their decision. I find the mandate to use PartsTrader troubling, and I’m also troubled by the application as recent disclosures have indicated estimates coming back with alterations to labor rates which have nothing to do with parts! This is not what PartsTrader was intended to do, as represented by State Farm and PartsTrader.” The state of OH specifically has

gress really wants to do something good for the consumers, they should focus on evaluating patents on medication; that would be far more beneficial than exempting imitation parts!” An interesting side of this proposed legislation is the fact that, for decades, the insurance and aftermarket parts industries have claimed that the imitation parts are “purely cosmetic” and have nothing to do with how the vehicle performs in a collision; however, because the parts auto makers seek to protect are cosmetic—the standard for design patent eligibility—imitation crash parts manufacturers are now arguing that their parts do have a meaningful function in the car’s performance. Eversman says “this is a terrible idea! We have patent laws for a reason, and since imitation parts manufacturers haven’t demonstrated a significant need to change this, we

“There is a confluence of things impacting repairers that they don’t have much control over.”

cerns should be highlighted because “if consumers had any idea that they’re driving potentially dangerous vehicles due to insurer interference, they would be appalled, but they have no clue what’s going on.” Actually, insurers have no role in the repair process whatsoever; they are only supposed to sign the check paying for the repairs, but they’ve become involved because the closer their involvement, the more control they can exert, allowing them to avoid dispersing full payment on repairs. Rather than arguing labor rates and shortchanging repairers, Eversman believes insurers should “take a step back, consider what they are asking shops to do, and reevaluate whether their requests are fair.” When insurers refuse to compensate for the full repair cost, shops are forced to pursue shortpay cases, but Eversman admits, “litigation is not pleasant. You may get what you’re entitled to at the end of the day, but you have to trudge through mud to get there.” Recently, there has been a significant rise in the number of shortpay lawsuits being pursued in the courts, but this is not a novel or recent experience. Eversman believes that “collision repairers have had enough interference in their businesses from a third party entity who doesn’t perform repairs or accept liability. They are tired of being shortchanged on payments, so they are turning to the courts for attention, but no one is excited to go to court.” There are benefits to this recent influx, though. Not only do these lawsuits send a message to the insurance industry, they also serve to create awareness of these issues amongst repairers, attorneys and consumers nationwide, raising public scrutiny and

“Anything that is imposed on collision repairers from an outside entity is inherently a bad thing.”

20 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com

may as well do away with patents [if the PARTS Act is passed] since it undermines the entire patent system.” Though Eversman admits that she has not been very involved with and is not particularly informed on the Right to Repair, she wants collision repairers to be able to make a living doing what they’re good at. On the flip side, she has significant concerns with the increasing technology and sophistication of vehicles, as well as the use of alternate metals and composite parts, and she believes the industry is rapidly approaching a point where not everyone has the necessary skills and equipment to safely repair all vehicles. Because Eversman also wants consumers’ vehicles to be repaired safely, she can see the value of restricting this information to those who have received the proper training, yet since she also sees value in permitting any repairer access to this information in order to repair all vehicles, her opinion is split between these two conflicting interests. Additionally, there are many other challenges facing the collision repair industry. For starters, the industry is in a continuous state of flux, partially because of the changing nature of the vehicles themselves and also due to the significant presence of consolidators and multi-shop operators (MSOs). Many MSOs are actively buying other shops, leaving independent shops feeling that they can’t compete and providing an escape route for shop owners who are exasperated with the current state of the industry. Of course, the still impoverished state of the economy comes with its own set of problems which also negatively impact repairers. Finally, the fact that people are driving less and winters have been milder in recent years leading to fewer accidents also affects some shops’ business. Overall, Eversman believes there is “a confluence of things impacting repairers that they don’t have much control over.” Fortunately, there are some preemptive measures that shops can take to protect themselves from some of these problems. Stay tuned to Autobody News for a future series on key documentation that every shop should consider utilizing.

www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 21

Continued from Page 19

Hey Toby!

conditions are maintained: the specified current, conductivity time, welding pressure, holding time, and shutdown time recommended for spot welder. Follow the spot welder manufacturer's instructions. MIG brazing specifications

• MIG brazing machine with pulse controller • Wire: CuSi3 • Shielding gas: Argon gas (100%)

NOTE: • For details about correct brazing current and voltage, refer to the equipment manufacturer’s recommendations. • MIG welding/brazing: Metal inert gas welding or brazing where 100% Argon (Ar) shielding gas is used. Argon is inert and does not react with the molten weld pool or brazing operation.

Brazing hole size For joining, or brazing of stiffener (340 and 980 MPa) and the highstrength steel (1500 MPa) parts: Drill two holes φ8 mm (0.31 in) in about 10 mm (0.39 in) pitch. For joining, or brazing of outer panel (270 MPa) and the high-strength steel (1500 MPa) parts: Drill one hole φ8 mm (0.31 in) at the outer panel. As I previously mentioned, let’s talk welding machines.

I purchased a Prospot SP5 after testing it at the SEMA show.

This diagram is taken from the 2013/2014 Honda Body Repair Manual. It is located in the General Description under Roof and Side Panel 4 Door Construction

Center Pillar Stiffener Complete

Upper Stiffener [1.8 (0.071)]

1500

Center Pillar Reinforcement [1.8 (0.071)]

980

Lower Stiffener [1.8 (0.071)]

590

— —

This legend is also found on the same page as the diagram. Note that part number 6 is constructed of 3 different metal strengths

You will note that there are 3 spot welds (590 steel)welded to reinforcement on the inside of the vehicle along with 4 spot welds

weld all in one machine. It is a 220 volt single phase machine that is pulsed. It is a very user friendly and the welds that are produced are amazing. This machine is overkill for the body shop. Prospot has the same machine, but with 2 guns (steel, aluminum or MIG braze—your choice). It is about 25 percent cheaper and I

Welding Symbols Plate spot welding Plate spot welding Plate spot welding MAG plug welding MAG welding MIG brazing

L= Welding length unit: mm (in) ( ) and ( )*: The number of welds

would highly recommend this unit. You can go to Prospot.com and click on the SP welder for a video demonstration of this welder. Now to the actual replacement of the center pillar and rocker reinforcement.

1. When replacing the center pillar lower stiffener (A) only, weld it to the center pillar reinforcement (B) and the center pillar upper stiffener (C). ( )*: Welding positions with 590 MPa or higher parts. Confirm the plug welding specifications. (■)*: Welding positions with the center pillar upper stiffener (1500 MPa parts). Confirm the spot welding and the MIG brazing specifications

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You will note that there are 3 spot welds (590 steel)welded to reinforcement on the inside of the vehicle along with 4 spot welds

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11. From the passenger’s compartment, weld the center inner pillar (A) and the roof side rail (B)

You will note that the upper and lower out sections of the reinforcement are MIG weld braze

22 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com

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WMABA Lobby Day by Chasidy Sisk

The Washington Metropolitan Auto Body Association (WMABA) recently distributed invitations for their upcoming Lobby Day in Annapolis, MD. The event will take place on Wednesday, January 22nd from 8:3010:30am at the Calvert House located at 58 State Circle, Annapolis MD 21401. WMABA’s Lobby Day will begin with attendees joining their Maryland legislators for breakfast, followed by a presentation given by WMABA Executive Director and the association lobbyist representatives from Alexander & Cleaver. Attendees will learn about the 2014 proposed parts legislation for the current legislative session which began on January 7th. This legislation is WMABA’s 2014 Parts Bill which focuses on aiding shops interested in keeping the same vendors and on providing the best parts to customers. In addition to discussing the specifics of the bill, WMABA will also explain how repairers and vendors can participate in

the legislative process. Those who register at least a week before the event will also have the opportunity to schedule a personal meeting with their legislator. “It is very important that repairers be involved with their personal legislator and the legislative process, even if they do not actively support particular legislation,” states Jordan Hendler, Executive Director of WMABA. “You want them to know you as the expert when it comes to anything relating to automotive issues. Then, they come to you for advice on proposed legislation versus us chasing them down on something that could have been easily avoided. It really is rewarding to be active with those who represent you and your business’ interests at the capital.”

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AAIA Releases 67 page 2013 Digital Collision Repair Trends Report with Analysis of Whole Industry

The Automotive Aftermarket Industry Association (AAIA) has released the 2013 Digital Collision Repair Trends report, an online 67-page descriptive analysis of data compiled from primary AAIA research, federal government and independent research data sources. The report highlights the size and scope of the U.S. collision industry, including the paint, body and equipment (PBE) aftermarket, with a brief analysis of the Canadian collision industry. It also includes analyses of factors influencing the collision industry, automotive collision insurance coverage and the Direct Repair Program (DRP). According to this year’s report, collision repair-related sales by aftermarket repair shops grew 2.3 percent in 2012 to $39.7 billion. This growth was driven by several factors such as increased number of registered vehicles, increased road congestion causing a higher frequency of accidents per year and the increased collision repair cost per ve-

hicle. Powered by Nxtbook Media LLC™, this digital publication retains both the traditional design and high quality content of AAIA reports. This online production provides added value with many new functional enhancements. Users can: ● Download Excel-based files, charts, tables and graphs that can be copied and pasted for presentations. ● Turn pages with the click of a mouse. ● View pages in a variety of sizes and formats. ● Quickly locate what you are looking for through a “word search” feature. ● Save material for future reference through the “bookmarks” feature. ● Print the entire publication. Copies of the new 2013 Digital Collision Repair Trends report are now available—cost is $125 for AAIA members and $250 for nonmembers. To order, visit www.aftermarket.org and click “Market Intelligence,” or call AAIA market intelligence at 301-654-6664.

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On Creative Marketing

Tom Franklin has been a sales and marketing consultant for fifty years. He has written numerous books and provides marketing solutions and services for many businesses. He can be reached at (323) 871-6862 or at tbfranklin@aol.com. See Tom’s columns at www.autobodynews.com under Columnists > Franklin

Re-Think Your Marketing For The New Year with Thomas Franklin

When you’re running a busy shop, it’s necessary to have many systems and procedures more or less on automatic. There’s no time to address every situation newly every time. Lean processes and procedures have been carefully thought out so if everyone adheres to the system, the shop runs smoothly. Nevertheless, periodically it’s necessary to re-evaluate any system or procedure that’s been used for a long time. I, for example, tend to invest in dividend-bearing securities that I can count on generating consistent income for the long haul. But from time-totime I have to weed out the poor producers and replace them with better producers or perhaps just purchase more of the good producers. An astute shop owner or manager should do the same thing with marketing procedures. Sadly many shops fail to accurately track the effectiveness of promotional ads, mailings, e-mails, website hits and events. At one time this was understandable. We didn’t have tools like hit counters or e-mails received reports or 800 number calls. But even tools like these don’t really tell us whether any of these promotional responses turned into real jobs. Our only reliable statistic is the customer’s report about what sent him or her to the shop. Without those numbers the shop owner or manager has no real idea what marketing actions to drop and which ones to double up, to refine or replace.

Even with customers’ information about who sent them, it’s still not always possible to know how to reinforce the sources that sent business to the shop. Some insurance company referrals will specify the customer’s agent but sometimes the agent is many miles away so that it’s not practical to market to thse remote agents. If most of the jobs come to the shop referred by one insurance company, how secure is it to bet the survival of the shop on one source that could cripple the shop if it stops sending work? One again, the investment metaphor applies. How secure is it to put most of your investment money into purchasing or holding just one stock, bond or other security? It’s well known that a certain amount of diversity is necessary to protect oneself against possible market turndowns. Another factor that must be considered in a re-evaluaton is the cost of each marketing action. Some promotional actions are hard to track but cost so little it may be worth keeping them in motion. But if a marketing move is costly, it’s definitely worthwhile to take a close look at how much profit that action is creating. One shop owner I knew well kept a DRP with a low-profit, cut-rate insurance company that he knew barely made him a profit on each job. But when he was able to get a contract with a much better paying DRP, he dropped the other one like a rock! I’ve found that some shop owners don’t really know the true cost of

referral arrangements with insurance companies, dealerships and other referral sources. If the labor and parts discount is calculated per job, and give-aways factored in, like lot damage, totals storage and more, the real costs of some of those relationships may be much more than they seem to be at a glance. Like the automatic production procedure, a shop owner may have gotten so comfortable with a relationship, he or she may not realize it’s time to re-evaluate that relationship and perhaps consider looking for a new one -- or re-negotiating the profitability of that long-term situation. Finally, our world has changed significantly with the proliferation of smart phones and tablets. New apps for these pop up daily now, and there is an expectation that every business can provide instant electronic information. Printed paper phone books and many publications are now rarely

The following dealerships are eager to serve your needs. Call your local Subaru collision parts specialist today!

Mobileye Integrates with Accel Connected Car Technology

Mobileye, a Dutch private company and a leader in camera-based advanced driver assistance systems (ADAS) technologies for the automotive industry and Accel Telecom Ltd., a leading provider of cellular based connected car solutions, have announced the integration of Mobileye’s Collision avoidance system with Accel’s VOYAGER connected car smartphone. The integrated solution allows remote monitoring of Mobileye alerts transmitted via the VOYAGER 3G cellular connection, which is ideal for fleet managers, insurance companies and families that want to receive real time updates on

their driver’s behavior on the road. Isaac Litman, Mobileye CEO commented: “[This] is an elegant solution that allows both the driver and a third party to receive Mobileye’s life saving alerts in real time which is a real need for fleet managers, businesses, families and more. We are happy to partner with Accel on this exciting offering and believe it will enhance the Mobileye experience.” Marc Seelenfreund, Accel CEO said, “the integrated VOYAGER– Mobileye solution will add an additional layer of driver safety via remote monitoring of Mobileye alerts.”

24 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com

read or used. Resources spent in this direction may be totally wasted. While it can be costly to seek out a good provider for social media promotion and possibly even a smart phone app, it would be wise to face up to that cost now or be left behind in the dust. And even this marketing effort and cost might not be necessary if a shop’s primary customer base is unlikely to seek out or respond to this electronic kind of marketing. The location, age, environment and occupations of a shop’s customers could be such that the shop could get away with another year of limited state-of-the-art electronic marketing. But the young people becoming adults today are totally conversant with smart phones, social media and more. If a shop plans to be in business past this year, there’s no getting aweay from the need to embrace these new technologies and put the marketing dollars in that direction.

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Ford Rep Paul Massie on Repairing the 2015 F-150

Paul Massie, powertrain and collision product marketing manager for Ford, spoke at the Collision Industry Conference (CIC) held Jan. 16–17 in Palm Springs, CA. He sought to reassure repairers concerned about the forthcoming newly engineered 2015 F-150 which goes on sale later this year. “We designed the vehicle so it can be easily repaired and accessible so the customer can go where they want to get it repaired,” said Massie. Massie said there will be no restrictions on what kind of shops can repair the vehicle. Ford will not require a shop to have a separate clean room however, it will recommend the use of curtains to separate aluminum from steel work and specific equipment to handle the repairs. The total investment for a shop that is starting from ground zero with aluminum repair can be as high as $50,000. (Autobody News’ next issue will detail a shop’s outlay on clean room setup.) “That’s if you have absolutely no aluminum equipment,” Massie said. “So if you’re already in the aluminum business and already have the equipment and can separate aluminum from steel, you’re probably a long way towards having the equipment you need.” Genuine Ford collision repair parts will be available to all shops. All parts sold will include instructions on how to

properly install them. Ford will begin its education on the 2015 F-150 and aluminum repair at the AASP/NJ Northeast Show March 21–23 at the Meadowlands Expo Center in Secaucus, NJ. A cutaway of the vehicle will be featured so repairers can see all of its structural components. Engineers will be present to talk about the vehicle, and I-CAR training developed with Ford will be available. Ford is also offering to do a presentation on the 2015 F-150 at the next CIC April 9–10 in Portland, OR, although details are not firmed up yet. Information will also be available at NACE in July and SEMA in October. “The goal is to make high-strength, military-grade aluminum alloy collision repair mainstream,” said Massie. “We want it to be as mainstream as it already is for steel.” Elsewhere Ford has said it put the new model through rigorous tests, including cross-country hauls through desert valleys and over high-altitude mountain passes and in climates of 20 degrees below zero and 120 degrees above. A disguised F-150 even raced in the Baja 1000, where it earned the distinction of completing the 883-mile race while some other purpose-built race vehicles could not.

CIC in Brief, More Next Issue

CIC chair George Avery welcomed the CIC body before inviting John Van Alstyne, president and CEO of I-CAR, to present the organization’s initiatives for the coming year (see I-CAR story this issue) Following Van Alstyne was a presentation by guest speaker Scott Sorrell, CEO of Sales Adrenaline. Sorrell discussed how to find your value as a business and how to keep reselling that value to customers. The afternoon was focused on reviewing each CIC committee—definitions, insurer/repairer relations, parts and material, data privacy, education and training, human resources, governmental, marketing, and technical—and their plans for the coming year. Notable changes to the committees included putting the definitions committee on hiatus, and the appointing of Randy Hanson, auto director at Allstate, as the new chair of the insurer/repairer relations committee. Hanson will replace Rick Tuuri. Discussion also occured on the data privacy committee on vehicle information technology.

CIC Roundtable Launches Consumer Website for OEMs

The Collision Industry Conference’s OE Roundtable Committee announced the launch of crashrepairinfo.com, a consumer education site, during the first day of the January 2014 Collision Industry Conference (CIC) planning meeting in Palm Springs, CA. The site is aimed at providing consumers with information that can help them navigate the process of getting their vehicles repaired following a collision. Gary Ledoux, assistant national manager of wholesale parts marketing at Honda and a member of the OE Roundtable Committee, said the site is meant to help vehicle owners make informed decisions about the collision repair of their vehicle. The site includes OE position statements, collision repair basics, what to do in case of an accident, and links to other OE sites. Ledoux said the committee recommends all repairers use the site as a resource and direct customers to the site, as is applicable.

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www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 25

Industry Insight with John Yoswick

—John Yoswick is a freelance writer based in Portland, Oregon, who has a body shop in the family and has been writing about the automotive industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). Contact him by email at jyoswick@SpiritOne.com.

Shops Can Put News and Trends Related To Auto Insurers To Good Use It’s easy as a shop owner to get so caught up in day-to-day operations that it can be a challenge to follow just the news directly affecting collision repairers. But there’s plenty of insurance-related news that shops also should know about, because it can help them educate their customers, market their business, and maybe even alter how they vote or shop for insurance themselves.

Insurer pushes for more alternative parts As of this year, The Hartford is now requiring its direct repair shops to use “any appropriate alternative part when it is available” regardless of the age or mileage of the vehicle being repaired. A memo from Bethany Siddall, director of auto claims for The Hartford, tells shops the new policy is subject to state law, and that any salvage parts still must be of the same model year or newer than the vehicle being repaired. But unless prohibited by state law, the new mandate means available non-OEM parts must be used even on current model year vehicles. “Keep in mind that each claim should be handled on an individual basis and any variance from this standard should be clearly documented in the claim file,” Siddall’s memo states. State Farm encouraging welding training, certification. When I-CAR announced a new lower pricing structure for its welding qualification testing (now called Welding Training and Certification) early this year, it also announced that State Farm negotiated a discount for its Select Service shops as well. The announced continues State Farm’s track record of encouraging but not mandating certain training requirements on its direct repair shops. “We believe welding proficiency benefits State Farm policyholders by providing quality repairs to policyholder vehicles,” Russ Hoffbauer, director of property and casualty claims for State Farm, said. “While participating in the I-CAR Welding Training and Certification is not mandatory for Select Service repairers, we anticipate that repairers will be eager to take advantage of this unique opportunity.”

Tardy insurance regulation report issued by the feds. Nearly two years after it was due, a new report released by the Federal Insurance Office in December concludes more federal regulation of some aspects of insurance is needed. Rather than debating federalvs. state-oversight of insurance, the report suggests a hybrid approach, with federal involvement where beneficial in an otherwise state-based system. Most of the federal regulation suggested in the report deals with mortgage insurance and international insurance issues, but it also calls for oversight of personal lines in terms of practices related to risk-profiling groups and individuals based on personal information. Insurer groups were generally pleased with the report’s support for more consistent state-based regulation of the industry but were more skeptical of its call for more federal involvement.

State insurance regulator group in upheaval At the same time when increased federal oversight of the insurance industry is being proposed, the association of state insurance regulators Tom Leonardi appears to be having internal conflicts. Connecticut Insurance Commissioner Tom Leonardi is calling for an outside firm to conduct a corporate-governance review of the National Association of Insurance Commissioners (NAIC), questioning what he sees as poor decisions by the group’s executive committee and what he called NAIC’s “imperial presidency.” Leonardi cited as one example the decision by last year’s president, Kevin McCarty of Florida, “to give the Federal Insurance Office one of the NAIC’s three seats on the International Association of Insurance Supervisors Executive Committee.” He was also critical of some insurance commissioners’ decision to turn down an invitation to meet with President Obama. “This could be so bad that it might be the pivotal point we later rec-

26 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com

ognize that doomed state-based regulation. Talk about a self-inflicted wound,” Washington Commissioner Mike Kreidler is quoted in the letter. Leonardi said “cronyism” and the “undue influence of two former [unnamed] commissioners,” is undermining the NAIC and gives fodder to those who question “whether we are up to the task of regulating the largest insurance market in the world.” Tom Corbett Other state insurance commissioners have raised similar concerns but believe the NAIC needs to attempt to address the issues internally before seeking the outside review that Leonardi wants. State enacts new deductible rules. Pennsylvania Gov. Tom Corbett in December signed a new law that allows insurers to offer zero-deductible

auto policies? Previous state law required a deductible of at least $100. The legislation also drops the current mandate that policyholders selecting a deductible below $500 acknowledge in writing that they recognize that “a lower deductible means a higher premium.”

Insurer offers telematics as a way for parents to track teen drivers Esurance says parents in 39 states who have installed its DriveSafe telematics device on their vehicle can now pair the device with their teenage driver’s cell phone to limit (on some phone brands) texting or other use of the phone while the car is in motion. The system also allows parents to monitor a teen’s driving behaviors including routes taken, speeding, hard braking or driving past curfew. Esurance says the information is not shared with the insurer nor is it used to determine premiums.

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Insurance exec a big, big winner Ira Curry, a 56-year-old vice president for property-casualty in the Atlanta office of Aspen Insurance, was one of two winners in December’s Mega Millions $636 million jackpot. An Aspen spokesman said Curry had taken a leave from the company “to disappear with family for a while.” Curry took the lump-sum cash option, walking away with about $120 million after taxes.

Insurer to offer policies in another state Pennsylvania-based Erie Insurance Group will expand into Kentucky, its 13th state, by early next year. Erie is the 15th largest personal auto insurer in the country, although nearly half of its premiums are from insureds in its home state. Idea of city-owned insurer debated An editorial in the Detroit News urged Mayor-elect Michael Duggan to drop his idea of starting a city-owned auto insurance company. Duggan first raised the idea last fall while campaigning to become Detroit’s next mayor. Detroit residents by some estimates have the highest auto insurance

rates of any city in the country, leading some residents to use suburban addresses when buying auto insurance. Duggan said his own auto insurance rates doubled when he moved from nearby Livonia to within the city limits of Detroit. The newspaper says Duggan should not take on such a risky endeavor but should instead focus on efforts to curtail auto thefts and to lobby the state for reform of the nofault system. One claim in the editoMike Duggan rial surely caught the eye of collision repairers. “If Duggan believes he can lower premiums by taking the profit out of insurance, he’s in for an awakening,” the editorial states. “There is no profit in auto insurance, (Peter) Kuhnmuench (executive director of the Insurance Institute of Michigan), says.”

John Yoswick is also the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). He can be contacted by email at: jyoswick@SpiritOne.com.

Continued from Page 15

Insurers Sued

“These statements have been made about certain plaintiffs without any attempt to ascertain the truth thereof,” the suit said. “Not only that, some of the ills recited which implicitly criticize the shops are wholly attributable to the insurer itself.” “Plaintiffs have performed valuable services and expended material resources with the reasonable expectation of payment/compensation for those services and materials. This is their business,” the complaint reads. “Performing said services and expending material resources benefitted Defendants and Defendants’ insured/claimants for whom Defendants are required to provide payment for repairs.” The complaint added that several of the plaintiffs attempted to raise these issues with insurance industry representatives at a meeting held in April. At the meeting, the insurers said that repairs and subsequent payments should be consistent with the

estimates prepared through the companies' database software. But the suit said that little has changed since, with State Farm and the other defendants continuing to refuse to make full payments for necessary repairs. The suit seeks treble damages and injunctive relief, along with any other relief the court deems proper. Among the other insurers named in the suit are Progressive Gulf Insurance Co., Allstate Insurance Co. and Nationwide Property And Casualty Insurance Co. An attorney for the repair companies and a representative for State Farm did not immediately respond to requests for comment. Counsel information for the insurance companies was not immediately available for comment. The case is Capitol Body Shop, Inc. et al v. Lewis et al., case number 3:14-cv-00012, in the U.S. District Court for the Southern District of Mississippi.

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www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 27

Social Media for Shops

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

How to Improve Your Success with Google in 2014 with Ed Attanasio

I tell marketing people at body shops all the time that if you pay attention to Google and stay on top of its periodic algorithm updates, you’ll be way ahead of the game. It may not sound that important, but when you think about the fact that every website in the world is affected by Google in one way or another, you can see that those who know how to use it right will obviously have a distinct advantage over their competition. Google’s incarnations (or releases) come with little or no warning and every time Google updates itself, it’s an attention-getter for anyone who works with the Internet. Named after animals (first there was Penguin and then there was Panda) these updates revolve around the fact that Google wants to reward sites that offer value while penalizing those that contain spam and irrelevant content. The newest update is called Hummingbird and it’s been buzzing in every webmaster’s ears since it was released nearly six months ago. This summer, Google explained their newest update in a simple paragraph: “Hummingbird is paying more attention to each word in a query, ensuring that the whole query—the whole sentence or conversation or meaning—is taken into account, rather than particular words. The goal is that pages matching the meaning do better, rather than pages matching just a few words.” Some people will always try to beat the system and fool Google with “black-hat” tactics, but in the end they’re like the IRS. You may get away with using text that you’re “borrowing” from other sites for a while and do other shady things to rank highly in local searches, but in the end, the party’s over. And Google is not like the American justice system—no one is innocent until proven guilty and they could care less about reasonable doubt. But, do not fear—if you hire a respectable webmaster with a good track record that performs honest SEO relevant to your business and adhering to Google’s rules, you’ll be fine online. One company that’s been doing exceptional work for both mechanical

and collision businesses online is Ring Ring Marketing in San Jose, CA. Their motto is “We Make Your Phone Ring” and they specialize in working with small to medium-size companies. Welton Hong, the COO at Ring Ring Marketing offered us some valuable tips on how body shops can use Google effectively in this new Hummingbird environment. “To optimize an auto body shop website for Google Hummingbird, consider adding more real-world, question-specific queries into your site content,” Hong said. “This could be in the form of blog posts, FAQs and more.” In the end, Google still values and respects original content and quality links over anything else. Any time you’re going to post something on your web site or blog, ask yourself this—is it of real value to my customers? Make certain that you’re creating content that is relevant to your audience and then integrate it into all of your social media. Increase your exposure and build your brand by positioning yourself as an expert in collision and getting the word out through to the local media, including radio, TV, print and the Internet. And post different types of content to enhance your SEO and create more opportunities to engage your audience—especially video, according to Hong. “Add more relevant video content to your site,” he said. “It's much harder for Google to generate this sort of content in response to inquiries, so this type of material will be insulated, at least for now, from the negative effects of Hummingbird.” Other Google-related things to consider this year: ● Ride the Google+ Train: Google rewards companies that use their products and this is one of their leading products. Too many body shops set up Google+ accounts in 2013 and did nothing else. Tell your marketing people that you want to use Google+ more and devise a plan.

● Going Mobile: The Internet is going more mobile every day, so get on the ball and be a part of it. Google wants you to make your site optimized

28 FEBRUARY 2014 AUTOBODY NEWS | www.autobodynews.com

for mobile users to attract mobile visitors. Right now, half of all Americans (and every 13-year-old girl out there) own smartphones and one-third own tablets. The number is going to grow at an explosive rate, so get mobile of get lost. “Make sure your site is as mobile-friendly as possible,” Hong explained. “Hummingbird is designed for mobile users. Mobile visitors are quickly outnumbering desktop visitors. You must focus your efforts here.”

● Some Appetizing Google Apps: I use Google Docs every day, because it enables me to share documents easily with others, via my desktop, laptop or smartphone. It saves time, because users can check in whenever and wherever. Also consider Evernote (a great note-taking app) and of course, Gmail and Dropbox. Google tweaked and improved both of these applications in 2013, making them

easier to use and full of new functionality. Whether working on a vehicle or coordinating your marketing efforts, it’s all about having the best tools available and knowing how to use them. Google has literally 50-plus business tools to make you more effective and profitable in 2014 and beyond. So tap into the Google universe and learn which ones are best-suited for you. But, most importantly, learn the Hummingbird update and discover its nuances and capabilities. Make Google a bigger part of your marketing plan this year and plug away at creating a significant presence there. Because Google is here to stay and the shops that use it correctly will reap huge benefits over time. Be patient and stick to your plan and pretty soon you‘ll hear the phone ringing, followed by those wonderful words, “We found you on Google!”

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Study Estimates 9% of Cars will be Self-Driving by 2035

Sales of vehicles able to drive themselves will account for about 9 percent of global auto sales in about two decades, according to a forecast published this month by auto industry consultant IHS Automotive. The study focused on autonomous cars, which can drive with “no attention needed by the driver,” IHS analyst Egil Juliussen said. Such cars are not currently available for sale, but IHS predicts they will be available around 2025. IHS expects global sales of self-driving cars in 2025 to be 230,000—less than 1 percent of the 115 million cars expected to be sold that year. But by 2035, sales of self-driving cars will reach 11.8 million, or 9 percent of the 129 million global auto sales expected that year, Juliussen said. Most of those sales will be in well-established auto markets such as the United States, western Europe and Japan. The pace of growth for self-driving cars will exceed that of electric cars, which have been hobbled by the high cost of batteries, Juliussen said.

14 States to Increase the Minimum Wage in 2014

As of January 1, 2014, thirteen states will raise the minimum wage for workers. In Arizona ($7.90 per hour), Colorado [pdf] ($8.00 per hour), Connecticut [pdf] ($8.70 per hour), Florida [pdf] ($7.93 per hour), Missouri ($7.50 per hour), Montana ($7.90 per hour), New Jersey ($8.25 per hour), New York ($8.00 per hour), Ohio ($7.95 per hour), Oregon [pdf] ($9.10 per hour), Rhode Island ($8.00 per hour), Vermont [pdf] ($8.73 per hour), and Washington ($9.32 per hour), workers will see an increase. All employers in these states need to display updated posters with the new state minimum wage as required by state law. Additionally, California’s minimum wage will increase to $9.00 per hour on July 1, 2014. The Federal minimum wage remains unchanged at $7.25 per hour. However, if your workers are in a state that has a minimum wage above the Federal rate, you must pay workers the higher rate.

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CCC Acquires Auto Injury Solutions Inc.

Chrysler Seeks Registration of Diagnostic Software

CCC Information Services Inc. (CCC) announced on Jan. 7 the acquisition of Auto Injury Solutions, Inc. (AIS), formerly a division of Humana Inc. The transaction brings together CCC with AIS, the only national, full-service provider of auto injury medical review solutions. “We’re thrilled to welcome Matt Elges and his team to the CCC family. The acquisition of AIS is an important step in the continued execution of our strategy to expand into adjacent segments in order to better service the auto claims market,” said Githesh Ramamurthy, Chairman and CEO of CCC. “Together, our platform will be able to leverage proven technology, advanced data analytics and worldclass customer service to provide customers with an array of solutions.” Elges said, “The combination of CCC and AIS represents a strong strategic fit that will enable us to expand our reach and leverage our collective strengths in developing innovative new solutions for our customers.

The National Automotive Service Task Force (NASTF) reported that the Chrysler Group LLC is registering diagnostic software and tools in both dealerships and aftermarket shops to ensure authenticity when servicing customer’s vehicles. NASTF was made aware of this from Chrysler in response to a question NASTF had asked on this topic. License registration has been in use by many OEMs for some time, but in the near future, unregistered Chrysler tools will not operate. Soon, the wiTECH software will show a warning to users whose devices do not hold a valid registration. Registration of the Chrysler tool is free, assuming the user has paid the yearly license fee. A Chrysler spokesperson told NASTF that approximately 80– 90% of known users have already registered their device. Later in 2014, Chrysler will no longer allow unregistered users to operate their wiTECHs. The other affected group will be users of clones of the wiTECH VCI.

Hyundai, Kia Expect to Top 2013 Global Vehicle Sales

North American Car & Truck Production Hits 16.6M Units

Hyundai and Kia saw their combined global sales rise 6 percent to 6.9 million vehicles from January to November 2013 from a year earlier. The companies said that they are on track to sell more than 7.5 million vehicles globally this year, higher than their earlier target of 7.41 million vehicles. Hyundai and Kia rank fifth in global vehicle sales, and expect a tough year in 2014 as Japanese and European automakers are seen accelerating competition and the United States and Chinese markets slow. In the US, Hyundai’s sales are up 2 percent this year through November while volume has declined 3 percent at Kia in an overall market that has expanded 8 percent. Solid sales gains in emerging markets like China and Brazil outweighed slowing sales in the United States and South Korea where Hyundai and Kia have underperformed rivals partly due to aging models. Last year, Hyundai and Kia sold a combined 7.1 million vehicles.

North American car and truck production reached an estimated 16.6 million units in 2013, up 4 percent. That would mark the first time since 2005 that production surpassed 16 million units. Mexican plants are expected to have produced a record number of vehicles in 2013, an estimated 3,071,000 units, topping 2012’s record of 3,020,404. Several manufacturers’ North American totals are expected to surpass records set in 2012. Honda, Hyundai-Kia, Nissan and Toyota all had record producing years in 2013, but BMW, Subaru, Volkswagen and AutoAlliance—the FordMazda joint venture—produced fewer units in 2013 than in 2012. While Canada built over 2.4 million vehicles in 2012, that number is expected to drop to 1.8 million by 2020. Since 2010, auto makers have invested $42 billion in manufacturing. The biggest declines in Canada are expected to come at GM and Chrysler.

www.autobodynews.com | FEBRUARY 2014 AUTOBODY NEWS 29

AUTOBODY MARKETPLACE

OSHA Implements New Internet Resources to Encourage Safer Practices: Toolkit Options and PEL Tables

On October 24, 2013, the Occupational Safety and Health Administration (OSHA) initiated two new internet resources to assist employers in better protecting their employees from exposure to hazardous chemicals. These initiatives do not create new mandatory standards, but rather provide employers with resources that OSHA hopes will encourage companies to voluntarily adopt safer policies regarding hazardous chemicals. According to OSHA, these new resources are needed because many of its standards are out-of-date and fail to adequately protect workers from exposure to hazardous chemicals. One of the new internet resources is a toolkit that identifies safer chemicals that can be used in place of more hazardous chemicals. This toolkit can be found at: http://www.osha.gov/dsg/safer_che micals/index.html. OSHA also created Annotated Permissible Exposure Limit tables

(annotated PEL tables), which list more stringent exposure limits for chemicals. The annotated PEL tables can be found at: http://www.osha.gov/dsg/annotatedpels/index.html. Compliance with the exposure limits contained in the annotated PEL tables is voluntary, though recommended by OSHA. David Michaels, assistant secretary of labor for occupational safety and health, stated that he hopes employers will adopt these new PEL tables. He explained, “I advise employers, who want to ensure that their workplaces are safe, to utilize the occupational exposure limits on these annotated tables, since simply complying with OSHA’s antiquated PELs will not guarantee that workers will be safe.”

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Ford’s Best Selling F-150 Gets Lighter and Tougher

In what many industry analysts consider a risky move for Ford, and others consider a transformative moment, the company is rolling the dice on the pickup line, America’s best-selling truck for 37 years and its best-selling vehicle for 32. The 2015 F-150 will be substantially lighter due to extensive use of aluminum and more high strength steels. Aluminum alloys are used throughout the F-150 body for the first time, as the truck slims down by up to 700 pounds. The lighter body then allows other components such as fuel tanks, brakes and powertrains to also shrink, all while maintaining or improving driving performance and fuel economy, according to companies involved, including Alcoa and Novelis Inc. “This is already the most significant debut at the auto show,” said Joe Langley, a production analyst for researcher IHS Automotive. “Especially since Ford will be taking such a big gamble.” Ford engineers increased the use of high-strength 70,000-psi steel—from 23 percent to 77 percent of the frame—to improve stiffness and durability while reducing weight. The new frame is up to 60 pounds lighter than the current frame. “The frame is the backbone of the

truck, and we delivered a frame that is stronger and more capable than before,” said John Caris, F-150 lead frame engineer. “Our frame team developed exclusive, industry-first engineering techniques to create a truck foundation that is lighter without sacrificing toughness. This F-150 frame is the toughest we have ever built.” Ford engineers also increased the use of advanced materials in the F150 body. “Our objective was to find materials that allowed us to design the truck to be as tough or tougher than the current model, yet could help it be hundreds of pounds lighter for better capability and fuel economy,” said Pete Friedman of Ford manufacturing research. “Out of all the materials we tested, we carefully selected only certain grades of aluminum that met our high performance standards in all of our tests, while allowing us to trim hundreds of pounds from the truck.” The reduced weight of the highstrength, military-grade, aluminum alloys enables the F-150 to tow and haul more than ever while also improving acceleration, braking and handling performance. Also, aluminum alloys will not rust and are resistant to corrosion, helping enhance vehicle life.

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Other Lightweights at the Detroit Auto Show

The redesigned 2015 Ford F-150 and the 2015 BMW M3 and M4 lead the “lightweight” movement at the 2014 Detroit Auto Show. The push for better fuel economy is helping to drive the movement toward lighter weight vehicles. Consumer demand for more content, such as infotainment systems, leather seats and larger wheels, adds more weight to the car. Automakers are then under pressure to cut weight elsewhere throughout the body of a vehicle in order to improve fuel efficiency. This new diet requires new materials such as aluminum, magnesium and carbon fiber, as every pound counts. The estimated 700 lb weight loss in Ford’s best-selling truck helps the vehicle to “tow more, haul more, accelerate quicker and stop shorter,” while “contributing to efficiency,” Ford said on Monday. The EPA has not yet published fuel economy numbers on the 2015 F-150. BMW said its 2015 BMW M4 Coupe has a curb weight of around 3,300 pounds, “thanks to the rigorous application of intelligent lightweight design measures.” This reflects a weight savings of around 176 pounds over a comparably equipped previous model, according to the automaker.

Daydreaming Tops List of Crash-Causing Distractions

Studies and data suggest that drivers need to pay more attention to the task of driving to avoid accidents. According to a recent study, simply being “lost in thought” amounted to 62 percent of the distractions listed as a cause of a fatal automobile accident. The report indicates that roughly 10 percent of fatal traffic accidents involve at least one driver who is distracted. This amounts to about 6,500 people killed each year. Cellphone usage of all types placed second at about 12 percent in the study. This includes both talking on the phone as well as texting and dialing. Using other devices, such as navigation tools, was ranked as being a factor in two percent of fatal accidents as was adjusting the climate control or audio systems. Other major factors include being distracted by the scenery or people outside the vehicle, which accounted for seven percent of accidents, and conversing with passengers, which was listed in five percent of accidents. More minor causes include consuming foods or liquids, adjusting car controls, smoking, moving pets and even swatting insects. These factors were found in about two percent of the incidents.

The weight was reduced through the increased use of lightweight materials, such as carbon-fiber-reinforced plastic and aluminum on a number of chassis and body components. The 2015 BMW M3 and M4 feature a carbon roof. Another car in the BMW lineup also puts the emphasis on light weight. The electric 2014 BMW i3 features a body made of carbon fiber. The automaker says this super-light vehicle gets more miles on a charge than its competitors. An all-aluminum body and chassis let Land Rover shave about 800 pounds off the 2014 Range Rover Sport. The 2014 Chevrolet Corvette Stingray, which debuted at the 2013 Detroit Auto Show, features lightweight materials, including an aluminum frame, carbon-fiber hood and a removable roof panel on coupes. Edmunds.com said: As this trend picks up speed, “lightweight” is becoming a major marketing point, a good thing for car shoppers concerned about fuel economy.

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