September 2020 Midwest Edition by Autobody News

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Survey Finds Shop Sales Down, but Employment Steady, Optimism Improving by John Yoswick

An industry survey this summer not surprisingly found a significant decline in shop revenues this spring, but it also found shops were not continuing to lay off employees and were actually growing less concerned about weathering the storm. About 250 shops responding to a survey in June reported data on the number of full-time employees they had in June compared to pre-pandemic. Those shops combined said they had 3,718 full-time employees, an average of about 15 employees per

shop, in early March, but had dropped to 3,293 employees in June, a decline of about 11%, to an average of about 13 employees per shop. That was an improvement from earlier months, when surveys found employee counts were down as much as 18% in April and 15% in May. Additionally, nearly three in five shops in June had the same number of fulltime employees as they did pre-pandemic. “This is a family business, and the owner cares greatly for his staff and their families, and is committed See Survey Finds, Page 18

PPP Forgiveness: No Need to Rush, and Other Tips by Jeff Drew and Ken Tysiak, Journal of Accountancy

Although forgiveness for Paycheck Protection Program (PPP) loans is a foremost topic on the minds of borrowers and the CPAs who advise them, experts are saying borrowers should not rush to apply for forgiveness. Long-expected FAQs expected to clarify many PPP-related issues are still awaited from the U.S. Small Business Administration (SBA) and Treasury. In addition, the loan forgiveness application has not been updated to reflect the recent five-

week extension of the program’s deadline to Aug. 8. A big reason for these delays is that Congress is debating a new round of COVID-19 relief, which is expected to include a second PPP initiative more targeted than the first one, said Mark Peterson, the executive vice president who heads the AICPA’s advocacy team in Washington, D.C. Those discussions also may include major changes relaxing the forgiveness requirements for the smallest loans, possibly those up to $100,000 or $150,000. “The situation is very dynamSee PPP Forgiveness, Page 20

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Focus Advisors Releases Midyear Updates on Collision Repair Industry David Roberts, Focus Advisors’ managing director, sent an email Aug. 7 reviewing the advisory firm’s updates on the collision industry. “It’s August and we are more than halfway through a most extraordinary year,” Roberts said. “The Great Pause continues. What follows is our midyear update.” Operations Average shop revenues are down 25% to 30% across the country, though it varies by region and by the intensity of regional COVID cases. Most shops are slowly returning to

higher volumes. The best news—many operators have figured out how to maintain close to normal margins on dramatically reduced revenues. The recession of 2009 taught operators how to both survive and then improve operations while under financial duress. Lessons well-learned then are helping the best operators weather this even more extraordinary downturn. PPP loans have had a universally positive impact for those operators who were successful in their applications. The relaxation of repayment See Midyear Updates, Page 8

New CIC ‘Industry Relations’ Committee Seeks Progress by Expanding Beyond Shops, Insurers by John Huetter, Repairer Driven News

The CIC has replaced its Insurer-Repairer Committee with an Industry Relations Committee, seeking progress and greater understanding on issues that affect all other segments of the industry as well. The committee presented the virtual CIC on July 23 a slide showing all the potential stakeholders when a vehicle owner or lessee crashes a car. The list included not just the motorist, insurer and repairer, but also the OEM; dealership; sublet providers like glass, PDR and towing interests; suppliers; educators; regulators; information and tech providers like estimating systems, management systems and diagnostic providers; trade groups; and trade press. Co-Chairman Jim Keller, of 1Collision, said the panel now has “about 35 total” participants, and it seeks a “great cross-section” of representation. Core members today include representatives from four insurers, five repairers—counting Keller’s 1Colli-

sion—Audi, SCRS, Fayetteville Technical Community College and I-CAR, Enterprise, CCC, 3M and Auto Techcelerators.

Collision Industry Conference Industry Relations Committee member Jonathan Chase, of National General, speaks to the July 23 virtual CIC. Credit: Screenshot from CIC video

Asked at one point about recyclers, Keller encouraged them to get in touch; he’d love to have some on the panel. Committee member Mark Algie, of 3M, challenged his other paint and materials colleagues to participate and noted that some supplier issues deserved attention. Co-Chairman Mark Allen, of Audi, said both he and former Insurer-Repairer Relations Committee Co-Chairman Clint Marlow, of See ‘Industry Relations’, Page 22

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Shops Report Measurement Issues With Some Steering Columns

CONTENTS

by John Yoswick REGIONAL

Ledoux - The Advent of the Computer Age ��30

Carvana Opens Newest Car Vending Machine

Phillips - SCRS Open Board Meeting Highlights

Classic Car Procession Celebrates Lifelong Enthusiast ��14 GM Invests in Lordstown Motors Merger That Will Make it Publicly Traded ��8

Include Presentations About Pressing Industry Topics ��42 Phillips - The Importance of Creating Lifelong Learners and Implementing Hands-on Efficiency Training ��37

Thousands of Dollars Despite Pandemic ��10 IL Community College Helps Create Automotive Technology Path for Young Adults ��6 Iowa Auto Body Shop Hit Hard by Dorecho Storm ��12 Oshkosh, WI, Receives $250,000 State Grant to Support Redevelopment of Former Gibson Auto Body ��18 Report: Ford Gets 1-Year Extension on Billions in Loans ��6 State Farm Slashes Auto Premiums by 14.3% in Ohio ��14 Wahlberg, Lithia Continue Blockbuster Summer Acquisitions in Ohio ��12

Serving Illinois, Iowa, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, 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. ©2020 Adamantine Media LLC.

American Icon Automotive Finishes �� 14

Malco �� 10

Audi Wholesale Parts Dealers �� 41

Matrix Automotive Finishes �� 2

AutoNation Collision Parts �� 5

McGrath City Hyundai �� 35

BMW Wholesale Parts Dealers �� 45

MINI Wholesale Parts Dealers �� 44

Car-O-Liner �� 15

MOPAR Wholesale Parts Dealers ��28-29

Certified Automotive Parts Association �� 12

Morrison’s Auto Parts �� 18

Classic Chevrolet �� 21

Nissan/Infiniti Wholesale Parts Dealers �� 40

Classifieds �� 46

Patrick BMW MINI �� 36

Courtesy Subaru �� 30

Patrick Hyundai �� 32

Seeks Progress by Expanding Beyond

Eagle Abrasives, Inc �� 11

PPG Refinish �� 9

Shops, Insurers ��1

Equalizer Industries, Inc �� 8

SATA Dan-Am Company �� 7

Gandrud Parts Center �� 17

Sears Imported Autos, Inc �� 35

GM Wholesale Parts Dealers �� 39

Shaheen Chevrolet Parts Warehouse �� 22

Haldon Company �� 13

Spanesi Americas �� 16

Hawkinson Kia �� 34

Steck Manufacturing Company �� 20

Honda-Acura Wholesale Parts Dealers ��24-25

Subaru Wholesale Parts Dealers �� 38

Hyundai Wholesale Parts Dealers �� 37

The Porsche Exchange �� 6

Innovative Tools & Technologies, Inc �� 19

The Sharpe Collection of Automobiles �� 23

Kelly BMW �� 26

VanDevere Chevrolet �� 31

Kia Wholesale Parts Dealers �� 43

VanDevere Kia �� 31

Survey Finds Shop Sales Down, but Employment

Laurel Auto Group of Westmont �� 33

Willis Volvo �� 6

Steady, Optimism Improving ��1

Luther Bloomington Acura-Subaru �� 27

Zimmer Chrysler-Dodge-Jeep-Ram �� 48

NATIONAL American Views 2020: Trust, Media and Democracy ��4 ARA Takes Summer Road Trip Virtual, Annual Convention to Follow Suit ��46 CIECA Webinar Highlights the Importance of OEM Certification ��47 Focus Advisors Releases Midyear Updates on Collision Repair Industry ��1 Honda is Asking Office Staff to Work on Assembly Line ��47 New CIC ‘Industry Relations’ Committee

NICB: Thousands Left to Rebuild After Isaias ��47 COLUMNISTS Anderson - More Best Practices to Make the Most of the ‘Parts’ Portion of Your Business ��26 Attanasio - CCC Photo Estimates and AI-Supported Claims Spike in Response to COVID-19 ��40 Chess - An Overview of Corrosion Protection Products: Part 2 of 2 ��34

See Measurement Issues, Page 10

Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Contributing Writers: John Yoswick, Janet Chaney, Toby Chess, Ed Attanasio, Chasidy Sisk, David Luehr, Stacey Phillips, Victoria Antonelli, Gary Ledoux Advertising Sales: Joe Momber, Bill Doyle, Norman Morano (800) 699-8251 Office Manager: Louise Tedesco Digital Marketing Manager: Bryan Malinski Art Director: Rodolfo Garcia Graphic Designer: Vicki Sitarz Online and Web Content Editor: Abby Andrews Accounting Manager: Heather Priddy Editorial/Sales Assistant: Randi Scholtes Office Assistant: Dianne Pray

IL ‘Community Christmas’-Related Event Raises

PPP Forgiveness: No Need to Rush, and Other Tips ��1 SBA Suggests Getting Help With Loan Forgiveness Applications ��20

INDEX OF ADVERTISERS

in Kentucky ��16

Safety inspections required by automakers as part of post-collision repairs sometimes include measurement of the steering column to ensure it was not damaged in an accident. Speaking at the Collision Industry Conference (CIC), held virtually in late July, Jason Bartanen of CIC’s Emerging Technologies Committee said such requirements have

led more shops to measure steering columns—and, in some cases, to find discrepancies in the OEM information. Bartanen said General Motors, for example, has a requirement to inspect the steering column for “bending, twisting, buckling or any type of damage” after any collision. In one instance, Bartanen said, a shop found the steering column in a GMC Sierrra appeared to have col-

Autobody News P.O. Box 1516 Carlsbad, CA 92018 (800) 699-8251 (760) 603-3229 Fax www.autobodynews.com editor@autobodynews.com

Shops Report Measurement Issues With Some Steering Columns ��3

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American Views 2020: Trust, Media and Democracy The following is an executive summary of Gallup and the Knight Foundation’s annual report on American views on trust, media and democracy. The full report can be downloaded here. https://knightfoundation. org/wp-content/uploads/2020/08/ American-Views-2020-Trust-Media-and-Democracy.pdf Americans still value the media’s traditional roles in society, such as providing accurate news and holding powerful interests accountable for their actions. The vast majority of Americans (84%) say that, in general, the news media is “critical” (49%) or “very important” (35%) to democracy. Americans are more likely today to say the media’s role in democracy is “critical,” up five percentage points since 2017. Large majorities say it is “critical” or “very important” for the news media to provide accurate and fair news reports (92%), ensure Americans are informed about public affairs (91%) and hold leaders accountable for their actions (85%). More Americans say the media is performing poorly rather than well in accomplishing these goals than did in 2017. However, Americans see increasing levels of bias in the news media; majorities see bias in the news source they rely on most. A majority of Americans currently see “a great deal” (49%) or “a fair amount” (37%) of political bias in news coverage. The percentage seeing a great deal of bias is up from 45% in 2017. Most Americans see bias in their go-to news source; 20% see “a great deal” and another 36% see “a fair amount” of bias in the news source they rely on most often. Given the choice, however, more Americans say they are concerned about bias in the news other people are getting (69%) than say they worry about their own news being biased (29%). Nearly three-quarters of Americans say they see too much bias in the reporting of news that is supposed to be objective as “a major problem” (73%), up from 65% in the 2017 study. Americans suspect inaccuracies in reporting are designed to push a specific agenda. Americans perceive inaccurate news to be intentional— either because the reporter is misrep-

resenting the facts (54%) or making them up entirely (28%). Nearly eight in 10 Americans (79%) say news organizations they distrust are trying to persuade people to adopt a certain viewpoint, while 12% say they are trying to report the news accurately and fairly but are unable to do so. Eight percent of Americans say distrusted media are trying to ruin the country, driven largely by the 1 in 5 Americans who identify as “very conservative” and 1

in 10 Republicans who feel this way. Differences in Americans’ opinions of the news media are most pronounced by political party affiliation. Almost three-fourths of Republicans (71%) have a “very” or “somewhat” unfavorable opinion of the news media, compared to 22% of Democrats and 52% of independents. Democrats and Republicans differ greatly in their ratings of the media on every aspect of performance, including providing objective news reports, holding political and business leaders accountable for their actions and helping Americans stay informed about current affairs. Sixty-nine percent of Americans, including 61% of Democrats, say the increasing number of news sources reporting from a particular point of view is “a major problem.” In contrast, 77% of Republicans say the same. While a majority of Americans across the political spectrum (80%) say the media is under attack politically, they are divided as to whether those attacks are merited. Whereas 70% of Democrats say the media is under attack and those attacks are not justified, 61% of Republicans say such attacks are justified. In addition to partisan differences in media attitudes, views also vary by age, with older Americans generally more favorable toward the news

media than younger Americans. Whereas 44% of Americans aged 65 and older have “very” or “somewhat” favorable views of the media, less than 1 in 5 Americans under age 30 (19%) say the same. Majorities of Americans say noews organizations should diversify their reporting staffs, but they differ—largely by politics—on the focus of diversity efforts. A strong majority of Americans (79%) say news organizations should hire to increase the diversity of their reporting staffs. However, while majorities say it is important for the news media to reflect the diversity of America, this ranks lowest of the priorities among the roles for media to play in society. The priorities cited by Americans who say news organizations should hire for more diversity differ greatly by race and political party. Democrats (49%) and Blacks (60%) prioritize racial/ethnic diversity in hiring, while Republicans (51%) and whites (35%) are most apt to prioritize diversity in political views. Americans commonly feel overwhelmed by the volume and speed of news, but say misinformation is media’s greatest problem. Those overwhelmed are most likely to turn to one or two trusted news sources as a solution. Four in five Americans (78%) say the spread of misinformation online is “a major problem,” exceeding all other challenges posed by the media environment. Seventy-three percent of Americans want to see major internet companies find ways to exclude false/hateful information online. More Americans say it is harder (62%) rather than easier (36%) to be well-informed because of all the sources of information available. In 2017, 58% said it was harder to be informed. Reasons Americans who say it is harder to stay informed cite for feeling overwhelmed include the mix of news interspersed with non-news on the web (72%), followed by the pace

or speed of news reporting (63%) and the increased number of organizations reporting the news (63%). More Americans (54%) say there are enough media sources to sort out the facts than say there is so much bias it’s difficult to sort out the facts (43%), an improvement from 2017 when the split was 50% to 47%, respectively. Republicans (65%) are much more likely than independents (48%) and Democrats (21%) to say there is too much bias to sort out the facts. In response to feeling overwhelmed, 41% of Americans say they only pay attention to one or two trusted sources; 31% try to consult a variety of sources to see where they agree; 17% go to the extreme of ceasing to pay attention to news altogether; and 8% rely on others to help them sort out what they need to know. Local news plays a key role in political and civic engagement. Thirty-one percent of Americans say they follow news about issues affecting their local community “very closely,” an increase from 25% in 2017. However, most Americans are not very confident in their knowledge relating to public affairs in their community. Americans who follow local news closely are more likely to vote in local elections and to feel attached to their communities. They are less likely to say that “people like me don’t have any say in what the government does.” Americans who primarily access their news online—predominantly, younger Americans—are less likely to be knowledgeable about their local communities and to feel attached to their communities. In a deeply divided nation, majorities of Americans say the media bears blame for political division. But they also see the potential for the media to heal the divide. Forty-eight percent of Americans say the media bears “a great deal” of blame for political division in this country, while 36% say they bear “a moderate amount.” But nearly identical percentages say the media could do “a great deal” (49%) or “a moderate amount” (35%) to heal those divisions. We thank the Knight Foundation for reprint permission.

4 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com

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IL Community College Helps Create Automotive Technology Path for Young Adults Evanston, IL, resident Kobi Evans, 19, was all smiles after graduating July 14 from the Automotive Service and Repair Career Pathways Program, a partnership between Oakton Community College, Youth Job Center in Evanston and Evanston Township High School. “This program taught me perseverance and how to stay focused on the task at hand,” said Evans, who plans on attending Oakton this fall. “I learned valuable skills on how to fix cars. And that was something I didn’t know how to do before.” Established in 2014, the program is geared for young adults between the ages of 18 and 25. Participants gain 200 hours of work experience in an automotive service and repair setting over 11 weeks. Oakton’s Workforce Solutions team developed a customized automotive service and repair curriculum specifically for this program, taught at ETHS auto labs. The elements were customized based upon employer feedback regarding desired competencies. It includes key content that leads to the first step toward National

Institute for Automotive Service Excellence (ASE) certification, ensuring participants are knowledgeable in critical areas.

Evanston,IL, resident Kobi Evans, 19, was all smiles after graduating July 14 from the Automotive Service and Repair Career Pathways Program. Credit: Youth Job Center

Evans was one of five students who graduated from this year’s program. Other graduates include Evanston residents Steven Reyes and Jordan Dorsey and Solomon Cannon and Willie Doles of Chicago. Thomas Sprengelmeyer, who teaches auto mechanics and engineer design at ETHS, served as the instructor of the program. “I love having a small class size as we can dive deeper into things on a more personal level. The aim is for

Report: Ford Gets 1-Year Extension on Billions in Loans by Eric D. Lawrence, Detroit Free Press

Ford has secured some additional breathing room as it tries to navigate the ongoing global financial crisis. The Dearborn, MI, automaker has gotten commitments from enough banks for a one-year extension on the bulk of revolving loans totaling about $5.35 billion, according to Reuters, which said JP Morgan was leading the effort. The news service, citing sources close to the transaction, noted that Ford has been trying since early this month to get the maturity extensions on two different three-year credit facilities, one for $3.35 billion and another for $2 billion. Ford and other automakers have been hit hard by the toll the COVID-19 pandemic has taken on the global economy, and Ford said it lost $2 billion in the first quarter of the year. Ford, of course, is not alone, and numerous other automakers reported bleak sales and earnings for the first part of the year. The company is scheduled to release its second quarter earn-

ings soon. Reuters said more banks could agree to an extension before the close of the deal on July 27, which would allow for some positive news ahead of the earnings release. Carlene Lule, a spokesperson for J.P. Morgan Chase, declined to comment. A Ford spokesman did not immediately return a message seeking comment. Ford’s CFO Tim Stone said earlier the company believes it has enough money to get through the end of the year. Ford had $34 billion in cash on hand and $35 billion in liquidity at the end of the first quarter, the Free Press reported in April. The move to secure loan extensions as Ford has done, however, is not surprising. Experts have said companies like Ford would aggressively try to improve their cash positions because of the experience from the previous financial crisis when it became very difficult to borrow money. We thank the Detroit Free Press for reprint permission.

the student to get used to working in an auto shop setting by providing an overview of cars,” he said. “Topics include oil changes, tire rotation, how an engine works, suspensions, safety and brakes. “With COVID-19, we didn’t get as much shop time as we wanted, but students were still able to learn key concepts in the classroom.” Oakton’s Workforce Solutions partnership with YJC and ETHS is one example of the full range of cost-effective, high-quality training solutions that can be delivered at a variety of locations. Oakton’s experienced team of consultants, trainers and program managers develops customized training programs that enhance employee skills and knowledge to drive business results. “This automotive training is a true reflection of the quality of our customized programs,” said Eilish McDonagh-Hermer, Oakton senior manager, Workforce Solutions. “Attending the automotive graduation is always one of the highlights of my job. This program provides students with a career path and is an amazing collaboration. We are excited to

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continue these types of relationships with business partners in Oakton’s community.” At the graduation ceremony, Rose Chavira, career pathways assistant manager for YJC, told the graduates: “It was amazing to see all of you grow over the last few weeks. This will open career opportunities for you. Beautiful things are coming your way.” And Cannon agrees. “I’ve always wanted to work with my hands. Receiving my certificate meant a great deal to me because it provided me with skills I can use for the rest of my life. The program was so focused on hands-on learning and will definitely help me find a job in the automotive field,” he said. For more information about the program, which will be offered again next spring, contact Stacy Lomax, adult education transitions coordinator, at 847-376-7758. For more information about partnerships with Oakton’s Workforce Solutions, call 847-635-1447 or email workforcesolutions@oakton.edu. We thank Patch for reprint permission.

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Midyear Updates terms has been a positive development. Most loans are expected to be largely forgiven. An interesting side note: anecdotally, most of the MSOs and shops that received PPP loans during the first application period obtained those loans from small and local banks and credit unions. Evidently the big banks focused on their largest customers. During the second application period, more loans were obtained from some of the big banks, but many MSOs not only didn’t get big bank loans, but some never even heard back after their inquiries. M&A Activity The current level of mergers and acquisition activity keeps surprising us. Not surprisingly, the top two national consolidators continue to make offers and acquire independent shops and MSOs. But private equity firms have really stepped up their interest and investments. Five super regional MSOs are also in acquisition mode. Add to these numbers several dozen sub-regional MSOs that are continuing to make acquisitions largely using internal capital sources. Finally, Driven Brands now owns a nine-shop MSO and is pursuing more acquisitions. Private Equity Interest is Driving Activity Industry buyers have changed dramatically in five years. Five years ago, the most active buyers included the four big consolidators—ABRA, Caliber, Service King and Gerber—plus seven regional MSOs—Pacific Elite, Kadels, Cooks, Craftsman, Joe Hudson, Classic Collision and Car Care— and one PE firm, Carousel Capital, which owned Driven Brands. In the years since, almost all of those firms have disappeared into larger firms. ABRA bought Cooks Collision, then sold to Caliber ABRA bought Kadels Pacific Elite got bought by PEbacked Crash Champions Car Care got bought by Service King Joe Hudson got bought by TSG

Consumer private equity Carousel owned Driven Brands, which it subsequently sold to Roark Capital Classic Collision was acquired by New Mountain Capital We attribute the activity and the values to the number of new entrants into the collision space, mostly private equity firms—the highest we’ve seen in 20 years. New PE entrants have come flocking back to the market looking for opportunities that will benefit from increasing consolidation. Most see the stability and non-cyclical nature of collision repair as effective cash generators with modest risk. Some are looking to buy and then sell out to someone larger. And some are probably looking to coat-tail Caliber and Driven, if and when they have IPOs. PE firms come in lots of sizes and varieties. The new participants range from $350 million in assets to more than $16 billion. Some are inexperienced in the industry but anxious to learn. Some have hired CEOs who are highly skilled executives. Others have already found their platforms and are aggressively expanding. Ten are still looking for their first platform! All of them are looking for high quality large MSOs in major metro areas. Deal Terms and Structures Today Five years ago, structures involved a variety of cash, stock, debt and earnouts with most deals being done for cash. Some deals were done as stock purchases, though most were asset purchases. Multiples ranged from five to nine times reconstructed EBITDA, with some outliers for very large MSOs. Increasingly, deals are being measured on purchase price to revenues, with smaller shops in the 35% to 45% and medium size MSOs in the 65% to 90% of revenues, depending upon the strategic fit, EBITDA levels and ongoing management teams. Today, we see the same variety of consideration with most all deals still being done as asset purchases. During this time of COVID, many are structured with both cash and earnouts with performance hurdles— some EBITDA based and some revenue based. Some are structured to

share the risk between the sellers and the buyers. Multiples are trending lower for plain vanilla acquisitions but remain robust for quality platforms. OE certifications are driving increases in values—especially highend brands. National Consolidators Just Keep on Buying Assisted by an additional capital raise in the second quarter, Gerber has acquired more than two dozen shops so far in 2020, including nine in Southern California, as it enters the largest U.S. market for the first time. Caliber Collision added more debt capital and continues its growth even as its revenues have slowed. In late July, it acquired one of the premier MSOs in the Southeast, when it closed on Professional Collision of Mobile, AL. Multi-Regional MSOs Are Growing Most Rapidly Illinois-based Crash Champions, led by Matt Ebert, reached from Chicago across to Southern California to acquire 14-shop MSO Pacific Elite early this year using both equity and

debt capital. In February, Crash added three shops in Ohio, and is on the hunt for more. Former ABRA senior executives with the backing of a highly credible sponsor, New Mountain Capital, are deploying millions of new equity capital following their takeover of Classic Collision in Atlanta last year. Led by CEO Toan Nguyen, Classic expects to challenge Joe Hudson’s position as the fourth-largest operator in the U.S. Classic now has eight of its 37 locations in south Florida, including the acquisition of the former Carolina Auto Body. (Full disclosure: Focus Advisors represented Carolina Auto Body.) Joe Hudson’s continues to beef up its management ranks and consider additional acquisitions across its Sunbelt markets. Texas-based ProCare acquired six-shop Houston operator Hodges Collision to bring its total to 41 shops. Regional MSOs are Preparing for Growth Chilton Auto Body, a 12-shop MSO in the San Francisco Bay Area, reSee Midyear Updates, Page 44

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Continued from Page 3

Measurement Issues

IL ‘Community Christmas’-Related Event Raises Thousands of Dollars Despite Pandemic by Jill Moon, The Telegraph

lapsed slightly because it measured 273 mm, not the 286 mm called for in the GM collision repair information. But the new replacement column the shop received measured 278 mm, also short of the measurement in the automaker’s documentation.

GM’s John Eck said the automaker is reviewing the safety inspections it currently requires after any collision

Another shop, he said, similarly found a steering column in a Nissan Versa was shorter than indicated in that automaker’s collision repair information—only to then ﬁnd that it was the

This year’s “Christmas in July” raised $26,700 for the nonproﬁt “Community Christmas” area-wide event that starts in November. “It is with a very grateful heart that we raised the funds with donations, which are still coming in,” said Margaret Freer of Freer’s Auto Body, where the summer fundraiser originated and held each year in Godfrey, IL. “We ran out of food—Margaret Freer never runs out of food. I would never have guessed with COVID-19 that we would have had the crowd and the success we had.” The Freer family, along with the sisters’ friends, normally serve the sloppy Joes, bag of chips and a beverage to people who stop by during the one-day event for lunch, although plenty have ordered carry out in past years, too. Lunch is provided for a donation to the whole Community Christmas cause. This year, all orders were carry out only on July 31. All proceeds go to help those in need. Freer Auto Body’s owners began the lighthearted event 12 years ago,

when it was founded at the behest of Freer’s granddaughters, Taylor, 16, and Lily Freer, 13, as part of United Way and The Telegraph’s Commu-

Taylor Freer, 16, hands a prepared lunch for carry out to a friend and helper at this year’s Christmas in July fundraiser, held annually at Freer Auto Body in Godfrey, IL.

nity Christmas, which raises money and collects new items for families in need. New toys, personal items and non-perishables, either through donations or purchased with the money raised, are distributed through a network of businesses, groups and volunteers at Christmastime. Pre-pandemic past Christmas in Julys have raised approximately $40,000 each year during the past few summers. “We truly have the best friends,

customers and family ever, who always step up to the plate and help out,” Margaret Freer said. “We are grateful and amazed. This was all done during a pandemic without our usual raﬄe. There will be a lot of happy kids this Christmas.” The Freers also take time to shop sales each year for needed items, such as coats, hats, gloves, toys and personal items. “We have been shopping sales all year for needed items,” Freer explained. “We are truly blessed and are so grateful for a giving community.” Hopefully by the time Christmas comes, celebrating will be closer to normal. But in the meantime, families in need still rely on Community Christmas. “We know this is a rough time, but if you would still like to donate to Community Christmas you can,” she said. “We are accepting cash donations, as well. We have always appreciated the support from the community and lots will need help this year at Christmas with the pandemic.“ We thank The Telegraph for reprint permission.

See Measurement Issues, Page 14

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8/17/2020 7:39:21 PM

Wahlberg, Lithia Continue Blockbuster Summer Acquisitions in Ohio by Joe Overby, Auto Remarketing

Seems like a summer of sequels for dealership acquisitions. While blockbusters aren’t driving folks to theaters these days, movie star Mark Wahlberg continues to add to the coffers of a different line in his business portfolio.

Credit: PRNewsfoto/Mark Wahlberg Buick GMC

Less than a month after it was announced the actor/producer and his business partner, Jay Feldman, had purchased two dealerships in Columbus, OH, the pair purchased another store in town: Jack Maxton Chevrolet. The store is being renamed Mark Wahlberg Chevrolet of Worthington.

Wahlberg and Feldman now have four stores in Columbus. Others include Mark Wahlberg Buick GMC and Mark Wahlberg Airstream & RV (the two purchases from last month) and Mark Wahlberg Chevrolet, their first store in 2018. “The people of Columbus have been good to us,” Wahlberg said in a news release. “This latest acquisition just strengthens our roots and deepens our bond with the market.” Feldman added, “Having four dealerships in Columbus gives us the opportunity to provide consumers with a consistent sales and service experience. “The Mark Wahlberg imprint on four locations enables us to leverage the Wahlberg advantage of providing brand choices, offering huge selection at the lowest prices and delivering great customer service,” he said. Jeff Mauk, who previously owned the dealership, said: “The Maxton name has been on that Chevy dealership for 90 years. I know the current and future customers are in good hands with Mark and Jay at the helm.” Further West, Lithia Motors

Iowa Auto Body Shop Hit Hard by Dorecho Storm by Janet Chaney

Waln Collision Repair, a family-owned collision business in the idyllic community of Fairfax, IA, was slammed by a dorecho that barreled through the Midwest on Aug. 9. The straight-line wind storm hit Fairfax and nearby Cedar Rapids around 12:30 p.m. The shop is a well-known fixture in the community, and always staying busy. Due to two recent hail storms, the shop was at capacity. The place was humming. Every stall was full, body and refinish techs were busy, Smart Express was completing scans and calibrations and PDR was performing smaller paintless dent repairs. Then the noise started. The wind started to become violent. Everyone got into one paint booth and huddled together, as the dorecho blew 100 mph winds for 30 minutes. When they felt safe to come out of the building, they found a surreal landscape. The paint stacks

were gone—they still can’t find them. A wooden building behind the shop exploded and 2-by-4s had been driven through the metal walls like missiles. One wall was partially caved in. Amazingly, the fury of this storm did not destroy the entire shop. “Everything is OK, no one was hurt,” owner Steve Waln told Janet Chaney of CaveCreek Business Development. “It was so loud, like a freight train running through the shop. It could have been so much worse.” There is no power, no internet, and sporadic cell phone service. The interview stopped when Wain’s cell phone went quiet. Owners Steve and Teresa Waln have built a strong and successful business and have an awesome cadre of employees. We wish them all good luck and good everything while they navigate through this. www.walnrepair.com We thank Janet Chaney for submitting this information.

these high-performing teams to the Lithia family. Their reputation in their communities and extraordinary volume reflect a commitment to an exceptional customer experience,” DeBoer said. The four stores are expected to add $500 million in annualized revenues. Lithia financed the purchase through free cash flows and existing on-balance sheet capacity.

made it a Texas-sized sequel with the purchase of four John Eagle Dealerships stores in Dallas and Austin: John Eagle Honda of Dallas, Honda Cars of Rockwall, Howdy Honda of Austin and John Eagle Sports City Toyota. Just last week, Lithia announced it had purchased BMW of San Francisco, which followed the addition of DCH Subaru of Thousand Oaks,

“This latest acquisition just strengthens our roots and deepens our bond with the market.” — Mark Wahlberg “The acceleration of our plan to increase the reach and density of our network to more conveniently serve our customers is well underway,” DeBoer said. “Together, with our Driveway ecommerce digital home channel, we are providing personal transportation solutions wherever, whenever and however consumers desire.”

CA, in midJuly. Earlier in the month, Lithia announced it acquired Smolich Chrysler Jeep Dodge Ram and Nissan dealerships in Bend, OR. “We’re delighted to announce our network expansion in two of the largest markets in our logistically key South-Central region,” Lithia President and CEO Bryan DeBoer said of the Texas additions in a news release Aug. 4. “We’re excited to welcome

We thank Auto Remarketing for reprint permission.

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Measurement Issues

State Farm Slashes Auto Premiums by 14.3% in Ohio by Mark Rosanes, Insurance Business America

same length as several replacement columns the shop ordered. So what should a shop do in such instances? â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s the question weâ&#x20AC;&#x2122;re trying to get some clariďŹ cation for from the vehicle manufacturers,â&#x20AC;? Bartanen said, saying in the case of the GM column, the shop installed the replacement part given the column in the car was even 5 mm shorter than the replacement part. â&#x20AC;&#x153;The people Iâ&#x20AC;&#x2122;ve talked to are, for the most part, putting the old column back in if itâ&#x20AC;&#x2122;s measuring the same as the replacement column.â&#x20AC;? Bartanen said the discrepancy could be based on data from OEM engineering drawings not matching the actual part once it went into production. In some cases, it could be shops are not measuring the columns correctly; he said Subaru is one automaker that provides better illustrations than some other automakers as to what distances on the columns are

Thousands of auto insurance policyholders in Ohio will soon be paying less on premiums as insurance giant State Farm announces plans to cut rates for drivers in the state by 14.3%. The reduction is expected to save the insurersâ&#x20AC;&#x2122; 1.9 million customers in the Buckeye State an estimated $174.1 million. The decrease applies to current policyholders at renewal, as well as new and returning clients. The cut comes after State Farmâ&#x20AC;&#x2122;s announcement in May that it was working to reduce rates in every state by an average of 11%. Once implemented, customers of the countryâ&#x20AC;&#x2122;s largest auto insurer could save a total of $2.2 billion. â&#x20AC;&#x153;Current State Farm driving data and claims experience show a considerable decline in miles driven and fewer accidents,â&#x20AC;? said Robert Stewart, the ďŹ rmâ&#x20AC;&#x2122;s senior vice president. â&#x20AC;&#x153;As a result, weâ&#x20AC;&#x2122;re looking for ways to continue supporting our Ohio customers while we monitor and adjust to trends.â&#x20AC;? Will others follow?

State Farmâ&#x20AC;&#x2122;s move may prompt other state insurers to follow suit, said Dean Fadel, president of the Ohio Insurance Institute. â&#x20AC;&#x153;State Farm is the market share leader in Ohio, and sometimes what the market share leader

ed slashing premiums at renewal by 5% in April. â&#x20AC;&#x153;As the driving public gets back behind the wheel, we plan to build additional beneďŹ t of the slowdown into future rates, on a state-by-state basis, and based on

does aďŹ&#x20AC;ects what others may decide to do,â&#x20AC;? he told The Times-Reporter. However, James Lynch, chief actuary of the Insurance Information Institute, explained to The Times-Reporter that some insurers in the state have already oďŹ&#x20AC;ered rate cuts. â&#x20AC;&#x153;DiďŹ&#x20AC;erent insurance companies are taking diďŹ&#x20AC;erent approaches to this,â&#x20AC;? he said. â&#x20AC;&#x153;Some are handling this as time passes by extending credits. Some other companies have done what State Farm is doing.â&#x20AC;? Among these companies is State Auto Financial, which start-

frequency and severity trends at the local level,â&#x20AC;? the insurer said in a statement. â&#x20AC;&#x153;To the extent that lower miles driven or claims volume persists, we will take that favorability into account in future renewal rates. Some of this favorability may be oďŹ&#x20AC;set by higher repair costs driven by more high-speed crashes and higher auto repair shop costs.â&#x20AC;? We thank Insurance Business America for reprint permission.

See Measurement Issues, Page 16

www.autobodynews.com

Classic Car Procession Celebrates Lifelong Enthusiast by Jeffrey N. Ross, Motorious

Over his lifetime, itâ&#x20AC;&#x2122;s estimated Phil Deegan owned 150 cars, and his home in Mankato, MN, is said to have always displayed an assortment of classic cars and trucks. So it makes total sense that after Deegan passed away July 14, his funeral procession would be a rolling tribute to the automotive enthusiast.

Credit: KEYC News

At the funeral service, a group of classic cars and trucks lined the churchâ&#x20AC;&#x2122;s parking lot, and this was followed by a procession of classic vehicles to the cemetery, including a 1964-66 Chevy C10 that carried

his coďŹ&#x192;n in the cargo bed. In a video report from KEYC News, Deeganâ&#x20AC;&#x2122;s son, Dan, said his father â&#x20AC;&#x153;loved anything with wheels on it and anything with a motor in it,â&#x20AC;? while his obituary shows an enthusiast who enjoyed collecting and restoring classic vehicles, including tractors. It went on to say that any time the weather was nice, Deegan would have his cars cleaned up to show them oďŹ&#x20AC; in his front yard. Deegan died with family by his side, and he was even able to take one ďŹ nal ride in one of his cars just hours before passing away. His funeral took place on July 21, and family, friends and visitors were encouraged to bring their classic vehicles. The procession of cars ranged from hot rods to muscle cars and just about every type of classic car you could imagine, including an old Ford dump truck. When itâ&#x20AC;&#x2122;s your time to go, we couldnâ&#x20AC;&#x2122;t think of a better way to be remembered.

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Measurement Issues

Carvana Opens Newest Car Vending Machine in Kentucky by Auto Remarketing staff

to be measured. But any incorrect measurements in the OEM information, he said, may be impacting cycle time and repair costs, damaging credibility with consumers, fostering tensions between shops and insurers and placing undue burden on the parts supply chain. “All those things aside, my biggest concern is we ﬁnally have this momentum of people starting to read and follow OEM procedures, and if they’re getting bad information, we’re going to have technicians and repair facilities and insurance personnel start to ignore those OEM procedures,” Bartanen said. “They may think: ‘If this is bad, what else in the manual is inaccurate? What else can I just arbitrarily ignore because maybe it’s wrong? Maybe that sectioning procedure was put in the wrong place. Maybe the material type or thickness was wrong.’ “If we’re ignoring the procedures, ultimately we’re going to compromise

Just like the racing at nearby Churchill Downs, Carvana is looking to speed past the used-vehicle retail competition in Louisville, KY. To help, Carvana on Aug. 11 launched its latest car vending machine in Louisville, within 30 minutes of the famous horse racing venue. Standing eight stories tall with a 27-vehicle capacity, Carvana’s newest car vending machine oﬀers buyers what the company says is a “a one-of-a-kind experience.” Carvana customers who choose touchless pickup at a car vending machine can enjoy the unique experience Carvana has become known for—from a safe, comfortable distance. The Louisville car vending machine is located at 1510 Lakeshore Court. Carvana’s newest car vending machine is the ﬁrst of its kind in Kentucky and the company’s 25th in the U.S. Additional car vending machines are located in Tennessee, Texas, Florida, Maryland, Arizona, Ohio,

descending through the structure from the heart of the all-glass tower. While the coronavirus pandemic pushed this year’s “run for the roses” at Churchill Downs from its traditional time in May to September, Carvana customers in Louisville can enjoy this delivery excitement now. “Just three years ago we brought the ‘new way to buy a car’ to Louisville, and customers have continued to enjoy the ease Carvana opened its 25th car vending machine in and convenience we ofLouisville, KY. Credit: Photo courtesy of Carvana fer,” Carvana founder and CEO Ernie Garcia said in By appointment only, custom- a news release. “As we enhance our presence ers can select a day and time convenient for them, at which time they here with the launch of our newest will be the only customer inside car vending machine, we look forthe vending machine. They will be ward to providing area residents greeted by a customer advocate and with a fun, safe option for getting receive a commemorative, over- their next vehicle,” Garcia went on sized Carvana coin to activate the to say. automated vending process. Buyers can then get an immer- We thank Auto Remarketing for resive, central view of their vehicle print permission. Pennsylvania, Indiana, Illinois, Missouri, North Carolina, Oklahoma and California.

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Oshkosh, WI, Receives $250,000 State Grant to Support Redevelopment of Former Gibson Auto Body The City of Oshkosh, WI, is receiving a $250,000 state grant to help in the renovation and preservation of the former Gibson Auto Body into a unique gathering space in downtown Oshkosh. The Community Development Investment (CDI) grant from the Wisconsin Economic Development Corporation (WEDC) will support the preservation of the nearly 100-year-old former Gibson Auto Body Shop by converting it into the Gibson Social Club. The new development will be an event space for weddings, meetings and other social gatherings. The project is expected to be complete next year. “A vibrant blend of businesses is vital to a community’s overall economic success, which is why it is one of WEDC’s top priorities to support communities across the state and invest in improving their business districts,” said Missy Hughes, secretary and CEO of WEDC, the state’s lead economic development organization. “This project will not only preserve a piece of the city’s history by renovating a building that is 100 years

Continued from Cover

Survey Finds to keeping all of his staff working,” an estimator who is one of nine employees at a shop in eastern Pennsylvania said. Shop optimism had also rebounded a bit from what it was in the spring. In the second half of April, 15% of shops said they were “very” or “extremely” concerned about their business surviving even just the next month, and 25% felt that way when they looked out three months. By June, those rates were cut by about half, with just 8% worried about the next month and 14% worried about making it into the fall. In April, only half of shops said they were not very, or at all, concerned about being in business next spring; in June that had nudged up to three in five shops, with just 16% saying they are “very” or “extremely” concerned about still having their doors open a year from now. “People are using their cars as safety bubbles to go out and explore,” a survey respondent in Texas

old, but it will serve as a catalyst for future development and investment in the Oshkosh community.” Purchased by Eric and Kristen Hoopman, the remodeling of the space will include the addition of a catering kitchen, bathrooms and three bars, including one on a mezzanine level. The entire space will be renovated and will be available for large and small events. The new owners plan to highlight and preserve the building’s historical elements and beauty and will use reclaimed or salvaged materials in the process. “With the support of WEDC and the City of Oshkosh, we are excited to bring this new adaptive reuse multi-purpose venue to the heart of downtown Oshkosh next year,” said Eric Hoopman. “We’ve been admirers of this historic space for a long time now and are thrilled to be able to help preserve it in a way where the community can enjoy it for decades to come.” “We are excited that the Hoopmans are demonstrating their commitment to downtown Oshkosh with the renovation of the former Gibson

said. “Collisions will continue.” Across a total of 151 shops that reported February to May monthly revenue figures in June, the combined total monthly revenue fell from $39 million in February—an average of $261,000 per shop—to $38 million in March, $27 million in April and $23.5 million in June—an average of $156,000 per shop, and a cumulative loss of more than $29 million. Interviews with some shops this summer offered anecdotal evidence that revenue patterns vary widely by market. “For whatever reason, in our area we’re usually about 30 to 45 days behind other businesses,” said Tim Cockrell, owner of two Cockrell’s Body Shop locations in Alabama. “March and April and May were down 15% or 20%, but all of a sudden in June, it went down to 50%.” Richard Fish, owner of six Fix Auto USA franchises in Southern California, saw things turn in the opposite direction, but also vary by location. “In June, we were at 78% of our baseline sales. So we’ve seen some rebounding,” Fish said. “At our worst [this spring], we were close to 50%.”

Auto Body,” said Mark Rohloff, Oshkosh city manager. “This is truly a transformation of a building that has sat idle in our downtown business improvement district for many years. The addition of the Gibson Social Club will bring a new spirit into the night life of Downtown Oshkosh while honoring the history of a classic Oshkosh landmark.”

cused urban core. When the venue opens, it’s expected to create 12 full time jobs with a total of 20 people employed. WEDC’s CDI grant program supports community development and redevelopment efforts, primarily in downtown areas. The matching grants are awarded based on the ability of applicants to demonstrate

“This grant will help to ensure the unique architecture and charm of this building are preserved for generations.” — Sen. Dan Feyen “The Gibson Auto Body has been a staple of Main Street Oshkosh for almost 100 years,” said Sen. Dan Feyen. “This grant will help to ensure the unique architecture and charm of this building are preserved for generations.” The project has the potential to be a catalyst for the success of the downtown neighborhood and the business improvement district. The city is looking at this project as a way to transform a traditionally industrial downtown toward a community fo-

the economic impact of the proposed project, including public and private partnership development, financial need and use of sustainable downtown development practices. Since the program’s inception in 2013, WEDC has awarded more than $30 million in CDI Grants to over 100 communities for projects expected to generate more than $500 million in capital investments statewide. Source: Wisconsin Economic Development Corporation

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Continued from Cover

PPP Forgiveness ic,” Peterson said July 23 during the AICPA’s weekly Town Hall covering PPP and other issues related to the COVID-19 recession and recovery efforts. Erik Asgeirsson, CEO of CPA.com, the technology and business subsidiary of the AICPA, said during the Town Hall the SBA and Treasury are not expected to release the expected 25 to 30 FAQs before President Donald Trump signs new relief legislation. Congress is trying to hammer out a package before going on recess Aug. 8. Even if the FAQs do come out, the SBA issued a procedural notice July 23 that indicated it would not begin accepting PPP forgiveness submissions from lenders until a new software-as-a-service platform currently under development goes live Aug. 10. The SBA said the launch could be delayed if new legislation changes the forgiveness process in ways that require changes to the new platform. The SBA’s notice adds another reason for waiting to work on PPP loan forgiveness applications to those covered in an AICPA blog post that published July 14, said Mark Koziel, CPA, CGMA, the AICPA’s executive vice president of public practice. “We have to be as patient as

possible,” he said. The real PPP forgiveness deadline Kari Hipsak, CPA, CGMA, an association senior manager, said in an interview the important deadline in the PPP forgiveness process doesn’t come until 10 months after the end of the loan’s covered period. At that point, if forgiveness forms have not been submitted, the funds officially become a loan that needs to be repaid. Hipsak said it’s best for borrowers to take their time and make sure they have as much information as possible so they can maximize loan forgiveness. “There’s no need to rush through the forgiveness,” she said. “A lot of businesses, I think, want to put the forgiveness behind them, but there are still a lot of unanswered questions. And so as long as there’s not a deadline to have this application submitted, other than 10 months after the end of the covered period, it’s really a business decision.” Some additional considerations related to PPP forgiveness include: Questions about utilities: Utilities are among the items besides payroll that borrowers can pay with PPP funds. But there are questions about what qualifies as a utility under the PPP guidance. “It includes the basics, such as trash collection, water, electricity, etc., but we get a lot of questions about business-specific utilities,” Hipsak said. “And there is even some guidance that indicates that

transportation costs such as fuel for a business vehicle is includible. But we don’t have all the answers for that yet.” Internet services, which have become even more vital in this time of social distancing, appear to qualify as utilities under the PPP, Hipsak said. Many exceptions to full-time-equivalent (FTE) rules: The PPP was designed to help organizations keep paying their employees as pandemic-related closures and slowdowns reduced revenue. As a result, employers who reduce their workforce generally see a reduction in their PPP forgiveness eligibility amount. But there are numerous exceptions for situations such as: An employee who was offered a chance to return to a position but refused. An employee who was fired for cause or voluntarily resigned. An employee who voluntarily requested and received a reduction in hours. There are additional exceptions as well to the FTE and wage rules, and borrowers should be aware of them when they apply for forgive-

ness. needed for Clarification self-employed borrowers: PPP guidance states that self-employed individuals must compare their 2020 income with their 2019 income to determine their maximum eligible compensation. “If you’re a self-employed individual, how do you prove what you got paid in 2020?” Hipsak said. “That’s one big question that remains for self-employed individuals.” Documentation is critical. The forgiveness applications are extremely detailed, and the final rules are uncertain in some areas. Some documentation isn’t required for submission with the forgiveness application but is required to be retained by the borrower. So it’s important to keep documentation of any facts that could become an issue related to forgiveness. “It’s always easier to be prepared going into something than having to look in hindsight and collect all the necessary data,” Hipsak said. We thank the Journal of Accountancy for reprint permission.

SBA Suggests Getting Help With Loan Forgiveness Applications by John Yoswick

Although there’s been a push for Congress to greatly simplify the process of seeking forgiveness for Paycheck Protection Program loans of less than $150,000, it seems likely those receiving loans above that amount will still need to provide adequate documentation for how the funds were spent. If your business is preparing to apply for loan forgiveness, the Small Business Administration (SBA) says help is available. “We really encourage you to reach out to our SBA resource part-

ners to assist with the forgiveness application,” Sonia Smith, a public information officer for the SBA, said during the Collision Industry Conference (CIC), held virtually in late July. “Whether you’re using the EZ Loan Forgiveness Application or the long form, we can help in making sure it is all correct, making sure you have the right documentation. So when you submit it to your lender, you’ve got the package correct from the beginning.” Smith said loan recipients can use the “Find local assistance” page on the SBA website (www.sba.gov/ See SBA Suggests, Page 32

20 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com

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Continued from Cover

‘Industry Relations’ Allstate, agreed the revamp offered an opportunity to be “evocateurs” to the industry. Allen said the point was to address “real challenges,” but stop talking “up and over.” The idea was to find something on which the industry could find more agreement, he said. “The CIC Industry Relations Committee will foster discussions that identify topics that the Industry would benefit from gaining alignment on,” the committee’s purpose states. Keller said “alignment” was the key word here. “How are we gonna do that?” he said. “Very carefully.” The committee planned a “very interactive” setup with open mics for a lively and engaging dialogue, he said. It also planned to leverage but not interfere with work done in other CIC committees, he said. Engaging other segments of the industry also was a goal, Allen said. For example, he said, if a paint company wanted to talk about an issue,

it should bring it to the committee. Committee member Amber Alley, of Barsotti’s Body and Fender, said she’s seen issues left in a stalemate during her 2.5 years on the Insurer-Repairer Relations Committee. “Neither side is wiling to give,” she said. She hoped the introduction of perspectives from segments outside of the auto body repair and insurance industries would lead to greater appreciation of others’ views and find actual resolutions, rather than applying “Band-Aids on problems that we all know exist.” Algie felt the new committee format could accomplish more than the old Insurer-Repairer Relations iteration. The presence of a third party might “calm the waters a little bit,” he said. The Industry Relations Committee’s plans for its first two official CIC discussions suggest its new direction. During the SEMA Week CIC meeting, the body would discuss operating in a pandemic, Keller said. (The live SEMA has since been cancelled, but CIC plans to convene in November, albeit virtually.) The January 2021 CIC

would examine artificial intelligence, Keller said. “This is a great starting point,” Alley said of the planned conversation on COVID-19 lessons. Nobody had experienced such a thing, and it would be naive to assume anyone in the room emerged without some negative impact, she said. Sharing successes and failures from the experience could lead to a vision for the future, she said. The committee provided a teaser of sorts for the COVID-19 discussion with comments from two of the panel’s insurers. Committee member Scott Kohl, of Liberty Mutual, noted his company has about 3,500 shops on its direct repair program. “It hit each one very, very different,” he said of COVID-19. Fellow committee member Jonathan Chase, of National General, pointed to the matter of cleaning fees. All stakeholders wanted to collaborate and do the right thing, but different parties obtained information in “different spots,” he said. Since the issue is fresh in everyone’s mind, it can be used as an example of how to to work better

together in the future, Case said. The committee wasn’t trying to say anyone acted incorrectly; rather, it wanted to discuss the different approaches, he said. Treating the cleaning issue as a case study would make everyone more effective, he said. Chase recalled “being confronted daily” with a changing environment and talking to “MSO partners” and other vendors and peers. Everyone wanted to take care of the customer and deliver safety, but the experience still proved difficult “because we weren’t all talking together,” Chase said. If the topic of cleaning a car left stakeholders struggling, it could be even harder to handle a customer complaint about their Level 5 self-driving car, but “it’s coming,” he said. We thank Repairer Driven News for reprint permission.

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autobodynews.com / SEPTEMBER 2020 AUTOBODY NEWS 25

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with Stacey Phillips

From the Desk of Mike Anderson with Mike Anderson

Mike Anderson is the president and owner of Collision Advice, a consulting company for the auto body/collision repair industry. For nearly 25 years, he was the owner of Wagonwork Collision Center, an OEM-certified, full-service auto body repair facility in Alexandria, VA.

More Best Practices to Make the Most of the ‘Parts’ Portion of Your Business In a previous column https://www. autobodynews.com/index.php/ from-the-desk-of-mike-anderson/ item/20425-from-the-desk-of-mikeanderson-making-the-most-of-theparts-portion-of-your-business.html I shared some best practices shops can use to improve their parts-related processes and profits. Here a few more. Best Practice: Check the OEM information. You might presume that checking OEM collision repair information for each repair is something related to just procedures. But it also plays a role in streamlining your parts processes as well. One way in particular: Identifying any non-reusable or one-time-use parts that need to be on your estimate and parts order. We’re not just talking about clips and fasteners. On some vehicles, there are interior or exterior trim pieces that are one-time-use, as well as some suspension or supplemental restraint system parts. It’s important to know that while the estimating systems are doing a better job of identifying all one-timeuse parts, those systems—nor even the OEM electronic parts catalogs— identify all of them. The only way to make sure you are aware of all of them is to read the OEM repair information. Not all of the automakers identify one-time-use parts in the same way. Toyota/Lexus, for example, uses a black dot to indicate something is a non-reusable part. Nissan/Infiniti uses a black dot with a white X; sometimes these parts are color-coded in the automaker’s documentation. Mazda uses a white “R,” Subaru uses a star and Ford uses a symbol of a trash can to signal something is a one-time-use part. There are other automakers, such as BMW, General Motors and Porsche, that currently don’t have a symbol, but instead use wording within the procedures to identify one-timeuse parts. It might say, “Remove and replace,” for example, or “Remove and discard,” or “This is a non-reus-

able part.” So you can’t just glance at the OEM repair procedures. Take the time to read them thoroughly. And when you list one-time-use parts on your estimate, include a line note indicating that the OEM has designated it as such. The OEM repair procedures can also alert you about which parts can be repaired and which cannot. Many automakers, for example, say that components of certain strengths of steel should not be repaired, only replaced. The procedures also can designate “if this, then that” statements related to parts. One example might be “If an airbag deploys,” then certain other parts on the vehicle must be replaced, even if they don’t appear damaged. The time to have all this information is up front, so you don’t get into a job and only then discover you didn’t order all the parts the OEM procedures require. Best Practice: Improve the parts information in the estimating systems—for yourself and the rest of the industry. If you determine a part needed as part of a repair wasn’t shown in the estimating system, or if you find some other information gap, like a one-time-use part not being identified in the estimating system, don’t just order the part and move on. Contribute to the solution! It’s easy: Visit the Database Enhancement Gateway (www.DEGweb. org) and submit an inquiry. It’s a quick process, particularly after you’ve done it a few times. The DEG will reach out to the estimating system provider, which in turn will research whether information was indeed missing or inaccurate, and if so, correct it. That may well help you in the future, as well as help all the other shops working on that make and model of vehicle. If we all work together on this, we can help make the estimating databases more complete. Some may argue you shouldn’t have to do that,

given what shops spend on the estimating system. But at the end of the day, complaining does not solve the problem. By taking the time to submit inquires to the DEG, you help control your own destiny. As Mike Jones of Discover Leadership says, “You can be the wind or the flag. The wind dictates which way the flag blows. The flag is subject to the wind. Always be the wind.” Best Practice: Maximize efficiency through better parts receiving. Receiving parts might seem the most passive process in your shop: The delivery driver brings in the parts and drops them off. But the best-run shops use some very specific steps related to parts receiving. They are mirror-matching all parts, for example. Take the new part out of the box or packaging, and compare it to the old one to make sure at

that point in the process the parts for the job are accurate. Given the average body technician generates $100 in gross profit per hour, you don’t want that technician stopping work and spending time to come find you to tell you a part is incorrect or missing. In my previous column, I talked about the value in using an electronic parts ordering system. Some of those systems can help with parts receiving processes as well. Some allow the parts vendor, when fulfilling the order, to electronically push the parts invoice back to your management system to automatically post the invoice for you. We did a survey of more than 400 body shop parts managers, and they said they spend at least 40% or 50% of their time just manually rekeying parts invoices. So if your electronic parts system can streamSee More Best Practices, Page 36

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with Victoria Antonelli

In Reverse

Gary Ledoux is an industry veteran with 48 years’ experience in the automotive and OEM collision parts industry. His column appears exclusively in Autobody News. He can be reached at YesterWreck@yahoo.com

with Gary Ledoux

The Advent of the Computer Age (Circa 1980) In January 1980, BYTE Magazine computers. If you’ve never taken a announced in an editorial “the era of look at these at these smart machines, off-the-shelf personal computers has you’re in for a pleasant surprise.” The arrived.” article went on to explain the differwith Gary Ledouxence between hardware and the new and Apple Tandy (RadioShack) had already been selling computers emerging world of software. for more than a year and the soon- Another trade magazine artito-be ubiquitous IBM PC, which cle looked at three different computwould set the standard for some time er systems designed specifically for to come, would be introduced in Au- body shops. One was called Auto Regust 1981. Individuals’ lives and the pair Management Systems. One was business world at large would soon made by Kennedy Communications be changed forever. and sold for $29,900; that’s $79,600 in with Stacey Phillips Beginning around 1982, a lot 2019 dollars. And one was produced of ink was spent within the collision by Triad Systems of Sunnyvale, CA. industry trade magazines addressing The magazine devoted an entire computerization and how and why article to the ADP/Audatex estimatthe industry should embrace this new ing system and how easy and effimedium. cient it was. Another article asked “Is One collision industry maga- Your Shop Ready For A Computer with Attanasio zine noted, “As we moveEd through the System” and provided a 15-question ‘80s, shop owners around the coun- check list to help the reader decide. try are discovering a new tool for get- But the latest in technology came ting and keeping a competitive edge: from a company called Mitchelmatix.

OE Shop Certification

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A trade magazine article noted shop estimators loved their estimating manual but now Mitchellmatix was going to make them easier to use by inserting a bar code into the book. The bar code was then read when a computerized wand was passed over the strip by the estimator. The mini-computer was then hooked up to a telephone line, a call made to one of 19 IBM computers spread around the country. Two and a half minutes later, the estimate printed out on a dedicated printer at the body shop. The cost of doing all that was about $10 per estimate plus the cost of the call—if it had to be long distance. Most calls were said to be local. ADP also entered the field in mid-1984 with the introduction of “Tele-Estimating,” a computerized estimating system handled over the

phone allowing a shop to use computerized estimating without having to buy the computer. “Simply call a special toll-free number and read off the damage codes from a completed AUDATEX worksheet, and within minutes your estimate is processed, printed and distributed.” A spot survey conducted by a trade magazine and published in December 1982 indicated that of 600 body shops surveyed across the country, 101—17%—had a computer system. Of those that did not have one, 20% said they were considering buying one, while 80% said they would not consider buying one. Then as now, change comes hard to the collision repair industry. One respondent noted that he had purchased a computer system to help run his shop but the monthly cost of maintaining the system far exceeded

Auto Body Attorney with Bruce Roistacher

Truck Topics with Gary Ledoux

COURTESY

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its usefulness. In January 1985, a trade magazine ad for Digitree Systems of Boulder, CO, offered a complete body shop management software system including estimates, job costing, repair orders and full accounting with payroll for $1,995. Together with a computer of the purchaser’s choice, a shop could computerize for less than $5,000 ($11,946 in 2019 dollars.) By mid-1986, a trade magazine article noted, “Like it or not, we are now living in the computer age. For many years, computers have been used for various business applications and we find them more and more in each aspect of our daily lives. You probably can’t remember when your monthly department store bill was not prepared by a computer. In fact, if all the computers now in use were suddenly shut down the whole world would be thrown into chaos.” Despite this obvious statement, many shops had still not computerized. The article was followed by an ad for Team Management Network computers featuring a “portable computer,” forerunner to the laptop, which could be brought out to the car to complete an estimate, then reconnected to the main computer system. According to an article published in the fall of 1986, 32% of all body shops would seriously consider installing a computer system within the next year. That means 20,000 shop owners were asking, “What can a computer do for my business?” The

article suggests the No. 1 priority for shop owners should be computerized job costing. A January 1987 article about computerized estimating systems noted, “Although the traditional role of computers in business tends to be in bookkeeping and finance, a properly written estimating program can provide the starting point for a whole new level of efficiency and profitability.” A three-page spread in a January 1987 trade magazine offered short descriptions of computerized estimating systems and body shop management computer systems from 16 companies, including S & S Development Systems, Tru-Time Systems, Inc., and Keep It Simple Software and Cad Design Systems. It seemed everyone and their brother was jumping on the computer bandwagon. Many systems were designed to run on an IBM XT or AT computer system or Tandy system. Some did not require the hardware system to have its own hard drive. Making the right choice was very confusing, especially for those people with no background or knowledge of the computer world. And those who did have some knowledge were quick to point out the system purchased today could be obsolete in a year, further scaring shop owners. By January 1988, many shops had accepted the inevitable and computerized their shops, but many were still on the fence. Those that made the leap found, much to their delight, learning the management programs was not that difficult. And once mas-

Continued from Page 20

Not one of those shops reported their application had been rejected, and in fact, nearly 84% said they had already received notification that repayment of the funds was not necessary. More than three in five of shops receiving a PPP loan as of June had not yet applied for having repayment waived, though more than 90% of those said they intended to do so.

SBA Suggests local-assistance/find) to locate SBA resource partners in their area. An analysis conducted by the Society of Collison Repair Specialists suggests nearly 20,000 body shops nationwide received a PPP loan. The data, released in July by the SBA and the Treasury Department, indicates 2,500 independent repairers received loans of $150,000 or more. An industry survey in June found among 200 shops that had received a PPP loan, almost a third (31%) had already applied for loan forgiveness.

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tered, shops didn’t know how they lived without computerization. Computer systems of the period could have included not only a shop management system but also estimating software. At that time, more than 20 different brands of collision shop-related software were available, including shop management and estimating systems. One computer advocate noted, however, that most shop owners bought a computer for the wrong reason—to write estimates. He noted the real value in a computer was job costing—knowing how much money was made on each individual job. The concept of job costing would take some time to sink in. An early 1988 ad for Digitree computers noted the popular computer was now being shipped with the “Mitchell Connection,” an automatic estimating program containing the entire text of the Mitchell crash estimating guides The ad noted the Digitree program required an IBM or compatible computer with MS DOS 3.1, 640K RAM and a 40MB hard drive, pretty standard stuff for the times. A 40MB hard drive! Imagine!

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More space than one will ever use! The 40 MB hard drive was obsolete in a fairly short time, causing people to buy compression programs for their software, making the entire system unstable. Despite the burgeoning computer industry, a trade magazine article in the summer of 1988 discussed various uses for a new tool in the body shop—the fax machine, ideal for, among other things, placing parts orders. The article noted, “The fax machine is here to stay, and most successful collision shops will have fax machines in use in the near future.” The fax concept had been around for years but only commercially acceptable and viable since the early 1980s. By the end of the decade, computers equipped with the proper software could create an estimate, job costing, create work orders, order parts, create estimate supplements, analyze data, log technicians on and off a job, create technician progress reports, maintain parts and materials inventory, create work flow, perform accounting procedures and do word processing.

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Hey Toby! with Toby Chess

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

An Overview of Corrosion Protection Products: Part 2 of 2 applied. Seam sealer tape can be removed and repositioned until it is firmly pressed into place with a roller (See Fig. 15) which sets the adhesive.

This is the continuation of Corrosion Protection: Part 1, printed in the August issue of Autobody News.

will lead to an adhesive failure.

California Autobody Association with David McClune

Fig. 14

DTM sealers (Fig. 14) have the same characteristics as the generally Single part seam sealers (Fig. used seam sealers, but has corrosion 12) are an NVH control material. Its inhibtors added so it can be applied to John Yoswick bare metal. primary purposewith is to keep out moisNo OEMs recognize the use of ture, wind and sound, and it is used on all joined metals. It dries by at- these seam sealers. They all state tracting moisture and will take longer there needs to be a barrier coat beto dry than two-part adhesives, gen- tween the bare metal and the seam sealer, perferably 2K epoxy primer. erally speaking. A friend of mine used a compa Every OEM for which I have corrosion data requires a primer to ny’s DTM seam sealer with no primbe applied prior to the application of er on a new roof panel. The vehicle returned with all of the seam sealer seam sealer. lifting off the panel. He contacted with Richard Steffen the manufacturer of the product and they would not warranty the repair. They said he did not follow OEM procedures, which stated a coat of epoxy primer was needed to be applied prior to the application of the seam sealer. I just want you to be warned before you apply this seam sealer to bare metal.

Fig. 17

Fig. 12

Year in Quotes

Fig. 16

Make sure you clean the primed surface with a good wax and grease remover such as Acrysol (Fig. 16). Using your thumb to put the tape in place and not cleaning the surface

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Fig. 13

Two-part seam sealers (Fig. 13) are used just like the single component. They have a faster drying time than single-part sealers, but cost more. Control flow sealers are used in areas where a flowable self-leveling type seam sealer is required, as Fig. 15 The next type of seam sealer is it flows up to 2 in., then cures, pre- in the form of tape (Fig. 15). Comventing further with flow. Self-leveling Karyn Hendricks sealers are recommended for roof mon locations of use are the hood seam sealing and on drip rails and hem, door hem, deck lid hem and trunk opening seams. A fast drying, quarter panel arches. There is no dry non-sag, high build sealer is used for time so you can paint immediately. Do not stretch the tape as it is all other areas that need seam sealer.

Shop Showcase

Sound deadener (Fig. 17) is a two-part material used for noise, vibration and harshness. It can be used to fill large gaps, but I teach using it as an adhesive between the outer door skin and intrusion beam. Work time is about an hour and it is a non-expanding material that works well on horizontal as well as

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34 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com

with David M. Brown Midwest_Issue_0920.indd 34

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vertical applications. You will need a foam base to apply this material. I recommend use on sail panels on quarter panels and around the gas door pocket.

comes in direct contact with bare aluminum in the presence of moisture and oxygen. A chemical reaction occurs and aluminum will start to corrode, and it will not stop. If a coating, such as primer, is applied over the aluminum after the corrosion process has started, the corrosion process is known as filiform corrosion. (See Fig. 20).

flexible foams and rigid foams.

Fig. 20 Fig. 19

Fig. 18

Sound deadening pads (Fig. 18) are used on door skins, floor pans and quarter panels. They stiffen up a panel to help with noise reduction and vibration. Vibration can lead to an opening of a panel and moisture can get in, which could result in the formation of rust. Automotive foams are used for NVH control and, in the case of structural foam and rigidity, in place of using a steel reinforment. There are

These two-part materials are designed to eliminate panel flutter, water leaks, wind and noise, and duplicate OEM sound deadening on sheet metal. They eliminate oil-canning of door skins, hood/deck lids, roof panels, rear quarter assemblies and sail panels. Do not substitute it with commercial single-part foam found at home building supply stores, which is highly flammable and attracts moisture to expand. You will need to remove the foam from areas that will be welded. If the material catches on fire, cyanide gas and carbon monoxide will be released.

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Panel adhesives (Fig. 20) are now considered a corrosion protection item. When the adhesive is applied, it forms a barrier so moisture cannot get in between the joints. Toyota has limited the use of adhesives to only weld bonding, a combination of resistance spot welds and glue, which are listed in its specific model repair manuals. Toyota (CRIB 158) does not approve of panel bonding as a substitution for welding. A final note on corrosion and aluminum: as you are aware by now, aluminum does corrode. The first kind is galvanic corrosion, which occurs when bare steel

Fig. 20a

The other type of corrosion occurs naturally. When bare aluminum is exposed to oxygen and moisture, a barrier coat known as aluminum oxide (Al3O2) forms on the surface. This material will not burn off—it melts at 3725 degrees F, whereas aluminum melts at 1220 degrees F. It causes porosity in the weld site. Adhesive, body repair pins and paint do

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surface of the aluminum fender. Besides the iron particle beginning to rust, galvanic corrosion started under the rust particles. What would happen if I primed the fender? A big comeback.

not stick to it, and that is why it is necessary to remove before welding, painting and adhesive application.

Fig. 21, Sand with 180 grit DA Fig. 23

Fig. 22, Clean with a good wax and grease cleaner. Note the aluminum (black soot) on the towel

The next set of pictures show how to perform a recommended cleaning process in a clean environment. As I stated earlier, I was sanding the body of a vehicle that I took down to bare metal. I used the same DA and the sandpaper from the steel body to sand away the paint and primer on the aluminum fender. When I was finished with the fender, I put it outside, and look what happened after one week. (See Fig. 24). Metal particles were transferred from the dirty DA sandpaper to the

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At https://scrs.com/wp-content/ uploads/2018/01/2016-scrs-guideto-complete-repair-planning-revised-11-16.pdf , you will find a complete list of non-included items needed for repairing aluminum. Check out I-CAR and its offerings on corrosion protection classes. Kent Automotive, 3M, Fusor and SEM have online classes on their products, and Kent has in-house training as well.

More Best Practices line that, you’ve greatly reduced time spent on a process for which your shop can’t bill. I can’t write about parts without mentioning one of the mistakes I see some dealership management make. At some dealerships, the body shop isn’t given financial credit for parts sales. I think this a bad idea for several reasons. I think it reduces the likelihood that someone within that shop is responsible for following up on parts credits, for example. It also could lead to less than ideal repair-vs.-replace decisions; if those making parts decisions are paid on commission, and the shop gets no credit for a part sale, they may choose to repair a part when replacing would be the better decision for the repair. Do you have questions related to parts? Want more ideas and best practices? Reach out to me, and check out our parts-related videos when you subscribe to our free YouTube channel (https://tinyurl.com/AdviceYouTube).

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Fig. 24, Clean with a good wax and grease cleaner. Note the aluminum (black soot) on the towel

Continued from Page 26

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time your

hout I see ake. shop parts sev-

hood s reparts ould .-reking mist for o red be . ated best heck you nnel ube).

with Stacey Phillips

Techs of the Future

Stacey Phillips is an award-winning freelance writer and editor for the automotive industry. She has 20 years of experience writing for a variety of publications, and is co-author of “The Secrets of America’s Greatest Body Shops.” She can be reached at sphillips.autobodynews@gmail.com.

with Stacey Phillips

The Importance of Creating Lifelong Learners and Implementing Hands-on Efficiency Training Over a year ago, Jeff Smith, a collision repair instructor at the Northeast Arkansas Career and Technical Center, reached out to me about the overwhelming shortage of technicians. As a result of our conversation, I initiated a new column for Autobody News magazine called Solving the Tech Shortage, which has since received an award. At the time, shop owners and managers faced a shared challenge: how and where to find new technicians. My intent was to come up ways for the industry to discuss ideas on how to solve this problem. Since then, our industry has encountered new unexpected challenges due to the pandemic. In light of the recent changes in shops across the country, I felt it was appropriate to rename the column to “Add name of column” and focus on ways body shops can help recruit, develop and retain technicians for the

future. I encourage you to reach out to me with any ideas you would like to share with others in this forum. Workforce development and technician recruitment remain a top priority for repair shops across the country. Aaron Schulenburg, executive director of the Society of Collision Repair Specialists (SCRS), said there are some unique initiatives currently taking place in the industry. “The reality is the gap we have is far too wide for any one program to simply wipe away,” said Schulenburg. “The more opportunities there are to pull people into this industry, bring them up to speed with what they need and get them ready to be producing on the shop floor, the more the industry will benefit.” During the SCRS open board meeting in July, the association invited two educators from Ranken

A few years ago, John Helterbrand recognized many of the students graduating from the automotive collision repair program at Ranken Technical College in Missouri couldn’t find a job. Although they had successfully earned their associate’s degree, were eager to work and had a good work ethic, the department chair of the program said they weren’t being hired by the collision repair industry. “As an educator, that’s a big problem,” said HelJohn Helterbrand, right, department chair of the automoterbrand. tive collision repair program at Ranken Technical College, with students Spencer Woodall and Robert Burkett As a result, he set out to make some changes. Heland how they are making a differ- terbrand reached out to the school’s ence. advisory board, and then talked to students to learn about their conCreating Lifelong Learners at Ranken cerns. He soon found retention was Technical College one of the main issues. Technical College and Matrix Trade Institute to share information about the programs they have established

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“Students felt they didn’t fit into a shop’s culture or were making a difference; they were essentially lost in the business model,” said Helterbrand. “We’re all so busy doing processes, we forget we’re people.” Worst of all, according to Helterbrand, he found employers were often shortsighted and convincing students they didn’t need an education.

Two students at Matrix Trade Institute mapping a vehicle with one of the institute’s blueprint/ technical writing stations

“For a student, who has low self esteem, that’s detrimental for their success because they always feel like they aren’t completing something,” said Helterbrand. Helterbrand also reached out to several OEMS in the industry with internships programs, including Toyota, Honda, GM and Ford. He found retention was very high within these programs and wanted to learn more about how they keep students motivated. “The OEMs do a very good job of what I call ‘culture experience,’” he said. A pilot project was then initiated at Ranken College using the best practices from the OEM programs. It consists of five semesters of learning, which includes a semester of aluminum training. As part of Ranken’s program, students are paired with a mentor. Together, they follow an operator game plan, outlined in a booklet that walks them through the learning process. The intent is to keep track of what is accomplished, so neither the mentor nor the student becomes overwhelmed. “The idea behind the automotive program is to make somebody productive on Day One,” said Helterbrand. This may include teaching students about tear down methods, detailing or R&I. Industry training

is provided from organizations such I-CAR, SP/2 and ALLDATA. A set of tools is also given to each of the students. “If we are going to put our students to work, we need to make sure they have tools,” said Helterbrand. “We don’t want them digging in other people’s toolboxes. They need to have something they feel is theirs.” In addition, students learn about shop culture and develop interviewing skills. The goal is to find a place for them to work in the industry after the first eight weeks of hands-on training. Helterbrand said Ranken Technical College and other accredited technical colleges and high schools must ensure students are receiving high quality education so they are marketable when they graduate. “The industry plays a very big role in this,” said Helterbrand. “We have to be able to help students prepare themselves for the industry.” Working together, his hope is they create lifelong learners who aspire to be part of the industry for the long term. More information about the pilot program is expected to be announced in late summer 2020. Implementing Hands-on Efficiency Training at Matrix Trade Institute Dustin Peugeot, CEO and co-founder of the Matrix Trade Institute, said it’s critical to look at workforce development and technician training through the lens of a student. “If we forget that, whatever kind of education or training we provide won’t resonate with the student,” he said. The Matrix Trade Institute was established two years ago in Beachwood, OH, and is currently expanding to Detroit. “We’re the new kid on the block but fortunately, we have done more things right than wrong and built some nice momentum,” he said. Peugeot said that too often, employers find that entry-level technicians don’t have the proper training or skills needed to be effective and productive on the shop floor. As a result, Matrix assists employers retain and grow the next generation of technicians. Peugeot said the goal is to create an environment

where shops ultimately hire fewer employees, by boosting productivity and creating a cohesive culture. “We believe the best recruiting model is a great retention model,” said Peugeot.

Nico is a student at Matrix Trade Institute

Their focus is to “revitalize, retain and recruit.” “We all fight that battle of try-

ing to get the best and brightest to feel good about entering the trades,” said Peugeot. “We have to put forth the effort to make that as appealing as possible, not only for trainees, but also for the people in their lives who need to support and be proud of their decision.” He stressed the importance of investing time and energy into the development of current employees. The first step is talking to employers about the various ways they can encourage their teams to become more involved in their own development and plot a career path, based on training, education and growth. By taking this approach, Peugeot said employees will never have a reason to leave the business, because they are being provided with all of the skills required to do their jobs effectively. The next step is revitalizing employees by investing in their skills and growth, offering specific skills training and increasing production. Ultimately, Peugeot said this allows shops to recruit differently and find employees to focus on specific

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autobodynews.com / SEPTEMBER 2020 AUTOBODY NEWS 39

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National News

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

with Ed Attanasio

CCC Photo Estimates and AI-Supported Claims Spike in Response to COVID-19 more than doubled from January to April, as carriers are accelerating use and adoption of digital tools in response to COVID-19. Sisk“Industry use of photos for method of inspection has been growing and insurers are seeing benefit to both cycle time and customer satisfaction,” said Susanna Gotsch, director, industry analyst for CCC. “The recent spike is likely indicative of a with Chasidy Rae new Sisknormal as we’re seeing greater use of digital by carriers that have been in market and new insurers coming online with digital solutions.” CCC also reports a similar trend in estimates written using CCC® Smart Estimate, the world’s first AIguided estimating solution. Smart at a record claims have expanded Estimate applies AI and estimating with Victoria Antonelli pace exceeding double-digit growth logic to photos captured with Quick through May of this year. Estimate. Many shops that used to think of CCC’s Senior Vice President of photo estimates as an option are now Product Management Jason Verlen making them the norm for a wide has extensive experience in the softrange of reasons. ware industry, with specific experti CCC’s statistics show the rapid se in product management, big data adoption of digital technology is in and analytics. Before joining CCC with Gary Ledoux direct response to social distancing in May 2015, Verlen spent five years and work-from-home protocols initi- at IBM, where he was VP of big data ated to combat COVID-19. The com- analytics. “The use of AI-supported claims has accelerated from steady adoption by industry leaders to a massive increase in use and adoption by the with Gary Ledouxindustry at large,” Verlen said. “Our data, and the conversations we are having with customers, strongly suggests that this point in time will mark a digital revolution in claims.” “We’re seeing every industry embracing new technologies, rethinCCC’s Senior Vice President of Product Manageking how they work, and focusing ment Jason Verlen reported the usage of CCC® with Stacey Quick Estimate, the company’s mobile photoPhillips on personalizing experiences for estimating solution, has more than doubled their customers. The insurance infrom January to April of this year in response dustry is no different.” to COVID-19 By creating an easy-to-use syspany’s industry data indicates the in- tem for customers, insurance adsurance industry recently surpassed 3 justers and shops alike, Verlen has million estimates initiated leveraging seen all three parties using more and photo technology, sinceEd tracking be- more photo estimates than before. with Attanasio gan in 2018. “The adoption rate was already The company also reports the going up, but then the pandemic turpercentage of claims processed ned it into a complete transformation,” through CCC® Quick Estimate, its he said. “Shops are more concerned mobile photo estimating solution, now about safety for its customers At any point, a piece of technology can go from being discretionary to essential, and in many cases, this is what’s happening now with photo with Chasidy Rae estimating within the collision repair industry. Recently, CCC Information Services, Inc. (CCC) reported photo estimates and AI-supported insurance

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and employees for obvious reasons. More and more insurers are asking for our mobile photo estimating solution and shops realize that they’re

“It’s providing a vastly better and safer consumer experience and we’re getting more and more users every month,” he said. “We know from history that people will use technology to adapt for whatever reason, and then don’t change back. The pandemic has made photo estimating systems more relevant than ever before and shops that were reluctant to use them are now embracing this technology.” Another reason CCC’s photo estimating is quickly CCC’s statistics show the rapid adoption of digital technology gaining in popularity is the is in direct response to social distancing and work-fromfact the technology is better home protocols initiated to combat COVID-19 and the public is more comgoing to get more work by making it fortable using it on a daily basis. part of their processes.” “There was a little friction two to Those who are adopting the sys- three years ago because the first getem now will likely use it for the long neration of any technology is always going to be inferior to the technology term. Verlen said.

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40 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com

with Bruce Roistacher Midwest_Issue_0920.indd 40

8/17/2020 7:40:38 PM

it replaces,” Verlen said. “One of the main issues back then was the quality of digital cameras in cellphones, but you look at them now and they are amazing. The enhanced camera capabilities lead to greater clarity, and we’ve applied technology to guide users in taking the right pictures, so picture accuracy has improved, adding a whole new level of credibility, which is so important, especially for shops that are using it for the first time.” CCC offers the industry’s only end-to-end digital auto insurance experience, from telematics data used by insurers for policy quotes and premium discounts, to incident management, where telematics can be used to alert an insurance carrier after a crash event, to photo- and AI-powered applications for repair, total loss and casualty claims management. Using mobile, AI and IoT together with its industry platform, CCC connects the broader auto insurance ecosystem supporting more than $100 billion in transactions each year. In June, CCC announced the availability of CCC® Quick View, a photo-guided vehicle inspection so-

lution. Quick View enables auto underwriters to efficiently and affordably complete vehicle inspections virtually by offering policyholders a mobile app to easily capture vehicle photos.

When CCC’s patented Damage Detection Heatmaps® are applied, shops and insurer can easily assess a vehicle’s condition, including pre-existing damage

Once photos are received, CCC’s proven AI-enabled photo analytics and Damage Detection Heatmaps® are applied, allowing insurers to assess vehicle condition, including the identification of pre-existing damage. Quick View also makes it easy for insurers to assess the presence of custom equipment. Policyholders can capture and share photos at their con-

venience typically in five minutes. Early use of Quick View by a large, national insurer shows marked improvements in cost, speed and the identification of pre-existing damage. Specifically, Quick View reduced costs by 75% over manual inspections, led to 60% of inspections being completed in less than 24 hours and identified pre-existing damage on more than 15% of assessed vehicles. “Insurers are looking to balance the need to understand risk with the ability to efficiently and consistently conduct vehicle inspections,” said Naved Siddique, CCC’s group vice president, insurance services group. “Quick View offers policyholders a guided experience to make photo capture easy, while AI and heatmaps help insurers with their virtual vehicle assessments. “Quick View has additional inherent value as vehicle photos can be integrated with CCC’s claims solutions, making them readily available for review by insurers should a physical damage claim arise in the future,” Siddique said. “We’re excited to apply our mobile, AI and

heatmap capabilities to the inspection process, supporting the broader needs of our insurance customers.” CCC Quick View empowers drivers to carry out photo collection digitally and at their convenience. Insurance carriers can use digital photos to be more productive and effective in determining the condition of a new policyholder’s vehicle. CCC Quick View offers features such as guided photo capture, which enables consumers to receive a Quick View invite, prompting and guiding them through photo collection and submission and geo-coding that verifies where photos were taken, helping identify garage location. It also enables users to take photos that can be integrated with CCC’s claims solutions, making them easily available for comparison if a physical damage claim is initiated under the applicable policy in the future, allowing carriers to potentially mitigate prior damage claims. www.autobodynews.com

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autobodynews.com / SEPTEMBER 2020 AUTOBODY NEWS 41

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National Associations with Stacey Phillips

SCRS Open Board Meeting Highlights Include Presentations About Pressing Industry Topics The collision repair industry recent- focus,” he said. “We all feel fortuly had the opportunity to attend the nate that SCRS has a role of support Society of Collision Repair Special- for its members and we have taken a ists (SCRS) open board meeting, held lot of great pride in doing that.” virtually in July. During his executive director’s “The open meeting was for report, Schulenburg shared some of anyone wishing to learn more about the COVID-19 resources the organithe current state of the association’s zation provides on the SCRS website activities and pressing industry top- (https://scrs.com/covid19-resources), ics,” said Aaron Schulenburg, ex- which includes information about workplace preparation and health, ecutive director. Open to association members and financial aid and relief. and non-members, the meeting in- He also mentioned the organicluded updates and presenzation’s involvement with tations from SCRS staff and other entities and industries committees outlining curto help drive the industry rent initiatives. The agenda forward. These include noalso featured guest presentable groups such as the tations and comments from American Society of Assoindustry colleagues. ciation Executives, the U.S. John Eck, GM Chamber of Commerce and The following is a sumcollision manager mary of some of the highthe National Federation of lights from the meeting, which includ- Independent Business, as well as newed a presentation about GM’s ADAS ly-formed coalitions like the Ameridocument, information about data ca’s Recovery Fund Coalition. privacy and the SCRS award-winning “We are working to identify ways to help the small businesses we repBlueprint Optimization Tool (BOT). At the start of the meeting, resent and the information we could Schulenburg announced SCRS would bring to the marketplace,” he said. During the open board meeting, be holding a live electronic vote of board members for the first time. John Eck, collision manager at GM, Following the meeting, the winners and Chris Blackmore, GM program were announced. They included the manager, shared information about incumbent, Amber Alley of Barsot- GM’s Advanced Driver Assistance ti’s Body and Fender; Tony Adams Systems (ADAS) support document of Weaver’s Auto Center; and post-collision inspecand John Mosley of Clinton tion. The four-part ADAS docBody Shop. All three will sit ument outlines the answers on SCRS’s board of directors for the next three years. to questions that arose as a “We had five outstandresult of GM’s attendance ing candidates,” said Brett at the VeriFacts Automotive Bailey, SCRS chairman Brett Bailey, SCRS summit in February. The of the board. “The wealth sections include system dechairman of knowledge that each of scription, component locathem has is off the charts. Whoever tion, calibration and slow calibration. wins the election in those three spots “Several in the industry pressed will do a great job.” us to help identify ADAS terminolo Since the start of the pandemic, gy, abbreviations and component loSchulenburg said the situation has cations as well as how to calibrate,” impacted every one of its member said Eck. businesses. As a result, the organiza- This technical document, Doction has strived to offer guidance and ument ID #5577683, is available assistance to members. with GM Service Information (SI) “It certainly has been something and also as a free PDF document on that has taken a significant amount of GM’s website: https://www.genuine

gmparts.com/pdf/techinfo/gm-driver “You want to make sure that the -assistance-systems-aid.pdf. right security wording and legal doc Blackmore then talked about GM’s umentation is in place in all those collision inspection process. agreements to not only protect your collision center, but “We recognized that the requirements process we laid all the vendors you work with, the customer and the data proout for a collision are exvider,” he said. tremely labor-intensive and He advised shops to look vehicle invasive,” he said. “We’ve been working on at what he referred to as sereviewing that process and Chris Blackmore, GM curity detection and response program manager document since January.” capabilities. “You want to work with partners This involves talking to other OEMs and working closely with who are proactively looking to ensure that there is nothing egregious taking GM’s internal engineering team. He outlined GM’s draft concept place, data is always being protected, in regard to post-collision inspection, and providers have a security officer which includes the steps for visual in- in place or are audited by a third-parspections and affirming diagnostics. ty organization to make sure data seIf approved, a final document will curity is the No. 1 priority,” he said. be available to the industry He then offered recommendations on what to look with details and photos. Schulenburg said SCRS for in a security partner: fields numerous concerns from members in regard to ▪ Third-party certification data privacy. ▪ Annual investment in en “Data protection is a hanced security very important issue right Brandon Lauer, vice ▪ Storage solutions that abide now,” he said. “We believe president of business by GDP laws that electronic commerce development and ▪ Team members dedicated client experience for needs to take place, but we to security ClaimsCorp. should be able to count on the ▪ Full transparency of data companies that we are working with usage that it takes place responsibly.” ▪ Deletion practices He then introduced Brandon ▪ Auto Claims Economy industry Lauer, vice president of business de- knowledge velopment and client experience at ▪ Strong data transfer and protection ClaimsCorp., who talked about the processes proactive steps businesses can take ▪ Data usage agreements in regard to data privacy. Lauer offered tips on how shops At the close of the meeting, Schulencan protect their businesses. First, burg shared information about the award-winning SCRS Bluehe stressed the importance of print Optimization Tool always asking for consent and (BOT), powered by NuGen authorization from customIT, an OEC company. ers. Next, he said companies should evaluate their solution “We worked with Nupartners. This includes askGen IT due to their treing where the data is stored, mendous development rewho has access to it and Pete Tagliapietra, sources and shared vision business development in what we could accomhow it is transferred. leader at NuGen IT, Lauer recommend- an OEC Company plish with the BOT,” said ed leveraging data storage Schulenburg. providers for multiple solutions and The BOT was the recipient of a carefully reviewing all agreements 2020 SEMA New Product award and that require data sharing. See Meeting Highlights, Page 45

42 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com

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ge 45 autobodynews.com / SEPTEMBER 2020 AUTOBODY NEWS 43

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Midyear Updates cently hired Chris Abraham, former CEO of Service King, and a team of acquisition professionals with expectations of growing substantially. Oklahoma-based Collision Works added eight shops with a large acquisition last year, and now operates 33 locations in Oklahoma and Kansas. The Collision Works team is sized to add more capital and acquisitions. Franchise and Affiliation Opportunities Accelerate Franchisors and banner networks are finding increasing success as operators seek multiple ways to increase partnerships and revenues. Driven Brands’ portfolio of franchisors—CARSTAR, ABRA, MAACO and FIX USA—is continuing to add franchisees, as well as expand its portfolio of other automotive industry participants. Driven’s April acquisition of FIX USA and its largest franchisee, Auto Center Auto Body, reinforced its hold on most of the “waterfront” franchise opportunities. (Full disclosure: Focus Advisors represented FIX USA.) Two banner groups, CCG and 1 Collision are growing as well. 1 Collision, which has now merged with Canada-based CSN, is expecting to rapidly add new affiliates to its current U.S. network of 50 shops. Together, the combined companies have more than 280 shops. California-based Certified Collision Group now claims more than 450 shops with $2 billion in gross revenues across the U.S. With some of the country’s largest independent MSOs in the fold, CCG is focused on helping them gain additional DRP and vendor relationships. Our Expectations Our best estimate is that 2020 will end with revenues annualizing at

80% of 2019 revenues. A realistic expectation for 2021 is that shop revenues will return to 2019 revenues. Miles driven will continue to be negatively impacted by a slowly returning economy, but positively impacted by people’s willingness and need to travel more securely without exposure to potential infections. With many more vacation and business trips being taken, miles driven should be positively impacted. The Federal Reserve has been cautioning that damage to the entire economy is profound, deep and expected to impact us all for years ahead. So, while we are inclined to be optimistic, we believe caution is more realistic. When there is a widely available and distributed COVID-19 vaccine, revenues will accelerate rapidly as confidence in normal economic activity returns and overall economic growth begins to accelerate. What is the net result for the collision repair industry? Continued uncertainty, but not widespread disaster. Questions we answer every day: Should I sell now or should I wait two years until the economy and my revenues improve? For some folks, their age and their lack of a successor dictates they sell now. Others with a succession plan—or, even better, a growth plan—have the best of both worlds. Acquirers are still looking favorably on targets today. In two years they may be less aggressive because they will have already bought their key platforms and may only looking for smaller fold-in acquisitions. For sub-regionals determined to grow into super regionals, accessing capital today is likely to be easier than in two years because of strong PE interest. Values are always suppressed when there are many sellers and a limited number of buyers. If everybody is heading for the exits at the same time, there is a danger some

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deals just won’t get done and that acquirers will use that opportunity to reduce valuations. Everything else being equal, savvy sellers prefer to go into the market when there are more buyers and fewer sellers. For many owners, it’s a balancing act between the growth they expect in the years ahead versus the opportunity to sell when there are multiple buyers willing to make them fair offers. With trillions and trillions of dollars being spent by the government to prevent the collapse of the economy, there will come a time, sooner rather than later, where taxes will rise to begin reducing the debt. Our expectation is that capital gains taxes are likely to rise first. Closing a transaction in 2020 may avoid a significantly greater tax hit in 2021. What kind deal structure is possible today? Acquisition deals are likely to be structured differently than in the past. We expect less cash up front and more earned out by achieving performance hurdles over time. Sellers may also be asked to finance

part of the acquisition price. On the plus side, many of the private equity investors are creating vehicles in which sellers can roll over a portion of their sale proceeds into equity ownership positions. Will these new investors actually close on the offers they have extended? Most professional buyers that issue Letters of Intent have an established track record of honoring their purchase commitments. Even in the time of COVID, deals negotiated before the pandemic hit were largely fulfilled, although some had structural and hurdle requirements added. Inexperienced or first-time buyers may have a harder time holding the pricing of their offers as their private equity sponsors have fewer transactions under their belts. And if there is a long-term recession of incredible depth, that would be a material change that would impact valuations and closings. We thank Focus Advisors for reprint permission.

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44 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com

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Lifelong Learners functions that work well in the business and increase throughput. For shop owners looking to ﬁnd the next generation of the workforce, Peugeot encourages them to set up their businesses in such a way that

productive members of the business the ﬁrst day of an internship. Similar to the program at Ranken College, participants receive a tool set and are shown how to organize it. Rather than relying on outdated textbooks, the programs focus on modern technology, such as interactive, game-style learning simulation.

“We’re the new kid on the block but fortunately, we have done more things right than wrong and built some nice momentum,” — Dustin Peugeot they are considered the best landing spot for a recruit, regardless of their education. “We have to look within before we can start complaining about Millennials or work ethic or people wanting to get into the trade,” he said. Currently, Matrix offers 20-week programs in collision repair and refinish, automotive maintenance and service advisor training, all of which focus on a hands-on efficiency-based curriculum. Students typically intern after the first two or three weeks. Peugeot said students are seen as

They have found this enables individuals to perform, feel valued and grow within their internships. The majority of the time, Peugeot said the internships turn into full-time employment. Peugeot said it’s critical to help the industry become a better place to onboard employees and develop employees who work hard, show up on time and want to work. “We can’t blame the students of this generation,” he said. “We have to look within and ﬁnd out how we can become better employers, recruiters and growers of talent.”

Continued from Page 16

Continued from Page 42

Measurement Issues

Meeting Highlights

customer safety. That’s not okay. We need information that’s accurate, and we need collision repair professionals following that information to ensure we’re putting our customers back in vehicles that are safe.” General Motors in July also said its published requirements for inspections, which it currently says must be completed “after any collision,” will be reviewed to see if they can be scaled back for vehicles needing only minor repairs. “We recognize that the requirements and processes we had laid out… are extremely labor intensive and vehicle invasive,” GM’s John Eck said. A survey of 17 automakers showed GM and Subaru are the only two that require extensive inspections following any collision, regardless of severity. Eck emphasized that prior to its new procedures being ﬁnalized, GM’s current post-collision inspection requirements remain in place. “Until then, nothing has changed,” Eck said.

2020 SEMA Global Media award. Schulenburg said the windows-based application is an automated version of the Guide to Complete Repair Planning, providing collision repair facilities with an intelligent, easy-to-use estimate analysis tool. “It immediately identifies labor operations, line items and customizable charges that could be overlooked on an estimate,” he explained. “Based on the feedback and insight we’ve received, we’ve identified a very successful utilization of the tool in identifying the opportunities being missed and the financial impact for the end user,” said Pete Tagliapietra, business development leader of NuGen IT. Live demos of the BOT are being held every Wednesday at 2:30 EST. An access code is available on the SCRS website: https://scrs.com/bot/. Visit https://scrs.com/events/ to learn more about the next SCRS open meeting and visit the website for membership information.

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Midwest_Issue_0920.indd 45

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ARA Takes Summer Road Trip Virtual, Annual Convention to Follow Suit by Chasidy Rae Sisk

The Automotive Recyclers Association (ARA) planned its inaugural ARA Summer Road Trip for July 2325, with the intention of connecting up-and-coming industry leaders with experienced auto recycling veterans through tours of several ARA member facilities. The Road Trip was to be an evolution of the association’s Future Leaders of Automotive Recyclers Educational Summit (FLARES), established in 2018. The tour was scheduled to begin in Chicago, but unfortunately, in the days leading up to it, Chicago Mayor Lori Lightfoot issued an emergency order requiring two weeks of self-quarantine for travelers from 15 different states due to COVID-19 concerns. Although ARA was forced to postpone the Road Trip out of precaution for members’ health and safety, ARA Director of Member Relations Vince Edivan, who had planned to act as host of the trip, was able to safely travel to Chicago, since his home state of Virginia was not on

the restricted list. Edivan took the tour virtual, posting pictures and videos to the organization’s social media accounts to allow would-be attendees to join him for the road trip experience. Edivan began his road trip on July 23 by visiting CAR Auto Recyclers in North Manchester, IN, and Legal Chop Shop in Fort Wayne, IN. Over the following days, he visited Auto Parts City in Gurnee, IL, and Rockford’s Auto Parts in Rockford, IL, as well as Bionic Auto Parts & Sales in Chicago and Northlake Auto Recyclers in Hammond, IN. Edican also dined with the owners of ABC Auto Parts in Riverdale, IL, owned by Jim Watson, ARA past president, and his brother, Joe Watson, current president of the Auto & Truck Recyclers of Illinois (ATRI.) “All locations are either CARand/or Gold Seal-certified automotive recycling facilities, having achieved the top tier of certification for general business practices, environmental and safety issues, and customer service offered by ARA and recognized by the industry,” Edivan shared. “It was a rewarding experience for all,

as the ARA members who graciously agreed to open their doors to their peers were able to still reach the ARA membership at large through videos and postings on ARA’s social media platforms.” Sandy Blalock, executive director of ARA, added, “While the challenges presented by the COVID-19 pandemic made the widely-attended Road Trip unrealistic, ARA was able to adapt and leverage the reach of social media and technology to bring ARA members together and share knowledge. “Overall, it was a great opportunity for ARA to get back out and visit face-to-face with some of our great Illinois and Indiana members, and ARA looks forward to rescheduling the Road Trip as soon as safely possible,” Blalock said. ARA has also made the difficult decision to shift its 77th Annual Convention & Exposition, scheduled for Nov. 11-14, to a completely virtual event. “Ultimately, the health and safety of the membership and staff is our top priority,” Blalock said. “After many discussions, serious consideration,

and with the safety of all attendees at the forefront, we have decided to re-direct all our efforts into transitioning the 77th Annual ARA Convention and Exposition into a virtual conference. We were hopeful that this year’s convention could remain a live event, but the current state of affairs simply presents too much uncertainty and risk at this time.” “For 76 years, the ARA Annual Convention and Exposition has been the gathering place for the professional automotive recycling industry and an incredible place to network, learn and conduct business,” said ARA President Scott Robertson. “ARA is the voice of the professional automotive recycling industry and it is our duty to provide information, education and opportunity to automotive recyclers from around the world—even in the midst of a global pandemic. “Yes, it will look different, but it will still be the extraordinary experience that our attendees have come to expect year after year.” For more information on ARA and the upcoming 77th Annual Convention & Exposition, visit a-r-a.org.

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for e!

CIECA Webinar Highlights the Importance of OEM Certification by Emmariah Holcomb, glassBYTEs.com

“You’re making the investment today for the return down the line,” said Connor Smith, CARSTAR original equipment manufacturer (OEM) manager, as he began describing the value in auto glass businesses gaining OEM certifications in an industry webinar. The webinar, The Importance of OEM Certification, was hosted Aug. 11 by the Collision Industry Electronic Commerce Association (CIECA) and took a closer look at the long-term benefits available to the industry. Smith shared his insight on why now is the time for businesses to start looking into becoming OEM certified, which certifications are the most beneficial to shops, what the return on investment (ROI) looks like once gaining certifications and what the future of certifications look like. Automotive technology plays a large role in why Smith thinks “now is the time to look into OEM certifications.” During the webinar, Smith

mentioned some of the related challenges associated with newer-model vehicles. “Everyone knows your standard Corolla is more high tech now than it was 10 years ago,” said Smith. “All of the advancements and safety-marketed features makes repairs more challenging, especially when you factor in the

future. He stressed the importance of always having a good relationship with your local dealers. “The first thing you should do is research various certification requirements and other needs,” said Smith. “Be aware that some certifications will require dealer sponsorships—this is why building a relationship with them is key.”

“There’s one consistent thing, the OEs are here and they aren’t going away,” — Connor Smith training. The best way to get OEM certifications of any type is through training.” When it comes to which certification shop owners should consider, Smith had a simple but direct answer: “Business owners should choose the one that they have the most equipment for and that doesn’t need a huge investment to start.” He advised industry business owners to look at their local dealerships and inquire if they need or have a body shop. This, according to Smith, can lead to a possible partnership or sponsorship in the

There were a number of attendees concerned about the ROI associated with gaining specific OEM certifications. Smith responded to their concerns by stating, “This is a long-term game and you should think of this like a 401(k) for your business; it’s wrong to want shortterm gains from these certifications.” Although the cost associated with certifications is high up front, according to Smith, there are several areas for future growth. By choosing this type of investment for your business you could gain

Honda is Asking Office Staff to Work on Assembly Line by Kurt Verlin, The News Wheel

Are you currently waiting on the delivery of a Honda you ordered? When it arrives, it may have been assembled by one of Honda’s accountants. According to a report from local radio station WOSU, white-collar employees at Honda’s plant in Marysville, OH, have been asked to fill in for a rapidly dwindling blue-collar workforce.

Honda is still scrambling to regain normal inventory levels after its factories were shut down between March and May, and it can’t backfill assembly line positions fast enough to recover. “Regardless of whether or not you wanted to, you could be subject to it,” said a Honda employee

who wished to remain anonymous. “They took volunteers first, but my understanding was they didn’t receive many volunteers for this activity, so then they made it mandatory.” WOSU was able to procure an email in which a Marysville general manager outlines why Honda employees working in the research and development, purchasing and accounting departments were requested to work on the factory floor. Chief among the reasons were COVID-19 and the $600 benefit that unemployed workers are receiving until the end of July. Though Honda is taking precautions—daily temperature scans for employees, mandatory masks and the ability to test for COVID-19 on-site—it confirmed it has recently seen an increase in cases across North America. Honda’s anonymous worker believes that whenever an assembly line worker gets sick, they’ve been in contact with 40 other workers. People in the regular assembly line workforce are also absent for other COVID-19-related reasons,

such as finally taking the time to receive elective surgeries they had initially postponed because of the

pandemic, and dealing with the medical, familial and other impacts brought on by the coronavirus. According to Jamie Karl of the Ohio Manufacturers Association, Honda’s Marysville plant already needed workers before the pandemic, which has only made the situation worse. Honda says it is targeting “sometime in August to return to proper staffing levels,” but with the COVID-19 situation only getting worse in the U.S., it is difficult to imagine how the automaker will pull that off. We thank The News Wheel for reprint permission.

additional technicians, marketing support from the OEs, which include an influx of brochures as well as digital content, and more. “The potential for additional techs could also get your business additional cars within the year as well, you just have to keep reminding yourself that it’s a big investment upfront, but a minimal maintenance investment,” Smith said. Going Forward According to Smith, the future of OEM certifications are uncertain, but they are a big factor in the “right now.” “There’s one consistent thing, the OEs are here and they aren’t going away,” said Smith. He also stated these types of certifications are becoming a standard which may lead to issues with future repairs if your shop or technicians aren’t certified. “I honestly think it’s worth the investment to keep your business,” Smith concluded. We thank glassBYTEs.com for reprint permission.

NICB: Thousands Left to Rebuild After Isaias As Hurricane Isaias leaves a path of destruction in its wake, the National Insurance Crime Bureau (NICB) warns everyone as floodwaters recede, many flood-damaged vehicles are left. This provides an opportunity for fraudsters to dupe innocent car buyers. Dishonest dealers can buy flooded vehicles, clean them up and sell them to unsuspecting buyers. Many of these vehicles come on the market after natural disasters. NICB recommends buying from a reputable car dealer; to check the car thoroughly looking for water stains, mildew, sand and silt under the carpets, headliner and behind the dashboard; and to look under the hood for signs of oxidation. Pull back the rubber “boots” around electrical and mechanical connections for these indicators. Ferrous (containing iron) materials will show signs of rust; copper will show a green patina; aluminum and alloys will have a white powder and pitting. Source: NICB

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