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ASA to Hold ASRW 2014 in Detroit Alongside I-CAR and CIC July 28–Aug 2 The Automotive Service Association (ASA) announced at the Collision Industry Conference (CIC) in Boston that the NACE expo will be moving away from its traditional fall event schedule to stage a summer show beginning in Detroit in 2014. NACE (the International Autobody Congress & Exposition), I–CAR (Inter–Industry Conference on Auto Collision Repair) and CIC (Collision Industry Conference) have announced the formation of Industry Week 2014, uniting several of the industry’s key events. The announcement was made by ASA Executive Director Dan Ris-

ley at the opening of this week’s CIC meetings at the Westin Boston Waterfront. Speaking in front of the assembly, Risley said the move backs the ASA’s promise he relayed at CIC in April that NACE will see substantial changes in the coming years. Industry week will take place July 28–Aug. 2, 2014 at Detroit’s Cobo Center, and has the following preliminary schedule of events: Tuesday, July 29 – CIC Meeting & Reception Wednesday, July 30 – I–CAR Conference & Reception See ASRW 2014, Page 19

Carlisle and Company Blogs on PartsTrader market strategies that help OEMs manage risk and optimize performance. Carlisle and Company is known for its data benchmarking, both in service and parts, designed to help member companies improve dealer service support, and service quality to vehicle owners. One of their groups, the North America Parts Benchmark (NAPB, formerly NASPC) has been analyzing the parts supply chain since 1993, so it’s interesting to read the company blog, which recently addressed the ongoing PartsTrader controversy. The text following comes directly from the Carlisle blog (www.carlisle-co.com): See Carlisle’s Blog, Page 30

Change Service Requested P.O. BOX 1516, CARLSBAD, CA 92018

Carlisle and Company is a consulting firm—not to be confused with Carlyle Group (an American-based global asset management firm active in acquiring collision MSOs, such as Service King recently)—which develops

PartsTrader rollout plan

VOL. 1 ISSUE 12 AUGUST 2013

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Wisconsin Moves to Reform its Lemon Law; State is Known for Excessive Awards Wisconsin is notorious among automobile, motorcycle, truck, and recreational vehicle manufacturers as having the worst lemon law in the country. The law places unreasonable and unworkable requirements on OEMs that allows lawyers like selfproclaimed “Lemon Law King,” Vince Megna, to win exorbitant awards that have no apparent relationship to the underlying goals of the law. For example, in Marquez v. Mercedes-Benz, a vehicle that cost $56,000 resulted in a $618,000 award, with over $300,000 in attorney fees. (See article p. 4 this issue.) Wisconsin is the only state in the nation to provide for mandatory double damages under its unique lemon law. Under Wisconsin law, if the manufacturer fails to provide a comparable vehicle or refund for a “lemon” within 30 days of the vehicle owner’s request, the the courts are required to award him or her double any pecuniary loss,

together with costs, disbursements and reasonable attorney fees. The courts have interpreted “pecuniary” loss to include the vehicle’s purchase price. Assembly Bill 200, currently in front of the legislature, would repeal the nondiscretionary double-damage requirement, but the fundamental obligation that a manufacturer provide a comparable vehicle or refund remains unchanged. The law will still allow a consumer to bring an action to recover any pecuniary loss (including the cost of the vehicle), along with costs, disbursements and reasonable attorney fees, and any equitable relief the court determines appropriate, if the manufacturer fails to provide the vehicle or refund within the specified deadline. Thus, manufacturers still have every incentive to provide a timely refund or vehicle, but lawyers will have less incentive to delay resolution of the dispute. See Wisconsin Lemon Law, Page 6

State Lawmakers Around U.S. Consider Or Approve Legislation Affecting Body Shops by John Yoswick

Dozens of proposed laws that will have an impact on collision repairers get introduced in state capitols around the country every year. Paying attention to them—even if they aren’t up for consideration in your state now—can pay off because you may be interested in getting similar laws enacted in your state. Conversely, a bill you don’t like in another state could make its way to your Capitol, so it’s helpful to know what to watch for. Here’s a look at some of the bills that have recently been introduced, are under consideration or have been passed by lawmakers around the country. Parts-related legislation A New York bill (A 7234) (similar to

one introduced in Maryland) takes aim at PartsTrader by prohibiting an insurer from requiring a shop to use a specific vendor or process for the procurement of parts or materials necessary for repair of a vehicle. Another New York bill (A 3872) introduced would require consumer notification and consent regarding the type of parts to be used in repairing their vehicle, and would prohibit the use of anything other than new OEM parts for vehicles less than three years old. A similar bill (HB 362) in Vermont would place a 2-year ban on the insurer-use of the parts on new cars. New regulations that will go into effect in California early next year place significant new limitations on the use of non-OEM parts in that state. See Legislation Affecting Shops, Page 10

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2 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com

Contents

NATIONAL Allstate Insurance Owners Plan to Hire 400 Sales Staff. . . . . . . . . . . . . . . 24 ASA Meets with Administration Re MFN Clauses . . . . . . . . . . . . . . . . . . . . 28 ASA to Hold ASRW 2014 in Detroit Alongside I-CAR and CIC July 28–Aug 2 . . . . . . . . 1

ASRW Will Have Main Stage with Rotating Speakers . . . . . . . . . . . . . . . . 19 Auto Body Speed Shop’s Mall Location Stands Out. . . . . . . . . . . . . . . . . . . . . . . 8 Bookkeeper Sentenced to Seven Years For Theft from Florida Body Shop. . . . . . . . 24 Carlisle and Company Blogs on PartsTrader . 1 Car-O-Liner Gets Honda Approval As Official Supplier . . . . . . . . . . . . . . . . . . 14 Chrysler Issues Recall on Air Bag Modules . 22 Collision Industry Makes Gains at SEMA Show . . . . . . . . . . . . . . . . . . . . 33 Ford to Hire 3000 Salaried Workers in ‘13. . 22 Ford to Recall 13K Vehicles over Door Latches . . . . . . . . . . . . . . . . . . . 22 Future Looks Bright for U.S. Auto Industry, Hiring, Sales . . . . . . . . . . . . . . . . . . . . 23 GM and UTI Partner to Help Grow Supply of Auto Techs . . . . . . . . . . . . . . . . . . . 22 GM to Recall Four 2012 Volts. . . . . . . . . . 22 Historical Snapshot: A Look Back at this Month in Collision News History . . . . . 16 Honda Reponds to Amended Class Action Complaint . . . . . . . . . . . . . . . . . 23 I-CAR Tech: OSHA Hazard Communication Standard Revision . . . . . . . . . . . . . . . . 36 Japan’s Diamond Electric to Pay $19M Price Fixing Fine. . . . . . . . . . . . . 22 Japan’s Toray Buys Stake in Plasan Carbon Composites . . . . . . . . . . . . . . . 22 LA CAA Featured BMW i3 Technology at June 19 Meeting . . . . . . . . . . . . . . . 29 Lane Auto Body Shuts with Death of Owner Steve Lane . . . . . . . . . . . . . . . . . 8 May OK Tornado Insurance Claims: 75,000+, $687 M+ . . . . . . . . . . . . . . 24 NC Body Shop Wins Short-Pay Arbitration Case Against Nationwide Insurance . . . . 3 Nissan Plans Major Reforms in Buying, Shipping, Building . . . . . . . . . . . . . . . . 22 Nissan Will Add 900 Jobs for Rogues Built in Tennessee . . . . . . . . . . . . . . . . 24 NOLA Shop Owner Implicated in Cover-Up of Hit and Run, Fourth Suspect Sought. . 4 OEMs, CARE, and AAIA Seek Solution to Right to Repair. . . . . . . . . . . . . . . . . 23 Oregon Body Shops Grade Insurance Companies . . . . . . . . . . . . . . . . . . . . . 25 Rearview Cameras Delayed . . . . . . . . . . . 22 Rodney Pierini is President & CEO of CAWA, Operating in California, Nevada, Arizona . 38 State Farm’s Richardson, TX Complex Keeps Growing . . . . . . . . . . . . . . . . . . 24 State Lawmakers Around U.S. Consider Or Approve Legislation Affecting Body Shops. . . . . . . . . . . . . . . . . . . . . . 1 Texas Governor Signs Franchise Tax Bill . . 30 Volvo: Six State Class Action Should Not Be Certified . . . . . . . . . . . . . . . . . . . . . 23 Your Driving Costs—AAA Study Finds Vehicle Ownership Costs are Rising . . . 33

Michael Bradshaw, vice president of operations for K&M Collision in Hickory, NC, was awarded claimed shortpays in a court-ordered arbitration. The binding arbitration was the result of Bradshaw filing a lawsuit on behalf of K&M Collision’s customer against Nationwide for the insurer’s underpayments of what were determined to be reasonable and necessary repair costs. In North Carolina, every lawsuit filed goes to binding arbitration, and only after same can either party then seek a trial if so inclined. The insurer’s short-pays included: labor rates ($48 body and refinish, $80 mechanical and $65 frame); procedures (i.e. sand and buff, final detail, road test, color tint and collision access time); invoiced paint and 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 a total amount of $2,506.98 plus accrued interest until the insurer’s full payment is made. “I’m glad the courts recognized who 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 regardless 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 bottomline cost and the cheapest repairs possible. My father (the CEO) and I decided if we were going to stay in business and continue to repair vehicles properly, we See NC Short Pay, Page 17

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

Great Lakes

COLUMNISTS Franklin: Still Using a Quota System For Consumer Sales? . . . . . . . . . . . . . . . . 28 Historical Snapshot: A Look Back at this Month in Collision News History . . . . . 16 Insider: Insurers Hate to Admit It, But Our Success Depends On You and Your Estimators . . . . . . . . . . . . . . . . . . 14 Repairer-Only Rountable Airs the Issues Important to Repairers . . . . . . . . . . . . . 26 SCRS Board Meeting: Partial Panels, Labor Rates, SkillsUSA . . . . . . . . . . . . 32 Sisk: Auto Body Association of Connecticut Supports Members’ Concerns and Fights Unfair Legislation . . . . . . . . . . . . . . . . . 34 Sisk: Executive Director Jillian Zywien Contributes Expertise in Public Relations to AASP/MA . . . . . . . . . . . . . 35

by Barrett Smith

Indexof Advertisers

REGIONAL ABRA Acquires Royal Auto Glass in Indianapolis, IN . . . . . . . . . . . . . . . . . . . 8 Allstate to Close Call Ctr in Illinois, Cuts 379 Jobs . . . . . . . . . . . . . . . . . . . . . . . 12 ASA-IL Announces 2013 C.A.N. Conference in Chicago. . . . . . . . . . . . . . 6 Body Shop Burn Camp Donor Recalls His Own Burn . . . . . . . . . . . . . . . . . . . . 8 Burnsville, MN, Students Go on to Engineering . . . . . . . . . . . . . . . . . . . 12 Demand is High and Growing for Auto Techs in Michigan . . . . . . . . . . . . 31 Edgerton, WI, Car Fires Are Still Being Investigated . . . . . . . . . . . . . . . . . . . . . . 8 MB-USA Pays Out Another $260K in Long-Running WI Lemon Law Case as Legislature Hears Revised Law . . . . . 7 Mechanic Shot in Ohio Shop . . . . . . . . . . . 8 MI Couple Charged with Embezzling by Auto Glass Shop . . . . . . . . . . . . . . 12 NASCAR’s Carl Edwards Drives ‘Sweepstakes’ on Henry Ford’s 150th Birthday Celebration in Honor of Fords’s One and Only Race . . . . . . . 18 OH Shop Employee Gets to Work by Boat During Flood 1 . . . . . . . . . . . . . . . 12 SkillsUSA Conference Yields Silver Medal for MI Student . . . . . . . . . . . . . . 12 Solon, OH, Shop Owner is Found Safe and Sound. . . . . . . . . . . . . . . . . . . . . . . 8 Steve Belknap, Illinois Shop Owner, Restores 1947 Ford Pickup Found Roadside . . . . 13 Wisconsin Moves to Reform its Lemon Law; State is Known for Excessive Awards. . . 1

NC Body Shop Wins Short-Pay Arbitration Case Against Nationwide Insurance

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 . . . . 33 BASF . . . . . . . . . . . . . . . . . . . . . . . . . 5 BMW Wholesale Parts Dealers . . . . 29 Car-Part Pro. . . . . . . . . . . . . . . . . . . 23 Certified Automotive Parts Association (CAPA). . . . . . . . . . . 11 CJ, Inc. - Signature - Star-A-Liner . . 17 Classifieds. . . . . . . . . . . . . . . . . . . . 38 Equalizer . . . . . . . . . . . . . . . . . . . . . . 8 Erhard BMW of Bloomfield Hills . . . . 7 Erhard BMW of Farmington Hills . . . 7 Ford Wholesale Parts Dealers . . . . 35 Forklift Wrecker . . . . . . . . . . . . . . . . . 4 Ganley Auto Group, Inc . . . . . . . . . 12 Garmat . . . . . . . . . . . . . . . . . . . . . . 13 GM Wholesale Parts Dealers . . . . . 29 Graham Auto Mall . . . . . . . . . . . . . . . 6 Honda-Acura Wholesale Parts Dealers. . . . . . . . . . . . . . . . . . 20-21 Hyundai Wholesale Parts Dealers . 24 Infiniti of Naperville . . . . . . . . . . . . . 14 Jake Sweeney BMW . . . . . . . . . . . . 25

Jake Sweeney Chevrolet . . . . . . . . 25 Kempthorn Motors, Inc . . . . . . . . . . 16 Laurel Auto Group of Westmont . . . 39 Lexus Wholesale Parts Dealers . . . 36 Malco. . . . . . . . . . . . . . . . . . . . . . . . 13 Mazda Wholesale Parts Dealers . . . 30 Milosch’s Palace Chrysler-JeepDodge . . . . . . . . . . . . . . . . . . . . . 15 MOPAR Wholesale Parts Dealers . . 27 Nissan/Infiniti Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . 32 PPG . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Preval Spray Gun . . . . . . . . . . . . . . 40 Rare Parts, Inc. . . . . . . . . . . . . . . . . 18 SEMA Trade Show . . . . . . . . . . . . . . 9 Sherwin-Williams Automotive Finishes . . . . . . . . . . . . . . . . . 18, 19 Subaru Wholesale Parts Dealers . . 31 Toyota of Grand Rapids . . . . . . . . . 10 Toyota Wholesale Parts Dealers . . . 28 VIM Tools. . . . . . . . . . . . . . . . . . . . . 34 Volkswagen Wholesale Parts Dealers. 37

www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 3

NOLA Shop Owner Implicated in Cover-Up of Hit and Run, Fourth Suspect Sought The owner of the New Orleans body shop at which police found the car allegedly involved in a fatal hit and run of an officer bonded out of jail the morning of July 11. Best of the Best Auto Shop owner Bill Cager, 33, was booked with obstruction of justice and accessory after the fact to manslaughter. His bond was set at $100,000. Officer Rodney Thomas was fatally struck by a Porsche Panamera, which was allegedly being driven by Justin McKey, 25. McKey was booked on manslaughter and felony hit and run charges, as police said that he was behind the wheel of the 2013 Porsche Panamera that hit Officer Thomas on the High Rise at around 1 o’clock the morning of July 7. Orleans Parish Sheriff’s records

Gravier St., and was recorded the morning Thomas was killed. Anyone with information on the whereabouts of this man is asked to call Crimestoppers at 504.822.1111 or toll-free at 1.800.903.7867 McKey turned himself in at 3:30 p.m. July 8, told police where to find the Porsche, and admitted he was behind the wheel when he hit Officer Thomas on the Interstate 10 high rise around 12:45 a.m. July 7, said court records. Before the hit and run, Thomas was involved in a minor traffic accident in a personal vehicle on the way home from his night shift in the second district, and began directing traffic while in his uniform and reflective vest. While Thomas was directing traffic, witnesses said the Porsche side-swiped Thomas’ truck before striking Thomas, carrying him on the hood of the vehicle before he fell to the ground. The Porsche then sped off. McKey told investigators he was driving the “car in and out and it was dark and he didn’t see him.” McKey’s neighbors said he and his mother have lived Rosalyn Thomas, far right, the wife of New Orleans Police Department Officer Rodney Thomas, looks at a photo of in the neighborhood for her husband, far left, on the hood of a NOPD car during a years, and they have never vigil at 2nd District Police Station on Magazine Street in before seen a white Porsche New Orleans on Thursday, July 11, 2013. (Photo by Chris on their street, raising quesGranger, Nola.com) tions about who owns the car. show McKey posted $50,000 bond at Court documents confirm, Hal7:39 p.m. July 9. ley was previously cited for driving A third suspect in the case, Ken- the Porsche erratically near the Merneth Halley, 28, remained jailed as of cedes-Benz Superdome around 9 pm July 11. Halley is accused of taking on July 6, hours before the fatal hit the damaged Porsche to Cager’s Best and run. of the Best Automotive and Collision Police have not yet said who Center, at 2635 Gravier St. Bond was owns the Porsche. set at $100,000 for charges of accesWhen the car was discovered at sory after the fact to manslaughter Cager’s shop, he and another man aland obstruction of justice. But he was legedly involved in the cover up, being held without bond for parole Kenneth Halley, were arrested. Halviolation. ley has a previous felony conviction New Orleans police are search- according to court records. ing for a fourth suspect in the fatal According to court documents, hit-and-run of NOPD officer Rodney Cager used towels to wipe blood off Thomas, according to NOPD the car. NOPD technicians found spokesman Frank Robertson. blood stained rags in garbage cans in Police released a grainy photo- and around the business the next day, graph of the suspect on July 10. Ac- as well as hair on the car’s windcording to police, the photo was shield. taken from surveillance video inside The vehicle had extensive damthe Best of the Best of the Best Auto- age to the front end and passenger’s motive and Collision Center, at 2635 side, and the windshield had a mas-

4 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com

sive indentation where glass had shattered. According to court documents, Halley picked up a friend and drove the Porsche to the body shop within an hour of the crash.

Halley has a lengthy criminal record, which includes multiple arrests, including charges for second degree murder and heroin distribution. He was arrested multiple times in 2008 alone, resulting in convictions for distribution of heroin and cocaine and attempted possession of a firearm by a felon. Halley was released on good behavior in 2011, serving only two years of a fiveyear sentence that would have been up in 2014. New Orleans Police have arrested Justin McKey, left, Shop owner Cager was arKenneth Halley, center, and Bill Cager, right, in connection with the fatal hit-and-run accident that took the life of rested in 2002 for unauthoNOPD Officer Rodney Thomas early the morning of July 7. rized use of a motor vehicle, (Orleans Parish Sheriff's Office) illegal possession of a stolen Surveillance cameras inside and auto worth over $500, and altering or outside the business showed the ve- removing an auto VIN number, all of hicle arriving at the business, and the which were refused. Cager also had subsequent attempts to clean the car, a 2002 municipal court charge for said prosecutors. disturbing the peace. McKey has a January arrest in Thomas’ funeral services were which he pled no contest to criminal held morning of July 12 at Franklin trespassing (domestic violence) and Avenue Baptist Church. The cerewas sentenced to 30 days, a $350 fine mony was conducted with full police including court costs, and one year department honors, described by the inactive probation. local media as a “sea of blue.”

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ASA-IL Announces 2013 C.A.N. Conference in Chicago

The bill makes other changes that bring WI law more in line with other states: Clarifying Out of Service. Under existing law, a vehicle is considered a lemon if within one year of delivery the vehicle is subject to repair at least four times for the same problem or if the vehicle is out of service for 30 days or more due to nonconformities with the warranty. The bill clarifies that “out of service” means that the vehicle is unable to be used for its intended purpose. Providing Comparable New Vehicle. The bill provides a more reasonable time period to provide a comparable vehicle – 120 days for commercial vehicles and 45 days for others. In addition, the bill requires the manufacturer exercise due diligence in locating and providing a comparable new vehicle within the applicable time period. However, if no comparable new vehicle exists, or is otherwise unavailable for delivery within the applicable period, the manufacturer must provide a refund within that timeframe.

Changing Election. If the consumer makes a change in his or her choice of refund or new comparable vehicle, the applicable time period to deliver the refund or vehicle is reset. Providing Needed Information. The bill requires a consumer requesting a refund to provide the manufacturer needed information on a form approved by the Wisconsin Department of Motor Vehicles. The manufacturer must provide the refund 10 days after receiving the information or 30 days from the refund request, whichever is later. Allowing Negotiated Settlements. As an alternative to a refund or comparable new vehicle, the bill allows for negotiated settlements. Establishing a Statute of Limitation. A vehicle can only be a lemon under the law as a result of problems arising while under the term of the warranty or within a year after first delivery, whichever is sooner. Thus, waiting six years to file a claim, as is currently allowed, is an unnecessary delay. The bill’s 24-month statute of limitations is consistent with other states where the limitation periods range from 12 to 24 months. Read the full text of the bill at https://docs.legis.wisconsin.gov/2013 /related/proposals/ab200.

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Shop owners, service writers, advanced and intermediate technicians, and automotive industry suppliers are encouraged to attend the 5th Annual Automotive Service Association of Illinois (ASA-Illinois) Chicago Automotive Networking (C.A.N.) Conference, scheduled for Friday, Sept. 20, through Sunday, Sept. 22, 2013, at the Crowne Plaza Chicago O’Hare in Rosemont, IL. The C.A.N. Conference, which draws industry professionals from all over the United States and Canada, will feature the best class instructors and education opportunities in the automotive sector, top vendors with the latest tools and technology, a variety of hands-on demonstrations on the exhibit show floor, and networking opportunities with industry peers and suppliers. The 2013 education line-up includes management, advanced and intermediate technician classes led by industry experts John Thornton, Scot Manna, Matt Winslow, Bernie Thompson, Scott Shotton, Jim Moritz, Bob Pattengale and Jorge Menchu. Topics will cover tips on increasing shop profits, effective management skills and Internet marketing strategies, understanding fuel injection, electrical circuit testing, German car driveability, air fuel ratio sensors, top three DTCs,

waveform analysis and energy management systems. Trade Show - Friday Only, is $10 (ASA Member), $15 (Non-ASA Member); Saturday & Sunday Only (Advanced Tech or Management Class)* $285 for ASA Member, $330 for NonASA Member; Saturday & Sunday Only (Intermediate Tech)* $195 for ASA Member, $235 for Non-ASA Member; Weekend Package* $350 for ASA Member, $395 for Non-ASA Member *Includes lunch on Saturday, refreshments and handout materials For additional information regarding classes, instructors, exhibit opportunities, online registration and hotel details, please visit the conference website at www.asacanconference. com. Or contact Sharon Ozimek and Deb Bullwinkel, co-executive directors of ASAIllinois, via email at info@asaillinois.org or at the following numbers: (877) 2724445, (773) 919-3875 or (630) 4303832. Since 1951, ASA-Illinois advances professionalism and excellence in the automotive repair industry through education, member services and legislative representation on the state level. ASA-Illinois is an affiliate of the Automotive Service Association (ASA), in Colleyville, Texas.

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MB-USA Pays Out Another $260K in Long-Running WI Lemon Law Case as Legislature Hears Revised Law

Mercedes-Benz USA LLC has paid out another $260,000 in a long-running lemon law case. Attorney Vince Megna (known locally and self-identified as the ‘Lemon Law King’) sued the company in 2005 on behalf of a Waukesha businessman who purchased what was deemed a defective E-series sedan. The state Supreme Court last year upheld a $482,000 judgment against the company. Megna argued the company owed interest that had accrued during the case’s court journey and MercedesBenz paid $618,000. A Waukesha County judge has now ordered the company to pay attorney fees and costs totaling $259,536. The company cut a check dated the same day. According to court documents, Marquez purchased a $56,000 E320 from a Milwaukee dealership in April 2005. Almost immediately, the car wouldn’t start and a number of repair attempts failed. In October 2005, Marquez had Megna send Mercedes-Benz a lemon law notice, demanding a refund. Under the law, the company had 30 days to comply. Marquez and the company spent most of those 30 days discussing a replacement vehicle in lieu of a refund. Ultimately, Marquez said he wanted a refund five days before the compliance window closed.

Wisconsin law provides that “if a new motor vehicle does not conform to an applicable express warranty,” and the nonconformity is not cured after a “reasonable attempt to repair,” then the consumer may return the vehicle and elect to receive either: 1) a new comparable vehicle, or 2) a refund. If the auto manufacturer fails to provide a refund or replace the vehicle within 30 days, the law provides harsh penalties. The plaintiff is also entitled to pre- and post-judgment interest, which can be large in cases like this that take years to wind through the court system. After Mercedes-Benz was alerted that the car was a lemon, it began working with the owner and his attorney to provide the owner the proper remedy. Originally Marquez sought a new vehicle, but instead of seeking a similar Eseries he requested an S-series, which had not yet been released to dealers. The car company argued it wasn’t liable because Marquez didn’t give one of its employees the information they needed to grant a refund. The case started in Waukesha County Circuit Court, where a judge ruled in favor of the owner. The case was appealed to the court of appeals, which reversed the lower court. The court of appeals held that a consumer

who intentionally thwarts a manufacturer’s efforts to provide a refund within the 30-day statutory period cannot recover the Lemon Law’s stiff remedies. The court remanded the case back to the circuit court for the jury to determine whether the owner intentionally thwarted Mercedes-Benz’s attempt to provide a statutory refund within the 30-day period by failing to provide the requisite bank information. On remand, the jury found in favor of Mercedes-Benz. The jury determined that the owner and his attorney, Megna, acted in bad faith by failing to call the bank so that Mercedes-Benz could access the bank account information. The circuit court judge, however, overturned the jury’s verdict by issuing a directed verdict in favor of the owner. The judge determined there was no credible evidence that the owner (or his attorney) intentionally thwarted Mercedes-Benz’s efforts to provide a refund. The case went straight to the Supreme Court, which affirmed the judge’s directed verdict in favor of the owner. Chief Justice Shirley Abrahamson, writing for the majority, found the lemon law is designed to force large, well-funded auto makers to compen-

sate customers for their losses. Expanding the manufacturers’ defenses would undermine the law’s purpose, Abrahamson wrote. No evidence suggested Marquez intentionally tried to block the refund, Abrahamson said. She found the initial refund demand provided MercedesBenz authorization to contact Marquez’s bank and his loan officer, noting Marquez called the loan officer the day he reaffirmed he wanted a refund and authorized him to release the account information to the car maker. Therefore, Mercedes-Benz had all the information it needed to deliver the refund before the deadline, Abrahamson said. In addition, the company’s employee never tried to contact the loan officer, never clearly asked Marquez to contact the bank and didn’t leave a number or express any urgency when he contacted Megna’s office later that afternoon, she found. Justice Patience Roggensack wrote in dissent that she didn’t believe Marquez acted in good faith and the decision deprives auto manufacturers of a valid defense. Republican legislators have recently introduced a Wisconsin bill that would cap damages at actual losses. See cover story.

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(888) 834-8635 (248) 699-3003 www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 7

Mechanic Shot in Ohio Shop

A man was arrested after allegedly shooting a shop employee in Camp Washington, OH. 18-year-old Keontis Clark was arrested after a mechanic was shot in the face at Uni Auto Sales. Police said the mechanic was conscious and able to talk when they arrived at the scene. He told authorities that Clark was arguing with him over work done on his car. He then allegedly shot the mechanic under the eye. The mechanic was taken to the hospital. His condition is unknown at this time.

Lane Auto Body Shuts with Death of Owner Steve Lane

Solon, OH, Shop Owner is Found Safe and Sound

The Solon Police Department was asking for help in locating Renat A. Akberdin, a 48-year-old male from Solon declared missing from his Auto Body shop in Willoughby. He drove a 2000 Honda Odyssey van grey in color bearing Ohio registration ERG 9320 according to the department’s Facebook page. Akberdin was later found safe in Eastlake, according to the Solon Police. They did say that he had minor injuries but it is unclear at this time what they are or what caused them.

Steven Lane died Saturday, July 20, 2013, at his home in Davenport, IA, after a yearlong battle with cancer. Memorials may be made to the family. Memorial services were held at Heritage Wesleyan Church, Rock Island. Visitation was held at the Van Hoe Funeral Home Ltd., East Moline. His shop closed June 28 this year. Steven was born Dec. 6, 1959, in Moline, the son of Freddie and Betty Albright Lane. He married Denice Long Sept. 4, 1993, in Moline. He owned and operated Lane Auto Body in Davenport for 35 years. He loved spending time with his family and enjoyed the outdoors, especially fishing and camping. Survivors include his wife, Denice Lane, East Moline; sons, Joshua DeCrane, Moline, and Brandon DeCrane, Rock Island; a grandson, Parker DeCrane; parents, Freddie and Betty Lane, Osbourn, Ill.; brothers, Robert (Tena) Lane, Warsaw, Mo., William Lane, Chicago, Ernest Lane (Scott Biniak), Lake of the Hills, Ill., and Michael Lane (Stephen Wolfe), Columbus, Wis. He is preceded in death by his grandparents. Online condolences may be left for the family at www.vanhoe.com.

Auto Body Speed Shop’s Mall Location Stands Out

ABRA Acquires Royal Auto Glass in Indianapolis, IN

Auto Body Speed Shop (ABSS), a repair shop located in Jacksonville, Florida, is located in a high-end strip mall. ABSS uses its location in the site of a former Blockbuster video store to create a retail look and feel for its customers. The facility boasts floor-to-ceiling windows that allow customers, as well as window-shoppers, to see techs at work. For added transparency, the shop has a live camera on its shop floor so anyone on the website can see what is happening in the shop at any given moment in realtime. Another rare occurrence, wind spires, can be seen on the far side of the property. The three wind spires work in conjunction with rooftop solar panels to decrease utility costs for the shop. The visual uniqueness is

Auto Body Speed Shop’s Mall Location in Jacksonville, FL

sure to make them memorable to both customers and spectators alike.

ABRA Auto Body and Glass has announced the acquisition of Royal Auto Glass in Indianapolis, IN. ABRA purchased Royal Auto Glass for undisclosed terms from owner Steve Hoyt who founded the business and offers more than 20 years of auto glass industry experience. The company has a rich history in the area and a well-established reputation with local residents and corporate partners. President and CEO of ABRA, Duane Rouse, spoke of the new glass asset as an important part of an ambitious growth strategy to acquire repair centers and glass companies like Royal Auto Glass. The deal is a critical element to expanding ABRA’s operations in the Indiana market. Royal Auto Glass’ owner Steve Hoyt will join ABRA and assume a leadership role in the company to maintain and manage auto glass operations in the Indianapolis market. Hoyt stated, “This is a great cultural fit and an exceptional opportunity for our employees. ABRA has all the ingredients of a successful company – integrity, a culture of ethics, a well-respected reputation, and teamwork with a strong focus on customer service.” ABRA now operates 49 independently-owned franchises and 124 company-owned locations for a total of 173 repair centers in 17 states.

8 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com

Body Shop Burn Camp Donor Recalls His Own Burn

Downtown Niles, IL, was inundated with motorcycles for the Burn Run July 13-14. Registation proceeds will send children who are burn victims to Great Lakes Burn Camp, in Jackson, MI. For one donor who works at Precision Auto Body Shop in Chicago the burn run has special meaning. Jeremy Clanton said, “I was lighting a firework in a tube and it misfired and hit my hand... It was very painful but it’s only my hand, so I can’t imagine if it was more than that.” He said the pain was excruciating and he won’t be able to ride his motorcycle this weekend in the Niles Burn Run. “We’ve always thought it was a great cause so we’ve always tried to be the number one donor of the burn run but since I’ve hurt my hand... I had a situation where I got burnt as well... and you have a different appreciation for what a burn means.” Jeremy’s devotion to the race runs deep. Jodi Curran, Board member for Niles Burn Run, said “He’s been very helpful to the Burn Run. They’re also following our route this year in case a motorcycle breaks down so that they can tow it back for them.” The Niles Burn Run trailer was stolen but returned a few weeks ago, which Curran said was a pleasant surprise.

Edgerton, WI, Car Fires Are Still Being Investigated

Police are investigating a rash of car fires July 6 that left five cars burned out and destroyed in Edgerton, but the fires are being investigated as arsons, police Chief Tom Klubertanz said in a news release. The fires all happened within moments of each other early July 6. Rock County 911 dispatch reported two of the cars burned up were parked outside of Bumper to Bumper Auto parts at 15 N. Main St., Edgerton. The other cars burned were at Orens Auto Body, a body shop at 101 Swift St, Edgerton, and at another location in the 100 block of Swift Street, according to Rock County 911 dispatch. Mike Johnson, who owns Bumper to Bumper Auto Parts, said two cars burned at his business were owned by customers who’d left their vehicles for repairs by a mechanic who shares space with Bumper to Bumper. Johnson said that the fires, which burned up a Saturn car and a Pontiac Grand Prix, started in one car and spread to the other, and completely torched both vehicles. He said the fire then spread to a van owned by the auto mechanic. Anyone with information about the car fires is being asked to call CrimeStoppers at 608-755-3636, or Edgerton Police at 608-884-3321.

www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 9

Continued from Cover

Legislation Affecting Shops The California Department of Insurance finalized regulations this year requiring insurers to pay for the costs to remove, replace and return a defective or non-compliant part; to cease the use of any part known to be non-compliant and to notify the distributor within 30 days; and to pay for repairs based on “accepted trade standards” set by shops licensed by the California Bureau of Automotive Repair. Insurer groups have indicated they may challenge the new regulations, which they say are unnecessary and thwart their ability to negotiate “the most effective, less costly repair,” nor do anything but “pay whatever auto repair shops demand.” Eileen Sottile, vice president of governmental affairs at LKQ Corporation, told non-OEM parts distributors at their convention earlier this year that it’s unclear whether the regulation will have a significant impact on insurers’ use of non-OEM parts in California. She said LKQ is reviewing legal analysis related to a possible suit against the regulator. Such a suit, she said, could challenge the Commissioner’s authority to promulgate the rule, or could be based on the rule’s impact if “we see it has damaged our ability to compete.” Other options, she said, could be to address the issue through legislation, or to do nothing “if we see there truly is no market impact.”

Rates are focus of some bills Nevada lawmakers have approved a bill (SB 170) capping daily storage fees charged by shops at 1.5 times the prevailing storage rate determined by state survey; the new law also sets limits on when storage fees can be charged. After three attempts over the last six years to get legislation related to labor rates passed by Massachusetts lawmakers, a fourth such bill (H 969) has been introduced for the 2013-14 legislative session. The bill has evolved over the years, and now if passed would establish a labor rate in Massachusetts based on data from an independent study of the average labor rate of five other Northeastern states.

Airbags under scrutiny The National Highway Traffic Safety Administration’s warning last fall to

consumers to avoid counterfeit airbag replacements seems to have resurfaced the topic of airbags among some state lawmakers. The New Mexico House unanimously passed a bill (H 118) that would prohibit the manufacturing, sale or installation of a counterfeit or substandard airbags. It would also prohibit selling or installing a device that causes the vehicle diagnostic system to inaccurately indicate that the airbag is functional when a counterfeit airbag is installed. Similar bills have been approved by lawmakers in New York and Connecticut, and by the House in Ohio. Also in New York, a bill (S 3779) would place significant new restrictions on anyone selling or installing a recycled airbag. The seller or installer, for example would be required to maintain records including the airbag identification number, the VIN of the vehicle from which it was removed, the name and address of the purchaser, and the VIN of the vehicle in which it was installed. Other proposals, new laws Bills in other states tackle a variety of topics impacting the industry. Some states have established a damage value threshold at which a vehicle must be declared a total loss. But previously nothing prohibited an insurer from totaling a vehicle below that threshold. The Rhode Island legislature, however, has approving a bill (HB 5263) prohibiting an insurer in that state from declaring a vehicle a total loss if the cost to repair is less than 75 percent of the vehicle’s preaccident value, unless the vehicle owner provides written authorization to do so. Texas Gov. Rick Perry in June signed a new law (HB 500) that allows independent repair shops to be taxed at the same rate as dealerships, parts stores and tire stores; previously shops operated by dealerships were taxed at a significantly lower rate because these businesses were classified as “retail” businesses. A new North Carolina law (HB 247) signed by Gov. Pat McCrory, deals only with health insurance but does ban insurer’s use of “most-favored nation” clauses (such as the one in State Farm uses to require the best rates and discounts that its Select Service shops offer any other insurer) when contracting with health care providers.

10 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com

The Automotive Service Association (ASA) in June wrote to a New Jersey Assembly committee, opposing proposed “Right to Repair” legislation (AB 352), saying that it puts at risk ASA’s agreement with automakers that “already provides independent repairers access to service, tool and training information.” Aaron Lowe, vice president of government affairs for the Automotive Aftermarket Industry Association (AAIA), told the committee his group supports the legislation, but also urged lawmakers to hold off further action on the bill while his group is in “negotiations with the vehicle manufacturers regarding a national agreement on Right to Repair.” Similar Right to Repair bills have been introduced in Maine and New York this year. Connecticut Gov. Dannel Malloy has signed a new law (effective January 1) designed to reduce insurer steering of glass claims; under the new law, insurers (or third-party claims administrators) must disclose to insured’s during their initial contact that, “You have the right to choose a licensed glass shop where the damage to your motor vehicle will be repaired. If you have a preference, please let us know.”

And under a new law (SB 86) that went into effect this past December and designed to combat chop shops, Pennsylvania shops must photocopy the ID of anyone towing or selling a vehicle or major component; the law, requires that photocopy (along with the name and license number of the towing company) must be maintained for three years, and law enforcement agencies have the right to inspect body shops or other automotive businesses (to look for stolen vehicles or parts) any time work is being performed. John Yoswick, a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). He can be contacted by email at: jyoswick@SpiritOne.com.

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OH Shop Employee Gets to Work by Boat During Flood

People in several Summit County, OH, communities were victims of massive flooding, including some body shop employees, as of July 12. Using a boat was the only way Chris Gnap could get to the body shop where he works in Norton, OH. “I had to drive through two feet of water to even get close to here, so I went and got my boat and brought it down,” Gnap said. Gnap and the owner of Norman and Sons Body Shop, 3053 Barber Rd, in Norton, say at least two and a half feet of water was inside when the flooding occurred on July 10. “There’s probably an inch of mud inside, worms everywhere,” Gnap said. Part of Barber Road near the shop at Interstate 76 was closed because water still covers the road. But that did not stop some drivers from chancing it, plowing through the high water to get to the other side. In neighboring Barberton, many residential streets are still impassable and some homes are still filled with water, even where the flood itself has receded, as of July 12.

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MI Couple Charged with Embezzling by Auto Glass Shop

Michigan Washtenaw County Judge Archie Brown has set the trial dates for a married couple accused of embezzling about $250,000 from A2 Auto Glass, according to a courthouse official. The jury trial date for Oral and Janice Molden is scheduled for November 4, with the pre-trial hearing scheduled October 9. Charges against the couple were first brought in 2011, with new counts filed in December 2012, according to local reports. The couple is accused of embezzling the money from the auto glass company over a three-year period. Janice Molden, 45, was a bookkeeper for the company and Oral Molden, 47, did computer work there. Oral Molden is charged with false pretenses of more than $20,000, false pretenses of between $999 and $20,000, making or permitting a false tax return and malicious use of a telecommunications service. Janice Molden faces charges of embezzling $100,000 or more, and $25,000 or more, as well as more than $999 but less than $20,000. She is also charged with three counts of using a computer to commit a crime. A2 Auto Glass has locations in Ann Arbor and Jackson, MI, as well as a mobile service.

SkillsUSA Conference Yields Silver Medal for MI Student

The SkillsUSA National Leadership and Skills Conference was held June 25–28 in Kansas City, MO. Four students represented the St. Clair County Technical Education Center in Marysville, MI. Adam Hoock, 18, of Capac, who recently graduated, took a silver medal in collision repair technology. “It feels awesome,” Hoock said. “... I was surprised. I was competing against a lot of kids.” Hoock had to fix dents in a fender, work at a plastic repair station, complete vertical and horizontal welding and do a frame damage analysis, which required an interview and giving an estimate. He said he plans to go into industry and collision repair by working at Collex Collision Experts. Nearly 6,000 outstanding career and technical education students - all state contest winners - will compete hands-on in 98 different trade, technical and leadership fields. Contests are run with the help of industry, trade associations, and labor organizations, and test competencies are set by industry. See coverage including video at: www.skillsusa.org/events/nlscphotos.shtml

Allstate to Close Call Ctr in Illinois, Cuts 379 Jobs

Allstate Corp. the largest publicly traded U.S. home and auto insurer, said it will cut about 379 employees next month, or about 1 percent of its workforce, by closing a call center in Woodridge, Illinois. The call center will close on Aug. 11, Chris Bauer, a spokesman for Northbrook, Illinois-based Allstate, said in an e-mailed statement to The Chicago Tribune. “More of our calls are now being sent directly to our agencies,” Bauer said. “This has resulted in lower call volumes to our call centers, so the difficult decision was made.” Allstate had about 38,000 fulltime employees at year-end, according to a filing. It is among insurers including Axa SA and Sun Life Financial Inc. that have sought to sell life and annuities assets as low interest rates pressure returns. The Illinois Department of Commerce and Economic Opportunity said in a report today that Allstate notified the state in June that it will cut 348 jobs in Woodridge next month and 31 in Northbrook.

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Burnsville, MN, Students Go on to Engineering

Skills learned in the Burnsville High School auto shop will take two recent graduates to college, where both will pursue engineering degrees. The skills that two recent Burnsville High School graduates learned in their high school auto shop will soon take them from under the hoods of cars into a college classroom. While in high school, Jacob Mischel and Nick Hernandez took multiple automotive classes from teacher Russ Tesmer, and both plan to use that foundation to study engineering at four-year colleges in the fall. Mischel plans on majoring in electrical engineering at North Dakota State University and Hernandez will pursue mechanical engineering at the University of St. Thomas. The students’ plans show just how versatile coursework in career and technical education can be, said Tesmer. “Having this background … it really helps students who are interested in engineering as well as being automotive technicians,” said Tesmer, who has been teaching at Burnsville since 2000. “These guys are using their automotive knowledge as something to build on.” 12 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com

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Steve Belknap, Illinois Shop Owner, Restores 1947 Ford Pickup Found Roadside Three years ago, Steve Belknap, owner of Belknap Auto Body Inc. in Lake Barrington, IL, spotted a wornout 1947 Ford pickup sitting for sale at the side of the road. He paid $4,000 for

it, and resisting the urge to restore it to a gleaming, sparkling show piece, Belknap spent about $2,000 and a few hours to make some basic safety upgrades, like brakes. With its original paint, Belknap took his relic to the 2012 Barrington Concours d’Elegance and won Most Coveted Vehicle Award. Belknap opted to keep his highway find as original as possible with its intact glass, floorboards and untouched engine. He didn’t want to do anything more necessary than fix what was falling apart. Belknap drove the 66-year-old truck home and within a week, was

driving it everywhere. If the weather is nice, he drives it. “Nothing makes me happier than driving the truck” in its well-used condition, he said. “It was built for work and I don’t think a pristine restoration on an old truck is appropriate.” Belknap’s story was featured in the local paper, the Daily Herald, and he described the modifications he made: “I rebuilt the brakes because only one wheel cylinder was working, and replaced the carburetor,” Belknap said. Other maintenance items included a rebuilt distributor and fuel pump, new fuel lines and replacement tubes in the tires. The only upgrade is a set of dual exhausts.

“The heat riser in the exhaust manifold seized and snapped off while I was working on it. Nothing would seat right with it gone,” he said.

Undeterred, Belknap located a vintage set of Fenton exhaust manifolds, allowing for the dual pipes. “It ended up being a great modification. The V-8 runs better and sounds better, too.” While very little has been added, there are some things that have been removed. “A previous owner had installed incorrect seat belts and turn signals, which I took off,” Belknap said. He also added a new covering for the bench seat. “I didn’t want to reupholster but the original material had been patched too many times, dried out and became brittle. It was beyond uncomfortable,” he said. The dented and battered body only received a few welds to keep the fenders from vibrating off. “I avoided extensive body work to preserve the original paint, which still covers the majority of the truck,” he said. Unfortunately, the previous owner couldn’t pass on many details regarding the Ford’s history, but Belknap has uncovered several clues. “I found 1953 registration in the glove box from northern Wisconsin.” In addition, Belknap found a 1947 mimeo-

graphed movie bill caught in a crevice on the underside. In its earlier days, the Ford pickup was worked hard. “It clearly grew up on a farm, acquiring reasonable dents here and there. By looking at a couple of the makeshift repairs on the truck, you can tell when a farmer needed to get it back on the road,” he said. For example, when a bolt broke on the tailgate, it was simply welded shut.

Belknap, who has owned his shop for 19 years, had the doors custom painted with lettering that resembles an old-time look, right down to the shop’s phone number, which reflects an early Barrington area code. Steve can be reached by phone at: (847) 382-9433 or email: steve@belknapautobodyinc.com

www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 13

Inside Insurance with The Insurance Insider

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

Insurers Hate to Admit It, But Our Success Depends On You and Your Estimators

Every insurance company knows that their profitability and loss cost expense relative to auto claims has many independent variables. We often have no control over them. For an obvious example, we can’t ask Mother Nature to reduce the number of hurricanes that ravage areas bordering the ocean. And we have no control over the number of accidents that our policyholders are involved in. On the flipside, there are some variables within our control—to varying degrees, to be sure, but within our control nonetheless. I’m referring to our staff adjusters. If our staff is well trained, if we maintain strict operating procedures, and if we provide proper oversight of our employees, we can reduce our overall loss cost expense. Therefore, most insurance carriers spend a lot of time and money to train and supervise their staff. In addition, they regularly make large capital investments to purchase or develop tools to automate an additional level of oversight. The challenge is that even the best electronic tools can’t replace the effectiveness of a human being. Several insurance carriers have made a especially significant commitment to education. Allstate is one example. They are the largest insurer that requires their staff to be I-CAR Platinum. That’s quite an investment for a company that was recently reported as being on the verge of dropping into the third spot among the largest carriers in the United States. (Oh, how the mighty have fallen. Not so long ago, Allstate was a lock solid No. 2 and looking for ways to knock State Farm off its pedestal. Instead, Allstate finds itself being pulled

down by an otherwise benign Englishaccented lizard. Er, I mean gecko. At any rate, I’m sure it’s creating mayhem within Allstate.) One thing is for certain: When a company begins losing market share, it causes them to ratchet down on expenses. Let this serve as your advanced warning: Allstate likely will be stingier than ever. What makes Allstate’s investment in educating their staff even more interesting is the fact that other large carriers (including several I’ve worked for) don’t require any training. Some may wonder if they are taking an opposite strategy, sort of a “survival of the dumbest.” As Forrest Gump famously said, “Stupid is as stupid does.” If you don’t know how to properly write an estimate, nobody can blame you for trying to cheat them. There are dozens of other independent variables that impact loss costs, but let’s focus on “dependent variables.” A dependent variable is loosely defined as those things that insurance companies depend upon a collision repair shop for. I never thought I’d say that we depend upon shops but we do. Most of you are probably guessing that we depend on you for proper part selection or cycle time. Although both of those are critically important to controlling loss costs and improving profitability, there is one even more key variable. An insurance company’s loss costs have less to do with your standard operating procedures or part type selection than they do with your estimator. Your profitability and our loss cost expense ultimately are based on

Car-O-Liner Gets Honda Approval As Official Supplier

Car-O-Liner has announced participation in American Honda’s Tool and Equipment Programs as an official approved supplier of collision repair products. The programs offer the advantage of one-stop shopping for all service tool and equipment needs. Equipment has been selected for these specific manufacturers in order to enhance collision centers’ productivity and efficiency while properly returning the vehicles to factory specifications.

“Car-O-Liner is pleased to be a part of Honda’s and Acura’s Tool and Equipment Programs,” said Peter Richardson, key accounts manager for Car-O-Liner. “Adding Car-O-Liner to their approved equipment offering means greater flexibility, accuracy and efficiency. Our complete solutions will provide Honda and Acura collision centers with the products they need to maximize their repair potential.”

14 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com

your estimator’s ability to write an accurate estimate, manage a claim and follow our guidelines. If you have an experienced estimator that understands a particular carrier’s program guidelines, you are better off than 90 percent of the people reading this article. You should make sure that he or she is well compensated. The skills they have are about as rare as you receiving labor time for prime, block and fill on a repaired panel. That individual can turn a company around and make a historically unsuccessful shop successful. I’ve seen shops that have performed at a high level for years fail miserably when their lead estimator left. Collision repair shops that have the most astute owner, ironclad operational procedures and long-tenured technicians have come to a screeching halt when they lose the glue of the operation provided by a good estimator.

I’m sure it is going to cost some shop owners money when their estimator realizes he’s worth far more than you are paying him. Great technicians are probably more difficult to replace, but you can overcome the loss with an average technician and strong estimator. I’ve been in meetings where shops beg to remain on a program after a few months of poor performance. They are quick to indicate that they have lost their best estimator. Without trying to sounding heartless, I don’t care about that. My job isn’t to help you manage your operation. Our goal is to make sure that the best shops are repairing our customer’s cars. If you can’t do it, we’ll gladly take our work to the shop owner that realizes that having only one All-Star on your team is poor planning. So do you have a contingency plan? If you don’t, today would be a good day to start making one.

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www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 15

Historical Snapshot with John Yoswick

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

A Look Back at this Month in Collision News History This month we begin a new type of column that takes a look back at this month in collision history 20, 15, 10 and 5 years ago. You may be surprised how many issues we think of as recent concerns were in the news back then. Keep in mind that these stories may have turned out differently than the way they were reported at the time. Where they did, we attempt to clarify the later outcome.

20 years ago (August 1993) Collision repairers may soon be hearing about EXACT, a Colorado-based foundation that wants to see body shops take part in an early trial of its autobody repair standards. So far, the foundation’s executive director, Phil Freeman, has sent out applications for membership to repairers in Rochester, NY, and Chicago. If they take part, shops pay $3,160 after undergoing extensive training, testing and certification. While shops may

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balk at paying yet another fee for another organization that’s supposed to bring them success, EXACT wants to establish comprehensive industry standards that will be for autobody work what building codes are for building contractors. “One of the things we’re trying to do is keep it out of the hands of lawmakers,” Freeman said. “A legislator could come in and try to establish something for an industry he’s not too familiar with.” Already EXACT has spent three years writing up 140 pages of repair standards that Freeman expects to become even more refined over the years. Called the Uniform Autobody Repair Code, the standards will have to be approved by the collision repair industry. “They’ve been through a technical committee of 27 shop owners,” Freeman said. “We anticipate approval around the first of the year.” ►The EXACT Foundation sub-

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sequently reached an agreement with I-CAR under which that organization would continue to develop, manage and market the code under the name Uniform Procedures for Collision Repair (UPCR)

15 years ago (August 1998) I-CAR also made two significant announcements about its Uniform Procedures for Collision Repair (UPCR) at its annual meeting. First, Toyota Motor Sales USA, Inc., has agreed to provide its Toyota and Lexus collision repair manuals for inclusion with the UPCR. Beginning with the January update to the UPCR, subscribers will have access to the same collision repair technical information made available to Toyota and Lexus dealers. I-CAR’s Tom Mack said he hopes Toyota is just the first of many vehicle manufacturers to make their collision repair manuals available to UPCR subscribers.

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The second announcement about the UPCR made at the meeting was that 20th Century Insurance Company has become the first insurer to purchase the UPCR for widespread use by its employees. John Bierer of 20th Century said he was charged earlier this year with improving the consistency of the estimating, adjusting and reinspection efforts of the insurer’s staff. He said after reviewing the UPCR with his claims office management, he presented it to his superiors as the solution they were looking for. “Each one of our adjusters, our quality control reinspectors, our supervisors and mangers will have a copy of UPCR on their laptops to use in their adjusting, inspecting and quality control,” Bierer said, adding that he hopes other insurers will follow 20th Century’s lead. ”I think it’s what we’ve been looking for for quite some time.”

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► I-CAR one year later shelved its UPCR product, which included collision repair procedures as well as vehicle and product manufacturerspecific information, saying sales were “reasonably underwhelming,” but a revival of UPCR has been raised by some during more recent discussions of collision repair standards.

10 years ago (August 2003) (From Autobody News): Aftermarket parts manufacturers and CAPA are likely vexed by the newly-released “Crash Parts Certification Study” published by the California Bureau of Automotive Repair (BAR). The report blasts the parts certification process, concluding that “certification has no value to the customer…If there are problems with the certified product, the certifying entity does not stand behind their own certification process.” Legislation enacted in 2001 authorized $125,000 to be spent by the BAR, a sub-agency of the California Department of Consumer Affairs, to study the best process for certifying crash parts, and to designate the agency to bear responsibility for overseeing crash parts certification. For two-anda-half years, the BAR held meetings

with repairers, insurers, OEMs and aftermarket parts certifiers. It sent out surveys to auto body repair shops and conducted field test on crash parts. In the end, the BAR reached several conclusions, most notably: ● Elimination of non-certified aftermarket crash parts is not a viable option. Outlawing non-certified aftermarket parts (as suggested by CAPA) would make the market less competitive and leave a shortage of such parts. ● Certification does not protect consumers from poor quality parts… If the certifying entity warranted their certified parts it would provide ‘added value’ to the certified part, and protect consumers against poor quality parts. The study compared the CAPA Quality Seal to the well-known Good Housekeeping Seal of Approval. The Good Housekeeping seal carried a limited warranty stating that if any product bearing the seal proves to be defective within two years of the date of purchase, the product will be replaced or the purchase price refunded. “If CAPA or Global Validators feel their certification parts fit the criteria of their certification program, why don’t they stand behind their certified parts?” the BAR report asks.

5 years ago (August 2008) The Progressive Insurance fraud lawsuit against Greg Coccaro and his New York shop, North State Custom, was dismissed. When Progressive concluded presenting its evidence and testimony, Coccaro’s attorneys moved for a directed verdict (a standard practice in many cases) and Judge Mary Smith granted the motion, dismissing the case, saying Progressive had not presented sufficient credible evidence for the trial to continue. Coccaro issued a press release saying he was “elated with the Judge’s decision” and “extremely grateful and touched by all of the support and encouragement shown by fellow members of the collision repair industry.” “We are disappointed by the court’s decision, and we plan to appeal,” spokeswoman Cristy Cote of Progressive Insurance. ► Progressive indeed appealed and the case was retried, only to have a jury find Coccaro not guilty in 2010; Coccaro earlier this year reached an out-of-court settlement with the insurer just days before trial was set to begin in his tortious business interference lawsuit against Progressive (terms of the settlement are subject to a non-disclosure clause).

Continued from Page 3

NC Short Pay 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 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. “I hope our actions and results encourage other quality-minded repairers to seek similar actions against the less-than-ethical insurers,” said Bradshaw. “We learned a great deal in this initial case, and I have had to embark on two more cases against Nationwide for short-pays 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. 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.”

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NASCAR’s Carl Edwards Drives ‘Sweepstakes’ on Henry Ford’s 150th Birthday Celebration in Honor of Fords’s One and Only Race When NASCAR superstar Carl Edwards hopped aboard Sweepstakes, the 1901 race car built by Henry Ford, he wasn’t exactly sure what to expect from the ride. But much like it did for Ford in his victory over Alexander

of Henry Ford, invited Edwards out to Greenfield Village to learn more about the history of the vehicle, meet with Sweepstakes Engineer Glenn Miller, and eventually learn to drive the 1901 machine. “This is the coolest car I have ever driven, no doubt about it. There isn’t even a close second,” said Edwards on the grounds of Greenfield Village at The Henry Ford. “It may not look like much standing here, or on video, but I am telling you that is one of the scariest things I have ever done. Coming around that turn back Ford Racing NASCAR superstar Carl Edwards was given there, there are no brakes. I don’t the honor of driving the legendary Sweepstakes race car know how those guys did that built and raced to victory by Henry Ford in his one and because we were only going only race in 1901 what, eight miles per hour? They Winton, the time spent at the wheel of drove this thing near 70 mph back in the historic vehicle changed his life 1901. That is just insane.” forever. Sweepstakes carried Henry Ford to victory in the first and only race he Edwards joined Hall of Famer ever drove — the race against AlexanDale Jarrett as the second NASCAR der Winton on October 10, 1901, in driver allowed behind the wheel of the Grosse Pointe, Michigan. Since Ford car, when he took it for a spin June 13, was the underdog, and the local fa2013. Edsel B. Ford II, great-grandson

vorite who defeated one of the best and most successful racers in the country, his victory was popular and widely publicized. In fact, Ford’s win changed everything for him, and ultimately the

“To think that this car is what started this whole thing is just amazing.” Edwards reflected. “If it weren’t for this, there might not be a Ford Motor Company, there might not be a Ford Racing, and a lot of people’s, including my own, paths would be very different.” Henry Ford’s 1901 Sweepstakes race car is part of the Racing in America collection at Henry Ford Museum and is on display daily. “Sweepstakes is one of the key, paradigm-changing cars in our collection at The Henry Ford,” said Christian Overland, Edwards drove the car around the grounds of Greenfield executive vice president of The Village at The Henry Ford, under the guidance of Sweepstakes Engineer Glenn Miller and the watchful Henry Ford. “To be able to eye of Henry Ford’s great-grandson, Edsel B. Ford II have someone like Carl come out and experience what Mr. Ford felt history of the auto industry. Several when he drove Sweepstakes back in people watching that day came forward with offers of financial support, 1901 is important in helping others understand the challenge he was facwhich set him on the road to establishing Ford Motor Company in June ing that day going against the best driver in America. The result of that 1903. Ford went on to prove his belief race changed the automotive world as in low-cost production with the Model we know it.” T, the car that put the world on wheels.

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e n y d, e o e lt n s st at s

Continued from Cover

ASRW 2014 Thursday, July 31 – Collision Repair Education Foundation Golf Outing Thursday & Friday, July 31–Aug. 1 – NACE Education & Expo Saturday, Aug. 2 – Education & Hosted Industry Tours “Co-locating NACE with the ICAR and CIC conferences in July and creating Industry Week represents the beginning of a new era for our industry, and this is extremely exciting. Professionals in the industry can now truly take ONE week and participate in all the meetings they need involving the industry’s most influential in-

dividuals and organizations, attend all the conferences, walk the show, network, and receive the education critical to their business success,” said Risley. “Beyond the events already mentioned, there will be innumerable opportunities for attendees and exhibitors because it’s located in Detroit, the heart of the automotive industry. Additional announcements will be forthcoming in the ensuing months but suffice it to say, if you are a ‘car person’ you will not leave the city disappointed.” John Van Alstyne, I-CAR CEO & President, shared his enthusiasm, “Industry Week is an opportunity to bring more of the industry together and simplify coordination of scheduling for all events, which we believe

will be valued by the industry.” He added, “Industry Week will present attendees with excellent educational, knowledge–building, and networking opportunities; and I-CAR’s longstanding July Conference, which has been aligned with CIC for many years, will remain an independent event that will now take place under the new umbrella of Industry Week. Additionally, the annual fund–raiser for the Collision Repair Education Foundation will continue to be held the same week, offering a fantastic social networking opportunity while raising money for a great cause that helps us to sustain the future of our industry.” “The Collision Industry Conference looks forward to meeting during

this time when all groups come together,“ stated Jeff Hendler, Founder, Collision Industry Conference. “The more often that all entities attempt to share the calendar with the varying functions of meetings, educations, trade displays, and networking opportunities, the better it is for those who attend. Everyone and every entity stands to benefit.” “The Collision Industry Conference looks forward to building upon our longtime alignment with I–CAR to welcome ASA into the fold and offer our collision industry stakeholders the opportunity to attain even more industry knowledge, make even more valuable industry connections, and conduct even more business,” said George Avery, CIC Chairman. “Better yet, Industry Week lets them do it all in one week, under one roof, and in the heart of the Motor City to enable everyone to maximize their time and travel.” Additional details on each event taking place during Industry Week 2014 will be released by each organization in the coming months. Hotel details will be available in the near future. More information will soon be available at http://www.naceexpo .com, http://www.i-car.com, and http://www.cic.com.

ASRW Will Have Main Stage with Rotating Speakers

ASRW 2013 will have a brand new area on the show floor called the ASRW Main Stage. Located prominently on the expo floor, the ASRW Main Stage will showcase a different industry speaker every hour during show hours. ASRW will take place Thursday and Friday, Oct. 1718, with education beginning Wednesday, Oct. 16, at the Mandalay Bay Convention Center in Las Vegas. A total of 12 speakers will comprise the ASRW Main Stage, with six speakers on Thursday and six speakers on Friday. The ASRW Main Stage presentations will take place each hour between 10 a.m. and 3 p.m. “The powerful slate of speakers and topics planned for the ASRW Main Stage make it the first of its kind,” stated Dan Risley, ASA executive director. “Attendees won’t find these speakers in one place at any other event.” Seating will be on a first-come, first-served basis as tickets/registration will not be required. Additional details, including the full schedule of ASRW Main Stage speakers and topics, will be announced in coming weeks.

www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 19

20 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com

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www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 21

AUTOMAKER, AU A UTOM OM MA AK AK ER O OEM EM AUTOMAKER KE R,, OEM, M,, AND AND RECALL RE R E C AL CA ALL LL EC Autobody News

MICHIGAN • OHIO • INDIANA • ILLINOIS • WISCONSIN

Chrysler Issues Recall on Air Bag Modules

GM to Recall Four 2012 Volts

Japan’s Toray Buys Stake in Plasan Carbon Composites

Ford to Hire 3000 Salaried Workers in 2013

Chrysler is recalling certain model year 2013 Town & Country and Dodge Grand Caravan vehicles manufactured June 11, 2013, through June 12, 2013. The occupant restraint control module (ORC) has incorrect software installed which may adversely affect air bag deployments in collisions. Thus, these vehicles fail to conform to the requirements of Federal Motor Vehicle Safety Standard No. 208, “Occupant Crash Protection” and No. 214, “Side Impact Protection.”

Japan’s Toray Industries Inc. has taken a minority stake in U.S. auto carbon fiber supplier Plasan Carbon Composites Inc. in a move underlining the potential growth for carbon fiber parts. The 20 percent stake comes as Plasan begins to launch its biggest and highest profile project —making two body panels for the 2014 Chevrolet Corvette Stingray. The companies did not disclose financial terms of the deal. Tokyo-based Toray has been establishing development centers globally to help speed the use of carbon fiber in the auto market. The investment in Plasan takes Toray’s involvement further, and helps to ensure a distribution channel to U.S. automakers and to establish Toray as part of a vertical integration system for the material.

Nissan Plans Major Reforms in Buying, Shipping, Building

Nissan Motor Co. is attempting to pare U.S. operating costs by rethinking the way it buys parts, builds cars and moves cars and components around the continent. U.S. executives are looking for the cost reductions to help Nissan meet CEO Carlos Ghosn's "Power 88" business plan, which calls for a global consolidated operating profit of 8 percent by March 2017.

General Motors Co. said it will recall four 2012 Chevrolet Volts because of an electronic glitch that could increase the risk of a crash — the first recall of the Detroit automaker’s plug-in hybrid electric vehicles. GM says the electronic stability control may not work as intended and increase the possibility of a crash in an emergency braking incident. GM is unaware of any crashes or injuries associated with this condition. This is the first recall for the Volt since late 2010.

Ford Motor Co. said it will hire 3,000 salaried workers this year—800 more than previously announced. Ford said 80 percent of the new employees will be technical professionals with “new skills.” The company expects 85 to 90 percent of those hires will be placed within the state of Michigan. Ford said it also plans to increase hourly employment by 12,000 by 2015. “Engineers and technical professionals are in as much demand as our cars, trucks and SUVs,” Felicia Fields, Ford’s group vice president for human resources, said in a statement. “Global demand and increasing capacity in North America and Asia requires that we aggressively seek out technical professionals in order to continue our growth.” The vast majority of the technical hires will be engineers in purchasing, manufacturing and product development. About 200-300 will be hired in IT-related fields. Fields said some of the hires are attrition replacement, but more than two-thirds of the hires will be new jobs. As a result of the recession, Ford reduced its workforce by 13,000 salaried employees between 2006 and 2009, she said. “There are some people that we did lose during that downturn that have skills and capabilities that we absolutely welcome back into Ford, and some of those employees have returned to Ford,” Fields said, adding that there are still many “new,” advanced skills that require fresh talent.

22 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com

Ford to Recall 13K Vehicles over Door Latches

The Ford Motor Co. said June 27 it will recall about 13,100 vehicles for door latches that may fail and cause child safety locks to deactivate. The Dearborn automaker will recall three 2013 model-year vehicles — the Explorer SUV, Taurus sedan and Lincoln MKS sedan — built at Ford’s Chicago Assembly Plant. Upon opening or closing a door, the child safety lock may change from “activated” to “deactivated.” Ford said that no accidents or injuries have been reported. As part of the recall, dealers will test rear door latches and child safety locks, and replace the latch if necessary. The affected vehicles, sold in the U.S., Canada and Mexico, were built between Nov. 29 and Dec. 12, 2012. The problem was first discovered on Dec. 6 during a routine audit, the latch supplier identified a latch with lower-than-expected child safety lock retention torque. On Dec. 7, Ford’s Chicago Assembly Plant was notified of the condition and a stop-ship was issued. Ford spent months testing the issue, using accelerated testing on each vehicle line. This is not the first time that Ford has recalled model year 2013 Explorer, Taurus and Lincoln MKS vehicles.

Japan’s Diamond Electric to Pay $19M Price Fixing Fine

A Japanese manufacturer of ignition coils that were sold to Ford, Toyota and Subaru parent Fuji Heavy Industries Ltd. has agreed to plead guilty and pay a $19 million fine for its role in a conspiracy to fix prices of automotive components, the U.S. Department of Justice said. The plea agreement with Diamond Electric Manufacturing of Osaka, Japan, marks the first time that the Justice Department's broadening automotive parts price-fixing probe has involved parts sold to an automaker headquartered in the United States, the government said in a statement.

www.autobodynews.com

August 2013

GM and UTI Partner to Help Grow Supply of Auto Techs

Universal Technical Institute has formalized an agreement with General Motors Co. (GM) to develop a 12week elective training program for UTI students. The program will first be available at UTI’s Avondale campus. “The availability of qualified, trained automotive technicians is and will continue to be a critical area of importance for GM,” said Mike Durkin, Director Dealer Service and Warranty Operations, at GM. “When looking at UTI’s industry leading curriculum, facilities and student and employer support services, we knew we had a solid partner to build something great with, supporting a growing need for technicians at our dealerships across the country.” The curriculum for the GM elective program will be developed in partnership between UTI, GM and Raytheon Professional Services. For more follow UTI on Facebook at www.facebook.com/UTI, or on Twitter at @UTITweet.

Rearview Cameras Delayed

The Obama administration is again delaying regulations on whether new cars and trucks must come equipped with rearview cameras to protect against drivers backing over people in blind spots behind their vehicles, a victory for automakers who say requiring the cameras is too costly. Transportation Secretary Ray LaHood said Thursday in letters to three members of Congress that more research is needed. He set a new deadline of January 2015 for the regulations. An average of 228 people are killed and 17,000 injured each year because of back-over accidents. Nearly half the deaths involve children under age 10. The elderly also frequently are victims. Congress passed a law in 2008 requiring the government to issue final regulations aiming at protecting against backover accidents by Feb. 28, 2011, and that the changes be in place for model year 2014 vehicles. But the regulations have been delayed repeatedly.

Honda Reponds to Amended Class Action Complaint

Honda has filed a response to an amended class action complaint, which alleges some of the automaker’s vehicles have defective window regulators. In the case, Grodzitsky versus American Honda Motor Co., the plaintiffs argue the window regulator defect results in the sidelite falling into the door frame or becoming stuck in the fully-open position. Phyllis Grodzitsky, owner of a Honda Odyssey, and Jeremy Bordelon of Tennessee, owner of a Honda Element, alleged in the original complaint that they reported repeated failures of window regulators in their vehicles. Grodzitsky further claims that she contacted her local Honda service manager and was told, “all [Honda Odysseys] have that problem.” In its response to the amended complaint, the automaker’s attorneys write, “Honda expressly denies that ‘all Honda Odysseys have that problem.” Honda’s attorneys deny most of the allegations. Honda admits that within some, but not all, vehicles that are part of plaintiffs’ putative class definition, side windows are moved up and down by a window regulator that operates with a central track, a shuttle and a cable, attached to a motor.

Volvo: Six State Class Action Should Not Be Certified

Citing a recent U.S. Supreme Court decision, Volvo has filed a motion requesting that the U.S. New Jersey District Court reconsider certification of a six-state class action over an alleged sunroof defect. In March, Judge Dennis Cavanaugh granted plaintiffs’ motion for certification of statewide classes in Massachusetts, Florida, Hawaii, New Jersey, California and Maryland. “In doing so, the court rejected Volvo’s argument that certification of plaintiffs’ statewide classes was improper because, among other reason, plaintiffs had offered no proof that class-wide damaged could be proved with common evidence,” Volvo’s attorneys argue in the motion. “Rather, the court relied on the allegations of the second-amended complaint to conclude that the relief sought by the plaintiffs applies to all members of the certified classes. The United States Supreme Court issued its opinion in Comcast Corp. versus Behrend... [which] makes clear that the court’s decision to certify a class without any showing that damages can be proved on a class-wide basis was in error. The court should reconsider and reverse its decision,” the attorneys write.

Future Looks Bright for U.S. Auto Industry, Hiring, Sales

The auto industry is about to go on a hiring spree as car makers and parts suppliers race to find engineers, technicians and factory workers to build the next generation of vehicles. The new employees will be part of a larger, busier workforce. From coast to coast, the industry is in top gear. Factories are operating at about 95 percent of capacity, and many are already running three shifts. As a result, some auto and parts companies are doing something they’ve been reluctant to consider since the recession: Adding floor space and spending millions of dollars on new equipment. “We’re really bumping up against the edge,” says Michael Robinet, managing director of IHS Automotive, which forecasts auto production. “So it really is brick-and-mortar time.” The auto industry’s stepped-up hiring will help sustain the nation’s job growth and help fuel consumer spending. The government said U.S. employers added 175,000 jobs in May, roughly the monthly average for the past year and a sign of the economy’s resilience. U.S. consumer confidence has reached a fiveyear high. The auto industry’s outlook is bright. Vehicle sales for 2013 could reach 15.5 million, the highest in six years.

OEMs, CARE, and AAIA Seek Solution to Right to Repair

At a hearing on New Jersey Right to Repair bill, representatives of AAIA and CARE along with auto OEMs said they want to develop a national solution on the right to repair issue. Hope to conclude an agreement by the end of July. ASA believes its 2002 deal with manufacturers is working. After more than a decade of effort to pass legislation, first at the Federal-level, then at the statelevel, some of the organizations supporting Right to Repair legislation appear to be seeking a negotiated solution with automakers. In testimony before the Consumer Affairs Committee of the New Jersey State Legislature on Assembly Bill 352, the Motor Vehicle Owners Right to Repair Act, Aaron Lowe, with the Automotive Aftermarket Industry Association (AAIA) stated that while they remain strong supporters of right to repair legislation in the states, nationally, they are in discussions with auto manufacturers on a national solution. Lowe said that after the passage of Right to Repair legislation and the success of a later ballot measure in Massachusetts, AAIA and CARE began to seek a national solution with OEMs.

www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 23

Bookkeeper Sentenced to Seven Years For Theft from Florida Body Shop Jennifer Vasseur could have gotten six months in jail, but when she couldn’t make restitution, she was given a seven-year prison sentence. As part of a plea deal, the 38-yearold Winter Haven woman had to repay more than $20,000 that she stole from A&E Auto Body in Eagle Lake, where she worked as a bookkeeper and secretary. The deadline was July 9. She was short about $15,000. Her punishment was up to Circuit Judge Catherine Combee to decide. She ordered Vasseur to serve seven years in prison followed by 10 years of probation. Vasseur was arrested in May 2011 after an investigation by the State Attorney’s Office in Bartow. She wrote unauthorized checks in her name, her husband’s name and to cash, according to a complaint affidavit. Vasseur told investigators that she took the money to help pay bills, the affidavit states. In May, she pleaded guilty to grand theft and making false entries on the books of a corporation. During the hearing, Vasseur vowed to “pay back every single penny.” She asked for house arrest or probation. “I will pay the money back,” she said. “I’m not the person that I was.” Victoria Arrington, owner of A&E Auto Body, said she and her employees were supportive of Vasseur while she worked there for four years. She described many examples of as-

Nissan Will Add 900 Jobs for Rogues Built in Tennessee

Nissan is adding 900 jobs to start making the Rogue crossover SUV at its Tennessee plant. The announcement is in addition to 800 jobs added at the Smyrna plant last year, and will bring total employment at the suburban Nashville facility to more than 7,000. Hiring is already underway and Rogue production is scheduled to begin this fall. Building the Rogue in the United States for the first time is part of the Japanese automaker’s plan to have 85 percent of its domestic sales to be produced in North America. This month marks the 30th anniversary of Nissan producing vehicles in the U.S. The plant in Smyrna built its first pickup truck in June 1983. The plant also makes Nissan’s most popular car, the midsize Altima sedan, among other models.

sistance provided to Vasseur over the years: getting her a car, paying to turn her power on, giving her a computer, providing her extra money to eat at restaurants on the weekend, paying for her cellphone, purchasing massages for her, helping with preparations for her wedding, offering to pay for her to continue her education and sending Vasseur’s daughter to a theater camp. Vasseur’s theft was painful, but the business was able to carry on, she said. “We didn’t lose faith in people though,” Arrington said. “We still hire people, and we still trust them. We could have been cynical, but we believe that people are good.” Prosecutors asked for a five-year prison sentence. The judge went higher, noting Vasseur’s past criminal history. Vasseur said she didn’t know that her plea deal exposed her to a sevenyear prison sentence, or she wouldn’t have signed it. She thought the most that she faced was 15 months in prison. Vasseur was also ordered to pay $20,729 in restitution.

State Farm’s Richardson, TX Complex Keeps Growing The size and cost of the big State Farm Insurance office complex under construction in Richardson, TX, keeps growing. The regional office campus under construction at Plano Road and State Highway 190 now includes work on two office towers and parking garages, according to building permits filed with the City of Richardson. The permits list the value of the current “shell” construction at $229 million. But that’s just for the outside of the buildings. It doesn’t include most of the mechanical, interior finish and other aspects of the huge project being built by developer KDC and general contractor Austin Commercial. Richardson building permits just show part of the cost of the development. The entire project will cost well over a half billion. A similar project near Phoenix is estimated at $600 million. Even more construction is on the way at the site in Richardson. Along with the building that began back in April at the southwest corner of S.H. 190, work crews have now are clearing land across the street on the east side of Plano Road.

May OK Tornado Insurance Claims: 75,000+, $687 M+

Insurance claims filed in response to a major tornado outbreak in May jumped to 75,758 Wednesday, with insurance payments reaching $687,945,276. “The victims of these devastating tornadoes will be dealing with the aftermath for quite a while,” said Oklahoma Insurance Commissioner John D. Doak. “The claim filings are slowing down but they’re nowhere near complete. Most policies allow for claims to be turned in up to one year from the date of loss. The Oklahoma Insurance Department is here to help guide the victims through some important decisions. We’re committed to seeing this through to the very end.” The May 19th & 20th Tornadoes saw Private Auto claims of 22,126, costing $73,043,057. Commercial Auto was 478, totalling $2,594,410. The May 30th & 31th Tornadoes saw Private Auto at 11,684, costing $27,142,380. Commercial Auto was 497, costing $1,962,854 “These numbers are more proof of the dramatic impact the tornadoes had on our state,” said Oklahoma Insurance Commissioner John D. Doak.

24 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com

Allstate Insurance Owners Plan to Hire 400 Sales Staff

Allstate Insurance agency owners across Texas are planning to hire at least 400 licensed sales professionals by the end of the year. Licensed sales professionals play a pivotal role in driving business for Allstate agencies in growing states like Texas. They work side by side with agency owners, educating and assisting customers with their insurance needs. That’s why Allstate is encouraging its nearly 1,000 agency owners to continue to build their agencies by hiring top notch staff. Interested candidates should have exceptional selling and customer service skills, a high school diploma and the ability to obtain or begin the process of obtaining a Property and Casualty license at the time of hiring. “Sales positions with Allstate agency owners are a great opportunity for talented, motivated people with strong communication and customer service skills, to work with a world-class brand and an experienced sales staff,” said Adam Pisani, an Allstate agency owner in the Houston area. “As agency employees, interested candidates will become licensed sale professionals and get the help, support and training they need to help them succeed.”

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Oregon Body Shops Grade Insurance Companies State Farm and two smaller Northwestbased auto insurers continue to be among the best at taking care of their customers after an accident. And some of the other larger, best-known insurers—including GEICO, Safeco and Farmers Insurance—are among the worst. That was the finding of the latest survey of businesses that interact with auto insurers on behalf of vehicle-owners every day: Oregon collision repair shops. “Just as medical providers see how health insurers take care of patients, collision repair shops interact with auto insurers on a daily basis, so we feel it’s worthwhile to ask how those insurers treat Oregon drivers after an accident,” said Barbara Crest, executive director for the Northwest Automotive Trades Association (NATA), which conducted the survey of Oregon shops. “We believe their views will be helpful to insurance companies and consumers.” More than 500 collision repair shops throughout the state received the survey, which asked them to grade the Top 20 auto insurers in the state in terms of how well each company’s

“policies, attitude and payment practices ensure quality repairs and customer service for Oregon motorists.” This is the seventh time the association has conducted such a survey since 2004. Crest pointed to a number of items of interest in the findings of the latest survey: ● Repairers have consistently given the same three companies a grade of B or better all seven times the survey has been conducted. State Farm has continued to hold on to the top spot, receiving an overall grade of B+ again this year. But a Northwest insurance company, Oregon Mutual, nudged up from a B last year to also receive a B+ in the latest survey. Mutual of Enumclaw once again ranked third with a B. State Farm is the largest auto insurer in Oregon: Mutual of Enumclaw and Oregon Mutual are ranked 12th and 13th, respectively. ● In addition to Oregon Mutual, six other insurers saw their grades improve from the 2012 survey. Travelers became the fourth-highest graded insurer by earning a B- (up from a C+ last year). Progressive, Ameriprise and Country Companies each moved up

half a grade to C+. ● Although the same four insurers were on the bottom of the rankings for the third straight year, the order amongst them changed because Allstate improved to a C (from a C-) and Geico brought its D+ in 2012 up to a C- this year. ● Progressive’s improvement is notable given that it had a D+ or worse (and the lowest or second-lowest ranking) in every survey between 2004 and 2009. Even last year it was ranked 16th on the list with a C, but this year moved to 8th with a C+. ● Although Allstate still only receives an average grade, that’s an improvement over the D or D+ it received in each survey between 2008 and 2011. ● Three insurers saw their grades drop. USAA, which ranked fourth last year, dropped behind Travelers and Kemper/Unitrin when it received a C+ rather than the B- it did last year. American Family and Liberty Mutual also dropped half a grade. ● Farmers and Safeco received a “F” from about one-in-four shops, the most failing grades received by any insurer. (By comparison, GEICO, the

third-lowest graded insurer, received about half as many Fs as Farmers.) State Farm received an “A” from well over half of shops. ● In most cases, the grades given a particular insurer from shops involved in that insurer’s direct repair program (DRP) were higher than those given by shops that are not part of that insurer’s program. This was particularly true with USAA and The Hartford; their DRP shops gave them grades of A- or better while non-DRP shops gave these same insurers grades of C or C+. But even American Family and Farmers Insurance direct repair shops gave those insurers only average grades of C. “Collision repairers say the insurers receiving the highest grades—which includes both larger and smaller insurance companies—do the best job of taking care of Oregon drivers after an accident,” Crest said. “We hope consumers will take these ratings into account when choosing an auto insurer, and that insurers that received lower grades will work to improve their performance.” More than 70 shops throughout Oregon responded to the survey.

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Repairer-Only Rountable Airs the Issues Important to Repairers by Chasidy Rae Sisk

For the sixth time since the Repairer’s Roundtable began over a year ago, collision repairers from across the nation gathered for three and a half hours on Tuesday, July 23 at the Westin Boston Waterfront. The exclusive event intended only for representatives of collision repair businesses was hosted by AASP-MA, but while Aaron Schulenburg, Executive Director of the Society of Collision Repair Specialists (SCRS), was present to kick off the meeting, he repeatedly told the attendees that the “goal here is to have discussion from everyone in the room,” stressing the concept of “your agenda, your meeting.” Over forty individuals gathered to discuss current concerns with the collision repair industry and possible solutions. The dialogue began with a local shop owner objecting to the fact that Massachusetts has the lowest labor rates in the country, a travesty he partially attributed to steering. Regarding a possible solution, it was suggested that there could be a national campaign to promote consumer awareness and education; distributing a common message to association members who would, in turn, relay the information to their customers seemed to be the most viable option for disseminating this important message. As options for educating consumers were introduced and debated, one suggestion was to distribute a nationally consistent message through social media, on either a weekly or monthly basis. Another suggestion was made to provide and disseminate prepackaged material for social media consumption. Tony Ferraiolo, President of the Auto Body Association of Connecticut (ABAC), emphasized the need for a joint effort between national and local associations as well as shops to promote the message, noting “insurer steering is easy because consumers just don’t know.” In addition to utilizing social media, the group endorsed the effectiveness of Public Service Announcements as consistent with the way consumers obtain their information, directing them to association websites for further information. Ferraiolo acknowledged that there are no simple solutions, “but we can do a better job of educating consumers” through the vast array of technology not being uti-

lized currently. Seeing a parallel between consumers and repairers when it comes to the distribution of information, Schulenburg noted that lots of information intended for collision repair shops is never utilized, asking what the key to inspiring the use of these resources could be. One attendee noted that

terested in vehicles being repaired properly. The ideas that shops are expected to invest in additional training without expecting any return on their investment led Schulenburg to ask, “is this really an issue of whether or not we should invest in training and equipment, or is the model of how we do business broken?” As participants discussed which issues to tackle later in the meeting, one participant compared the collision repair industry to a sinking ship; though there may be many leaks, the first step is to find the biggest hole and plug it up. Many participants pointed to the low levels of local collision repairer business representation in the room. (l to r): Tony Ferraiolo, Peter Abdelmaseh & Tony Lombardozzi immediately conLombardozzi at Repairer’s Roundtable curred, citing an overarching apOEMs will be funding Public Service athy in the industry as the biggest Announcements this fall to explain obstacle faced. Most repairers see the that new vehicles which are being reproblems, but they assume that someleased cannot be safely repaired the one else will fix them. This apathy alsame way as older vehicles, but the lows others (insurers, OEMs and so message has nothing to do with sellforth) to assume control of the indusing more OEM parts. It’s about maintry, but Lombardozzi insists, “we taining the safety and value of the don’t need anyone [else] to tell us vehicles. It also stresses that modern where we’re headed; the experts in our repairs require specific educational industry need to determine where and equipment components and that we’re going.” the fact that the industry is changing. Peter Abdelmaseh, former ExecThe conversation turned to the isutive Director of AASP-MA, added that sues surrounding manufacturer certifithere is a huge distrust of associations cations with some repairers seeing the within the industry, and it is necessary value of becoming certified while oth- to look outside the associations to uners, such as Tony Lombardozzi, Presderstand their limitations. They can’t do ident of the Coalition for Collision everything repairers want them to do Repair Excellence (CCRE), took a unless they are strengthened. Another more skeptical view. Lombardozzi repairer pointed out that it is impossible asked “what good is a certification? to overcome this distrust if those reIt’s just a piece of paper that says you pairers are not in the room. have knowledge, but you can have In addition to the difficulties in knowledge without that paper.” He getting away from their businesses and suggested that this issue may create spending money to attend events and crises in the industry as a shop can meetings, low self-esteem is a major have all the proper training and equipcontributing reason that many repairment and still not complete the repair ers opt against participating in associcorrectly. ations and industry events, according This debate led to a general questo Lombardozzi who believes “the tion: do repairers trust OEMs? Several only way we can change that is to clarified that their issues with manu- bring the message to them.” facturer certifications are less related Nearly all of the attendees agreed to trust than ‘pecuniary inequalities,’ that too many third parties are inserting especially in the MA market where themselves into the collision business, labor rates are so low, making it diffiso repairers must be very cautious cult to pay the costs associated with when deciding who to partner with. the certification. Several attendees As the roundtable continued, then engaged in a conversation about many topics were broached without OEMs offering training to independ- being pursued in great depth. There ent repair facilities because they’re inwas some discussion about repair

26 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com

standards, and several attendees expressed concern with the domineering growth that multi-shop organization (MSOs) are taking in the industry and how this will affect smaller shops’ competitive abilities. However, one opposing view suggested that the recent interest of private equity firms and their decision to invest in MSOs could see these firms taking a stand to demand the right to establish their own pay rates which could, in turn, benefit the entire industry. Schulenburg’s inquiry regarding how to take the voices of those in attendance and present it at larger forums, led to an impassioned discussion about CIC’s agenda and significance to actual collision repairers. Several expressed belief that CIC has abdicated their role as a leading organization in the collision industry. Some expressed sentiments that they feel CIC has been “overtaken” by special interests and no longer works. The discussion of third-party interference led back to repair standards and who should be involved in the process of establishing and implementing them. Most attendees agreed that the creation and establishment of repair standards has nothing to do with insurers and should be left to OEMs and repairers, yet there were some dissenting views about whether insurers should play a role in the implementation of the standards since they do possess their own areas of expertise that may be important in this part of the process. Many of the attendees agreed it was necessary to walk away from the meeting with at least one unified position that could be shared as a consensus of the repairers represented at the meeting, and this particular topic was chosen by the audience participants. The repairers in attendance represented as wide a diversity as exists in the collision industry—single location and both regional and national multi-shop operators, DRP and independent shops, family-run business and dealerships—but even in the diversity, there was commonality in their beliefs. The discussion concluded that nearly all in attendance felt it was important to convey that any formulation of standards for the collision repair industry should be developed and managed by the collision repairer, inviting in expertSee Repairer Roundtable, Page 38

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it e nat c ie xe aP n n nn ny r d e twww.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 27

On Creative Marketing with Thomas Franklin

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

Still Using a Quota System For Consumer Sales? I was surprised recently to learn of a shop that still uses sales quotas. As a professional in marketing and sales, I am very familiar with quotas, and the pros and cons of the practice. It’s likely that the various sales reps that call on collision repair shops, selling everything from computer systems, estimating software and spray booths to frame machines, are expected to meet sales quotas. It’s also likely that at the end of the month when a rep is still way under his or her quota that some drastic measures will be taken to force yet one or two more sales. That’s just the nature of using a sales quota system. But I had to ask what a collision shop sales person could do to close more business for the shop at the end of the month? Earlier in the month he or she could have gotten on the phone and called prior customers, or placed more follow-up calls to prospects who brought in their vehicle and didn’t leave it to be repaired. Or when the shop has dealership connections, the sales rep could push hard on the dealership service drive for collision work. But at the end of the month, the story would only be told with closed tickets. What could he or she do to push that up to meet a quota? I talked to one rep who said the game begins when a customer brings in a car to be repaired. The aggressive rep on quota barely waits until the cus-

tomer is out the door before he or she is on the phone to the customer’s insurance company to get an adjuster out to look at the car. If the company says five days, he or she immediately contacts the customer to call and push his or her insurance company to get out to see the car in three days or less. The rep also pushes for a quick teardown to expedite the parts orders and avoid supplements. If the end of the month is coming quickly and some of that rep’s vehicles have still not been completed and closed out, the rush is on to find out why not. Delayed delivery of parts is a hard problem to overcome, but supplements are a different story. I was surprised to learn that a shop owner willing to work with this kind of quota pressure would permit a rep to go the customer to approve a supplement if the insurance company is holding back on it. When the job is completed if the insurance company hasn’t paid for the supplement, the customer will get the bill. Now the aggressive rep has to convince the customer that he or she will be able to collect back from the insurance company eventually. So here we arrive at why few shops allow this kind of last minute quota pushing. A customer who is pushed to authorize supplements and collect back from his or her insurance company may not choose to use this shop again. It was obvious this shop

ASA Meets with Administration Re MFN Clauses

Automotive Service Association (ASA) leaders recently gathered in Washington, D.C., to meet with administration and Capitol Hill officials to discuss Most Favored Nation clauses contained in some direct repair program (DRP) agreements with insurance companies. ASA wrote administration officials in 2012 asking that they also consider the impact of MFN clauses on parties involved in property and casualty insurance. Testimony by administration officials on Capitol Hill to date have reflected more interest in health insurance agreements. ASA maintains that the anti-competitive nature of the clauses puts both consumers and collision shops at a disadvantage. In 2010, the U.S. Department of Justice filed a suit against Blue Cross Blue Shield of

Michigan regarding the use of MFN clauses. In 2012, the commissioner of the Office of Financial and Insurance Regulation of Michigan issued an order, which prohibited the use and enforcement of any MFN clause in a health insurer provider contract that has not been previously reviewed and approved by the commissioner. The Michigan legislature followed with a ban on MFN clauses in health insurer contracts. The North Carolina legislature approved House Bill 247, a bill that restricts MFN use by allowing health providers and health insurers to freely negotiate reimbursement rates by prohibiting contract provisions that restrict rate negotiations. The bill has been signed into law and will become effective Oct. 1, 2013.

28 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com

owner put the highest value on quotas and profits, while another might do everything possible to not irritate a customer. I could see that this shop is highly profitable and capable of bringing in plenty of jobs without worrying about retaining every customer in the long run. I could also see why many shop owners would shy away from using quotas, but might there be a way to do it without irritating and possibly losing customers? A long history of successful companies using sales quotas says they serve an important purpose. Sales reps are strongly motivated by sales contests, sales bonuses, commissions and more. Even the mention of quotas when hiring a rep will tell an owner whether or not this person can work with that kind of pressure. Many cannot and it’s best to determine this as soon as possible. The pressure of having to meet a quota will probably drive a laid-back employee crazy but

an aggressive sales type will thrive on it and draw on a depth of ingenuity to bring in or close business that otherwise could have slipped away. After this conversation about quotas, I asked a few other shop people whether or not they used quotas in their shops. No one else I spoke to used them, but there was often a greater emphasis on targets and team closing. It seemed to me that individual quotas could be difficult to manage in most collision shops, but given the new emphasis on lean processes and team production, I think there is definitely a place for some sort of target or quota system. At first glance this might not seem applicable to a small, independent shop but perhaps that’s where it may be needed most to “light a fire” under sometimes complacent estimators and owners who now have to compete in a much more ruthless collision repair marketplace.

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LA CAA Featured BMW i3 Technology at June 19 Meeting The Los Angeles chapter of the California Autobody Association met June 19 with 110 members in attendance to view a special showcase of the new BMW i3 technology.

Guest speaker Tom Brizuela, body and paint technical team leader for BMW North America, introducd and reviewed the new BMW i3 platform that features carbon and aluminum composite technology. The meeting included an actual cutaway view of the BMW i3 platform to review the repair methodology crash worthiness of its new generation platform.

Brizuela began working on cars at age 15, with the dream of someday working for a car manufacturer. He served in U.S. Marines as a diesel/automotive technician and graduated from National Technical College in Los Angeles with an AS degree in Automotive Diagnosis and Repair. Over the years, he worked at independent high-line and exotic auto body repair shops, restoration shops, and a Mercedes Benz dealership, and in 1988 as head paint technician for BMW of North America, Inc. at their Vehicle Processing Center in Oxnard, CA. In 1990, Brizuela was promoted to the BMW Service Training Department and began developing BMW’s Body & Paint Service Technician Education Program (STEP). From 1991 to 1995, he was responsible for STEP training at the BMW Montvale New Jersey facility.

In 1995, Tom accepted a Body and Paint training/curriculum development position with Toyota Motor Sales, USA, at their Los Angeles corporate headquarters. During this time, he was promoted to Body Service Group Supervisor where he became responsible for Toyota and Lexus body and paint training development, technician certification, and training facility management. In 2000, BMW of North America

committed to build a new body and paint-training center in Oxnard, CA., to train entry-level technicians, and BMW dealer technicians. He saw this opportunity and returned to BMW as Body and Paint Technical Team Leader. The meeting was held at Nick Alexander Los Angeles Imports in Huntington Park, CA.

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www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 29

Continued from Cover

Carlisle’s Blog If you’re involved with the collision repair industry, you’ve no doubt heard the hullaballoo regarding State Farm and PartsTrader. For those who haven’t, here’s a brief summary: State Farm recently launched PartsTrader, a mandatory online parts

rollout throughout the United States. It’s clear that State Farm isn’t just interested in an efficient online ordering platform. Otherwise, they could just mandate that their Select Service shops use any online platform for parts ordering, and do this at no cost to themselves. Instead, they’ve spent millions of dollars on a brand-new online ordering platform. Why? The collision parts market in the

There are two significant negative impacts for OEMs. Loss of market share: A wider reach throughout salvage yards and aftermarket suppliers in the United States for parts sourcing will eventually mean that more alternative parts are used. This impacts OEM profitability and customer repair quality. Financial harm to dealers: A competitive marketplace means that

It’s clear that State Farm isn’t just interested in an efficient online ordering platform. Otherwise, they could just mandate that their Select Service shops use any online platform for parts ordering, and do this at no cost to themselves. Instead, they’ve spent millions of dollars on a brand-new online ordering platform. Why?

ordering platform for their Select Service (Direct Repair Program (DRP)) shops. These Select Service shops receive State Farm’s collision customers in return for ceding some control to the insurer. The parts ordering platform is meant to capitalize on all the efficiencies of e-commerce, reducing the cost of parts by requiring suppliers to submit competitive bids. PartsTrader is undergoing a gradual

United States is about $16 billion. At present, insurance carriers pay about $10 billion dollars of that total, but have little influence over the parts procurement process or pricing. State Farm’s competitive online parts marketplace provides leverage by pitting suppliers against each other to offer the best price on parts. Even a one percent reduction in parts cost represents a $100 million savings for insurance companies.

Texas Governor Signs Franchise Tax Bill

The Texas Franchise Tax legislation, supported by the Automotive Service Association (ASA) and ASA-Texas, was included in Substitute House Bill 500, which recently passed the Texas legislature, and has now been signed by Texas Gov. Rick Perry. Currently, automotive service and collision repair shops owned and operated by new or used car dealerships are taxed at half the rate used to tax independent automotive repair facilities doing identical work. The state classified new and used car dealerships as “retail” operations, but not independent repair operations. The Texas state tax code classifies dealership sales as “retail” and allows their service and repair business to be included under that banner. Independent automotive repairers have not had the same opportunity. The new law reclassifies independent repair shops as retail trade— cutting their tax bill in half and giving

them a level playing field with car dealerships. The Texas Franchise Tax legislation, included in Substitute H.B. 500, states that “the activities classified as Industry Group 753 of the 1987 Standard Industrial Classification Manual published by the federal Office of Management and Budget fall under Retail Trade,” addressing the Texas inequity. ASA thanks its Texas members for rallying around Substitute H.B. 500. To view this legislation in its entirety, visit ASA’s legislative website at www.TakingTheHill.com. The Texas Franchise Tax legislation, included in Substitute H.B. 500, states that “the activities classified as Industry Group 753 of the 1987 Standard Industrial Classification Manual published by the federal Office of Management and Budget fall under Retail Trade,” addressing the Texas inequity.

dealers will have to offer even greater discounts. Parts suppliers, including dealers, will also be required to pay a fee to participate in PartsTrader. Unfortunately, even if OEMs and IRFs band together and manage to kill State Farm’s PartsTrader, Nationwide or GEICO will almost certainly come out with a similar program. The business case is far too compelling and the stakes far too high for insurance carri-

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Adopt, use and manage smarter pricing. Right now, OEMs have access to tremendous quantities of data through estimating platforms and CollisionLink. OEMs also have relatively sophisticated pricing systems and access to robust analytical platforms. Together, pricing systems and data enable surgical precision on parts pricing far in advance of what aftermarket parts providers can manage. Separate out collision parts pricing from the rest of

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If the concept is here to stay, what strategies should OEMs explore?

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ers to leave parts cost in the hands of the parts supplier, the shop and the claims adjuster. Eventually, this concept is going to be implemented in such a way that it takes off. It may not be this goaround with PartsTrader, but the competitive online parts marketplace will happen. The industry is consolidating, and there’s even more incentive for large multi-store operators to follow the insurance companies’ policies in return for repairs. After all, keeping the doors open at a big shop requires a healthy volume, and the easiest way to a healthy volume is through DRP.

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your pricing rules and strategies, and get down into the details. This means creating strategies for pricing specific part numbers and car models. Although OEMs do pursue pricing strategies and aging curves, this is usually done at a broad, part-type level. In other words, your strategy for pricing a bumper for a full-size pickup truck should not necessarily be the same as your pricing strategy for a bumper for a midsize

bines online ordering with OEM pricecompetitive capabilities. In contrast, PartsTrader is only in a few markets, but more are sure to follow, and other insurance carriers will jump in the game shortly. An aggressive push by the OEMs to get their tools embedded in the market at the dealer and shop level before the insurance carriers enter will make the road harder for insurance companies and promote OEM

OEMs’ advantage. 95% of body shops in the United States can’t competently complete repairs on structural aluminum. 99.9% of body shops in the United States can’t competently complete repairs on structural carbon fiber or CFRP. If OEMs can control the training associated with advanced materials, they can make sure that vehicles get repaired at shops which use more OEM parts.

sedan. And the key to the success of pricing strategies is dynamic management of strategies, rather than “set, forget and revisit in 5-10 years.” Promote price competitive programs and alternative online ordering tools. Insurers may have leverage over behavior for their DRP shops, but OEMs have first-mover advantage here. CollisionLink has been in the market for nearly a decade, and com-

market share. Your price competitive programs have to be integrated into your smart pricing strategy, or you’ll be working at cross-purposes. Expansion of advanced technical training. Factors such as CAFE, safety regulations, and the natural order of progress—that is, advanced materials and design—have made parts more complex, and more expensive. That complexity works to

Core returns and salvage leakage. How does a part wind up in an LKQ yard? If OEMs can control the spread of cores and salvageable parts using core return charges and total-loss buyback programs, they can starve the network of salvage parts. Of course, this comes at a cost, but salvage parts are the fastest-growing segment and the most risky for OEMs. After all, it is easy to argue that an aftermarket-

Unfortunately, even if OEMs and IRFs band together and manage to kill State Farm’s PartsTrader, Nationwide or GEICO will almost certainly come out with a similar program. The business case is far too compelling and the stakes far too high for insurance carriers to leave parts cost in the hands of the parts supplier, the shop and the claims adjuster.

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produced part does not meet or exceed OEM standards. It is more challenging when that part came from the OEM at some point. Many OEMs are already active in this area – but they need to dial up the breadth of parts covered and the aggressiveness of the programs. Certified Body Shops. A certified shop network provides the OEM with additional input into the repair process and helps take some of the leverage away from insurance carriers. When combined with advanced training and access to OEM tools, equipment and techniques, certified body shops are in a position to capture more of the high end of the increasingly complex repair market. OEMs may lose the battle on covers and similar nonstructural parts, but there are opportunities to make up ground in structural, safety, and specialized parts. The bottom line: Expect insurance companies to increase their involvement in the parts procurement process, and expect it to have a significant negative impact on OEM market share. Just maintaining current market share will require a tremendous amount of additional effort.

Demand is High and Growing for Auto Techs in Michigan As with many other skilled trades fields these days, automotive technicians are in high demand—and there’s a talent gap between jobs posted and available workers to fill them. In Southeast Michigan, employers such as car dealerships and body shops have posted 777 open jobs in the first six months of this year, and this time last year were seeking more than 1,200 mechanics and technicians. That’s according to data tracked by the Detroit-based Workforce Intelligence Network. As is the case with industrial jobs like machining and welding, for at least a generation parents have discouraged their children from entering the auto service world, pushing them toward white-collar jobs even though many technical degrees yield better salaries than many college degrees, said Tony Molla, vice president of communications for the Leesburg, Va.based National Institute for Automotive Service Excellence, which certifies technicians. Demand will grow in the future; about half of all technicians will be eligible to retire within 15 years. “If there is such a thing as job security, it’s in the trades,” said Molla, also noting that garages compete for mechanics not just with each other, but

also the aerospace industry. The mean annual salary for automotive technicians, according to the U.S. Bureau of Labor Statistics, is about $39,000, and Molla said that’s on the low side compared to industry numbers he’s seen. Al Lecz, director of employer strategies at WIN, said all nine community colleges in the Southeast Michigan Community College Consortium have automotive service training programs, with Macomb Community College’s Center for Advanced Automotive Technology premier among them. The nine colleges in the consortium are Macomb, Mott Community College, Oakland Community College, St. Clair Community College, Wayne County Community College District, Henry Ford Community College, Monroe County Community College, Schoolcraft College and Washtenaw Community College. Other resources include the National Automotive Technicians Education Foundation and NATEFaccredited schools; the Automotive Training Managers Council; and automotive manufacturers, which operate internal training programs. General Motors Co.’s is called the General Motors Automotive Service Educational Program.

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SCRS Board Meeting: Partial Panels, Labor Rates, SkillsUSA by Chasidy Rae Sisk

In the midst of the CIC and I-CAR conferences being held in Boston during the week of July 22–26, the Society of Collision Repair Specialists (SCRS) also held their board meeting. The 2-hour meeting was held in the Hancock room of the Westin Boston Waterfront, located at 425 Summer Street in Boston, MA. Led by thirteen board members, including Ron Reichen making his debut as Chairman, the meeting was to convey updates from SCRS staff and committees to outline current and future work initiatives. Approximately twenty attendees gathered to listen to these updates. The SCRS Education Committee, led by Toby Chess, offered a presentation focused on repairing aluminum, stud welding and dent-pulling equipment technologies. Moving on to a pressing industry issue, Executive Director Aaron Schulenburg addressed partial panel finishing and dissatisfactory compensation from insurers, noting that this problem which was seemingly corrected back in 2007-8 is returning. SCRS has seen a drastic increase in the number of queries about this issue since the beginning of 2013. Even more disheartening, this issue is not geographically isolated, occurring throughout the country. SCRS issued letter to six different carriers in May 2013 to enquire about their guidelines. Surprisingly, the overwhelming response was that carriers have not made any changes to their policies, with many of the carriers saying that their expectations for reduced refinish time on repaired panels are based on receiving a mutual agreements with individual repairers based on the repair needs. Additionally, no company has provided or admitted to any corporate position or policy which specifies any precise reduction in time, although some examples of such documentation have been received by SCRS. The association is continuing to work with these carriers to address the issue and hopefully resolve what has become a pattern of practice for some in 2013. Schulenburg’s said his concern arises because SCRS has received complaints from repairers who don’t agree to a reduction in time yet are being told that it is a matter of company policy. The question he now

poses to insurers is how to respond to claims that this is company policy when, in fact, it is not. Schulenburg emphasized that such conflicts benefit neither collision repair shops nor the relationships between repairers and insurers. SCRS will continue to seek answers to this dilemma and will provide an update on the situation at SEMA in November.

creased involvement within the industry. Through their partnership with Lynch Associates, AASP-MA hopes to create a stronger presence, especially legislatively. Currently, AASP-MA is trying to get the Auto Body Labor Rate Bill approved into law. Since 2008, the state has seen a free market resurgence with new insurers writing new policies,

(l to r): Ron Reichen, Aaron Schulenburg & Andy Dingman at SCRS Board Meeting

SCRS Past Chairman Barry Dorn reported that over 6000 inquiries have been received through the Database Enhancement Gateway (DEG)— but while the number is a milestone accomplishment for the free industry resource, that number should be significantly higher. Collaboratively supported by national associations, the DEG is funded by SCRS, AASP and ASA who monitor the received inquiries through a full time administrator. Though the DEG has seen an increase in the number of inquiries received, there are over 30,000 collision repair shops nationally, suggesting that the number of submissions from repair facilities who have experienced issues with estimating data could significantly increase if more in the industry became aware of the tool, and how easy it was to use. The industry as a whole benefits from each inquiry, as they are publicly posted into a database. Next, Schulenburg introduced representatives from their local SCRS Affiliate Association to talk about local industry efforts. SCRS represents 40 state and regional Affiliate Associations across the U.S. Molly Brodeur, Vice President of AASPMA, provided updates on current industry activities in Massachusetts as well as an overview of her association’s efforts. The association has hired a management firm, Lynch Associates, as of May 2013, and with that addition came new Executive Director Jillian Zywien (see my interview with her this issue p. 35) who was excited to attend the week’s events and looks forward to her in-

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however, there have been no changes to labor rates in fifteen years, leaving Massachusetts with some of the lowest rates in the nation. The Auto Body Labor Rate Bill proposes an increase in labor rates to reach a more competitive level, combined with a review and possible increase of rates every three years. AASP-MA has also redesigned

their website recently to enhance their member benefit packages as they strive to increase membership. Since there is not much I-CAR influence in Massachusetts, the association is also working to change that by focusing on acquiring Gold Class certifications for local shops. Through their work with the Collision Repair Education Foundation (CREF), AASP-MA awarded the first recipient of their tool grant at their 2012 golf outing. As Brodeur concluded, Schulenburg turned the meeting’s focus toward the future as he assured attendees that SCRS’s plans for SEMA are coming along well. He encouraged collision repairers to attend the November event, claiming it is a great environment where a shop can learn how to market itself, add revenue or just learn more about the industry. SCRS is most closely involved with the Repairer Driven Education series at the SEMA Show, and this year’s development of different learning tracks will allow individuals to choose the focus of their education. SCRS has engaged compelling indus-

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try speakers for the vents, and Schulenburg believes, “the program hits home for repairers and will provide tangible benefits.” The show floor at SEMA promotes enthusiasm for the collision repair industry, due in large part to the vast array of exhibiting corporations, with attendees groups coming from as far away as Australia and New Zealand. Several SCRS board members proceeded to talk about their involvement with Skills USA, emphasizing the importance of reaching out to young people who “truly are our future,” according to Reichen. Schools with students participating in the competition received a free SCRS membership, and student competitors received individual recognition from SCRS, letting them know the industry supports their efforts to become the best in their field, and is watching their accomplishments. The overall consensus was that an amazing energy surrounded the event which deserves to be supported and promoted; SCRS is excited to be a part of it and plans to continue their involvement. As always, SCRS emphasizes the importance of continuing education.

Your Driving Costs—AAA Study Finds Vehicle Ownership Costs are Rising If you own your car outright, you might not think it costs you that much to own it, but AAA’s 2013 Your Driving Costs study shows that costs range from nearly $7,000 to more than $11,000 for the average American, depending on the kind of car driven. What’s more, the cost of owning a car is rising, which means it’s costing more to drive your car year after year even though it’s worth less and less.

Different car types equal different costs AAA calculated the average costs for six different car types based on the ownership costs in the study. It found that the average cost of all sedans— the majority of cars on the road—is 60.8 cents per mile or $9,122 annually, based on 15,000 miles of driving. Small sedans cost the least—$6,967 annually. Four-wheel-drive sport utility vehicles cost the most—$11,599 annually—largely due to the fuel costs of those cars. Perhaps surprisingly, large sedans cost almost as much— $11,248—as four-wheel-drive SUVs, while minivans, which often have about the same amount of passenger and cargo-carrying capability as many SUVs, averaged just $9,795.

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Depreciation doesn’t compensate In last year’s study, depreciation rates had slowed significantly, making cars worth more and partially offsetting the increases in ownership. According to the 2013 Your Driving Costs study, depreciation rose 0.78 percent to $3,571 annually on average. AAA attributed this to an increase of used cars available, which has softened resale values.

Maintenance costs see big rise In terms of car-maintenance costs, the AAA study found that there were significant increases in the cost of labor and parts over the past year. As a result, average maintenance costs are up by 11.26 percent on average for sedan owners, the largest percent year-over-year increase, to 4.97 cents per mile. Included in that figure are the labor and parts costs to maintain and repair the car for five years and 75,000 miles as well as purchasing an extended warranty. AAA noted that figure also has increased due to increases in extended warranty prices—the result of high losses by underwriters. Car insurance costs more, too While AAA notes that auto insurance

rates vary widely due to numerous factors, car insurance is rising 2.76 percent to $1,029 annually for the average sedan owner over 2012. To arrive at its average, AAA used a hypothetical low-risk driver with a clean driving record and obtained quotes from five AAA clubs and insurance companies representing seven states.

Fuel costs rise marginally While gas prices have continued to rise, fuel costs are up only slightly, partially offset by improvements in car fuel economy. The average cost for regular unleaded gasoline is up 3.84 percent, but due to miles-per-gallon improvements, fuel costs have risen just 1.93 percent to 14.45 cents per mile on average for sedan owners. For its calculation, AAA uses the national average for regular, unleaded gas in the fourth quarter of the prior year. Tire costs stay stable After an increase in the 2012 study, tire costs have remained stable this year, as manufacturing and shipping costs for tires have leveled off. The average sedan owner pays one penny per mile for tires.

Collision Industry Makes Gains at SEMA Show With warm summer months still ahead of us, collision repairers have already been hot to book their fall travel plans to attend the 2013 SEMA Show in Las Vegas, Nevada. Since 2010, the Society of Collision Repair Specialists (SCRS) has provided the acclaimed Repairer Driven Education (RDE) series during the Show, attracting record breaking attendance numbers with each year. As of July 1st, SCRS reports an attendee registration increase of over 250% (YTD), in comparison to the same time period last year. With more than four months remaining until the Show opens on Tuesday, November 5th, the pace at which the program is gaining registrations is a tremendous indicator that the 2013 SEMA Show will be the destination for professionals in the collision repair industry. “We are extremely proud of the series we have developed this year, and still have some additional programming we are working on to even further amplify the experience this fall,” shared SCRS Chairman Ron Reichen. “Attendee reaction to our events is always the best indicator of whether or not we are delivering what the industry is looking for in our series. Based on the feedback we have re-

ceived so far, and the extremely compelling numbers, we are confident that the varied content is going to provide very tangible value to all involved.” The RDE series isn’t the only area of the Show where the collision industry is demonstrating early spikes in activity. Show management numbers through the end of June indicated an increase in collision industry exhibitor counts, square footage occupied by exhibiting collision industry companies and both overall and collision-focused attendee registration. While the primary activities for the collision repair industry take place in the Collision Repair & Refinish section of the show in the North Hall of the Las Vegas Convention Center, industry meetings, forums and newly expanded show floor space also extend into the Las Vegas Hotel & Casino (LVH). In addition, many collision industry companies take advantage of space that is available in virtually every area of the show. Areas such as Tools & Equipment (North Hall), Restyling & Car Care Accessories (North Hall), Racing & Performance (Central Hall), Hot Rod Alley (Central Hall) and at the First Time & Featured Exhibitors (LVH) all feature companies that have a strong collision repair focus.

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Northeast News 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.

Auto Body Association of Connecticut Supports Members’ Concerns and Fights Unfair Legislation Since 1968, the Auto Body Association of Connecticut (ABAC) has been fighting for the collision repair industry. While their focus has changed many times over the past 45 years, ABAC is still dedicated to preserving the integrity and independence Tony Ferraiolo of repair specialists throughout their state. Because there are currently so many important issues facing the industry, Tony Ferraiolo, President of ABAC, took time to share the association’s goals and stances with Autobody News readers. Regarding their mission, Ferraiolo states, “ABAC continuously strives to educate the motorists of Connecticut and to enhance the abilities and knowledge of its members, through education, to provide safe and dependable repairs to the public. Through proposing and monitoring legislation, the ABAC endeavors to protect the best interests of consumers, its members and the collision repair industry.” ABAC has many ongoing goals and projects in 2013. One of their primary focuses is on education. They strive to educate their members on industry-related issues and training, as well as promoting education on and protection of consumer rights. ABAC educates and trains their members on proper repair procedures, including the latest information from OEMs. Additionally, they protect the driving public with consumer advocacy groups which provide the necessary tools to allow the average driver to make informed decisions about their repair needs. Another important goal for ABAC is related to legislation. In addition to supporting class action lawsuits when necessary, the association monitors current legislation, serving as a watchdog to expose insurers for violating fair trade practices and to combat legislation attempts seeking to limit the independence of collision repair facilities. Beyond education, ABAC’s current projects focus on ongoing legislative reforms by maintaining and improving communications with local, state and federal officials.

They are currently in the process of pushing two class-action lawsuits. When asked about the biggest challenges facing the industry today and possible ways to overcome these issues, Ferraiolo lists “the influence that insurance companies have in the auto body industry. Actions to overcome these influences include lawsuits (class action and individual), legislative reforms, and consumer education.”

ABAC does not approve of the PARTS Act because “the OEMs should have the same protection that’s given to any other parts manufacturer. We defer to the OEMs because it’s the safest, best way to repair the vehicle. The research and development that is put into the OEM parts should not be undermined. The PARTS Act will hamper innovative new designs and cause costs to be amortized over a short period of time, driving costs up. Therefore, we reject the PARTS Act.” They also reject the Right to Repair. Ferraiolo notes, “We believe all information should be given out to everyone so as not to discriminate against any repairers. Information should be shared so that vehicles can be safely and properly repaired.” Ferraiolo also believes “PartsTrader is bad for our industry.” In their press release on PartsTrader from September 2012, ABAC notes, “the endeavor is a wolf in sheep’s clothing. It is bad for repairers, part manufacturers, and most importantly, consumers. The only two enterprises in place to profitand profit handsomely- are State Farm Insurance and PartsTrader.” It is clear that PartsTrader does not benefit repairers or consumers as PartsTrader’s model shows insurers collecting more premiums only to find ways to pay less on claims, which “is fundamentally corrupting both industries,” the press release continues. Even worse, ABAC predicts that it is only a matter of time before other

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insurers institute similar programs to the detriment of the collision repair industry. This is the reason that ABAC refers to PartsTrader as “an embodiment of what’s wrong with the auto body industry and a harbinger of what’s to come,” which is why they encourage their members (and collision repairers nationwide!) to become educated on the program and stand up for themselves. “In light of the long-

term damage this program will likely cause our industry, we are respectfully encouraging those of you who have not yet weighed in on this debate, to carefully examine the pilot program and voice your opinions.”

ABAC was formed in 1968 when around seven independent organizations joined together to form one association: the Auto Body Association of Connecticut. At that point, ABAC was comprised of two officers from each individual organization who gathered for monthly meetings, but each organization continued to operate separately as well until around 15 years ago when all of those individual organizations joined together to strengthen ABAC. According to Ferraiolo, “because individual groups consolidated and became one, the organization runs more efficiently. The locals were able to concentrate on committees and, therefore, accomplish more for the association. There is strength in numbers.” While keeping their busy repair members engaged in the forefront of the industry, by participating in the latest developments, is always a challenge, ABAC rises to the occasion repeatedly. See Supports Concerns, Page 37

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Executive Director Jillian Zywien Contributes Expertise in Public Relations to AASP/MA with Chasidy Rae Sisk

Recently, the Massachusetts chapters of the Alliance of Automotive Service Providers (AASP/MA) named Jillian Zywien to the position of Executive Director. Zywien is honored to be chosen to represent the association’s best interests, and she looks forward to implementing new programs to benefit their members. Despite the time demands of her new duties, she was eager to take time to share her plans for the association. As a senior account executive for Lynch Associates, Zywien’s experience is primarily based in the Public Relations and Communications fields, and she believes that her work in association management consulting across a broad spectrum of industry organizations will benefit AASP/MA as she steps into her new role. “During my tenure, I have applied my skills to broaden communications to members; to enhance marketing of events and benefits to members, and to

implement electronic and social media contacts. The members will find this provides a growing stream of industry related information at their fingertips.” In recent months, a large part of AASP/MA’s attention has been focused on education. Having instituted a variety of training options during her career, both industry-specific and general business topics, Zywien notes that “Education is a primary focus of the services professional associations provide… For example, we recently began providing educational opportunities through webinars for ease of delivery to members. These programs provide members with the Jillian Zywien opportunity to access educational content at any time that is convenient to them. We would love to hear what members think and

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how we can better cater to their needs.” AASP/MA has also spent a considerable amount of time in filing complaints about insurance companies with the Auto Damage Appraiser Licensing Board (ABALB). Zywien believes these efforts are yielding fruit, and it’s important to attend these hearings on members’ behalf because “In order to continue to influence the regulatory process, we must build a robust and ongoing relationship with the Board of governance over this industry. Relationship building and strategic interaction are two of the goals we have for AASP members with the ADALB Board. Demonstrating that an issue is a frequent reoccurrence allows us to approach remedies from the broader viewpoint, as such, we will continue prior practices relative to the ADALB board.” One of AASP/MA’s largest projects in 2013 has been the re-filing of the Labor Rate Bill. Zywien is taking an active role in this process; “Having just come into the position in the last few days, our first goal will be to meet with our legislative committee and formulate a long-term strategic plan that addresses all of the public policy objectives the association is confronting. Issues include the labor rate, insurance company practices with consumers, and matters brought before the ADALB. For the mechanical side of the industry, we will remain vigilant on the implementation of the recently enacted Right to Repair initiative. It is our goal to take an expansive view of both statutory and regulatory initiatives affecting the automotive service industry, and develop remedies that may occur in a variety of governmental bodies.” Additionally, Zywien feels it is imperative to educate consumers on their rights under the policy and with regard to repairs in particular. “One of our many goals is to ensure that the AASP/MA is a resource, not only for the industry, but also for our consumers. It would be our hope that providing this education would begin to overcome the misimpressions often left by insurance companies and empower consumers when it comes to their own vehicles.”

Though it’s no surprise that many AASP/MA members are discouraged by the past failures in passing the Labor Rate Bill, Zywien remains optimistic. “A new broom sweeps clean. Each industry advocate comes to the table with different perspectives on how issues can be addressed. Our relationship with the association provides for an opportunity to rebrand and expand the arguments used on policy debates. We would ask that the members remain open to new strategies and informational delivery systems. Clearly the reason people join associations is to enhance their own business environment. We are keenly aware of that and will work to build the members’ confidence for new strategies. We will provide members with informational content they can use to advocate on their own behalf with elected officials and regulators. I would ask the members to give us a chance to change the dynamics and reinvigorate advocacy efforts regarding their issues.” As Zywien strives to implement improvements throughout the association and the industry as a whole, she believes that now is the perfect time to join AASP/MA. By contributing many new, innovative ideas, she hopes to continue strengthening the foundation created by the current leadership of the association. Additionally, her involvement with Lynch Associates provide beneficial resources as the firm consists of many long-term professionals in the association consulting market, and they’ve already outlined several new programs to the Board, making it easier for members to access benefits, participate in programs, and receive timely communications. Zywien’s enthusiasm and energy makes her an idea choice for Executive Director of AASP/MA, and she’s diving right in to her new responsibilities. “This provides an exciting opportunity to grow AASP/MA and we are ready to roll up our sleeves and share the enthusiasm we have for the organization. Look for new branding, look for new benefits, look for new educational opportunities, and please provide feedback. We serve the members, and we want to do it with excellence.”

www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 35

I-CAR Tech

This article first appeared in the I-CAR Advantage Online, which is published and distributed free of charge. I-CAR, the Inter-Industry Conference on Auto Collision Repair, is a not-for-profit international training organization that researches and develops quality technical education programs related to collision repair. To learn more about I-CAR, and to subscribe to the free publication, visit http://www.i-car.com.

OSHA Hazard Communication Standard Revision

The Occupational Safety and Health Administration (OSHA) is requiring that all employees be trained, by December 1st of 2013, on the revision to its Hazard Communication Standard. The revision to the 1994 standard more closely aligns with the Globally Harmonized System (GHS), an international approach to labeling and classifying hazardous products. Why the change? Credit the global marketplace. The U.S. is both a major importer and exporter of chemicals. American workers often see labels and material safety data sheets (MSDS) from the U.S. and from other countries. The diverse and sometimes conflicting national and international requirements can create confusion among those who seek to use hazardous material information effectively. Major Changes The Hazard Communication Standard regulates identification and communication of hazardous products in the workplace. The major changes include:

■ Hazard classification: There are now specific criteria for classification of health and physical hazards, to help ensure that evaluations of hazardous effects are consistent across product makers. ■ Labels: Chemical manufacturers and importers will be required to provide a label that includes the product name, supplier identification including an emergency phone number, the word “Warning” or “Danger,” pictograms, and hazard statements for each hazard class and category. Precautionary statements must also be provided. ■ Safety Data Sheets: The word “Material” has been dropped, and there is a specified 16-section format. The previous standard had a nine-section material safety data sheet, but product makers could generally deviate from that as long as the information was there. Now all safety data sheets will be 16 sections. If manufacturers, importers, distributors, or employers become newly aware of any significant information

regarding the hazards of a chemical, the label should be revised to the new standard within six months of becoming aware of the new information. With products that have not changed, product makers have between June and December of 2015 to convert their labels and safety data sheets to the new standard. Why the December 1st 2013 training requirement for employees if the product makers have until 2015 to implement the new standard requirements? OSHA believes that American workplaces will soon begin to receive labels and SDSs that are consistent with the GHS, since many American and foreign chemical manufacturers have already begun to produce GHScompliant labels and SDSs. It’s important to ensure that when employees begin to see the new labels and SDSs in their workplaces, they will be familiar with them, understand how to use them, and be able to access the information effectively. Label Requirements The supplier must provide at least the following on every hazardous material label:

■ The product identifier (name) ■ A signal word, indicating the relative level of severity of the hazard, either “Danger” (more severe) or “Warning” (less severe) ■ Hazard statements assigned to each applicable hazard class or category, such as “Flammable” or “Carcinogen” ■ Pictograms, eight to choose from and one environmental hazard option ■ Precautionary statements stating what should be done to protect the worker from the hazard, such as “Respiratory protection required” or “Keep away from open flame” ■ Name, address, and telephone number of the product maker or importer or other responsible party

The eight pictograms are shown on page 24. Note that the pictograms are all within a red diamond. There are two new pictograms, one indicating “Health Hazard” and one indicating “Explosive.” Health Hazards include

36 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com

carcinogens, reproductive toxins, and other toxins that target a specific organ. Explosives have been separated from flammables. The Environment pictogram is non-mandatory, as OSHA does not oversee environmental hazards.

Workplace Labels Workplace labels are mentioned in the revised standard, but nothing has really changed. The minimum requirements for a workplace label are still the product name and indications on the specific hazards of the product, using pictograms, phrases, or words, whatever is available and applicable. If pictograms and phrases are used, they should be consistent with the revised standard. Sources for the label can be as complicated as using labeling kits from a safety catalog, or writing the information directly and legibly on the container in permanent marker.

National Fire Protection Association (NFPA) labels, with the diamond shape and the color and numbering system, can be used as workplace labels, but there’s an important difference in the numbering system used by the NFPA compared to the GHS. With the NFPA system, the higher the number the greater the hazard, so a “1” is the least severe hazard. With the GHS, it’s just the opposite, the lower the number the more severe the hazard, so a “1” is the most severe hazard. When using the NFPA label as a workplace label, use the GHS numbering system. The numbers are often included in the SDS.

Safety Data Sheet (SDS) The information required on the SDS remains essentially the same as that in the 1994 standard, except that the information must be presented using 16 specific headings in a specified sequence.

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The format of the 16-section SDS should include the following sections: ■ Section 1. Identification ■ Section 2. Hazard(s) identification ■ Section 3. Composition/information on ingredients ■ Section 4. First-Aid measures ■ Section 5. Fire-fighting measures ■ Section 6. Accidental release measures ■ Section 7. Handling and storage ■ Section 8. Exposure controls/personal protection ■ Section 9. Physical and chemical properties ■ Section 10. Stability and reactivity ■ Section 11. Toxicological information ■ Section 12. Ecological information ■ Section 13. Disposal considerations ■ Section 14. Transport information ■ Section 15. Regulatory information ■ Section 16. Other information, including date of preparation or last revision. Note that although the headings for Sections 12–15 are mandatory, OSHA will not enforce the content of these four sections because these sections are within other agencies’ jurisdictions.

Health Hazard

• Carcinogen • Mutagenicity • Reproductive Toxicity • Respiratory Sensitizer • Target Organ Toxicity • Aspiration Toxicity

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Employer’s Responsibility Repair facility owners and managers need to become familiar with the standard revisions and train their employees on recognizing the new labels and reading the new SDS versions by December 1st. OSHA has some downloadable “quick cards” available for help with this training. Go to www.osha.gov. Besides the general information, it’s even more important that repair facility owners and managers explain how the hazardous communication procedures will change in the specific facility. If OSHA makes a visit, that is what they will be looking for; if employees know how to find and read the information on hazardous materials that they work with.

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• Irritant (skin and eye) • Skin Sensitizer • Acute Toxicity (harmful) • Narcotic Effects. • Respiratory Tract Irritant • Hazardous to Ozone Layer (Non Mandatory)

• Skin Corrosion/burns • Eye Damage • Corrosive to Metals

One or more of these pictograms must be on supplier labels.

WANT EVERY JOB TO BE A BANG-UP JOB?

Exclamation Mark

Supports Concerns Other benefits of membership include group discounts, educational meetings and quarter meetings which allow members to stay up-to-date on the latest trends to maintain national awareness. Though ABAC has over 400 members, including honorary members, shops

Skull and Crossbones

Conclusion OSHA recently updated its Hazard Communication Standard, which covers requirements for labels, safety data sheets, and hazard material classifications. Several product makers have already begun using the new labeling and SDS system, so OSHA is requiring employees be trained to recognize the new label and SDS format by December 1st, 2013. Even more important than general information is for shop owners and managers to inform employees about how hazard communications will change in the repair facility. For comments or suggestions on the Advantage Online, please contact I-CAR at advantage@i-car.com. and vendors, they still strive “to grow and strengthen our membership to create a stronger association.” 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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Rodney Pierini is President & CEO of CAWA, Operating in California, Nevada, Arizona Rodney Pierini has been the President and CEO of the California Automotive Wholesalers Association (CAWA) for the past 17 years. The CAWA a nonprofit trade associRodney Pierini has ation representing been at the helm of automotive afterCAWA for the past 17 market parts manyears, an organization ufacturers, jobbers, that represents automotive aftermarket warehouse distribparts manufacturers, utors and retailers jobbers, warehouse in California, Nedistributors and vada, and Arizona. retailers in California, The organization Nevada, and Arizona was formed in 1955 and serves as the voice of the aftermarket parts industry in the West. We sat down with Pierini recently to discuss his organization and how its role affects and impacts the aftermarket/warehouse parts business within the collision industry in the three states he represents and also on a national level. ABN: While representing your membership, how do your goals feed into the collision industry and how do you support your membership in these areas? RP: The collision industry is a segment of the automotive aftermarket and as such we are in the business to promote and protect the industry, particularly, in the government affairs arena. Through legislative and regulatory alerts we keep our membership apprised of what is happening in government that will impact their business. Many of our members supply the collision industry with parts and products required to service customers in a qualitative and timely fashion, as well. ABN: Why do you think business professional groups like the CAWA help the industries they serve and maybe cite some specific examples? RP: As an automotive aftermarket trade association, CAWA was founded by members of the aftermarket industry to collectively speak as one voice, to promote training for themselves and their employees and to come together to improve their purchasing power in business service programs and products, e.g., business insurances. ABN: You’ve been the President/CEO of the CAWA for many years and have seen the automotive parts industry change. What are the

most significant changes your members have encountered? RP: Consolidation and a more intense and sophisticated competitive business environment. ABN: There’s an on-going push and shove when it comes to the aftermarket/recycled/re-manufactured parts industry vs. the manufacturer’s OE parts industry. Talk about how the aftermarket parts sector has become more efficient and responsive to changes within the market and how the quality is equal with OE parts, in many instances. RP: In many cases, the major OE supplier is also manufacturing replacement parts in the aftermarket. These parts are as good as, if not better than the part that rolls off the assembly line (because of the improvement in manufacturing post assembly). Also, the remanufacturing segment is at the forefront of reduced emissions and a greener industry footprint in the automotive sector of today’s economy. In the government affairs process we continuously stress the quality of aftermarket replacement parts and their contribution to the overall economy and public good, i.e., the aftermarket gives the consumer the choice of where to purchase their parts and where to have their vehicles serviced. ABN: If you wanted to give any feedback or advice to body shops or the manufacturers of aftermarket collision parts, what would you tell them? RP: Look to the CAWA membership who offers quality collision parts and products. Also, see the hard parts manufacturers, manufacturer representatives, distributors and retailers as an ally in promoting and protecting the collision segment of the industry. This notion strengthens all segments of the industry. ABN: What changes do you think will occur in the auto repair industry overall within the next 10-20 years that will impact the aftermarket parts industry? RP: Parts generally are manufactured and re-manufactured to high quality standards today and will continue to improve as the industry adapts and changes to new technologies and the vehicles of the future. As technology becomes more sophisticated, we’ll see more repair specialization that will require the parts industry to remain nimble and responsive to this emerg-

38 AUGUST 2013 AUTOBODY NEWS | www.autobodynews.com

ing trend. New vehicle technology will also add to the ever-changing future and the parts industry will adapt and , as always, find ways to respond to the yet unforeseen future of the automobile. ABN: New legislative bills emerge all the time, and if passed, they can greatly affect your membership. Tell us how you play a role in staying on top of these proposed bills/laws and how you stay vigilant on these developments as they arise? RP: Perhaps the greatest service we provide to the aftermarket industry is our legislative work. If CAWA were not in California, Nevada and Arizona, the industry would feel the void in uncontested intrusion through legislation and the regulatory powers of all levels of government. If the aftermarket voice is not heard in these state capitols, business owners would find themselves helpless to the governments’ presence in the conduct of daily business. CAWA monitors legislation, regulation and other government programs to assure our members and the industry are not ill served by these processes and the insatiable financial appetite of political operatives. And we promote legislation that supports our members and makes doing business more palatable in the face of government politicians and bureaucrats throughout the western states. ABN: How have aftermarket/ warehouse parts businesses figured out how to survive the collapse of 2008 and has it become a more competitive market as a result? RP: There is no doubt that the market is more highly competitive today and has been so for several years. That’s one reason we still see parts warehouses and jobber stores going out of business. Those that are purchasing right, managing right, constantly monitoring revenues and expenditures and going to market in an efficient manner will continue to be successful. Those not up to the challenges of todays and tomorrow’s competitive environment will not be around in 5-10 years. Those that have survived have also created alliances with other aftermarket business to strengthen their buying power and position in the market place. There are many very competent and entrepreneurial owners and managers in this industry that adapt well and quickly to survive and stay competitive.

Continued from Page 26

Repairer Roundtable ise in certain areas when needed, but never relinquishing control of the standard. As the Repairer’s Roundtable’s time drew to a close, Schulenburg announced that the next gathering will be held at SEMA in November, and he asked what can be done constructively to result in meaningful action and to be certain that something relevant comes out of the meeting. Everyone agreed that the most important way to improve these meetings is to encourage everyone in the industry to attend. The take home message to repairers is ‘So what are you waiting for?’ As Martin Luther King Jr. once said, “change does not roll in on the wheels of inevitability, but comes through continuous struggle. And so we must straighten our backs and work for our freedom. A man can’t ride you unless your back is bent.” Don’t let anyone bend your back! Join associations. Attend meetings. Support and institute change today for a better industry tomorrow.

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Hours: M-F 7-6; Sat 8-4 www.autobodynews.com | AUGUST 2013 AUTOBODY NEWS 39

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