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Prohibits Dealerships
An agreement between government officials and Tesla will allow Michigan consumers to purchase the automaker’s products as well as permit manufacturer authorized service of those vehicles in the state. However , Secretary of State Jocelyn Benson and Attorney General Dana Nessel held firm in denying Tesla the right to legally own and operate dealerships in Michigan. T esla filed suit against the state of Michigan in 2016, claiming the state’s 2014 amendment to the automobile dealer law was unconstitutional. That amendment denied the procurement of a Class A sales license to car companies that, in other words, prohibited automotive manufacturers from owning and operating their own dealerships. The amendment thereby requires automakers to conduct vehicle sales with franchise retailers. The agreement stipulates that Tesla may operate “one or more galleries in the State to educate cus
tomers and facilitate transactions out-of-state so long as Tesla does not transfer legal title to the vehicles within the State….” The agreement outlines the galleries’ “permissible activities” “include (but are not limited to) conducting demonstration drives;
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discussing prices, service, financing, leasing, and trade-ins with potential customers; helping potential customers configure a vehicle; facilitating ordering and purchase of a vehicle for which the legal title transfers out-of-state; and facilitating customer transaction paperwork for a sale for which legal title trans
fers out-of-state….” According to a statement from Kelly Rossman-McKinney, a spokeswoman for the attorney general: “Today the state of Michigan defendants Secretary of State Jocelyn Benson and Attorney General Dana Nessel filed a stipulation to dismiss with Tesla that recognizes that any Michigan resident may lawfully buy a Tesla and have it serviced in Michigan.” Rossman-McKinney continued: “The stip ulation acknowledges that Tesla may: operate under existing Michigan law; sell cars to Michigan customers as long as the sales contract indicates the sale took place in a state other than Michigan; and, indirectly own service and repair facilities in Michigan through a subsidiary, Tesla Michigan.”
Daniel Crane , a professor of law who teaches contracts, antitrust and intellectual property, and legislation and regulation at the University of Michigan in Ann Arbor, told The Center Square he considers the retention of the no-dealership regulation “annoying,” but says the agreement poses “no great inconvenience” to potential Tesla customers in Michigan. “T esla was never a custom operation to begin with,” Crane said. “Although there’s no good reason to prohibit the company from owning and operating its own dealerships, customers can still visit galleries for test drives and product informa tion.” He continued: “The only difference is the product cannot be driven off a showroom floor on the day of the purchase. Instead, buyers can have their new vehicles delivered to their homes and offices.” More important, said Crane: “Tes la can now open service centers in Michigan whereas Tesla owners requiring maintenance were forced previously to have those services performed out-of-state.”
We thank The Center Square for re print permission.
The HD Repair Forum announced the release of its’ educational programand agenda (www. hdrepairforum.com/agenda) for this years’ installment of the only event dedicated to the heavy-duty collision repair market. The two-day event is filled with a fast-paced agenda, with speakers from industry leading companies and individuals driving change in the industry. Some of the top ics include: FHD Repair Forum March 24 th -25 th Details
• Frame, Cab, and Trailer Repair • Advanced Driver Assistance Systems (ADAS), Scanning, and Diagnostics • Business Strategy and Employee Relations • Steering, braking, and other key repair knowledge
The speakers and content for this program are a derivative of the work, input, and direction of the HD Repair Forum Adviso ry board www.hdrepairforum. com/advisory-board.
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Michigan is giving new scrutiny to auto insurance rates, beefing up anti-fraud investigations and mounting a public education campaign in an effort to help drivers realize savings promised in a new law that takes effect this summer, a top state official said W ednesday. No-fault auto reforms pushed by the Republican-led Legislature and signed by Democratic Gov. Gretchen Whitmer will require insurers to reduce personal injury projection premiums for consumers who choose to buy policies with limited medical benefits. To help ensure that happens, the Michigan Department of Insurance and Financial Services is contracting with six independent firms to review underlying risk assumptions insurers use to set their rates, director Anita Fox told reporters in a media roundtable. “It’ s a big change for all of us after more than 40 years of the old system,” Fox said of the new law, which will prohibit insurers from selling policies without prior approval from the state. “We want to make sure that the new rates comply with the law .” Michigan had been a “file and use” state, allowing insurers to sell policies immediately upon submitting paperwork to the department. They were still subject to subsequent review, but the state had only one actuary to assess policies offered by more than 100 insurers.
It was “more of a spot check to make sure the ducks were in a row ,” Fox said of the old system. Insurers are required to offer new policy choices to consumers by July 1, and with that date fast approaching, several companies have already filed proposed policies with the state.
“Nothing has been approved or completely rejected right now, but there certainly have been objections,” Fox said, telling reporters the department has already told some insurers to revise policies that did not fully comply with new requirements. Michigan auto insurance rates have routinely ranked among the highest in the nation. Reformers claim that’s largely because the state had long required unlimited lifetime medical benefits for catastrophic crash victims.
The new law instead gives motorists a choice to purchase policies with as little as $250,000 in medical coverage or opt out entirely if they have Medicare health insurance. In exchange for that flexibility, insurers will be required to roll back average personal injury protection premiums by at least 10 percent for eight years.
Critics contend the promised cost savings may prove a mirage because the law also requires consumers to purchase additional bodily injury liability coverage to protect themselves in the event they cause an accident and are sued by another driver. Drivers who purchase plans with reduced medical benefits and sustain catastrophic injuries “will spend their benefits within a few weeks, if not sooner,” according to a warning from The Coalition Protecting Auto No-Fault, which is leading a lawsuit over separate hospital fee schedules and hourly attendant care caps also included in the law. “Meanwhile, any dollars saved through reduced PIP premiums will likely be offset by increases in liability premiums required under the new law ,” the group claims. But the state is not expecting that to happen, Fox said Wednesday. Even for consumers who elect to continue unlimited lifetime medical benefits, “our anticipation is they will see a rate decrease,” she said. Total costs will depend on an individual’s driving record and policy choices, but the department does not expect higher liability premiums to “zero out” the savings.
Legislative Republicans who pushed the state reform have predicted an annual average savings of between $120 and $1,200 per driver, likely more in cities like Detroit that are known for astronomical rates.
Fox said the state is also reviewing proposed policies to make sure auto insurers are not basing rates on non-driving factors prohibited under the new law, including gender, marital status, home ownership, educational level, occupation, credit score or ZIP code. Insurers can still base rates on territorial boundaries, but those should not be “substitute for ZIP codes,” she said.
Funding for the new law has allowed the department to hire roughly 20 new employees, including staff now working on a beefed up anti-fraud unit in collaboration with Attorney General Dana Nessel’s office.
Former Gov. Rick Snyder first created an anti-fraud auto insurance unit through executive order in 2018, but the state had not actually provided any funding for the department to hire staff. As a result, more than 1,600 complaints had piled up without formal action, Fox said. Investigators are now in the process of “triaging” that backlog to set up cases for possible protection by the attorney general. “W e are very excited about what’s going to happen in that unit for the coming year,” said Fox, who Whitmer appointed to the post in early 2019. Criminal prosecutions
will serve as a deterrent for “industries that have built up to take advantage of consumers, or consumers trying to get around the law by buying policies that weren’t really policies just to get their plates.” State officials are expecting some public confusion over the new law but say they are ramping up efforts to help consumers navigate the new system. Insurance agents will be required to explain new policy choices to motorists, and the state has created a sample form with four pages of detail.
As of last fall, just 12 percent of motorists said they were “very familiar” with the auto insurance reform law, according to a survey conducted for the Michigan Health and Hospital Association. A majority of drivers said they’d only “heard of” the law or were “not at all familiar” with it.
Roughly 24 percent of motorists said they would “opt out” of medical coverage all together if given the option, according to the hospital asSee New Scrutiny, Page 15
Matt’s Automotive Service Center is back to where it began.
Eleven months after a heavy snowfall collapsed the roof at 1234 1st Ave. N., totaling the old structure, a new state-of-the-art two-story service center now stands. The 9,750-square-foot building opens for service on Monday, Feb. 10, with an open house scheduled for Saturday, Feb. 15.
It sports a big, climate-con trolled service bay with seven lifts, extensive sound insulation, plenty of windows to bring in natural light, and touches that range from a $30,000 tire tread checking system to a room set aside for staff training and customer classes. Owner Matt Lachowitzer said the $1.7 million investment is both a recruiting tool and a thank you to a part of Moorhead that helped him jumpstart his Fargo-Moorhead fleet of auto and collision repair centers. “Obviously , we think it was im portant to rebuild here. We’ve been here a long time,” Lachowitzer said Thursday , Feb. 6. As workers installed and calibrated equipment or toted in new furniture, Lachowitzer showed off the building he had designed to his specifications.The customer intake area is fully enclosed, leading to an auto detailing area, and then a re pair bay with room for 20 cars to be worked on at the same time.
The repair bay is brightly lit and is air conditioned in the summer. The building’s sound system is also zoned to allow workers in different areas to listen to the music or news they enjoy most. Lachowitzer said he wants to make the environment as welcoming as possible for employees.
“I wanted this to be like a talent recruiting tool, basically,” the former auto technician said. “The whole thing was built around ease of use. If I was a technician still, this is exactly what I would want.”
Nearly everything is new , but there are some touches of the old. Lachowitzer made sure that lift doors, heaters and other items that could be salvaged from the old shop were incorporated into the new shop. The first floor customer waiting area has four televisions, a coffee bar,
USB ports and plenty of plug-ins for computers, Lachowitzer said. But you won’t see tires or other auto mer chandise, he said. “I wanted it to really feel like you’re in a living room, not an automotive shop,” he said.
Upstairs are storage areas and a room for pumps and the fluids used in the shop. The second floor also has an area for the company’s marketing team, as well as a lunchroom/train ing room with a projector and large screen for staff training and customer classroom events. A small office for Lachowitzer and an adjoining conference room take up the remainder of the second floor . Lachowitzer said he had a lot of sleepless nights when designing the facility. “It was a big decision for us to go this big or not,” he said.
“I had a chance for a fresh start. I designed this building,” Lachowit zer said. “We’re very, very proud of this facility” and feel it will be an asset to the downtown and the city. Since he had other service stations in town and offers for the property, he did ponder selling, but dismissed that thought. Customer loyalty weighed heavily in that decision. “This store had been where we started. It was important to me in that sense. This area had been very good to us” and it had been one of his top-producing stores, he said. “W e’re hopeful the community will support us as they have for the last 10 ½ years,” Lachowitzer said. “I built this with the community in mind. Everything in here is the state of the art. I didn’t cut one corner.” Lachowitzer now has six shops in the Fargo-Moorhead area. He said a nearby auto repair shop and offices purchased after the roof collapse has now been repurposed.
The building at 1321 Center Avenue has been rebranded for his Hammer Promotional and Valpak companies. The repair bays will be refitted for off-site mechanical work on vehicles that requires higher-tech repair equipment, Lachowitzer said. Saturday’s celebration will include door prizes, food, child-friendly fun including inflatable games, various prizes, including door prizes for the first 250 people, and tours of the fa cility, Lachowitzer said. We thank INFORUM for reprint permission.
Furthering Toyota’s commitment to better serve customers and build vehicles where they are sold, Toyota Indiana (TMMI) invested an additional $700 million and added 150 new jobs to complete the transformation of its plant modernization project, announced in January 2017. The project adds 550 new jobs and represents a total new invest ment of $1.3 billion, which was used for retooling, new equipment installation and advanced manufacturing technologies to further modernize the facility and meet strong demand for the all-new 2020 Toyota Highlander. Since 1996, Toyota Indiana’s total investment is approximately $5 billion and total employment exceeds 7,000. The plant has the capacity to assemble more than 420,000 vehicles annually . This new investment is part of a broader commitment from Toyota to invest $13 billion in its U.S. operations over a five-year period through 2021. To date, Toyota has committed approximately $7.1 billion of the announced total; cumulative direct in vestment in the U.S. exceeds $28.4 billion.
“Hoosier manufacturers are driving our economy forward, building the products that power our world every day ,” said Governor Eric Holcomb. “For more than 20 years, Toyota has been providing quality career opportunities and helping train Indiana’s future workforce. I am so grateful that Toyota remains committed to Indiana, and am thankful for all they are doing to continue making Indiana the best place to live, work and play .” “Part of Toyota’s tremendous success in North America is building vehicles where we sell them,” said Christopher Reynolds, chief administration officer, manufacturing and corporate resources for TMNA. “Our $1.3 billion investment at TMMI is further proof that our Hoosier workforce is rededicated to producing safer, high-quality vehicles our customers love to drive.” Today’s news was announced at a celebration in Princeton, IN, where the all-new 2020 Highlander recently began production. In addition to the plant investment, Toyota Indiana committed $1 million to a new, regional workforce program that will connect students with career opportunities in advanced manufacturing while still in high school.
“This program will allow students to get a jump start on their careers while receiving hands-on training with industry experts and educators,” said Leah Curry, Toyota Indiana plant president. “By collaborating with our local schools, we are creating a workforce solution— but, more importantly—providing greater visibility to student career options and pathways in the region.” Obtained via pressroom.toyota.com. Toyota Indiana Completes $1.3 Billion Modernization Project; Includes 550 New Jobs Credit: Toyota
Jim Powell's son Jamie became his partner 10 years ago and the father-and-son team has delivered year-over-year sales increases the last eight years, while achieving Maaco Diamond Certification sta tus. Diamond certification is the premier level within the Maaco system, meaning that the center has all the equipment and training necessary to repair the complex vehicles that are on the road to day. Diamond certification also means the center and its technicians are I-CAR ® Gold Certified and are qualified to participate in an insurance company DRP (Direct Repair Program) as well as Maaco’ s national fleet program. The Powell’ s commitment to excellence and continuous improvement, as demonstrated by their Diamond certification, is one of the reasons that they were selected as a Maaco Cup Winner. “Becoming Diamond Cer tified was very important to us and our objectives for continued growth,” said Jim and Jamie Powell. Father and Son Win Maaco Cup Award
LaFontaine Chrysler Dodge Jeep Ram of Fenton announced today it has completed the installation of the largest array of solar panels on any dealership in the Midwest as part of an ongoing strategy to increase its green initiatives.
The 428 panels – installed through a partnership with POWER HOME – produces nearly 180,000 kWh annually and is expected to reduce the dealership’s electric need by 60 percent in its first year . “My mom, Maureen LaFontaine, was a true pioneer in terms of our dealerships focusing on green initiatives,” said Ryan LaFontaine, chief operating officer , LaFontaine Automotive Group. “Being better stewards of the environment makes great business sense. Our sustainability efforts have had a positive impact on our bottom line, our workplace culture and our customers.”
The nearly 38,000 square-foot LaFontaine CDJR Fenton dealership was the second CDJR dealership in the nation and the first in Michigan to incorporate Fiat Chrysler Ameri ca’s new design and technology. The LaFontaine family invested heavily on the sustainability aspects of the dealership, building on best practices learned in the construction of their existing LEED-certified dealerships. The best green practices used during the build of the LaFontaine CDJR Fenton dealership include: Additional r oof insulation equal to R-38 Whitesolarreflectiveroof All LED lighting, interior and exterior, with advanced control systems High recycled content in 90% of building materials W aste stream management High-efficiency HVAC system and contr ols, occupancy contr ols and timers with W i-Fi system contr ols and monitoring Low flow and measured fix tures forwaterefficiency Sourced materials regionally whenpossible “We applaud the green investments undertaken by the LaFontaine family ,” said FCA U.S. Head of Sales Reid Bigland. “Their efforts are an example for the entire automotive industry as we all work to improve and protect our environment.” A recent McKinsey paper stated dealers need drastic business-model changes in the approaching age of autonomous, electric and shared vehicles. These changes include reducing operating costs through improved efficiency. “The fact that LaFontaine will own a majority of their power at their Fenton location says a lot about how much they believe in the value of solar ,” said Jayson Waller, CEO of POWERHOME. “LaFontaine al ready is a leader in the U.S. auto industry, and adding renewable energy will further position the dealership as environmentally conscious.” Founded in 1980 by Michael Sr . and Maureen LaFontaine, the award-winning and nationally-recog nized LaFontaine Automotive Group includes 36 retail franchises, seven collision centers and 17 Michigan retail l ocations. The group employs nearly 1,400 individuals. It’s the mission of the LaFontaine Family to personalize the automotive experience by building lifelong relationships that connect families and strengthen the community . The LaFontaine commitment to customers, staff, and local com munities is demonstrated by active participation and contributions to numerous non-profit organizations, educational institutions and charities throughout southeast Michigan. The combination of both the mission and core values provides the basic foun dation of our promise … to treat every customer like they are members of our family . From sales, to service to parts, LaFontaine Automotive Group is able to meet any customer’s specific needs. LaFontaine represents the following brands: Buick, Cadillac, Chevrolet, Chrysler , Dodge, Ford, Fiat, Genesis, Honda, Hyundai, Jeep, KIA, RAM, Subaru, Toyota, Volvo and Volkswagen. The LaFontaine Family Deal; it’s not just what you get, it’s how you feel. Visit www.familydeal.com for additional details. LaFontaine Automotive Group Installs Largest Solar Array For a Dealership in the Midwest
by Matthew Sanders A Jefferson City auto body shop owner is suing MFA Oil Co. and one of its employees for an explosion that left him with serious injuries. Christopher Russell and his wife, Elizabeth Russell, and their company Xtreme Body and Paint, LLC, filed the personal injury suit last week against MFA Oil and one of its employees.
In the lawsuit, the Russells claim the actions of MFA Oil and its employees led to the 2019 ex plosion that left Christopher Russell with severe burns to his head, neck, arms and body and “substantial damage” to his eyes. The lawsuit labels the injuries “permanent, disabling and disfiguring.” The explosion happened at about 4:30 a.m. Jan. 31, 2019, at 1007 Lomo Drive, where the Russells’ home and shop were located. According to the lawsuit, an MFA Oil employee sent “hundreds of gallons” of propane gas through an unused line on the Russells’ property when servicing applianc es. The propane built up underground and in the auto body shop leading to a lar ge explosion, the lawsuit claims. Court records indicate MFA Oil was served with the lawsuit Tuesday. A summons was issued for the employee, Charlie Houchins , last week, records show. No attorneys were listed for MFA Oil or Houchines in online court records. An MFA Oil spokesperson said the company would not com ment because the lawsuit is ongoing. Louis Accurso, a Kansas City lawyer representing the Russells, was not available for comment Friday afternoon. We thank ABC 17 News for reprint permission. Jefferson City, MO, Body Shop Owner Sues Over 2019 Explosion
The Xtreme Body and Paint shop after an explosion Jan. 31, 2019.
troit-Hamtramck over the next few years.”
When the plant is fully operational, this investment will create more than 2,200 good-paying U.S. manufacturing jobs.
GM will also invest an additional $800 million in supplier tooling and other projects related to the launch of the new electric trucks. Since the fall of 2018, GM has committed to invest more than $2.5 billion in Michigan to bring electric vehicles to market through investments at Orion assembly, GM battery lab in Warren, Brownstown and today’s announced direct investment in Detroit-Hamtramck. The plant’ s paint and body shops and general assembly area will receive comprehensive upgrades, including new machines, conveyors, controls and tooling. GM’ s joint venture with LG Chem – which is investing $2.3 billion to manufacture battery cells in Lordstown, Ohio – will supply battery cells for the electric vehicles manufactured at Detroit-Hamtramck. A key driver behind GM’s decision to make the commitment to Detroit-Hamtramck was the support this project received from the state of Michigan. “The support from the state of Michigan was a key element in making this investment possible,” added Reuss. “This investment helps ensure that Michigan will remain at the epicenter of the global automotive industry as we continue our journey to an electrified future.”
Detroit-Hamtramck currently operates on one shift of production and builds the Cadillac CT6 and the Chevrolet Impala. Approximately 900 people are employed at the plant. As previously confirmed, the plant will be idled for several months beginning at the end of February as the renovations begin.
The plant has built more than 4 million vehicles since opening in 1985. Hourly employees at Detroit-Hamtramck are represented by UAW Local 22.
General Motors (NYSE:GM) is committed to delivering safer, better and more sustainable ways for people to get around. General Motors, its subsidiaries and its joint venture entities sell vehicles under the Cadillac, Chevrolet, Baojun, Buick, GMC, Holden and Wuling brands. More information on the company and its subsidiaries, including OnStar, a global leader in vehicle safety and security services, Maven, its personal mobility brand, and Cruise, its autonomous vehicle company, can be found at http://www .gm.com.
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The National Institute for Automotive Service Excellence (ASE) has announced the officers for its 2020 board of directors. The new chair is Bobby Bassett, North American national training manager, Gates Corporation. Mark Polke , manager of sales and consulting, Bosch Workshop Concepts, North America, Robert Bosch LLC, is vice chair; Brad Pellman, president, Pellman's Automotive in Boulder, Colora do, is treasurer; and Glen Nicholson, senior director, learning and development, TBC, is secretary. Tom Trisdale, vice president, quality, Toyota, serves as past chair. Also announced were newly elected board members. Tom Palermo of Preferred Automotive Specialists begins a term on the board of directors, while Jason Rainey of the NAPA AutoCare Program will serve on the board of governors.
Stepping down as their terms expire are Annette Sykora, Ja mie Bulli, Mike Phillips and Rafael Garcia. ASE Announces New Officers for 2020
Lordstown Motors plans to use a $200 million U.S. Department of Energy loan to update a former General Motors plant in Northeast Ohio.
The company intends to hire as many as 400 workers by the end of this year and start production of electric-powered pickup trucks.
General Motors’ decision to shutter the Lordstown facility drew condemnation from a spate of officials, including President Donald T rump. Lordstown Motors purchased the plant in November.
“Our community in Northeast Ohio has a long auto-manufacturing history,” U.S. Rep. Tim R yan, D-Ohio, who recently met with Lordstown Motors CEO Steve Burns, said in a news release. “I’m pleased that Lordstown Motors understands our community’s expertise and skills in this field and plans to put us back to work doing what we do the best – building award-winning vehicles.”
Lordstown Motors is applying for a $200 million Advanced Technology Vehicles Manufacturing (A TVM) loan through the energy department. The loan program supports the manufacturing and engineering of fuel-efficient, advanced technology vehicles and related components. “We think we are worthy of government help,” Reuters quoted Burns as saying in an interview . “We don’t want a handout – we want a loan. It’s just going to be more jobs faster if we get it. We are viable without it.” Lordstown plans to debut its electric pickup truck during June’s North American International Auto Show in Detroit, The Detroit News reported.
Earlier this month, a bipartisan group of 10 members of the U.S. House and U.S. Senate from Ohio, including Ryan, penned a letter to Secretary of Energy Dan Brouillette in support of the loan application. “Northeast Ohio saw its econ omy suffer when General Motors announced in October that it was The company could receive performance-based tax subsidies from JobsOhio, which receives funding from liquor sales revenue. Last April, Ryan jumped in the
permanently closing its Lordstown Assembly Plant,” they wrote. “As a result, thousands of workers were forced to move, retire, or obtain oth er jobs, dealing a severe blow to the regional economy .” The lawmakers called it a “high priority” to support Lordstown Motors “so that it will be successful and provide high-paying job opportunities in the region.” Separately , General Motors selected a 160-acre site near Lordstown for a new battery cell assembly plant. race for president and cited the clo sure of the Lordstown plant as one reason for running. He has since abandoned his bid for The White House.
“I’m heartened that Lordstown Motors will be providing high wag es to Ohio workers, and I will do everything I can to help them secure an ATVM loan and keep moving this project forward,” Ryan said.
We thank The Center Square for re print permission.
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OEM (i.e., “if the BMW part has a BMW logo on it, then this part will have the BMW logo on it”), or “Tier 1 with Branding Differences,” such as one lacking the automaker logo. Schulenburg’s subcommittee took much of the same approach in terms of determining different part attributes (who makes the part, how it is packaged, who distributes it, who backs it with a warranty), but concluded that only a two-pronged way to classify the parts is needed. An “OEM part,” the subcommittee said, is one manufactured by or for the automaker, sold in the automaker’s packaging and within the automaker’s authorized supply chain, and warranted by the vehicle manufacturer. Any part not meeting all four of those attributes, Schulenburg said his subcommittee decided, is a “non-OEM part.” “W e really tried to approach it like: Here’s ‘OEM.’ Anything that doesn’t meet that definition is ‘nonOEM,’” Schulenburg said. “That’s super clear for a consumer to understand. It doesn’t make [non-OEM] bad or wrong or an unacceptable option. There are thousands and thousands of non-OEM parts that are legitimately chosen every single year. But we first defined ‘OEM,’ and anything that doesn’t meet that definition from our vantage point is a ‘non-OEM part.’” W eiss said he’s not necessarily opposed to the other work group’s proposal, but said he thinks those making parts decisions would need more information about all the different parts designated as “non-OEM,” such as who manufactured a particular part, not just the supplier. Tier 1 suppliers to the automakers, such as Denso and
Bosch, he said, produce quality parts that consumers on the mechanical side of the industry regularly choose.
“There are companies out there that have a well-respected name, and it can mean more to you to know you’re getting it from that manufacturer as opposed to a company that may not use the same quality and may not have the same reputation,” Weiss said. Weiss also noted that the California Bureau of Automotive Repair (BAR), which has said terms like “optOE” and “alt-OE” cannot be used, has said an OEM part not purchased from a dealer can be called “OEM.” “We have one very large state that has decided that warranty has nothing to do with the part [designation],” Weiss said. Schulenburg acknowledged that Weiss is correct about the BAR’s decision but added, “Just because California got that one attribute wrong isn’t reason enough for us not to try to define it correctly for the other 49 states. Then California might rethink their position.”
He said that currently a part may get dubbed by the seller as “OEM surplus” when it wasn’t made for the automaker and isn’t in the automaker’s packaging. When there’s no matching line for “OEM surplus” in the parts platform where the part is listed, it gets described as “opt-OE,” and then if sold in California, it is switched to “OEM.” “What ends up on the estimate to the consumer is not at all reflective of the part that comes in the box or what goes on their vehicle, and that’s what we’re trying to get away from,” Schulenburg said.
But given that “opt-OE” has been a “catch-all bucket” for multiple types of parts, wouldn’t lumping in all parts not meeting the subcommittee’s definition of “OEM” result in a variety of
Brandon Honda has been awarded DealerRater’s 2020 Honda Dealer of the Year Award for the fourth year, as well as its sixth Consumer Satisfaction Award among Honda auto dealerships throughout Florida. The awards are based on Brandon Honda’s customer reviews of its customer service, quality of work, friendliness, pricing and overall customer experience, as posted on www.DealerRater. com during calendar year 2019. Brandon Honda has a cumulative customer satisfaction rating of 98%, with a score of 4.9 stars (out of a maximum of 5.0) over 8,796 lifetime reviews. “Car buyers have spoken and given Brandon Honda the highest satisfaction ratings among all Honda dealers in the state of Florida,” said DealerRater’s General Manager, Ja mie Oldershaw. “The high quality and number of reviews of Brandon Honda speak volumes about the topnotch experience it provides its customers.” Brandon Honda wins DealerRater’s 2020 Award
types of parts under the “non-OEM” label, Schulenburg was asked.
“I think there are ways for us as an industry to figure that business-to-business piece, and to differentiate them [within the parts platforms],” Schulenburg said. “But I think what is more important is the consumer understanding.”
The six labels the other subcommittee proposes for the parts, he said, won’t be clear to consumers. “I think they serve to validate parts that a consumer should understand aren’t OEM,” Schulenburg said.
He said the two subcommittee’s proposals remind him a little of the 2017 internet meme in which different people, looking at the same photo of a pair of shoes, see them as either pink and white or mint and gray.
“The way we are each wired to perceive it is going to be how our brain determines what color that shoe actually is,” Schulenburg said.
The parts debate, he said, is a challenge because everyone approaches it from their own vantage point and their own business objectives. Instead, he suggested, the industry might want to think of it more
from the perspective of Marcia and Matthew Seebachan, the Texas couple who earlier in the CIC meeting in Las Vegas had shared what the impact of a poorly-repaired vehicle had on their lives.
“My personal opinion is at the end of the day, we need to look back at that presentation and think about that rather than our own personal vantage points,” Schulenburg said. “What do we do to make all of this clear to [consumers like them], so they never have to sit in that seat and tell that kind of story.”
Several CIC participants in Las Vegas voiced heated condemnations of one or both of the subcommittees’ approaches. Schulenburg said those exchanges demonstrated the dilemma the committee faces, “where we each have defined our perspectives but haven’t found a middle ground, or a roadmap to get to it.” He said the committee has “experienced professionals within the industry who just vehemently disagree with one another,” trying to determine where to go next. “I don’ t think we have an answer,” Schulenburg said. “I think the point here was to establish where we are today. I think we’ve done that.”
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