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VOL. 3 ISSUE 2 NOVEMBER 2013
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NACE 2013 Proceeds As Expected, Eyes Turn to Revitalized Show in Detroit in 2014 To no one’s surprise, the 2013 NACE exhibition was a downsized event from previous years, but the Las Vegas-venue may have been the Mike Anderson most appropriate brought his tradelaunching pad for mark mix of humor, experience, consul- what is expected to tation, and evangel- be a revitalized ism to the NACE NACE event in Dekeynote address. troit next summer. Attendance has been down for the past three years, with a slight
uptick for the 2011 show in Orlando, FL. This year’s event saw another attendance dip, which ASA Executive Director Dan Risley says was expected. There were significant successes at the 2013 show such as a popular keynote by industry veteran Mike Anderson and the MSO Symposium which has been growing in attendance, Mike Anderson kicked off the 2013 NACE Expo with a keynote speech entitled “The Future Is Not Set in Stone” at the Opening General Session/Collision Industry Forum.
Anderson’s familiar audience engagement techniques were on display as he employed humor, moving personal annecdotes, and even his
Tourette’s syndrome ticks, as models and metaphors for perseverance, unity and action in the industry. See NACE 2013, Page 4
Autobody News Associations Issue covering some local and national associations outside your area. See pp. 10, 14, 22, 28, 30, and 34. In the Spring, we’ll publish updates on associations from other parts of the country. Tell us about your favorite Collision Repair Associations.
AASPI Board of Directors Releases Statement Denouncing PartsTrader Mandates
shadow of a doubt that the overwhelming purpose of this program is to minimize the shop’s control of their business and expand the profitability of State Farm,” said AASPI President Jeff Kallemeyn. “PartsTrader is crippling the business relationship between shops and suppliers, and ultimately the vehicle owner will receive inferior repairs due to mandated usage of PartsTrader.” AASPI will be hosting a statewide meeting on November 23, 2013 at Pheasant Run Resort in St. Charles, IL, featuring guests from MCRA and their See AASPI v PartsTrader, Page 12
Change Service Requested
P.O. BOX 1516, CARLSBAD, CA 92018
The Alliance of Automotive Service Providers of Illinois (AASPI) Board of Directors has released a statement officially denouncing PartsTrader and supporting the efforts of the Mississippi Collision Repair Association (MCRA) in their lawsuit against State Farm to halt the insurer from requiring that shops in Mississippi use PartsTrader. AASPI’s statement comes on the heels of State Farm expanding its mandated use of PartsTrader beyond the Chicago metro area and into the entire state of Illinois. “PartsTrader and its mandated use by State Farm proves beyond a
AASP-MN Files Formal Complaint with State Dept of Commerce Re PartsTrader Mandates The Alliance of Automotive Service Providers of Minnesota (AASP-MN) has filed a formal complaint with the Minnesota Department of Commerce requesting timely administrative and/or legal action to prevent State Farm from mandating that repair shops use the PartsTrader parts procurement system. The Complaint and Request for Relief is based on State Farm’s violation of Minn. Stat. § 72B.092, subd. 1(6). This provision, enacted in 2007, prohibits insurers from specifying “…the use of a particular vendor for the procurement of parts or other materials necessary for the satisfactory repair of the vehicle.” The complaint states that the mandated use of PartsTrader restricts market options for parts procurement, and therefore should be prohibited as intended by the legislature. AASP-MN was instrumental in getting this provision included in Minnesota law. In May 2007, Minnesota’s Governor, Tim Pawlenty, signed into law a bill, proposed by AASP-MN, that added specifying parts procure-
ment vendors to the list of prohibitions on insurers in collision cases. In addition to existing language providing for an insured’s right to choose a shop and other prohibitions, two additional prohibitions were included to prevent insurers in collision cases from adjusting a damage appraisal without conducting a physical inspection or specifying parts vendors. The law states that no insurer shall: ● adjust a damage appraisal of a repair shop when the extent of damage is in dispute without conducting a physical inspection of the vehicle; or ● specify the use of a particular vendor for the procurement of parts or other materials necessary for the satisfactory repair of the vehicle. This clause does not require the insurer to pay more than a reasonable market price for parts of like kind and quality in adjusting a claim. For more than a year, AASP-MN has corresponded and met with Department of Commerce officials to express concerns regarding the mandated use of PartsTrader in other See AASP-MN Complaint, Page 29
Presorted Standard US Postage PAID San Bernardino, CA Permit #2244
2 NOVEMBER 2013 AUTOBODY NEWS | www.autobodynews.com
REGIONAL
AASPI Board of Directors Releases Statement Denouncing PartsTrader Mandates. . . . . 1
AASPI Opposes State Farm Sand/Buff Policy. 12
AASP-MN Files Formal Complaint with State Dept of Commerce Re
AudaExplore™ Introduces GoTime Line
of Driver Focused Mobile Solutions . . . 35
Auto Data Direct Adds 3 New States
to Database . . . . . . . . . . . . . . . . . . . . . 36
Autobytel Acquires Assets of Advanced
Mobile LLC . . . . . . . . . . . . . . . . . . . . . 12
PartsTrader Mandates . . . . . . . . . . . . . . 1
BASF Joins ASA as Newest Corporate
Jr. Opposing Insurer Mandated Parts . . 13
BMW Asks California Court to Strike
and Networking Event . . . . . . . . . . . . . 26
Bob Stevenson Joins Carbench . . . . . . . . 33
Next April. . . . . . . . . . . . . . . . . . . . . . . 12
Consumer Groups Go to Court to Force
ASA-MI Hosts Great Lakes Training
Auto TECH Expo to Debut in Chicago Baker’s Collision in Mansfield, OH,
Celebrates 60 Years . . . . . . . . . . . . . . . 12
Choice Autobody Repair Association Advocates for Both Consumers
and Repairers . . . . . . . . . . . . . . . . . . . 10
Michigan Cracks Down on Auto Insurance
Fraud, No Fault Blamed . . . . . . . . . . . . 31
Member. . . . . . . . . . . . . . . . . . . . . . . . 33 Class Action in Leaking Sunroof Case . 38
CAPA Tops 60M Certified Parts . . . . . . . . 33 Obama Administration’s Hand on
Back-Up Cameras . . . . . . . . . . . . . . . . 36
Enterprise Makes Amusing Video at
My13days.com . . . . . . . . . . . . . . . . . 31
Faces of NACE 2013 . . . . . . . . . . . . . . . . 27 Independent Garage Owners of
North Carolina Pushes Ahead . . . . . . . 28
NY CTE Students Get Hands-On Lesson in
Lincoln Electric Announces New
Sheep Bolts Farm Truck, Seeks Refuge
NACE 2013 Proceeds As Expected,
Airbrush Painting from Ohio Instructor . . 8 in Detroit Body Shop . . . . . . . . . . . . . . 23
COLUMNISTS
Attanasio - Do Ad Specialties (“Swag”)
Really Make an Impression? . . . . . . . . 18
Welding Devices/Lifters . . . . . . . . . . . . 33 Eyes Turn to Revitalized Show
in Detroit in 2014 . . . . . . . . . . . . . . . . . . 1
NC Shop Won Short-Pay Arbitration in July, Have There Been Changes or
Consequences?. . . . . . . . . . . . . . . . . . 16
Insurance Insider - Cycle Time is
NHTSA Recommends Back Up
Rhode Island’s Don Cushing Wears
Overall Parts Solutions is a NABC Top
Money for Everyone. . . . . . . . . . . . . . . 24
Multiple Hats in Parts Wholesale
Cameras for New Cars. . . . . . . . . . . . . 38
Level Member . . . . . . . . . . . . . . . . . . . 36
and Auto Body Associations . . . . . . . . 22
SCRS Adds Consolidation Tracks to SEMA
Battles for Shops in DC and
SEMA Supports Ban of E15 . . . . . . . . . . . 37
Taking it to the Capitol—WMABA Fights
Nationwide . . . . . . . . . . . . . . . . . . . . . 14
Tennessee CRA Advances Professionalism
Repairer Driven Education . . . . . . . . . . 37
Sherwin-Williams Adds Full Feature
Claims Portal. . . . . . . . . . . . . . . . . . . . 37
& Consumer Issues . . . . . . . . . . . . . . . 30
Sisk - ABAC’s Decade-Long Battle
the Collision Repair Industry. . . . . . . . . 32
Sumpter County, SC, Continental Tire
Yoswick - November Retrospective on NATIONAL
Allstate Plans to Increase its MA
Against the Hartford Insurance Co.. . . . 34
Plant Ready to Roll . . . . . . . . . . . . . . . 17
Todd Chizmar on I-CAR Board . . . . . . . . . 33
Tru-Way’s New Website, Data . . . . . . . . . 33
Workforce by 130 Agents . . . . . . . . . . 33
Urethane Supply Company Offers
Increasing . . . . . . . . . . . . . . . . . . . . . . 38
US Auto SAAR to Hit 16.4M, Highest
Not to Renew 17-Year-Long State Farm
Virginia Shop Owner Says Collision Repair
Allstate Says Usage-Based Insurance
Aluminum Impasse Causes Oregon Shop
Select Service Agreement . . . . . . . . . . 23
ASA-AZ Surveys Wholesale Parts Dealers on PartsTrader Usage, Majority
Not Impressed . . . . . . . . . . . . . . . . . . . . 6
New Welding System. . . . . . . . . . . . . . 37
Level Since 2006. . . . . . . . . . . . . . . . . 33
is Easy Compared to Politics . . . . . . . . . 8
WIN Announces Opening of Most Influential Women Nominations for 2014, Gala to
Welcome We elcome to our Ass Associations socia i ti tions Issue Issu uee which h will run in the fa fall all and spring in future. In addition to covering national tradeshows like NACE and SEMA, Autobody News is dedicated to providing regular coverage of regional auto body and vendor associations. We hope you like the coverage here. Autobody News is pleased to announce that, beginning in November 2013, we have expanded our circulation into eight additional states. These states are North and South Carolina, Tennessee, and Virginia—in our Southeast Edition—and Connecticut, Massachusetts, Rhode Island and Maryland—in our Northeast Edition. This expansion will enable us to reach out to thousands of “new” body shops and provide coverage of these states' regional auto body association activities and industry events. Our readers continue to tell us that our coverage of regional industry news keeps them informed about what’s going on locally and what other associations are doing nationwide. Get in touch with us at editor@autobodynews.com if you have a regional article or event that you’d like the rest of the collision community to know about. Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Contributing Writers: Tom Franklin, John Yoswick, Janet Chaney, Toby Chess, David Brown, Rich Evans, Ed Attanasio, Chasidy Sisk Advertising Sales: Joe Momber, Sean Hartman, Bill Doyle, David Dawson (800) 699-8251 Sales Assistant: Louise Tedesco Art Director: Rodolfo Garcia
Indexof Advertisers
ASA Ohio Writes to State Farm’s CEO Ed Rust
Is Expanding to New Readers
be Held in San Diego . . . . . . . . . . . . . . 19
Great Lakes
Contents
Serving Illinois, Indiana, Michigan, Ohio, Wisconsin and adjacent metro areas, Autobody News is a monthly publication for the autobody industry. Permission to reproduce in any form the material published in Autobody News must be obtained in writing from the publisher. ©2013 Adamantine Media LLC.
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Audi Wholesale Parts Dealers . . . . 36 BASF . . . . . . . . . . . . . . . . . . . . . . . . . 5 BMW Wholesale Parts Dealers . . . . 22 Car-Part Pro. . . . . . . . . . . . . . . . . . . 31 Certified Automotive Parts Association (CAPA). . . . . . . . . . . 15 Chief Automotive. . . . . . . . . . . . . . . 17 Classifieds. . . . . . . . . . . . . . . . . . . . 38 Equalizer . . . . . . . . . . . . . . . . . . . . . . 4 Erhard BMW of Bloomfield Hills . . . 27 Erhard BMW of Farmington Hills . . 27 Forklift Wrecker . . . . . . . . . . . . . . . . . 9 Ganley Auto Group, Inc . . . . . . . . . 10 GM Wholesale Parts Dealers . . . . . 29 Graham Auto Mall . . . . . . . . . . . . . . 26 Honda-Acura Wholesale Parts Dealers. . . . . . . . . . . . . . . . . . 20-21 Hyundai Wholesale Parts Dealers . 29 Infinity 3D Laser Measuring . . . . . . 40 Intertape Polymer Group . . . . . . . . 12 Jake Sweeney BMW . . . . . . . . . . . . . 6
Jake Sweeney Chevrolet . . . . . . . . . 6 KBS Coatings . . . . . . . . . . . . . . . . . 14 Laurel Auto Group of Westmont . . . 39 Lexus Wholesale Parts Dealers . . . 32 Malco. . . . . . . . . . . . . . . . . . . . . . . . . 9 Mazda Wholesale Parts Dealers . . . 33 Mercedes-Benz . . . . . . . . . . . . . . . . 11 Mitchell International. . . . . . . . . . . . . 8 MOPAR Wholesale Parts Dealers . . 25 PPG . . . . . . . . . . . . . . . . . . . . . . . . . . 2 SATA Spray Equipment . . . . . . . . . 16 Sherwin-Williams Automotive Finishes . . . . . . . . . . . . . . . . . 18, 19 Startorius. . . . . . . . . . . . . . . . . . 13, 23 Subaru Wholesale Parts Dealers . . 28 Toyota of Grand Rapids . . . . . . . . . 24 Toyota Wholesale Parts Dealers . . . 33 Valspar Automotive . . . . . . . . . . . . . . 7 Volkswagen Wholesale Parts Dealers. 37 Walcom USA . . . . . . . . . . . . . . . . . . 35
www.autobodynews.com | NOVEMBER 2013 AUTOBODY NEWS 3
Continued from Cover
NACE 2013
“We get caught up in how much things cost, in Parts Trader, in cycle time, and we forget that what matters is how we fix the car,” Anderson said. “When the industry gets a black eye, it affects every single person [in it].” “With insurers, they try to come in our industry and do things to us and not with us,” he said, citing his experience living briefly in Hawaii where he was counseled about developing a more colobarative style while teaching. At the conclusion of his talk Anderson was honored with the 2013 Joe Jackson Industry Champion Award, presented by Axalta Coating Systems, which recognizes collision repairers exhibiting outstanding leadership, charity or humanitarian works.
MSO Symposium The largest Multi-Shop Operator (MSO) Symposium to date was held on Oct. 16 and provided a strong draw to the shops in attendance. It attracted a sold-out crowd of 275 MSOs. “We had the combined benefit of collision repairers and capital market leaders, as well as expert speakers on leadership and decision-making contribute to our interactive event that focused on the current and future state of the U.S. collision repair industry,” said Vincent Romans, The Romans Group, producer of the MSO Symposium. (See the Romans Group Profile of the Evolving Collision Repair Marketplace.) The MSO Symposium was full from start to finish. Several attendees commented it was the main reason they came to Las Vegas for the convention and a few described the event as a kind of speed dating process in which some smaller MSOs vied for attention from the four big players in attendance. “All the major players were represented at this year’s MSO Symposium and the room was a veritable ‘who’s who’ list,” says Ron Nagy, AAM, of Nagy’s Collision Specialists. “This event continues to deliver.” “The representation from both large and small MSOs at the symposium provided a good view of the changing landscape occurring within the industry on an almost daily basis,” says Frank LaViola, Assistant Vice President at Enterprise Rent-A-Car. “These changes
will undoubtedly affect all the constituents within the industry and helps us all be better prepared to tackle these changes.” “The attendance at the MSO was strong and key MSOs were well-represented,” says Shelton Byrd, Sales
Mike Anderson (l) receives the Joe Jackson Industry Champion Award from Axalta’s Michael Bennett
Executive Western Region, Mitchell International. “The overlying message of the panel discussion was the importance of recruiting talented people and fostering their growth.”
Stone Fort Takes Over the Show Major changes will occur in the show management with Stone Fort Group taking over the NACE-CARS show from current show operator Hanley Wood Exhibitions, who has managed the show for the past 13 years. Stone Fort Group offers an experienced team to provide conference management, sales and marketing for NACE and CARS 2014, and will work closely with the association in a similar capacity to Hanley Wood, who will now concentrate on the trade shows that they own. Stone Fort Group co-founders Sean Guerre and Brian Nessen have 20 years of trade show and conference experience, and reportedly have broader international marketing reach than Hanley Wood.
NABC Presented Three Vehicles The “First Responder Emergency Extrication” presentation was delivered by the Clark County Fire Department
Fred Schultz, CEO of Positively Kids, accepts Handicap-Accessible Van donation
4 NOVEMBER 2013 AUTOBODY NEWS | www.autobodynews.com
from Henderson, NV, who conducted live emergency extrication techniques on late model vehicles. The NABC’s Recycled Rides presentations featured three vehicles donated to local community organizations targeting those in need. The first was a specially equipped, handicap-accessible van that has been repaired by Gerber Collision and donated by State Farm Insurance. The van was donated to the Foundation for Positively Kids and will be used to transport medicallychallenged children so that they can receive the medical care they need. NABC also hosted the presentation of two vehicles donated by Allstate Insurance and repaired independently by Caliber Collision and the Van Tuyl Group. The vehicles were donated to the Nevada Partnership for Homeless Youths.
I-CAR Presentations I-CAR offered three technical presentations of its “Repairability Technical Support” initiative, designed to help bridge the information gap between the repair industry and vehicle manufacturers. I-CAR hopes to improve industry access to technical repair knowledge, address gaps in repair pro-
cedures, and enhance industry technical communication with OEMs. “Vehicle Maker Repair Information and I-CAR Technical Support,” stressed the importance of OEM repair procedures, how to access information online and various resources available when accessing them. “Today’s Advanced Vehicle Construction Materials & Safety Systems,” focused on the advanced materials used by car makers and how those materials affect the repair process now and in the future. “Advanced Joining Methods–Understanding OEM Procedures and Repair Processes” covered important repair information on advanced joining technologies, which ones to use in different situations, and how to replace parts following OEM recommendations. All presentations were led by Jason Bartanen, I-CAR director of industry technical relations, and Jamie Boettcher, instructional designer and trainer. NACE and CARS 2014 will take place July 29-Aug. 2 at the Cobo Center in Detroit, MI, and will be co-located with I-CAR and CIC. To learn more about NACE, visit www.ASAshop.org or call (800) 2727467, ext. 361.
www.autobodynews.com | NOVEMBER 2013 AUTOBODY NEWS 5
ASA-AZ Surveys Wholesale Parts Dealers on PartsTrader Usage, Majority Not Impressed
Over 130 people attended an Automotive Service Association of Arizona (ASA-AZ) meeting on the evening of August 13th that featured Dale Sailer from Parts Trader and George Avery, national spokesperson from State Farm Insurance. Mike Anderson of Collision Advice facilitated the meeting in which questions were answered following presentations by Mr. Sailer and Mr Avery. Among those in attendance were two state legislators curious about the program and the impact on constituents. (See John Yoswick’s article on this event in the September Autobody News.) The meeting coincided with the national rollout of Parts Trader in Arizona, Texas, New Mexico and Colorado. Arizona was the first state in which Select Service shops were required to locate and purchase all parts using the relatively new and controversial program without benefit of the “fax only” option. Select Service shops are now only allowed to purchase parts from vendors that agreed to sign a Parts Trader Agreement. As a follow up to this meeting, ASA-AZ sent out surveys to new car
dealerships parts departments. “The overwhelming majority of our collision repair members are opposed to the mandated use of parts procurement programs” stated Luz Rubio, Executive Director for ASA-AZ. “We sent out the surveys to find out how Parts Trader was actually working for vendors and whether they felt it added value to their business.” Thirty OEM vendors replied to the survey with results that were overwhelmingly negative in regards to how parts departments felt the program was working for them. “The results of our survey do not seem to support Mr. Sailer’s claims that Parts Trader has been well received by many of the vendors using it” said Ms. Rubio. One of the respondents commented on the overall program, “We have not seen a value in the program. We pride ourselves on relationships built with repairers throughout the years and find Parts Trader to be an unnecessary part of our business. There are a lot of unanswered questions as to who will pay for the Parts Trader program and how that will affect established relationships and pricing models.”
ASA-AZ released a position statement opposing Parts Trader on July 27, 2012. “Feedback from OEM parts vendors as well as repairers has given us no reason to change our position regarding the use of Parts Trader” commented Ms. Rubio. “Not one collision trade association has come out in support of the State Farm mandate and now, it is clear, that OEM parts departments are also opposed to its use. It is time for State Farm to consider an alternative instead of forcing repair shops and parts vendors to use a program that is both unpopular and ineffective.” The ASA AZ continues to reinforce its position that insurance companies should stay in the business of insurance and leave all aspects of the collision repair process including parts ordering to the collision repair professionals. The Automotive Service Association of Arizona is a not-for-profit trade association of its kind dedicated to and governed by independent automotive service and repair professionals. ASA of Arizona serves a membership base that includes groups from
both the mechanical and collision repair segments of the automotive service industry. ASA of Arizona’s mission advances professionalism and excellence in the automotive repair industry through education, representation and member services. For additional information about ASA of Arizona visit www.asaaz.org. Survey results can be downloaded at Autobodynews.com.
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NY CTE Students Get Hands-On Lesson in Airbrush Painting from Ohio Instructor
Students in the Collision Repair Technology program at the CattaraugusAllegany BOCES Career and Technical Education Center (CTE) at Ellicottville, NY recently received a hands-on airbrush lesson from Tom Banks of the Ohio Technical College Custom Paint and Graphics Training Program. The students used the latest and safest water-based paints as they worked their way through a two-hour series of exercises using a two-stage airbrush. The exercises helped the young painters begin to develop the technique and fine motor control needed for effective painting using an airbrush. “Tom Banks came in and taught the kids using best teaching style: hands-on learning,” said BOCES Instructor Ed Arnold. “Mr. Banks also stated airbrush painting can be a great source of additional income for those with the talent and skill to pursue it.” The Custom Paint and Graphics Training Program at Ohio Technical College is a 12-week,
300-hour, all-inclusive program developed to train body shop technicians in the highly rewarding field of custom painting and refinishing. Students explore the artistic side of painting, special effects and graphic design. Banks said the program blends frame and body refinishing skills with art as stu-
dents learn airbrushing, 3-D paint effects, exotic paint, chameleon colors, flames and more. Students also learn to do pinstriping and apply vinyl graphics, all of which he said can greatly enhance their earning potential and make them more valuable employees.
8 NOVEMBER 2013 AUTOBODY NEWS | www.autobodynews.com
Virginia Shop Owner Says Collision Repair is Easy Compared to Politics by Ed Attanasio
Throughout the years, body shops owners all over the country have run for political office and instituted changes at the local and national level. People have said that the skills accumulated while running a body shop can easily transfer into politics. By negotiating on a daily basis with insurance companies, coordinating literally thousands of details monthly and working with a crew consisting of a wide range of distinct personalities, collision professionals are well-suited for public office, according to Doug Conner, the owner of Conner Bros. Collision Centers in Richmond, VA., an MSO consisting of four locations. Conner, 69, started painting cars when he was 17 and worked for local car dealerships for roughly 15 years. He started his very own shop in 1976 with the help of his wife Jean and his brother Donnie, another painter. “I worked for another shop to learn the business and then got the nerve to start my own,” Conner chuckled. “We signed a three-year
lease and were just hoping to get some cars in here at the beginning. During the first six months, we didn’t know if we were coming or MSO owner Doug going, to be honConner served two terms as a councilest. Our original man in Richmond, location was 3,000 VA, and is proud of square feet. It was the things he did a long building, so for the city, even if we parked them though he ran into complacency and a side-by-side, we lot of red tape could maybe get a total of six cars in the shop at one time. But, eventually, we saved about $10,000 and purchased some land close to our original shop. After our lease expired, we built our first shop. We never needed to borrow any money, which was very fortunate.” Today Conner is semi-retired with his two sons Kevin and Alan running his shops, after serving two terms as a councilman of the ninth district in Richmond, VA. He decided
to run for the first time in 2004, when he began to see an alarming trend in local Richmond politics, he explained. “There was a period of time in Richmond here when we had a lot of council people ending up in jail for a wide range of reasons. For bribery, outright theft and other things—we were really in horrible shape here in Richmond for a few years. I was always under the impression that in order to be a public official, you need to have this degree or that degree, so I never really considered it. But eventually I realized that these politicians might have degrees, but they don’t have common sense. Their job was being a council member and that was it. They were professional politicians, essentially. So that’s when I decided to get interested and involved. I served for six years, completing two terms from 2006 to 2012 and I never bribed anybody or stole anything from anyone.” During his first campaign in 2004, Conner lost in a three-person race, but it was a learning experience, he explained. “So, I ran the next time in 2006 and beat the incumbent in a close race where I won by only 250 votes. It was great, because I knew I
was going to make changes and I was excited about the opportunity to play a role in helping the city. It turned out to be an interesting new experience, with surprises every day—just like running a body shop.” Conner immediately saw that he could apply his skills in the collision repair field to use in the political arena. Said Conner, “All I can say is that body shop owners are more than capable of holding any of these political positions and handling the responsibilities associated with them. A person running a body shop has tons of experience, both professionally and personally that can be easily transferred to being a council person, a congressman or even a senator or a governor, in my opinion. Education helps, but I believe real-world experience is the most important thing required for any job. Serving in public office parallels the collision repair business in many ways, because body shop professionals have to develop skills to make it, such as negotiation (DRPs), networking (community outreach), managing people (employees) and delivering results.” Conner achieved a lot of really good things while being a councilman
ing people for jobs where there is demand in Richmond, like laboratory technicians, pharmacy technicians for medical coding professions, for example. In one year, we can train someone to be a lab tech and we know that companies will hire them, because we’re also working with the Conner Brothers Collision Repair has four locations, but is employers.” looking to open its fifth soon. Here the shop is sponsoring Another significant aca local community car wash. complishment that Conner is for Richmond and is proud of it. “We proud of involves his outsourcing of had drainage issues and problems with the city’s fleet. the infrastructure, so those were essen“We went to Baltimore and tial things that needed to be fixed right checked out a fleet service and deteraway,” Conner said. “We did some mined that we could save $200,000 a band-aid work, but we never really month by outsourcing our city’s fleet. completely fixed it, and if I had won a With roughly 1,000 vehicles and their third term, I am confident we could equipment, it was a huge undertaking. have gotten that done. I ran out of time. The thinking behind outsourcing is just We had some huge projects that were like a shop running on salary vs. comtaken care of and that is very gratifying. mission. The people who were running I started a career and education comthe fleet were on salary. Now, sure mission, which got labor people tothey weren’t making a lot, but they gether working with our schools. It led also weren’t doing much either. By to the establishment of a career training using an outside company, total acfacility, which is being built right now, countability became a part of it and to provide nursing training for welfare there was a huge difference right off mothers and people who need new cathe bat. If you have someone working reers for whatever reason. We’re trainSee Collision v Politics, Page 13
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Chasidy Rae Sisk is a freelance technical writer from Wilmington, Delaware, Great Lakes Associations who writes on a variety of fields and subjects, and grew up in a family of NASCAR fans. She can be contacted at crsisk@chasidyraesisk.com.
Choice Autobody Repair Association Advocates for Both Consumers and Repairers with Chasidy Rae Sisk
Consumers play a vital role in the collision repair industry—and educated consumers are the best customers. Choice Autobody Repair Association (CARA) recognizes the importance of educated consumers as customers and believes that trade associations help repairers perform better for their customers. In fact, President Rick Finney explains CARA’s mission as “to educate the consumers of the collision industry, educate the consumers on their rights, so that if they are ever involved in an automobile accident, they (the consumer) can make an educated decision on who they want repairing their automobile. Give back the Rick Finney choice to the customer about who repairs their vehicle. Make the consumers the decision maker!” CARA is a non-profit association dedicated to educating consumers, and they believe “it is their choice who repairs their vehicle. We’re not anti-DRP or anti-insurance—we’re simply pro-consumer. We want to empower the motoring public with the confidence that it’s their opportunity, right and power to make you their choice.” CARA was established in late 2005 when Finney and several other shop owners in the Ohio Valley decided to form their own, consumerbased organization. “We felt that it was very important the consumers were aware of their rights after being involved in an automobile accident. We have had a very good response from our consumer awareness campaign.” Though CARA is based in OH, they are actually a national association with members throughout the US. They recently started a Southwestern Michigan chapter in Battle Creek, MI, plus they are planning to add many more chapters throughout the country in the near future. Currently, CARA has around 50 members, and they offer both associate and corporate memberships, each of which features various benefits, such
as discounts on BASF management training, Collision Billing Services and a plethora of other purchasing discounts. CARA also makes docu-
mentation available to members, and they distribute informational fliers to consumers. One of CARA’S most important goals right now is to strengthen the association by attracting new members. Finney notes, “Whenever I talk to a shop owner, managers, etc., I hear the same issues, no matter where the person that I talk to is from. Ohio, Michigan, Florida or California, the same issues. We need to attract new membership so that we can better address the issues that we are business owners face on a daily basis.” Other goals include continuing to address industry issues by working with other associations to share information and ideas, in addition to improving matters for their members and their customers. Finney “would like to show our membership that we need to regain control of our business as well as our customer base.” With so many lofty aspirations, it is no surprise that one of the biggest challenges CARA faces, like many other associations, is dealing with the cost of maintaining operations. Finney elaborates, “we have many issues that we need to address, and like anything else, it takes time and money. In my opinion, we as an industry need to start meeting more often with various agencies on a consistent basis and bring to their attention what some of the issues are that our membership faces in their daily business practices. I would personally like to meet with the automobile manufacturers, paint manufacturers and departments of insurance.” In addition to growing their association with new members, CARA is also in the process of scheduling meetings to address some of the issues plaguing the industry, such as the issues related to purchasing paint materials. Addressing the ongoing con-
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troversy of PartsTrader, Finney asks, “what is the benefit for shop owners and their customers? PartsTrader is just another way for an outside entity to control your business. In my opinion, this is bad for our industry, period!” Finney believes that Right to Repair is a consumer issue, and “every consumer has the right to have their vehicle repaired wherever they choose. Having said that, as shop owners, we believe we should have access to the information so that we may be able to properly repair our consumer’s vehicle as well.” When asked about CARA’s stance on the PARTS Act, Finney notes, “I have read in a consumer reports issue that consumer groups estimate the cost of collision repairs would raise by 1 billion a year, nationally, and consumers would foot that bill through their insurance premiums. It is my understanding that
when the insurance industry calculates the cost to the consumer, they are calculated with the repairs installing new OEM parts. As far as the aftermarket parts issue, we keep hearing they are guaranteed to fit and have a lifetime warranty. I believe we would all like to hear how they must be crash tested and be subjected to the same testing as the OEM parts are subjected to.” Overall, CARA’s viewpoint on many industry issues reverts back to their mission statement and their belief that is should be the consumer’s choice as to who repairs their vehicle, as is inherent in the very name of the association.
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www.autobodynews.com | NOVEMBER 2013 AUTOBODY NEWS 11
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AASPI v PartsTrader
lead attorneys in their lawsuit against State Farm. Also making an appearance will be Ray Gunder of Gunder’s Auto Center, who has successfully settled lawsuits with State Farm for underpayments of labor rates, paints and material.
Baker’s Collision in Mansfield, OH, Celebrates 60 Years
Baker’s Collision Repair Specialists Inc. in Mansfield, Ohio, hosted an Open House to celebrate “60 Years in Business” on Saturday, Oct. 5. Baker’s has been in operation by family members since it was founded by Mervin and Esther Baker in 1953. Starting out in a two-car garage on Snyder Street in Mansfield, it has now expanded to its current 40-stall facility that has been located on 5th Avenue since 1956. Complimentary hot dogs and bratwurst, chips and soft drinks were served to attendees. There were facility tours, displays of community projects and door prize giveaways, including an iPad as a grand prize.
Autobytel Acquires Assets of Advanced Mobile LLC
Autobytel has purchased Advanced Mobile LLC, a provider of mobile communications services for the automotive industry. Autobytel said it will offer OEMs and dealers the ability to connect with consumers using a preferred method of text communication, via a secure platform that protects consumers’ privacy. Autobytel will also offer dealers a comprehensive suite of mobile products including apps, websites, Send2Phone capabilities and text message marketing. Advanced Mobile, founded in 2006 and based in King of Prussia, PA, markets a full range of advanced mobile technologies that facilitate communication between dealers and car buyers on smart phones and tablets. This platform will be the core of an array of mobile services Autobytel will offer to its dealer and manufacturer customers, and will also be available to consumers through Autobytel’s websites. “Last year, more than 326 million U.S. wireless subscribers sent more than 2 trillion text messages,” said Jeffrey Coats, president and CEO. “This acquisition enables us to offer the industry the mobile resources it requires to successfully communicate with car buyers in a preferred manner,” Coats said.
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Auto TECH Expo to Debut in Chicago Next April
Auto TECH expo, a refocused automotive aftermarket trade show, makes its debut April 3–5 at the Hyatt Regency O’Hare in Chicago. Formerly known as Showpower, Auto TECH expo will include a wider variety of training seminars for technicians dealing with in-depth diagnostics and drivability issues. Industry-requested seminars addressing transmissions, brakes, steering and suspension, emission controls and shop management will be presented by nationally known automotive instructors, according to Michelle Dickemann, president of M D Publications Inc. “Auto TECH expo is designed for automotive-service providers and those who supply them with the necessary tools, equipment and services to prosper in this expanding and competitive marketplace,” she said. This show is a perfect fit for shops that once offered specialized services but are now expanding to a wider range of offerings to meet the demands of motorists.” With this expansion, Auto TECH expo’s exhibit hall will include more automotive parts, tools, equipment and service vendors displaying their latest contributions to the industry, including online technical and management information. Visit www.autotechexpo.net or call 800-274-7890
AASPI Opposes State Farm Sand/Buff Policy
The Alliance of Automotive Service Providers of Illinois (AASPI) released a statement Monday declaring its opposition to State Farm Insurance’s new “verbally imposed” policy regarding reimbursement of “wet sand and buff” procedures. State Farm, according to the AASPI release, has informed a number of shops that it will not pay for “wet sand and buff” on original estimates. The insurer has not put out a formal, written notice regarding the issue. AASPI regards the process as a standard in the repair industry to duplicate the original sheen by eliminating orange peel and remove any normal imperfections occurring during the refinish process. AASPI is encouraging all collision repair businesses in Illinois to request that State Farm document items they are declining to cover under the policy in writing and forward received documents to AASPI. These correspondences can be sent to issues@aaspi.org.
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ASA Ohio Writes to State Farm’s CEO Ed Rust Jr. Opposing Insurer Mandated Parts The Automotive Service Association of Ohio (ASA Ohio) has sent a letter to State Farm CEO Ed Rust Jr., expressing the association’s opposition against any insurer-mandated parts ordering system. In the letter, ASA Ohio President Joe Sanfillipo III explaines the association’s concerns surrounding State Farm’s new policy, which requires all collision repair shops participating in its Select Service program to electronically order parts through PartsTrader LLC. After a brief pilot program was tried in various locations throughout the country, it has been reported that State Farm intends to complete a nationwide rollout of the plan by the end of 2014. ASA Ohio carefully reviewed the information available on State Farm’s new parts procurement mandate and held open sessions to discuss the proposal. After reviewing the program and hearing concerns from ASA Ohio members, it was determined that the State Farm mandate has the potential to disrupt the relationship between automotive repair facilities and their
parts vendors. Furthermore, the letter describes that the added influence that such a mandate would give State Farm over collision repair market pricing would have a negative impact on repair facilities’ operations and would take even more control away from automotive repair professionals. The letter explains that the most efficient method of ordering parts is in a free market system. Disrupting this process through a single mandated system will negatively affect the relationship repair professionals have developed with their customers, who have trusted them to service their vehicles. In its letter, ASA Ohio encourages State Farm to offer the online parts ordering system to its Select Service network on a voluntary basis. Should the electronic platform prove to be efficient and improve the automotive repair process, then ‘certainly’ the industry would adopt the program.
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Collision v. Politics
for commission or flat rate, they’re obviously going to be more motivated. By outsourcing our fleet, we saved several million dollars every year, because it’s 100% based on performance, so we’re not paying for people or cars sitting around doing nothing.” After a year in office, Conner began to see the bad side of politics and it’s called inactivity. “When it comes to government, nobody wants to stick their necks out, because they’re afraid to lose their jobs,” Conner said. “So nothing happens except for a lot of talking and posturing. They’re real good at coming up with reasons not to do something. It’s very tough and if you want to achieve anything, you have to stay on it and work at it. It takes a long time and that’s why we have so many problems in this country—the inactivity can kill you. “In planning, for instance, it’s all about what you can’t do,” Conner said. “For example, some of the sign ordinances in this city are ridiculous. They would block new businesses from getting new signs, for example, with these
lame restrictions, but I told them, ‘How do you expect new businesses to come here when we won’t even let them have a sign?’ We need new businesses to become successful, so that we can build up our tax base and offer services to our folks, but you’re going to wrestle with this small business owner about the size of his sign? It’s in a commercial area, I told them, but you would think we’re in Hollywood, the way they were reacting. In every situation, I was advocating small businesses and their rights, because that’s where I came from. But, red tape will slow you down and discourage you, because there is so much of it. It took a lot of time and effort, and I did get some things done, but it was tough.” Accountability was something else that Conner eventually realized was non-existent in local politics, at least in the city of Richmond. “The average politician talks a lot and makes a bunch of promises. They’re hoping that people eventually forget about what they said. If you do what you say you’re going to do, people will remember that, you know? I feel like I was different because I followed through and cared and that’s the most important thing I can say about that.”
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Associations Assembling with Chasidy Rae Sisk
Chasidy Rae Sisk is a freelance technical writer from Wilmington, Delaware, who writes on a variety of fields and subjects, and grew up in a family of NASCAR fans. She can be contacted at crsisk@chasidyraesisk.com.
Taking it to the Capitol—WMABA Fights Battles for Shops in DC and Nationwide In existence since 1968, the Washington Metropolitan Auto Body Association (WMABA) has spent the past 45 years supporting member shops and acting as their members’ voice for business and legislative concerns. The organization was founded by DC-area shops who sought to work together to combat some of the common issues facing the collision repair industry. Since its inception, WMABA’s efforts have been focused on addressing shop issues and continuing education on a local and national level, including aspects regarding legislative issues. Because they emphasize the importance of addressing issues on a larger scale, many WMABA members have also played a key role in establishing larger national associations, including the Society of Collision Repair SpeJordan Hendler, cialists (SCRS) of file photo which the association is an affiliate. WMABA’s service area encompasses MD, VA & Washington DC, and as the association continued to grow, they absorbed the Virginia Auto Body Association. In 2007, Jordan Hendler became the Executive Director of WMABA. Through her previous work with SCRS, NABC and CIC, Hendler has gained insight into collision repair markets and trends across the United States, and in her current role, she participates in national industry forums, such as SCRS and CIC, to address issues and try to affect positive change for collision repairers. On a day-to-day basis, WMABA focuses on maintaining active involvement with current legislative initiatives in VA and MD, meeting with legislators and shop representatives, as well as participating in national groups. Additionally, WMABA conducts an annual labor rate survey for the region in order to report their findings to individual shop owners, local government and the industry at-large. Hendler also assists with addressing issues at a shop level, including documentation, OEM service providers and other problems that impact shops during their daily operations.
Hendler notes that the main challenge WMABA faces is keeping shops informed and involved with issues in the industry, including education, yet she notes, “I don’t feel that we’re alone in that; most associations deal with the same problem.” One way they strive to combat these types of issues is through the publication of their monthly magazine Hammer & Dolly, as well as their quarterly membership newsletter which serves to disseminate relevant information and generate shop involvement within WMABA’s service area. WMABA serves their members by offering representation in legislative matters, both locally and nationally, in addition to working with individual shops on their issues, such as in the instance of short-pay cases. The association also strives to keep their members educated and informed through their magazine and newsletter, as well as by holding educational meetings and seminars. They act as a resource for vendor and insurer contacts, but most importantly, WMABA is at their members’ disposal when they face any type of problem or have general questions. Still, despite the many services WMABA provides to their members, Hendler claims that the biggest benefit members get from involvement with the association is “our peer network which gives them the opportunity to compare the issues they face with what other shops are going through. It lets them see that others are experiencing the same problems, and we’re all in this together.” Regarding the challenges facing the industry as a whole, Hendler believes “shop awareness is the biggest hurdle. If all shops were aware of the proper repair techniques, tooling and education, these issues wouldn’t be as hard as they are, but many repairers don’t know how to gain access to proper information. Those who don’t know are affecting those who do. It’s not necessarily on purpose, but it is ignorance nonetheless.” Hendler also notes that the advancement of vehicle technology, tooling and regulations is another challenge as it raises shops’ costs at the same time that insurers are becoming stricter in their payment of operations and services, especially for independent shops that do not participate in their direct re-
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pair programs. Thus, the cost of operation is steadily increasing while the ability to earn a profit decreases. Though PartsTrader has been a ever present news item for over a year now, WMABA has not taken a stance against their business model specifically but instead is against any insurermandated program that dictates which vendors can be used. “It is an interference in the collision repair business,” says Hendler. In fact, the association is currently working on legislation and an agenda to address the process of mandating parts or supplies. Why is WMABA’s legislative work so important? Hender explains, “it is one of the few options left to us to address these problems since the insurers are not willing to stop their pursuit.” Legislation also benefits the consumer because it “helps keep the free market free… if insurers become more involved in all aspects of collision repair, they reduce the shops’ ability to operate properly and
give the customer the widest capacity of options for a safe repair.” Hendler admits that there are challenges inherent in the legislative process, noting “it’s arduous at best.” In order to get new legislation to pass, WMABA must meet with legislators to convince them that the matter is in the best interest of their constituents, the consumers, and then, the legislators must vote. Hendler notes that the process is long; “we have to go through all of the committees and hearings to get the vote without the opposition tearing it down.” Luckily for WMABA members, Hendler is not easily discouraged and will continue to fight on their behalf to make the collision industry better for everyone involved. Washington Metropolitan Auto Body Association (WMABA) 804.789.9649 http://wmaba.com/ info@wmaba.com
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NC Shop Won Short-Pay Arbitration in July, Have There Been Changes or Consequences? by Chasidy Rae Sisk
In July 2013, Michael Bradshaw, VP of Operations at K&M Collision in Hickory, NC, was victorious in a court-ordered arbitration against Nationwide for a short-pay lawsuit filed on behalf of a body shop customer. We wanted to know what’s happened since. The underpayments were determined to be reasonable and necessary repair costs, but the problem continues as Bradshaw reports that this issue is an ongoing and common with several specific insurers, including Nationwide and GEICO. Currently, Bradshaw is pursuing six short-pay cases against Nationwide, three against GEICO, and one against Allstate. Still, his pursuit of full payment has not yet impacted these insurers’ practices. Bradshaw notes, “they come out and refuse to pay for the same things they just lost. Their attitude is ‘sue us again,’ and I do.” On a positive note, Bradshaw says that some other insurers who are aware of his short-pay cases have “chosen to do the right thing and pay
the full repair bill because they know they’ll get tied up in the same litigation if they don’t.” In Bradshaw’s July victory against Nationwide, the insurer’s short-pays included: labor rates ($48 Body & Refinish, $80 Mechanical and $65 Frame), procedures (i.e. sand and buff, final detail, road test, color tint and collision access time), invoiced paint & materials, sublet markup, fixture usage and a $250 Damage Analysis fee which included a comprehensive part by part inspection of all components including: exterior panels, inner structure, mechanical components and SRS and seat belt systems. The award also included storage charges at a rate of $50 per day for the total amount of $2,506.98 plus accrued interest until the insurer’s full payment is made. “I’m glad the courts recognized whom the repair experts were.” says Bradshaw. “From the beginning I was very confident we would succeed through our legal system in proving all our charges to be both reasonable and necessary. For any insurer to expect all shops to operate by the same rates, procedures and charges regard-
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less of training, manufacturer certifications, equipment and facilities is ludicrous. The fact is we have made a commitment to repairing vehicles properly, adhering strictly to all manufacturer repair methods and guidelines and what we’re consistently finding with some insurers is they care very little about manufacturer certifications and proper repairs and only about bottom line cost and the cheapest repairs possible. My Father (CEO) and I decided if we were going to stay in business and continue to repair vehicles properly we could no longer accept insurer dictated repair costs. We found that short-pay litigation was necessary to stop insurer underpayments and provide our customers with the factory certified repairs their policy affords them.” Bradshaw credited assistance and advice from Erica Eversman, Ray Gunder, Barrett Smith and many other industry experts as well as his legal team of Jason A. Orndoff and William E. Morgan for his legal victory. Bradshaw admits that there are challenges to pursuing short-pay
cases, such as the difficulty of waiting to receive the money rightfully owed to him. He also notes that there has been a great deal of pushback from certain insurers who go out of their way to steer customers to other shops. “I hope our actions and results encourage other quality-minded repairers to seek similar actions against the less than ethical insurers. We learned a great deal in this initial case and I have had to embark on two more cases against Nationwide for shortpays in the amounts of $5,663.24 and $10,135.52. I’m confident we will prevail as I know we are in the right. I know such actions are necessary to stop such behavior and to best serve our community members, our employees and our company,” Bradshaw said. “We’ll continue to share our efforts with others so they may know that they no longer have to accept insurer dictation of repairs, rates, materials and charges.” Bradshaw hopes that his victories in pursuing short-pay cases “will make it easier for other shops to pursue them. Maybe we’ll even get to the point where the insurance companies
just do the right thing instead of forcing shops to pursue litigation in order to get paid what they are rightfully owed.” For shop owners interested in pursuing a short-pay case, Bradshaw advises you to start by finding a knowledgeable attorney who is willing to learn about the collision repair industry and to consult with other attorneys across the country. It is also imperative that you are “meticulous in your documentation, especially the repair contract.” Bradshaw believes that the solution to preventing such lawsuits from being necessary is multi-faceted. First, it must begin by “educating shop owners and their personnel as it relates to what is necessary for proper
repairs and how to bill accordingly. Because many shops don’t do this, the ones who do look like the bad guy to the insurers.” Next, more legislation is needed to dictate what the insurance companies are required to do when paying for a claim. Finally, consumer education is key; “we need to teach consumers to purchase proper insurance coverage from a carrier who will reimburse them fairly in the event of a loss.” One of Bradshaw’s suits against Nationwide involves a vehicle which was declared a total loss midway through the repair, and Bradshaw is in the midst of a battle to receive payment for the work completed thus far.
Sumpter County, SC, Continental Tire Plant Ready to Roll Nearly a year and a half after breaking ground, the new Continental Tire the Americas plant in Sumter County, SC, is nearly ready to start production. The 1 million-square-foot facility is slated to begin production by January 2014, but could start even before then. “We hope to begin in January 2014, but we’re striving to do better
than that,” Tom Tompkins, a plant engineer, told local media. “Most of the machines are functional. They’re just in the testing phase. We’ve already produced test tires as a finished product.” When production begins, the plant will produce an estimated 4.5 million tires a year, with capacity expected to increase to 8 million by 2021.
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www.autobodynews.com | NOVEMBER 2013 AUTOBODY NEWS 17
Social Media for Shops
Ed Attanasio is an automotive journalist based in San Francisco, California. He can be reached at era39@aol.com.
Do Ad Specialties (“Swag”) Really Make an Impression? with Ed Attanasio
As I start to pack for my annual pilgrimage to SEMA, I’m thinking about all those overloaded shopping bags carried through the exhibit halls bulging with what we know in the business as the advertising specialty. Anything emblazoned with your company’s name: pens, scratch pads, key chains, calendars, baseball caps, mugs, bags, foam footballs, clocks, and bottle openers—is called an ad specialty. Although some simply know them as “swag” or “chotchke,” other people call them “things that sit around my office.” I’m guilty of enabling my hoarding tendencies this way. We’re so used to seeing them that it may be a surprise to learn that the automotive industry is by far the largest user of these promotional items. Some people (including me) delight in collecting pens and baseball caps while others argue that most ad specialties end up in the roundfile and then the landfill. What will future civilzations think about us when in the year of 2220, archeologists dig up tons of coffee mugs and refrigerator magnets that say “Bill’s Body Shop” or “Tom’s Auto Collision”? Will they laugh and point out ad specialties as a token of our society’s eventual demise? Many companies use them as an effective form of branding and advertising, particulaly for businesses that have infrequent contact with their customers, like body shops. If you’re a body shop and spending a significant amount of money on ad specialties, you should always ask yourself ‘are they a good use of my advertising money?’ Have you ever encountered a customer who actually said, “I saw your name on a desk pad and that’s why I brought my car here.” The Advertising Specialty Institute (ASI) is the largest media, marketing and education organization serving the $19.4 billion promotional products industry, with a network of over 25,000 distributors and suppliers throughout North America. ASI’s CEO is Tim Andrews and I had a chance to talk to him recently about the power of the ad specialty and how automotive repair businesses can benefit from using them. “For impressions, ad specialties
are by far the most cost-effective form of advertising out there,” Andrews explained. “Every time someone sees your name on a pen or a key chain, that’s called an impression. During lean economic times, ad specialties are an ideal solution for smaller companies that need to get their names out there, but they can’t afford other forms of conventional advertising. Ad spe-
shirts, recognition items (awards, plaques), caps/headwear, flash drives, health and safety products, desk/office accessories, and bags, according to Andrews. ASI provided several statistics that are worth noting when making decisions on promotional products. ● Nearly nine in ten (87%) recipients of promotional merchandise can iden-
“Nationwide the automotive industry buys more promotional items than all other consumer product companies combined” — Advertising Specialty Institute
cialties are remembered and kept and many of them are used by people for many years, based on our research.” Getting a high-quality ad specialty and personalizing it for your current customers is also a great way to further strengthen your position with your customer base, Andrews says. “For your return customers or top influencers in your community, personalization is a unique way to really connect even more with your mostprized contacts. If someone has a tshirt or a pen with their own name on it, they will logically keep it for a much longer period of time. It creates additional value and the impressions derived from a personalized ad specialty can be ten times higher, in some cases.” Also, instead of buying 2,000 cheap plastic pens, for example, maybe purchase a smaller number of higher-quality pens, in order to keep them in the hands of your customers longer. “The more they use that pen, your brand name and logo will remain further in the top of their minds, which means your efforts will grow exponentially,” Andrews said. “An inexpensive pen or key chain might get discarded after limited use, but if the end-user values it and sees it as being special, it will remain on their desk and in their possession for a much longer period of time. It just makes sense.” The products that leave the most positive impressions and those that recipients keep longer are: outerwear,
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tify the advertiser on the item. ● Over one-half (52%) of the time, ad specialties leave a more favorable impression of the advertiser. ● Promotional products deliver the same or a better ROI than other forms of media.
● 81% of product recipients indicated that an item’s usefulness is the primary reason to keep it. ● There are nearly 8,000 different automotive-related promotional products currently in ASI’s database. ● The automotive industry buys more promotional items than all of other consumer product companies combined nationwide. ● Study results show that most people own approximately 10 ad specialty items on an on-going basis and hold on to them for an average of six months, a far longer time period than any other traditional form of advertising. What’s your ultimate goal in giving a pen, hat or key chain away? Who’s your target audience? Are you trying to reach out to prospective customers? Or, are you staying in touch with your VIP clients, those who seem to get into more accidents or have higher-end vehicles? Are you doing a campaign targeting your vendors, in-
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surance agents, local community leaders or organizations? It all comes down to finding your target market and continually branding. Many automotive-related businesses use ad specialties as one of their main forms of marketing. For example, glass replacement companies often distribute scratch pads, desk calendars, and other items to auto body shops. Since most body shops frequently work with several glass replacement companies, it’s a good idea for them to keep their name and phone number in front of them. Car dealers often provide license plate brackets to their customers with the dealer’s name and logo—nine times out of ten the customer never thinks about it again, but the dealership is being advertised
to everyone who sees that new car and thinks about buying that model for themselves. So, as I run around at SEMA, loading up on pens, hats, key chains, scratch pads and any else I can get my hands on, I will be thinking about the power of the ad specialty. Ad specialties are a useful form of branding and that’s why they’ll continue to be an integral part of the marketing and advertising efforts of almost every body shop in this country today. Recently, for example, a company that manufactures and sells these items sent me a nice little key chain flashlight with my name and company printed on it. It’s something I might actually use, if I can find room on my already overloaded key chain.
WIN Announces Opening of Most Influential Women Nominations for 2014, Gala to be Held in San Diego The Women’s Industry Network announced that nominations for the Most Influential Women (MIW) Awards will open on Thursday, Oct. 17, 2013 and will be accepted through Tuesday, Dec. 31, 2013. The winners will be recognized at a gala held during the 2014 WIN Educational Conference, May 5-7, 2014, at Paradise Point in San Diego, CA. The MIW award recognizes women who have enriched the collision repair industry with their leadership, vision and commitment to excellence. “Being recognized as one of AkzoNobel’s Most Influential Women in the collision repair industry was si-
multaneously humbling and empowering,” said Linda Sommerhauser, owner of Autobody Color Co. in Kansas City, MO. “I was humbled because I knew that there were so many within the industry who could have just as easily been recognized for their many contributions. However, I also felt empowered because I was now part of a recognized community of leaders who were committed to making the path a little easier for others to follow.” In addition to the MIW awards gala, where honorees are presented with a Tiffany’s crystal award and custom commemorative pin, WIN has added a new element to the program this year. Recipients will have the opportunity to invest in the future of collision repair by mentoring a WIN scholarship winner as they continue their education toward a career in the industry. “We felt this was an important way for seasoned professionals to embrace the future of our industry,” said Margaret Knell, chair of the MIW Planning Committee. Honorees have held positions in every facet of the collision repair industry, as shop owners, body and paint technicians, managers, wholesalers, lobbyists, suppliers, insurance adjusters, consultants, educators, editors and writers, and industry association directors. “Being honored as a Most Influential Women in 2011 was an amazing experience,” said Barbara Davies, co-owner/general manager of Autobody News. “I was thrilled to be a part of such an impressive group of women from so many different parts of the industry. Having the opportunity to get to know this group of smart, inspiring and creative women has been the highlight of my career in the collision repair industry.” The MIW program’s charter aligns with WIN’s mission to “enhance the role of women in the industry” and has recognized more than 75 women for their professional accomplishments and for going beyond requirements of their positions to give back to their communities. Although WIN membership is not a requirement for nomination, more than 30 percent of MIW recipients are currently, or have previously been, members of WIN.
www.autobodynews.com | NOVEMBER 2013 AUTOBODY NEWS 19
20 NOVEMBER 2013 AUTOBODY NEWS | www.autobodynews.com
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Northeast Associations with Chasidy Rae Sisk
Chasidy Rae Sisk is a freelance technical writer from Wilmington, Delaware, who writes on a variety of fields and subjects, and grew up in a family of NASCAR fans. She can be contacted at crsisk@chasidyraesisk.com.
Rhode Island’s Don Cushing Wears Multiple Hats in Parts Wholesale and Auto Body Associations World wide, collision repair is a complex industry with many factors weighing heavily on its practice and progress, and the environment in New England is no different. There are constant legal battles, training issues and new technology to contend with, making it difficult for many people to keep up with and stay ahead of all these changes. The easiest way for many to keep up with current trends and information is supporting industry associations with your involvement on a local and national level. Don Cushing of Rhode Island is the Wholesale Manager at Bald Hill Dodge Chrysler and Jeep. With nearly 40 years of experience in and around the collision repair industry, Cushing is a valuable resource for information and trends locally and nationwide. Cushing exemplifies this involvement with several important associations: the Mopar Masters Guild (MMG), the Auto Body Association of Connecticut (ABAC), and the Alliance of Automotive Service Providers of Massachusetts (AASP/MA). “I take my career with Bald Hill DCJ and my involvement with the Mopar Masters Guild, ABAC News and AASP/MA very seriously, and I’m determined to make a difference! I use all of these avenues to network with customers and build relationships because without our customers we are nothing.” After graduating ITT Technical Institute in 1974, Cushing began his career as a parts counterperson at a small dealership in Providence RI, and after a few months, he was recruited by a large dealership, under the direction of Ernie Wennerstrom, his current Parts Director at Bald Hill. After a few years working for various smaller dealerships during which he “yearned to get back to the wholesale side of the business,” Cushing was hired as the Wholesale Representative at a Chrysler dealership where he was employed for 16 years. A change came in 1997 when Wennerstrom hired Cushing as Bald Hill’s Wholesale Manager and made him responsible for supplying over 1100 customers for their mechanical and collision departments. Cushing notes, “I have several parts representatives that work alongside me in my endeavors to gain customer base and
formulate new and exciting ideas to increase the company revenue.” Cushing became involved with MMG in 1998 when Wennerstrom introduced him to the Executive Board who were interested in having Cushing create their newsletter. Cushing’s contributions yielded success. He says, “What started out as a simple updated pamphlet to members has now turned into a multi-page magazine featuring members’ stories, vendor profiles, vendor ads and industry news! The plus side of working for the Mopar Masters Guild is that I get to listen and hear what the ‘Best of the Best’ have to offer at guild events.” The same year, Cushing began expanding Bald Hill’s customer territory into CT, and as Bald Hill acquired more customers in their neighboring state, Cushing met many collision repair shop owners who belonged to ABAC. Over time, he told them about his success with MMG’s newsletter, and in 2001, he helped them launch ABAC News, the official newsletter for ABAC. The newsletter, combined with the financial support of its advertisers, allowed ABAC to continue growing their educational and legislative programs. Through his roles with Bald Hill, MMG and ABAC, Cushing also became involved with AASP-MA, and in November 2012, he was appointed as their Statewide Association Division Director. His duties are to serve the Board of Directors by using his experience as a vendor to contribute input on the many concerns and issues facing the industry. Currently, ABAC’s most important topic is the Hartford Lawsuit. In regards to this endeavor, Cushing notes, “This class action lawsuit will certainly be a game changer in the way that insurance companies conduct themselves in the future, both on the local (Connecticut) level, northeast and nationwide. Increasing membership, the education of ABAC members and shop owners and legislation are some of the ongoing issues that the ABAC is focusing on. These endeavors will prove extremely valuable as they move forward.” He also explains that a few of the ways that ABAC works toward
22 NOVEMBER 2013 AUTOBODY NEWS | www.autobodynews.com
achieving their goals is through seminars, OEM presentations, guest speakers at events and advertising. Another important concern in CT right now is their Anti-Steering Bill, and Cushing has “always supported the fact that everyone has a right to choose the repairer of their choice. There should be no influence from the insurance company on where a customer brings their vehicle.” One of MMG’s biggest events is their annual meeting at NADA, and their next meeting is scheduled for January 2014 in New Orleans, LA. According to Cushing, “This annual meeting draws the best Mopar parts managers (and the top 100) in the country. The motto for the MMG is ‘the exchange of information by likesize dealers in a non-competitive environment.’ This meeting combined with several Performance Group meetings throughout the year keeps members apprised of new and innovative ideas that
are brought forth from these gatherings.” Recently, Cushing was elected as President of the Southern New England Mopar Service and Parts Master’s Guild. The group meets once a month, and their variety of guest speakers tends to draw a decent crowd. Cushing hopes that this role will also allow him to aid with necessary industry improvements; “I plan on using this position to help to further educate attendees in their daily operations and hopefully share some ideas and best practices (as we do with the Mopar Masters Guild) with each other.” In regards to issues impacting the collision repair industry as a whole, Cushing notes, “As we move forward in the automotive industry, there are challenges that we all face. The Right to Repair Act is one. Working for a dealership and with our large customer base, we have always shared and assisted with information that our customers (collision Original BMW Parts
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and mechanical shops) need. I don’t believe that we should just sell parts to our accounts and not help them when they are in need. This is also one of the main reasons why I don’t support the Parts Act. We as a dealer of OEM parts have the resources to give our wholesale customers information on repairing their vehicles in the best and safest way possible according to our manufacturer specifications.” Though PartsTrader has not yet impacted the New England area, Cushing believes that these type of insurer-mandated parts programs are the biggest challenge facing the industry, and he fears that it will soon spread to impact his company’s market area. “I can see alienation of customers, delayed deliveries, reduced profits and most of all, dissatisfied consumers. The only winners in this game are State Farm and PartsTrader.” What can be done about PartsTrader, insurer steering, and other issues plaguing the industry? Cushing advises, “I hope that all parties involved (mainly collision shop owners) work towards getting educated and ‘doing their homework’ before embracing this product. Let your thoughts be known. Be vocal. Get involved!”
Aluminum Impasse Causes Oregon Shop Not to Renew 17-Year-Long State Farm Select Service Agreement
During a meeting with the area State Farm Estimatics Manager, Ron Reichen, President of Precision Body and Paint in Beaverton, Oregon, chose not to re-negotiate his company’s Select Service agreement with State Farm Insurance, the nation’s largest personal auto insurer—a relationship which lasted over 17 years and of which accounted for $2 million dollars in business over the past year. “It was actually a business decision we had been considering for some time” stated Reichen; “Discussions came to an impasse over fair and reasonable rates and allowances for aluminum repair. Our terminating the Select Service agreement stems from our company being a certified Tesla repair facility and the investments in time, equipment, training, specialized equipment and facilities which we could not offer for the rates State Farm was willing to pay. This will no doubt enable our company to re-evaluate and revise our pricing on other goods and services for the other manufacturers of which we are a certified
repairer for including Porsche, Audi, Volkswagen, Nissan, Volvo, GM, Chrysler and several others.” Along with all other insurers, State Farm has paid Precision’s posted aluminum labor rates in the past. With Precision being the only certified Tesla repairer in the state, it is believed that with its growing popularity and its all aluminum construction, that State Farm has now elected to deny Precision’s aluminum rates under the Select Service Program. As a result, like all other insurers, State Farm will no longer be provided the concessions (e.g. storage) Precision offered in the past. Reichen stated: “While insurers continue to adjust their rates based upon economic pressures; as vehicle technology advances with new sophisticated metals, manufacturing and repair techniques, repairers, party to such programs as Select Service are precluded from keeping pace with their increasing costs. We found attempting to do so, while maintaining the highest level of quality and serv-
ice, to be both unreasonable and unsustainable, and as a business decision we elected to resign from the insurer’s program. “This was Precision’s last insurer Direct Repair relationship, and as in the past, we will continue to work with all insurers on our customer’s behalf. Precision is committed to its customers and our community and will continue to work diligently to serve them with the highest quality repairs and service in an expeditious manner regardless of which insurer is involved.“
Sheep Bolts Farm Truck, Seeks Refuge in Detroit Body Shop
A sheep escaped from a truck and was seen running down Eight Mile Road before she darted into Nortown Collision & Glass on the city's east side. The frantic creature ran around the shop, knocking things over, and tried to escape through a window made of safety glass. Employees eventually corralled the sheep, tied her up and gave her food and water.
www.autobodynews.com | NOVEMBER 2013 AUTOBODY NEWS 23
Inside Insurance
Cycle Time is Money for Everyone with The Insurance Insider
How often have you heard the expression Time is Money? It’s a phrase that applies to many businesses but—as it pertains to body shops, insurance companies and vehicles owners—it is only half of the equation. In this industry, time equals money and customer service. It’s much more expensive to find a new customer than to retain an existing one. As insurers we are aware that the time it takes to repair an insured vehicle is directly tied to the insured’s CSI score and retention rates. Low cycle time equals high CSI, so we need to focus on reducing cycle time. Here’s what I mean. Although customer service can’t be defined by an algebraic equation, it’s safe to assume that cycle time is less than or equal to customer service. (I promise I won’t reference algebraic equations for the remainder of the article.) The important idea is that the less time it takes to repair a vehicle, the greater the customer service is. That’s because, even when the vehicle owner rates customer service poorly in terms of the repair itself—or the handling of the claim, the overall score is going to be better when the repair is done quickly. Also, if you can get repairs through your facility faster, you can move more repairs through the same facility and you make more money. For the collision repairer, reduced cycle time equals increased sales equals more money. Increased CSI increases customer-driven repeat and referral business. Therefore, reducing cycle time translates to increased collision repairer profitability, CSI, and customer referrals and repeat business. I am not suggesting that shops should sacrifice quality just so you can get the customer’s car back sooner. But I am pointing out the importance of managing cycle time. The importance of cycle time goes far beyond the dollars saved in rental car expense. It also goes beyond the fact that if you repair the car quicker, you can get another car in the shop. For insurance companies, there’s another factor: open claim liability.
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
The longer a claim is open, the more likely the claim will increase, for a lot of reasons. Paying and closing claims quickly reduces open claim liability, and that’s additional motivation on the insurer’s part to push for reduced cycle time.
high customer service scores which equals greater policyholder retention. It is frustrating as an insurance executive to realize that we lose policyholders because the customer was dissatisfied with the length of time it took to repair their vehicle. I realize
Body shops tend to think that this is just part of the game for insurance companies, that we are just imposing our will on hapless shops to save a few dollars on a rental car. But if you remove yourself from that “usagainst-them” posturing and think about something other than arguing with insurance companies, you will realize that this just makes sense. We are all in business to deliver a service to the customer. You just happen to repair cars; we simply provide coverage in the event of a loss. But the bottom line is that delivering customer service is a more important business proposition than anything else the shop or insurance company does. In the highly competitive insurance and collision repair markets, retaining policyholders and getting repeat business will make the difference between survival and prospering. The challenge for insurance companies is that we are beholden to the time that body shops take to make the repairs. With few exceptions, the time it takes for you to repair a vehicle is solely dependent upon your shop’s management and operational efficiency. Although you may think it’s an insurance company goal to manage your shop, it isn’t. We don’t have enough manpower or systems to manage your business for you. Instead we need shops to be conscientious about cycle time. Better cycle time equals
that insurance companies can adversely impact cycle time with outdated processes or lack of trust (though I’m sure many of you will
24 NOVEMBER 2013 AUTOBODY NEWS | www.autobodynews.com
email me to point this out). But the fact remains that there are tens of thousands of body shops in the industry. A small percentage of you understand what I am saying. And an even smaller percentage actually take action to ensure that cycle time and operational efficiency are dominant in all phases of your facility. The greater percentage of body shops repair cars at their own pace because, after all, they don’t owe anything to the insurance company. They proclaim that they are repairing the car the right way and you just can’t rush such things. If you are one of those short-sighted people, please don’t repair any of my customers vehicles. But for those that want to survive what is going to be a continual reduction of shops in the United States, please keep reading. The moment you are notified that there is a claim, we are starting the clock. Why? Because we are doing
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that internally with our own staff. We are monitoring and assessing every step of the claim process. The stopwatch starts the moment you are notified of the claim, and only stops when the customer is handed back their keys. The days of measuring cycle time by the number of days is gone. Insurance companies are measuring cycle time by the minute. We can no longer tolerate working with shops that aren’t driven to improve their efficiency and cycle time – especially when your competition down the street understands the rules of engagement and how to win. I know that all shops aren’t created equal. Fortunately, we are getting better at identifying the “haves” from the “have-nots.” If you aren’t keenly aware of the cycle time in all phases of your operation, your fate will be sealed because your customers won’t tolerate it. Time is money. Customer satisfaction and retention is driven by how long it takes you to repair the car.
ASA-MI Hosts Great Lakes Training and Networking Event
On September 28, the Automotive Service Association of Michigan (ASA-MI) hosted the Great Lakes Event at Lansing Community College West Campus in Lansing, MI. This year’s event featured a full day of networking opportunities and training for just over 50 attendees. ASA-MI hosts the Great Lakes Event because it provides an opportunity for the automotive service and repair industry to spend a day enhancing their skills. A morning and an afternoon training session were offered for office staff, management and owners. The major attraction at this year’s event was the participation of Elite Worldwide, a company that provides coaching, consulting and training for automotive repair businesses. Elite Worldwide conducted abridged versions of two of their popular classes: High Impacts Sales II and 8 Steps to a More Profitable Shop. Ray Fisher, President of ASAMI, states, “We were blessed to have Bob Cooper and Doris Barnes from Elite Worldwide present to great classes for the Great Lakes Event. When we called Bob, the first thing he
asked was ‘when will it be, and what can I do to help?’ before we even discussed any other details. Bob and Doris did a fantastic job with our group – and the various role playing episodes they performed within their presentations, I think, really brought home to reality for a lot of the folks. The attendees raved about the sessions and the venue - this was truly another success.” Though ASA-MI sponsors the Great Lakes Event, it is open to the entire industry; however, association members receive the benefit of attending at a reduced rate. The low admission price also included fabulous food for attendees. In addition to a breakfast break in the morning, participants indulged in a “Tour of Italy” lunch buffet, and during their afternoon break, attendees were treated to a “Touch of Autumn”, featuring pumpkin bread, apple cider and other seasonal treats. Fisher said the event was a success. “The surveys came back with great enthusiasm and comments were all extremely positive. I’m biased, but our results weren’t. According to the
feedback we received in the surveys, it was the best that many had attended, the venue was very conducive, and the professionalism was first class – much like what was stated last year!” During the Great Lakes Event, ASA-MI also updated attendees on some of their initiatives over the past year. Fisher explains, “We’ve accomplished a great deal when meeting with our committees, some key State Representatives and Senators, and various State Department Directors, and we are seeing those efforts coming to fruition. For example, the Director of the Bureau of Licensing and Regulatory Division which issues the licenses to the Automotive Repair Industry shared some of the things they have accomplished from our efforts of over a year ago. Along with my Board, we’ve been very busy behind the scenes, but unfortunately, sometimes that goes without knowledge. The challenge is that our sponsorship dollars are gone in this tough economy, and our primary revenue is from membership, so each year, we have to carefully budget activity based on the membership revenue, and
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Southeast Associations
Chasidy Rae Sisk is a freelance technical writer from Wilmington, Delaware, who writes on a variety of fields and subjects, and grew up in a family of NASCAR fans. She can be contacted at crsisk@chasidyraesisk.com.
Independent Garage Owners of North Carolina Pushes Ahead with Chasidy Rae Sisk
The Independent Garage Owners of North Carolina (IGONC) recently held their annual Automotive Service & Technology Expo the weekend of September 27–29, 2013 at the Embassy Suites Hotel and Convention Center in Cary, NC. According to Executive Director Bob Pulverenti, the event went well with around 200–250 attendees, but most were from the mechanical side of the association as IGONC has had a more difficult time getting collision shops and their vendors involved. IGONC does their best to put together useful seminars, and this year’s event featured 14 seminars on management and business related topics. Pulverenti believes these types of industry events are important. They Bob Pulverenti present a good networking opportunity for shop owners to meet and work together, plus they provide a casual setting for interacting with vendors and suppliers. Pulverenti would like to see more collision repairers involved with the exposition but, he says, “it’s like pulling teeth to get the shop owners and technicians to come.” He notes that even the monthly seminars put on at the I-CAR training facility in IGONC’s office are not well attended by local collision shops. In fact, generating interest and participation is one of the biggest challenges his association faces. Because people can research online and obtain a good portion of their information that way, many no longer see the value of associations, according to Pulverenti, “but we still have a purpose and fulfill a need.” Despite these challenges, IGONC has been able to maintain their membership, though they haven’t seen much growth since the recession began. While they had planned to expand into SC and VA in 2008, economic difficulties inhibited those plans, but they still hope to expand into those neighboring states once the economy improves. IGONC is North Carolina’s largest member-sponsored, non-profit association servicing the automotive repair, service and collision industry. It was es-
tablished in 1959 by a group of garage owners with the goal of helping members deal with the challenges facing their industry. Originally named the In-
Thomas Richard at the Regional Auto Center, Greensboro, NC
dependent Garage Owners of America which eventually became ASA affiliated, but over time, they ended their affiliation with ASA and have since become associated with SCRS and AASP. Pulverenti notes, “everything changes over time, and we have to reinvent ourselves constantly, but I still feel like we’re a relatively strong group compared to other associations.” According to their mission statement, IGONC exists “to help make NC’s independent garage owners the absolute best in the country.” They undertake the distribution of the most upto-date information on automotive repair and business practices, protecting members from unfavorable legislative initiatives, and by building productive relations between members, vendors and consumers. Though IGONC membership peaked in the mid-1980s with around 1000 members, they have managed to maintain around 550 members throughout the economic crisis of the past decade. Pulverenti believes this is due to creating a positive perception of what the association does, such as providing vendor benefits, education, information and training. IGONC also plays a role in legislative matters on behalf of their members, such as when they participated in a rally for Right to Repair several years ago in the nation’s capital. Short-term, IGONC’s goals are to continue providing information to members and to seek benefits to help put money back in garage owners’ pockets. They also constantly monitor legislation, mostly locally but also on a national scale when necessary. Going
28 NOVEMBER 2013 AUTOBODY NEWS | www.autobodynews.com
forward, they plan to focus more on because, even if IGONC compiles educational initiatives and to look at documentation, they are lucky to get industry trends to determine how they an audience with legislators who do can best serve their members and the not have the time or interest to get inautomotive repair industry as a whole. volved, and he believes the only soluSince IGONC recently wrapped tion is for people from this industry to up their annual expo, they do not have become legislators so they understand much on the docket right now. Acthe challenges collision repairers face. cording to Pulverenti, IGONC has a repair shop licensing bill they’d like to introduce when they sense the timing is more favorable. Pulverenti notes that instituting legislation is one of the largest challenges facing the industry today. “Sometimes, legislators will introduce a bill, thinking they’re Clint Rogers of Triangle Collision in Morrisville, NC doing good for one or two constituents who complained, but they Regarding other issues facing the don’t really understand what they’re industry, Pulverenti notes that meintroducing or how it impacts the inchanical shops are dealing with presdustry, whether in a positive or negasure from mass merchandisers and car tive way.” He finds it frustrating dealerships, while collision repairers
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Brunswick Toll Free (888) 460-7080 Direct (330) 460-7080 (330) 460-7082 Fax Mon.-Fri. 8-6; Sat. 8-4 www.brunswickautomart.com
WISCONSIN
Wilde Subaru
Waukesha (800) 903-2434 (262) 544-1913 Fax Mon.-Thu. 7-7; Fri. 7-5; Sat. 8-4 parts@gowilde.com www.wildesubaru.com
face insurers’ pressure in terms of labor rates and steering. Labor rates for collision repair are set unrealistically when looking at the cost of operations and labor, but trying to convince insurers to increase the labor rate seems futile at times. Similarly, PartsTrader also negatively impacts collision repairers. Pulverenti explains, “it’s a bad thing because obviously bidding on parts reduces the list price and profit margins, just like labor rates that are being controlled by insurers reduces their profit margins.” Unlike ASA, IGONC favors Right to Repair in some form as they believe the information needed to safely repair a vehicle should be guaranteed accessible to repairers; however, he is convinced that as various states get these bill passed, it will become a non-issue. NC has a bill regarding Right to Repair in mind, but it has not yet been introduced as they are watching for developmens for similar bills in other states.
IGONC PO Box 90426 Raleigh, NC 27675-8117 800-243-1560, www.igonc.com
Continued from Cover
Continued from Page 26
states. According to AASP-MN, the department was reluctant to act until State Farm indicated its intention to implement PartsTrader in Minnesota. AASP-MN is also pursuing this issue with the office of the Attorney General. Information has been transmitted to the appropriate officials to request that they work with, or in lieu of, the Department of Commerce to prohibit the implementation of PartsTrader as a violation of Minnesota Statute. In addition, AASP-MN has consulted with legal counsel to identify possible causes of action that could be brought before a court. In May of 2012, AASP was among the first industry associations to go on record stating that State Farm’s newly-mandated bidding process for parts procurement was an unprecedented and uninvited intrusion into the business of collision repair. AASP-MN says its efforts reinforce that position and are intended to protect the interests of the collision repair industry and give voice to its concerns.
it has been tough for all of us; hence, the reason we have taken many things virtual. The old saying ‘many hands makes for light work’ applies to membership as well—more members and more revenue streams helps us remain effective.” Another of ASA-MI’s projects over the past year has been to create a “Members Only” community website which contains important document libraries for the industry and a virtual library for relevant webinars, among many other features. With regard to ASA-MI’s work, Fisher notes, “we are here representing the entire collision and mechanical repair industry here in Michigan; the results of our work help raise the professionalism here in our state for all of the licensed repair facilities, not just our members The question to ask is: who will do it if we weren’t here?!” Fisher explains why association events are so important to their members and the industry as a whole: “Time is a precious commodity, and I believe the demands of running a busi-
AASP-MN Complaint
ASA-MI Event
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ness today limit the repairer’s availability to get away. We have made drastic changes over the past couple of years, being cognizant of that by going to a more “virtual” platform in many ways, and we are placing focus on the Great Lakes Event as the ‘one time get-together’ for networking opportunities. Regardless of the leanness and the demands, we have to be able to get away at least once a year for a breather and to get new ideas.” Due to the success of this year’s event, ASA-MI has already announced that the 2014 Great Lakes Event will be held on September 26 and 27, 2014, at the Lansing Community College West Campus; however, next year’s event will feature a few changes. For starters, it will be a two-day long event, compared to one day in the past. They will also support the Lansing Community College Automotive Program as they host their NATEF training during the same weekend. Fisher reasons, “we believe that the Automotive Recyclers of Michigan will be hosting their annual meeting at the same time, which they have done at our first two, all of this fitting into our strategic plan for the automotive repair industry.”
QUALITY IS ALL WE THINK ABOUT. THAT AND QUALITY.
See these Hyundai dealers below for all your collision parts needs!
Michigan
Ohio
Alma Chevrolet Buick GMC
Jake Sweeney Chevrolet
989-463-0456 Fax
513-782-2846 Fax
Mon.-Fri. 7:30-6 parts@almabuickgmc.com
Mon.-Fri. 7:30-6 Sat. 8-Noon www.jakesweeneychevy.com
888-229-2336 ALMA
513-782-2829 CINCINNATI
OHIO
INDIANA
Classic Hyundai
Indy Hyundai
MENTOR
INDIA NAPOLIS
440-266-6750
800-592-5170
440-266-6763 Fax
317-536-1552 Fax
Mon-Fri 7am - 6pm Sat 7am - 3pm gregj@driveclassic.com www.driveclassic.com
Mon 8am - 8pm Tue-Fri 8am - 6pm Sat 8am - 1pm inss.partsmgr@rohrman.com www.indyhyundai.com
Wisconsin
Ivan Gandrud Chevrolet
WISCONSIN
800-242-2844
800-236-9888
Mon.-Fri. 7-7; Sat. 7-2 parts@gandrud.com
Mon-Fri 7am - 5pm Sat 8am - 12pm www.vanhornhyundai.com
GREEN BAY
920-468-3658 920-468-3673 Fax
Van Horn Hyundai SHEBOYGAN
www.autobodynews.com | NOVEMBER 2013 AUTOBODY NEWS 29
Southeast Associations
Chasidy Rae Sisk is a freelance technical writer from Wilmington, Delaware, who writes on a variety of fields and subjects, and grew up in a family of NASCAR fans. She can be contacted at crsisk@chasidyraesisk.com.
Tennessee CRA Advances Professionalism & Consumer Issues with Chasidy Rae Sisk
Getting local shops involved tends to pose the biggest challenge for most collision repair associations, and this is currently the focus for the Tennessee Collision Repairers Association (TCRA). As TCRA strives to increase their membership, Executive Director Tony Nethery shared some insight into the association and their objectives. TCRA was established in 2006 when three collision repair shop owners met for lunch and the conversation turned to “the struggles of going it alone in the collision industry,” according to Nethery. This casual conversation sparked an idea and a goal, leading to the first TCRA meeting about a month later which was held at a restaurant in Jackson, TN. One of the founders volunteered to serve as chair until a board could be formed and an official charter completed. Though 50 people attended TCRA’s first meeting, “the crowd dwindled to about half of that when it was made clear that TCRA was being formed to increase knowledge and work together, not to do battle with insurers,” Nethery explains. Still, enough interest was generated to allow TCRA to form a second chapter in Nashville the following year. Currently, the Jackson chapter of TCRA focuses on the western part of the state, while their Nashville chapter services central TN; however, since TN is over 400 miles long, they hope to establish an eastern chapter in the near future. Currently, TCRA consists of around 20 member shops, but they are actively seeking new members and sponsors across the state. As such, they are also restructuring their board and meeting locations and times. While TCRA’s current membership is lower than it has been in the past, Nethery believes “our members are committed to seeing it grow again.” Previously, each TCRA chapter had their own Board of Directors and officers and would meet monthly on their own, but Nethery notes that this “basically resulted in two associations with sometimes completely different agendas.” As TCRA tries to increase their membership, they are also restructuring the organization to pro-
mote unity. According to Nethery, “In order to try and boost attendance, we are now meeting every other month as a large group and moving the meetings to different areas to make travel equal for everyone. At the first of the year, we hope to elect one set of officers for the state and include board members from the entire group. This allows us to bring in better speakers Tony Nethery because of the larger group and keeps us all working on the same issues. We are also hiring a part time staff member to keep up our website, send out reminders and solicit new members.” Anyone in the state is invited to join TCRA, and there are definitive benefits to membership, according to Nethery. “Membership in TCRA provides an opportunity to have a stronger voice in the industry. Many young shop owners have had the benefit of being mentored by their peers.” TCRA is a member of the Society of Collision Repair Specialists (SCRS), and they subscribe to SCRS’s mission, purpose and objectives which include promoting education and communication within the collision repair industry. In May 2012, TCRA also entered into an alliance with the Congress of Automotive Repair and Service (CARS) in order to provide several new industry and business-related benefits to members, including a discount on the cost of TCRA’s membership. The top purpose of TCRA is education and communication between collision repairers. They promote a professional atmosphere, as seen in their policy which is detailed on their website: that all officers, sponsors and members of TCRA conduct themselves and their transactions in a legal and ethical manner; and in addition, follow all guidelines and regulations set forth by the association during meetings and events, and exhibit great care regarding the reputation of this organization. TCRA’s objective is “to develop a forum for interaction and exchange
30 NOVEMBER 2013 AUTOBODY NEWS | www.autobodynews.com
of ideas between body shops in TN, promote ethical and best practices, and to communicate with and educate members in all matters relevant to these objectives.” Nethery clarifies, “our mission is to educate the consumer and ourselves on how to correctly repair a vehicle and to promote ethical business practices.” Regarding the emphasis on education, Nethery notes, “education is important for the same reason in this industry that it is in any other. An educated consumer is a customer that will make good choices in repair and not be easily steered by the insurer. In the state of TN, there is no license required to do collision repair, other than a business license that anyone can buy. A hairdresser has to have a license to cut hair, but anyone can call themselves a collision tech and cut your car in half. The fact that is even sadder is that an insurer will pay them (anyone who says they are a body shop) the same rate that they pay the shop who is trained and has invested millions in equipment. This will not change until our industry begins to work together and develop some sort of license or standards.” One of the ways that TCRA is promoting education to members is through participation in the annual Southeastern Conference which includes TN, AL, GA, MS and FL. They have been involved with the conference since 2012 and hope to see an increase over the 250 attendees from last year when they meet again in April 2014 in Biloxi, MS. TCRA also believes that communication is vital in this industry, and Nethery explains, “we believe the biggest problem in the industry is the division of the shop owners. Even fierce competitors need to stick together on key issues that will hinder the freedom to do business in the future. That is the value of being part of an association.” TCRA’s most relevant short-term goal revolves around PartsTrader, and they are currently trying to exert influence to dissuade PartsTrader from spreading in their state. TCRA does not believe that PartsTrader will improve cycle time, but it will allow in-
surers to exert control on parts profitability in the future, just like they control labor rates today. “All of the group hopes that somewhere along the way that Parts Trader will be stopped but also believe that it is not likely that it will. We are encouraging all the OEM parts venders to not sign up on Parts Trader. The only thing that will stop Parts Trader will be if enough venders do not sign up for it to work,” Nethery explains. The topic of Right to Repair yields mixed views amongst TCRA members since the association consists of dealership shops and independent shops, but Nethery notes that it is not really a big issue in TN at present. Though TCRA is not currently involved in any legislative matters, Nethery explains that when they’ve pursued legislative reform in the past, the challenges they’ve faced are acquiring the revenue to combat insurers’ lobbyists and, once the law is passed, making sure that it is enforced. TCRA PO Box 66 Jackson, TN 38302 731-394-5628 www.mytcra.com
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Michigan Cracks Down on Auto Insurance Fraud, No Fault Blamed Michigan officials and law enforcement authorities say they’re cracking down on fraudulent auto insurers and Michigan drivers who purchase their policies. But consumer advocates say the new initiative, announced by Republican Secretary of State Ruth Johnson, fails to address the underlying problem: exorbitant car insurance premiums caused by Michigan’s mandatory no-fault system that requires drivers to purchase basic coverage that includes unlimited medical benefits. Lawmakers are expected to debate this fall on whether to reform the system and make it more affordable. Meantime, Johnson said she’s formed a new task force to address what she said is rampant insurance fraud—the extent of which she said was uncovered when her office began to receive digitized insurance reports for the first time last year. An example: On July 31 of this year alone, more than 500, or 16 percent, of the 3,400 insurance certificates collected at Secretary of State
branches across Michigan were deemed invalid, Johnson said. The worst offenders were in Chippewa, Van Buren and Sanilac counties, where at least 46 percent of insurance certificates presented for verification in each county were fake. Across Ingham, Eaton and Clinton counties that day, that figure was nearly 11 percent. Thirty-eight of Michigan’s 83 counties reported no falsified certificates that day but branches were closed in four of them. Johnson said “unsuspecting” Michigan drivers are being unwittingly scammed by criminals selling insurance out of the backs of trailers or through listings on Craigslist. “We have people being ripped off,” she said. “They think they’re buying insurance and when they get in an accident, their world collapses.” However, Butch Hollowell, general counsel for the NAACP in Detroit, said it’s “preposterous” to suggest Michigan consumers are that naive. “They’re really being duped by the industry, which is charging them rates far in excess of what they
should be charged,” said Hollowell, who was an insurance consumer advocate for the state during the last two years of Democratic Gov. Jennifer Granholm’s administration. “That measure (by Johnson) will do absolutely nothing to help solve the underlying issue, which is affordability,” Hollowell said. “It will force more people off of insurance and create an even worse driving environment.” Johnson would not comment on whether the high costs of Michigan’s no-fault system might be forcing drivers to look for less expensive, albeit fraudulent, coverage. Johnson said insured drivers pay hundreds of millions each year—$220 million in 2012 alone—to cover the benefits of uninsured drivers who get in accidents. “The honest people are getting bills that are higher and higher, and it’s not fair to them,” she said. Drivers who present fake auto insurance can face felony criminal charges and county prosecutors in Michigan are also stepping up their efforts to combat fraud.
Enterprise Makes Amusing Video at My13days.com
According to Enterprise Automated Rental Management System (ARMS®) data, vehicles are in the shop for an average of 13 days after an accident, leading vehicle owners to have to borrow family cars, hitch rides or pay out-of-pocket rental fees of up to $400. “Many people aren’t sure if they’re covered for a replacement rental while their vehicle is in the shop, and many don’t find out until it’s too late,” said Mary Mahoney, vice president at Enterprise Rent-ACar. “One year of rental reimbursement coverage can cost less than a one-day car rental. With that in mind, the video and website are fun, lighthearted ways to generate awareness and educate drivers.” Enterprise’s short YouTube video has already gained nearly one million views in just one week. The dedicated micro-site, my13days.com also takes a humorous approach to the vexing challenges drivers could face—like driving a teenager’s car for nearly two weeks—without this inexpensive insurance offered by auto insurance companies.
www.autobodynews.com | NOVEMBER 2013 AUTOBODY NEWS 31
Historical Snapshot
—John Yoswick is a freelance writer based in Portland, Oregon, who has a body shop in the family and has been writing about the automotive industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). Contact him by email at jyoswick@SpiritOne.com.
November Retrospective on the Collision Repair Industry with John Yoswick
20 years ago in the collision repair industry (November 1993) “My time away from the industry this year made me more aware than ever that many of the people who keep telling us how we can improve the claims process, improve parts ordering, improve productivity, improve turn-around time and cut car rental costs don’t know the first thing about how our shops operate or half the steps required to properly repair a damaged vehicle. Computers and software programs are great, but computers don’t take the nuts and bolts out of a fender, and they can’t comprehend the fact that a left door can’t be replaced with a right door, even if the part numbner on the invoice is the correct part number. “It seems that many insurance companies—and some shops—have bought into the promise that one or another computer system will solve many or all of their problems. There is always one direct repair program or another telling shop owners that something will greatly expedite the claims handling process…All these promises sound great on paper or in panel discussions, but they don’t do the repair work.” ► from a column by Bobby Johnson, at that time the owner of B&J Collision in Jefferson, Texas
15 years ago in the collision repair industry (November 1998) PPG has done a comprehensive study of over 2,000 collision repair facilities. Here is a snapshot of some of the statistics: The average labor rate: $34 an hour. Average gross profit per hour per technician: $45.63 (top 25 percent), $32.57 (middle 50 percent), $19.69 (bottom 25 percent). Labor efficiency (hours sold versus available hours): 154 percent (top 25 percent), 118 (middle 50 percent), 82 percent (bottom 25 percent) PPG’s Rich Altieri said it is likely that repair opportunities will continue to decrease. His prediction: By 2006, 40 percent of today’s shops will cease to exist. If the collision industry is a $24 billion business, 24,000 shops doing $1 million a year in sales would take care of the market. ► As reported in Hammer & Dolly. Indeed in 2006, there were about 36,000 shops, 40 percent fewer than the 60,000
Altieri said there were in 1998. (Last year there were about 34,500.) The average labor rate nationally last year was $45.43, up 33 percent since 1998, but below 41 percent cumulative rate of inflation during that period; to keep up with inflation, the national average last year would have had to have been $47.89.
10 years ago in the collision repair industry (November 2003) Collision repairers who are part of State Farm’s “Select Service” or “Service First” direct repair programs have been lauding the insurer for the way it administers its claims management process for vehicle repair. It’s a process that technicians and shop owners are saying puts trust in collision repair professionals. Repairers have often been frustrated with how insurers handle the claims management process. For years they have argued that many insurers are overly involved in the process and don’t let repairers do their job without telling them how it should be done. But State Farm is taking a different approach. “To put it simply, State Farm is letting the experts—collision repair professionals—do what they do best,” says Don Keenan, owner of Keenan Auto Body in Clifton Heights, Penn. Keenan said State farm respects its Select Service collision repair shops’ experience and expertise and “as a result, we’re freed up to do the best possible job.” The Society of Collision Repair Specialists earlier this year issued a press release praising State Farm for what the organization is calling a “professional approach to claims management.” “I have received countless calls from members commenting on the positive relationship with State Farm, SCRS Executive Director Dan Risley said. ► As reported in Auto Body Repair News (ABRN). The most recent national survey allowing shops to rate insurers with regard to reimbursement policies and claims handling efficiency still found State Farm at the top, but with a score of 64.8 (out of 100), down from 93.4 in 2003. In 2003 it had a nearly 30point edge over its closest competitor. Now two other insurers are within 4.2 points of knocking State Farm out of the top spot. SCRS this past year has been among the most vocal critics of State
32 NOVEMBER 2013 AUTOBODY NEWS | www.autobodynews.com
Farm’s implementation PartsTrader, and Risley, now with the Automotive Service Association, wrote to State Farm in September saying the insurer’s mandated use of a vendor “that solely financially benefits State Farm is more dictatorship than partnership.”
5 years ago in the collision repair industry (November 2008) Minnesota shop owner and NACE chairman Darrell Amberson said (at the event’s opening sessions) that the collision industry should also be paying close attention to increased efforts by automakers to gain design patents on crash parts, which could limit competition from non-OEM parts manufacturers. He said that while design protection is a “fundamental right” for any industry, it could also drive up parts costs, also leading to more total loss vehicles. He called on the estimating system providers to bring more automation, sophistication and automaker information
to the systems to help them evolve from being “just a guide to a tool that could be used to blueprint jobs.” The systems, he said, currently are too incomplete and subject to interpretation. “Can you imagine a world where we didn’t have to spend so much effort negotiating, debating (and) looking for non-included operations? I think whether an insurer or repairer, we could probably increase our life expectancy if we didn’t have to deal with this,” Amberson said, drawing laughter and applause from the crowd. Overall, Amberson, despite the struggling economy and the specific challenges the collision repair industry faces, is optimistic about the opportunities for those shop owners who embrace new technology and processes, diversify their business, and think of themselves as business people, not repairers. ► from Autobody News coverage of the 2008 International Autobody Congress and Exposition (NACE)
All The Genuine Lexus Parts You Need For That Trouble Free Repair, And Lexus Finish! These Dealers Below Are Genuine Lexus Parts Distributors:
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Allstate Plans to Increase its MA Workforce by 130 Agents
BASF Joins ASA as Newest Corporate Member
US Auto SAAR to Hit 16.4M, Highest Level Since 2006
Lincoln Electric Announces New Welding Devices/Lifters
Tru-Way’s New Website, Data
CAPA Tops 60M Certified Parts
Bob Stevenson Joins Carbench
Todd Chizmar on I-CAR Board
Allstate Insurance Co. plans to significantly increase its Massachusetts workforce by the end of 2014 by hiring 130 more insurance agents. Allstate opened its first Massachusetts office in October 2012 and has since expanded to more than 18 locations throughout the state with more than 40 employees. The company plans to open another 30 offices in the next year. Several other national insurance companies, including Geico and Progressive, have also entered the Massachusetts market in recent years.
Tru-Way Company has launched a new, data-driven website offering point-to-point vehicle measuring data for cars, trucks and SUVs from the 1950s to now. The website’s database contains more than 10,000 vehicles that can be searched by vehicle year and model, or by classification—domestic, imports or classics. Said Loretta Clos, manager at Tru-Way. “Tru-Way is unique in [its] offering of valuable historical data for older vehicle platforms that may be difficult to find... with the ability to purchase measuring data in a choice of format appropriate for them.”
BASF is the newest corporate member of ASA. “BASF is excited about the changes at ASA. They’re off to a fresh start with a new leadership team and are strengthening relationships within the collision repair industry. A good example is the combined NACE/I-CAR/CIC conference in Detroit next year. We believe collaborations like this can help the collision industry thrive,” said Joe Skurka, manager, OEM and Industry Relations. Visit www.ASAshop.org or call (800) 272-7467, ext. 361.
The Certified Automotive Parts Association (CAPA) announced that its parts volume has reached nearly 62 million CAPA certified parts. In the past five years, CAPA has increased its number of part applications by and average of 16% each year and added 17 new manufacturers to the program, bringing the total to 43 manufacturers. The number of CAPA parts sold in the market has also increased by 13% in that time frame. While metal parts have been the backbone of the CAPA program, plastic parts and lights are now the fastest growing part categories.
The U.S. auto industry’s new-vehicle sales in 2014 will hit their highest level since 2006 as consumers continue to replace aging cars and trucks. Edmunds.com forecast that sales next year will hit 16.4 million vehicles. That would be up from an estimated 15.5 million the firm expects in 2013 and the highest total since 16.5 million were sold in 2006. However, the projected 6% growth rate would be the industry’s smallest increase since sales bottomed out at 10.4 million vehicles in 2009.
Car Bench America welcomes Bob Stevenson to the position of National Sales and Training. Stevenson will be responsible for sales and training of; Car Bench®, Inverter Spot Welders, Computerized Measuring, AluminumSteel-and MIG Brazing Machines, Self-Piercing Riveting (SPR), Aluminum Repair Tools and most all other equipment needed to rebuild today’s and forthcoming automotive body and chassis construction. Stevenson brings 20 + years of professional collision knowledge and experience in both paint and equipment.
Lincoln Electric announced Sept. 19 that it has added a line of magnetic angle fixturing devices and hand lifters to its Radius tool Welding Gear product group. The tools are designed to position steel for tack welding or other pre- or post-weld operations. They also are ideally suited for cutting and grinding applications. The magnetic fixtures are available in three different models intended for various material thickness or applications. The design makes them ideal for tight spaces.
I-CAR announced the appointment of Todd Chizmar of Chrysler Group LLC to its international board of directors. The senior manager of technical training for Chrysler, Chizmar has been part of the automotive industry for nearly 20 years, the last 14 in technical and management roles at Chrysler. Said I-CAR chair William Brower, “His insights will be particularly helpful as I-CAR begins to significantly increase its repair-related technical support of the industry through its new Repairability Technical Support and Knowledge initiative.”
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M-F 8-6; Sat 8-4 www.brunswickautomart.com
www.autobodynews.com | NOVEMBER 2013 AUTOBODY NEWS 33
Northeast Associations with Chasidy Rae Sisk
Chasidy Rae Sisk is a freelance technical writer from Wilmington, Delaware, who writes on a variety of fields and subjects, and grew up in a family of NASCAR fans. She can be contacted at crsisk@chasidyraesisk.com.
ABAC’s Decade-Long Battle Against the Hartford Insurance Co. For nearly ten years, the Auto Body Association of Connecticut (ABAC) has been engaged in a legal battle with the Hartford Fire Insurance Company (the Hartford), and though a judge and jury awarded the victory to ABAC, the fight is not yet over as the Hartford has appealed the ruling to the state’s Supreme Court. Still, Tony Ferraiolo, President of ABAC, remains optimistic, noting “this is one of the biggest things happening in the industry right now, and it will rock the country if—no, when—we win next year.” ABAC filed a class-action lawsuit against the Hartford in 2003, claiming the insurer was manipulating labor rates across the state and using steering practices to direct customers to shops on their direct repair program (DRP). Besides getting a discounted rate from their network of DRPs, the insurer also had their appraisers use the same uniform labor rate in their estimates across the state, thus pressuring independent shops to lower their rates. David Slossberg, lead attorney for ABAC in this lawsuit, noted that, as a result of this conduct across the industry, profit margins for auto body shops have decreased from 6% to less than 2%, which disregards the shops’ expenses related to training, equipment and environmental regulations. In November 2009, a Superior Court jury in Stamford ruled in favor of ABAC, awarding $14.7 million in compensatory damages to the shops represented in the lawsuit because they found that the Hartford engaged in unfair trade practices which resulted in a loss to CT body shops. David Slossberg Earlier this year, in May, Superior Court Judge Alfred J. Jennings granted injunctive relief which mandated that the Hartford “refrain from interfering with the independent judgment of motor vehicle physical damage appraisers in its employ in the performance of their duties… including the determination of the hourly rate to be applied in calculating the labor component of costs to repair.”
The injunctive relief was granted after the jury found the Hartford to be engaging in unfair business practices
through the use of in-house appraisers and their network of DRP shops to artificially suppress labor rates in CT. In addition to being prohibited from interfering in their appraisers’ judgments, the Hartford will also be required to submit a Quarterly Compliance Report to the court which must include: (i) the range and average of hourly rates used by each Hartford appraiser, (ii) hourly rate(s) charged by all shops under DRP contract with the Hartford, (iii) any changes the Hartford makes to estimates or appraisals as a result of reinspection or supervisory reviews, and (iv) a summary of any adverse or disciplinary action against any of the Hartford’s CT-licensed appraisers. Judge Jennings ruled in favor of ABAC and the shops they represent yet again in June 2013, awarding $20 million in punitive damages intended to punish the Hartford for manipulating the labor rate and to deter other insurance companies from engaging in the same unlawful conduct; the award is believed to be the largest unfair trade practices award ever issued in the state of CT. Jennings explained the award was meant to send a message to the Hartford and other insurers that any violations of fair trade rules will not be tolerated. After the Hartford appealed the court’s decision, a stay was placed on the injunctive relief, but Ferraiolo notes that during the two weeks it was in effect, it seems to have caused other insurers to begin negotiating higher labor rates and concessions. He emphasized that appraisers should be negotiating rates on a shop-by-shop basis, establishing labor rates based on the individual shop’s business model, the quality of their repairs and the model of the car being repaired. “What we have sought to achieve in this lawsuit is simply for the Hartford and its appraisers to follow
34 NOVEMBER 2013 AUTOBODY NEWS | www.autobodynews.com
the law,” said Ferraiolo. “We already won the case, but now we’re dealing with the political and bureaucratic nonsense. Yet, there is merit in the fact that we’ve engaged in a ten-year battle, and the jury decided in our favor.” ABAC also acts as a “watchdog” on their members’ behalves, meeting with legislators to explain how the Hartford’s actions negatively impact their constituents. Ferraiolo says, “we’ve had a lot of success in showing the negative impact on consumers, but the insurers consistently try to muddy the waters. Still, this is industry-changing stuff! As long as it doesn’t become politically corrupt, we will win next year.” Like Ferraiolo, Slossberg is confident that after fighting this battle for more than a decade, the ABAC will ultimately prevail. “This case should give hope to all those individuals and small businesses who think they can’t push back against the big insurance companies. The ABAC and some 1000 small businesses in the State of Connecticut won a hard fought and well-earned jury verdict which was followed by carefully written and well-reasoned decisions by the trial judge regarding injunctive and punitive damages.” While Ferraiolo is definitely pleased with the court’s ruling, he is less confident that the Hartford will comply with the judge’s mandates, noting that the insurers just don’t seem to be getting the message, despite ABAC’s victories in court. Ferraiolo believes that DRP shops are part of the problem because they are doing the publicity for the insurers, claiming that it’s necessary to be on DRPs in order to stay in business. He notes, “they’ve helped build this big monster, but now they can’t destroy it.” A & R Body Specialty, Ferraiolo’s shop, is a medium-sized, independent shop which represents that market that’s in trouble as most mid-sized shops participate in DRPs in order to stay in operation; however, he insists that while solutions are few and far between, and shops like his are at a competitive disadvantage due to
the unfair trade practices of the Hartford and other insurers, independent mid-sized shops are trying to compete in the market by providing education to both their employees and the consumer and by offering excellent customer service. Because the case is still in the appeals process, none of the shops have received any of the awarded funds yet. If the Hartford’s appeal is rejected, each
member of the class-action lawsuit will have to apply to receive their share of the money, and the trial court will establish a process to distribute the funds. The class originally began with 1000 CT body shops, but it has since grown to include an estimated 1500 shops affected by the Hartford’s practices. The sheer number of complainants “shows the breadth and extent of the damage caused by the defendant’s misconduct,” according to Judge Jennings. In establishing the amount of punitive damages, Jennings also considered the net worth of the Hartford, somewhere in the $12 to $13 billion range, in order to ensure the award would be a meaningful deterrent to the insurer. Jennings has not yet determined the amount that will be awarded to ABAC’s attorneys who have not received a cent of compensation from this ten-year long lawsuit. Ferraiolo praises the attorneys’ dedication to the cause; “our attorneys are aggressive and are working very hard to win this case. They have just as much, if not more, invested since they don’t get paid unless we win!” In fact, these attorneys have proven their support of local auto body shops yet again by representing ABAC in a second, similar lawsuit which was filed four years ago against Progressive for steering and labor rate suppression. This case is being pursued in Federal Court, and ABAC will be seeking class certification later this year. As Ferraiolo stated repeatedly, these lawsuits could change the collision repair industry if the association is victorious. Industry
leaders from other states have already begun contacting ABAC to express interest and seek advice on how to pursue these types of battles. The Hartford was contacted for opposing point of view or comments, but none have been received at press time.
Auto Body Association of Connecticut (ABAC) 104 Cheshire Rd Prospect, CT 06712 203-767-5731 www.abaconn.com info@abaconn.com
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AudaExplore™ Introduces GoTime Line of Driver Focused Mobile Solutions AudaExplore™ has announced the launch of GoTime, a new line of driver-focused mobile solutions that streamline and accelerate a range of partial and total loss claims and repair processes while driving an improved and optimized vehicle owner experience. “There’s a perfect storm of change hitting the market—from a new generation of vehicle owners to the pervasiveness of mobile devices to newly available self-service offerings that enable new ways of engaging vehicle owners never before possible until now,” said Neal Lowell, AudaExplore’s vice president of product management and innovation. “Our GoTime line of mobile solutions empowers insurers and repair facilities to address these market dynamics head on, with features that take business efficiencies and the vehicle owner experience to the next level.” The GoTime family of mobile solutions is powered by AudaNet, AudaExplore’s global, intelligent, nextgeneration claims and collision repair platform. GoTime product highlights include: ● GoTime Autosource. Drives immediate accuracy and quicker per-
formance for insurance staff and independent appraisers. According to AudaExplore, it is the only smart phone app with advanced vehicle identification, one-thumb conditioning, and the market-driven valuations of Autosource, AudaExplore’s valuation service. AudaExplore says the intuitive design of GoTime Autosource empowers appraisers to easily complete comprehensive vehicle-side inspections. ● GoTime Repair. Designed to enable peak performance for collision repair facilities through better repair tracking and shop management. By combining AudaExplore’s AutoFocus body shop management system (BMS) with AudaExplore’s AutoWatch collision repair tracking software on smart mobile devices, the company states that users can quickly and easily optimize operations, reduce cycle times and maximize customer communications. ● GoTime Appraiser. AudaExplore calls this feature an all-in-one mobile solution that enables appraisers to efficiently and effectively manage appraisal appointments and vehicle repairs while providing vehicle owners with an optimized customer experience. Going beyond just photos,
GoTime Appraiser features drag-anddrop schedule updates, integrated turn-by-turn directions, single-click customer communications, AudaExplore’s patent-pending vehicle photo guides, and location-specific repair statuses and alarms. “With the mobile technology age comes new ways of increasing the efficiency and productivity of appraisers and collision repair experts in the field, as well as delivering immediate and optimal communications to vehicle owners,” added Lowell. “We are fanatical about providing our customers’ customers with the best experience possible and are proud to bring the first three GoTime solutions to market, building upon our commitment to delivering continuous innovation and integrated intelligence for the automobile claims market.” In other news, the company announced Oct. 8 it will expand its global automotive data footprint with the addition of Chrysler vehicle manufacturing build data, for vehicles in the US., Canada and Mexico. The expansion brings Chrysler vehicle build data accuracy to every country where Chrysler vehicles are sold through AudaExplore’s AudaVIN™ vehicle identification technology.
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Consumer Groups Go to Court to Force Obama Administration’s Hand on Back-Up Cameras Consumer groups are taking the Obama administration to federal court over its about-face on backup cameras. In a lawsuit filed today in federal court in New York, two individuals and four organizations—including Consumers Union, the advocacy wing of Consumer Reports magazine— asked a judge to order the U.S. Department of Transportation to set rear visibility standards for light vehicles, as required by a 2008 law. DOT proposed rules in 2010 that would have required backup cameras in all new cars and light trucks. Final rules were delayed multiple times after automakers and White House officials raised concerns over costs. Before leaving office this year, Transportation Secretary Ray LaHood set a new goal of completing the standards by 2015. With the lawsuit, the consumer groups hope to force the administration’s hand and make backup cameras a standard feature on new light vehicles several years sooner. “When Congress ordered this rule issued in three years, they meant three years, not seven,” said Scott Michelman, an attorney for Public Citizen, a consumer advocacy group. Neither the DOT nor the U.S. Department of Justice would comment on
Overall Parts Solutions is a NABC Top Level Member
Overall Parts Solutions, a leading parts procurement and logistics technology provider for the collision industry has become a top-level Diamond member of NABC. Based in Grand Prairie, Texas, Overall Parts Solutions provides a collision parts tool called OPSTRAX, a Web-based parts coordination system designed to work with major estimating and management systems. “We look forward to being an integral part of the National Auto Body Council,” said Nick Bossinakis, president of Overall Parts Solutions. “With the help of many of our partners in the collision industry, we have been quietly growing our business. As we now take our business to the next level, we believe we have an obligation to support the work of the National Auto Body Council, which will strengthen and benefit all of us in the collision industry. “ With the addition of Overall Parts Solutions, membership in the National Auto Body Council now includes 199 businesses and individuals representing all facets of the collision industry. OPS joins 26 other companies at the top-tier Diamond sponsor level.
the lawsuit. DOT has added the safety device to the list of recommended features under the federal New Car Assessment Program. The move does not impose any requirement on automakers but it “will encourage both automakers and consumers to consider more vehicles that offer this important technology,” LaHood’s successor, Anthony Foxx, said in a statement. “While adding this technology to our list of safety features is important, I remain committed to implementing the rear visibility rule as well,” Foxx added.
Opposition and support The rules still face resistance from some car companies, though some suppliers stand to gain from a mandate. Trade groups representing automakers challenged the rules in meetings with the White House in 2011, saying that backup cameras would be less cost effective than other features required in cars, such as electronic stability control. DOT said rearview cameras would replace electronic stability control systems, which are now required by law, as a recommended advanced
Auto Data Direct Adds 3 New States to Database
Auto Data Direct, a Web-based motor vehicle record database, has added Washington, Virginia and Indiana to its lineup, bringing the company’s state count to 31. Company president Jim Taylor said, “This is an important milestone in the growth of our company’s services. ADD’s core business is to provide real-time motor vehicle inquiries to DPPAqualified companies. We’ve grown from Florida records only in 1999 to now working with 31 states. Our customers value a single point of access for records so that the process of finalizing transactions is easy, accurate, and can be completed from online without extra steps to retrieve the information from other sources.” The records provided by ADD include include owner, lien holder, and registration information as well as vehicle data such as make, model, year, tag and title number, and records are made available through a secure internet connection, based on a company’s qualifications under the Federal Driver’s Privacy Protection Act (DPPA). ADD also provides a national title pointer with information from the National Motor Vehicle Title Information System.
36 NOVEMBER 2013 AUTOBODY NEWS | www.autobodynews.com
technology feature in the NCAP program. According to NHTSA estimates, an average of 292 fatalities and 18,000 injuries occur each year as a result of back-over crashes involving all vehicles, the agency said in a December 2010 report. NHTSA said 228 fatalities of those fatalities involve light vehicles weighing 10,000 pounds or less. “Two particularly vulnerable populations—children and the elderly —are affected most,” the report said. “Approximately 44 percent of fatalities involving light vehicles are children under five—an unusually high percentage for any particular type of crash. In addition, 33 percent of fatalities involving light vehicles are elderly people 70 years of age or older.”
Cost per life Also in 2010, NHTSA estimated that adding a backup camera to a car would cost $58 to $203, depending on whether the car already has a display screen, and would save 95 to 112 lives per year—and up to $18 million per life. Even without a mandate, backup cameras have become more common in recent years. They were standard or optional in 77 percent of 2013 model-
year vehicles, according to Edmunds.com, up from 32 percent of 2008 models. Trucks, minivans and crossovers, which tend to have more limited rear visibility than cars, have often been the first vehicles equipped with the cameras. But some automakers have decided to put them into smaller cars, as well. When the redesigned 2015 Honda Fit subcompact arrives in showrooms next year, Honda’s entire lineup will have backup cameras as a standard feature. Ami Gadhia, senior policy counsel at Consumers Union, said all types of cars could use better visibility. Even if backup cameras gain widespread acceptance across the market, that is no substitute for a government mandate, she said. “We don’t see a need for a compromise on safety,” Gadhia said in an interview. “We think it should be offered across the board.”
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SCRS Adds Consolidation Tracks to SEMA Repairer Driven Education SCRS has included several tracks in its Repairer Driven Education (RDE) series at the SEMA Show that will address the consolidation trend in the industry. “SCRS is continually looking at ways that we can help collision repair business owners succeed in the marketplace, and we realize that what defines success varies for the wide array of repairers operating in today’s shifting landscape,” said SCRS Chairman Ron Reichen. “We suspect that the private equity entering our industry is going to continue to fund acquisitions, and that means independent collision businesses are likely to be interested in one of two models for success: they will either position themselves to compete against consolidation or position the business to sell for the highest value.” SCRS has put together several sessions, including a panel of well-known industry veterans who made headlines of their own during the sale of their previous businesses. The panel, “If I Knew Then What I Know Now – Lessons Learned Selling My Body Shop,” will be held from 3 to 5 p.m. on Thursday, Nov. 7. Panelists will discuss things they learned in the process that can help attendees interested in proceeding down a simi-
lar path best prepare themselves. Subject matter experts include: • Aaron Clark, former owner of Collision Solutions, sold to ABRA Auto Body & Glass • Pat O’Neill, former owner of 911 Collision Centers, sold to Caliber Collision Centers • Dan Bailey, former owner of A&B CARSTAR, sold to CARSTAR Franchise Systems • Mike Anderson, former owner of Wagonwork Collision Centers, sold to Pohanka Collision Centers “There is a great deal of combined knowledge among these experts, who will be offering first-hand insight into how to navigate the process of valuing and selling your business,” said SCRS Executive Director Aaron Schulenburg. “That said, it is very important to point out that we have a great deal of optimism that independent collision repair owners can thrive in today’s marketplace as well, and have also defined specific programs that address solutions for them.” Perhaps none of the programs address these solutions more specifically than Wednesday afternoon’s session entitled, “Competing in a Consolidated Marketplace.” This session will be led by Tim Ronak of AkzoNobel and will take place from 3 to 5 p.m.
Ronak will discuss the most current consolidation information available as of November 2013 and suggest the path consolidation may take and the impact it might have on the industry at large. He will compare collision consolidation to other industries to identify strategies that were successful within those industries when consolidation reshaped their business model. Participants will have better understanding on how to navigate in this environment and insight into survival strategies for their business. On Friday from 12:30–2:30 p.m., Scott Biggs of the Assured Performance Network will host a session entitled, Creating a Parallel Universe: Reinventing the Collision Repair Industry, focusing on profit, prosperity and business survival in the decades ahead. Attendees will see alternative versions of the future based upon the plans and agendas of insurers, MSOs and OEMs. The 2013 RDE series is sponsored by industry organizations such as SEMA, PPG Automotive Refinish, GM Genuine Parts, BASF Refinish, Ford Motor Company, AkzoNobel, Hertz, Axalta Coating Systems, Goliath Carts, PBES (a division of AAIA), LKQ Corp., SATA, Spanesi Americas, Sherwin-Williams and AASP.
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Sherwin-Williams Automotive Finishes A-Plus Network, in affiliation with VehicleOwnersGuide.com, has released a new dispatching system aimed at increasing car count for APlus shops and making claims management simpler for insurers. A-Plus shops will now have 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 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 also 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,” said Troy Neuerburg, director of sales excellence at SherwinWilliams. “This system offers numerous benefits.” It also includes the ability to generate a consumer estimate and an e-Coupon program.
SEMA Supports Ban of E15
SEMA is supporting legislation (S. 344) introduced in the U.S. Senate to ban the sale of gasoline containing 15% ethanol. The bill would overturn actions taken by the U.S. Environmental Protection Agency (EPA) two years ago to permit ethanol levels to rise from 10% (E10) to 15% (E15). The agency is only requiring a gas pump warning label to alert motorists that E15 could potentially cause equipment failure for vehicles older than model-year 2001. “This legislation is necessary to protect auto enthusiasts by preventing damage to older vehicles and high-performance specialty components,” said SEMA Vice President of Government Affairs Steve McDonald. “SEMA applauds Senators Roger Wicker (R-MS) and David Vitter (RLA) for their efforts to correct by statute a flawed decision by the EPA. Unless enacted into law, E15 may soon appear at a gas station near you.” Ethanol increases water formation that can then create formic acid and corrode metals, plastics and rubber. Older cars and certain highperformance specialty parts are not constructed with corrosion-resistant materials or able to tolerate the higher temperatures at which E15 may burn.
Urethane Supply Company Offers New Welding System
The Urethane Supply Company recently released the 6057-C Nitro Fuzer Welding System, a new nitrogen welding technology that combines hot air and nitrogen welding. The Nitro Fuzer includes fine-flow control regulators on both the air and nitrogen sides. Those are combined with output pressure gauges and a flow gauge to give users control over the amount of gas that is used during the welding process. The system includes a pressure safety circuit to help prevent burn out in heating elements, an electrically actuated air-nitrogen switch, and a melt-proof silicone and fiberglass braided hot air welder hose. The Nitro Fuzer also features an integrated airless welding system to allow for smoothing out the nitrogen weld and for repairing thermoset polyurethane. “It’s a fraction of the cost and time of two-part epoxies,” said Kurt Lammon, president of the Urethane Supply Company. “An average six-inch repair costs about $2 for the plastic welding rod; with epoxy, it could cost over $30.” The Nitro Fuzer is shipped fully assembled and includes a variety of accessories and an instructional DVD.
www.autobodynews.com | NOVEMBER 2013 AUTOBODY NEWS 37
BMW Asks California Court to Strike Class Action in Leaking Sunroof Case
BMW has asked the U.S. Northern California District Court to strike the proposed state class action status of a lawsuit filed against the company by two BMW owners who claim that drainage tubes installed to pull water away from vehicles’ sunroofs do not properly work, leading to water damage. Plaintiffs’ attorneys claim the class should include California residents who have “owned or leased any BMW X5 series vehicles, X3 series vehicles and 5 series vehicles.” In response, BMW’s attorneys claim in court documents, “First, the purported class is not ascertainable because it includes many persons who have no claims against BMW North America. Those putative class members whose cars have never manifested the alleged defect, those whose sunroofs leaked for reasons other than the alleged defect and those whose cars are covered under warranty—and thus eligible for repair at no cost to them— cannot claim they suffered any cognizable injury and therefore lack standing.” The attorneys also claim, “The class includes many vehicles purchased more than ten years ago, meaning that the transactions at issue are well outside
Allstate Says Usage-Based Insurance Increasing
Allstate reports that drivers that are signed up for its usage-based insurance program, Drivewise, will register more than one billion miles driven this month. Allstate said that Drivewise is launching in Kentucky and Montana this month, making the usage-based insurance product available in 22 states including New York and New Jersey. Allstate’s usagebased auto insurance (UBI) product measures mileage, hard braking, excessive speed, and the time of day when a customer drives. Using that data, Allstate calculates insurance premium savings for each customer using its telematics technology. Customers can receive savings equal to 10 percent of premium. After the first six months of use, savings are based on driving performance calculated from the data collected. The company said that seven of every 10 Drivewise customers save money through the program and no one receives an increase. Of the drivers earning a discount, the average savings is 14 percent per vehicle. Allstate reports that roughly, a third of all new customers enroll in the Drivewise program, where it is available.
the statutes of limitation of, for example, plaintiffs’ CLRA (three year), UCL (four year) and breach of express warranty (four year). At a minimum, persons whose claims are outside the statutes of limitation should be excluded from any proposed class.” BMW’s attorneys also point out that it is difficult to identify owners who have “experienced water damage because of the alleged defect, rather than other reasons—including lack of maintenance, accident damage or even leaving the sunroof or trunk open before a rain storm.” Citing the certified pre-owned BMW warranty, attorneys claim that the automaker “cannot be held liable for ‘failing to company with the warranty’ or ‘refusing to repair’ if putative class members did not comply with their own obligations under the warranty or if the warranty does not provide coverage for the damage claimed. Determining whether such compliance exists will require individualized inquiries precluding class certification as a matter of law.” BMW’s attorneys conclude by claiming, “Plaintiffs cannot represent the putative class specified in their complaint because the class is simply too board and faces overwhelming in-
NHTSA Recommends Back Up Cameras for New Cars
dividualized inquiries and because plaintiffs cannot satisfy basic typicality requirements. These deficiencies are plain, even at the pleading stage. For the foregoing reasons, the class allegations therein should be stricken.” Attorneys for plaintiffs’ Monita Sharma and Erica Anderson claim “BMW designed, manufactured, distributed, sold and leased various makes and models of BMW vehicles that contain a serious design defect that significantly impacts both the safety and value of its vehicles. Specifically, numerous models of BMW vehicles manufactured during the class period were designed so that certain vital electrical components known as SDARS, RDC, and PDC modules, are located in the lowest part of the vehicles’ trunk. … Because BMW decided to place these vital electrical components in what is essentially the lowest part of the vehicle (the spare tire well under the trunk), they are especially prone to water damage that can be caused through the normal and ordinary use of the vehicle. “When this water damage occurs, the vehicles become inoperable and pose a serious safety risk to those who experience this problem. Although these components are highly suscepti-
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The National Highway Traffic Safety Administration (NHTSA) has included a recommendation in its New Car Assessment Program (NCAP) that encourages manufacturers to equip new vehicles with a rearview video system. NCAP includes a five-star rating system for raising consumer awareness about crashworthiness and rollover You don’t have to stand on safety information. The NCAP update your head, to get high quality is separate from NHTSA’s proposed at a reasonable price. rule to update Federal Motor VehiJust go to: cle Safety Standard No. 111 (Rear www.autobodypaintstore.com View Mirrors) to require all new passenger cars be equipped with a www.autobodynews.com rearview camera system. The equipCHECK IT OUT! ment is intended to prevent accidents by alerting drivers when Advertise in our pedestrians are behind the vehicles. Under a law passed in 2008, the CLASSIFIED SECTION for NHTSA had until 2011 to issue the $50 per column inch! rule to be phased-in by 2014. While the law permitted sensors, mirrors or an ad in our ToPlace advertise other devices to provide drivers with rearward information, the NHTSA callAUTOBODY AdvertisingMARKETPLACE Sales at: determined that a camera and dash800-699-8251 section of Autobody News. board display screen system was the best solution. The automakers have e-mail: generally objected to not being pro- advertising@autobodynews.com vided more flexibility in determining cost-effective ways to achieve www.autobodynews.com ltedesco@autobodynews.com the goal.
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ble to water damage, BMW provides no warnings or advisories to BMW owners about the location of this vital equipment or the importance of keeping the vehicle’s trunk compartment free of liquids,” they continue. The attorneys point out that drainage tubes are installed to pull water away from the sunroof. “Unfortunately, these sunroof drains were designed in such a way that they are prone to become clogged with dirt, debris, leaves, and other naturally-occurring materials. When these tubes become clogged, they come loose or leak into the trunks of the vehicles. These leaks, which eventually flood the trunks of the vehicles, cause the vital electronic components contained at the bottom of the vehicles’ trunks to short-shutting off certain components of the automobile necessary for driving and creating a potential safety risk,” the attorneys allege. BMW had asked the court earlier to dismiss the lawsuit by Sharma and Anderson. The court had not issued any decision at press time.
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