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VOL. 2 ISSUE 2 OCTOBER 2013

Indiana Autobody Association Expresses Support for SCRS Position Statement

Quintela Sues 21st Century A Second Time for Short-Pays, Makes ‘Cents out of Sense’

Mississippi Collision Repair Association and Parts Suppliers File Suit Against PartsTrader

Eddie Quintela, Owner and President of Collision Concepts of Delray Beach, FL has once again found it necessary to file a lawsuit against 21st Century Insurance on behalf of his customer who made a claim under their policy with the carrier. In 2012, on behalf of his company’s customers, Quintela filed three separate lawsuits against 21st Century of which the insurer agreed to settle before the trial dates. In addition to the disputed amounts, the insurer paid all of Eddie’s legal fees and costs. In spite of recent claims whereas the insurer has provided full payments, as of late, 21st Century claims representatives have elected to once again deny payments for the repairer’s

The Indiana Autobody Association (IABA) has announced its full support of the Society of Collision Repair Specialists' (SCRS) recent position statement on insurer mandates (see p. 8 this issue). The IABA believes that all repair decisions, vendor selections and business processes should be left to the collision repair professionals who work on vehicles and have been entrusted by the vehicle owners to make correct repair decisions. The IABA also believes that the intent of these mandated programs is not to improve efficiency in any current business process, or for the ben-

efit of the vehicle owner. It believes these attempts are solely driven by insurers and other third parties seeking to make additional profits and gain control of the collision repair business through practices that can be considered extortion and tortious interference, as previously identified in the 1963 Consent Decree (see page 15), and the IABA will pursue to deter these actions using the fullest extent of the law. ASA President Dan Risley has also made ASA’s position clear that it is against all forms of direct repair program requirements to use specific suppliers or products (see p. 19.)

The Mississippi Collision Repair Association and Parts Suppliers are seeking industry support in suit against State Farm and PartsTrader. Over 30 plaintiffs, mostly Mississippi body shop owners, have filed an injunction against State Farm and PartsTrader in an attempt to prohibit the insurer from forcing any Select Service shop in Mississippi to use PartsTrader. The suit was filed Aug. 28 by Jackson, MS-based attorney for the nearly three dozen plaintiffs, John Arthur Eaves, Jr., in the Hinds County, MS, Chancery Court against State Farm Mutual Automobile Insurance Company and PartsTrader LLC.

Plaintiff include the Mississippi Collision Repair Association (MSCRA) OEM parts dealers and other parts suppliers and dozens of collision repair principals, including prominent local repairers John Mosley (Clinton Body Shop) and Doug White (Capitol Body Shop). The suit seeks the court’s declatory judgment and injuction to block State Farm from requiring the PartsTrader ordering process in Mississippi. The requested injunction is to: 1) Prohibit the Defendants from forcing implementation of PartsTrader in the State Farm Select ServSee Suit Against PartsTrader, Page 14

by Barrett Smith

posted labor rates, processes and procedures as deemed to be reasonable and necessary to properly restore their customer’s vehicle. As Such, Quintela, on behalf of and with the full support of his customer, has Eddie Quintela found it necessary to once again file a lawsuit against the insurer on his customer’s behalf for such denials. “As in the past with this company”, states Eddie, “they pay us only after we file suit but before they go before a judge and/or jury. Thereafter they pay in full for every needed material, process and rates for a while… See Quintela, Page 19

Special SNAPSHOT of the Collision Industry, survey by Collision Repair Educational Foundation and I-CAR p. 22

State Farm and PartsTrader Offer More Info on Roll-Out, Use of the System by John Yoswick

Whether or not they participate in State Farm’s Select Service program, shops and parts vendors still have lots of questions and concerns about PartsTrader as State Farm continues its roll-out of the program. Here is some additional information addressing some of those questions that representatives of State Farm or PartsTrader have provided. Roll-out schedule. PartsTrader rolled out in September in major markets in California, Nevada and Utah, and in October in Michigan and Ohio. It will reach major markets in Wisconsin, Illinois, Indiana, Kentucky and Tennessee later this year. Vendor choice. Shops are not required to get price quotes from anyone beyond their designated preferred dealer. In fact, Partstrader’s

Dale Sailer said, the system defaults to sending a job’s parts list only to the shop’s preferred dealer, though the shop can expand the search from this default. State Farm does not get data about whether a Select Service shop’s parts list for a job went only to the shop’s preferred dealer for quotes. A shop can “direct order” a part through the system without waiting for any parts quotes; State Farm does know, however, if a Select Service shop does this. And if a dealer always gives a shop the same discount, the dealer can set the system up to automatically respond with that discount to all requests for quotes from that shop. “Dealers don’t have to hire a whole bunch of people to fill out quotes,” Sailer said. See More on PartsTrader, Page 24

Change Service Requested

P.O. BOX 1516, CARLSBAD, CA 92018

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

2 OCTOBER 2013 AUTOBODY NEWS | www.autobodynews.com

Contents Body Shop. . . . . . . . . . . . . . . . . . . . . . . 6

ABRA Helps Raise $30,000 for Veterans’

Service Dogs . . . . . . . . . . . . . . . . . . . . 38

Alpine Glass’ $150,000 Short-Pay Award

through Arbitration v. AAA Insurance Co.. 6

ASA Michigan to Host Shop Management

Classes . . . . . . . . . . . . . . . . . . . . . . . . 4

CARSTAR Adds a Shop in Wood River, IL. . 6

Insider - Eliminating the “Have Not”

Shops Will Help the “Haves” . . . . . . . . 12

NATIONAL

ASA Launches New Website, Improves

Repairer Tools . . . . . . . . . . . . . . . . . . . 16

ASA President Risley Writes to State Farm’s Ed Rust Jr. Suggesting

Stopping Mandates . . . . . . . . . . . . . . . 19

CARSTAR Adds Another Illinois Shop

ASRW’s New Format Will Be ‘Vastly

EXCEL Trade Show Hosted by AASP/MO

Automotive Instructors Get Special

IABA Golf Tournament Helps Support

Best Way to Research New Product

Illinois Enacts Auto Service Ancillary

BLS Says Collision Industry Production

Illinois Newest State with Electronic

Caliber Collision Opens Two New

in Roselle . . . . . . . . . . . . . . . . . . . . . . . 6 was Major Success . . . . . . . . . . . . . . . 28

the Future Generation . . . . . . . . . . . . . . 18

Products Bill . . . . . . . . . . . . . . . . . . . . . 6

Insurance Proof . . . . . . . . . . . . . . . . . . . 4

Different Experience’ . . . . . . . . . . . . . . 38

at SEMA Show. . . . . . . . . . . . . . . . . . . 16 Rose in June . . . . . . . . . . . . . . . . . . . . 35

Locations in CO and CA . . . . . . . . . . . . 16

Daimler to Sell Self-Driving Production

Marshall Auto Body Donates Vehicle to

Franchitti Reunites with The Henry Ford

SE WI Resident . . . . . . . . . . . . . . . . . . . 4

MI Bill Would Exempt Some Historic

Vehicles from Plates . . . . . . . . . . . . . . . 4

Midwest Collision Center is First Body Shop

in Michigan to Replace Every Fluorescent

Car by 2020 . . . . . . . . . . . . . . . . . . . . 35 and the Jim Clark Lotus-Ford 38/1

Indianapolis Winner as Part of Clark

Tribute at 2013 Goodwood Revival. . . . 26

GA and CA Most Expensive States to

Own a Car . . . . . . . . . . . . . . . . . . . . . . 35

Bulb with LED Lights . . . . . . . . . . . . . . 10

MD Shop Owners Prevail Against Short

and Parts Suppliers File Suit Against

Mitchell Announces its New Reputation

Ohio Auto Insurance Premiums Increased

NABC Partners with ATT on Anti-Texting

Mississippi Collision Repair Association

PartsTrader . . . . . . . . . . . . . . . . . . . . . . 1

by the Largest Percentage in a Decade

Last Year . . . . . . . . . . . . . . . . . . . . . . 16

Ohio Dealership Group is Faced with

Class Action Claim. . . . . . . . . . . . . . . . 10

Russ Darrow Opens New Superstore in WI . 27

Pays—No DRP, No Problem. . . . . . . . . 30

Manager Package . . . . . . . . . . . . . . . . 38

Campaign . . . . . . . . . . . . . . . . . . . . . . 35

New SRS Checklist Available . . . . . . . . . . 37

Quintela Sues 21st Century A Second

Time for Short-Pays, Makes ‘Cents

out of Sense’ . . . . . . . . . . . . . . . . . . . . . 1

State Farm Awards $3K to MN State

SCRS Issues Position Statement on

Vendors Support 5th Annual Chicago

Sherwin-Williams and Online Blueprint

Collision Program . . . . . . . . . . . . . . . . . 4

Automotive Networking Conference

Held September 20–22 at Crown Plaza . . 4 COLUMNISTS

Attanasio - Is Radio Advertising a Sound

• Autobody News has a 32-year track record of providing more in-depth regional news than any other collision repair publication • Targeted 100% to collision repair • Featuring the collision industry’s top regional columnists, experts and reporters • Read by 35,000 collision professionals every month in five regional editions • Advertising packages that get results by reaching your target market

Target Ta arget Success S with Autobody y News. News

AAPEX 2013 Invite . . . . . . . . . . . . . . . 16

Indiana Autobody Association Expresses

Support for SCRS Position Statement. . . 1

Hitting H itti tthe h ttargett ffor 3 32 2 years

Come t sa visit u oth o NACE B 50 5 1 #N

Insurer Mandates. . . . . . . . . . . . . . . . . . 8

Provider Team Up . . . . . . . . . . . . . . . . 38

Snapshot of the Collision Repair Industry . 22

State Farm and PartsTrader Offer More

Info on Roll-Out, Use of the System . . . . 1

The 1963 Federal Consent Decree . . . . . . 15

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Contact: Barbara B Davies, General Manager * (800) 699-8251 Autobody News | P.O. Box 1516 | Carlsbad, CA 92018 | bdavies@autobodynews.com

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Great Lakes

A Flood of Problems for a Negaunee, MI,

Decision For Body Shops? . . . . . . . . . . 36

Indexof Advertisers

REGIONAL

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. ©2013 Adamantine Media LLC.

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Audi Wholesale Parts Dealers . . . . 38 BASF . . . . . . . . . . . . . . . . . . . . . . . . . 5 BMW Wholesale Parts Dealers . . . . 24 Car-Part Pro. . . . . . . . . . . . . . . . . . . 26 Celette Inc. . . . . . . . . . . . . . . . . . . . 15 Certified Automotive Parts Association (CAPA). . . . . . . . . . . 17 Chief Automotive. . . . . . . . . . . . . . . . 9 CJ, Inc. - Signature - Star-A-Liner . . 31 Classifieds. . . . . . . . . . . . . . . . . . . . 38 Equalizer . . . . . . . . . . . . . . . . . . . . . . 6 Erhard BMW of Bloomfield Hills . . . 29 Erhard BMW of Farmington Hills . . 29 Ford Wholesale Parts Dealers . . . . 37 Forklift Wrecker . . . . . . . . . . . . . . . . 12 Ganley Auto Group, Inc . . . . . . . . . 24 GM Wholesale Parts Dealers . . . . . 34 Graham Auto Mall . . . . . . . . . . . . . . 28 Honda-Acura Wholesale Parts Dealers. . . . . . . . . . . . . . . . . . 20-21 Hyundai Wholesale Parts Dealers . 34 Jake Sweeney BMW . . . . . . . . . . . . 30 Jake Sweeney Chevrolet . . . . . . . . 30

KBS Coatings . . . . . . . . . . . . . . . . . 16 Laurel Auto Group of Westmont . . . 39 Lexus Wholesale Parts Dealers . . . 36 Malco. . . . . . . . . . . . . . . . . . . . . . . . 11 Mazda Wholesale Parts Dealers . . . 35 Mercedes-Benz . . . . . . . . . . . . . . . . 13 Mitchell International. . . . . . . . . . . . . 8 MOPAR Wholesale Parts Dealers . . 25 Motor Guard Corporation . . . . . . . . 10 PPG . . . . . . . . . . . . . . . . . . . . . . . . . . 2 PreFab Ads . . . . . . . . . . . . . . . . . . . . 4 Preval Spray Gun . . . . . . . . . . . . . . 40 Rare Parts, Inc. . . . . . . . . . . . . . . . . 18 SATA Spray Equipment . . . . . . . . . 14 Sherwin-Williams Automotive Finishes . . . . . . . . . . . . . . . . . 18, 19 Subaru Wholesale Parts Dealers . . 36 Toyota of Grand Rapids . . . . . . . . . 10 Toyota Wholesale Parts Dealers . . . 35 Valspar Automotive . . . . . . . . . . . . . . 7 Volkswagen Wholesale Parts Dealers. 37 Walcom USA . . . . . . . . . . . . . . . . . . 27

www.autobodynews.com | OCTOBER 2013 AUTOBODY NEWS 3

Vendors Support 5th Annual Chicago Automotive Networking Conference Held September 20–22 at Crown Plaza

Key industry vendors featuring handson demonstrations showcasing the latest technology, tools, parts and more are on the schedule for the 5th Annual Automotive Service Association of Illinois (ASA-Illinois) Chicago Automotive Networking (C.A.N.) Conference, scheduled for Friday, September 20 through Sunday, September 22, 2013 at the Crowne Plaza Chicago O’Hare in Rosemont, IL. The 2013 exhibitor line-up includes AES Wave, ATI, Automotive Seminars, Auto Vitals, Inc., BOSCH, Combined Worksite Solutions, DELPHI, DemandForce, Fox Valley Fire & Safety, Heil Insurance, Herb Kuhn Equipment Sales, IEPA, Jasper Engines, KUKUI, LKQ, Mitchell 1, NAPA Auto Parts, Quality Oil, Snapon and WorldPac. “We are very excited about the vendors we have joining us this year at the C.A.N. Conference,” said Dave Walter, President of ASA-Illinois. “People from all over the United States attend C.A.N., and we expect this conference to be the best we’ve ever had with the vendors,

MI Bill Would Exempt Some Historic Vehicles from Plates

Legislation has been introduced in the Michigan Senate to exempt historic military vehicles from the requirement that they display a license plate unless the vehicle was originally manufactured with lighting and mounting provisions for a plate. Under the bill, if the plate is not attached to the exterior of the historic military vehicle, it must be present in the vehicle and available upon demand by law-enforcement officers. In Michigan, “historic military vehicle” means a vehicle, including a trailer, regardless of the vehicle’s size, weight or year of manufacture, that was manufactured for use in any country’s military forces and is maintained to represent its military design and markings accurately.

ASA Michigan to Host Shop Management Classes

Two shop management classes hosted by ASA Michigan’s Bob Cooper will present: “High Impact Sales” (morning) and “8 Steps to a more Profitable Shop” (afternoon) on Saturday September 28th at Lansing Community College. Registration starts at $75 (includes both 3 hour classes). Seating is limited http://www.thegreatlakesevent.co m/class-descriptions-registrationlink/

instructors and classes we’re featuring this year.” A new element added to the 2013 C.A.N. Conference will be live interviews and streaming video of vendors, instructors and attendees from the tradeshow floor. This will provide conference participants with a unique opportunity to perform equipment demonstrations, share education highlights and conference experiences live from the show. The C.A.N. Conference is open to shop owners, service writers, advanced and intermediate technicians. Don’t delay, attendee and vendor registration is open now. For additional information regarding classes, instructors, exhibit opportunities, online registration and hotel details, please visit the conference website at www.asacanconference.com. Or, contact Sharon Ozimek and Deb Bullwinkel, co-executive directors of ASA-Illinois, via email at info@asaillinois.org or by phone at (877) 272-4445, (773) 919-3875 or (630) 430-3832.

State Farm Awards $3K to MN State Collision Program

State Farm has awarded a $3,000 grant to Minnesota State Community and Technical College’s Auto Body Collision Technology Program, to be used for scholarships and for tools and equipment used by the students. “We are grateful to receive the grant and to have the support of State Farm,” said M State President Peggy Kennedy. “At M State we are committed to educating the region’s workforce, and this will certainly have a significant impact on the Auto Body program.” The Auto Body program, located on the Detroit Lakes campus, offers an associate of applied science degree and a diploma. State Farm Public Affairs Specialist Sonia O’Brien said the company’s support of the M State program is a reflection of its commitment to Minnesota communities, and the company is pleased to be able to partner with the Detroit Lakes campus to help students acquire the career skills they need to succeed.

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4 OCTOBER 2013 AUTOBODY NEWS | www.autobodynews.com

Illinois Newest State with Electronic Insurance Proof

Gov. Pat Quinn signed a new bill into law that allows drivers to provide law enforcement officers with electronic proof of insurance on smartphones and other similar devices when prompted. Effective immediately, drivers will no longer be required to have the traditional paper proof of insurance to avoid a ticket. The option for digital proof of insurance is growing in popularity. More and more insurance companies offer apps for customers to download on electronic devices. The trend toward electronic insurance cards is seen throughout the nation. Illinois is one of 27 states to adopt the policy, according to the Property Casualty Insurers Association of America. Seventeen states have approved electronic proof in 2013. Missouri’s new law takes effect now and Texas’ rule will be implemented Sunday, Sept. 1. The Illinois law relieves law enforcement from any liability for damage to an electronic device when it’s presented as proof of insurance. However, law enforcement is prohibited from accessing any other information on the phone or device.

Marshall Auto Body Donates Vehicle to SE WI Resident

Marshall Auto Body is gearing up to donate a 2004 Buick Rendezvous to a veteran living in Milwaukee, Ozaukee, Racine, Washington or Waukesha County in Southeastern Wisconsin. The company is working in conjunction with The Wisconsin American Legion Foundation to find a recipient for the Rendezvous that was donated by Farmers Insurance. The goal is to help a veteran in the local community because reliable transportation is important and can provide a family with a new lease on life. The American Legion will qualify a deserving OEF/OIF veteran or family living in Milwaukee, Ozaukee, Racine, Washington or Waukesha County of Southeastern Wisconsin for this vehicle. An application is required and must be submitted to be considered to receive this vehicle. Applications can be found by visiting the Marshall Auto Body website or Facebook page. Any OEF/OIF veterans’ and their families living in Milwaukee, Ozaukee, Racine, Washington or Waukesha County of Southeastern Wisconsin can apply beginning Aug. 26, 2013. The application deadline is Oct. 11, 2013.

www.autobodynews.com | OCTOBER 2013 AUTOBODY NEWS 5

Alpine Glass’ $150,000 Short-Pay Award through Arbitration v. AAA Insurance Co.

Alpine Glass of Minneapolis, MN, has been awarded an arbitration award against AAA Insurance Co. for $149,500.57. The award represents 100 percent of the amount sought through arbitration for short pays from the insurer. Mike Reid, president of Alpine Glass, says the company won this arbitration because the insurer was unable to prove Alpine had unfair billing practices. “It’s sad to see glass companies failing as a result of being desperate and accepting reimbursements that are ridiculously below what is fair and reasonable,” says Reid. “Glass companies are losing out by not fighting for a fair price. We have shown time and time again that our prices are fair and reasonable.” According to court documents, “Alpine asserts, as assignee of its customers, that it is entitled to the full amount billed for glass repair and replacement work governed by the terms of the AAA insurance policy. The claims are from July 6, 2006, through May 9, 2012.” “AAA did not conduct a survey of the ‘area where the car is to be repaired,’” writes arbitrator David T. Magnuson in the arbitration award. “The short-pays of Alpine’s invoices was systematic and consistent, but not based upon written estimates, competitive bids or an agreement.

CARSTAR Adds a Shop in Wood River, Illinois

CARSTAR Auto Body Repair Experts has announced that Stock Auto Body CARSTAR in Wood River, Ill., has joined is national network of collision repair centers. Stock Auto Body CARSTAR is independently owned by Kent Eberhart. Eberhart has been in the auto body repair business since 1980 and opened Stock Auto Body in 1987. “We joined CARSTAR to help us gain future sustainability in this changing collision industry for our customers, our employees and ourselves,” said Eberhart. “We congratulate Kent and Suzanne Eberhart on joining the CARSTAR family and their commitment to operational excellence,” said David Byers, CEO of CARSTAR Auto Body Repair Experts. “We are thrilled to expand our collision repair family’s presence in the St. Louis region with this topnotch collision repair center.” CARSTAR is North America’s largest multi-shop operator network.

AAA did not comply [with] the terms of the policy in processing Alpine’s claims.” “Alpine will continue to fight against insurers who short pay our invoices and, if necessary, we will continue to file for arbitration in order to be paid what is right,” he adds. In July 2012, Alpine won a sixfigure award against Liberty Mutual for short pays. Additional wins include six other awards from Illinois Farmers, Allstate, American Family, USAA, Integrity and Guide One. According to the arbitration award, “The dispute arose as a result of claimant Alpine Glass’s insurance policy with respondent wherein claimant pays for glass repair and replacement work, get as assignment for each individual claim, and then submits the claims to respondent AAA Insurance Co. A third-party administrator, in turn, pays pursuant to the insurance policy what they deem to be the amount charged by a majority of the repair market for glass repair and replacement claims.” The recent award is Alpine’s eighth within the last two years; the total of the awards is now approaching $3 million. Alpine Glass has been victorious in all of its arbitration cases. A representative for AAA had not responded to request for comment at press time.

CARSTAR Adds Another Illinois Shop in Roselle

CARSTAR is adding a new location in the Chicago region with a new location in Roselle, IL—CARSTAR Friendly of Roselle—expanding its offering of high-quality collision repair and excellent service throughout the Windy City. Owned by Randy Yockey and managed by Eric Schmit, CARSTAR Friendly of Roselle is located at 333 E. Irving Park Rd., Roselle, IL. Yockey is expanding the automotive complex that includes the dealership and a QuickLane Tire and Auto Center. “As a franchised Ford dealer with 41 years of experience I recognize that quality workmanship, along with communication, drives customer satisfaction,” said Yockey. “Realizing the industry has changed, I decided to entertain opportunities to grow our collision center. Looking and understanding the competition, it has become crystal clear that the CARSTAR franchise has not only the reputation but the strength to propel our business to the next level.”

6 OCTOBER 2013 AUTOBODY NEWS | www.autobodynews.com

A Flood of Problems for a Negaunee, MI, Body Shop

A new body shop that Fox Negaunee Auto Dealers is setting up has created some controversy with the neighborhood. At the most recent City Council meeting, Eastwood Apostolic Church members explained their concerns with the structure located across from their church on Maas Street. The area has had issues with flooding, particularly this past spring. Fox Negaunee is building a retention pond on their property, but the church feels it's not quite enough. "We are not against the building and business; we are against the pond. Get rid of the pond, and if they're going to have the pond, line it and meter the water that's going in the ground so it doesn't cause a problem for everybody else," said Leonard Laurila from the Eastwood Apostolic Church. The building is currently under construction. City officials say they're trying to find a solution that everybody can agree on. The city plans to put a pipe in underneath Maas Street. They hope that will also help divert some of the water that builds up in the area.

Illinois Enacts Auto Service Ancillary Products Bill

On August 9, Illinois enacted HB 1460, which expands the definition of “service contract” in the state’s Insurance Code to include ancillary auto service contracts—that is, contracts related to the repair or replacement of tires, repair of certain damage to motor vehicles, or that provide for protective systems applied to a vehicle. By expanding the definition, the new law requires any provider of such ancillary products operating in Illinois to register with the Illinois Department of Insurance, pay an annual registration fee, and to designate an individual for service of process. Ancillary auto product providers also will be subject to, among other things, financial requirements, disclosure rules, and record keeping requirements, and will be subject to examination and enforcement by the Illinois Department of Insurance. The changes take effect on January 1, 2014.

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www.autobodynews.com | OCTOBER 2013 AUTOBODY NEWS 7

SCRS Issues Position Statement on Insurer Mandates

The Society of Collision Repair Specialists (SCRS) has issued a position statement regarding insurer mandates. It reads as follows: In representation of collision repair businesses across the United States, The Society of Collision Repair Specialists (SCRS) takes exception to business mandates that property and casualty insurers impose upon collision repair businesses; particularly those that specify required vendors, business platforms or internal processes that must be followed in order to be included in, or avoid being excluded from, certain lines of work. As an example, insurer mandates surrounding parts procurement platforms may inhibit independent collision repair businesses from utilizing parts vendors with whom they have an existing relationship, providing insurers with greater influence and control over the parts supply chain. SCRS believes this control falls outside of the scope of the insurance business. Some insurers are stipulating agreement to these terms, as a condition of being recognized in Direct Repair Programs (DRP). SCRS supports efforts that

rightfully seek to eliminate such intrusion into the collision repair business, and enforcement of existing laws, regulations and codes that currently prohibit such actions. It is the opinion of SCRS that voluntary agreements cannot include stipulations which violate existing laws, rules and regulations. SCRS believes that collision businesses are capable of establishing successful vendor relationships and internal processes that will best accommodate the needs of the consumer, and that service providers will continue to respond to the market with increasingly creative solutions that drive performance for their customers and the respective market entities. We believe that solutions with tangible value propositions will be utilized and supported by the marketplace without the undue influence of insurer mandate. The encouragement to embrace open platforms to enhance performance, rather than rely on exclusionary program agreements influenced by one or more of the participants, follows an acknowledgement from State

8 OCTOBER 2013 AUTOBODY NEWS | www.autobodynews.com

Farm Insurance that the nation’s largest carrier is transitioning from “piloting” the requirement to use the PartsTrader online part sourcing and ordering program, in select marketplaces, to a tiered national rollout. State Farm had previously included a provision in its Select Service Agreement requiring participating repairers to agree to utilize automated replacement parts locating services or applications, as specified by the insurer, for ordering and/or sourcing replacement parts. According to SCRS, as the program rollout developed, so did the rules of engagement surrounding it. The organization provided a brief rundown of the history of the program: ● In May of 2012, State Farm issued a video on its B2B website where Auto Estimatics Consultant George Avery expressed: “... repairers are in control of who provides your parts, regardless of the part type. We have worked with PartsTrader on a process that [enables] you to maintain your relationships and negotiated deals with your vendors. We understand that relationships with

your suppliers are important in managing your business, much in the same way we value our relationship with you.” ● In an email distributed within the same month, PartsTrader communicated to suppliers who had declined the offer to participate in the quoting process that: “State Farm Select Service repairers will be placing all parts orders related to State Farm claims via the PartsTrader application from [date]. During our discussion you indicated that this was not in your interest to register online with PartsTrader to participate in the intended parts procurement process. We respect your choice and want to make sure you are still able to receive those State Farm orders. With that stated, it is not our intent to come between the relationships you have built with the shops. This email is to confirm that we have now modified your company’s configuration to be a ‘Fax Only Supplier.’ This means that a repairer can place an order to your company in PartsTrader, and we will send that order to you at the fax number... Note: This

process means you will not participate in the quoting process, and repairers may order from suppliers that have quoted first, then direct order any remaining parts to you via the ‘direct only’ option.” ● Just over a year later, the option to not be a fully active participating supplier was revoked. In an email communication issued in July of 2013, PartsTrader advised Select Service repair facilities in certain markets that: “As you were notified in a previous email, PartsTrader is discontinuing the fax only option for suppliers who choose not to utilize the PartsTrader platform as a fully active participating supplier... When you use PartsTrader after July 31, suppliers which you have nominated to use PartsTrader but have not yet begun to use the PartsTrader application to provide quotes or accept orders, will no longer appear on your system as an available vendor, and therefore will no longer be able to receive orders placed in PartsTrader via fax.... We would of course like you to encourage these suppliers to participate, but you should also identify suppliers for those makes who are participating to avoid any purchasing issues on Au-

gust 1 or later. We can assure you that we do have participating dealers covering every major vehicle make in the [market] area.” According to SCRS, “The rules of the game are changing and it is apparent that maintaining the relationships and negotiated deals of participating repair facilities is only a priority, so long as all involved submit to do business in the manner prescribed by State Farm Insurance, and other carriers with similar programs. Today these mandates address parts sourcing and ordering, but there is valid concern that they open the door to future market manipulation and influence over other similarly critical collision businesses purchasing habits as well.”

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Ohio Dealership Group is Faced with Class Action Claim The Ohio Court of Appeals has upheld class certification in a suit alleging that the arbitration clause in a Clevelandarea dealership group’s sales agreement was unconscionable and unenforceable, according to Eric Freedman writing in Automotive News. The 2-1 ruling against Ganley Chevrolet and Ganley Automotive Stores came in a spot delivery-related dispute that began in March 2001, after Jeffrey and Stacy Felix purchased a 2000 Chevy Blazer. Ganley has asked the appellate court for reconsideration and, if that’s unsuccessful, may seek state Supreme Court review, says dealership lawyer Steven Dever of Lakewood, Ohio. The plaintiffs contend that Ganley told them they were approved for 0 percent financing and let them take home the Blazer. But a few days later, Ganley told them GMAC would approve only 1.9 percent financing, which they accepted. More than a month later, they were told GMAC had rejected them. The dealership then found a bank that would provide a 9.4 percent loan, but the Felixes refused to sign a new agreement at that rate, the decision said. The suit alleges “bait-and-switch tactics,” violation of the state Consumer Sales Practices Act, misrepresentation, and emotional

distress. It includes individual and classaction claims and challenges the validity of the arbitration provision in the sales agreement. A lower-court judge rejected Ganley’s request for arbitration and approved class-action status on behalf of all consumers whose sales agreement with any Ganley store had the same provision. Ganley Automotive Stores has 34 franchises in northern Ohio. The judge found the provision ambiguous and misleading and awarded $200 in damages to each of the “thousands of members” of the class. It covers customers who signed such agreements from two years before the lawsuit was filed in June 2001 until the company changed the provision in 2007, said plaintiffs’ lawyer Mark Schlachet of Cleveland Heights, Ohio. However, only a “handful” of those customers went to arbitration, Dever said. He added: “How can you quantify the harm when people had no complaint? The analysis is fundamentally flawed.” The appeals court held that class-action status was appropriate under the consumer protection law. Appeals Judge Mary Kilbane said the trial judge, who handled the case for 11 years, had “conducted a rigorous analysis into whether the prerequisites for class certification have been satisfied.

Midwest Collision Center is First Body Shop in Michigan to Replace Every Fluorescent Bulb with LED Lights

Midwest Collision Center Inc. announced a major green initiative to replace their fluorescent lighting with LED lighting from Green Universal Solutions Co. (GUSCO) becoming the first automotive body repair center in Michigan to make the change to replace every light with LED lighting. “Besides being responsible in going green with LED, you get so many advantages ... better and brighter light, tremendous savings in energy used, the cost of the energy, replacement and maintenance costs with some of the LED lighting having an L70 rating of 200,000 hours,” says Ed Schippers, co-owner of Midwest Collision. “It really was a no brainer, a win-winwin for our decision to go LED. We win with all the savings... computed to be over $130,000 during first 10 years based on our current energy bills. Our employees win with better, cleaner, brighter, safer LED light. Our environment wins because when we save energy, we save all the pollutants that happen from creating that electricity.” “I also appreciate the way that Steven Kuivenhoven, energy consultant from GUSCO, approached us... in that he had a conversation, he asked questions, listened to us share how our

current lighting was inadequate, he asked for copies of our energy bills, took numerous light readings throughout the shop, then his findings were submitted and a proposal was created by the engineers at GUSCO. He then shared the proposal with us. It was very complete with all data we needed to make a decision,” says Ed and continues “GUSCO even fills out the consumers energy incentive paperwork for us... how great is that?” Joe Brule, coowner of Midwest Collision adds, “The cars themselves are equipped with more and more LEDs. LEDs are everywhere. It’s the best time to upgrade for many reasons including the uncertainty about future electric rates. Consumers Energy supports the upgrade with an incentive and because GUSCO was able to cut our energy 76% we will, according to our company accountant, be eligible for a 179D tax deduction.” “We at Midwest are all anxious to experience the LED lighting with the scheduled installation being the first part of September. “For the sake of our environment, your employees and your pocketbook, I would encourage every auto repair facility to contact Steven at GUSCO 269-779-6005 and learn about the savings.”

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Inside Insurance

The Insider is a corporate-level executive with a Top 10 auto insurer in the U.S.. Got a comment or question you’d like to see him address in a future column? Email him at Auto.Insurance.Insider@gmail.com

Eliminating the “Have Not” Shops Will Help the “Haves” with The Insurance Insider

It wasn’t so long ago that all shops were created equal. If you had tools, four walls and a sign, you could be a body shop. Actually, I should remove “four walls” from the list; there were many “shops” repairing cars that didn’t have one wall, let alone four. At any rate, the qualifications to repair a car didn’t include special equipment or training. Starting a body shop business required not much more than proclaiming that you were a body man. At that time, thankfully, direct repair programs were virtually non-existent. I can’t imagine what we would have done during that time period if direct repair programs were prevalent. How would an insurance company identify which shops to refer their customers to? Even though shops have evolved significantly since that time, the same dilemma exists for insurance companies today: Which shops do we refer our customers to? Without having the intimate knowledge of your shop or your competitors, finding the most qualified shops in a market is as about as easy as developing a national health care plan. Why does an insurance company care where their insureds have the vehicles fixed? There are a lot of reasons. The cost of the repair is a motivating factor in finding the right shop, although it no longer is the most important. Back in the early 1980s when there were more than 70,000 shops in the United States, price was the biggest concern. Customer service wasn’t even on our radar. The quality of the repair was assumed to be no better or worse at one shop than at another down the street. In fact, the biggest concern I had with a shop was determining whether or not the dog in back lot was chained up so I could write my estimate. Everyone was assumed to be able to perform a proper repair. For the younger generation reading this, it’s probably difficult for you to understand what I’m talking about.

To put it in proper perspective, some shops would need to wet down the dirt floor before painting a car. It wasn’t uncommon to see shops pulling fullframe vehicles with anything that was stationary. And one of my personal favorites was watching the old-time

body men use a torch. A torch in the late 1970s and early 1980s was about as useful as duct tape. The industry has changed dramatically over the past few decades and the unprofessional, uneducated shop owner has been replaced. Professional, educated and astute operators have taken the industry to the next level. Now customer service is religiously the topic of conversation. Insurance executives are facing increased scrutiny and pressure to improve customer service scores. Policyholder retention is the lowest the industry has seen. Insurance has become a commodity where price is the single most motivating factor to consumers. There are intense battles happening between the Top 10 carriers for policyholders, as evidenced by the marketing dollars being spent. Ironically, our biggest challenge isn’t finding new customers; it’s keeping the ones we have. Retention is directly correlated to customer service. Unfortunately, the collision repair facility and insurance company typically share a common fate relative to customer service. If the customer likes the shop, more often than not, the customer will like the insurance company. Conversely, if they don’t like you, they don’t like us. Thus, the importance to us of finding the right shop to repair our insureds’ vehicles. Repairing vehicles today poses a

12 OCTOBER 2013 AUTOBODY NEWS | www.autobodynews.com

significant challenge to the collision repair industry as well as the insurance industry. Collision repair shops need to make significant investments in training to remain current with the latest technology and repair methodologies. We recognize that this is critically important to a safe and proper repair. There are still over 40,000 shops in the U.S. How do we find the shops that are the best trained and have invested in their people? The new and specialty equipment required to properly repair many of today’s vehicle should help foster a reduction in the number of shops in the industry. The days of opening up a shop with a tool box and a sign in front of the building are a distant “bad” memory. The challenge is eliminating those shops from the marketplace. We don’t want our insureds’ vehicles in shops that are ill-equipped. Collision repair shops need to work closely with insurance compa-

nies and state and national regulators to eliminate the “haves” from the “have-nots.” Those that have the equipment and training must survive while those that “have-not” should not. The insurance industry can’t do this alone. We need help identifying the “haves.” The industry continues to evolve and the upper class of the industry is growing exponentially. The middle and lower tier shops are shrinking. It would be our desire to increase the pace of this, with the thought that the surviving shops would be better trained and equipped. The sooner we eliminate the “have-nots,” the better it will be for everyone in the industry. The Insider is a corporate-level executive with a Top 10 auto insurer in the U.S.. Got a comment or question you’d like to see him address in a future column? Email him at Auto.Insurance.Insider@gmail.com.

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Continued from Cover

Suit Against PartsTrader

ice shops, 2) Finding the Defendants in breach of the 1963 Federal Consent Decree (and thereby voiding the Select Service agreements), and 3) Stopping the Defendants from interfering in the relationship between customer and shop by delaying service payments or otherwise limiting the use of rentals. The suit alleges that State Farm’s implementation of the PartsTrader system tortiously interferes with prior business relationships that collision repair facilities have with their long standing parts suppliers. (Tortious interference occurs when a person intentionally damages the plaintiff’s contractual or other existing business relationships.) In addition, the suit contends that State Farm is attempting to force the Plaintiffs to breach their legal fiduciary (trustworthiness) duty to their customers, ie. compromising a safe and reliable repair. “The relationship between consumer and repairman has been all but destroyed. The repairman

must do as instructed by the insurance company, not the consumer.” Said attorney Eaves Jr., “PartsTrader and State Farm will effectuate a ‘race to the bottom’ in quality and safety.” And though he says the case very likely will go to court, he is hoping for an out-of-court resolution. “We would love for them not to bring it (the Parts Trader system) to Mississippi. But it would be up to them,” he said. Cheaper parts have indeed been responsible for multiple injuries, said Eaves Jr., who is a former candidate for governor of Mississippi. “Nobody likes to be forced into filing a lawsuit but this is the largest automobile insurer in the country and we have a lot of mutual customers that will be impacted by this,” said John Mosely, president of MSCRA from Clinton Body Shop and a plaintiff in the suit. “We have invested tons of money in our business and State Farm telling us we have to buy through PartsTrader system, is not the best thing for the repair or the customer.” Mosely currently participates in the Select Service program with State Farm.

14 OCTOBER 2013 AUTOBODY NEWS | www.autobodynews.com

In addition to seeking an injunction against implementation of the PartsTrader system, the suit seeks a declaratory judgment that State Farm is operating against the 1963 Consent Decree, entered into by several insurance company associations and the Federal Government, limiting insurer’s activities in collision repair to influence customers. Because of this conflict, the suit seeks to void the Select Service agreements between repair facilities and State Farm. Finally, the suit seeks to keep State Farm from interfering in the contract between the customer and body shops by “causing or implying delay in service payments, appraisal or limitation on the usage of rental automobiles.” State Farm is requiring use of PartsTrader for specified shops in its Select Service DRP but insists using the service is strictly voluntary because membership in Select Service is voluntary. State Farm’s public affairs representative Roszell Gadson said, “Repairers participate in Select Service® on a voluntary basis. Parts Trader is a company that provides an electronic

parts ordering platform to repairers nationwide. State Farm guidelines for the use of parts and part types have not changed due to electronic parts ordering. Estimates are written and part types are chosen by repairers based on consistent guidelines,” said State Farm’s public affairs representative Roszell Gadson. Barry Lewis of Ridgeland, MS, and owner of European Coachworks, says participating in the lawsuit was simple common sense for his business. “I’m just trying to cover us for the future,” says Lewis, “because eventually it’s going to affect us whether you’re in the program or not.” The “program” to which Lewis is referring is also a company doing business as Parts Trader LLC, which was named in the lawsuit as well. While Parts Trader’s website states that the repairer has the final say in which part they should use, the MCRA maintains that State Farm insists their insured drivers receive the cheapest parts available in order to cut repair and replacement costs. State Farm neither confirmed nor denied whether parts purchased through the Parts Trader service were

inferior to those the repair shops claim to use. “There are thousands of examples where inferior parts led to injury,” Eaves Jr. said, citing his considerable experience as a trial lawyer. “This PartsTrader program is the first time this has been implemented. Most of the cheaper parts will be made in countries where quality is not as im-

portant,” he continued. But State Farm says the suit is without merit and that the Parts Trader system is not yet a reality for Mississippi. Preventing it from being implemented in Mississippi is, of course, the point of the suit. “State Farm recently received notice of a lawsuit in Hinds County, Mississippi, related to our electronic parts

ordering initiative and our Select Service® program. We believe the suit is without merit. We intend to vigorously defend the suit,” said Roszell. “The Parts Trader program has not yet even been implemented in Mississippi.” MCRA President Mosley argues that parts ordered from off-shore sites are not upheld to the same standards

of safety as are American-made parts. But the PartsTrader website states unequivocally that it does not recommend specific parts or manufacturers. “Collision parts suppliers providing pricing within PartsTrader must be nominated by repairers like you before we invite them to participate in this market,” says the PartsTrader website.

The 1963 Federal Consent Decree (www.ican2000.com/documents/1963/)

Collision repairers and their representatives have come up with numerous different legal theories about why insurers shouldn’t be allowed to create networks. One of them is based on the now littleknown Consent Decree. In November 1963, the U.S. Justice Department settled a class action suit that it brought against the associations representing some 265 insurance companies, which resulted in their officers signing a “Federal Antitrust Consent Order,” known as the Consent Decree. A consent decree in general is a written agreement in which a company or organization under investigation by a governmental agency agree to

do or not do something in the future – without admitting any past wrong-doing. In this case it settled the class action suit without trial. The signers, three insurance trade associations and their members agreed to forever refrain from several practices, including setting prices and steering. They admitted no wrongdoing but agreed to abide by its terms in perpetuity, meaning it’s still binding on its signatories today. The DOJ filed an action against the associations alleging that they had formulated an “Independent Appraisal Plan” in 1947 “to depress and control automobile material damage repair cost.” The heart of the plan was a scheme to control the work

of independent appraisers who prepared estimates of repair costs and got body shops to agree to them. The Government’s case focused on an insurance industry invention called the Combined Claims Committee (CCC) which was established to control collision repair prices. Basically, each CCC member-insurer selected one favored appraiser or appraisal firm in each market area, to the exclusion of others, to receive all of the participating insurer’s adjusting work, as long as this adjuster worked within the guidelines that the CCC established and controlled. Under the plan, committees appointed by the trade groups would spon-

sor individuals or partnerships to act as appraisers in assigned territories for all association members. In return for the insurers’ agreement to use them exclusively, the appraisers would agree to depress and control repair costs by arranging (when possible) for shops to agree to estimates before they had examined the damaged vehicles, by “establish[ing] strict labor time allowances,” and by “obtain[ing] the lowest possible hourly labor rate.” The DOJ alleged that the plan violated the Sherman Act. In November 1963 (less than a week after John F. Kennedy’s assassination) the Government’s case was See Consent Decree, Page 29

www.autobodynews.com | OCTOBER 2013 AUTOBODY NEWS 15

ASA Launches New Website, Improves Repairer Tools

The Automotive Service Association (ASA) has provided independent repairers access to a web-based advocacy program at the federal and state levels for a number of years. After researching various online advocacy programs, ASA has been working to remodel its legislative and regulatory website, www.TakingTheHill .com. The new website is more userfriendly and designed to move information quickly to members and to policymakers. ASA members are encouraged to visit the newly designed site and sign up for free legislative alerts. “With our Washington, D.C., office on Capitol Hill looking out for repairers, the industry looks to ASA for grassroots advocacy and information. Redesigning this site is one more step in the association’s commitment to provide members with the tools they need to stay informed and be heard on Capitol Hill,” said Angie Wilson, ASA’s vice president of marketing and communications. The TakingTheHill.com website redesign was donated by Autoshop Solutions, the website design and Internet marketing agency that recently redesigned ASA’s main website, www.ASAshop.org.

Automotive Instructors Get Special AAPEX 2013 Invite

Automotive instructors are invited to attend Inside AAPEX for Automotive Instructors on Wednesday, Nov. 6 and Thursday, Nov. 7 at the Automotive Aftermarket Products Expo (AAPEX) in Las Vegas, Nev. Attendees will learn about new technology, meet with manufacturer product managers and trainers, and earn National Automotive Technicians Education Foundation (NATEF) credit hours. The program features education sessions offered as part of the AAPEX Learning Forum that address new technology and timely repair issues including “Direct Injection Update,” “Wallet Flushing?” “New Exhaust Technologies Including the New Clean Diesel,” “Wiring Diagram Color Coding: A Tool for Understanding Electrical Circuits” and “TPMS Smart Maintenance and Repair.” All of the sessions have been approved by NATEF for continuing education credit hours. Each session is accredited for one hour. Attendance certificates will be available at the conclusion of each session. Instructors will have access to the AAPEX show floor to view products and talk with manufacturers.

Ohio Auto Insurance Premiums Increased by the Largest Percentage in a Decade Last Year

The 4.1 percent increase in private passenger auto insurance rates was the largest by far since at least 2002, after years of 1 or 2 percent increases, or even decreases in some years, according to figures released by the Ohio Department of Insurance, which regulates insurance carriers. Ohio is seeing bigger increases now to make up for years of rates being too low, said Mary Bonelli, spokeswoman for the Ohio Insurance Institute, an industry association. “I would suspect that in many cases, insurers had premiums that were so low in Ohio that they were actually losing on their investment in auto,” Bonelli told The Plain Dealer. “There is some catch-up going on.” Because Ohio has the third-highest number of auto insurers in the nation, at 660, many companies have tried to offer rates as low as possible to gain or keep market share, she said. “The competition has been a driving force and continues to be.” Indeed, during the last decade, average rates actually dropped four years, from 2004 through 2007. The Department of Insurance, meanwhile, said that changes in auto insurance rates stem from medical

costs, weather-related claims, the number of cars being driven and repair costs. Among the five largest carriers, Nationwide Insurance had the highest increase, at 9 percent. Progressive Insurance was next at at 5 percent. Nationwide has 10 percent of the market; Progressive has 13 percent. The largest carrier in Ohio, State Farm had a 0.4 percent decrease in rates. No. 3 Allstate had a 3 percent increase. Zurich Insurance had the largest increase among the top 10, with a 26 percent increase. Since 2003, the largest overall increase before last year was in 2009, at 2.3 percent. Even with the 4 percent increase, that amounts to only $2 a month for the average customer, Bonelli said. Bonelli also noted that Ohio still has the ninth-lowest auto insurance premiums, according to 2010 figures, the latest available from the National Association of Insurance Commissioners. Ohio’s average premium is $619 a year; the U.S. average is $791. Those figures are per insured vehicle, so they don’t include drivers of vehicles that are uninsured.

16 OCTOBER 2013 AUTOBODY NEWS | www.autobodynews.com

Best Way to Research New Product at SEMA Show

The SEMA Show annually features a New Products Showcase to provide exhibitors with a designated display to highlight new product debuts, yearly updates and the latest versions of their best sellers. All of the products entered into the New Product Showcase are photographed and include product details and key information on how to locate and contact exhibiting manufacturers. Buyers can obtain a wealth of product information that will be relevant well into 2014 by taking advantage of the free scanners available. Provided via “Free Scanner Pickup” booths located around the New Products Showcase, buyers can scan all of the products they are interested in, while examining and researching additional products exhibitors have to offer. There is no limit to the number of scans buyers can conduct, and the information is gathered electronically, allowing for it to be retrieved or printed immediately. With new exhibitor and product information in hand, buyers can concentrate on making deals and spend more time on the Show floor connecting with existing partners and new suppliers. More information is available at www.SEMAShow.com.

Caliber Collision Opens Two New Locations in CO and CA

Caliber Collision Centers continues its aggressive expansion with the announcement today that it has acquired Mattocks Brothers Autobody in Denver, CO and opened a new location in Tustin, CA. “Today’s opening of two new Caliber locations in Colorado and California reinforces our commitment to add centers that provide the operational consistency, customer focus and cost management our clients require in today’s competitive insurance marketplace,” said Steve Grimshaw, CEO of Caliber Collision Centers. Caliber Collision’s new 13,000 square foot West Denver location opened today at 4171 Morrison Drive, Denver, CO. Caliber’s new 16,000 square foot Tustin location also opened today at 5 Auto Center Drive, Tustin, CA. “Our new Denver and Tustin centers increases Caliber Collision’s locations to 132 as we continue to restore our customers to the rhythm of their lives in Colorado and California,” added Mark Sanders, Caliber Collision Centers’ Chief Operating Officer.

www.autobodynews.com | OCTOBER 2013 AUTOBODY NEWS 17

IABA Golf Tournament Helps Support the Future Generation

On August 22nd, the Indiana Auto Body Association (IABA) held their second annual golf tournament at the Noble Hawk Golf Course in Kendallville, IN. The event took place from 3:30-7pm, to minimize the amount of time shop owners would be away from their businesses. Each four-person team enjoyed hot dogs, drinks and

1st place Team Koester

snacks as they participated in the 9hole scramble. Mike Hartman, President of IABA, shared some insights into the event and some of the association’s other projects. A little bit of rain on the day of the tournament caused a 30-minute delay, but that didn’t stop the 52 participants who were grouped into 13 four-person teams. Team Koester was

the winner of the event. This year’s event attracted the same number of attendees as last year; however, more vendors sponsored the event, with three sponsors at nearly every hole. Hartman notes “our vendors and sponsors really came through this year with some great prizes,” including a flat-screen TV and a golf bag valued at $200. The number of sponsors allowed IABA to distribute door prizes, such as t-shirts, hats and golf balls, to all participants. Hartman enjoyed seeing body shops gathered together in support of the event, mingling with their day-to-day competitors and even playing on a team together. He believe it’s important to give shop owners a reason to “escape the daily stress of the job and interact with competitors, employees and paint representatives;” reps from PPG, Axalta, BASF, Akzo Nobel, Sherwin Williams, and others were in attendance. He also believes that events like the golf tournament emphasize the personal side of the association, showing they do more

than just hold meetings. This year, IABA’s golf tournament raised a bit more money than last year, totaling a little under $3700 combined in the two years the event has been run, but as with any such event, Hartman hopes to gain a little more each year. The proceeds from IABA’s bi-annual convention at Lincoln Tech is used to award two scholarships each year in the south-central area of the state, and Hartman plans to meet with local vocational schools in northern IN soon to determine a way to donate the proceeds from the golf

2nd place Team 3 Automotive Color

tournament to future repairers in the form of scholarships or equipment donations.

Hartman believes “it is imperative that we put the money back into the industry. We raise this money so we can award scholarships to students who want a career in the collision repair industry. We all know there’s a shortage of technicians, so it’s vital that we grab that person who is interested and help them so they can continue learning our trade.” In turn, this benefits the industry as a whole by providing a new generation of repairers with the proper tools and education to safely and effectively repair vehicles. In addition to hosting such events, IABA holds bimonthly meetings for their members, and 284 people are registered for their September meetings which will be held in six locations across the state. With new OSHA training coming due on December 1 in IN, IABA also plans to host some sessions and meetings to ensure that everyone is current with the new requirements. Another ongoing issue that collision repair facilities in IN are currently

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facing is insurers capping the price of paint and body materials on their estimates and even shifting items into the sublet category to avoid taxation. IABA

3rd place Team 2 Automotive Color

has taken notice and is working on the issue. Recently, Tony Passwater, Executive Director of IABA, has attended field hearings hosted by the National

Federation of Independent Business (NFIB) which are also attended by state representatives and senators. Passwater has gained interest by informing these politicians that the state is losing money because the insurance companies persist in doing the wrong thing. Though IABA has been working on this project for a year now, Hartman believes “we were finally able to get with the right group to voice our opinions, and I really think we’re getting somewhere this time.” IABA www.iaba.info/ Mark Hartman, President (260) 837-2802

Continued from Cover

Quintela

then abruptly change back to their old ways. I’m puzzled; as I am confident their company share-holders would be as well, since the insurer has often paid 20 times the amounts in dispute, often paying upwards of $2,500.00 in legal fees and costs for a dispute that may be under $100.00!” “I don’t care” said Eddie Quintela; “it would be much easier for their policyholder if they just paid what they owe without the need for litigation, but when they don’t, I’ll be helping my customer to have their ‘day in court.’ As I see it, they [insurers] can ei-

ther pay fairly now… or pay much more later! “It doesn’t make a lot of sense and even makes less ‘cents’ says Quintela. “It’s no wonder insurance rates continue to climb and it has absolutely nothing to do with the cost of proper repair as the insurers would have people believe!”

ASA President Risley Writes to State Farm’s Ed Rust Jr. Suggesting Stopping Mandates

ASA’s Dan Risley has made ASA’s position clear that it is against all forms of direct repair program requirements to use specific suppliers or products. In a letter dated September 11 to Ed Rust Jr., chairman of the board and chief executive officer of State Farm Mutual, Risley commends the U.S.’s leading private passenger automobile insurer for its past decision to eliminate its requirement to use a specific estimating platform by its direct repair shops. The association also acknowledges State Farm’s scoring system that promotes competition among Select Service repair facilities. However, the association comes out firmly against State Farm’s recent requirement to use the PartsTrader online parts marketplace, stating it will increase a State Farm shops cycle time, negatively impacting customer satisfaction and increasing the insurance company’s costs in the long run. The letter states, “ASA would like to acknowledge State Farm as one of the first companies in the country to not mandate that a collision repair facility utilize a specific estimating platform. For many years, several top 10 insurance carriers required a specific estimating platform to participate in their direct repair program. In addition, State Farm was one of the first to implement a scoring system that allows Select Service repair facilities to compete against each other in a transparent and real-time environment. These decisions clearly elevated State Farm’s position in the industry as a thought leader and facilitated positive change. The letter continues, “In light of the recent announcement of the national rollout of Parts Trader, ASA is taking a firm stance against insurance company mandates that limit a repairer’s right to choose their vendors, distributors and suppliers.” ASA includes three suggestions for State Farm to consider as a startSee ASA to State Farm, Page 27

www.autobodynews.com | OCTOBER 2013 AUTOBODY NEWS 19

20 OCTOBER 2013 AUTOBODY NEWS | www.autobodynews.com

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www.autobodynews.com | OCTOBER 2013 AUTOBODY NEWS 21

22 OCTOBER 2013 AUTOBODY NEWS | www.autobodynews.com

See Snapshot of Industry, Page 32

www.autobodynews.com | OCTOBER 2013 AUTOBODY NEWS 23

Continued from Cover

More on PartsTrader

markets have dropped out of the Select Service program rather than use PartsTrader. But Avery said the program is not part of any plan to reduce the number of shops on the program or shift work toward large MSOs. “That could happen, but this is not an effort to drive the number of Select Service repairers we have,” Avery said. He also noted that more than 50 percent of Select Service shops are independent single-location businesses, a higher percentage than any other large insurer’s program. “That’s not a signal to me that I’m trying to dump the independents,” Avery said. “They are great business partners.” Lawsuit filed. PartsTrader hasn’t rolled into Mississippi yet, but repairers and parts vendors there have already filed suit in an effort to prevent shops from having to use it. The Mississippi Collision Repair Association and more than two dozen body shops, dealers and other parts suppliers al-

lege in the suit, filed in Hinds County Chancery Court, that State Farm’s implementation of PartsTrader tortiously interferes with existing business relationships that shops have with their parts vendors. In addition to an injunction halting State Farm’s implementation of PartsTrader, the suit seeks a ruling that State Farm is violating the terms of the 1963 Consent Decree, which placed limits on more than 260 insurer’s activities related to auto insurance and claims. The suit also seeks to prevent State Farm from interfering in the relationship between a shop and its customers by delaying payments or appraisals, or by placing limitations on the use of rental vehicles. State Farm said the case is without merit and that it will vigorously defend against it. See related story this issue. John Yoswick, a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network (for a free 4week trial subscription, visit www.CrashNetwork.com). He can be contacted by email at jyoswick@ SpiritOne.com.

Russ Darrow Opens New Superstore in WI

Russ Darrow Used Car Superstore opened Sept. 16 at 2800 Ramada Way in Ashwaubenon, WI. The dealership carries 150 pre-owned vehicles and has access to more than 1,000 vehicles within the Russ Darrow Group. The Russ Darrow Group is Wisconsin's all time #1 vehicle retailer. It started as a Chrysler dealership in 1965 and has grown to 15 dealership locations offering Honda, Nissan, Toyota, Chrysler, Dodge, Jeep, RAM, Kia, Mazda, Mitsubishi and Scion. The building was previously home to a Bergstrom Automotive Saturn dealership. The superstore includes a fullservice maintenance and repair facility. Body work will be managed by Russ Darrow Group’s Collision Repair Center in Appleton. Paul McDonald is the general manager, overseeing 25 employees. A grand opening is planned for the fall. The website is russdarrow.com. Russ Darrow Group, headquartered in Menomonee Falls, owns dealerships in nine Wisconsin markets and has more than 600 employees.

Continued from Page 19

ASA to State Farm

ing point to address the industry’s concerns. ● Immediately eliminate mandates requiring collision repair facilities to purchase or source parts using a specific third-party vendor. ● Encourage the use of these types of programs on a voluntary basis with a financial incentive. ● Heavily weight your scoring system to reward repair facilities that are leading their respective markets in parts cost, alternative parts usage, length of rental and cycle time. All of which are key operational metrics that drive overall repair costs. The letter concludes, “Hopefully, our suggestions are viewed as a sincere outreach to devise a solution that is amicable and beneficial to all the industry stakeholders including, but not limited to, State Farm, collision repairers, parts dealerships, parts vendors, ecommerce technology providers and, most of all, our customers.” The complete text of the letter can be read and downloaded at www.autobodynews.com.

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EXCEL Trade Show Hosted by AASP/MO was Major Success During the weekend of September 68, AASP/MO held their 32nd annual EXCEL Trade Show at the St. Charles

more attendees who registered only for the exposition portion of the event. Excluded from the count are attendees who did not register. Reiling notes that two of I-CAR’s courses sold out with 50 attendees in each session; both their blueprinting class and their aluminum seminar were well attended, and participants seemed to gain much needed knowledge that will assist them in their daily repairs. This year, AASP-MO gave out two awards at the EXCEL Trade Show. The award for Outstanding Member of

Convention Center in St. Charles, MO. Executive Director, Ron Reiling, was pleased with this year’s event, noting that it went exceptionally well. The EXCEL Trade Show, which is open to anyone involved in the collision repair industry, featured a plethora of training classes on business management and technology, including several I-CAR classes. Over 200 participants registered for the training sessions, leaving over 150

the Year was given to Tom Barrows of Hi Tech Automotive in Cape Gi-

rardeau, MO, and after 65 years in business, Fritz Aljets of Aljets Automotive in Dorsey, IL received the Lifetime Membership Award. Though this year’s event was comparable to the past three years’ events, Reiling admits “we always want more participation from the industry.” He explains that when EXCEL first began, there were limited options for acquiring training, so that was a big part of what the event provided for their members. Now that training options are more plentiful, AASP-MO “tries to provide training that our members cannot get elsewhere. We have quality instructors to teach our seminars, plus it gives attendees a chance to spend time with other professionals in the industry.” Reiling believes that these type of events are important to members because it allows them to stay on top of what’s going on. The EXCEL Trade Show features training on new technology, plus attendees are able to see new products and equipment which is showcased on the exposition floor. Reiling notes, “our industry is a constant target for training. With so many new vehicles

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and requirements being released, shop owners have to keep an eye on training.”

Moelhenkamp presents Lifetime Member Award to Fritz Aljets

Furthermore, the training offered at such events benefits the entire industry because “better trained technicians make better choices and sharpening their skills leads to better run businesses which improve customers’ perceptions of our industry.” AASP-MO also continues to stay involved with issues their members face on a regular basis. In their recent meetings, topics of discussion included PartsTrader and what Obamacare means for small independent business owners.

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The 1963 Federal Consent Decree (continued from p. 15)

dismissed, pursuant to an agreed order under which the defendant associations were enjoined from pursuing any program that had the purpose or effect of “exercising any control over the activities of any appraiser.” The Independent Appraisal Plan has never been revived, nor has any program or practice which favors chosen damage appraisers or excludes others. In the words of Silvie Licitra, wellrespected collision industry writer and a collision repairer at the time, resultant payoffs and corruption were rampant because the selected appraiser fixed the labor rates, required arbitrary discounts on parts, and held firm to the labor times published in a guide. These appraisers also had shops with which they had unwritten agreements that their estimates would be accepted, sight unseen. “Those appraisers all had their hands out and if you didn’t pay them off, they’d write lousy estimates (creating) a take-it-or-leave-it situation, the shop being faced with losing the job if they didn’t play ball (with insurers).”

Frank Stepanek, chairman of the National Body Shop Committee of the Independent Garage Owners (IGO) of America (precursor to the Automotive Service Association), was quoted in a November 1963 industry publication: “It’s no longer legal for many insurance companies to demand discounts, set the hourly rates, boycott repair shops [and] use specific appraisers.” A number of trade associations were targeted in the years following the signing of the Consent Decree. In March of 1964, Allstate Insurance Company filed suit against 109 members of the Central Jersey Auto Body Association (CJABA), charging them with antitrust violations, conspiracy and price fixing. In July of that year, a judge ordered the association members to sign a consent decree of their own. The embittered members reluctantly settled with Allstate, citing lack of funds to finance a protracted legal battle with the company. In support of the CJABA, an association of central New York body shop owners set up a legal defense fund for the CJABA.

Their spokesman was quoted as saying: “It’s with deep regret that this spirit was not nationwide. I strongly urge every body shop or garageman who looks forward to freedom in his business to alert himself and seek remedies that will maintain our rights and freedoms in the industry.” The legal wrangling went back and forth until the summer of 1967, when a congressional committee called for an investigation into the auto insurance business. U.S. Sen. Philip Hart of Michigan proposed federal oversight of the industry and an amendment to the 1945 McCarran-Ferguson Act as a way to curb insurance domination of the collision repair industry. McCarran-Ferguson effectively shielded the insurance industry from federal antitrust laws by granting states the primary responsibility for regulating insurance. Sen. Warren Magnuson, chairman of the Senate Commerce Committee, made additional calls for investigative probes and even threatened to launch an independent investigation by a special counsel.

Between congressional pressures and Transportation Secretary Don Boyd’s insistence the matter be studied by his department, the White House was prompted to step in. In a message to Congress in early 1968, President Lyndon Johnson called for a thorough investigation into the auto insurance business. “The Consent Decree was like a BandAid,” said Dick Hogg, a suburban Philadelphia body shop owner who remembered the ‘63 action, as well as the business conditions that led to its signing. Hogg also remembers that its signing didn’t usher in a golden age for body shops. “It only gave us temporary relief because like some other laws, there was no enforcement. The terms of the Consent Decree were diluted by the state regulations that are, for the most part, unenforced. The insurance departments give the benefit of the doubt to the insurers.” Since insurance companies hedged their bets with their chosen appraisal firm, they had control. No auto damage claims were settled unless they passed through See Consent Decree, Page 34

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MD Shop Owners Prevail Against Short Pays—No DRP, No Problem by Chasidy Rae Sisk

Anyone who has been involved with the collision repair industry for any amount of time knows how frustrating it can be when insurers refuse to pay the full amount billed for a repair. Many repairers count their losses and move on to the next vehicle, but Mark Schaech Jr., co-owner of Mark’s Body Shop in Baltimore, MD, refuses to take this insult lying down. While he and his partner, his father, would prefer to avoid the necessity of taking legal action, he’s definitely “not taking it anymore!” Schaech knows this is a common problem that shop owners face, so he’s glad to share his experience and advice with collision repairers across the nation. In May 2013, Schaech won his first short-pay lawsuit against GEICO for $392.95. Since then, Schaech won a case against State Farm when the insurer filed a replevin lawsuit (replevin is a legal remedy for a person to recover goods unlawfully withheld from his or her possession) against him, claiming his charges for storage were unreasonable and not competitive

within the market area. Mark’s Body Shop was holding a car while awaiting payment, but when State Farm settled with the car’s owner and took title, they refused to pay Schaech. The repair contract was the deciding fac-

Mark Schaech Sr. with his son Mark, Jr.

tor in Schaech’s victory, playing a huge role “like it does in any other case,” according to Schaech, who added that “it is so important that your documents are in line.” In addition to being paid the full amount owed, Schaech was also reimbursed for his attorney’s fees. He feels the victory was very important since a loss would have given State Farm, and possibly other insurers, precedent for refusal to pay on total losses.

Schaech credits the CCRE (Coalition for Collision Repair Excellence) for his knowledge of such legal actions, noting that “the first time I heard of a shop taking control of their business was at a CCRE meeting.” He followed that up by hiring an industry consultant, Barrett Smith, of Auto Damage Experts and a good Maryland attorney, Anthony DiPaula to support his efforts to take control of his own business. He is also grateful to all of the “attorneys fighting a successful fight.” His next case involved an assignment of proceeds, ammunition he obtained from industry lawyer Erica Eversman, but it doesn’t stop there! Schaech is currently pursuing numerous lawsuits, including one involving an older claim of two short-pays from GEICO and a similar suit against State Farm. The lawsuits that Schaech is currently pursuing are older claims since he has not had any recent problems with GEICO, which he attributes to his successful case in May. Most insurers are paying his operation costs, though labor rates with insurers refusing to pay his full labor rate continue to be a problem. The one exception he

notes is State Farm who always leaves a short-pay, but for now, the customers are paying the difference. Schaech is not taking any additional assignments of proceeds at this time as he has several in progress. Schaech notes, “I would say that 90% of the time, insurers in our market refuse to reimburse our customer for their entire repair bill. These short pays are for reasonable and necessary rates and procedures required to repair our customers’ vehicles to pre-loss condition to the best of human ability. It seems that the larger the carrier, the worse the behavior. It seems like as opposed to fairly paying claims, these carriers would prefer to spend those dollars on advertising campaigns.” Regarding what may cause him to hesitate before filing a lawsuit, Schaech admits that it can be expensive and time-consuming to sue an insurance carrier, especially when the short-pays are small amounts, but one way to combat that is to pile several claims into one case, making it more efficient. His ultimate goal is to handle these cases on his own; as he attends the trials, he is educating himself via his attorney in

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hopes of being able to handle future suits in small claims court on his own. “All I will have to spend is time which I’m more than willing to do in order to ensure my customers are being taken care of,” Schaech notes. The short-pay lawsuit in May was the first that Schaech actually pursued to trial. Because these types of cases are new to the Maryland court system, “it takes a bit of educating the courts that we are contracted by our customers to provide a proper and safe repair and do not have any contract with any insurance companies. But the misconception is that, because the insurance company is paying the bill, they have a right to inject themselves into the repair process when this is simply not the case. Because we are the experts, we carry all of the liability associated with the repair. We are the ones who have to provide a warranty to our customers and stand behind the repairs. We are the ones who know our cost of doing business. Therefore, only a shop can know what to charge for a given repair. The duty of the insurance company, by contract, is to make the customer whole, not to control the price or dictate the repair methodology, all while not sharing in

the liability for those repairs.” Though most insurance companies insist that they don’t pay for certain operations or that a shop is overcharging, Schaech insists, “the collision repair community knows that these are word tracks that insurance adjusters have been trained to use for years, and in most cases, these carriers do pay for that, and the shops that are asking to be compensated are not the only ones asking for these operations and rates.” Schaech was happy when the judge ruled in his favor: “It felt good that the Judge got it. I also feel confident that the courts will continue to find in our favor as courts are in many other states all over the country. It takes a close look at the law and the insurance policies to realize that determining the cost of repairs and the repair methodology is not the business of insurance. In many policies, the insurance company has the option to take the customer’s vehicle and repair it themselves, but if they chose that option, they would have to accept all of the liability that goes along with the repair which is why they do not select that option.” As a proud member of CCRE and SCRS, Schaech strongly encourages

other collision repair experts to stand up for their rights. “I would encourage other shop owners to know their state laws and get a good attorney to work with. There are many shop owners across the country who have been forced to go legal, and these repairers have been an inspiration and have always made time to answer my questions and lend advice. There is unbelievable support available to those who want to learn.” Schaech’s desire to become more involved has also led him to become involved with the Washington Metropolitan Auto Body Association (WMABA) where he sits on the Board of Directors. Schaech also assures other shop owners that the trial itself was not very difficult. “It was easy for us to explain who the expert repair professional is and who decides what the Final Bill should be, and the judge agreed that because GEICO doesn’t know our costs, they cannot possibly determine what we are able to charge.” It is also important to note that Schaech’s lawsuit has not really affected his relationship with GEICO or any other insurers. His problem isn’t with the individuals that he deals with but the company’s policies on handling claims.

Schaech also takes issue with his state’s laws regarding insurance companies breaching contracts and how this affects consumers’ rights. “If a Maryland Insurance Company breaches their contract with the policy holder, and the consumer wants to hold them accountable in a court of law, the consumer is not able to recover attorney’s fees in our state. This really inhibits consumers from taking action, even when it is obvious that they are in the right… I wish the carrier would spend some of those billions of dollars they spend on marketing to properly compensate consumers for quality and safe repairs. I see a lot of poor repairs that have been completed in shops who were not properly compensated for repairs, and this is a consumer problem, especially as it relates to consumers’ safety and the value of their vehicles.” When asked what measures should be enforced to prevent the necessity of short-pay lawsuits, Schaech notes, “If insurers would get back to the business of insurance, selling policies and paying claims, and stay out of the collision business, we would not have to go this route. The reality is that, by law, consumers have the right See MD Short Pays, Page 34

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Continued from Page 23

Snapshot of Industry

32 OCTOBER 2013 AUTOBODY NEWS | www.autobodynews.com

www.autobodynews.com | OCTOBER 2013 AUTOBODY NEWS 33

The 1963 Federal Consent Decree (from p. 29)

The Plan’s sieve, and as you might expect, the dollars that passed through were only those deemed allowable by the insurance industry at large. The typical labor rate for collision repair was between $5 and $6 per hour. Essentially, the selected appraiser fixed the labor rates, required arbitrary discounts on parts and held firm to the labor times published in a guide. In addition, the appraiser had shops with which one had unwritten agreements to accept their estimates sight unseen. According to Silvie Licitra, a well-known collision industry writer whose experience dates from that era, payoffs and corruption were rampant at that time. “It was a real crazy business back then,” wroteLicitra. “Those appraisers all had their hands out, and they were taking money like crazy. If you didn’t pay them off, they’d write lousy estimates. It was a take it or leave it situation because a body shop was faced with losing the job if they didn’t play ball.” In question, however, is the specificity of the Consent Decree to individual insur-

ance companies today. The Decree was signed by representatives of the three major insurance associations at the time: Association of Casualty and Surety Companies (ACSC); American Mutual Insurance Alliance (AMIA); and National Association of Mutual Casualty Companies (NAMCC), all of which are now defunct. Also, despite their seniority in business the majority of the dominant companies today are not on the list of signatories so represented. State Farm (1922), Farmers (1928) and GEICO (1936) do not, for example, appear on the list of companies represented. In addition, communication from the DOJ’s Antitrust Division claims that the consent decree cannot be enforced against individual insurance companies, since the companies themselves were not signatories to the decree. Read the 1963 Consent Decree http://www.ican2000.com/documents/1963/ Content herein draws upon articles published by Charlie Barone and John Yoswick.

Continued from Page 31

MD Short Pays

to choose the body shop that they feel will do the best job, and by contract, the insurance company is supposed to indemnify the policy holder when there is a loss. So, I say ‘just pay the bill Mr. Insurance Company.’” In 1975, Schaech’s father opened Mark’s Body Shop in a two-bay garage. After six years of refinishing cars through high school and college, Schaech managed the family business from 1999–2002 when they moved into their current 17,000 square foot facility. At that point, Schaech Jr. became his father’s partner. Though Mark’s Body Shop repairs approximately 1000 cars annually, grossing around $3 million in sales, they do not participate in any DRPs, but that wasn’t always the case. “There was a time when we participated in as many as five DRP programs, but over the years, these programs developed into bargain basement repair programs. We were asked to use more aftermarket and junk yard parts which we find to be a lower quality alternative to new OEM

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parts. We were instructed to utilize remanufactured wheel and junkyard suspension components which we believe to put our customers in harm’s way. Finally, we were asked to work so cheaply that it became difficult to invest in new equipment and training which is imperative to repair today’s modern vehicles.” To shops that are currently facing difficulties obtaining full payment on repairs, Schaech offers the following advice: “There are numerous organizations and individuals in our industry who really care about consumers and repair facilities. These leaders are only a phone call or email way and willing to provide sound advice when a shop owner or consumer needs some sound advice.” “The reality is not all shops are the same; we all have different costs, different levels of quality, different equipment and training, different certifications, and different fixed costs. It just doesn’t make sense that we can all work for the same price.” Mark’s Body Shop 4025 Mortimer Ave. Baltimore, MD 21215 410-358-5155 www.marksbodyshop.com

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BLS Says Collision Industry Production Rose in June

According to the latest data from the U.S. Department of Labor Bureau of Labor Statistics (BLS), the total production for the auto body repair industry rose in June after declines in both April and May. The total average weekly production in June increased to 6.59 million man hours. The industry’s total production, which we define as the total average weekly hours by month multiplied by the total number of production and non-supervisory workers employed each month, closed June, 2013 at 6.59 million man hours. This represents an increase. from the 6.5 million man hours reported in May. Production hours in June 2013 stood at 1.4 percent above 2012. The decline came chiefly from an increase in average hours worked each week by production employees, up to 38.7 hours in June from 37.4 hours in May. The number of production and non-supervisory employees actually declined in June to 170,300 from 173,800 in May. Added together, the average weekly production over the past twelve months now totals 78.96 million man hours. That is 3.5 percent higher than the 12 month total a year ago.

Daimler to Sell Self-Driving Production Car by 2020

Daimler plans to start selling a selfdriving car by 2020 to help its Mercedes-Benz brand regain the top spot among premium carmakers, development chief Thomas Weber said. “We want to be the first to launch autonomous functions in production vehicles. You can be sure we will accomplish that in this decade,” Weber said. Carmakers and suppliers are working on ways to make driving safer and more comfortable through automation and the race is on to bring the technology to the mass market. Daimler is focusing on so-called highly automated driving, in which cars master situations such as cruising the highway or maneuvering through traffic jams while the driver relaxes. The car would recognize difficult situations such as dealing with traffic lights or urban driving among pedestrians and cyclists, and hand control back to the human behind the wheel. Daimler is not alone in its ambitions. Nissan, for example, has also announced plans to launch a car completely guided by computers this decade. The technology was shown at the Frankfurt auto show, with production estimate to take 10 to 15 years.

GA and CA Most Expensive States to Own a Car

The cost of buying and operating a car varies from state to state and you might be surprised to learn which state is the most expensive. Driving in Georgia will take a bite out of your pocketbook. A new survey by BankRate.com has found that Georgia is the most expensive state in the U.S. to operate a motor vehicle, followed by California. Oregon is said to be the most affordable for those hitting the roads everyday. The cost of gas, insurance, repairs, taxes and fees are all factored into what it costs Georgia residents an average of more than $4,000 per vehicle per year. Residents of Oregon benefit from the lack of a state sales tax, low auto insurance and the fact that they drive 16-percent fewer miles than the national average. Those factors land the state on the bottom of the list at $2,204 annually. The national average for operating a car is $3,201 according to the survey.

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NABC Partners with ATT on Anti-Texting Campaign

As an advocate of the ‘It Can Wait’ movement, the National Auto Body Council issued a call for its members and others in the collision industry to join the nationwide effort to curb texting and driving on Drive 4 Pledges Day, September 19. Drive 4 Pledges Day is a national day of action that aims to have every driver make a personal commitment to never text and drive and to also recruit others to do the same. The NABC is urging drivers to make the pledge online at go-att.us/NABC, a dedicated link created by AT&T specifically for the National Auto Body Council’s efforts. The campaign is a collaborative effort between major wireless carriers AT&T, Verizon, Sprint and T-Mobile. As part of the nationwide Drive 4 Pledges Day, NABC member companies will be implementing a variety of promotional events to educate employees and the public—particularly teens—about the dangers of texting while driving. While texting is by far the biggest distraction on the road, NABC notes that any distraction is dangerous, including phone calls, reading e-mails, eating, changing CDs, fixing makeup, etc.

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www.autobodynews.com | OCTOBER 2013 AUTOBODY NEWS 35

Social Media for Shops

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

Is Radio Advertising a Sound Decision For Body Shops? with Ed Attanasio

Even thought the Internet is continuing to explode and cable TV advertising is flourishing, radio is still alive and well and more body shops are using it, according to people who know—such as: advertising agencies, media buying companies radio stations and body shops themselves. According to Kantar Media, there are nearly 5,000 AM stations and roughly 9,000 FM stations in this country and last year radio advertising dollars increased by 8 percent at the national level and 3 percent locally. While the collision industry is always looking for new forms of advertising and marketing, the word out on the street is that good old broadcast radio is still a viable form for body shops, both MSOs and independents. Phil D’Angelo is a sales manager for three radio stations in northern California (KUIC, KKIQ and KKDV) and has seen how radio advertising has worked well for body shops in his

regions. “We currently have five body shops advertising on KUIC in Vacaville, CA, and they’re happy with the results,” D’Angelo said. “Radio is more popular now, because it offers so many options for companies of all sizes. For regional companies, you’re going to get more bang for your buck with radio, as opposed to other forms of advertising or marketing. People wake up in the morning with the radio; drive to work with the radio and listen to the radio all day at work, so radio travels everywhere and some people listen to it 8–10 hours and more every day. Also, we’ve discovered that the Internet and broadcast radio work hand-in-hand, because radio creates demand and the Internet fulfills that demand. If they hear you on the radio and then see you online, there’s a good chance you’ll get them as a customer.” D’Angelo had to learn the collision game in order to better serve his body

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36 OCTOBER 2013 AUTOBODY NEWS | www.autobodynews.com

shop clients, he explained. “When we started working with body shops, we discovered that their business model is unique, because from what they’ve told us, 80% of all the work comes through the insurance companies. So, the advertising we’ve designed for them conveys a specific message, but branding is also a big part of it. We want the body shop’s name to be in the listener’s head. In the radio business, we call it the consumer’s ‘top-of-mind awareness,’ and it’s very important in the collision repair industry, because getting your car fixed is not an impulse buy. So, when people do get in an accident, they’ve already heard the shop’s name over and over on one of our stations and that’s who they will mention it to their insurance agent.” Chuck Jessen is the owner of PreFab Ads in San Francisco, a company that licenses professionally-produced TV spots to body shops on an

exclusive-by-market basis. These commercials have appeared on 260 local television markets throughout the country and several have won international advertising awards and have been featured on such national TV programs as “Reel TV” and “World’s Funniest.” Jessen is currently producing a series of radio ads to add to his menu of offerings, because his clients are asking more and more for 30 and 60second spots they want to air on local stations. “Some body shops are switching from TV to radio, so that they can target their customers more specifically,” Jessen said. “In the bigger markets, the cost of TV advertising is prohibitive for many independent body shops with modest advertising budgets. If you’re paying to advertise to a certain market and a large majority of it is out of your area, it doesn’t make sense for any regional business to advertise outside

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that area. With radio, body shops can get more saturation and coverage in smaller to mid-size markets, so it’s ideal for body shops that draw customers from no more than 10 miles away.” Radio has a captive audience and Jessen knows from his 30 years of experience what types of radio ads will work in any market, he said. “People are in their cars a lot and commuters aren’t going away any time soon. We’re producing several different types of radio ad, including humorous and instructional. With our TV ads, we already know humor works and community service type themes are always well-suited for the collision industry. We produced a radio ad that conveys an anti-texting message and it gets good reviews, because it’s a warm and fuzzy type of ad that listeners will find useful.” Sharon Wicks is the president of Silicon Valley Media Consulting in San Jose, CA and has seen a recent spike in her clients’ interest in buying more radio advertising time, she said. “Radio is thriving, because it just makes sense for regional businesses that can’t afford a heavy television advertising schedule. Radio has gone

full circle and now it’s back in a big way, especially for companies that value a highly targeted approach.” Wicks has seen more and more of her clients asking about Pandora Internet Radio, an automated music recommendation service that plays musical selections of a certain genre based on the user’s artist selections. The user then provides positive or negative feedback for songs chosen by the service, which are taken into account when Pandora selects future songs. “Advertisers like Pandora, because it is more targeted than conventional radio,” Wicks said. “Pandora has specific demographic information about every one of its users, so you’re getting exactly who you want to reach. When your ad runs, it appears in a pop-up banner-type ad with audio that can be either 15 or 30 seconds in length. Either way, it’s less invasive than a 60-second radio ad and of course, it’s paired with a visual, which gives it more impact.” Rich Villanueva is the marketing manager at Michael J’s Body Shop, Inc., with three very busy locations in San Jose, CA. After much planning and research, Villanueva decided that

radio was the best plan for this burgeoning regional MSO, for several reasons. “We found a local FM station (KEZR) that offered a package we were very comfortable with, so we hired an advertising agency (Kilburg & Associates) that does ads for the San Jose Sharks NHL hockey team,” Villanueva said. “We decided to go with humorous ads and almost immediately we received a lot of positive feedback. We’re basically doing branding with these radio spots, rather than doing promotions. Since this is our first radio schedule, we want to get the name out there and connect the dots with our audience.” Michael J’s had their agency produce seven different ads to run in rotation on KEZR and is now going to create more ads to leverage the fact that one of their owners is a woman. “We’re targeting women with these new commercials, because they represent a large portion of our customer base,” Villanueva said. “Jamie Ryan is one of our co-owners and she’s a great spokesperson for what we’re trying to do. In these ads, we position her as an expert and an advocate, especially for our female market. The message is we

will treat our customers well from beginning to end, by providing them with a stress-free, non-threatening environment when they bring their car to Michael J’s.”

New SRS Checklist Available

Airbag Solutions recently released a new Supplemental Restraints Systems (SRS) estimating checklist designed to allow damage appraisers to more easily identify each of the components required to remain in compliance with OEM service requirements surrounding restraint systems. The free SRS service checklist is available online as a fillin PDF or as a printed download. Douglas Gan, COO of Airbag Solutions, said this brings the company one step closer to its goal of offering a standardized, one-step source for critical OEM requirements to the collision industry. “With the use of this checklist [and our database], appraisers are now able to address each of the critical questions needed to ensure a proper and timely repair. Knowing the answers to SRS related questions before the repair has begun will help to eliminate supplements, reduce cycle times and follow OEM procedures.” See Airbag Solutions at: www.airbagsolutions.com.

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ASRW’s New Format Will Be ‘Vastly Different Experience’

The Opening General Session, sponsored by Axalta Coating Systems, will now offer two concurrent sessions, one for Collision, one for Mechanical, that will combine the best components of a keynote presentation with the industry-specific focus of a forum. The forum’s headlining guest speaker will be Mike Anderson. Admission to the new Opening General Session/Industry Forums are included in all registrations, and all attendees are invited to attend. “Vastly different from past years, we’ve completely redesigned the Opening General Session and attendees can expect a much different experience. Mike Anderson is extremely well-respected, and attendees are going to want to hear his message,” says Dan Risley, ASA president. “The format of this key event also aligns with our mission to create exceptional value for our audience and provide invaluable networking opportunities for the industry and by the industry.” “Axalta Coating Systems is honoured to sponsor this year’s Opening General Session,” said Mike Bennett, North America marketing director, Axalta Coating Systems.

Mitchell Announces its New Reputation Manager Package

Mitchell has announced the general availability of RepairCenter™ Reputation Manager. The new package offering combines real-time text and email updates with advanced customer insights from satisfaction surveys and social media data to improve the repair shop and vehicle owner processes. The tool should help increase repeat business and referrals by providing actionable insight into the customer experience. By adding online customer satisfaction surveys and incorporating comprehensive reporting and analytics technology, repair shops can better identify steps during the repair process that can be improved. “Customer retention and business growth go hand-in-hand, but until recently, repair shops haven’t had the breadth of automated tools needed to improve upon the customer experience,” said Anlin Sethi, Senior Manager of Product Management, Auto Physical Damage solutions. “By incorporating real-time interaction and engagement, alongside robust survey analytics, Reputation Manager allows repair shops to improve their reputation and build stronger customer bases.”

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Sherwin-Williams and Online Blueprint Provider Team Up

ABRA Helps Raise $30,000 for Veterans’ Service Dogs

Sherwin-Williams Automotive Finishes A-Plus™ Network and VehicleOwnersGuide.com, an online provider of blueprint documents that help collision repair shops identify any missed revenues, are providing access to the provider’s Open Claims Gateway™, a full feature claims portal that includes claims workflow, dispatching, estimate review, vendor e-Coupons, consumer translations and analytics. The new dispatching system is already populated with the A-Plus Network’s leading collision repair facilities and will provide a turnkey repair network for insurance companies throughout the U.S. and Canada. The Open Claims Gateway portal will dispatch cars to A-Plus shops, and then these facilities and insurance companies can use the system to manage the claims. “Open Claims Gateway will be provided free of charge to A-Plus Network facilities, and there is no contract to sign. Says Troy Neuerburg, Director of Sales Excellence at Sherwin-Williams Automotive Finishes, “This system offers numerous benefits.” For information call call 1-800-SWULTRA (1-800-798-5872).

ABRA Auto Body & Glass helped to raise more than $30,000 during the first annual Bent Creek Charity Golf Tournament to benefit Helping Paws Inc. More than 100 golfers and guests gathered at The Bent Creek Golf Course in Eden Prairie, MN, on August 12 to support Helping Paws of Hopkins, MN, according to officials. This inaugural golf event is part of Helping Paws’ initiative to connect the healing power of service dogs with disabled veterans suffering from Post Traumatic Stress Disorder. The cost of raising and training a service dog is estimated at $30,000. These canine companions can help to transition returning veterans back to civilian life. “We are absolutely thrilled and proud to partner with important charitable organizations like Helping Paws,” said Duane Rouse, president and CEO of ABRA. “We recognize the amazing accomplishments of our military veterans who served with courage and their unending drive to make a difference for our country. Supporting these training dogs to help heal our heroes is a privilege.”

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40 OCTOBER 2013 AUTOBODY NEWS | www.autobodynews.com