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VOL. 1 ISSUE 8 NOVEMBER 2011
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East Coast Shops and Dealerships Hit by Hurricane Irene Try to Clean Up in the Wake of More Rain Storms Following flooding and damage done by Hurricane Irene and Tropical Storm Lee, body shops and dealerships on the east coast were not prepared to have to deal with heavy rain storms. In northeast Pennsylvania and western New York state heavy rain drenched an already inundated area with more water the week of September 26. During Hurricane Irene, rushing water ripped the bay doors off the service department at Maroon Kia in Wayne, NJ. The water was so powerful it washed two front-end alignment machines, each weighing an estimated
2,800 pounds, from the service bays into the nearby Pompton River. About
The opening general session at NACE/CARS, introduced by Mitch Schneider, CARS Chair, and Ron Nagy, NACE Chair, (r). Autobody News has extensive coverage of the show at: www.autobodynews.com/ events/nace-2001.html Stay up-to-date at this year’s SEMA show with Autobody News. Visit http://www.autobodynews.com/ events/sema-2011.html for more SEMA show coverage.
Maroon Kia’s bay doors were damaged and their shop floor flooded during Hurricane Irene in Wayne, NJ See NE Flooding, Page 8
Health Care Panel at:
NACE/CARS 2011 Moderator, ASA’s Bob Redding
Terri Seefeldt, Rogers Benefit Group
Brock Bulbuck, The Boyd Group
Steve Grimshaw, Caliber Collision
Cathy Bonner, Service King
Rollie Benjamin, ABRA Auto Body and Glass
See preview at: autobodynews.com Don Seyfer, Seyfer Automotive
Jim Houser, Hawthorne Auto Clinic
An auto service-oriented Health Care Panel at NACE/CARS revealed surprising misconceptions, passionate disagreement, divided opinions and competing priorities for Health Care and how it should be paid for and managed in America. A three-part series on Health Care and its likely impact on shop owners begins here next month.
CEOs of Four of the Largest MSOs in the Industry hold first-time MSO Symposium at NACE/CARS See MSO Insights, Page 14
The 2011 SEMA show will occupy the Las Vegas Convention Center from October 31 to November 4 and attendance numbers continue to climb as the show draws closer. The show boasts over 2,000 exhibiting companies already registered for booths, more than 500 of which are exhibiting for the first time. The ever-popular Paint, Body and Equipment section will also return this year, showcasing companies who offer products, services and equipment suited for the collision repair professional. See page 48 for I-CAR and SCRS RDE Schedule.
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2 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
Contents
Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Assistant Editor: Erica Schroeder Contributing Writers: Tom Franklin, David Brown, John Yoswick, Lee Amaradio, Rich Evans, Janet Chaney, Toby Chess, Mike Causey, Tom McGee, Ed Attanasio, Chasidy Sisk Advertising Sales: Joe Momber, Sean Hartman (800) 699-8251 Sales Assistant: Kristy Navarro Art Director: Rodolfo Garcia
Amato Agency . . . . . . . . . . . . . . . . . . . 28 Autoland Scientech . . . . . . . . . . . . . . . 35 Audi Wholesale Parts Dealers . . . . . . . 61 BASF . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 BMW Audi of Turnersville. . . . . . . . . . . 41 BMW Wholesale Parts Dealers . . . . . . 52 Cadillac of Mahwah . . . . . . . . . . . . . . . . 4 Central Avenue Chrysler-Jeep-Dodge . 21 Chief Automotive . . . . . . . . . . . . . . . . . 31 Circle BMW . . . . . . . . . . . . . . . . . . . . . 43 Classifieds . . . . . . . . . . . . . . . . . . . . . . 63 Cramer Motors. . . . . . . . . . . . . . . . . . . . 6 Dover Chrysler-Jeep-Dodge . . . . . . . . . 8 DuPont . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Equalizer Industries . . . . . . . . . . . . . . . 28 Ford Wholesale Parts Dealers . . . . . . . 51 Fred Beans Parts . . . . . . . . . . . . . . . . . 64 Fuccillo Auto Group . . . . . . . . . . . . 12-13 Garmat . . . . . . . . . . . . . . . . . . . . . . . . . 14 GM Wholesale Parts Dealers. . . . . . . . 49 Honda-Acura Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . 32-33 Hyundai Wholesale Parts Dealers . . . . 39 Jaguar Wholesale Parts Dealers . . . . . 59 Kia Motors Wholesale Parts Dealers . . 53 Kia of West Chester . . . . . . . . . . . . . . . 30 Koeppel VW-Mazda . . . . . . . . . . . . . . . 38 Lazare Kia . . . . . . . . . . . . . . . . . . . . . . 25 Lexus Wholesale Parts Dealers . . . . . . 59 Lynnes Subaru. . . . . . . . . . . . . . . . . . . 18 Malco . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Serving New York, New Jersey, Pennsylvania, Delaware 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. ©2011 Adamantine Media LLC. Autobody News P.O. Box 1516, Carlsbad, CA 92018 (800) 699-8251 (760) 721-0253 Fax www.autobodynews.com Email: news@autobodynews.com
Northeast
COLUMNISTS Amaradio - There is No Such Thing as a ‘Bad Decision’ in Business . . . . . . . . . . . . . . . . 24 Attanasio, Pro-Spray - Busy Shop Clearly Sees Benefits Working with Pro-Spray Solvent & Waterborne. . . . . . . . . . . . . . . . 37 Attanasio - How to Use Five Different Forms of Social Media to Gain Customers . . . . . . 45 Chess - SEMA’s Repair Driven Education and Government Regulations . . . . . . . . . . . . . 52 Franklin - Choosing a More Profitable Market . 55 Gesterkamp - Taking a Fresh Look at an Old Debate—Color Matching, Blending, or Both?. . . . . . . . . . . . . . . . . . . . . . . . . . 20 Insurance Insider - Can the Collision Industry Support Two Major Trade Shows? . . . . . . 44 Schroeder - GW & SON Auto Body—Blending Yesterday’s Service with Today’s Technology. . . . . . . . . . . . . . . . . . . . . . . . 59 Sisk - Moody’s Collision Centers in Gorham, ME, Is Concerned for the People: Co-workers, Community and Environmental Responsibility. . . . . . . . . . . . . . . . . . . . . . 46 Sisk - Richmond, Virginia’s Baugh Auto Body —An Exceptional Shop Made More So by Lythos Studios’ Advertising Expertise . . . . 62 Weaver - Dealing with Angry Customers and Growing ‘Alligator Skin’. . . . . . . . . . . . . . . 35 Williams - A Relatively Young Audi Dealership Makes Quality Pay Off . . . . . . . . . . . . . . . 56 Yoswick - SCRS Affiliate Groups Help Members Address Legislative and Regulatory Issues . . . . . . . . . . . . . . . . . . . 10
NATIONAL 2011-2012 Chevrolet Corvettes Recalled for Rear Hatch Hinges . . . . . . . . . . . . . . . . . . 34 A Profile of the Evolving Collision Repair Marketplace . . . . . . . . . . . . . . . . . . . . . . . 28 AAIA ‘Shop of Tomorrow’ Vehicle Service at AAPEX . . . . . . . . . . . . . . . . . . . . . . . . . 60 AAPEX Learning Forum to Provide 30 A/M Programs . . . . . . . . . . . . . . . . . . . . . . . . . 60 Allstate and Progressive Agree to Settle Patent Litigation . . . . . . . . . . . . . . . . . . . . 51 AM Tow Package Wiring Harnesses for Hyundai/Kia Recalled . . . . . . . . . . . . . . . . 34 At NACE, State Farm Announces Change to Shop Locator to Allow Ranking Based on Internal Performance Score, Will Use ‘Parts Trader’ for DRPs. . . . . . . . . . . . . . . . . . . . 21 CA Dealers Now Required to Sticker Salvaged Vehicles . . . . . . . . . . . . . . . . . . 49 CARSTAR 2011 Holds National Teleconference At Annual Seattle National Conference . . . 18 Chrysler to Invest $165 Million in Body Shop at MI Plant . . . . . . . . . . . . . . . . . . . . . . . . 57 Dollar Thrifty Halts Sale Process, Hertz Still Interested in Acquisition . . . . . . . . . . . . . . 61 DuPont Custom Finishes to Exhibit at SEMA 2011 . . . . . . . . . . . . . . . . . . . . . . . 48 DuPont Exhibit at SEMA Show Live Paint Demonstrations . . . . . . . . . . . . . . . . . . . . 50 EPA Federal Office Response to SCRS Letter on 6H Rule . . . . . . . . . . . . . . . . . . . . . . . . 63 Fiat 500 Top IIHS Safety Pick . . . . . . . . . . . . 57 Florida and Michigan AAA Clubs Join Forces, Now 2nd Largest . . . . . . . . . . . . . . . . . . . 51 Girl Scouts Gear Up at NACE for Collision Hub’s Tools for Success. . . . . . . . . . . . . . 38 GM Introduces Industry-First Front Center Airbag . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 I-CAR Repairability Summit: Don’t Section Ultra-High-Strength Steel . . . . . . . . . . . . . 16 Industry Veteran Alerts ‘Collision Repair Standards on their Way’ . . . . . . . . . . . . . 58 IRS Offers Employers Tax Relief if Workers Reclassified . . . . . . . . . . . . . . . . . . . . . . 50 LKQ Founder Donald E. Flynn Passes Away . 57 MBUSA CEO Lieb Ousted . . . . . . . . . . . . . . . 57 Mitchell Partners with Enterprise Rent-A-Car, Integrates with Update Promise.com to Deliver Services via RepairCenter™ . . . . . 51 MSOs Share Insights During First-time Symposium at 2011 NACE . . . . . . . . . . . 14 NABC Nominees for 2012 Board of Directors Announced. . . . . . . . . . . . . . . . . . . . . . . . 50 State Farm Elects to Settle Three of Gunder’s Customers’ Lawsuits . . . . . . . . . . . . . . . . 54 U.S. Deer-Vehicle Collisions Fall 7 Percent . . 60 Virginia Branded Title for Water Damage Settles at $2500. . . . . . . . . . . . . . . . . . . . 50 Women’s Industry Network Awards Two Scholarships to NACE . . . . . . . . . . . . . . . 60 World’s Oldest Running Car Fetches High Price at PA Auction. . . . . . . . . . . . . . . . . . 55
Indexof Advertisers
REGIONAL AAA Fight New York-New Jersey Toll Hikes . . 6 AASP-PA’s Big E Tool Show . . . . . . . . . . . . . . 4 Allstate, Encompass Insurers Fined for Violating Delaware Insurance Law. . . . . . . . 4 CCAR Recognizes Five New York State Collision Facilities in GreenLink Shop Status Program . . . . . . . . . . . . . . . . . . . . . 4 Dealers Fight to Control NJ Honda Store . . . . . 6 Delaware Local Auto Workers Treasurer Pleads Guilty . . . . . . . . . . . . . . . . . . . . . . . 4 East Coast Shops and Dealerships Hit by Hurricane Irene Try to Clean Up in the Wake of More Rain Storms. . . . . . . . . . . . . 1 Federal Disaster Assistance Extended to Additional New York Counties . . . . . . . . . . 18 FEMA Warns NY Residents to Avoid Scams in Wake of Tropical Storm Lee . . . . . . . . . 36 Fuccillo Kia in FL Unseats NY Family Dealership at Kia Awards . . . . . . . . . . . . . . 4 New Restrictions Sought For Pennsylvania Junior Drivers. . . . . . . . . . . . . . . . . . . . . . . 6 New York’s Suffolk County Had Biggest Insured Property Loss From Irene. . . . . . . . 8 Nissan Leaf Heads to More Markets Including NY, NJ . . . . . . . . . . . . . . . . . . . . . 4 NJ Garage Keeper’s Liability Insurance Reduced to $50K . . . . . . . . . . . . . . . . . . . 6
Management Success. . . . . . . . . . . . . 24 Mattei . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Maxon Mazda-Hyundai . . . . . . . . . . . . 44 Mazda Wholesale Parts Dealers . . . . . 45 Mercedes-Benz Wholesale Parts Center. 40 Mercedes-Benz Wholesale Parts Dealers. . . . . . . . . . . . . . . . . . . . . . . 55 Metric Subaru . . . . . . . . . . . . . . . . . . . 48 MOPAR Wholesale Parts Dealers . . . . 29 Nissan/Infiniti Wholesale Parts Dealers . 62 Nucar Mazda . . . . . . . . . . . . . . . . . . . . 27 Plaza Auto Mall . . . . . . . . . . . . . . . . . . 11 Porsche Wholesale Parts Dealers . . . . 56 PPG . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 RealParts.com . . . . . . . . . . . . . . . . . . . 15 Safety Regulations Strategies . . . . . . . 50 SATA Spray Equipment . . . . . . . . . . . . 26 Scion Wholesale Parts Dealers . . . . . . 57 Security Dodge-Chrysler-Jeep . . . . . . 36 Shop-Pro Equipment . . . . . . . . . . . . . . 19 Star-A-Liner . . . . . . . . . . . . . . . . . . . . . 20 Subaru Wholesale Parts Dealers DE, NJ, PA . . . . . . . . . . . . . . . . . 22-23 Subaru Wholesale Parts Dealers. . . . . 47 Thompson Organization . . . . . . . . . . . 17 Toyota Wholesale Parts Dealers . . . . . 57 VeriFacts . . . . . . . . . . . . . . . . . . . . . . . 16 VIM Tools . . . . . . . . . . . . . . . . . . . . . . . 60 Volkswagen Wholesale Parts Dealers . 54 Volvo Wholesale Parts Dealers . . . . . . 58
www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 3
Allstate, Encompass Insurers Fined for Violating Delaware Insurance Law
Delaware Insurance Commissioner Karen Weldin Stewart has fined Allstate Insurance Co. and its subsidiary Encompass Insurance Co. a total of $50,000 for violations of Delaware insurance law. The fines are contained in two separate consent orders, signed by Stewart this month. The Allstate consent order asserts that the company violated insurance law by failing to provide defensive driving discounts to qualifying policyholders. The Encompass consent order asserts the company violated the law by imposing an accident surcharge on policyholders involved in accidents even though they were not the party at fault. In all, 3,645 Delaware policyholders were impacted. Allstate and Encompass cited computer errors and programming oversight as the cause of the violations and have said the problems have been fixed. Stewart wrote the orders in a way that would allow her to increase the fines up to $100,000 on each company if the problems re-emerge. Stewart said she believes both companies did a good job of notifying and refunding all monies owed to pol-
Fuccillo Kia in FL Unseats NY Family Dealership at Kia Awards
Fuccillo Kia of Schenectady, New York, has relinquished its title as the U.S. dealer with the highest retail volume of Kia sales, according to the Business Review. The crown stayed in the family though; the Schenectady Kia dealership, which held the honor for two years running, was unseated by its younger counterpart, Fuccillo Kia of Cape Coral in Florida. The Cape Coral store beat out 700 U.S. Kia dealerships for the honor. Fuccillo Automotive Group operates 31 franchises in 22 locations. Nine are in the Albany area. The awards, presented last week at the National Kia Dealer convention in Las Vegas, Nevada, recognized the Schenectady store for having the highest retail sales volume for Kia’s Eastern region. The Cape Coral Kia franchise was also named Best New Dealer for 2011. “We’re really doing well there. The guy who placed second did less than half of what we did,” says Billy Fuccillo, owner of Syracuse-based Fuccillo Automotive Group. Fuccillo’s Kia sales are going so well in Florida that the mega auto dealer said he plans to open a second Florida Kia dealership in the next two years. Fuccillo Automotive Group expects to finish 2011 with more than $800 million in sales.
icyholders, which totaled $848,355. However, Stewart said she remains concerned about the effect these types of mistakes have on highway safety efforts, especially her department’s defensive driving program. “One of my goals is to improve our state’s highway safety by getting more Delaware drivers into our defensive driving courses. What is more, I am committed to making sure that drivers who complete an approved defensive driving course get the discount to which they are lawfully entitled,” Stewart said.
AASP-PA’s Big E Tool Show
The Association of Automotive Service Providers of Pennsylvania held their Big E Trade show this month. The event was held Friday, October 14 from 4:30 pm to 10:00 pm and Saturday, Oct 15 from 9:30 am to 3:30 pm at the Valley Forge Convention Center in King of Prussia, PA. The Breakfast Keynote Speaker on Saturday was Scott Luckett, MAAP, AAIA Vice President, who gave a talk titled: “Who Will Service the Vehicles of Tomorrow?”
Nissan Leaf Heads to More Markets Including NY, NJ
The North American arm of Nissan Motors announced that the all-electric Nissan Leaf is expanding its availability in the U.S. Starting September 29, the company is taking orders for the 2012 model year Leaf from consumers in Colorado, Massachusetts, New Hampshire, New Jersey and New York. “A prioritized ordering phase” will be in place for customers in these states who have previously placed a reservation for the Nissan Leaf. On September 26, the company said it will open to the general public a new reservation process for the all-electric car. Nissan plans to take actual consumer orders for the 2012 Nissan Leaf in seven more states, including— Delaware, Indiana, Louisiana, Nevada, Ohio, Pennsylvania, and Rhode Island. Nissan recently announced lowered prices for its home charging system, developed by AeroVironment, which now costs $1,818 for hardware and home installation services. "We aim to make the system accessible to a wider range of consumers," said Brendan Jones, director of Nissan LEAF marketing and sales strategy for Nissan North America. The charging system includes a UL-listed charging dock, on-site consultation, installation, hands-on user training, and a 3-year hardware and service warranty.
4 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
CCAR Recognizes Five New York State Collision Facilities in GreenLink Shop Status Program
Four New York collision repair facilities have received recognition from the Coordinating Committee For Automotive Repair (CCAR) in its GreenLink Shop program, the organization announced. The newly-recognized shops are: Carubba Collision, Buffalo, N.Y. Carubba Collision, Hamburg, N.Y. Carubba Collision, Tonawanda, N.Y. Carubba Collision, Wheatfield, N.Y. “We are proud to recognize the newest recipients of the GreenLink Shop designation, bringing our total to 143 shops since the program’s introduction in January 2010,” said Daren Fristoe, CCAR president and chief operating officer. “We are seeing more and more auto repair facilities incorporate environmental and safety stewardship in their business and marketing plans, and we look forward to greater levels of awareness in the coming months.” All four shops being recognized are participants in the GEICO Auto Repair Xpress (ARX) program. CCAR and GEICO are partnering to promote the GreenLink Shop designation for GEICO’s ARX facilities across the United States. The GreenLink Shop status, which serves to promote consumer
confidence in local automotive repair facilities’ environmental/safety awareness and stewardship, is an extension of CCAR’s CCAR-GreenLink Environmental Compliance Assistance Center and S/P2 Safety and Pollution Prevention E-learning Program. Repair facilities pursuing GreenLink Shop status must maintain high standards in environmental, health and safety (EHS) practices in four categorie. The CCAR initiative recognizes auto service facilities and collision repair shops, with separate criteria for each type of business.
Delaware Local Auto Workers Treasurer Pleads Guilty
On June 7, James Hunter, former treasurer of United Auto Workers Local 1542, pleaded guilty in U.S. District Court for the District of Delaware to making a false statement in records in the Newark, Del. union. He had been charged in January. The charge and guilty plea follow a probe by the U.S. Labor Department’s Office of Labor-Management Standards.
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www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 5
NJ Garage Keeper’s Liability Insurance Reduced to $50K
A new law in NJ (N.J.S.A.39:13-2.1) amends the insurance coverage requirements for damage to property and for liability arising from bodily injury which an auto body repair facility must maintain for a full service license. The law reduces the minimum amount of garage keepers’ liability insurance that a shop must maintain from $300,000 to $50,000. Full service licensed auto body facilities must still maintain insurance coverage for damage to property and for liability arising from bodily injury, including, but not limited to: eligible garage liability or equivalent commercial general liability insurance in a minimum amount of $300,000 or a letter of credit in the amount of $300,000; Garage keepers’ liability insurance in a minimum amount of $50,000 or a letter of credit in the amount of $50,000. Limited full service license applicants and licensees must also comply with these requirements. “This will make the law fair to the shops by not forcing a small shop to purchase more insurance than it needs,” said Charles Bryant of the Alliance of Automotive Service Providers of New Jersey, which proposed and supported the change.
New Restrictions Sought For Pennsylvania Junior Drivers
Legislators in Pennsylvania are considering limiting junior drivers to just one teenage passenger cut down on the number of deadly auto accidents, according to WTAE News Pittsburgh. State Rep. Dom Costa thinks so. The Pittsburgh Democrat co-sponsored House Bill 9, which is being sent to Gov. Tom Corbett’s desk. If Corbett signs the bill into law, it will add 10 hours of night driving and five hours of bad-weather driving to the current 50-hour requirement of instruction that a junior driver needs before getting licensed. A junior driver would only be allowed to have one teen passenger at a time during the driver’s first six months on the road, with exceptions for family members. After six months, the limit would increase to three nonfamily members. Under the bill, drivers could be pulled over and charged with a primary offense if they have a passenger under 18 who is not wearing a seatbelt or in a booster or car seat. In Pennsylvania, the number of deaths from crashes involving 16- and 17-year-old drivers increased nearly 43 percent from 2009 to 2010.
AAA Fight New York-New Jersey Toll Hikes
Auto clubs want a federal judge to stop a toll hike that went into effect in New York and New Jersey last week, calling the plan an illegal fund for unrelated projects like the construction of the new World Trade Center, according to Courthouse News Service. In a 14-page complaint, the Automobile Club of New York and AAA North Jersey detail toll increases dating back from 1975, when bridge tolls jumped from $1 to $1.50 round-trip. The new rates top off at $12 for drivers paying in cash. First announced on Aug. 5, Port Authority originally planned to hike tolls by $4 for E-Z Pass holders and by $7 for those paying in cash, but governors of New York and New Jersey successfully lobbied for an incremental raise, according to the complaint. The adopted plan, which came into effect on Sept. 18, raised tolls for E-Z Pass users by $1.50 this year and called for a 75-cent annual hike until 2015. Drivers without E-Z Pass have to pay a $2 penalty on top of the increased toll. The plaintiffs say the plan suspiciously followed an announcement by the Port Authority’s executive direc-
Dealers Fight to Control NJ Honda Store
Hamilton Honda in Hamilton, NJ, is thriving, but there also has been a firestorm of controversy over how the franchise was awarded and who really is behind it, according to Automotive News. Lawsuits in New Jersey and New York—which could lead to perjury and racketeering charges for some involved—allege that Honda awarded the franchise to former New York Giants linebacker Jessie Armstead and his partner in 2004 as a minorityowned group, when the venture was actually backed by Albany, N.Y.based dealer Don Lia. David Davis, owner of Willis Honda in nearby Burlington, NJ, wanted to expand his territory, but Honda gave the open point to Armstead, who would own 51 percent of the store, and Michael Saporito, a former dealership executive with Huntington Honda in New York, which Lia owns. Davis’ suit maintains that Armstead and Saporito were secretly backed by Lia and that they abused minority-ownership statutes to secure the dealership. When the franchise was awarded, Lia, Saporito and Armstead swore under oath that Lia had nothing to do with the enterprise, the suit alleges. Now a separate lawsuit filed recently by Lia in New York accuses Saporito and Armstead of freezing Lia out of the Hamilton dealership’s prof-
its, after Lia invested $10 million in the startup. The Willis and Lia lawsuits seek unspecified monetary damages. The Willis suit contends that because Armstead is black, Saporito and Lia were allowed to use New Jersey minorityownership laws to bypass state franchise statutes that normally should have granted the nearest open point to Willis Honda. The suit contains documents sent to American Honda stating that Armstead had put $1.015 million into the new venture to have a 51 percent interest in the dealership, while Saporito had put in $200,000 for the 49 percent interest. When asked if any money had come from Lia, Saporito said that he had sold some adjoining land to Lia at a $3 million profit, but that Lia had no stake in the dealership or its real estate. In separate testimony at the time, Lia confirmed Saporito’s statements. Although Lia’s initial filing did not include the signed partnership agreements with Saporito and Armstead, Cohn said: “They will be produced at the appropriate time.” American Honda spokesman Jeffrey Smith said that Honda does not comment on pending litigation. Last week, Willis Honda filed a motion to combine the two suits under one judge’s jurisdiction.
6 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
tor about the reconstruction of the World Trade Center, now expected to cost $3 billion more than previously thought. According to the complaint, Port Authority has more than $484 million in surplus fund for its “integrated interdependent transportation network,” making the toll increase unnecessary. “Any determination as to the reasonableness of the Port Authority’S rate of return must exclude the World Trade Center from the rate base,” the complaint states. “The Port Authority’s inclusion of the World Trade Center in its rate base improperly distorts its rate of return, creating the illusion that a toll increase is justified when in fact the Port Authority’s integrated, interdependent transportation system is providing a significant surplus.” The plaintiffs seek an injunction blocking the current increase and a judgment declaring it illegal. They are represented by Michael F. Fitzgerald of Farrell Fritz.
www.autobodynews.com
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Continued from Front Page
NE Flooding
40 to 50 new and used vehicles were destroyed by the floodwaters, according to a report in Automotive News. The dealership’s building that houses the new-car showroom and service department had severe cracks in the walls and ceilings following Irene. The dealership’s used-car lot was littered with holes—one about 15 feet long, 10 feet wide and 6 feet deep. The National Automobile Dealers Association says it estimates that 10 percent of the dealerships in states affected by the recent storms would be unable to operate due to storm-related damage, according to Automotive News. Maroon Kia sustained major
damage and waterlogged vehicles. Other dealerships said the only impact came from distracted customers
left under 3-1/2 feet of water, according to owner Rob Amadio. Luckily, the shop was able to get out from
Water flooded 4 feet up the walls of McBride Auto Body in Woodland Park, NJ, ruining walls, floors, and leaving a ‘fishy’ odor
McBride Auto Body was able to not only repair but totally renovate their office area following flood damage done by Hurricane Irene
who prepared for the storm rather than shopping for vehicles. Following Hurricane Irene, Station Auto Body in Newark, DE, was
under the flood waters and returned to normal service shortly after the hurricane passed through. Amadio said they did not experience any recurring
ping $500 million from Irene. Virginia and Maryland completed the top five. The estimate was prepared by insurance data provider Verisk Analytics and released on Oct. 17. Among the individual counties affected by Irene, Suffolk County, New York, was followed by Dare County, North Carolina—with more than $200 million of insured
property damage in each—ranked first and second by insured damage. Completing the top five worst-hit counties from an insured property damage standpoint—with more than $150 million in damages in each—are Nassau County, New York; Monmouth County, New Jersey; and Worcester County, Maryland.
New York’s Suffolk County Had Biggest Insured Property Loss From Irene New York State’s Suffolk County suffered the highest insured property loss among the 191 counties affected by Hurricane Irene, according to the latest estimate and reports made by Insurance Journal. New Jersey, New York and North Carolina were the top three states with sustained insured property damage top-
8 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
flooding in the storms at the end of September. McBride Auto Body in Woodland Park, NJ, also sustained flood damage due to Hurricane Irene, and owner Joseph Carioti III took advantage of the mandatory cleanup as an opportunity to renovate some parts of his shop. Most of the flooding damage occured in the office area of the building, since the shop floor is bare concrete, but parts of the business were under 4-feet of water after Hurricane Irene blew through. Thankfully not all of the cars were flooded during the storm, but the business did lose some tools that got damaged by all the floodwater. McBride’s office area is now better than before Hurricane Irene hit, he told Autobody News. Overall, eight counties had estimated insured property damage in excess of $100 million. Verisk Analytics’s estimate, called Verisk Catastrophe Index, was prepared for the District of Columbia and the 13 states and 191 counties within these states that were affected by Hurricane Irene.
www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 9
Industry Insight
John Yoswick is a freelance writer based in Portland, Oregon, who has a body shop in the family and has been writing about the automotive industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). Contact him by email at jyoswick@SpiritOne.com.
SCRS Affiliate Groups Help Members Address Legislative and Regulatory Issues with John Yoswick
State and regional associations—that together represent more than 2,000 body shops—participated in the sixth annual “Affiliate Leadership Conference” organized by the Society of Collision Repair Specialists (SCRS) and held near Chicago in mid-September. SCRS Chairman Aaron Clark said the event is designed to help the national association gather input from its state affiliates on its direction and efforts, as well as to help those groups work with one another and with the national organization. The affiliate groups reported on their recent and upcoming legislative efforts, their interactions with shop and insurer regulators, and other activities and issues in which they have recently been involved. In Montana this past spring, for example, Governor Brian Schweitzer signed into law a bill, sponsored by the Montana Collision Repair Specialists, that prohibits a insurer from “unilaterally disregard(ing) a repair operation or cost identified by an estimating system” that the insurer and shop have agreed to use to determine the cost of repair. Bruce Halcro, a Montana shop owner and president of the association, said getting the state auto dealers’ association involved in backing the legislation was part of what helped push it through the legisBruce Halcro lature, where it narrowly failed just two years earlier. The Montana association this year had also backed a bill that would have allowed body shops and others – rather than only consumers—to file complaints with the state insurance commissioner’s office. That bill was overwhelmingly approved 97-3 by the Montana House, but died in a Senate committee. Jordan Hendler, executive director of the Washington Metropolitan Auto Body Association (WMABA), said that this was the second year the association battled efforts in Virginia to raise the threshold of damage requiring a flood-damaged vehicle to re-
ceive a branded title from $1,000 to $5,000. Proponents—including a state legislator whose vehicle was totaled after the sunroof of his vehicle was left open in a rainstorm—argued that the threshold had been set decades ago, and was unrealistic Jordan Hendler given inflation and the increased value of vehicles. Hendler said her group tried to point out that today’s vehicles have far more electronics than cars had decades ago, and that no consumer should unknowingly buy a vehicle that has had thousands of dollars in water damage. In the end, she said, the threshold was raised to $2,500. Hendler said the association is also working with the Virginia Department of Environmental Quality on a possible shop registration program that could prohibit the large-quantity sale of automotive paint to anyone other than registered shops. A sales tax issue has recently arisen in Indiana, according to Tony Passwater, executive director of the Indiana Auto Body Association. A shop in that state contacted the association after a sales tax audit resulted in a $13,000 assessment plus penalties for failure to collect and remit sales tax on items such as sandpaper and tape consumed in the repair of vehicles. Passwater said the auditor relied on a document that refers only to dealers of new cars and trailers. “There’s no possible way you would infer it had anything to do with a collision repair facility,” Passwater said. “The very last section says a dealer must pay sales tax on shop rags and towels and consumables that are not billed to the customer.” He said he is discussing the matter with the state revenue department in a effort to clarify and resolve the issue. Ron Stamm of the Automotive Service Council of Kentucky said his group expects to make a third attempt next year to push for consumer notification legislation in that state. The association-backed bill, which has narrowly missed making it through
10 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
the legislative process this year and last, would require insurers to include notification of a consumer’s right to select a repair shop on the bottom of printed estimates, and to tell the consumer of that right prior to explaining any direct repair program. The Texas Senate this past March approved a bill to establish an advisory board of shop, insurer, and public representatives to provide recommendations on the regulation of auto insurance in that state, But tthe bill never gained traction in the Texas James Brown House, according to James Brown of the Houston Auto Body Association. Likewise the Senate passed (but the House did not) a bill that would have required insurance companies to
provide written notice to both shops and consumers explaining how their payment policies and claims procedures differ between direct repair facilities and non-direct repair facilities. The bill also would have required insurers to provide to shops, upon request, a written explanation of the requirements to become a DRP facility with that insurer. It also would have made county mutual insurers— which account for about 45 percent of the Texas market—subject to state antisteering and consumer choice laws (from which they remain exempt). More recently and even closer to home for the Houston association, Brown said his group is opposing (in its current form) new shop and auto recycler licensing requirements being considered by the Houston City Council. The proposal sets out new disclosure and documentation requirements, See SCRS, Page 14
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MSOs Share Insights During First-time Symposium at 2011 NACE by John Yoswick
More than 400 shops were represented on a panel discussion at this year’s 2011 International Autobody Congress & Exposition (NACE)—but only four chairs were needed on the stage. That’s because the four speakers were representatives of some of the largest multiple shop operations (MSOs) in the industry, which combined have more than 7,200 employees and annual sales topping $1.26 million. The four were speaking at a new forum held for the first time at this year’s NACE in Orland, Fla., a daylong session aimed at (and open to) only MSOs. Much of the content of the panel discussions during the symposium, however, could have been equally of value to the single-location shop owner who wants to expand his or her business. During the “Lessons Learned From the Big Four,” panel discussion, for example, Cathy Bonner, the president of the 47-shop Service King Continued from Page 10
SCRS
and establishes an 11-member “automotive board” appointed by the mayor (and not necessarily including a collision repair shop representative). While the proposal includes no minimum requirements for equipment or training, it has detailed rules regarding fencing around the business property, and makes it unlawful for “grass or vegetation to grow to a height of more than nine inches above the ground.” Brown said there is a lot to like in the 28-page proposal, and he applauds the council’s effort to deal with the businesses—including shops connected with towing storage lots—that “hold vehicles hostage” and charge exorbitant fees to release a vehicle that a consumer wishes to move to another repair facility. But, he said, some of the mandates—such as requiring customer signature on any supplement over $100, and storing (at customer request) old parts for up to three days to return to the customer—are just too cumbersome. His group is also concerned that the proposal essentially gives insurers, as the “authorized agent” of the consumer, the
chain in Texas, was asked what role social media plays in her company’s extensive marketing efforts. Bonner said she thinks it’s a stretch to think that people want to “socialize” with a collision repair shop, and that measuring return on an investment in social media is difficult given how infrequently the average driver needs a shop’s services. Still, she said, Facebook and Twitter are reasonable inexpensive ways to help build a brand and name awareness by helping promote, for example, Service King’s charitable efforts. Social media are how a growing percentage of the population may find your shop and understand your reputation, she said. “People want to do business not just with good-performing companies, but with companies they like,” Bonner said. “They want an emotional attachment to that company. Social media can help you develop that.” The panel was asked what, other than improved pricing, they expect from their vendors as they have grown as buyers. Rollie Benjamin, CEO of
same rights as the owner of the vehicle. In an unrelated effort, Brown said the Houston association recently had a shop labor rate survey conducted by an independent third-party. Shops are being urged to notify state insurance regulators if an insurer is unwilling to pay the shop’s posted labor rate by taking a photo of the posted rate and emailing it along with the estimate at the lower rate (with customer and claim information omitted) to the Texas Department of Insurance. “Right now they’re just collecting those and we’re laying the groundwork,” Brown said. In addition to discussing ways to address issues that many of the state groups are facing, the affiliates also discussed some of the issues SCRS is pursuing, including a survey to insurers about their policies on parts usage, and interaction with the Environmental Protection Agency regarding interpretation and enforcement of its new refinishing regulation. John Yoswick is a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988. He can be contacted by email at jyoswick@SpiritOne.com.
14 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
the 110-shop ABRA Auto Body & Glass chain, said his company focuses more on service than price when working with vendors. In terms of parts, for example, ABRA looks for vendors that can do more to help with cycle time by getting the right part to the shop at the right time. “We survey our people to score the vendors on what level of customer satisfaction they giving our managers running these shops,” Benjamin said. “We give a report card to the vendors.” Steve Grimshaw, CEO of the Caliber Collision Center chain, which operates 92 shops in four states, he considers what aspects of business that vendors excel in – and then looks for ways to put that expertise to work for Caliber. “Rental car companies are experts at customer service,” Grimshaw said. “I expect them to leverage that expertise to help me train my people how to be customer service experts. You have paint vendors who are experts on lean processes; I expect them to dedicate resources to help improve
our operations. There’s generally a lot of willingness on their behalf to dedicate resources to help us achieve our objectives. So it becomes more of a strategic relationship than a vendor relationship.” What are the MSOs looking for in terms of expanding into new markets or acquiring other collision repair businesses? Benjamin said his company operates company-owned shops in currently six major metropolitan areas, but 35 of its shops are franchise operations in mid-sized cities. Bonner said her company’s model is to operate large shops in high-visibility locations. The average Service King location, for example, has 13 direct repair programs—nearly twice that of most other MSOs—and does $5.4 million in annual sales. A good candidate for Service King acquisition, she said, may be familyowned like Service King, will have a similar culture, and will have room to perhaps double its sales from $250,000 to $500,000 a month. She said that although all of the See MSO Insights, Page 26
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www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 15
I-CAR Tech
This article first appeared in the I-CAR Advantage Online, which is published and distributed free of charge. I-CAR, the Inter-Industry Conference on Auto Collision Repair, is a not-for-profit international training organization that researches and develops quality technical education programs related to collision repair. To learn more about I-CAR, and to subscribe to the free publication, visit http://www.i-car.com.
I-CAR Repairability Summit: Don’t Section Ultra-High-Strength Steel Unless specifically recommended by the vehicle maker, parts with a tensile strength over 600 MPa should only be replaced at factory seams. This is just
Knowledge Gap To prepare what information would be discussed at the summit, I-CAR conducted a survey of technicians in the field, asking what kind of information they would like to see from ICAR in a future course on the subject of advanced construction. The survey revealed a lack of information among technicians actually making the repairs, and a definite need for a course addressing the subject.
Figure 1 - Industry experts discuss steel identification
one of the “best practices” identified Summit Discussions at a Repairability Summit hosted by IThe agenda for the summit was laid CAR earlier this year. Summit atten- out like a repair plan. After the disdees consisted of subject matter cussion on steel strength identificaexperts from vehicle makers, tool and tion, the group discussed best equipment makers, collision repair fa- practices for anchoring and pulling cilities, insurance companies, and the and different removal methods. The American Iron and Steel Institute. created heat-affect zone from heating The primary intention of the and removal methods was a major dissummit was to identify best practices cussion point (see Figure 2). for working with ultra-high-strength A discussion on attachment steels (UHSS) and the new construc- methods focused on GMA (MIG) tion methods found on late model welding heat-effect on UHSS, the vehicles. In February 2012, I-CAR changes in spot weld machine setwill premiere its Best Practices for tings, and how destructive testing of High-Strength Steel Repairs (SPS09) course, highlighting issues covered during the Summit and other best practices. While vehicle maker recommendations should be followed first and foremost, these best practices can be leveraged where none exist. For example, while there’s a lot more information on steel Figure 2 - Industry experts discuss anchoring and structural straightening of UHSS strengths in the vehicle service information with each new model spot welds differs on UHSS panels year, sometimes the information is not compared to HSS or mild steel. there. Summit attendees discussed Somewhat new attachment various tests the technician can permethods like MIG brazing and selfform in the repair facility that help piercing rivet bonding were disidentify if the steel is mild, HSS, or cussed, including the applications UHSS (see Figure 1). where they are recommended and
Give us your opinion on matters affecting the industry.
write us! publisher@autobodynews.com
16 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
possible future uses (see Figure 3). To facilitate the conversation, I-CAR brought in two vehicles with similar side damage. The vehicles were of the same make and model,
Figure 3 - Industry experts discuss MIG brazing applications
and even though separated by only one model year, the later model contained significantly more UHSS compared to the previous model. The two vehicles were used to identify the necessary changes in re-
pairs due to more use of UHSS.
Summary It became clear during the recent ICAR Repairability Summit that vehicles cannot be repaired using the same repair methods that were acceptable just a few years ago. Industry experts that attended the Summit addressed these issues and agreed on a list of best practices that can be used when vehicle maker repair information does not exist. The list will be available in the Best Practices For High-Strength Steel Repairs (SPS09) course premiering in February 2012. Watch a video describing some of the highlights on the Best Practices For High-Strength Steel Repairs (SPS09) course at www.i-car.com.
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CARSTAR 2011 Holds National Teleconference At Annual Seattle National Conference CARSTAR held their annual National Conference for 2011 in Seattle, WA, from September 24 through 27. The conference drew in around 400 industry members and franchisees. During a teleconference leaders of the multiple shop operator (MSO) offered insights into their future plans for growth over the next few years. CARSTAR’s CEO, David Byers, who was added to the team as of this year, started the conference by highlighting where CARSTAR is presently. Byers said the MSO is on track to reach total sales of at least $600 million, and that according to industry averages for independent shops, individual CARSTAR franchises make about twice as much per year. Byers also talked about how the MSO has been able to continue to grow thanks to continued industry consolidation since the company’s inception in 1989 and an increasing trend of insurers moving towards using MSOs. At the Conference Ryan Keller was named the new head of Business
Development, and he is expected to help the MSO open 40 to 50 new stores in the next year. This is 2 to 3 times more growth than the MSO has been able to produce over the last few
left to right: Stacy Bartnik, VP, Field Services; Bill Garoutte, AVP, Marketing; Ermie Lakey, VP, Purchasing; Ryan Keller, VP, Franchise Development; Dan Young, VP, Insurance Relations; Brad Rein, Director of IT; Bing Wong, CARSTAR Canada; Michael Macaluso, CARSTAR Canada
years. This dramatic increase in growth is expected because of a renewed focus on acquiring new stores and adding a lot of new staff, according to Byers.
Federal Disaster Assistance Extended to Additional New York Counties
New York Governor Andrew Cuomo announced that federal disaster assistance is now available for homeowners, renters, small businesses, and municipalities in additional counties as a result of damages incurred by Tropical Storm Lee. Additions include: ● Public assistance: Ulster County ● Individual assistance: Oneida, Orange, Ulster Counties The individual assistance declaration allows homeowners, renters and small businesses to apply for the following federal aid: the individuals and households program, crisis counseling, disaster unemployment assistance, USDA food coupons and distribution, USDA food commodities, disaster legal services, the disaster supplemental nutrition assistance program, and small business administration disaster loans. The counties currently eligible for assistance from Tropical Storm Lee are as follows: ● Individual assistance (assistance to individuals and households): Broome, Chenango, Chemung, Delaware, Oneida, Orange, Otsego, Schenectady, Tioga and Ulster counties. ● Public assistance (assistance for debris removal, emergency protective actions and the repair or replacement of disasterdamaged facilities): Broome, Chemung,
Dan Young, Senior Vice President of Insurance Relations mentioned that part of CARSTAR’s success can be attributed to the way their franchises are set up. Although each store is a
Chenango, Delaware, Otsego, Orange, Tioga, Tompkins and Ulster counties. The counties currently eligible for assistance from Hurricane Irene are as follows: ● Individual assistance (assistance to individuals and households): Albany, Bronx, Columbia, Clinton, Delaware, Dutchess, Essex, Greene, Herkimer, Kings, Montgomery, Nassau, Orange, Otsego, Putnam, Queens, Rensselaer, Richmond, Rockland, Saratoga, Schenectady, Schoharie, Suffolk, Sullivan, Ulster, Warren, Washington and Westchester counties. ● Public assistance (assistance for debris removal, emergency protective actions and the repair or replacement of disaster-damaged facilities): Albany, Bronx, Clinton, Columbia, Delaware, Dutchess, Essex, Franklin, Greene, Hamilton, Herkimer, Kings, Montgomery, Nassau, New York, Orange, Otsego, Putnam, Queens, Rensselaer, Richmond, Rockland, Saratoga, Schenectady, Schoharie, Suffolk, Sullivan, Ulster, Warren, Washington and Westchester counties. Direct federal assistance is authorized.
18 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
CARSTAR franchise, there remains one owner at each location and this enables the franchises to self-manage and have a single point of contact for insurers and customers per franchise.
Stacy Bartnik, Vice President of Field Services also talked about the MSO’s continued efforts to grow existing stores as well. She mentioned training existing shops on lean processes so they can improve cycle and touch times. Gerald Wicklund, Owner of Wicklund’s CARSTAR was also on the teleconference. His franchise was the first franchise of CARSTAR and he is the second generation owner. He talked about the Conference’s focus on educating their franchises about effective marketing and website and social media management. Wicklund also mentioned that the military appreciation efforts his franchise makes have been very effective marketing tools for his business. “25 to 30 percent of my customers that come in the door have done their own research before I write the estimate,” said Wicklund. Wicklund’s CARSTAR was also honored with the Outstanding CSI Award at the conference this year. For more information please visit www.carstar.com.
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Paint Management with Stefan Gesterkamp
Stefan Gesterkamp is a Master Craftsman and BASF representative who has been in the automotive paint industry for 27 years. He started his career in a custom shop before turning to collision repair. Stefan graduated from the University of Coatings and Colorants in Germany and is the author of “How to Paint Your Show Car.”
Taking a Fresh Look at an Old Debate—Color Matching, Blending, or Both? As a paint manufacturer’s rep, there is not a single month that goes by without being put in the middle of collision repairers and insurers; expected to chime in on a dispute about what is necessary for a proper repair. In the July 2010 edition of Autobody News, I wrote an article on the debate about Color Match, Blending or both and no matter how many industry experts since then have expressed a similar point of view—this debate never seems to loose momentum. While arguing my point a month ago, I realized that we could end this debate once and for all. For a moment, let’s assume that in 2011, all parties involved in collision repair have come to the conclusion that blending is not only an option, but a necessary and required part of a quality repair process. I like to compare this to the restaurant experience. If you go out for an expensive dinner and the restaurant sim-
ply slaps the food on your plate, without creating a pleasant arrangement, the food will still tastes the same. Chances are the customer will not consider this a satisfying experience, or be a repeat customer at this establishment. Just like the owner of a restaurant, collision repairers and insurers want the same thing to maintain a successful business. We need happy vehicle owners that give us high CSI ratings and long-term customer retention. Blending is for collision repairers and insurance companies, what arranging the food is to the restaurant business. It is a must have in today’s business world. So let’s assume we all agree on the point of blending, where does this leave the color match portion of the estimate? During my last conversation I had with an insurance representative, I noticed clearly why we go around in circles on this issue. It is the classical
20 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
case of misunderstanding or misinterpretation of the term color match. When I asked what he felt constitutes color match, he explained to me, what we all know as the process of tinting the color. It is not overly surprising to me to find this to be the case with insurance adjusters. More often then not, they didn’t repair vehicles as a professional prior to their current position. It is nobody’s fault by the way, just a matter of fact. What I found more disturbing was the fact that some collision repairers felt similar when asked. Let’s take a close look at what the term color match really represents. It is a combination of a number of different tasks and operations that have to be accomplished to get to the stage of painting. This includes locating and verifying the paint code on the vehicle. If you repair a wide array of different makes and models, this can be a
tricky task. Paint codes are located in every imaginable location on automobiles. They can be located anywhere in the engine department, door opening, glove department, the center council or hidden somewhere in the trunk. And let’s not forget some cars that have no code anywhere on the vehicle. After locating and verifying the code, the painter has to retrieve all available information the paint manufacturer’s computer system provides for the repair. In general, the color retrieval systems will display more then just one solution. The next step from there is checking variant decks for the available solutions, or spraying out samples for what was not available as a chip. Although paint companies try to supply paint samples for the most common variants on the market, it is impossible to have a chip for each and every one of them.
Now and only now are we getting to the portion of the color matching process that is debatable. Is the best variant found good enough for a successful blend? Reality is that 90% of the color matching activity has to be accomplished simply to paint, blending or not. I am not an expert on estimating. I haven’t written one in 17 years. I am also not a data provider to this industry, but it became clear to me that we need to change the terminology. It requires separating and itemizing all activities currently bundled under the color match line item on an estimate. The vast majority of what is considered color matching can be compared to and should be handled like setup time for frame work. A repair operation on its own that should not be bundled with color tint time. It has to be done, should be itemized and needs to be paid for.
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At NACE, State Farm Announces Change to Shop Locator to Allow Ranking Based on Internal Performance Score, Will Use ‘PartsTrader’ for DRPs State Farm has changed its shop locator system, accessible from its consumer website, to now rank its Select Service shops based on current performance scores as assessed by State Farm in the geographic region the customer selects. Previously the system listed shops in order based only on proximity to the address entered. State Farm’s Claims Consultant, George Avery said that once the system is fully implemented, if a customer is trying to find a Select Service shop within 15 miles of a certain zip code, they will see a list of all Select Service shops in that area. The system defaults at 15 miles, but they can contract their search or expand it up to a 50-mile radius. The shop with the best score in the area will be listed first, the shop with the second best score will be listed second, and so forth. State Farm said it’s possible the customer would have to advance a page to see the bottom-ranked Select Service shops if the search area is large enough, but again, all Select Service shops in the area specified by the customer will be shown. The scores themselves will not be shown on the shop locator, but Select Service shops always have access to
their score and performance data. A shop’s score, on a scale of 1 to 1,000, is updated monthly and is established using a proprietary formula that takes into account the key performance indicators State Farm uses to track each shop’s performance. Several other features of the repair facility locator have been modified in a redesign of both Statefarm.com and State Farm’s B2B site for shops. “We’re not going to list the highest performing shop that’s 100 miles away,” said Avery. “It’s all pulled from the same source,” he said. “It’s the same data feed the repair facility uses. My guess is that the day the shops get their update, they may go to the locator to see where they fall in the list.” Avery continued: “We’ve evaluated what our capacity needs are based on the needs of our customers and asked local management to use some tools we have to determine how many Select Service shops they need in their given markets,” he said. “We’re always interested in dealing with high performers. Some repairers have improved, and if they have, we encourage them to contact local management and share some key KPIs to give them a sense of how they’re doing business. And then if there
is a capacity need, local management will approach them. Most local management has an ongoing dialogue with many repairers in their neighborhood because, just because you’re not on Select Service, doesn’t mean you’re not good. So don’t be offended if there are no openings.” As far as the electronic parts ordering system that State Farm is exploring, Avery says they continue to explore that concept as they feel it’s in the best interests of their customers and repairers. “We want to be very transparent that we’re gathering information and visiting people and getting their input to help us build an application,” said Avery. “We think it will help everyone.” Insurer will Require ‘PartsTrader’ Avery also said that PartsTrader will be the electronic parts ordering system the insurer expects it will eventually require its Select Service shops to use. He said testing of the system in several markets could begin in December. “It’s hard to tell for sure, but we would like to get some testing started before the end of the year,” Avery said. PartsTrader has yet to launch but has a provisional website at www.partstrader.us.com. Note this is not ThePartsTrader.com.
www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 21
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www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 23
Action Counts
Lee Amaradio, Jr. is the president and owner of “Faith” Quality Auto Body Inc. in Murrieta, California. Lee is president of the CRA as well as an advocate for many other industry groups. He can be contacted at lee@faithqualityautobody.com
There is No Such Thing as a ‘Bad Decision’ in Business with Lee Amaradio Jr.
First let me say that there is no “right” answer to most of the challenges a collision owner faces today. Things that worked in the past will no longer cut it today and we need to constantly re-invent the wheel. I will give some examples of ways to cautiously move forward in today’s market. One example is advertising, in the past we would get a bigger yellow page ad, and maybe we would do newspaper and maybe some TV. In today’s market the consumer rarely picks up the phone book and newspaper sales are at an all time low, while TV is still questionable with DVR’s people can fast forward through your expensive 30-second commercial. Another example is purchasing equipment and your ROI. In the past a shop would buy a thirty thousand dollar frame rack or measuring system and they would be able to close a sale based on something they had that their competitors didn’t. Today, repair standards and requirements to repair a collision have become so advanced that most decent collision facilities have the same equipment. So purchasing a large piece of equipment in today’s market most of the time offers “no” return on your investment.
Challenges Decision-making is the key to business success, and there is “no such thing as a bad decision.” As businessmen we decided to venture out on our own and start or purchase a business. No one gave us any guarantees or security blankets. We made the decision and went for it. I know I went for broke. No one stood behind me. I was on my own and I had to make decisions every moment that would set the direction of the future of my company. There was no road map then and there isn’t one now. I have learned that when I make a decision I need to make it based on the information I have at the time. We don’t have a crystal ball to see the future but many of us tend to beat ourselves up when these decisions don’t pan out. I always remember this because, when I think back, I would normally make the exact same decision if I had the exact same information at
the time. In other words, all else being equal, I wouldn’t change the decisions that I’ve made in the past. When we hire a new technician, for example, we check all their references and make sure they have all of the required training. Some turn out to be our worst nightmare. But that decision to hire someone was based on the information we had at the time. We needed someone and we hired them. We only know much later that it was the wrong person. Hiring was a good decision—but the wrong person may have been hired. So, not making a decision is the only wrong decision here. We could never have known this tech was right or wrong unless we had ventured out and made a decision to hire them. All business challenges require decision-making—that’s our job— embrace it because its what we do. It’s who we are. Another name for a businessman should be “Master Decision Maker.” I say this because if someone asks me what my job description was I would say more than anything else its making decisions, and they are all good.
Changes In the past we made advertising decisions based on information we had then. The younger generation are all iPhone and internet savvy now and never pick up a phone book or newspaper so we are changing our advertising plans to accommodate this high-tech future generation. We just canceled our last phone book ad. We do more “Marketing” and leave less to chance and we are not really sure of our final destination but we do know the direction has changed. Will this be a good decision? ‘Yes,’ based on the information we have at the time (now). Similarly, we must continue to purchase major equipment (to keep up with vehicle technology), but we are no longer expecting a return on our investment. We treat it as a liability like a rent increase—something that we can’t do anything about but we need to deal with, and this forces us to run a leaner operation. In retrospect, I made a decision to expand my operation at the worst pos-
24 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
sible time, but when the decision was made it was based on the best information I had at the time. Many would say it was the wrong decision—who would expand in the middle of a recession? The answer is “no one,” not even “me,” but I didn’t know there was a recession when I expanded and, given the same set of circumstances, I would make the same decision again because it was a good decision. So remember there is no such thing as a “bad decision in business” because that’s what we do. ‘Not deciding’ is not an option. With this in mind, it may be time to go back to the drawing board and re-invent yourself. As the leader of your company take charge and make those tough decisions quickly and matter-of-factly based on the information you have at the time. Don’t look back and never second-guess yourself. Once you make a decision,
move forward to the next decision—like firing that tech you now wish you hadn’t hired (because of the information you have now that you didn’t have before.) Think of yourself as a General leading your troops into battle. You need them to trust your decisions and follow you. No one wants to follow someone that is indecisive and insecure. If you don’t trust your own decision making, how can you expect anyone else to trust it and follow your lead? And quit beating yourself up (about events that turned out differently in hindsight)!
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Continued from Page 14
MSO Insights
17 shops Service King has added this year have been in Texas, the company is interested in expanding into other states. “My father used to tell me you can plan your work, but don’t plan on it working out,” Bonner added as a caveat. “It is important to plan, but in terms of growth and decisions about acquisitions, you have to have adaptability as well.” Grimshaw said reputation within a market is critical when considering businesses to acquire. “If you think you’re going to buy a (shop) that wasn’t performing well and that when you put your name on the sign, all will be forgiven, that’s being a bit naïve,” Grimshaw said. “It takes a long time and you have to mend a lot of fences to reestablish a reputation.” The panel was asked to comment on a proposition, espoused by an insurer in the United Kingdom, that business often “trip over themselves” trying to exceed customer expecta-
tions when they would be better off just ensuring they consistently meet those expectations every time. Brock Bulbuck, CEO of The Boyd Group, a Canadian-based firm that also operates 128 shops in the United States (many under the True2Form and Gerber tradenames) said the problem with that concept is that customer expectations keep rising. “If you don’t strive to wow and exceed and set the bar as high as you can, I think you run the risk of establishing a culture in your organization where just doing your job is good enough,” Bulbuck said. “I don’t think that’s conducive to create promoters (among customers) and growing your business.” Grimshaw, too, said exceeding expectations is the key to differentiating your business from the competition. But Bonner said there is some logic in what the U.K. insurer was espousing. “I think in collision repair, the primary customer is insurance, and if you don’t exceed their expectations, you will not be rewarded with
26 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
growth,” she said. “The secondary customer is the traditional retail customer. I think it’s true that you don’t have to exceed their expectations; you just have to satisfy them. That’s what we’re rewarded on by the primary customer, the insurance companies, whether we have satisfied those customers and given them great service.” As the panel discussion ended, Bulbuck said he’s interested in seeing other MSOs succeed because it demonstrates the success of the business model overall. “I truly believe the success of everyone in this room is dependent upon the collective success of the MSO sector,” Bulbuck said. “So my advice is a bit self-serving: Never put your business at risk, never bet the farm, either operationally or financially.” The MSO symposium was a new event at what was the first NACE held outside of Las Vegas in seven years. NACE organizers said the return to what will likely be a 3-city rotation (Orlando, New Orleans and Las Vegas) appears to have paid off; reported attendance at this year’s event (more than 18,000 people) was up 15
percent over 2010. About 40 percent of those who pre-registered indicated they were first-time attendees. Next year’s event will be held October 10–13 in New Orleans, and organizers say the success of this year’s MSO symposium will result in a similar session being held next year. While it will continue to be open only to MSOs, organizers point out that NACE includes nearly 90 other training sessions that have no such restriction on attendance.
John Yoswick, a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). He can be contacted by email at jyoswick@SpiritOne.com.
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A Profile of the Evolving Collision Repair Marketplace by Vincent Romans, Romans Group
A half decade has passed since we started tracking collision repair organizations that generate repair revenue of $20 million or greater annually. During these past five years we have seen a remarkable amount of change, not only within the collision repair and auto physical damage aftermarket industries, but also with our U.S. and world economies. July 2010 marked the “official” start of the recovery from the 2007 to 2009 recession, but it feels like a recovery in name only for many people. Our economy has been described by many economists and media pundits as being in a “soft patch.” A growing number of forecasters believe we are at risk of a double-dip recession due to the sluggish economy and a broad spectrum of increasing dynamic, complex U.S. macroeconomic and global downdraft variables that continue to influence fundamental structural change within our business, financial and government institutions with some currently identifiable and still
indeterminable impact on the collision repair, property and casualty insurance, and OEM and aftermarket auto physical damage segments. Who will lead the collision repair industry and how those leadership companies will influence the collision repair, property and casualty insurance and related auto physical damage business segments is an evolving story that is playing out at this very moment. This evolving story can be summarized by viewing it as part of a long-term continuum involving three simultaneously active industry changing phases: Contraction, Consolidation and Convergence. We have seen both long-term historical and real time contraction within the auto repair and affiliated industries. Collision repair industry contraction is due to an increasing number of complex dynamic macroeconomic and industry-related variables including, but not limited to: ● Continued overcapacity and fragmentation ● The persistently weak U.S. economy’s impact on consumer attitudes, confidence and spending habits
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● The multitude of fluctuating and conflicting trends affecting collision frequency, the number of accidents and vehicle repairs ● Proliferation of vehicle accident avoidance and safety technology ● Safer drivers due to aging population, insurance company auto policy premium discount programs based on good driver/vehicle monitoring technology, accident and incident-free driver experiences, graduated teenage driver training programs, and fewer alcohol-related accidents ● The changing profile of businessto-business relationships and their interdependencies and partnership expectations on how business is and will be conducted in the future ● Globalization This contraction stimulates and accelerates market share land grab, which in turn increases the likelihood of further consolidation, which then plays out through merger and acquisition expansion. The contraction and consolidation phases open the door to a convergence of businesses across different
and similar business segments. These companies combine and integrate their organizations’ strategic interests and competencies to win and further succeed through leadership, innovation, technology, market share gains, competitive positioning, and business execution. Following are examples of convergence among some key auto physical damage segments. This type of convergence includes clear examples of merger and acquisition activity, globalization and the integration of merged technology platforms among different business segments that will continue to alter and change the landscape for the collision repair industry and related auto physical damage business segments. ♦ P & C Insurance ▪ Mapfre Insurance acquires Commerce Insurance ▪Liberty Mutual acquires Ohio Casualty and Safeco ▪ AIG acquires 21st Insurance ▪ Farmers acquires AIG/21st Century ▪ QBE Insurance - acquires Balboa In-
www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 29
surance ▪ Allstate announces Esurance acquisition ▪ Nationwide announces acquisition of Harleysville Insurance
♦ Collision Repair ▪ Boyd Group acquires True2Form ▪ Boyd Group acquires Cars Collision ▪ Service King acquires Alamo Collision ▪ Service King acquires B&B Body and Paint ♦ Paint, Body and Equipment ▪ Uni-Select acquires Finish Master
♦ Parts ▪ LKQ acquires Keystone ▪ LKQ acquires Greenleaf ▪ LKQ acquires AKZO (40 Locations)
♦ Rental-Technology ▪ Enterprise acquires National and Alamo ▪ Clayton Venture Group acquires CynCast ▪ Audatex acquires New Era Software ▪ Audatex acquires See Progress, Inc. People frequently ask where the
collision repair industry is heading and what does its future look like. Since perception frequently influences reality, one guess is as good as another. However, one way that question can be answered is by following the actual numbers and by tracking the trends. This white paper provides that information for the growing $20 million-plus collision repair organization segment. We are now beginning to develop insight and understanding into another important and evolving collision repair segment that includes operators processing $10M to $20M annually. Our profile of $20 million multiple-location collision repair operators (MLOs) continues to include: ● Independent, dealership and insurance company-owned and managed collision repair operators processing $20 million or more annually within the U.S. market ● Operators with one or more locations in single or multiple geographic markets within the United States ● Professionally-managed operators providing performance-based, brandrecognized and competitively-differentiated collision repair services
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● Companies focused on achieving top-tier performance results, high customer satisfaction, and consistent and sustainable quality repairs ● Businesses that tend to pursue multiple customer segments for collision repair revenue including property and casualty insurance, automotive dealer, accident management, rental car, and direct-pay consumers We believe that the $20 million-plus and the $10 to $20 million collision repair segments will continue to grow their share relatively faster than other segments of the collision repair market. This growth will be driven by a number of variables. ● The segment’s local and multi-market footprint which offers greater consumer and insurance company choice Multi-level selling and marketing for insurer choice brand preference with access to insurance company direct repair claims ● Ongoing operational improvement resulting in increased vehicle repair quality, daily throughput and reduced cycle time ● Business service differentiation and market segmentation ● Market leadership through sustain-
able top-tier competitive performance results ● Expanded business hours of operation including multiple daily shifts, hybrid work shifts and weekends Single point of contact with operational conformity and predictable repair quality and performance outcomes ● Access to capital for business and market growth, expansion and infrastructure development ● An integrated sales and marketing approach to capturing consumer, insurance, rental, and fleet business through brand recognition, reputation, performance, and multi-level insurance company focused selling and marketing ● Mergers and acquisitions Examples of this type of accelerated growth and expansion is Boyd Group’s 2010 mid-year acquisition of True2Form’s multiple-location, multimarket business which had 37 locations and $71.0 M in annual revenue at the time of acquisition and their June 2011 acquisition of Cars Collision. With the Cars acquisition, Boyd’s U.S. business increased its lo-
cations by another 28 repair facilities for a total, of 164 locations in North America, 127 located in 13 U.S. markets. This expanded Boyd’s network reach and operating platform and is seen as being advantageous by a number of insurance companies. These types of acquisitions and mergers will continue to influence the consolidation and right-sizing of the collision repair industry as well as increase the MLO market share in the U.S. The $20 million MLO collision repair profile used for this analysis excludes repair facilities that focus exclusively or primarily on expedited paint and cosmollision, small dent, glass repair only, mechanical only, and collision repair related primarily to auction vehicles. We do recognize that within this segment some companies continue to be in various stages of strategic growth, transformation and transition to business models approaching that of an insurance company DRP wholesale or diversified customer segment platform. Portions of this report include a specific segment of collision repair conversion and multi-segment customer-focused franchisors which we
refer to as multiple-location networks (MLNs). The MLNs included are Maaco, CARSTAR, ABRA franchising, and Fix Auto, currently a hybrid model which includes both a franchise and non-franchise brand banner network model. These organizations represent a significant market segment of the collision repair industry that we believe warrants continued tracking and monitoring. We recognize that there are various types of multiple-location networks that are not currently included here such as integrated and outsourced auto physical damage and glass networks like LYNX APD and the Innovation Group, buying networks such as Assured Performance, accident management providers such as CEI, and peer performance groups like The Everest Partners. Key findings of our 2010 $20M MLO discovery, research and analysis include: ● The 56 $20 million MLO organizations process 10.8 percent of the $31.0 billion in collision repair revenue nationally representing $3,350 million, up from 9.1 percent in 2006.
● Within the top ten $20 million MLOs, five are independent and five are dealer groups. These top ten organizations account for 44.9 percent of all $20 million MLO production locations and 53.3 percent of all $20 million MLO revenue. ● $ 20 million MLOs have 2.9 percent of the 37,700 locations and 10.8 percent of the revenue. ● On average, the $20 million MLOs process $3.1 million per location, over four times more than the average annual revenue for non-MLO repairers of $754,949. ● Revenue for the top ten independent and dealership MLOs was $1.8 billion, an increase of $495 million over 2006’s revenue of $1.3 billion ● Our early research on the $10 to $20 million collision repair segment indicates that there are roughly 1,000 to 1,200 independent and dealer-owned collision repair businesses representing approximately 3,000 to 4,500 shops that process between $4.0 billion and $5.0 billion in revenue. When combined with our 2010 findings for the $20 million MLOs, these two segments represent a range of revenue being processed of $7.5 to $8.5 billion
through approximately 4,100 to 5,600 repair facilities. ● Training does matter for collision repairers when maintaining and expanding the scale of their business. Our research and collaboration with ICAR indicates that over 90% of the 56 MLOs have and maintain the I-CAR Gold Class Professional designation. Many of these organizations also have or are working toward increasing the number of Platinum technician designations within their employee ranks. There continues to be a wide range of opinions, anecdotal information and various government and private sector data reporting on and determining a meaningful and relevant collision repair market size. This is especially true in light of the aftermath of our last recession, the current weak economy, and the macroeconomic conditions which have influenced the accelerated loss of both dealership and independent collision repair operators in 2009 and 2010. Based on our longitudinal research and analysis involving published third-party industry sources, property and casualty insurance and See Evolving Marketplace, Page 39
www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 31
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973-705-9100
800-468-2090 412-390-2908
Dept. Hours: M-F 7-7:30; Sat 8-5 rt22hondaparts@route22honda.com
Dept. Hours: M-F 7:30-5 shadysidehondaparts@hotmail.com
PENNSYLVANIA
Honda of Princeton
Apple Honda
P r i n c e to n
York
800-682-5941 609-683-5941
800-960-9041 717-848-2600
Dept. Hours: M-F 8-4:30 kphillips2@princetoncars.com
Dept. Hours: M-F 7-6; Sat 7-4; Sun 10-4 applehondaparts@appleauto1.com
Honda of Turnersville
Baierl Honda
Tur ne r s v i lle
Wexford
800-883-0002 856-649-1584
724-940-2006
Dept. Hours: M-F 8-6; Sat 8-4 sbaptist@penskeautomotive.com
J.L. Freed Honda
Sussman Honda Roslyn
800-682-2914 215-657-3301 Dept. Hours: M-F 8-5; Sat 8-1 rendrick@sussmanauto.com
Dept. Hours: M-F 8-5; Sat 8-4 johnryan@baierl.com
AC U R A NEW Y O R K
NEW YORK
PENNSYLVANIA
P ENN S Y LVA N I A
Acura of Westchester
Smithtown Acura
Apple Acura
We s t ch e s te r
S t . J a m es
York
Emmaus
914-834-8887
888-832-8220 631-366-4114
877-5APPLE5 717-849-6639
877-860-3954 610-967-6500
Dept. Hours: M-F 7:30-5:30; Sat 8-4 parts@smithtownacura.com
Dept. Hours: M-F 7-5:30; Sat 7-3 parts@appleacura.com
Dept. Hours: M-F 7-5; Sat 8-5 mustafa@vinart.com
Baierl Acura
Smail Acura
Dept. Hours: M-F 7:30-8; Sat 8-4; Sun 9-4 acura.parts@yahoo.com
Curry Acura S c a r sd a l e
NEW JERS EY
800-725-2877 914-472-7406
Acura of Turnersville
Dept. Hours: M-F 8-6; Sat 8-5 parts@curryacura.com
888-883-2884 856-649-1884
Paragon Acura Wo od s id e
718-507-3990 Dept. Hours: M-F 8-6; Sat 8-5; Sun 9-4 johnp@paragonacura.com
Tur n er s v i lle
Dept. Hours: M-F 8-5; Sat 8-4 egreger@penskeautomotive.com
Elite Acura M a p l e S h ade
856-722-9600 Dept. Hours: M-F 8-5; Sat 8-4 bmartinsen@group1auto.com
Lehigh Valley Acura
Wexford
Greensburg
800-246-7457 724-935-0800
866-261-4999 724-219-1476
Dept. Hours: M-F 8-5; Sat 8-1 johnsabella@baierl.com
Dept. Hours: M-Thur 7-5; Fri 8-5; Sat 8-4 acuraparts@smailauto.com
Davis Acura
Sussman Acura
Langhor ne
Jenkin town
866-50-ACURA 215-943-7000
800-826-4078 215-884-6285
Dept. Hours: M-F 7-7; Sat 8-4 markh@davisacura.com
Dept. Hours: M-F 8-5; Sat 8-1 rendrick@sussmanauto.com
www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 33
Service, Service, Diagnostic Di Diagnostic gnostic and an d Mechanical M e chanical ch aniccal al NEWS nd Mec echanical Mech ech ec hanical ca
www.autobodynews.com
GM Introduces Industry-First Front Center Airbag Autobody News
General Motors announced the industry’s first-ever front center air bag on September 29. The airbag is an inflatable restraint designed to help protect drivers and front passengers in farside impact crashes where the affected occupant is on the opposite, non-struck side of the vehicle. The front center air bag will be introduced on the Buick Enclave, GMC Acadia, and Chevrolet Traverse midsize crossovers in the 2013 model year. This new safety feature will be standard on Acadia and Traverse with power seats and all Enclaves. The front center air bag deploys from the right side of the driver’s seat and positions itself between the front row seats near the center of the vehicle. This tethered, tubular air bag is designed to provide restraint during passenger-side crashes when the driver is the only front occupant, and also acts as an energy absorbing cushion between driver and front passenger in both driver- and passenger-side crashes. The air bag also is expected to provide benefit in rollovers.
NEW YORK • NEW JERSEY • PENNSYLVANIA • DELAWARE
GM analysis of the National Highway Traffic Safety Administration’s Fatality Analysis Reporting System database, found that far-side impact crashes, which the front center airbag primarily addresses, accounted for 11 percent of the belted front occupant fatalities in non-
GM’s industry-first front center airbag will deploy from the right side of the driver’s seat and protects the driver in side crashes
rollover impacts between 2004 and 2009 involving 1999 model year or newer vehicles. These far-side fatalities, where the occupant is on the nonstruck side of the vehicle, also represent 29 percent of all the belted
AM Tow Package Wiring Harnesses for Hyundai/Kia Recalled
Curt Manufacturing is recalling about 2,400 tow package wiring harnesses because moisture can seep into the converter module and defeat the internal circuit protection, according to reports made by Consumer Reports. This could potentially cause the module to overheat, leading to a fire hazard. Sold as an aftermarket product (not through Hyundai), the tow package wiring harnesses connect tow vehicle lighting circuits to trailer lighting circuits for 2009 through 2011 Hyundai Veracruz and Kia Sorento vehicles. The affected units that are not water tight, will have part number 56024. According to the National Highway Traffic Safety Administration, Curt Manufacturing has also identified a similar problem with the tow harnesses designed for 2009 to
2011 model year Hyundai Santa Fe SUVs. NHTSA and Curt have expanded the recall to include these models, part number 55538, believed to be installed in approximately 2,254 Hyundai Santa Fe vehicles. The safety recall to notify owners begins this month, and the tow package wiring harness will be replaced for free. Veracruz and Sorento owners who are uncertain the brand of tow gear on their vehicle should check, as it is possible that many consumers did not register their purchase and therefore would be difficult for Curt Manufacturing to reach. For more information, consumers can call Curt Manufacturing at 715-831-8713, or contact the National Highway Traffic Safety Administration at 888-327-4236, or visit Safercar.gov.
34 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
front occupant fatalities in side impacts. “The front center air bag is not required by federal regulation, and no other air bag in passenger vehicles today offers the type of restraint and cushioning this air bag is designed to provide for front occupants,” said Scott Thomas, senior staff engineer in GM’s advanced restraint systems. The front center air bag is expected to add to the vehicles’ record of third-party crash test performance. The 2012 model year editions of these midsize crossovers have received five-star Overall and Side Crash safety ratings from NHTSA’s New Car Assessment Program, and 2011 Top Safety Picks from the Insurance Institute for Highway Safety. “The front center airbag has real potential to save lives in side crashes,” said Adrian Lund, president of the insurance Institute for Highway Safety. “GM and Takata are to be commended for taking the lead in this important area.”
November 2011 GM and technology supplier Takata developed the front center air bag over the course of three years, testing many design iterations to achieve packaging, cushioning, and restraint for a variety of crashes and occupant positions. Numerous elements of the air bag’s jointly patented cushion design address the restraint’s unique performance characteristics while considering a range of occupant sizes. “While no restraint technology can address all body regions or all potential injuries, the front center air bag is designed to work with the other air bags and safety belts in the vehicles to collectively deliver an even more comprehensive occupant restraint system,” said Gay Kent, GM executive director of Vehicle Safety and Crashworthiness. “This technology is a further demonstration of GM’s above-and-beyond commitment to provide continuous occupant protection before, during and after a crash.” More information can be found at www.gm.com.
2011-2012 Chevrolet Corvettes Recalled for Rear Hatch Hinges The National Highway Transportation Safety Administration (NHTSA) has announced a recall for 2011 and 2012 model year Chevrolet Corvettes, according to reports made by Consumer Reports.
The sport coupes have rear hatches that can separate during a collision and cause further injuries. According to NHTSA, the problem stems from faulty hinges, which may not be able to bear the weight of the sport car’s rear hatch.
These rear hatch hinges, which fail to meet federal safety standards, may have been installed in about 5,755 Chevy Corvettes from January to September of this year. General Motors is currently working to identify which Corvettes are involved in this latest recall. The company will contact owners affected by this recall to bring their cars to local dealerships where mechanics will replace both rear hatch hinges free of charge. For more information, consumers can contact Chevrolet (800630-2438) or NHTSA (toll-free: 888-327-4236) or visit the Safer Car website: www.SaferCar.gov.
Gonzo’s Toolbox
This is a new story by Scott “Gonzo” Weaver as posted on his website, www.gonzostoolbox.com. Gonzo has been serving the Tulsa area at Superior Auto Electric for over 27 years. See his book “Hey Look! I Found The Loose Nut”, which provides a Good Laugh for Mechanics of Any Age. The book is available at amazon.com. Contact Gonzo at Gonzosae@aol.com.
Dealing with Angry Customers and Growing ‘Alligator Skin’ with Gonzo Weaver
If there is one thing I find hard to deal with in this topsy turvy world of the auto repair business is the way some people will react when they are at the repair shop. It’s the way they conduct themselves at the shop when it comes time to get their car repaired. Over the years I’ve been praised, and degraded. I’ve been called a saint and I’ve been called the devil (or worse). I’ve heard the shouting and the stuff I probably wasn’t suppose to hear (walls don’t always block sound you know). After awhile you’ve heard it all before, and the attitudes that you see at the front desk become a part of the daily grind. Coping with all this is what I call; “growing alligator skin”. I try not to take things so personal, I’ll let the alligator skin handle it, and then take off my protective coat before I get back home to the wife and kids. What gives with the need for such a thing as “alligator skin”? I be-
lieve there a several factors inherent to the automotive industry that brings on this crocodile coat of protection. Mistrust of the automotive repair world in general is what I believe is the number one factor; but what brings on that mistrust? Is it the incompetent mechanic? I doubt that is always the case. Is it the money out of their pockets which they were not expecting when they drove down the road to the repair shop? I believe it’s more in the hands of the unknowing consumer who reads and watches too many evening news reports on the unscrupulous business practices of the few out there that really are rip offs and not the normal operations of countless decent shops in this country. If you tie that into the other part of the equation it starts to make some sense. What is that other part? The customer, their car, and what they do
or don’t do with their family transportation. As I try to tell my customers; “Maintenance on a new car doesn’t do much to the value of the car or its current condition. It’s when it’s older and the miles are creeping up that all the previous maintenance pays off”. The inevitable degrading condition of the car doesn’t happen all at once, it takes time and miles for that to happen. And, sometimes some old failures will cause new failures to occur. “General Maintenance” isn’t a guy in the Army reserves, it’s something we all need to do. It is almost always overlooked, and a lot of times we will avoid or put it off, until it’s too late. That’s when the raised voices or mistrust starts at the service counter and that alligator skin becomes a necessity again. Of course, there are always those TV scammers that will try to
tell you they have the latest greatest product to aide in the diagnosing of your vehicle. Let’s not forget about the internet and the “wonderful” sources of information out there that the customer will no doubt inform you about when they show up with a complaint. I’m sure there are doctors, lawyers, and many other professional trades that know who’s the best and the worst in their field. We sometimes hear about those on the evening news, just not as often as the car repair business seems to be focused on. But cars are needed by everyone, no matter what the condition. Think about it, you may not need a lawyer tomorrow morning to get to work, but I’ll bet you’ll need your car. Educating the customer should start from the time they sign on the dotted line and purchase their vehicle. See Alligator Skin, Page 36
www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 35
Continued from Page 35
Alligator Skin
No recourse is given to educate the new owner on what needs to be done in the future with their new found horsepower. It’s up to the owner to deal with the maintenance issues and any repairs that come up. I personally have never bought a car and had the salesman walk over to me and mention, “Now you know, you’ll need to set some money aside for general maintenance and the usual break downs.” Without the needed “knowhow” the car is left to its own demise and the maintenance is left for another day. So, once you add up all these fac-
tors there is only one thing that is going to happen at the repair shop—a disgruntled owner with an issue about their car. Now we are back to the original problem, how do you deal with all of this? Start with a bit of Alligator skin, be prepared for the customer to tell you their life story about their car. They’re going to tell you what they think no matter what you say or do. Let them get it out and keep your alligator skin intact. Stay calm, but professional. Most of the time, if you explain the diagnostic procedures and the results of the repair in terms that they can understand. Things will go a lot smoother. Sometimes I might have to
go through it a few times but it’s worth the effort. So the key to this whole ordeal is to do a good job, be prepared to back up what you do with an explanation that can be understand by the typical driver. As long as you do that you can keep your wits about you and you won’t lose too much skin for your efforts. Keep in mind; it can be a little rough around the water’s edge. You may have to stand your ground and make your point known. Keep it as calm as possible and explain as best as possible. These issues usually don’t apply to the person who keeps up with their maintenance schedules or comes in on a regular basis. They understand the
tions personnel, local inspectors and real contractors—may have to visit a storm-damaged property. Officials warned, however, that survivors could encounter people posing as inspectors, government officials or contractors in a bid to obtain personal information or collect payment for repair work. The best strategy to protect oneself against fraud is to ask to see identification in all cases and to
safeguard personal financial information. Recently, residents in Tioga County in New York State have encountered a potential fraudster canvassing certain neighborhoods claiming to be a “financial consultant” allegedly doing a survey for FEMA in a bid to obtain personal financial information. All New Yorkers are reminded that all FEMA employees and contractors wear a laminated photo identifica-
FEMA Warns NY Residents to Avoid Scams in Wake of Tropical Storm Lee New York residents are urged to be alert for potential fraud during recovery and rebuilding efforts following Tropical Storm Lee, officials with the New York State Office of Emergency Management (NYSEMO) and the Federal Emergency Management Agency (FEMA) announced on Oct. 15, according to Insurance Journal. Many legitimate persons—insurance agents, FEMA Community Rela-
36 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
need and respect the work you do. It’s the ones that only show up when their car has reached the water’s edge and can’t go an inch further without falling into the crocodile infested water. They will stammer around trying to find a way to get their car repaired without stepping off into the deep end and risk losing money, time, and their temper. We’ve all been there, and we can all understand the problems involved. Let’s not forget that explaining things can only go so far. You don’t want to have to resort to their tactics, that’s not good business. But, remember one thing, the customer is still dealing with an alligator, and they can bite back if they’re not careful. tion—a FEMA shirt or jacket alone is not sufficient proof that someone works for FEMA. FEMA inspectors may require verification of identity but will not ask for personal financial information during a home inspection. If you believe you are the victim of a scam, contact local law enforcement and report it to the New York State office of the attorney general. Visit www.ag.ny.gov for more info.
Busy Shop Clearly Sees Benefits Working with Pro-Spray Solvent & Waterborne by Ed Attanasio
As the owner of Icon Collision in Memphis, Tennessee, Tim Russell runs a body shop that fixes approximately 210–230 cars every month, does $6 million in business annually and oversees six busy divisions—including two detailing businesses, a PDR department, a glass division, a retail collision branch and a wholesale body shop. Specializing in highend luxury vehicles, Icon works with several Memphis-area car dealerships that don’t have their own collision centers, such as Lexus of Memphis, Wolfchase Toyota-Scion, Performance Toyota and Wolfchase Dodge, Chrysler Jeep. Russell needs a paint system that will produce top tier paint jobs each and every time, either waterborne or solvent, depending on the job. That’s why he’s pleased to be using both of Pro-Spray’s paint systems—the Solvent Basecoat and the H2O Waterborne Basecoat. Russell, now 51, worked for sixteen years at a Memphis dealership group running their collision center and servicing their eight dealerships. When the group was sold to a large company, the climate changed rapidly. Russell wasn’t happy with the new corporate environment, so he decided to start his own shop. Icon Collision was opened in 2006 and the business grew at an alarming rate. The shop did $80,000 in sales the first month and doubled that the second month. Today, the business grosses roughly $500,000 every month. When Russell opened the doors at Icon six years ago, he initially signed with another paint company. “In the end, I left them because their color matches were not accurate enough. We just weren’t able to hit on a lot of the colors. They brought in their managers and it got to where I couldn’t even hit white pearls for Lexus cars anymore and it got embarrassing. So, we started looking around for a better solution.” Russell sat down with Mike Aguirre from Color Connection, who he had known for quite some time and who was now representing ProSpray. They met with Todd Berry, Pro-Spray’s local distributor and Phil Rich, Pro-Spray’s territory sales manager and went through the advantages and savings associated with the Pro-Spray products. As they say, the proof is in the pudding, so Russell and his crew tested and retested the products.
SHOP & PRODUCT SHOWCASE Icon Collision Services Location: Memphis, TN
Telephone: 901-213-3266 www.iconcollision.com Company At A Glance... Type: Collision Repair
Facility Employees: 23
In Business Since: 2006 DRP Programs: Zero
Number of Locations: One
Combined Production Space: 24,000 square feet
Tim Russell at Icon Collision knows that no paint company will come up with perfect color matches 100% of the time, but Pro-Spray gives him the best matches he’s ever achieved.
Recalls Russell, “One day, I couldn’t get a match on a Lexus we were painting, so I called Mike at Color Connection and said can you match this color?” He said, ‘we can butt match it.’ I told him, ‘get down here and if you can butt match these panels, we’ll talk.’ He gave us the Pro-Spray paint and without tinting or mixing, we hit it right the first time. I thought that was pretty incredible.” “All of the Pro-Spray people came here to the shop and we talked to them. I looked at the pricing and realized it’s about 40 percent less than what I was paying with the other company. I could also see that they hadn’t done a price increase in three years, while our other paint company was raising their prices about 6–10%, or even more, every year.” Other benefits became clear the more he looked at Pro-Spray. “I analyzed Pro-Spray’s clear coats, because that is always one of the main things I look at. I like high solid clears, and they have 52% high solid clear, with the competition coming in at 48%. It doesn’t look like a big difference, but if I can get a better clear at a lower price, why not? “The major things we were concerned about were the color matches and the protection provided by the clear coats. It’s not rocket science. If it’s prepped properly, it will last. We’re more concerned with the color match and the clear.” Hitting on color matches with Pro-Spray also got his attention, Russell explained. “Hey, I‘m not expecting every paint manufacturer to
match every color every time, because it just isn’t going to happen. There are times you’re going to have to tint, for various reasons, and that’s a reality. But, Pro-Spray definitely impressed me and I made a deal with them. We started with ProSpray in late 2009 and we’ve been spraying it ever since.” Adopting Pro-Spray was a gradual yet fairly drama-free process, Russell said. “We started by using their solvent product and about six months ago we added their waterborne line. They brought in their people and we didn’t have to send anyone to a school, so it was convenient. They had five people here for a full two weeks with the solvent and two people here in the shop with one week for the waterborne. We added the waterborne because more and more of these newer models are painted with waterborne. Right now he’s painting more cars with solvent, but that may change, Russell stated. “I have both systems in place and I’m letting my painters decide. They’re picking 90% solvent right now, because they’re comfortable using it and right now it takes them 15-20% longer using the waterborne. So, I’m going to have to make a decision soon on whether to make a full changeover to waterborne or use both. My guys get paid flat rate and the more cars they paint means more money in their pockets. Everyone hates change, but we like the Pro-Spray H2O waterborne, so once we can get faster at using it, the transition will be easier to make.”
Icon Collision in Memphis, Tennessee, is currently using both solvent and waterborne products by Pro-Spray in his busy shop. They’re painting more than 200 cars monthly.
Owner Tim Russell values Pro-Spray’s colormatching capabilities, as well as its attractive pricing and the quality of the finished product.
Pro-Spray Automotive Finishes Phone: (800) 776-0933 email: info@prosprayfinishes.com website: www.ProSprayFinishes.com www.ProSprayH2O.com
www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 37
Girl Scouts Gear Up at NACE for Collision Hub’s Tools for Success tory of DuPont with Petra Schroeder, the chemistry of paint and color with Laura Yerkey of ProSpray, advanced software and new technologies from CCC’s Susanna Gotsch, scholarship opportunities with the Women’s Industry Network, and more. Following the NACE Tools for Success tour, Collision Hub hosted a Women’s Panel sponsored by LKQ and moderated by Eileen Sottile, which featured: ●Kristen Felder—Founder and CEO, Collision Hub ●Denise Casperson— Manager, ASA Collision Division ●Audra Fordin—Owner, Great Bear Auto Repair and Auto Body Shop, Flushing, NY ●Stacee L. Royce—Laboratory Manager, Paint Applications and Local Girl Scouts were able to tour the NACE floor and get a taste of the collision repair industry in Masking Systems, 3M Collision Hub’s second annual Tools for Success Automotive Aftermarket Div. program ●Petra Schroeder—Brand Development Manager Standox, Dupont portunities available to young women Performance Coatings in the collision repair. ●Victoria Jankowski—P&C Claims The girls learned about frame Consultant, State Farm and President equipment and measurement systems of WIN with Bob Holland of Chief, the his-
With over 100 girls registered and nearly that number in attendance, Collision Hub’s second annual Girl Scouts: Tools for Success program was a huge success. For the event, the Girl Scouts of Citrus Council in Orlando came to the NACE show floor for an hour of conversations with leaders in the industry about the incredible op-
We’re open to serve you!
The Source for Mazda Parts!
57-15 Northern Blvd., Woodside, NY 11377 Parts: 3251 57th St., Woodside, NY 11377
57-15 Northern Blvd., Woodside, NY 11377 Parts: 3250 57th St., Woodside, NY 11377
• Value Products & Tires Available • Free Dedicated Delivery • Large Stock of OEM Parts
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Mon-Thur 7:30am - 6pm Fri 7:30am-5:30pm Sat 8am - 4pm
718.728.8111 x3019/3040
gorozco@koeppelautogroup.com
Women’s Panel Discussion and lunch Provided By LKQ. Other event sponsors included: Chief Automotive Technologies, 3M, PPG, VeriFacts Automotive, AutoBody America, AkzoNobel, Fix Auto, DuPont, CARSTAR, Mitchell, Esurance, Pro-Spray Automotive Refinishes, Automotive Service Excellence and CCC Information Services. The Girl Scouts is reforming its mission to incorporate an emphasis on engineering, science, and technology and are seeking avenues to achieve this goal. As the collision repair industry continues to seek ways to recruit new talent and creative methods for connecting with costumers, Collision Hub hopes to offer access to a truly untapped demographic. Tools for Success offered a unique opportunity for leaders in our industry to speak with a premiere group of goal-oriented and intelligent young women and capture their potential as future leaders and consumers as well as the support of each scout’s extensive personal network as potential customers and champions of the collision industry.
Koeppel Mazda
Koeppel Volkswagen
Hours:
Girls heard from these incredible women about everything from their personal journeys into the industry to words of advice going forward. Collision Hub offers this program as a way to connect with the leadership pipeline that is the Girl Scouts and to possibly light the spark that will one day usher them into the industry as our future CEOs, Marketers, Painters, Lobbyists, Technicians, Mechanics, Shop Owners, Engineers, Chemists, Industry Analysts and more. “In addition to their time on the NACE floor visiting selected company booths, we were able to introduce these dynamic young women to the work of the Women's Industry Network and the National Autobody Council's Recycled Rides Program,” said Kristen Felder, Collision Hub Founder and CEO. “We believe that October 8, 2011 was yet another step towards a wonderful career exploration and mentoring program between the Girl Scouts of America and the collision repair industry at large.” Tools for Success was Presented By Enterprise Rent-A-Car with the
718.278.0319 Fax
www.koeppelvw.com 38 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
Parts Dept. Dep
Hours: Mon-Thurs 7:30am - 6pm Fri 7:30am-5:30pm Sat 8am - 4pm
wesley@koeppelautogroup.com
718.626.7200 718.721.9100 718.626.1427 Fax
www.koeppelmazda.com
Continued from Page 31
Evolving Marketplace
government sources, primary and secondary research, and industry “knowledgeable and experienced,”
Source: The Romans Group LLC
professionals, we continue to ascertain that there is no one certain number that is universally recognized or accepted as being the “correct” number of collision repairers in the U.S. today. Our estimated U.S. market size for the number of collision repairers through year end 2010 is 37,700. This estimate
continues to reflect the long-term decline which began in the late 1980s. As seen in the chart below, the number of independent and dealership collision repair facilities in the U.S. has declined by 53 percent over the past 30 years. Since 2006, we see a reduction of approximately 7,300 independent and dealeroperated collision repair facilities within the United States, a 16 percent decline. Over the next decade, we believe that greater market share will continue to shift to the $20M plus MLOs, the $10 to $20M MLOs, and MLNs. Their focus will be on growthoriented strategies which deliver high-
quality and consistent repair performance, have strong insurance and consumer brand recognition and reputation, and adapt quickly to market, consumer, and insurance needs through innovative solutions, technology and services. This market share shift will move the industry toward a less fragmented and capacity-normalized model. Using our best-efforts approach in sizing the collision repair insurance and consumer-paid auto repair claims market size, insurance-paid repairable
Source: The Romans Group LLC
claims expenditures for 2010 rose slightly to $28.3 billion from $27.7 billion in 2009. Consumer-paid claims
were relatively stable at $2.7 billion. We estimate that the combined insurance and consumer-paid claims for repairable vehicles for 2010 was approximately $31.0 billion. The total number of collision repairers within the United States continues to have value as the traditional data point for calculating market share. Repairers who operate and integrate within their business collision damage estimating and shop management systems while leveraging other claims processing and management software such as auditing, capacity utilization, scheduling and key performance metrics analysis will be the collision repair providers last standing and preferred by insurance and other claims production companies. Our analysis of MLO production market share includes three primary market definitions: the total number of collision repairers, total estimating systems and management system software users.
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Hyundai Sonata 2011
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718-253-8400
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Mon-Fri 7:30am - 6pm Sat 7:30am - 4pm
cisco@plazacars.com www.plazaautomall.com
Largest Collision Inventory in North New Jersey
Vision Hyundai ROCHE STER
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Values for these market size data points are represented in the following chart. Our summary findings concluded that in 2010 there were 56 independent and dealership collision repair $20 million MLOs processing over $3.3 billion annually through 973 production locations. We attempted to identify nonproduction estimating and drop-off locations and base our market share on production locations only. While these $20 million MLOs represent 2.9 percent of the estimated 37,700 collision repair facilities nationally, they process 10.8 percent of the $31.0 billion in insurance and customer-pay collision repair revenue. The National Automobile Dealers Association, NADA, estimates that 5,841 dealers processed $6.4 billion in
repair revenue in 2010 versus $6.6 billion in 2009. The balance of $24.6 billion is being processed by approximately 31,859 independent collision repair locations. On average, the $20 million MLOs process $3.1 million per location, over four times more than the average annual revenue for nonMLO repairers of $754,949. There are many smaller independent and dealer non-MLO repairers that achieve greater-than-the-industry average annual revenue, especially those who represent and operate in the $10.0 million to $20.0 million segment. While this paper is focused on independent 1 May have more than one installation per location. Includes both and dealership multiplecommunicating and non-communicating systems. 2 location operators, we Assumes one per location
think it is important to recognize the continued interest in other collision repair models which we identify as multiple-location networks or MLNs. These MLNs are growing competitively with their service offerings, insurance-preferred value proposition, and market influence. When combined, their market share for vehicle repairs processed and their local, regional and national footprint become relevant.
We have included ABRA, CARSTAR and Maaco, all franchising organizations, and Fix Auto USA, a hybrid franchisor and brand banner network, as part of our multiple-location network segment for 2010. Together they represent a total of 884 locations repairing approximately $1.3 billion in vehicle revenue. We see interest on the part of collision repairers to investigate and consider the benefits of multiple-location franchisor and banner networks. The independent-brand model, historically believed by many repairers to be the most desirable way to successfully maintain and grow their business, may now be seen by a growing number of collision repair providers as possibly more risky than being associated with an MLO or MLN, especially in light of current macroeconomic, market and competitive conditions. Some repairers see the opportunity to adopt and integrate MLN member benefits as a potentially better way to sustain and grow their business through: ● Leveraging the MLN value proposition, brand association, multi-segment customer reach, multi-level sales
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and marketing, and insurance company business affiliation ● Franchisee performance tools for business and customer analysis, benchmarking and peer ranking ● Personnel, operational and general business training and development
● Standardized processes and procedures ● Utilization and integration of a technology platform ● DRP insurance relationships and business considerations not previously
available as an independent operator ● Expense reduction through largescale supply chain management and procurement Our regional location market representation for these $20 million MLOs is highest in the Southeast at 25.2 percent. In 2008 the West was the dominant region with a 25.4 percent share; it now represents 22.9 percent of the market. The lowest $20 million MLO representation continues to be in the Northeast at 6.1 percent which is down 4.3 percentage points from their 2006 share of 10.4 percent. Another way to view regional representation is to assess the geographic reach of the $20 million MLO organizations. Do they tend to contain themselves in a relatively small area or do they expand their influence across many states?
● Of the 56 $20 million MLO organizations, 31 do business in only one state. Of those 31 organizations, 25 are independents and 6 are dealers. ●Within the top ten rankings, only two independent and three dealer MLO organizations strategically position themselves in only one state. The West has the highest number of MLOs with at least one location in that region, 26 MLOs are represented which represents 46.4 percent of MLOs. The companies represented within the top ten MLO organizations
have not substantially changed since 2006 and have only lost one member. While their share of all collision repair locations has been relatively constant, revenue among this group had been increasing year over year in total as well as per location. Within the top ten $20 million MLOs, five are independent and five are dealer groups. These ten organizations account for 44.9 percent
of all $20 million MLO production locations and 53.3 percent of all $20 million MLO revenue. These top ten MLOs display trends similar to the total $20 million MLO group; higher revenue produced through fewer production locations. Smaller and non-MLO repairers, those with total collision repair rev-
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enue below $20 million annually, vary widely in claims processed per loca-
tion. For the top ten independent $20 million MLOs, the average repair revenue per location significantly surpasses that of their smaller and non-MLO counterparts at $3.0 million versus $740,619, over four times more average revenue per location. Top ten dealer $20 million MLO performance also exceeds their smaller and non-MLO counterparts at a repairsprocessed average of $3.9 million per location versus $964,691 per location for smaller and non-MLO dealer repairers; four times more revenue per location. The trend for both the independent and dealer groups is toward higher revenue per location in both the MLO and non-MLO segments. Comparing the top ten independent and dealer group $20 million MLOs, the independents have 69 percent more locations producing 27 percent more revenue than dealer repair organizations. However, in 2010 the top ten dealer repairers manage $3.9 million in average revenue per location versus $3.0 million per location for independent organizations. Within the top ten independent $20 million MLO group, the ranking
has remained fairly consistent over the past four years. The total number of production locations has increased along with their representative share of all $20 million MLO locations to 40.7 percent from 40.5 percent in 2006. This group’s share of all $20 million MLO revenue has increased to 39.7 percent, up 5.7 percentage points from 34.0 percent in 2006. The trend in the number of dealerships operating collision repair facilities has continued to decline since 2006 when 41 percent had repair locations down to 33 percent in 2010. Both the number of new car dealerships and the number of dealers operating collision repair facilities de-
Source: NADA, The Romans Group LLC
of 52 percent to a low of 33 percent in 2010, a 19 point drop over 16 years. Looking at the dealership share
Source: NADA Industry Analysis Division
of the collision repair marketplace, and according to NADA, revenue derived from collision repair work performed by dealerships declined to $6.4 billion in 2010, down nearly 33% percent from $9.5 billion in 2007. During the past 22 years, dealerships had seen their collision repair
Source: NADA, The Romans Group LLC
clined significantly since 2006. Using NADA’s reported total of 17,700 dealers at the end of 2010, this represents an estimated 5,841 dealer-operated collision repair facilities, a decline of 32.8 percent or 2,851 fewer dealer collision repair operators from 2006 when there were 8,692 dealers operating collision repair facilities. As can be seen in the following chart, the number of dealerships operating on-site body shops since 1994 has dropped significantly from a high
42 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
Source: NADA, The Romans Group LLC
revenue increase steadily until around 2005 when the industry’s total sales dollars began to decline to what are now levels equal to 1998. The revenue decline has started to tapered off since
2008. There was a 4.1 percent decline in the number of new car dealerships from year-end 2009 to year-end 2010, along with a 10.3 percent decline in the number of dealerships offering collision repair services. The significant decline in the number of dealerships in 2009 slowed in 2010. About 1,550 dealerships closed in 2009 and 760 closed in 2010, leaving the dealership count at 17,700, a drop of 4.1 percent. Within the top ten dealer group, there has been some minor shifting. For those dealers, average revenue per location has increased over the past year by $500,000, a considerable swing from the $300,000 decline in 2009. We expect that the evolving collision repair landscape will be the result of a number of industry-specific and macro-economic conditions likely causing a continuation of collision repairers exiting the business, MLO mergers and acquisitions, market share growth and expansion, and innovative partnerships and strategic alliances. Some of the prevailing conditions include: ● Insurance companies working with a more limited number of single and multiplelocation operators ○ DRP claims conversion is expected to increase over the next five years ○ Performance management results will drive DRP claims utilization and influence to top-tier collision repair performers ○ DRPs and preferred provider programs are influencing larger repair volumes to emerging end-game winners ○ Insurance companies increased adoption of the multiple-operator business model and single point of contact ● Fluctuating and conflicting trends affecting accident frequency and the
number of repairable claims. The negative impact of the current macroeconomic and business conditions and their influence on collision repairers remaining in business or de-
Source: NADA Industry Analysis Division
ciding to exit their business ● Acceleration of aggressive repairer selling, marketing and branding of their competitive value propositions and performance to current and prospective wholesale and consumer S segments ● Development, marketing and implementation of new and innovative services that many repairers will not have the ability or the inclination to
pursue with their customer base ● Lean production and its business benefits leading to competitive advantage and long-term business sustainability for some repairers compared to their competition ● Hybrid claims management and process models that not all repairers are willing or able to accept, adopt or maintain ● Insurers co-managing with repairers a growing number of their insured’s collision repairs through direct repair programs. ● Innovative, risk-taking repairers will move toward a self-managed vehicle repair model which will require less insurance company oversight, involvement and disintermediation. ● Technology and its affect on the evolution and movement toward an integrated electronic claims processing model ● Continued contraction, consolidation and convergence of all industries associated with and including collision repair ● Globalization and the potential U.S.
market entry of foreign companies in the collision repair, property and casualty insurance and auto physical damage industries The good news is that there is still much opportunity within the collision repair industry for those who adapt to the changing conditions and leverage their business, market, financial, and strategic competencies and capabilities for growth and future success. For further information, contact Vincent J. Romans or Mary Jane Kurowski of The Romans Group at
vincent@romans-group.com, maryjane@romans-group.com or visit www.romans-group.com.
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The Insider is a corporate-level executive with a Top 10 auto insurer in the U.S.. Got a comment or question you’d like to see him address in a future column? Email him at Auto.Insurance.Insider@gmail.com
Inside Insurance
Can the Collision Industry Support Two Major Trade Shows? with The Insurance Insider
“The Insider” is an auto insurance company executive who wishes to remain anonymous. This column reflects solely the opinion of The Insider in his unvarnished view of various issues impacting the collision industry.
Can NACE Survive as a ‘traveling regional trade show’? Well, it’s that time of year again: lights, slots, dice, scantily-clad women, lavish parties, casinos and NACE? Actually, it’s not—NACE is already over. In case you missed it, NACE (the International Autobody Congress and Exposition) took place in early October in Orlando, the first time it moved from Las Vegas in more than a half-dozen years. Yes, I was one of a handful of people that showed up to support the industry’s longest-standing national trade show. I have missed only four of the 29 of these annual extravaganzas, and I wasn’t about to let a trip to sunny Florida deter me from attending. I have to admit, I was apprehensive about spending the money and time to attend two shows this year. . How this small industry can support two national trade shows (NACE and the SEMA show in November, which I will discuss in my next column) is beyond comprehension. In fact, I would say it’s not possible. Here’s my best guess: We will be back to one national industry trade show in the next three years. There’s no way that the large companies buying booth space will continue to throw good money after bad. Even aside from the poor economy, national trade shows like NACE are a dying breed. Yup, even the mighty dinosaur eventually went extinct. The once-almighty NACE is dying a slow death. Before anyone submits an obituary, please note that the show still stands some chance of survival. Although this year’s NACE wasn’t the typical NACE we’ve been accustomed to, there was something different and positive. Aside from the fact that there weren’t a lot of people there, which made it easier to navigate the show floor, the smaller event meant my feet were intact after a few
days of walking. Usually, I can hardly walk after the weekend marathon. All kidding aside, the positive news is the reality that NACE could survive and possibly reinvent itself as a traveling regional trade show. There is a small percentage of people who have attended NACE in the past few years who walk a trade show floor to find a special deal or see something new. But the vast majority of the attendees attend the show to participate in other related industry events, or to network and reduce future travel expenses by meeting with large groups of people over a short period of time. Because this article is about sharing inside information and helping my dedicated readers gain a broader perspective, I suppose I should tell you something you probably don’t know. NACE transforming into just a large regional trade show didn’t happen overnight or by accident. It’s been a slow death. In the years leading up to its demise, the industry tried to tell organizers it was time for change. They assembled a committee of industry experts that were supposed to help guide them to “NACE: The Next Generation.” The goal: to actually create a trade show that met the demands of their customer and once again generated excitement. NACE organizers slowly changed the direction of the show, but by then it was too late. The excitement of NACE was basically reserved for those looking for a Las Vegas vacation. Attendance plummeted. The reported show attendance became similar to an Enron annual report: There was a lot of inflated numbers and not a whole lot to support the fact that the trade show floor looked like a bocce ball court on the weekend. One would swear that they were using a dog-years multiplier where every one attendee accounted for seven [organizers said 15% more attended than last year]. Although NACE organizers made a lot of mistakes along the way and often acted with arrogance, there were other contributing factors. This is kind of like a murder mystery:
44 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
There are a lot of suspects and clues, but we still aren’t sure of the killer or the murder weapon. But I think that the real killer of NACE was the SEMA show. SEMA is offering something that NACE no longer does: attendees, attendees and more attendees. Oh, and something else: attendees. SEMA can be found in the dictionary under the word “excitement.” SEMA will have about 10 times the number of attendees as NACE did this year. As far as the murder weapon, I think it was a vote at a Collision Industry Conference (CIC) meeting in early 2010. The attendees of this conference were asked to vote when and where they would like their fall meeting to be held: keep it as scheduled in November in Las Vegas, or move it a few weeks earlier to when NACE had been rescheduled to be held. They voted for the conference to be held in Las Vegas
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at the same time as SEMA [by one vote—Ed.]. The rest is history and we now have two trade shows to support. That’s it for now. See you in Vegas, baby.
The Insider is a corporate-level executive with a Top 10 auto insurer in the U.S. Got a comment or question you’d like him to address in a future column? Email him at Auto.Insurance.Insider@gmail.com.
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Social Media for Shops
Ed Attanasio is an automotive journalist based in San Francisco, California. He can be reached at era39@aol.com.
How to Use Five Different Forms of Social Media to Gain Customers with Ed Attanasio
I mentioned social media to a body shop owner recently and, to my surprise, he was almost hostile to the concept. There seems to be a very localized group in the collision industry that really understands social media and this guy was not one of them. “Why would I put my shop on Facebook?” he said. “I don’t have a lot of customers who are teenage girls!” I told this gentleman that Facebook and most other forms of social media aren’t being used exclusively by teenage girls. Facebook’s 800 million members aren’t all teenagers, and they certainly aren’t all girls. Last month’s NACE meeting featured a keynote speaker, Chris Brogan, who’s a social media guru accustomed to talking to large automotive groups like those attending NACE/CARS, and the GM Dealers of Canada, for example.
What’s going on here? Why would some shops and associations spend valuable time instructing on social media while others can’t run away from it fast enough? David Moore, the owner of CollisionBuilder.com, a company that designs web sites and develops social media plans for body shops and related businesses, has seen a recent spike in body shops getting involved in several forms of social media. “It’s unavoidable,” Moore explained. “Three or five years ago, having a company web site was enough, but now your shop’s customers are using more and more social media. It’s not just for students or people in their 20s anymore. Corporate types, senior citizens, your employees and your competitors are using it and in many cases, several times daily. To keep in touch with your clients on a regular basis and attract new ones, more and
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more body shops are gravitating toward sites like Facebook, Twitter, LinkedIn and even Youtube, with solid results.” One of the early adopters of social media in the collision industry was Wren’s Body Shop in Douglasville, Georgia, a company that repairs 160 cars monthly, employs 20 people and does approximately $3 million in annual sales. Owner James Wren jumped into the social media game with both feet several years ago and it’s paid off for him in a big way. “I know for a fact we’ve received a good amount of business through our involvement in Facebook and LinkedIn,” Wren said. “Sometimes we get several new customers every month and the social media keeps us in touch with our past customers. We’re still doing the other forms of advertising, but now we’re focusing more on social media. All it costs us
is our time, so it makes a lot more sense. Facebook has been great for us getting new business. LinkedIn has been booming for us recently and we’re definitely interested in using Youtube to get exposure for a video we produced.” Facebook and LinkedIn are ideal vehicles for body shops or professional organizations, such as the California Autobody Association, to keep its members informed and in the loop about news and events. Rather than getting an avalanche of e-mails from you, people interested in your business can check in for updates along the way. It’s not as disruptive as email because you don’t have to worry about spam. When your neighbors and peers see your social media posts, it adds immediate value to your message, and the interaction among the group can rapidly build. See Social Media, Page 47
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Shop Showcase
Chasidy Rae Sisk is a freelance technical writer from Wilmington, Delaware, who writes on a variety of fields and subjects, and grew up in a family of NASCAR fans. She can be contacted at crsisk@chasidyraesisk.com.
Moody’s Collision Centers in Gorham, ME, Is Concerned for the People: Co-workers, Community and Environmental Responsibility with Chasidy Rae Sisk
Moody’s Collision Centers in Maine are well-known by their community for their quality service, but they also display exemplary environmental efforts and a culture based around employees. In addition to the many environmentally friendly efforts made by the shops, owner Shawn Moody has also established an employee stock ownership plan (ESOP) for the company which allows employees to purchase a share in the business, thus inspiring morale and dedication.
The whole crew at Moody’s Gorham location
In July 2011, Moody’s Collision was acknowledged for their environmental consciousness, employee-focused culture and work with the community when they received AkzoNobel’s FIT award. “Receiving the FIT award was a legacy event. Moody’s is extremely honored to accept this prestigious award. We really place a great deal of thought and consideration to all that we do and consider sustainability our cornerstone of decision making,” said Moody. Moody’s switched to AkzoNobel’s Sikkens paint in 2003, and Moody considers it one of the best decisions in the thirty-three years he has been in business. In 2010, Thad Moody led the change to AutoWave waterborne paints in all of their shops, becoming one of the first shops in Maine to make this conversion which minimizes VOC emissions and reduces waste. Since the shops repair all makes and models, switching to waterborne presented the challenge of rebuilding their color library. Moody admits the first six months were a challenge but says they are getting better constantly. In addition to switching to waterborne, Moody’s was also the first in the industry to join the Governor’s
Carbon Challenge, reducing their carbon footprint by 30% over the past three years. They did this by installing high-efficiency T-5 lighting, variable frequency drive (VFD) compressors and spray booths. These efforts have also proven financially beneficial as it allows Moody’s to lower energy costs 35%. The shops also contribute to environmental conservation by recycling as many of their materials as possible. When there was a lot of concern in the early part of the century about Social Security being solvent in twenty to thirty years, Moody’s decided to explore the possibility of an ESOP because they did not want employees to suffer upon retirement after spending many years working diligently for the company. The ESOP was established in 2003 and now has over $2,000,000 in the trust. Though the ESOP is complex and costly to implement as well as to administer going forward, Shawn Moody feels “our coworkers deserve some sweat equity.” and the fact that employees own stock in Moody’s gives them a “vested interest in day-to-day decisions and operations”. Moody’s leadership structure places a high value on constructive feedback and ideas. While the business is still operated as it has been historically, they have legal responsibilities which require participant voting for major decisions as well as quarterly profit sharing meetings with all co-workers in which they share various information about the business. According to Shawn Moody, “We truly operate Moody’s with complete transparency. This style of open book management is consistent with the ESOP ownership culture. It’s powerful!” Moody’s believes in “taking care of people.” and this extends to customers, co-workers, insurance companies and the community. “You’ve got to cover all the bases to be successful in today’s competitive and challenging business climate.” As such, the company contributes to a variety of causes, both locally and
46 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
statewide. They also credit co-workers PTO time to participate in community activities and organizations. “Giving back is a tremendously important focus of Moody’s,” according to Shawn Moody. Shawn Moody started the first Moody’s Collision Center in 1977 by buying a piece of land and borrowing $6,000 to construct a 34’X 30’, threebay garage when he was seventeen years old and going into his senior year of high school. Between 1988
Shawn Moody and George Harrison
and 2000, Moody’s focused on growing their auto recycling business, Gorham Auto Parts, eventually becoming one of New England’s largest auto recyclers. They sold that business to LKQ Corp. in 1999 and began focusing on their collision business, selling their salvage auction business, Rogada Services, to IAA in September 2011. Shawn Moody states, “we didn’t really focus on growing the collision repair business until 2001. So to go from our original Gorham facility with ten co-workers in 2001 to six locations and close to one hundred coworkers in ten years has been quite a journey.” Moody’s Collision Centers currently consists of four nearly identical 17,500 square foot “Greenfield” shops in Gorham, Scarborough, Biddeford and Portland, as well as a 7,000 square foot center in Sanford. They are now constructing an additional 17,500 square foot shop in Lewiston, scheduled for Grand Opening on November 1, 2011. They chose this location because it was the next populated market outside of the greater Portland area. Moody’s plans to continue this
rapid growth: “We are currently looking at acquisition opportunities to add to our Greenfield schedule. Our goal is to be in the NH and VT markets by the end of this decade.” Each Moody’s Collision Center averages between fourteen and sixteen co-workers, totaling eighty-two currently. In addition to all of the standard equipment, each location also boasts two frame machines and two spray booths, with the exception of the Sanford shop which has one of each. The shops possess Continental, Chief and/or Chisum racks, and their spray booths are a combination of USI Italia and Junair booths. Each of the 17,500 square foot shops average between one hundred, fifty and two hundred customers per month. The shops are all I-CAR Gold certified and have been dubbed Department of Environmental Protection Environmental Leaders. Moody’s maintains direct repair relationships with fourteen insurance companies. Moody’s largest challenge continues to be procuring parts since Maine is a rural state and does not have access to large dealership groups with large inventories. While discussing his shops, Mr. Moody also took the time to discuss the current state of the auto body industry. He notes that because the value of the US dollar has decreased, a lot of auto salvage is exported to other countries, therefore reducing the availability of good affordable LKQ parts. “The lower volume shops are faced with higher costs and no prices increases to offset. Their overhead goes up and squeezes what little profit there is,” said Moody. He believes the future of the industry lies in continuing “to innovate with Lean and Green efficient business processes. Quality control and great customer service will identify the winners and losers going forward.” Moody's Collision Centers 200 Narragansett Street Gorham, ME 04038 207-839-2500
Continued from Page 45
Social Media
The first thing you need to do in order to start a social media plan, (in my opinion), is to create a Facebook page. Then, invite friends to your page and spread the word. Get your employees, customers and vendors who use Facebook to invite their friends as well. This will enable you to contact anywhere from hundreds to thousands of people just be tapping into your employees’ friends’ lists. For a direct approach, it’s very easy to find specific people by searching for them on Facebook and sending them a message through the link that’s under their profile picture. What types of information should you post about your shop? Well, pretty much anything and everything to create ongoing online conversations among your friends. Did you recently repair a rare or classic vehicle? Did some of your techs win an award for their job performance or recently complete some I-CAR courses? Does your painter have an amazing hot wings recipe (forward it to me,
please)? These are the types of things that will keep your circle of friends engaged and continually checking out your social media. Make it fun and readable and people will come back again and again. The process with LinkedIn is basically the same, but focusing more on your professional contacts. With any form of social media, setting it up is a big step, but administrating and maintaining it is also crucial. Too many shops start doing it because their competitor down the street is doing it, but eventually they let their social media sit dormant. People think “If I build it, they will come” but that couldn’t be further from the truth. Ideally, you should have a person dedicated to keep the dialog flowing and your social media up-to-date, with at 2-3 new posts monthly. The advantage of Twitter is that anyone out there in cyberland can find your shop. I suggest putting the name of your city in your Twitter address (like @joesbodyshopsanjose) so that people can find you searching that way. Hopefully, if you’ve been tweeting for sometime already, you already have a considerable Twitter commu-
nity assembled, but if not you can rapidly build one by letting all of your current and former customers, vendors and associates about your new Twitter account, by sending notifications to everyone on your e-mail list. Blogspot.com (others are blogger.com, wordpress.com, tumblr.com) is an easy site to use for setting up and maintaining a blog for your shop. Blogs are stronger than ever before and they provide advantages over web sites, because they can easily be updated on a regular basis. Think of a newsletter concentrating on your shop. Blog readers will anticipate and expect fresh information. Give customers helpful tips; talk about your paint, parts and equipment vendors (they appreciate it) and continually sell your brand. It’s fairly easy to publish a blog and by leveraging it and linking it to your main web site, you’ll get major mileage out of it. To learn a lot quickly about blogging, there are a ton of books and online tutorials. But, trust me—blogs are easy to create. If you know how to attach a photo or cut and paste text, you’re already there. Finally, Youtube can help you to attract people to your company. Shoot
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some video of the shop, interviewing your managers or your techs and counter people. You can even interview your vendors and/or customers, but get them to sign releases first. And then post the videos on Youtube, linking them to your social media, including your blog and your web site. One suggestion is make your videos less than two minutes in length, because studies show that people have very short attention spans and won’t sit through anything longer. A step beyond a blog would be a more dedicated phone app which provides a service but also helps customers find your shop such as those created by shops like Nigro’s in Philadelphia. See last month’s Autobody News or go online to check this out. Hopefully we’ve outlined some basic forms of social media for you to use to promote your business, attract new customers, strengthen your relationships with your existing customers and make money. All it takes is time, a rudimentary knowledge of software and the willingness to induct yourself into the new age of customer-focused advertising.
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November 1 Tuesday / 8am
Title: I-CAR: Plastic and Composite Repair (PLA03) / Where: Las Vegas Convention Center, N231-242 / I-CAR, the Inter-Industry Conference on Auto Collision Repair, 2011 SEMA ShowI-CAR, the Inter-Industry Conference on Auto Collision Repair, is returning to the SEMA Show in 2011 with I-CAR training available to attendees each day of the SEMA Show
Title: I-CAR: Exterior Panel Damage Analysis (DAM10) / Where: Las Vegas Convention Center, N231-242
Tuesday / 12:30pm
Title: SCRS Repairer Driven Education: Having Your Cake and Eating it Too: Marketing Practices / Repairer Driven Education, RDE, SCRS, 2011 SEMA ShowSCRS REPAIRER DRIVEN EDUCATION (RDE) series will feature seminar offerings Title: SCRS Repairer Driven Education: Load Leveling – The Hidden Enabler for Shop Performance Title: SCRS Repairer Driven Education: Understanding Design Based Repairs
Tuesday / 3pm
Title: SCRS Repairer Driven Education: Economic Pricing Considerations for the Collision Industry in 2012 Title: SCRS Repairer Driven Education: You Don’t Know What You Don’t Know - How New Auto Regulations Impact the Body Shop
Title: SCRS Repairer Driven Education: Leading for Performance & Profitability
November 2 Wednesday / 8am
Title: I-CAR: Restraint Systems Damage Analysis (DAM11) / Where: Las Vegas Convention Center, N231-242 Title: I-CAR: Corrosion Protection (CPS01) / Where: Las Vegas Convention Center, N231-242
Wednesday / 12:30pm
Title: SCRS Repairer Driven Education: Educate NOT Alienate: The Key to Successful Collision Negotiations (Part I)
Title: SCRS Repairer Driven Education: How to Capture More Cars, Customers and Revenues Through Digital Marketing Title: SCRS Repairer Driven Education:
DuPont Custom Finishes to Exhibit at SEMA 2011 DuPont Custom Finishes will participate at the annual Specialty Equipment Market Association (SEMA) tradeshow in Las Vegas, NV. The show will be held at the Las Vegas Convention Center, Nov. 1 - 4. DuPont Custom Finishes, exhibiting in booth #22789 in Hot Rod Alley, Central Hall, will feature DuPont™ Cromax® Pro, ChromaPremier® and Hot Hues™ custom paint products. Industry airbrush and pinstripe artists will be showcasing their skills with live demonstrations in the booth using DuPont™ Cromax® Pro waterborne products. Vehicles on display in the booth will include a 2012 DuPont Calendar winning ’61 Chevy Impala, owned by Tim Brown of Jacksonville, FL; a ’71 Challenger owned by Bob and Karon Zeitler and painted by John Riehn of John's Autobody and Paint. Imperial, MO; and a ‘50 Fleetline built by Tim Strange, owner of Strange Motion Rod & Custom Construction and host of PowerBlock TV series Search & Restore. Strange will make appearances to sign autographs in the booth 10a.m. to 12p.m. on Wednesday, Nov. 2 and 1p.m. to 3p.m. on Thursday, Nov. 3. The SEMA Show takes place at
the Las Vegas Convention Center. In addition, the SEMA Show provides attendees with educational seminars, product demonstrations, special events, networking opportunities and more. The SEMA Show is a trade-only event. For additional details about the show, or to register to attend, visit: www.semashow.com. More information about DuPont Cromax® Pro Waterborne, Hot Hues custom finishes or ChromaPremier® paint products is available by visiting www.pc.dupont.com or by calling 1800-GET-DUPONT. DuPont has been bringing worldclass science and engineering to the global marketplace in the form of innovative products, materials, and services since 1802. The company believes that by collaborating with customers, governments, NGO’s and thought leaders we can help find solutions to such global challenges as providing enough healthy food for people everywhere, decreasing dependence on fossil fuels, and protecting life and the environment. For additional information about DuPont and its commitment to inclusive innovation, please visit: http://www.dupont.com.
48 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
Lean 3.0 = A Practical Path to Using Lean to Improve Process Flow
try: The wins, the losses and a view of the future
Wednesday / 3pm
Title: SCRS Repairer Driven Education: Achieving Service Excellence (Part I) / Where: LVCC
Title: SCRS Repairer Driven Education: Educate NOT Alienate: The Key to Successful Collision Negotiations (Part II)
Thursday / 3pm
Title: SCRS Repairer Driven Education: Design Thinking for the Collision Repairer
Title: SCRS Repairer Driven Education: Achieving Service Excellence (Part II) / Where: LVCC
Title: SCRS Repairer Driven Education: Getting Ready for the Water Wave
Title: SCRS Repairer Driven Education: Right and Wrong Ways to Repair New Metals and their Reactions / Where: LVCC
November 3
Title: SCRS Repairer Driven Education: Contracts: Terms and Ties that Bind / Where: LVCC
Thursday / 8am
Title: I-CAR: Steel Unitized Structures Technologies and Repair (SPS07) / Where: Las Vegas Convention Center, N231-242
Thursday / 5:30pm
Title: SCRS Repairer Driven Education: Mission: Control – Flawless Execution in Business Combat / Where: LVCC
Title: I-CAR: Unitized Structures and Full-Frame Damage Analysis (DAM12) / Where: Las Vegas Convention Center, N231-242
November 4
Thursday / 12:30pm
Friday / 8am
Title: SCRS Repairer Driven Education: Estimology and P-Page Logic 101
Title: I-CAR: Advance Material Damage Analysis (DAM08) / Where: Las Vegas Convention Center, N231-242
Title: SCRS Repairer Driven Education: A New Legal Era in the Collision Indus-
Title: I-CAR: Recycled Parts for Colli-
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CA Dealers Now Required to Sticker Salvaged Vehicles
sion Repair (RCY01) / Where: Las Vegas Convention Center, N231-242
California automobile dealers must start labeling salvaged vehicles with a red warning sticker under a new law signed Sept. 26 by Gov. Jerry Brown. The new law also requires dealers to use electronic vehicle registration for all car sales and allows dealers to charge consumers more to recoup added costs. Under most states’ laws, a salvage vehicle is a vehicle that has been wrecked or damaged to such an extent that it is considered too expensive to repair. In almost all cases, salvage title is given to any vehicle that has sustained damage worth 75% or more of its value. Requirements are going to vary by state. In Florida, a car has to be damaged to 80% of its value before the accident. Vehicles in Minnesota are considered salvaged when they are declared “repairable total loss” by an insurance company, were worth at least $5,000 before the damage or are less than six years old. The title, license plates, and a required fee are submitted to the
Friday / 12:30pm
Title: SCRS Repairer Driven Education: Using the DEG to Make Dollars and Sense of the Estimating Systems / Where: LVCC Title: SCRS Repairer Driven Education: Exposed and Vulnerable: Learn How to Cover Yourself / Where: LVCC
Title: SCRS Repairer Driven Education: Dealing with Resistance to Change / Where: LVCC
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state Department of Motor Vehicles (DMV) and a Salvage Certificate is issued for the vehicle. Although many salvage vehicles are expertly repaired, some vehicles: are not properly repaired and/or tested and may be dangerous to operate and have been repaired with stolen parts. In California, if the California Highway Patrol or DMV determines the vehicle or its parts have been stolen, the vehicle cannot be registered and the vehicle or parts will be seized. All sellers, including dealerships, are legally required to disclose the vehicle’s salvage title and history, but the law is difficult to enforce, especially when cars come in from another state. Both the California New Car Dealers Association and consumer advocates backed the new law. “No other state can match the built-in protections and convenience awaiting Californians,” Peter Welch, president of the state’s dealers association, said in a statement. “Like every small business, dealers
want to focus on customers instead of paperwork.” About half of California’s dealers already participate voluntarily in the electronic registration system. Under the new law, they will be able to increase the maximum documentation charge from $55 for sales and $45 for leases to $80 for both. Even with that jump, document charges in California will be the second lowest allowed in the nation. Registrations also will be processed much faster. Consumers will wait only a month for their license plates, instead of as long as six months under the current system. Consumers also will benefit from the new warning sticker requirements. California is the first state in the nation to adopt that mandate. All new- and used-car dealers must post a red sticker on any used car flagged in a federal database as junked, salvaged or flood-damaged. “Consumer advocates have long sought the protections offered in this bill,” said Rosemary Shahan, presSee California Stickers, Page 50
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www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 49
Virginia Branded Title for Water Damage Settles at $2500
Jordan Hendler, executive director of the Washington Metropolitan Auto Body Association, said a Virginia state legislator whose vehicle was totaled after the sunroof of his vehicle was left open in a rainstorm was a proponent this year of legislation to raise the threshold of damage requiring a flooddamaged vehicle to receive a branded title from $1,000 to $5,000. Advocates for increasing the bar said that the fourdecade-old limit was unfair, especially because of inflation and rising sticker prices. They argued that the higher level would help consumers at resale as well as used-car dealers that don’t want a vehicle branded because of $1,000 of damage to a luxury car’s sunroof or leather seats. Hendler said WMABA tried to point out that today’s vehicles have far more electronics than cars had decades ago, and that no consumer should unknowingly buy a vehicle that has had thousands of dollars in water damage. The threshold was raised to $2,500, down from the $3500 proposed. The Virginia water damage threshold had been unchanged since 1966. Only Virginia, Washington, D.C., and Hawaii set thresholds—all at $1,000—on water damage allowed before a vehicle’s title is branded.
IRS Offers Employers Tax Relief if Workers Reclassified
The IRS has launched a new program that will enable many employers to resolve past worker classification issues and achieve certainty under the tax law at a low cost by voluntarily reclassifying their workers. The new program will allow employers to get into compliance by making a minimal payment covering past payroll tax obligations rather than waiting for an IRS audit. The IRS says under the Voluntary Worker Classification Settlement Program companies will owe about 1 percent of wages paid to reclassified workers in the past year, with no interest or penalties due. The program is part of a larger “Fresh Start” initiative at the IRS to help taxpayers and businesses address their tax responsibilities. The program will allow businesses that have been improperly labeling their employees as independent contractors to reclassify workers and make only a small payment to cover past payroll taxes. To be eligible, a company must have consistently treated the workers as non-employees; have filed required 1099 tax forms for the past 3 years; and not be under a worker classification audit. Part of the program will be increased vigilance about misclassification of workers in the future.
NABC Nominees for 2012 Board of Directors Announced
The National Auto Body Council (NABC) hasclosed nominations for the seven 2012 board positions coming open at the end of this year’s term. Every nominated individual has expressed their interest and desire to work for the NABC board. They were offered the opportunity to participate in the discussions and approval of the NABC’s new mission and vision statements, as well. The candidates are listed in their order of nomination: Keith Bell, Akzo Nobel; Stacy Bartnik, CARSTAR; Kenneth Seavey, Hertz First Edition; Mike Jordan, Manchester Collision; Karen Fierst; Fred Iantorno; Jon Faris, Enterprise Car Rental; Kristen Felder, Collision Hub; Elizabeth Stein, Fix Auto; David Niestroy, 3D Body Works; Richard Perry, Chief Auto Technologies; Mark Lovell, Precision Collision. Based on NABC bylaws, an official ballot will be sent to all NABC members for their consideration. The actual election will take place at the NABC annual meeting to be held in the Hilton Hotel in Las Vegas on Tuesday, November 1, 2011 at 12:30 p.m. concurrent with the SEMA Show. Only Individual members in attendance or their designated representative can participate in the vote.
DuPont Exhibit at SEMA Show Live Paint Demonstrations
DuPont Custom Finishes (DuPont) will participate at the annual Specialty Equipment Market Association (SEMA) tradeshow in Las Vegas, Nov. 1–4. DuPont Custom Finishes, exhibiting in booth #22789 in Hot Rod Alley, Central Hall, will feature DuPont™ Cromax® Pro, Chroma Premier® and Hot Hues™ custom paint products. Industry airbrush and pinstripe artists will be showcasing their skills with live demonstrations in the booth using DuPont™ Cromax® Pro waterborne products. Vehicles on display in the booth will include a 2012 DuPont Calendar winning ‘61 Chevy Impala, owned by Tim Brown of Jacksonville, Fla.; a ‘71 Challenger owned by Bob and Karon Zeitler and painted by John Riehn of John’s Autobody and Paint. Imperial, Mo.; and a ‘50 Fleetline built by Tim Strange, owner of Strange Motion Rod & Custom Construction and host of PowerBlock TV series “Search & Restore.” Strange will make appearances to sign autographs in the booth 10 am–12 pm on Wednesday, Nov. 2 and 1–3 pm on Thursday, Nov. 3. More information about DuPont’s paint products is available at www.pc.dupont .com or phone 1-800-GET-DUPONT.
usually have high mileage. ● Original Police or Prior Police: Vehicles formerly used by law enforcement and which usually have ident of Consumers for Auto Relia- high mileage. bility and Safety. “For the first time, ● Non-USA: Vehicles manufactured auto dealers will be required to pro- for use and sale outside the United vide vital information about a vehi- States which have been converted to cle’s safety, reliability and worth meet Federal and California safety before consumers even start negoti- and emissions standards. ating.” ● Warranty Return or Lemon Law The California Department of Buyback:Vehicles which have been Consumer Affairs has found that returned to the manufacturer under more than 700,000 structurally dam- California’s Lemon Law. ffecting the150,000 industry. to Contribute to thisconSouthwest Edition? aged and salvaged vehicles Want ● Remanufactured; Vehicles are returned to streets and highways structed by a licensed remanufacevery year without a safety inspec- turer and consisting of used or tion, and pose a potential hazard to reconditioned parts. These vehicles publisher@autobodynews.com ews.com all of the state’s motorists may be sold under a distinctive trade The State of California name. “brands” its titles. These brands indicate the vehicle’s past history: Continued from Page 49
California Stickers
us!
● Salvaged: Vehicles marked with a “salvaged” brand were involved in To advertise an accident or incurred considerable call Joe Momber at: such as damage from another source, 800-699-8251 a flood or vandalism. This brand includes e-mail: previously dismantled jmomber@autobodynews.com (junked) vehicles. ● Original Taxi or Prior Taxi: Vehiwww.autobodynews.com cles formerly used “For Hire” which
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Allstate and Progressive Agree to Settle Patent Litigation
Allstate Insurance Co., Allstate Fire & Casualty Insurance Co. and Progressive Casualty Insurance Co. announced they reached a settlement agreement over litigation involving technology patents and questions of trademark infringement. In the suit, Progressive alleged that Allstate infringed on its usagebased car insurance and online insurance policy servicing technology. Progressive also alleged trademark infringement. The companies entered into a trademark co-existence agreement involving the Drive and DriveWise trademarks. They also cross-licensed certain patent rights with each other. “This was about protecting and leveraging Progressive’s investment of more than 15 years in usage-based insurance research, development, testing and piloting,” Chuck Jarrett, Progressive’s chief legal officer, said. “We have always said we are willing to license our intellectual property rights to others and that we will enforce those rights when necessary.”Allstate said: “Although confident in the merits of its case, Allstate is pleased to be able to leverage its patent portfolio in this settlement by providing a license to Progressive and to eliminate the distraction from this litigation.”
Florida and Michigan AAA Clubs Join Forces, Now 2nd Largest
Two AAA clubs have combined operations to become the second largest AAA club in North America. AAA Auto Club South, based in Tampa, Fla., affiliated and combined with The Auto Club Group based in Dearborn, Mich., effective Oct. 1. The new enterprise, known as The Auto Club Group, now serves members and customers across 11 states and two U.S. territories. They are: Florida, Georgia, Iowa, Michigan, Nebraska, North Dakota, Wisconsin, Puerto Rico and the U.S. Virgin Islands. The group also serves most of Illinois, Minnesota and Tennessee, as well as a portion of Indiana. The new organization provides membership, travel, insurance and financial services to more than 8.4 million members through about 300 office locations. It is maintaining corporate headquarters in both Dearborn and Tampa. Robert Sharp, chair of the former Auto Club South board, is now chairman of the board of The Auto Club Group. Charles Podowski continues as CEO, and John Tomlin, former Auto Club South CEO, is chief operating officer. The Auto Club Group will provide access to a broader array of insurance products and services in the former Auto Club South region.
Mitchell Partners with Enterprise Rent-A-Car, Integrates with Update Promise.com to Deliver Services via RepairCenter™ Mitchell has announced a partnership with Enterprise Rent-A-Car. Under the terms of the agreement, Mitchell will directly integrate Enterprise Rent-ACar services into both its auto repair management software and insurance claims management software solutions, RepairCenter™ and WorkCenter™, by automating and simplifying the end-to-end vehicle rental workflow for insurance carriers. Planned for early 2012, the integration simplifies the rental process by eliminating manual updates and “middleman” communication between the insurer, body shop, rental agency and consumer. When a repair is delayed, an automatic notification can be sent from RepairCenter’s shop management system directly to WorkCenter insurance users or to the Enterprise representative to let them know they need to perform a rental task. Representatives and claims handlers will be able to send rental requests, extend rentals and receive rental updates. Paul Rosenstein, Mitchell’s Vice President of Claims Solutions, said “Partnerships with respected industry leaders like Enterprise Rent-A-Car are a part of our commitment to simplify and optimize complex claims and busi-
ness environments, ultimately creating an exceptional customer experience at every stage of the claims process.” Dave Smith, Vice President Strategic Solutions Sales, for Enterprise Rent-A-Car, said, “This is a significant opportunity for insurers to speed up automotive claims processing and increase customer satisfaction. In addition, direct integration of Enterprise Rent-A-Car into Mitchell’s solutions empowers small insurers to gain access to rental integration without having to build it themselves.” Separately, Mitchell has also teamed with UpdatePromise.com™ to enhance its RepairCenter™ auto repair shop software with proactive repair status updates. UpdatePromise is a Web-based service provider that delivers automated repair status updates to collision customers via text message and e-mail. This allows body shop users to manage delivery date promises, repair status updates, and customer responses from within the RepairCenter body shop software workspace. The widespread use of text messaging gives auto repair shops an improved option to communicate and connect with their customers in a consistent, proactive way.
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www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 51
Hey Toby!
Toby Chess is an I-CAR program instructor, Welding specialist, and former salvage yard operator. Toby is universally known in the collision industry for his charitable works, worthy causes, and magic tricks. He can be reached at tcspeedster@yahoo.com
SEMA’s Repair Driven Education and Government Regulations with Toby Chess
will also need to invest in training. ReSEMA is just around the corner and many of you will be attending the trade pairing aluminum is not difficult, but there are a few techniques that need to show and SCRS repair-driven educabe learned to achieve a successful retion. I am teaching a class on how government regulations will impact the pair. You will also see smaller vehicollision industry right now, but for those who cannot attend, I am going to cles. With smaller cars, you will see an increase in the use of ultra high highlight my presentation here. McClune Let’s with David strength steels in cabin reinforcements look at the US Government CAFÉ (corporate average fuel economy) for passenger protection. Nearly all standards. By the year 2015, the CAFÉ manufacturers require full replacement of these reinforcements and that will standard for the industry (cars and lead to more total losses. Let’s look at trucks combined) is 31.6 MPG (35.7 for cars and 28.6 for trucks). How will Federal Motor Vehicle safety standard 216A. these standards affect body shops? FMVSS 216A deals with roof First, cars will need to get lighter and smaller. The use of aluminum will crush. The standard for 2009 was 2.5 times Gross Vehicle Weight. In other increase. You will see more hoods, deck lids, fenders and other body parts with John Yoswickwords, if a car weighs 2000 pounds, the roof would need to support 5000 being made from aluminum. Many aluminum hoods are double paneled lbs. The Insurance Institute for Highway Safety did not think the 2.5 stanwith virtually no access to the back dards were sufficient, so they set a side. Most shops today do not the castandard for 2009 at 3 times GVW and pability to repair this type of damage. 4 times GVW by 2012. To gain a 5 star What is needed is an aluminum stud rating, the vehicles manufacturers had gun. to increase the strength of the ‘B” pillar reinforcements. How does this increased strength affect the collision industry?
signed to transfer energy and deform. This energy will travel to the opposite side of the vehicle and, if not measured before an estimate is written, can lead to all kinds of problems. The “B” pillar on the opposite side of the car can move (side impact), but the floor may not and this can lead to all kinds of improper fit issues. You will need to look at measuring systems that can measure “A” and “B” pillars without placing a vehicle on a frame machine.
California Autobody Association
Year in Quotes
OEMs for their current data (most of the time they make it available free) or check out ALLDATA. It is another investment that any body shop will need make. The stronger reinforcements have also created a need for pre-measuring for damage analysis. Besides the roof crush, these super strong reinforcements are de-
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The first thing that comes to mind with John Yoswickis the need for OEM data. You cannot do structural repairs or structural parts replacement without it. For example, you can section a “B” pillar on (lower portion) on a Toyota Venza, but you The unit pictured first comes with will need to replace the entire reinthe stud gun and a number of hand forcement on a Toyota Camry. tools for repairing aluminum. The maThe following page was taken chine pictured second is just the stud from Toyota’s Technical Information gun with the puller. You will need to System or TIS for short. The sheet invest in hand tools because aluminum shows where to section and the type of with Hendricks tools can’t be used on Karyn steel compowelds that are needed for a quarter nents because of the likelihood of galpanel replacement. You can subscribe vanic corrosion. Dent Fix, Reliable to TIS or you can subscribe to ALLAutomotive Equipment and ProSpot DATA (they obtain the OEM data for are a few examples of companies that you). sell aluminum repair equipment. You While at SEMA, check with the
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52 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
with David M. Brown
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to invest in an inverter spot welder. Ultra High Strength steels are very sensitive to heat. MIG welding produces a large heat affected zone.
2000 degrees Fahrenheit and UHSS steel becomes mild steel at that temperature. It’s weaker and it loses all of its energy transfer properties. A spot weld, on the other hand, has a very small heat affected zone. Inverter Spot welding machines have computers to reduce the heat affected zone on HSS and UHSS metals.
Heat Affected Zone
2013. With more vehicles with side curtains, knee bolsters, and between seat air bags, the cost of repairs is going to skyrocket and that will in turn lead to more total losses. Moreover, with a number of insurance companies not paying sublet markups (they are now calling them handling fees), you better start doing the work yourself. That translates into more training and equipment. A scan tool will be needed to reset the codes on the SRS system. You need this tool to clear the codes on the occupant classification system, when
The weakest part of the weld is in the heat affected zone. The temperature when MIG welding can approach
Some of the manufactures that make this type of equipment are, Celette, Car-O-Liner, The Collision Equipment Group and Chief Automotive Equipment. You see all of these machines at SEMA. Still dealing with the stronger “B” pillars, you will need
qualified electrician. One more item pertaining to side impact, is the side curtain. Side curtains will be mandatory on all vehicles sold in the United States by the year
Heat Affected Zone
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Manufacturers of these smart machines include Car-O-Liner, Elektron, Wielander+Schill, Tecna, and CompuSpot. Besides being able to produce a smaller heat affected zone, compared with their predecessors, they are fully automatic and can keep records on the welds for each repair job. But don’t run out and buy one without doing your homework. First and foremost, you will need to check your electrical supply. These machines only work on 3-phase power. They also require large gauge wires (minimum of 4 gauge is recommended) due to the increase in amps that is needed. Again, before you purchase one of these “bad boys,’ get the electrical needs and consult with a
you R&I the front passenger seat. You will need this tool to reset the steeringangle sensor. Let’s review the SAS. The government has mandated all vehicles by the year 2012 have some sort of electronic stability system. Part of that system is the steering angle sensor. The steering angle sensor counts the steering-wheel revolutions accordingly. The overall steering wheel angle is thus made up of the current steering wheel angle together with the number of steering wheel rotations. If a correction is needed, the ABS is activated and/or the engine is retarded to slow the vehicle down to prevent skids and rollovers. Every time an alignment is needed, a complete 4 wheel alignment is done followed by a recalibration of the steering angle sensor. If this is not done, the ESC may not work properly See Hey Toby!, Page 56
www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 53
State Farm Elects to Settle Three of Gunder’s Customers’ Lawsuits Following Ray Gunder’s charge alleging altered documents that show State Farm’s manipulation of their market survey of rates and allowances, State Farm has elected to pay the charged amounts of Gunder’s Auto Center, in Lakeland, FL, and avoid further discovery of its business records. See sidebar. In seeking discoverable information pertinent to three separate lawsuits by three of Gunder’s customers (of which Gunder was acting on behalf of each customer through power-ofattorney) State Farm’s refusal/failure to provide the requested documentation within the time-frame provided resulted in a court’s order compelling the nation’s largest personal auto insurer to comply and present the subpoenaed records ‘or else.’ As a result, State Farm first made overtures of a global settlement to avoid further litigation (and discovery) by inviting Gunder’s to mediate the more than 30 pending lawsuits pressed against them on behalf of Gunder’s customers for claims including, but not limited to Tortious Interference against State Farm employees including Larry Swearengin and Bob Davis as well as Breach of Contract and Bad Faith claims against State Farm Insurance. While guarded, Ray Gunder agreed and thus the Contempt of Court hearing scheduled for September 22nd was postponed and mediation was scheduled for October 6th, 2011. On September 27th, Gunder received notice that State Farm would provide full payment for the amounts outstanding on the three lawsuits which were pending which included the issue of Contempt of Court. ● Raymond Ellsworth Gunder [Wincey] v. State Farm Florida Insurance Company Case No.: 53-2008SC005094-0000-00, County Court, Polk County, FL Initial amount at issue $163.31 ● Raymond Ellsworth Gunder [Miller] v. State Farm Florida Insurance Company Case No.: 53-2008SC-0050930000-00, County Court, Polk County, FL Initial amount at issue $124.48. ● Raymond Ellsworth Gunder [Dewey] v. State Farm Florida Insurance Company Case No.: 5320011SC-00895-0000-LK, County Court, Polk County, FL Initial amount at issue $1,461.01 The payments included consideration for the underpaid amounts for
paint & materials (supported by PMC Logic invoicing), low labor allowances and refusal to provide consideration for rarely questioned simple procedures from R&I of hardware and trim operations to refinish related processes such as car-cover, color sand and buff, etc. The initial mediation between Gunder’s and State Farm took place on the morning of October 6th and while a monetary offer (which would no doubt be considered substantial by some) was presented by State Farm’s legal counsel, it was found by Gunder to be insufficient and thus rejected. Following the mediation Gunder stated: “While I'm disappointed that we couldn't come to an agreement; as I would very much like to put the issues behind us and be compensated fairly to restore people's vehicles and their peace of mind; we are encouraged to continue on with discovery and having our day in court. We have no fewer than 30 similar cases in the process of being filed on behalf of our customers; all with same or similar issues. State Farm is paying approximately $120,000 in legal fees and costs for these three cases which they have now elected to settle and will no doubt be paying substantially more in the coming months and years should things continue as in the past.” Shortly after mediation, a settlement letter came from State Farm. Review of the letter from State Farm legal counsel states in part: “After further consideration, and to discontinue the need for further litigation, State Farm has decided to tender the amounts at issue in each of the above-referenced matters, with interest.” The amounts State Farm will pay are: $163, $124 and $1,461, totalling $1748 and change. “In summary, with this letter, State Farm has paid the amount asserted by the insured to be in dispute for the above referenced claim, thereby curing any circumstance relating to any alleged improper estimate of damage or payment under the applicable policy, and any claim or coverage denial, claim handling or trade practice as the result of same,” the settlement continued. Ray Gunder stated further; “we've been sharing our legal journey with the collision repair industry and we'll continue to do so in the hopes our successes will encourage others to consider their legal options. Meanwhile, we'll continue to ‘Pound the Rock!’”
54 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
Some History in Gunder’s Case Against State Farm
These claims on behalf of customers of Gunder’s Auto Center are part of a long legal history between the auto center and State Farm. In early 2010 Gunder filed a claim against State Farm for Tortious Interference and Slander following disparaging comments allegedly made by employees of the insurer to their customers regarding the body shop. See autobodynews.com for more. “This entire matter hinges on whether any insurer, including State Farm, can merely target a repairer and have the right to say anything they wish with the intent to harm the repairer and disparage their good name in an effort to interfere with the relationship between the repairer and their customer; so long as the insurer does not breach the legal limit referred to as ‘Expressed Malice’, said Ray Gunder, owner of the shop, in a statement last May. The suit has gone through the appeals process multiple times since the initial complaint was filed. Most recently, in April of 2011, the U.S. Court of Appeals for the Eleventh Circuit upheld a lower court’s order granting summary judgment in favor
of State Farm in Gunder’s claim of slander and tortious interference with a business relationship against the nation’s largest personal auto insurer. In June Gunder filed an appeal of the decision with the U.S. Supreme Court. “After considerable thought, counsel and discussion with family and close friends, and as a result of recent activities on other pending cases against State Farm, I decided to proceed with submitting what is referred to as a Petition for Writ of Certiorari to the United States Supreme Court requesting their review and opinion of the lower court’s ruling,” Gunder said. “As we continue to ‘pound that rock,’ I see we are standing on a substantial amount of gravel…and as I’ve said before, we’re all-in and we’re too close to quit now and will continue until we either prevail or exhaust all opportunities to do so.”
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On Creative Marketing
Tom Franklin has been a sales and marketing consultant for fifty years. He has written numerous books and provides marketing solutions and services for many businesses. He can be reached at (323) 871-6862 or at tbfranklin@aol.com. See Tom’s columns at www.autobodynews.com under Columnists > Franklin
Choosing a More Profitable Market with Thomas Franklin
These days going to the movie theater shops already do aim their marketing can be very expensive. Theater own- at higher end European vehicles like BMWs and Mercedes, but the range ers have come to realize that former patrons now get their films online of vehicle choices has also increased from services like Netflix. To com- greatly. The Korean automakers have begun to claim a larger share of the pensate for the loss of these customers, they have begun to add luxury market. Like theater owners, a shop owner has to ask, “What special amenities like select seating and peramenities will get all better quality sonalized service in the auditorium. with Strom And of course the priceDick of a ticket has car-buyers to choose my shop over skyrocketed, in my area to around any other?” Many shops have already fo$14.00 for a ticket. Sadly, in this economy, lower-in- cused on pampering their customers. come car owners have also migrated They go beyond proving a rental car to cheaper paint and body providers. to taking the rental car to the customer and having a lock box for keys so the Shops like “One Day Paint and Body” are getting much of the business that customer can drop off the rental car at quality shops used to get to keep their the shop after hours. A shop may also choose to cover the difference in cost technicians busy and keep paint purfor a luxury rental vehicle. A luxury chase volume up. It may be time for shop owners to lounge with big TV, WIFI, computer Lee Amaradio Jr. for kids and up-scale refreshtake a hint fromwith theater owners and games more thoroughly focus on higher in- ments are already commonplace. come prospective customers. Many Many shops offer a car wash and inte-
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rior clean. For higher end customers, shops may even include exterior and interior detail. But who pays for all of these amenities when insurance companies are working to reduce what they will pay for? Like theater owners who raise the price of tickets, astute shop owners are realizing the need to offer more selfpay options even for insurance pay jobs. Unlike theater owners, they can’t ask for $5.00 for a box of popcorn or a cold drink. More ingenuity is called for. Time is a major concern for many vehicle owners, so one new specialty called “Cosmetic Car Repair” includes an in-house bumper repair kit that can sometimes enable the shop to turn out a bumper repair in just a few hours. This eliminates outsourcing costs and also delivers the rapid repair the customer wants. Another aspect of the same system is a more sophisticated version of paintless dent repair. Once again, speed of repair is the special value. Although cosmetic car repair is a specific system, other cosmetic improvements may be desired. Many shops have a contract with a vehicle graphics provider who will do pin striping, clear car bras and more. Another dimension of the luxury theater game is a focus on providing select films specifically chosen for an audience with those preferences. Invitation-only showings have already begun. If a shop has managed to capture sufficient information about customers, it may be in a position to do invitation-only showings. For example, as baby-boomers age, there are
more handicapped drivers. A showing of power lifts, power running boards and special driver’s seat modifications could bring in previous customers who were, or have become, handicapped. Prior customers whose children are reaching driving age may respond to an invitation to see blackbox driving controls and speed governor systems. Parents of younger children are more concerned with child car seats. These must be placed properly to provide maximum protection. Manufacturers of products like these may be willing to send a representative to the shop to do an invitation-only demonstration for customers with small children. More than a million pets are killed every year in vehicle accidents. Pet restraints and other controls are not only another add-on a shop can offer pet owner customers, but if a shop has collected customer information about pets, an invitation-only presentation of pet control products is possible. As a shop gets more involved in providing a few luxury accessories, significant opportunities open up to go beyond repairs and become an information provider. Like the child car manufacturers or distributors, these accessory providers have a wealth of representatives eager to go out to generate business for their companies. All you, as the shop owner, have to do is send out the invitations and provide the space and perhaps a few refreshments. In a sense, you become the new theater owner in a business once limited to collision repair.
World’s Oldest Running Car Fetches High Price at PA Auction
The oldest existing car in the world, an 1884 De Dion Bouton Et Trepardoux Dos-A-Dos Steam Runabout, was sold at auction for 4.62 million dollars at October’s RM Auctions sale in Hershey, PA. The car, named La Marquise, set a record price for vintage vehicles. The oldest car was put up for an American auction house RM Auctions. Auction organizers hoped to gain for rarity 2-2.5 million dollars. the auction house did not disclose the La Marquise Buyer’s name , who became the fifth owner
of this car in its history. The first owner of La Marquise was a French nobleman, Count de Dion, who took part in its creation. In 1906 De Dion sold the car to the French army officer Henri Doriolyu, whose family has owned La Marquise until 1987. The next owner was a member of the British club classic cars, Tim Moore , who restored the car and took it to fully operational status. In 2007, La Marquise was sold to a collector from Texas, John O’Quinn.
www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 55
Parts Profiles
Larry Williams is an innovative parts manager with national awards and over 30 years of experience in creating and managing profitable departments. He can be reached for consultation at ljoew2@gmail.com. To read all his columns go to http://www.autobodynews.com/columnists/williams-larry.html
A Relatively Young Audi Dealership Makes Quality Pay Off The newest member of the Autobody partment, and the best employees he ice creates the friendships and loyalty council. When important visitors arrive from Germany, Audi-Mission so necessary to success in these times. can find. News Distinctive Dealerships Group Automaker Actions and Announcements with Larry Williams
is Audi-Mission Viejo in Southern Justin’s investments in technology with Jeremy Hayhurst California. A relatively new dealer, include state-of-the-art inventory control, and a simple and easy internet only seven years old, Audi-Mission order system. Audimv.com is a good Viejo has managed to thrive by always example of how to set up a simple onputting quality first. Quality is in all areas of the parts line parts link. A well organized departdepartment. Justin Stinnett is a parts ment holds over a half-million dollar with how Jeremy Hayhurst inventory, and a modern communicadirector who knows to make quality pay off. Justin began only two tions system completes the basics. years ago, with a bloated inventory Justin has four quality counterand untrained personnel. He needed men, led by Armando with twenty years experience, then Henry and Robin with eight years, and Mario with six. A bilingual crew works well in the southern California market, language issues are no problem. This team works together with common goals, to keep all of his twenty years experience to their department the best in the region. change that. Since then, there has been Their efforts have been rewarded, a steady rise to the top and is one of their wholesale business has tripled! the best Audi parts departments in the Lee Amaradio Jr. Customer service is the standard region. His secretwith has been to insist on here, promises are kept, and orders are quality. Quality means the newest and best available technology for his de- always completely filled. Such serv-
Autobody Tech
I-CAR Tech
Amaradio Explains CRA
poor air quality. It is only a matter of time before the paint companies will switch entirely to waterborne so, if you’re not already there, you better get or, even worse, not at all. Most syson-board soon. You will have to retrain tems will not show a fault code on the your paint staff and invest in new dash, therefore, a scan tool will be equipment. It is easier to do it now and needed to reset the steering angle sennot when it is mandated. Where are sor. A couple of other governmental you going to get the money to pay for items that are on the horizon that you all of this equipment? should be aware of are the new Freon It comes from profits and every refrigerant—HFO-1234yf and, of time you give something away, you course, waterborne paints for those not are making a lot less in profits. I sugyet mandated. gest that you visit the Society of ColHFO-1234 yf is a new type of lision Repair Specialists web site Freon that is now being used in Eu(scrs.com). Scroll to the center of the rope. GM will be using it on their U.S. page and click on the Guide to comvehicles next year. This new Freon is plete repair planning. There are over much safer to the environment than 800 not-included items on their esti134A. You will have to invest in a new mating guide and by adding a few of with Dan Espersen recovery system, leak detection equipthese items to all your estimates; you ment, and new manifolds. can achieve some higher profits. The Many states have mandated the best part of all, it is free for everyone. use of waterborne paints in areas of Enjoy SEMA, I know I will.
Justin sees himself as a businessman, instead of a parts man, and regards the changes he has made as investments, not expenses. He believes “You get what you pay for. And if you have great people, you will achieve great results.” Results, for a dealer, equal profits. This parts department creates profit, which is exactly my philosophy. With proper management, the parts department will be a dealership’s best investment, not its worst. Again, no dealership can succeed without support. Audi is a company that wants to have the best parts delivery system possible. They have instituted a “local parts council,” which meets quarterly, to communicate with dealers and ensure a smooth flow of parts to all of their customers. Audi recognizes Justin’s hard work, and has chosen him for membership in their
Viejo’s parts department is on their tour, as an example of growth, organization, and cleanliness. An aside to all body shops in the Mission Viejo area… Should you need any parts for an Audi, call AudiMission Viejo. You are guaranteed to get great service, and I am proud to include them in my list of Distinctive Dealerships. In other areas, I’d also like to recommend Audi of Downtown LA in Los Angeles and Circle Audi in Long Beach. To see all of Larry Williams’ articles go to autobodynews.com and select Williams under the Columnists menu. See also Larry’s popular series of Parts for Profit articles in his column section. You can also link directly at: www.autobodynews.com/ columnists/williams-larry.html
Genuine Porsche Parts... Only The Best.
Continued from Page 53
Hey Toby!
Consumer Callout
ALL OEM Information
56 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
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LKQ Founder Donald E. Flynn Passes Away
Donald F. Flynn, Founder and Chairman of the Board of Directors of LKQ Corp., passed away on October 10, 2011. “We are saddened by the loss of a great leader and friend to so many. Don’s vision and leadership were key to the amazing growth LKQ has witnessed since 1998, the year the Company was founded. The Company and our shareholders owe Don a debt of gratitude for his dedication to LKQ. Our thoughts and prayers are with his family and friends,” stated Joseph Holsten, Vice Chairman and CoCEO of LKQ.
MBUSA CEO Lieb Ousted
Daimler AG has relieved Ernst Lieb of his duties as CEO of Mercedes-Benz USA, effective immediately. Even insiders were taken by surprise, and they believe the decision must be something personal since MBUSA has been growing steadily under Lieb's watch. The company said that “daily business operations of MBUSA will be conducted by Herbert Werner (CFO and Vice President Finance, Controlling & IT) until further notice.” Mercedes has strengthened its sales position in the last two years, becoming the No. 2 luxury brand behind Lexus in 2009 and 2010.
Fiat 500 Top IIHS Safety Pick
The diminutive Fiat 500 received a top rating from the Insurance Institute for Highway Safety. IIHS said the 2012 500 Sport two-door had earned good marks for front, side rollover and rear crash evaluations. Results reflect performance in crashes that would occur with similarsized vehicles. The only other mini car to earn similar scores was Ford Motor Cos Fiesta. The top score for front crash resistance was earned during a retest in August after Fiat/Chrysler modified front seating to make it more secure, the IIHS said. Chrysler is counting on the hatchback 500 and other fuel-efficient vehicles to revive its lineup, which is dominated by pickups and other light trucks. The IIHS assesses a range of models each year. Underwritten by the insurance industry, the institutes ratings are closely followed by automakers, consumer groups and safety regulators.
Chrysler to Invest $165 Million in Body Shop at MI Plant
Chrysler Group plans to invest $165 million to build a new 1 millionsquare-foot body shop at its assembly plant in Sterling Heights, MI, according to reporting by Bradford Wernle in Automotive News. The body shop will begin producing Chryslers next generation of midsize sedans in 2013, said Chrysler spokeswoman Jodi Tinson. The plant currently builds Chryslers two midsize sedans: the Chrysler 200 and Dodge Avenger. The announcement marks the second major investment in the Sterling Heights plant. This follows an announcement in December 2010 that the company would spend nearly $850 million to build a new paint shop for the plant. Chrysler Group has now invested nearly $3.5 billion in its U.S. plants since June 2009. To some Chrysler employees, the Sterling Heights factory has come to symbolize the company’s comeback story. Before Chrysler’s 2009 bankruptcy, previous owners Cerberus Capital Management had decided to close the Sterling Heights plant, but Chrysler CEO Sergio Marchionne changed course and decided to keep it open.
“Today marks another milestone in the rags-to-riches story of the Sterling Heights Assembly Plant,” Scott Garberding, Chrysler senior vice president of manufacturing, said in a prepared statement. “A plant that was slated to close nearly two years ago will now be a state-of-the-art facility that will play an integral role in the success of this company by building the next generation of all-new vehicles.” The vehicles will be built on a Fiat front-drive platform adapted for the U.S. market. The investment includes the construction of the new body shop as well as the installation of equipment and conveyors that will be some of the most advanced in the industry. Tinson said the new body shop would replace the factorys current body shop, which will be “repurposed” for another use. There will be no net gain in terms of jobs, she said. Sterling Heights now employs 2,524 workers on two shifts. General Holiefield, vice president of the UAW/Chrysler Department, praised the news in a statement, saying the project “recognizes the commitment and dedication of this highly skilled workforce.” tC 2011
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www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 57
Industry Veteran Alerts ‘Collision Repair Standards on their Way’ by Ed Attanasio
It’s a looming specter in the collision repair industry’s immediate future with potentially serious repercussions. We’re talking about Collision Repair Standards, and they will have more influence over the auto repair and claims industry than any single factor in its il-
Featured speaker Dale Delmege (left) and Ron Arth, Manager of George V. Arth & Son in Oakland visit at the September meeting of the East Bay CAA chapter
lustrious history, according to Dale Delmege, an industry spokesperson with more than three decades of collision experience. Delmege spoke on September 20th to the membership of the East Bay Chapter of California Autobody Association at Scott’s Seafood Restaurant in Walnut Creek, Calif. “We are at a critical crossroads and some of the most powerful forces in our industry either don’t know it or are picking the wrong route with collision repair standards,” Delmege said. “One way or another, the standards issue will affect every player in this industry, either adversely or positively.” Devising collision repair standards has been a long ongoing conversation without any results or other action for several reasons, Delmege said. “It’s a complex situation, be-
Jim Boyle, owner of Regal Collision Repair in Vallejo and Peter Locke, collision tech program coordinator at Contra Costa College catch up at the East Bay CAA chapter meeting in September
cause it involves the body shops, the techs, the OEMs, the insurers and the end users. It’s a tug-of-war with economic and psychological factors
thrown in. On any given day, the insurance companies, OEMs and body shops are pulling mightily in different directions, but repair standards would alleviate a lot of this tension.” Delmege cited the standards scenario that took place two years ago in the U.K., where all of the parties involved provided input to establish their repair standards. “The shops, OEMs and insurance companies in the U.K. worked together in a voluntary industry study that led to what’s now called PAS125. The government said they were going do it if the industry wouldn’t do it on their own, so they were motivated to act. Now, it’s an easier industry to make a living in, because they created an unmovable anchor and set some standards. Now the mysteries concerning body repairs are gone and there’s less fighting among the parties involved.” If we don’t do the same in this country, the government will take the reins and no one is likely to be satisfied with that idea, Delmege explained. “If we can’t co-exist in this business environment and do it ourselves, we could encounter a national regulatory frenzy. We’ve seen it done too many times before in other industries.” There is a window of time currently available, but if we don’t act quickly, it’s likely we’ll see a ton of class action suits and the uncertainty will further aggravate the already bumpy relationship between the body shops, OEMs, insurers and policyholders.” ‘Collision repair standards are way overdue’ was the takeaway message Delmege left the CAA Chapter audience with. “Other industries have specific standards they use every day, such as in machining, for example. If you’re a machine shop, each part you make is accompanied with a step-by-step set of specifications, describing the methods in careful detail, so that the machinist knows how long it should take to make it and what it will cost. Collision repair doesn’t have this oversight, and all that does is create confusion.” “Without defined repair collision standards, there are too many questions and not enough answers,” Delmege said. “People buy insurance to feel safe and responsible and when they get in an accident, they logically expect that their vehicles are returned to pre-accident condition. How many cars drive away from a body shop with at least one deviation from an allegedly safe and compliant repair?
58 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
There aren’t definitive answers, because we have no standards.”
At the conclusion of the meeting, Michael Govette, branch manager for Finish Master in Concord (at center) distributed the model trucks for their 14th Annual Toy Truck Competition, to Bill Andrews, auto body and paint technology instructor at College of Alameda (at left) and Dan Welsh, co-owner of Crocketts Premier Auto Body in Pinole (at right). The event will be held on November 15th at the Blackhawk Auto Museum in Danville, Calif.
Reporting as an observer, Delmege has visited more than 400 body shops in North America since 1989. Following a career which included various roles in sales and marketing at Black and Decker, and VP Marketing for IngersollRand Automotive Tools from 1989 to
1994, Delmege served as Senior Vice President Sales, Marketing and R&D, and subsequently Executive Vice President Operations, at Mitchell International, the auto claims repair information provider. Prior to its sale he was also a principal in AutocheX, which measures customer satisfaction following a collision repair. In 1994, Dale Delmege founded the Chelsea Group to assist auto claims businesses. Since then his company has served the collision repair and auto claims industry in a wide range of capacities. Delmege is also a founder, past director and Chairman of the Collision Industry Electronic Commerce Association (CIECA), and a founder and past director of the National Auto Body Council. He is a Lifetime Member of the Society of Collision Repair Specialists, one of two such honors ever conferred on a non-shop owner. Mr. Delmege produced and facilitated the widely acclaimed VeriFacts Invitational Symposiums in 2009, 2010 and 2011, featuring claims industry CEO’s and Auto Claims VP’s of Allstate, Progressive, Esurance, State Farm and USAA.
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Trust your order to the collision parts specialists at these fine Dealers
Erica Schroeder is assistant editor at Autobody News in Carlsbad, CA. She loves to talk with owners about their shops and goings on in their areas. Contact her at eschroeder@autobodynews.com, or 800-699-8251
Shop Showcase with Erica Schroeder
GW & SON Auto Body—Blending Yesterday’s Service with Today’s Technology
GW&SON Auto Body in Oklahoma Gary Jr’s siblings, and a nephew. Gary City, OK, was established in 1985 by Wano Jr, has also been afforded the Gary Wano and his son Gary Wano, opportunity to become nationally inJr. Gary Senior had 17 years experiwith John Yoswickvolved. He is currently holding and ence managing a local dealership post has held industry leadership positions such as a past chair of SCRS the nahis tenure as an automotive painter. With plenty of practical knowledge tion’s largest association solely foGary felt it was time for him to open cused on collision repairer needs, the his own shop with his son. CEICA Repair Advisory Panel, I-Car
Industry Insight
it was through this national involvement that spawned the business model that by choice limits GW&SON’s
data, says Gary Jr, GW&SON’s VP and operation manager. Gary Senior still works within the production of
Shop Showcase with Ed Attanasio
Social Media for Shops with Ed Attanasio
Since the shop’s inception they have grown to 6 times the size of their original facility, with a 27,000 squarefoot production floor. The shop now has 26 employees, including two of
ISAC, Co-Chaired CIC’s Anti-fraud Committee and is currently a voice for the repairer in CIC’s Insurer/Repairer Relations Committee and the Repair Standards Committee. Oddly enough, Lexus IS 2011
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Seated (l to r): Leona Wano and Gary Wano Sr. Kneeling (l to r): Chad Mason, Tammy Tomberlin, Weldon Gerdner, Kristi Wano, Ashley Ewing, (Buddy the dog), Terry Quinalty. Standing (l to r): Johnny Ellenburg, Andrea Jerman, James Coker, Inna Hadgisava, Clinton Carter, Derrick Cubie, Josh Johnson, Gary Wano Jr, Joseph Devine, David Rinehart, Weston Gardner, Tony Scarlett, Les VanVoast, Larry Van Voast
DRP relationship’s with only one insurer. The industry is constantly changing, repairers of today need the access to industry trends and all over
the shop, offering valuable insight to the production floor manager; with a business model centered on commuSee GW&SON, Page 60
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www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 59
Women’s Industry Network Awards Two Scholarships to NACE
The Women’s Industry Network (WIN) awarded the group’s annual scholarship to attend NACE to the two top-placing female winners at SkillsUSA. This year’s recipients are Alexandra Domer, who placed eighth in the automotive refinishing technology category, and Elizabeth Moore, who placed 10th in the collision repair technology category. The WIN scholarship includes airfare, lodging and associated expenses, as well as a full access NACE Expo Pass provided by the Automotive Management Institute (AMI) and Automotive Service Association (ASA). Additionally, Domer and Moore were honored at the ASA sponsored industry awards ceremony on Oct. 6, and also will receive a 2012 WIN membership. After high school, Domer attended the Waubonsee Community College, where she earned two Associate Degrees in Applied Science, one in Automotive Body Repair and Automotive Technology. She graduated in the spring of 2011 and hopes to have her own collision repair facility one day.
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AAPEX Learning Forum to Provide 30 A/MToPrograms advertise The AAPEX Learning Forum will feacall Joe Momber at: ture 30 education sessions with specific
source for timely Moore graduated from Freedom AAIA willThe feature its new Shop of Tocall Advertising Sales at: High School in the spring of 2011, morrow showcase at AAPEX in booth information that every and is 800-699-8251 currently attending UTI in 800-699-8251 classes recommended for general after#3066 to highlight vehicle service using body shop needs! Houston. market audiences, warehouse distribuconnected technology. Included will be: e-mail: e-mail: “The WIN NACE scholarship tors, manufacturers, retailers, auto Diagnostic, service information and advertising@autobodynews.com jmomber@autobodynews.co CALL 800-699-8251 goes to the heart of WIN’s mission to repair shops and parts stores. 28 of the telematics services by ALLDATA; A support and encourage women who 30 sessionswww.autobodynews.com are offered at no cost. The plug-in telematics device and cloudwww.autobodynews.com Start Your FREE are entering the industry, particularly two additional Lunch & Learn sessions based services powered by Carma Systhose in the technical ranks. SurMail Subscription. are $25 each. Sessions will take place tems; Back shop alignment and service rounded by our amazing WIN memNov. 1 to Nov. 3, at the Sands Expo solutions by Hunter Engineering combers, this scholarship has consistently Center. Sessions will be held at the Vemunicating seamlessly with the shop been a wonderful way to introduce netian Hotel, Marco Polo Rooms 701management systems; Internet parts loSee the NEW Register young women to the collision indus706. The Lunch & Learn sessionsYour will E cation and ordering services engineered try,” said Teresa Bolton, Director, be held in Marco Polo Rooms 801/802. by WHI Solutions. Collision Repair Test Development, ASE who also serves as WIN’s U.S. Deer-Vehicle Collisions Fall 7 Percent Scholarship Co-Chairwww.autobodynews.com and Treasurer. at www.autobod Michigan For the third consecutive year, the num- year, Vermont (24 percent), For more information go to ber of deer-vehicle collisions in the (23 percent), West Virginia (22 percent) www.womensindustrynetwork.com. U.S. has dropped, according to a study and Connecticut (22 percent) experidone by State Farm Insurance. And the enced the largest one-year percentage downturn is accelerating. The percent- declines. There were 23,000 fewer age decline over the last year is nearly deer-vehicle altercations in Michigan three times as large as during the previ- alone. Michigan is second on the list of ous two years combined. Using its states with the highest total number of claims data, State Farm® estimates 1.09 these collisions (78,304), well behind To advertise million collisions between deer and ve- Pennsylvania (101,299). call Sean Hartman at: For the fifth year in a row, West Virhicles occurred in the U.S. between 800-699-8251 July 1, 2010 and June 30, 2011. That’s ginia tops the list of states where an indi9 percent less than three years ago and vidual driver is most likely to run in to a e-mail: 7 percent fewer than one year ago. deer. Iowa remains second on the list. shartman@autobodynews.com Among those states in which at least Deer-vehicle collisions are least likely in 2,000 deer-vehicle collisions occur per Hawaii. www.autobodynews.com To advertise
Autobody News Website
phasis on having everything needed technically—from access to repair data to the proper equipment—to accurately repair all vehicles. nity involvement and technical trainOn the shop floor GW&SON has ing more than relying on a lot of DRP 5 Car-O-Liner Mark VI frame marelationships to bring in customers. chines, a CarTronics Electric Measur“Our OEM Certifications have ing system, three (3) Celette become a great niche for us,” said Fixture-Style Frame Benches—reWano Jr. GW&SON is the only Jaguar, quired for the shop’s Mercedes-Benz, Volvo, Mercedes-Benz and Corvette Jaguar, Volvo, and Corvette Z06 cerZO6 certified repair facility in the state. tified status and several different auto make specific vera-spot welding units. GW&SON believes that investing the training in their staff is worth the return on investment in the confidence of the production team following set SOP’s (Standard Operating Procedures) which drives consistency and quality. GLK 350 Mercedes-Benz, loaded on one of the Celette “It {training} can get costly, frame benches but in the essence of devel“We’re equipped and trained to oping production staff carrier paths repair specific high end cars,” said the investment is nominal,” said Wano Wano Jr. He also feels that this high Jr. level of certification reassures their Wano Jr. said the OEM training customers driving domestic models can cost the shop anywhere from their cars will be repaired accurately $2,000 to $3,000 per day, with payas well. roll, travel expense, course fee’s and GW&SON places a lot of emSee GW&SON, Next Page Continued from Page 59
GW&SON
60 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
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Dollar Thrifty Halts Sale Process, Hertz Still Interested in Acquisition Car rental firm Hertz Global Holdings still wants to buy Dollar Thrifty Automotive Group, despite missing a deadline to make a final offer, and is chasing antitrust approval for a takeover of its smaller rival, according to Reuters. On October 11, Dollar Thrifty said it failed by end-October 10 to flush out any final takeover bids that met antitrust concerns, and planned to go ahead as a stand-alone company. However, Dollar Thrifty, which has been at the center of an 18-month tug-of-war between Hertz and rival Avis Budget, said it would consider any changes to Hertz’s offer or any other offer that might be made. “We remain interested in acquiring Dollar Thrifty. We remain focused on receiving an FTC consent decree,” Hertz spokesman Richard Broome told Reuters, referring to the Federal
Trade Commission. “That’s the first step in the process.” Dollar Thrifty is seen as the last big prize in an industry that has consolidated in recent years, but its takeover has been uncertain as this would leave three players dominating more than 90 percent of a U.S. car rental market worth close to $21 billion in 2010. The market leader is privately-held Enterprise. One of Dollar Thrifty’s biggest shareholders said it was highly likely Hertz would win antitrust approval and would push to get a deal through early. The shareholder asked not to be identified due to the sensitivity of the issue. He noted that Avis, which dropped out of the bidding last month citing volatile debt markets and its recent $1 billion acquisition of its European arm, has the potential to return to the bidding fray in a few months
when it has paid down its debt. Dollar Thrifty had come up with October 10’s deadline as it sought to speed up the bidding race between Hertz and Avis, but the ultimatum lost its edge once Avis withdrew, he said. In August, Dollar Thrifty CEO Scott Thompson said the long-pending deal had kept the company from moving forward on growth initiatives and, last month, he wrote to both Avis and Hertz asking for their final written proposals by October 10. Dollar Thrifty decided that continuing the sale process—with uncertainty still over regulatory approval—would be costly and time-consuming, said a person close to the situation, who was not authorized to speak to the media. Hertz has a tender offer open to Dollar Thrifty shareholders that values the company at around $1.92 billion.
Thompson said his counterpart at Hertz called him on October 7 to reaffirm the company’s commitment to pursuing a deal. “... the fact remains that they have not made a proposal that addresses our board’s requirements,” Thompson said. Hertz was always seen as more likely to win regulatory clearance as it serves the high-end market, and is already in the process of selling its lowcost Advantage brand. But Hertz will have to raise its $66.21 per share offer to somewhere in the region of $75 a share, the Dollar Thrifty shareholder said. Tulsa, Oklahoma-based Dollar Thrifty reiterated its third-quarter outlook, and said it would soon start a $400 million share buyback program, buying back around $100 million worth of shares per quarter over the next four quarters.
Continued from Page 60
lost production to send their technicians, but that it is definitely worth it in the end. GW&SON cross-trains several
staff members in different OEM repair technologies, but Wano Jr. said that they usually invest this training into employees that have some history within the operation; it’s “too costly to train technicians for our competition.” If an employee exhibits commitment to GW&SON they will definitely get the opportunity to attend some OEM training.
keeps repeat customers coming in again and again, according to Wano Jr. “Our motto—balancing yesterday’s service with today’s technology—that’s really what we do,” said Wano Jr. Wano Jr. said that our operation develops personal relationships with their customers and that helps them become a part of normal contact for the customer when it comes to collision repair. GW&SON also participates in the local community to help deepen their relationships with their customers. According to Wano Jr. the shop donates to local athletic clubs and is active in their local Chamber of Commerce and local American Indian Chamber of Commerce. Wano Jr. and his family are also very active in their church. “Blast emails and discounted services will never take the place of a customer base that knows and trusts you,” said Wano Jr. For more information please visit www.gwandson.com.
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The shop also relies on PPG Envirobase paint combined with proper training and two Col-Met spray booths to ensure perfect paint matches on all repairs. GW&SON has also built lasting relationships with a lot of their customers over the 26 years of servicing the Oklahoma City/Edmond markets thanks to their integrity and old-fashioned style serviceability. “Our repeat client base has grown too include the grandchildren of past customers now coming in to get their cars repaired,” said Wano Jr. GW&SON’s personal service with each of their customers is what
GW&SON Auto Body Inc. 13417 N. Santa Fe Oklahoma City, OK 73113 (405) 751-1446
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www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 61
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Chasidy Rae Sisk is a freelance technical writer from Wilmington, Delaware, who writes on a variety of fields and subjects, and grew up in a family of NASCAR fans. She can be contacted at crsisk@chasidyraesisk.com.
Richmond, Virginia’s Baugh Auto Body—An Exceptional Shop Made More So by Lythos Studios’ Advertising Expertise with Chasidy Rae Sisk
What could a customer expect from an auto body shop that is open seven days a week? For some customers it’s enough to know such a shop exists! Baugh Auto Body in Richmond, VA, is the only shop in the area that’s open seven days a week from 8am to 6pm Monday through Friday, with the added convenience of being open on
Ashley and her father, Gerry Baugh
do this, they hired Lythos Studios, an advertising company, to assist in making their website more appealing to potential customers and to help promote their business. Lythos Studios was hired in the summer of 2009 to revamp the shop’s logo and their website, but ultimately provided much more. Lythos Studios helped with branding the business and pushing brand recognition, thus helping to position Baugh Auto Body as one of the top shops in their community. Though the changes proposed were not very difficult to implement, Lythos Studios’ marketing plan has greatly affected Baugh Auto Body’s business, and it took only a month or so for the shop to see returns from the marketing strategy. Ashley Baugh says emphatically, “Hiring Lythos is one of the best decisions we ever made as a company. We have come to really value their relationship and expertise... We have had much success with their plan and are pleased with the results.” Lythos Studios provides services include web and content development, SEO, brand development, and image creation. They help clients earn a return by developing branding and advertising strategies. Their website explains their philosophy and approach: “Lythos is in-
Saturdays and Sundays from 8am to 4pm. The shop also offers on-site car rentals on weekends. Customers do not need to schedule an estimate, but Baugh Auto Body will schedule specific times to provide an estimate if the customer prefers. Baugh Auto Body’s mission is to treat every customer like a member of their own family, and they guarantee their work, including paint, for as long as the customer owns the vehicle. According to Ashley Baugh, Customer Service and Marketing Coordinator, “Baugh Auto Body is a leader in the industry and has been ranked in the top GEICO national and regional shops for customer service and cycle time.” As part of his quality guarantee, owner Gerry Baugh oversees daily operations and is available to speak to clients personally. When he is not available, his daughter and Ashley Baugh, ensures that customers are treated with respect and the assurance Gerry Baugh (c) and the techs at Baugh Auto Body that their vehicle will be taken are featured on the website care of. Gerry Baugh established the shop in 1982 when the curvested in the success of our clients. rent space became available, but he Through strategy and design, we first became involved in the collision work to develop unique brands and repair industry when he was only six- messaging with forward-thinking teen years old. strategy and state of the art design... Though Baugh Auto Body has We advocate using strong web stanbeen in business for nearly thirty dards that focus on usability, foryears, they decided to spread the word ward-thinking solutions, and cutting about their quality and convenience to edge tools and applications in order customers in the Richmond area in a to develop the right website that more proactive way back in 2009. To meets your needs.”
62 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com
When they were hired by Baugh, Lythos Studios created a new logo design to use on printed materials as well as for use on the updated website and Facebook page they created. Lythos also developed radio and television advertisements which they integrated with the website. They also coordinated events at local colleges to direct students to the website and thus to Baugh Auto Body. Lythos monitors their advertising campaign monthly to ensure that they are hitting their goals and operating within budget. One of Lythos’ primary goals is to engage women who constitute a large portion of auto body customers but are frequently overlooked in auto body ads targeted toward men. To do this, they created Baugh Auto Body’s Utopia advertisement in both print and commercial format. This ad features
an idyllic beach scene with a woman languidly pictured in her hammock. In Utopia, the air is clean and warm, everyone is beautiful, and auto body
shops are open Sundays “for your convenience.” My guess is that this is a reassuring message to those worrySee Baugh, Next Page
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EPA Federal Office Response to SCRS Letter on 6H Rule
On April 4th, 2011, the Society of Collision Repair Specialists (SCRS) and 26 of its Affiliate Associations issued a letter to the ten Environmental Protection Agency (EPA, Agency) regional offices, requesting clarification on their interpretation and intended enforcement of exemptions listed in the EPA rule Subpart HHHHHH- National Emissions Standards for Hazardous Air Pollutants: Paint Stripping and Miscellaneous Surface Coating Operations at Area Sources (Rule 6H.) In addition to expressed concern that the rule as written “invalidates pollution controls based solely on the size of tool being used rather than the amount of pollution being generated,” the letter specifically requested a response from the EPA on three items: 1. A documented response regarding the exemption for coatings applied with a paint cup equal to or less than 3 fluid oz., and clarification that the rule applies to the type of work being performed. 2. A documented response that a 3 fluid oz. cup cannot be used and
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repeatedly filled to circumvent the rule. 3.Clarification that while a business applying coatings may be exempt from Rule 6H by meeting certain stated requirements, the exemption does not negate other additional regulatory requirements (such as OSHA, local zoning codes or fire ordinances) that may prohibit spraying flammable solvent or coatings with Hazardous Air Pollutants (HAPs) outside of a contained environment. In a response letter received by SCRS and issued by the EPA Air Branch, Monitoring, Assistance and Media Programs Division, it was clarified that the 3oz cup was indeed defined by the Agency as a way to distinguish conventional collision and vehicle repair from “operations that perform vehicle repairs of small stone chips and scratches.” The letter continues to point out that both “mobile operations and conventional collision repair shops are subject to the rule requirements for training, spray equipment, and the use of a spray booth or
other ventilated and filtered enclosures,” and that while “the 6H rule does not extend to spray-applied coatings applied from a hand-held device with a paint cup capacity that is equal to or less than 3.0 fluid ounces, the Agency may find that persons who repeatedly refill and use a three ounce cup, as a means of avoiding rule applicability, are attempting to circumvent the 6H rule...and reserves the right to bring enforcement actions against any person whose action equates to rule circumvention.” “We are pleased that the EPA has responded with a clear and concise message that collision repairers and mobile operators alike will be held to the same regulatory requirements as it relates to the 6H Rule,” said SCRS Chairman Aaron Clark. “In their response, the EPA Office has made it clear that much of the rule enforcement is based on intent. In some cases the use of the 3.0 ounce cup may be a necessity of the job being performed, but it is clear to us that the EPA offices will not accept in-
tentional circumvention of the rule by habitually “fragmenting paint jobs into smaller tasks” or “refilling 3.0 ounce cups in an effort to avoid regulation.” This is the basic clarification we were looking for, and anticipate that this will provide solid information for shops.” One additional point of clarification offered by the EPA letter confirmed that “the 6H rule does not negate other regulatory requirements (such as federal or local occupational health and safety requirements, local zoning codes, or fire ordinances) that may prohibit or restrict spraying flammable solvents or coatings containing HAPs within or outside of a contained environment.” To view the full letter provided to the ten EPA regional offices and the EPA official response follow the links posted with this story at www.autobodynews.com Additional information is available at the SCRS Web site: www.scrs.com. You can e-mail SCRS at the following address: info@scrs.com.
Continued from Page 62
tomer’s needs, documenting the plan, disassembly and inspection, obtaining parts, completing body repairs, preparation for painting, painting, vehicle reassembly, customer notification and review and delivery. Baugh’s monthly revenue varies from between $100,000 to $700,000 which shows at least a twenty percent increase since entrusting Lythos Studios with their advertising. This revenue is derived solely from auto body work as the shop does not provide additional services. Baugh Auto Body employs around thirty auto body specialists. All of their employees receive I-Car training on a regular basis. Baugh Auto Body is I-Car Gold certified, as well as I-Car certified for their welding capabilities. Technicians are also required to meet standard operating procedure guidelines as set forth by DuPont Performance Alliance. The shop processes insurance claims for their customers, and they participate in five direct repair programs with Hanover, Safeco, State Farm, Geico Express and Farmer’s Insurance. The shop encompasses 14,000 square feet. In addition to standard equipment such as lifts and migwelders, Baugh Auto Body also uti-
lizes two frame machines, two downdraft paint booths, an alignment machine and computerized welding. The shop uses DuPont brand waterborne paints. Baugh Auto Body also supports local college sports, sponsoring the athletic departments at University of Virginia as well as University of Richmond. Additionally, the shop partners with local organizations such as Children Inc. by donating funds to assist such programs. One final benefit: thanks in part to the advertising provided by Lythos Studios, Baugh Auto Body is currently preparing to open a second shop in Charlottesville, VA.
Baugh
ing about their vehicles, whether they see themselves blissfully relaxing on the beach or not. Baugh Auto Body’s website features quotes by satisfied customers sprinkled throughout the site, emphasizing the shop’s exceptional service as seen by various customers, including the former President and Chancellor of the University of Richmond. To reinforce the family-theme at the shop, photographs of Gerry and Ashley, as well as some of the workers, providing a friendly, comfortable atmosphere visible to browsers on the website. The website lists the shop’s goals to obtain customer service as well as how they achieve it: their goal is to provide the safest and highest quality repairs to their customers, and they achieve this by offering a combination of highly-trained technicians and state-of-the-art equipment. Their quality process, again, detailed on their website to assist customers in understanding the repair process, includes evaluating the cus-
Baugh Auto Body 6018 W Broad St. Richmond, VA Phone: (804) 285-8045 Fax:(804) 285-8068 www.baughautobody.com to contact Lythos Studios:
Clay Hamner 101 East Cary Street Richmond VA 23219 EMAIL : chamner@lythos.com PHONE: (804) 225-7780 www.lythos.com
www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 63