Southeast Edition Florida Georgia Alabama Mississippi
29
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VOL. 2 ISSUE 1 MARCH 2011
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Mississippi Auto Insurance Bill Passes Class Action Judgments: GEICO Wins Appeal vs. Greenberger & Progressive Wins vs. Blue Ash Inc. Senate, Moves to House
The Mississippi Senate has passed a bill requiring each motorist to show proof of liability insurance before receiving a car tag, according to reports made by the ClarionLedger. Sen. Billy Billy Hewes Hewes, a Republican from Gulfport, says his constituents have complained about being involved in crashes with drivers who aren’t insured. Hewes says the bill wouldn’t re-
quire any extra paperwork for tax collectors. He says all they’ll have to do is ask to see an individual’s proof of insurance before granting the car tag. Sen. Cindy Hyde Smith, a Republican from Brookhaven who voted against the bill, says her local officials were concerned about the extra duty slowing the process at tax collectors’ offices. The bill now moves to the House, where similar proposals have died in the past. The bill is Senate Bill 2053.
Jordan Hendler, executive director of the Washington (D.C.) Metropolitan Auto Body Association, averted a suicide attempt in January by physically intervening when she encountered a teenage girl threatening to jump Jordan Hendler from a freeway overpass. Hendler called 911 as she approached the girl on the edge of the overpass, then kept talking to her, pleading with her not to jump. “I told her something my father (CIC Administrator Jeff Hendler) always told me about suicide: “This is a permanent solution to a temporary prob-
lem.’” Jordan Hendler kept talking to the girl as another by-passer approached from the other end of the overpass. Together they restrained the girl and pulled her from the barrier she had climbed over. Hendler said it took both of them to hold the hysterical girl down until emergency responders arrived about four minutes after the call to 911. “It seemed like an eternity, a lot longer,” Hendler said. She said she knows nothing about the girl other than she looked to be about 14 or 15, and lives in a group home for teenagers. “You don’t know that one day you’ll be called upon to do the right thing at the right moment, but when the time comes, if you have your heart open, you will know exactly what to do,” Hendler said.
Jordan Hendler Averts Teenager’s Suicide Attempt
Two collision-related class action lawsuits against major insurers have recently been decided in favor of the insurers. In the GEICO case on appeal partially due to lack of evidence (the vehicle). In the Progressive case a summary judgErica Eversman comments on ment was returned Progressive vs. on two of six Blue Ash et. al. counts charged. The plaintiffs in the Progressive case have decided to drop the remaining existing charges to facilitate an appeal of the summary judgment.
Don’t Give Away the Evidence The January 10, 2011 GEICO decision pertains to a Chicago law professor’s prospective class action suit accusing the insurance company of deliberately omitting repairs from its estimates. He lost the case in part because he gave away the car (the evidence) before the case was resolved. On July 4, 2002, Greenberger, a professor and administrator at a Chicago law school, was involved in an automobile accident, and his 1994
Acura sustained damage to its bumper, steering box, suspension, and lower body. The next day, a GEICO insurance adjuster inspected the car at Greenberger’s home and wrote him a check for $3,284.69 ($3,784.69 minus a $500 deductible). Greenberger cashed the check but did not repair his car. Five months later, a stranger approached Greenberger in a parking lot and expressed interest in buying the car. Greenberger permitted this prospective buyer to take the Acura to a friend’s body shop for an estimate of what it would cost to repair it. The buyer’s technician, Sarkit Tokat of Lake Side Auto Rebuilders, delivered an estimate of $4,938.65, about $1,150 higher than GEICO’s estimate. The sale was not made, however, and in December 2002 Greenberger donated the car to charity without making any repairs. Exactly three years after accepting GEICO’s payment on his claim, Greenberger filed a proposed class-action lawsuit in Cook County Circuit Court alleging breach of contract, violation of the Illinois Consumer Fraud and Deceptive Practices Act, and common-law fraud. He claimed that
REGIONAL STORIES in this issue...
See Class Actions, Page 27
Arkansas Legislature to Ban Certain Cell Phone Usage . . . . . . .p. 23
Florida Cracks Down on Auto Insurance Fraud . . . . . . . . . . . . . .p. 8
Florida Has Most Staged Auto Crashes . . . . . . . . . . . . . . . . . . . . .p. 7
Florida Officials Warn on Used Car Title Fraud . . . . . . . . . . . . . . .p. 5
Mississippi Considers KKK Leader for License Plates . . . . . . . .p. 9
NATIONAL and COLUMNS in this issue... Class Action Lawsuits
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .p. 1
Ford Cuts Back on Lincoln Dealers . . . . . . . . . . . . . . . . . . . . . . . .p. 20
ABPA says Aftermarket Outperforms OEM Sometimes . . . . . . . .p. 21
COLUMNS in this issue... Amaradio, Attanasio, Danalevich,
Evans, Franklin, Insurance Insider, and Yoswick
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Contents ABRA Opens Five New Vehicle Repair Centers in Three States . . . . . . . . . . . . . . . . . . . 7
Arkansas Legislature to Ban Cell Phone Usage in School, Work Zones . . . . . . . . . . . . . 23
CA Paint Jobber NDI Sues BMW North America After the Automaker Implemented its own
BMW Paint Line . . . . . . . . . . . . . . . . . . 22
FL Cracks Down on Auto Insurance Fraud . 8 FL Representative Wants to Stop Texting
Announces Workshop in Atlanta. . . . . . 12
Toyota Opens TX, FL Quality Offices in Drive
to Cut Defects . . . . . . . . . . . . . . . . . . . . 7
COLUMNISTS
Amaradio - Setting the Record Straight on
Ford vs. Aftermarket Parts Testing . . . . 20
Attanasio - G&C Autobody Seizes
Opportunity to Expand in Northern
California. . . . . . . . . . . . . . . . . . . . . . . 25
While Driving . . . . . . . . . . . . . . . . . . . . . 4
Danalevich - “It’s a Misunderstanding”—
High-Speed Rail. . . . . . . . . . . . . . . . . . . 8
Evans - The Rich Evans Designs-Mopar Kit
Due to No-Fault? . . . . . . . . . . . . . . . . . . 7
Franklin - ‘Consistency’ May be Boring—But
No National Standard Exists . . . . . . . . . . 5
Insurance Insider - Not All “Referrals” are
Insurance Fraud . . . . . . . . . . . . . . . . . . . 4
Yoswick - New CIC Committee . . . . . . . . 13
Florida Has Most Staged Auto Crashes—
Florida Officials Warn on Used Car Title Fraud, Floridians Get Rewards for Reporting
GCIA & ASA-GA Doing Committee Work
with Georgia Insurance Commissioner
Ralph Hudgens . . . . . . . . . . . . . . . . . . . 6
GCIA Has CARFAX Talk About Information
Collection at January Meeting . . . . . . . . 5
Georgia Agency Approves Air Permit for
Steel Mill . . . . . . . . . . . . . . . . . . . . . . . . 8
Houston Auto Body Association Hosts
Insurance Appraiser Boot Camp. . . . . . 18
for Dodge's Challenger, Part 2 . . . . . . . 29
It’s Also Profitable . . . . . . . . . . . . . . . . 14 Created Equal . . . . . . . . . . . . . . . . . . . 24
Yoswick - Ten Things to Consider When Designing a New Shop, Remodel, or
Expansion . . . . . . . . . . . . . . . . . . . . . . 26
NATIONAL
ABPA Says Aftermarket Bumper
Outperformed Ford Counterpart in Lab
Crash Test . . . . . . . . . . . . . . . . . . . . . . 21
Legislative Breakfast for Texas Reps. . . 30
All Diamond Standard Bumpers Are Now
Georgia . . . . . . . . . . . . . . . . . . . . . . . . . 8
BASF Official Show Sponsor of
Economy. . . . . . . . . . . . . . . . . . . . . . . 19
Chief Advises on High-Strength Steel
Trade Practices . . . . . . . . . . . . . . . . . . 12
Chrysler Group’s Mopar Division to Expand
University Ecolean™ Workshop in
Class Action Judgements: GEICO Wins
Hyundai sending 71 O.C. jobs to Texas,
Hyundai, Kia Lift Southeastern Job Market, LA Insurance Agent Arrested for Unfair
Sherwin-Williams Announces A-Plus™
Houston . . . . . . . . . . . . . . . . . . . . . . . . 8
Louisiana Insurance Department Recovers
More than $9.6M in Insurance Payments
in 2010 . . . . . . . . . . . . . . . . . . . . . . . . 12
Mississippi Auto Insurance Bill Passes
Senate, Moves to House . . . . . . . . . . . . 1
Mississippi Commissioner Chaney to Run
Certified . . . . . . . . . . . . . . . . . . . . . . . . 3 NORTHEAST 2011. . . . . . . . . . . . . . . . 15
in OEMs . . . . . . . . . . . . . . . . . . . . . . . 11 Accessories Portfolio in 2011 . . . . . . . 17 Appeal vs. Greenberger & Progressive
Wins vs. Blue Ash Inc. . . . . . . . . . . . . . . 1
CREW Hosts New CIC Chairman Mike Quinn
in Webcast . . . . . . . . . . . . . . . . . . . . . 10
Federal $7,500 EV Credit May Change . . . 31 Feds to Decide on Vehicle Grades by July
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . 31
for Reelection . . . . . . . . . . . . . . . . . . . . 7
Ford to Ax Another 100 Lincoln Dealers . . 20
Confederate Veteran License Plates . . . . 9
House Votes to Block E15 from Pumps Due
Mississippi Mulls Putting KKK Leader on
MS Bill to Repeal Vehicle Safety Inspections . 12
General Motors January Sales Rise 23% . 23 to Potential Engine Failure . . . . . . . . . . 16
MS May Get Tough on Uninsured Drivers . . 6
Jordan Hendler Averts Teenager’s Suicide
MS Supreme Court Asked to Rule on Limit
Toyota Unintended Acceleration Probe Finds
MS Passes Texting Bill . . . . . . . . . . . . . . . . 4 on Damages . . . . . . . . . . . . . . . . . . . . . 4
Sherwin-Williams Automotive Finishes
Attempt . . . . . . . . . . . . . . . . . . . . . . . . . 1
No Electronic Flaws . . . . . . . . . . . . . . . 16
dard bumpers is moving forward. Diamond Standard Brand is poised to accelerate the introduction of new model car parts across all categories beginning this month and we’ll be adding new part categories within the year,” said O’Neal. “Dynamic and destructive comparative testing by industry experts proving equal functional performance is a demonstrated core competency of our Company and an assurance to the industry and vehicle owner that use of Certified Diamond Standard parts provide an acceptable alternative part without compromising safety and damageability. Diamond Standard Structural parts are available through limited quality distributors nationwide including the AQRP program at Keystone, an LKQ company. For more information visit www.diamondstandardparts.com or contact Geoff Crane at geoff@diamondstandardparts.com, or (901) 398-5759.
Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Editorial Assistant: Erica Schroeder Contributing Writers: Tom Franklin, Stefan Gesterkamp, John Yoswick, Lee Amaradio, Toby Chess, Mike Causey, Dan Espersen, Tom McGee, Jeff Webster, Rich Evans, Ed Attanasio Advertising Sales: Joe Momber, Sean Hartman (800) 699-8251 Sales Assistant: Kristy Mangum Art Director: Rodolfo Garcia
Indexof Advertisers
FL Senator Looking to Get Funding for
Diamond Standard has announced that it is the only “U.S. manufacturer to have all its alternative primed and plated front steel bumpers certified. “Specifically, 571 Diamond Standard parts/applications have reached Certification status in the NSF program,” says Geoff Crane, Business Development Manager of Diamond Standard. Additionally, all 280 Diamond Standard rear step bumper full assemblies are now Certified as meeting the Federal Standard of VESC V-5 towability by MGA Research Corporation of Burlington, Wisconsin, an independent, 17025 accredited test facility to the automotive industry. VESC V-5 functional performance testing is the only Federal requirement for step bumper assemblies. Diamond Standard’s Manufacturing Group also supplies USA made replacement steel/aluminum hoods and bumper top pads which are CAPA certified. “I am proud to announce that CAPA certification of Diamond Stan-
Southeast
REGIONAL
Diamond Standard Says All its Rear Step Bumpers Are Now NSF Certified
Serving Florida, Georgia, Alabama, Mississippi and adjacent metro areas, Autobody News is a monthly publication for the auto body 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.
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Arrigo Dodge-Jeep-Chrysler . . 12 Autoland Scientech . . . . . . . . . 17 Bill Penney Toyota. . . . . . . . . . 14 BMW Wholesale Parts Dealers. 24 Classifieds . . . . . . . . . . . . . . . . 31 Crown Automobile Company . . 7 Delray Honda . . . . . . . . . . . . . . 4 Don Reid Ford . . . . . . . . . . . . . . 8 Equalizer Industries. . . . . . . . . 13 Ford Wholesale Parts Dealers FL, GA, AL, MS . . . . . . . . . . . 2 Galloway Mazda . . . . . . . . . . . 21 Garmat USA . . . . . . . . . . . . . . 11 Global Finishing Solutions . . . . 5 Global PDR Solutions . . . . . . . . 6 GM Wholesale Parts Dealers . 19 Gus Machado Ford . . . . . . . . . 15 Honda Wholesale Parts Dealers 25 Hyundai Wholesale Parts Dealers 23
Kia Motors Wholesale Parts Dealers . . . . . . . . . . . . . . . . 32 Mazda Wholesale Parts. . . . . . 15 Mercedes-Benz Wholesale Parts Dealers . . . . . . . . . . . . . . . . 27 MOPAR Wholesale Parts Dealers11 Nalley BMW. . . . . . . . . . . . . . . 18 Nimnicht Chevrolet . . . . . . . . . 10 Nissan Wholesale Parts Dealers 20 Palmers Toyota . . . . . . . . . . . . 21 Porsche Wholesale Parts Dealers19 Savannah Hyundai . . . . . . . . . 10 Tameron Hyundai . . . . . . . . . . 26 Toyota Wholesale Parts Dealers 22 Unique Concepts . . . . . . . . . . . 9 VIM Tools . . . . . . . . . . . . . . . . . 29 Volkswagen Wholesale Parts Dealers . . . . . . . . . . . . . . . . 30
www.autobodynews.com | MARCH 2011 AUTOBODY NEWS 3
Floridians Get Rewards for Reporting Insurance Fraud Eight Floridians who provided information that led to arrests and convictions in five major fraud cases have been given rewards totaling $50,500, according to Insurance Journal. These citizens helped uncover more than $2 million in fraudulent insurance billings leading to 26 arrests to date, according to Florida Chief Financial Officer Jeff Atwater. “These citizens stepped up and made a tremendous contribution to the fight against insurance fraud,” said Atwater. “Their actions go beyond these cases—they have helped every Floridian who pays more than they should for insurance premiums.” Four of the cases involved fraudulent Personal Injury Protection (PIP) claims. Atwater had made combating insurance fraud on of his agency’s priorities. “It is unfair and unconscionable that every person who buys an auto insurance policy in the state of Florida is paying for the thieves and enabling industries who are gaming the system, and it won’t be tolerated,” said CFO Atwater, who yesterday addressed the Florida House of Representatives Insurance & Banking Subcommittee on auto insurance
fraud. Rewards issued for PIP cases include: • $2,500 to a witness who provided information leading to the arrests and convictions of three individuals who staged an auto accident and filed more than $48,000 in fraudulent claims through a Tampa clinic. • Three witnesses will be paid a total of $25,000 for providing information against Jacksonville-based Lee and Cates Glass Co., a windshield replacement business that filed 2,245 fraudulent claims totaling more than $1.2 million. There have been 11 arrests associated with this company. The company replaced windshields with after-market windshields and charged insurance companies for new ones. One of the witnesses will be paid $15,000, and two others will receive $8,750 and $1,250. These cases were investigated by the Division of Insurance Fraud. The Department of Financial Services said that to date it has awarded almost $250,000 to approximately 40 citizens as part of its Anti-Fraud Reward Program. The program rewards individuals up to $25,000 for information that directly leads to an arrest and conviction in a fraud scheme.
FL Representative Wants to Stop Texting While Driving Florida Representative Irv Slosberg is continuing his fight to ban texting and driving amongst minors, according to reports made by WPTV. Slosberg is pitching the Minor Traffic Safety Act. He’s suggesting minors be prohibited from texting while driving, as well as talking on the phone while driving unless they use a hands-free device. He’s suggesting the same thing for school bus drivers. The bill would also restrict the number of passengers minors can have in the car while they’re driving. Slosberg also wants any vehicle a minor is driving to contain a special sticker denoting their age, similar to a disability decal. “We know kids, they think they’re invincible, unfortunately they’re not, and 87 percent of serious injuries are due to driver distraction,” said Rep. Slosberg. Critics claim a sticker pointing out a minor could attract trouble, but Slosberg disagrees. “You could say the same thing about senior citizens or disabled people. They have handicapped stickers on their car. Law enforcement has to have some kind of way to identify
who is a minor,” he said. Drivers questioned by WPTV agreed with the bill. “Absolutely, it’s very distracting, especially out on I-95, a small distraction can result in a lot of trouble real quick,” said driver Mark Luttier. Slosberg talked about his bill February 2 at Olympic Heights High School in Boca Raton.
MS Passes Texting Bill
The Mississippi Senate has passed a bill that would ban texting while driving, according to WREG Channel 3. The bill says drivers cannot operate a vehicle on a highway while using a wireless device to type, send or read written communication. A violation would be a misdemeanor punishable by a $500 fine. Some lawmakers questioned how officers would be able to distinguish between texting or making a phone call. Judiciary B Chairman Gray Tollison acknowledged the measure would be difficult to enforce, but said lawmakers needed to act to ban the “dangerous” practice. The bill now moves to the House.
MS Supreme Court Asked to Rule on Limit on Damages A federal appeals panel is asking the Mississippi Supreme Court if state law that limits non-economic damages to $1 million in civil cases is constitutional, according to reports made by Insurance Journal. The question from a three-judge panel of the 5th U.S. Circuit Court of Appeals, dated Jan. 19, came in lawsuit filed over a traffic accident involving Lisa Learmonth and Sears and Roebuck Co. The law on non-economic caps puts a limit on what juries can award someone for such things as pain and suffering. The limits on damages were adopted by lawmakers after years of contentious wrangling over tort reform. Learmonth sued Sears and Roebuck Co. after she had been involved in a collision with one of the company’s vans. A U.S. District Court jury found Sears liable for her injuries and awarded Learmonth $4 million in damages, of which the parties agreed $2.2 million were for non-economic damages. The judge reduced the non-economic damages to $1 million. In its appeal, Sears asked the 5th Circuit for a new trial, which the appeals court panel denied. Learmonth appealed the decision to reduce the
non-economic damages, an issue that the 5th Circuit panel referred to the Mississippi court. “This is an important question of state law, determinative of the noneconomic damages issue in this case, for which there is no controlling precedent from the Supreme Court of Mississippi,” Chief Judge Edith H. Jones wrote for the panel. Last September, the Mississippi court overturned a $1.67 million verdict against the owners of a convenience store who were sued after a man was shot and wounded in its parking lot. Ronnie Lee Lymas sued Double Quick Inc. after he was shot in 2007 while leaving the store in Belzoni. He claimed the company didn’t do enough to ensure safety. A Humphreys County jury in 2008 awarded Lymas $4.17 million. The award was reduced to $1.67 million by the trial judge, who threw out all non-economic damages more than $1 million. The Mississippi Supreme Court said Lymas failed to prove that Double Quick was liable for his injuries. The case has been toued as a test of Mississippi limits on civil liabilities. The Supreme Court did not address the issue.
4 MARCH 2011 AUTOBODY NEWS | www.autobodynews.com
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GCIA Has CARFAX Talk About Information Collection at January Meeting
the night were Data Acquisition Manager Sali McCahill and Repair Advantage Program Director Nancy Fiorino from the vehicle history reporting company CARFAX. The speakers gave a presentation on how CARFAX gathers the infor-
mation they have on accidents and repairs on vehicles and their new Repair Advantage Program. Some repairers at the meeting expressed that they had gone through scenarios where a previous repair customer had come back to the shop quite upset because they had tried to sell their vehicle and had to lower the price due to accidents reported on CARFAX. The customers was concerned that the repair shop had reported the repairs without letting the customer
know or had misreported the repairs altogether, thus causing a diminshed value scenario when the owner attempted to sell the vehicle. McCahill and Fiorino said that CARFAX gets their reports from over 30,000 sources, or data partners, including police reports some body shops and some parts vendors. The new Repair Advantage Program will allow shops to become more of a part of the reporting process according to Fiorino. CARFAX has a few thousand
shops reporting to them already, but would like to increase that number. “Shops can ensure information is being correctly represented on reports if they’re part of the program,” said GCIA President Howard Batchelor. Shops can also brand their name on reports they give about cars they have repaired and make sure CARFAX has accurate information about the accident, repair processes and parts used. For more information please visit www.carfax.com.
Each state has a different title forms system — some such as Nebraska that display vehicle brand information prominently and others such as Florida that mix brand information in with routine data such as the VIN (vehicle identification number), the make, model and mileage of the vehicle. This can cause mishaps when titling used vehicles. Hall County supervisors recently paid $3,000 to a used car dealer and a car buyer after a clerk for the county
issued a clean title for a vehicle that was actually rebuilt. Hall County Sheriff’s deputies, who legally must inspect all used cars purchased from out of state, recently discovered one that was stolen. It left the car buyer, an innocent third party, without the car or the money used to buy it. Neri Alarcon Villa of Grand Island bought a 2002 Jeep Liberty at Jubba Auto Sales on West Second Street. She bought the car for $9,500,
but later discovered from a check by private vehicle information company CARFAX that the Jeep had been wrecked and rebuilt in Florida. Jubba and Villa approached the county for repayment, saying they both had believed the car had a higher value than it really does based on the clean title issued by Hall County. Hall County Treasurer Doris Mason and Motor Vehicle Department Supervisor Sandy Ballard researched the title. They traced it back
and discovered the initial Hall County title was issued in June 2009 when the titling functions were overseen by Hall County Clerk Marla Conley. The treasurer’s office took over titling duties in October 2009 as mandated by the Nebraska Legislature in its effort to create a single stop for taxpayers needing to title, license and pay taxes on new vehicles or boats. There is no national standard on title forms.
The Georgia Collision Industry Association held their first meeting of 2011 on January 27; the main speakers for
Florida Officials Warn on Used Car Title Fraud, No National Standard Exists
www.autobodynews.com | MARCH 2011 AUTOBODY NEWS 5
GCIA & ASA-GA Doing Committee Work with Georgia Insurance Commissioner Ralph Hudgens
The Georgia Collision Industry Association (GCIA) has been working with new Insurance Commissioner Ralph Hudgens this month on creating six regional Property and Casualty Advisory Committees and one smaller, statewide version of the committee. Hudgens first came to the GCIA in the beginning of January asking their help in finding people who would like to be nominated for the Howard Batchelor committee, said GCIA President Howard Batchelor. Batchelor then reached out Neva Hollins, Executive Director at ASA of Georgia, to help fill in nominees for more rural regions where
Insurance Commissioner Ralph Hudgens and the GCIA’s Howard Batchelor at the January 25th Property and Casualty Advisory Committee meeting
the GCIA has low membership numbers. On January 12, people from the industry met with Hudgens to discuss what he wants from this advisory committee and who would comprise each regional group. Once the regional committee members were decided, 3 people were nominated from each region to be part
missioner Hudgens’ attention. The regional meetings will be public while the statewide meetings will be members only. “Now we’re just really waiting for these committees to meet,” said Batchelor. The committees will focus on automotive industry issues that would concern the Insurance Commissioner’s office. The Property and Casualty Advisory Committee also met on January 25 for their first discussion meeting. For more information see: www.gainsurance.org, ww.asagashop.org or http://gacollisionindustry.wordpress.com.
of the statewide committee. A.C. “Carroll” Proctor Jr. and Howard Batchelor were nominated from the GCIA for the statewide committee. According to Batchelor, the committees will meet 2–3 times per year, and have conference calls another 2–3 times per year in the hopes of bringing issues and potential solutions in the Georgia collision industry to Com-
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MS May Get Tough on Uninsured Drivers Some state lawmakers say Mississippi’s decade old law requiring drivers carry insurance is being largely ignored because they say it has no teeth. Studies show more than one quarter of Mississippi drivers are uninsured. A bill set to go before the state House aims to make it difficult for uninsured motorists to hit the roads, according to WLOX-TV. Every day Mississippians get behind the wheel hoping they won’t get rear-ended by that one in every four drivers who doesn’t have liability insurance. “It seems to me sometimes people got to get around,” said driver Nicholas Quarles. “Got to get to work. If they’re just paying their bills, sometimes they can’t afford insurance.” Matthew Langlinais owns Lighthouse Insurance in Biloxi. He said the state’s current mandatory insurance law has good intentions, but that’s about all. “When they passed the law 11 years ago, it did not have enough teeth to track the uninsured motorists. So it really has done nothing in the way of forcing people to get insurance,” said Langlinais. “If you get into a wreck now with someone that doesn’t have insurance and you’re
only carrying liability yourself, the pinch to the pocketbook is pretty substantial.” Lawmakers are considering an electronic insurance verification system that police officers could access after a traffic stop. County tax accessors would also play a role keeping uninsured motorists off the roads. “When you go to get a tag right now and if you are forced to show your insurance card. For them to actually look on a database and see if it’s enforced or not, that would make more people carry the insurance,” Langlinais said. Not everyone is convinced another law is the answer. “I don’t think they’ll be very effective,” said Quarles. “I think people will get insurance just to get the tag then just drop it right afterwards.” Another driver, John Leggett, thinks people should show proof of insurance to buy car tags. “I think that’s a good thing. It will help out in the long run. Because if you’re not insured, that’s the same as not having a license. You have to have both to have a vehicle on the road.” The proposed bill would also allow the Mississippi Department of Public Safety to run random insurance checks. Fines would ensue.
6 MARCH 2011 AUTOBODY NEWS | www.autobodynews.com
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ABRA Opens Five New Vehicle Repair Centers in Three States
Minneapolis, Minn.-based ABRAAuto Body & Glass, a national damaged vehicle repairer, announced it has opened five repair centers. Three of the centers are corporate owned, and two are franchises, according to reports made by Claims Journal. The corporate centers were opened in Tucker, GA— part of metro Atlanta, and Glendale and Waukesha, WI— both Milwaukee suburbs. The new franchise centers are located in Clinton, Iowa, and Wisconsin Rapids, WI. The Clinton franchise agreement was awarded to John McEleney who has been operating under the name of McEleney Collision. McEleney also owns Chevrolet, GMC, Buick, and Toyota franchises in Clinton. Allen Taylor has opened the repair center located in Wisconsin Rapids. Taylor was formerly operating under the name of Rapids Ford Body Shop. He is also the owner of Rapids Ford-Lincoln-Mercury.
Mississippi Commissioner Chaney to Run for Reelection
Mississippi Insurance Commissioner Mike Chaney has officially announced his intention to seek a second term. Chaney was first elected to office in November 2007 when he beat Democrat Gary Anderson by taking 57 percent of the vote. Chaney succeeded long-time commissioner, George Dale. Prior to his election, Chaney, a Republican, served seven years in Mississippi’s House of Representative, followed by an eight year stint in the state Senate. He was a key member of the Senate Insurance Committee that enacted a major windstorm reform bill in 2007. Gearing up for the coming campaign Chaney highlighted a number of accomplishments including overseeing the transfer of $19 million into the state’s wind pool to stabilize rates for Gulf Coast homeowners. He also noted that the state had recovered $9.3 million from companies that overcharged policyholders premiums, which were returned to the policyholders. He also changed state regulations so that agents could now receive two-year licenses. Still, Chaney said there is much to be done.
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According to the National Insurance Crime Bureau, Florida ranks at the top of the list for staged accidents and suspicious automobile insurance claims. Miami, Tampa and Orlando remain in the top three, but West Palm Beach continues to climb, nearly doubling its numbers from 50 in 2008 to 96 in 2009. Special Agent Fred Burkhardt, with the South Florida Major Medical Fraud Task Force, said he thinks staged accidents may be happening everyday. “It’s just tough to prove on the surface because you have to do the investigation after the loss happens,” said Burkhardt. Experts believe one of the reasons the number of staged accidents is so high is because Florida is a no-fault state, which requires each driver’s insurance to pay for medical payments, no matter who is at fault. “It’s pretty bad how desperate things have gotten, but people are taking advantage in every way they can right now,” said resident Brenda Brown.
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Toyota Motor Corp. is adding offices in Texas and Florida to catch potential defects at an early stage a year after recalling millions of U.S. vehicles. The new Houston and Jacksonville operations follow similar field offices opened in New York and San Francisco last year to evaluate and respond to customers’ safety and quality concerns, Toyota said in a statement. It plans to open a fifth office in Denver in the first quarter of 2011, Toyota said. After recalling U.S. vehicles, Toyota is still working to regain its reputation for quality. The impact of a series of recalls last year led Toyota to report a 0.4 percent U.S. sales decline for the period, bucking the industry’s 11 percent annual gain. Technicians at the regional offices will investigate customer complaints and research specific vehicle issues, the company said. The Jacksonville office will specialize in heating, ventilation and air conditioning problems, while Houston will focus on trucks and chassis components, Toyota said. The Denver office will evaluate sport-utility vehicles and performance in high-altitude areas, the company said.
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1800 Montgomery Highway S. - Hoover, AL 35244 www.autobodynews.com | MARCH 2011 AUTOBODY NEWS 7
Hyundai sending 71 O.C. jobs to Texas, Georgia
Hyundai Capital America, the Korean auto company’s financing arm, is transferring 71 jobs from Irvine to its offices in Dallas and Austell, Ga., a spokesman has confirmed. Chris Hosford, a Hyundai Motor America spokesman, said Hyundai Capital would maintain a presence in Irvine but that collections and customer service positions would be moved. “The jobs are being transferred because they are focusing more of their efforts in the South and Southwest through Hyundai’s existing operations in those two cities,” Hosford said. He said the people in Irvine who are affected have been notified and those jobs will end March 31. “All the employees who are qualified have been offered to apply for the positions and encouraged to do so,” Hosford said. He did not know how many people will make the move. Hyundai Capital’s website says it has about 500 people in Irvine, Fountain Valley and Austell. The company provides financing to Hyundai and Kia dealers and vehicle buyers. Some of the Irvine workers have applied for other jobs with the company in California. “For some people, the opportunity to move to an area of the country where housing costs are lower could be a good thing,” he said. Hosford said the job transfers are unrelated to Hyundai Motor America’s plans to more than double the size of its North American headquarters off the I-405 in Fountain Valley. The company plans to begin hiring this year and expects to double the staffing at its headquarters to about 1,400 people.
FLCracks Down on Auto Insurance Fraud
Representatives from 17 auto insurance companies joined forces with the Broward County Sheriff’s Office during a one-day crackdown on motorists who drive without insurance, according to Claims Journal. This month’s crackdown on insurance fraud was an initiative put together by the sheriff’s office and the National Insurance Crime Bureau, which fights insurance fraud. Insurance agents waited at the sheriff’s substation as deputies called in to verify driver’s insurance information during traffic stops. By 3 p.m., they had fielded 39 calls. Deputy Marty Chastain said similar crackdowns are planned and he warns they will be random. Insurance fraud is “through the roof’’ in Florida.
FL Senator Looking to Get Funding for High-Speed Rail
Following Governor Rick Scott’s announcement to reject $2.4 billion in federal stimulus funding for a highspeed rail, Senator Bill Nelson says they’ll try to get that money here some other way, according to WOKV. Senator Nelson spoke with Transportation Secretary Ray Lahood about financing the high-speed rail line between Tampa and Orlando without the state’s participation. He says lawyers with the DOT are working on finding a way to get the funding allocated to an entity other than the state. One suggestion he had off the top of his head, getting Tampa, Lakeland and Orlando to join as one group in which federal funding would go to. The project is about 90% funded according to Nelson and the remaining $280 million could then be taken up by a private company. Several companies are vying to take the project up so the senator suggests having them make the remaining investment and have the federal stimulus aid come straight to the three cities. Without the project the state would lose out on 24,000 projected jobs that would have been created over the next 5 years.
Sherwin-Williams Announces APlus™ University Ecolean™ Workshop in Houston The next A-Plus™ EcoLean™ Level 1 workshop from Sherwin-Williams Automotive Finishes will be held April 13-14 at the Gulf States Toyota Corporate Training Center in Houston, TX. Sherwin-Williams’ exclusive EcoLean Level 1 workshops are designed to educate attendees about maximizing profitability by improving productivity and eliminating waste throughout their facilities. The program is offered to collision center owners and dealer managers from across the United States and Canada. “Our EcoLean workshop curriculum is developed with collision shop operators in mind,” notes Steven Feltovich, manager of business consulting services for Sherwin-Williams Automotive Finishes. “We aim to give them a comprehensive look of how they can build a lean culture in their shop from the ground up.” During the upcoming Houston EcoLean Level 1 workshop attendees will learn practical processes and useful tips on lean production’s practical application in collision repair and methods to make their collision shops more efficient, productive and profitable. To register online for the April 1314 workshop, go to: www.sherwin-automotive.com/en/ Events.aspx or call (216) 332-8580.
8 MARCH 2011 AUTOBODY NEWS | www.autobodynews.com
Georgia Agency Approves Air Permit for Steel Mill The Georgia Environmental Protection Division (EPD) of the Georgia Department of Natural Resources has granted an air permit to Osceola Steel Co., which is looking to build a minimill in Adel, Ga. Approval of the permit came on Dec. 29, 2010, and followed a forum held earlier that month when the EPA fielded comments and listened to a presentation on the proposed steel minimill. The company initially applied for the air permit in April 2010. According to documents submitted during the hearing, the Osceola Steel, founded in 2009, is looking to build a steel mill with the capacity of 430,000 tons per year. The end product would be primarily rebar and merchant bar, with the Georgia and Florida markets as targets for the steel. Raw material for the steel mill would be almost exclusively ferrous scrap metal. The location of the proposed steel mill is in an area zoned for heavy industry. In its presentation to the EPD, Osceola Steel said it expects the investment at the site to be around $70 million, and at full capacity the mill
would employee between 140-150 people. The mill would include one electric arc furnace, two horizontal ladle preheaters, one vertical ladle heating stack, two tundish preheaters, one reheat furnace, two casting machine torches and three cooling towers. The facility would use ferrous scrap as its raw material. In the public hearing, the company indicated that it hopes to start site construction, subject to the completion of venture financing, by March 2011 with start up by April 2012. Eric Cornwell, manager of EPD’s Air Protection Branch’s Stationary Source Permitting Program, says that the permit requires the company to break ground on the steel mill within 18 months. The company will need to obtain a number of other permits before it can break ground on the operation. Dennie Andrew, who is listed as a contact for Osceola Streel, says that the company is in the process of putting together its financing, which the company hopes to have complete by the middle of 2011.
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Mississippi Mulls Putting KKK Leader on Confederate Veteran License Plates A new, uncivil skirmish is brewing over a proposal to put the first Ku Klux Klan Grand Wizard on state license plates in Mississippi. Confederate Gen. Nathan Bedford Forrest will appear on the plates in 2014 if the Sons of Confederate Veterans, an American national heritage organization with members in all fifty states, gets its way. The organization is sponsoring a series of specialty plates over the next four years to commemorate the 150th anniversary of the Nathan Bedford Civil War, or the Forrest War of Northern Aggression, if you prefer. The Sons of Confederate Veterans describes its mission as “preserving the history and legacy of Confederate heroes, so future generations can understand the motives that animated the Southern Cause.” This year’s plate features the last home of Confederate president Jefferson Davis. The state-issued Specialty Auto-
Example of SCV commemorative plates
mobile License Plates available to vehicle drivers in Georgia, North Carolina, Alabama, Maryland, Mississippi, Louisiana, South Carolina, Tennessee, and Virginia. In each case, the license plate features the Sons of Confederate Veterans logo, which incorporates the square Confederate Battle Flag. There is some opposition in a number of these states to putting the Confederate battle flag on state license plates, given the widespread association of the flag with racist causes. The North Carolina appellate court upheld the issuance of such license plates in SONS OF CONFEDERATE v. DMV (1998) and noted: “We are aware of the sensitivity of many of our citizens to the display of the Confederate flag. Whether the display of the Confeder-
ate flag on state-issued license plates represents sound public policy is not an issue presented to this Court in this case. That is an issue for our General Assembly.” Forrest is remembered both as a self-made, self-educated innovative cavalry leader who rose from private to general officer during the war and as a leading southern advocate in the postwar years. Much more controversial is that he also served as the first Grand Wizard of the Ku Klux Klan, a secret vigilante organization which launched a reign of terrorism against blacks and Republicans during construction in the South. Forrest was born and died in Tennessee and joined his home state’s KKK shortly after the war. The general has both been hailed as a military hero and accused of war crimes at the Battle of Fort Pillow for allowing forces under his command to conduct a massacre upon hundreds of black Union Army and white Southern Unionist prisoners in 1864. Mississippi’s chapter of the NAACP strongly criticized the call to honor Forrest, who led several battles
in Mississippi during the war. “He should be viewed in the same light that we view Saddam Hussein and Osama bin Laden,” Derrick Johnson, the president of the NAACP in Mississippi, told The Associated Press, adding that the Klan was a terrorist group. “The state of Mississippi should deny any vanity tags which would highlight racial hatred in this state,” he said. Before his death in 1877, some historians claim Forrest softened his views on racial relations. “If Christian redemption means anything—and we all want redemption, I think—he redeemed himself in his own time, in his own actions, in his own words,” Greg Stewart, a Sons of Confederate Veterans member, told the AP. “We should respect that.” At least one black state lawmaker isn’t bothered by the group’s push to remember Forrest. “I don’t have a problem with it,” Rep. Willie Bailey said. “They have that right. We’ll look at it. As long as it’s not offensive to anybody, then they have the same rights as anybody else has.”
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CREW Hosts New CIC Chairman Mike Quinn in Webcast brought by a committee before his term. Quinn said he would like to make CIC helpful in creating a solution or finished product that can help solve a problem, not just a floor for people to vent their issues and opinions. “We’ve paired down a few of the committees,” said Quinn. CIC steamlined a few of their committees this term in order to make sure each committee had a specific and attainable goal. “We’re going to create a voting standard for the adoption of practices,” said Quinn. The hope is that new processes for solving issue within the industry can be voted on by committees, presented to the whole CIC to vote, then to the entire industry before attempted adoption. Quinn said he would like to see a repair standards committee take a similar route as compared to CIECA. “We’ve worked very closely with Thatcham... we’re hoping to discuss their repair standard at the July meeting,” said Quinn. Quinn also talked about promoting respect and new leadership at CIC meetings and in committees.
The February webcast of the Collision Repair Executive Webcast (CREW) hosted new Collision Industry Conference (CIC) Chairman Mike Quinn. Quinn also owns 911 Collision Centers with 7 locations in Arizona. The webcast detailed Quinn’s goals for his 2011-2012 term at CIC Chairman. Quinn’s main goals are to increase attendance and participation, increase trust, make CIC a place for people to voice issues without fear of Mike Quinn criticism, create a process where committees can develop work product that is valued by the industry and formulate processes to improve the overall effectiveness and efficiency of CIC as a body. Quinn further explained what he means by process by using the class A standard of a work facility that came from CIC previously as an example. He also mentioned the effectiveness of CIECA and their work with electronic commerce as a good process that was
“All segments of the industry need to be represented, respected and able to participate,” said Quinn. New guidelines and a code of conduct were released at the Palm Springs meeting held on January 12, 13, 14 to increase respect and encourage communication. “We’re reaching out to a number of the top 10 insurers and others to participate,” said Quinn, “And repairers as well as vendors.” Quinn also spoke about the close vote during the Palm Springs meeting between whether to hold the November 2011 meeting at NACE or SEMA; SEMA won out by one vote. “The vote was 99 to 98 in favor of SEMA, that really shows how divided this industry is over this issue,” said Quinn. Quinn also spoke about how this split is the beginning of a big change in how people conduct business and whether or not they attend trade shows, largely thanks to technology. Quinn was asked whether or not the CIC meetings should be televised or streamed live by webcast, and he
expressed that it was a good idea although CIC has some concerns about privacy and people continuing to be open with their opinions when they know they are being broadcasted worldwide. “It’s inevitable for the mere reason we’re talking about it,” said Quinn, who is positive technology will influence future meetings. Quinn also plans to engage younger people in the industry to participate in CIC, he said that he is already doing this through some of the people he has elected to chair certain committees and by reaching out to repairers to attend. “The only way we’re going to get new leadership ... is to have the leaders in the industry reach out to the younger people and bring them forward to participate,” said Quinn. Upcoming meetings for the CIC are: March 17 in Newark, NJ, July 20 in Salt Lake City, UT and November 2 and 3 in Las Vegas, NV. For more information please visit www.ciclink.com or www.crewwebcast.com.
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Chief Advises on High-Strength Steel in OEMs In their quest to make passenger vehicles even safer and more fuel-efficient, manufacturers continue to incorporate increasing amounts of advanced steel in new car and truck designs. And while the use of high-strength steel (HSS) makes the vehicles lighter and stronger, it can also make repairing them more complex. Many modern vehicles, regardless of sticker price, are built with more than 50 percent advanced steel. The Ford Fusion hybrid, for example, contains 55 percent HSS, and the Ford Fiesta uses more than 60 percent HSS. After a collision, most advanced steel can’t be repaired by traditional pulling or heating methods. The most efficient way to reverse the vehicle damage is through multiple, simultaneous pulls using equalized pressure. This technique applies the same amount of pressure across multiple points of the damaged area at the exact same time, to prevent ripping, tearing, bending or rolling the steel. “In many cases, the advanced steel components of a vehicle are strong enough and peripheral to the
primary impact zone that they remain undamaged in a collision — the weaker steel around them absorbs the majority of damage,” explains Mike Cranfill, vice president of collision for
The most efficient way to reverse collision damage in vehicles made with advanced steel is through multiple, simultaneous pulls using equalized pressure as provided by pulling systems like the Chief Titan-360
Chief Automotive Technologies. “By using multiple, simultaneous pulls with equalized pressure, the center section of the vehicle can be squared. Then the mild steel damage can be corrected or sectioned as defined by
OEM repair procedures. In contrast, pulling just a single area at a time, or pulling multiple areas without equalized pressure can actually put more damage into the vehicle.” Chief offers a range of pulling systems that can be used for multiple, simultaneous pulling with equalized pressure, including its Impulse™E/VHT, Goliath™ and Titan™-360. Each of these products features an electric-over-hydraulic system to equalize pressure to all towers in use. These Chief pulling systems also provide 10 tons of pulling power at the hook. Since advanced steels make it necessary for shops to use more pressure than ever before, this is an important differentiator. Other systems may use 10-ton rams, but by the time the pressure gets to the hook and the vehicle it’s attached to, the pressure could have dropped to as little as four tons. The Chief Impulse-E/VHT, Goliath and Titan-360 pulling systems are compatible with Chief’s Vector, Velocity and VelocityMAX measuring systems, featuring Chief’s exclusive vehicle measurement data.
For more information about any of the pulling or measuring systems available from Chief Automotive Technologies, contact your local Chief distributor, call 877-644-1044 or visit www.chiefautomotive.com. About Chief Automotive Technologies Chief Automotive Technologies, a Vehicle Service Group (VSG) brand, is one of the world’s largest manufacturers of high-quality collision repair products and services, including framepulling equipment, vehicle anchoring systems, computerized measuring systems, and vehicle frame specifications. Chief is also a leading provider of comprehensive training on structural analysis, repair and collision theory. VSG brings together several top brands of vehicle service and repair equipment, including Chief and Rotary Lift®. Based in Madison, Ind., VSG has operations worldwide. VSG is part of the Industrial Products segment of Dover Corporation (NYSE: DOV), a multi-billion dollar, global producer of innovative equipment, specialty systems and value-added services.
www.autobodynews.com | MARCH 2011 AUTOBODY NEWS 11
MS Bill to Repeal Vehicle Safety Inspections Mississippi House Bill 151, which would have repealed the Mississippi annual safety inspection of motor vehicles program, has died in committee. The bill was introduced by state Rep. Steve Horne, R-81. The Automotive Service Association (ASA) had previously launched a grassroots initiative to oppose MS H.B. 151 and is pleased the bill will not move forward. Another Mississippi bill of interest, H.B. 848, has also died in committee. MS H.B. 848, introduced by Rep. Charles Jim Beckett, R-23, would have revised the Mississippi Motor Vehicle Safety Inspection Law to require the commissioner of public
safety to require inspections not more than once every two years. It also revised the fees for motor vehicles safety inspections. To view MS H.B. 151 or MS H.B. 848, visit ASA’s legislative website at www.TakingTheHill.com. The Automotive Service Association is the largest not-for-profit trade association of its kind dedicated to and governed by independent automotive service and repair professionals. ASA serves an international membership base that includes numerous affiliate, state and chapter groups from both the mechanical and collision repair segments of the automotive service industry.
LA Insurance Agent Arrested for Unfair Trade Practices Troopers with the Lafayette Field Office of the Louisiana State Police Insurance Fraud Unit recently arrested a Ville Platte insurance agent for unfair trade practices, according to Insurance Journal. In October 2010, troopers received a criminal complaint about 65year-old Melvin J. Lavergne of Ville Platte, La. The complaint alleged that Lavergne, the owner and agent of Lavergne’s Insurance Agency located in Ville Platte, had failed to send insurance premiums collected from customers to the insurance companies.
Lavergne allegedly failed to submit more than $1,160 in insurance premiums for four separate customer accounts resulting in seven cancellation notices being issued. Based on the investigation troopers were able to obtain a warrant for Lavergne’s arrest. Lavergne is charged with committing unfair trade practices. The Department of Insurance Fraud Section Investigators served Lavergne with a summary suspension of his license, a cease and desist order, a $4,500 fine notice and notice of proposed license revocation for alleged misappropriation of insurance premiums.
Louisiana Insurance Department Recovers More than $9.6M in Insurance Payments in 2010 Louisiana Insurance Commissioner Jim Donelon announced that the Louisiana Department of Insurance (LDI) aided Louisiana insurance consumers in receiving more than $9.6 million in insurance payments from consumer complaints last year, according to reports made by Insurance Journal. This is an additional $1.4 million over the amount of funds recovered in 2009. The largest amount — more than $6 million — was recovered from property and casualty insurers. The recovered funds result from insurance claims disputes in which LDI was able to work with insurance companies and consumers to recover monies above what the insurance companies originally offered the consumers to settle their claims. Funds recovered are from formal complaints regarding property and casualty, health insurance, life and annuities, and consumer advocacy claims. Information on inquiries, complaints and funds recaptured by each
office is as follows: 2010 Consumer Insurance Dispute Settlements Office: Inquiries - Complaints - $ Recovered Office of Property & Casualty: 4,596 1967 $6,076,864.58 Office of Health: 592 1,310 $1,440,147.46 Division of Life and Annuities: 7,836 456 $2,060,429.00 Office of Consumer Advocacy: 74 21 $51,852.25 Total:13,098 3754 $9,629,293.10
Consumers who feel they are not being paid what they should for losses as stated in their insurance policies can contact LDI and request assistance and/or file a formal complaint. Department examiners review complaints from policyholders and determine if the insurance company has honored the insurance policy and paid the consumer what they are due per the provisions of their policy. For more information please visit www.ldi.state.la.us.
12 MARCH 2011 AUTOBODY NEWS | www.autobodynews.com
Sherwin-Williams Automotive Finishes Announces Workshop in Atlanta Sherwin-Williams Automotive Finishes will hold its first 2011 A-Plus™ University “Winning the Keys” Estimating and Profitability Workshop on May 4-5, at the Marriott Gateway Airport Hotel, in Atlanta. Designed to meet the challenges collision repair facilities face in today’s economic climate, participants in the innovative Sherwin-Williams “Winning the Keys” workshop will learn how to close more sales and increase business at the front end of the body shop. The program is targeted at collision repair facility owners, managers, estimators and customer service representatives who are interested in improving their closing ratio and creating loyal customers. Built by leading collision repair industry professionals, “Winning the Keys” focuses on three critical profit areas of importance to a successful collision facility: customer service, selling skills and estimating. In particular, the course curriculum focuses on achieving service excellence and estimating solutions for profit. “With these concepts in mind, attendees will learn how to implement
proven sales techniques that have been custom-tailored to the collision repair industry and designed to improve the effectiveness of their selling skills during the estimating process,” says Troy Neuerburg, marketing business services manager for SherwinWilliams Automotive Finishes. “Each attendee will leave the workshop with the detailed information and tools necessary to immediately write and negotiate more profitable estimates.” The workshop also provides attendees the opportunity to share best practices with their industry peers throughout the two-day learning session. Breakfast and lunch will be provided each day, with a group dinner scheduled for the first evening. To register online for the workshop, go to www.sherwin-automotive.com/. For more information on the A-Plus Network, call (216) 332-8580.
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Industry Insight with John Yoswick
John Yoswick is a freelance writer based in Portland, Oregon, who 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). He can be contacted by email at jyoswick@SpiritOne.com.
New CIC Committee to Focus on Shop Data’s Capture, Use, Sale, and Reports Arizona shop owner Mike Quinn opened his first Collision Industry Conference (CIC) as chairman of the quarterly gathering, held in January in Palm Springs, CA, by asking outgoing I-CAR CEO John Edelen to introduce new I-CAR chair John Van Alstyne, who takes the helm of the training organization this month. Quinn followed Van Alstyne’s brief remarks by praising Edelen’s efforts at transitioning I-CAR over the past three years. “If I’m able to engage the industry as much as John Edelen has engaged the indusMike Quinn try in the last several years, I’ll be successful as CIC chair,” Quinn said. The first meeting of a new CIC chairman’s term is generally set aside
as a “planning meeting,” one in which participants discuss the issues they’d like to see CIC address in the coming year or two, and form the committees to which those issues are assigned.
Outgoing I-CAR Chair John Edelen (l) and John Van Alstyne, the new I-CAR Chair
In Palm Springs, about 10 committees were approved to move ahead with their proposals of what they would work to accomplish in the coming year or two. A “Data Privacy Committee,” for
example, was formalized based on a taskforce that CIC created last year to address issues related to the use of shop estimate and other data. The issue has continued to grow in importance as the information providers shift toward “cloud comTony Passwater puting” systems, in which estimates and even shop management system data are stored on the vendor’s computers rather than the shop’s. Tony Passwater, who chairs the new committee, said part of what it will do is identify how shop data is being “captured, used, distributed, sold or reported on.” The committee, he said, also would seek to recommend guidelines or standards to protect the rights of shops, insurers and vehicle owners when this information is being captured or used in any way. Currently, Passwater said, shops have little in the way of choice about such issues, basically having to subscribe to an estimating system service, for example, under the terms offered. “If they do subscribe, they really don’t have any control of whether or not their data is used beyond their own internal use,” Passwater said. “I think the issue the collision repair industry has is that there should be Scott Biggs some rights for the individual subscriber that this data cannot be used outside of their own internal use.” Scott Biggs of Assured Performance Network said he’d also like to see the committee address the issue of the shop’s access to its own historical data once they no longer subscribe to that particular vendor’s service, for example, or if they want to access their current data through another service or application. The CIC “Parts Committee” oversaw some of the most heated or controversial subject matter over the last two years at CIC, particularly sur-
rounding concerns about structural non-OEM parts. That committee continues to have a long list of issues on its plate for 2011. It will be Ron Guilliams co-chaired by Chris Northup, a former Keystone Automotive executive who continues to work in the non-OEM parts industry, and Chris Caris of PCG Campbell, a marketing and communications firm whose clients include several automakers. In a first for a CIC committee, the Parts Committee will also have an “executive board,” that will consist of a representative from various segments of the industry (repairers, insurers, automakers, alternative parts and paint/materials). Several CIC participants offered ideas on issues the committee could address. Aaron Lofrano of F. Lofrano & Son Collision Centers in San Francisco, said he’d like the committee to address the issue of insurers asking shops to code parts in ways that don’t correctly identify them, as is required in some states.
General CIC session with approximately 200 in attendance
Biggs said he’d like to see the committee develop some industry “ground rules” on when it is and isn’t appropriate to use certain types of parts. “Establishing some practical logic instead of just arbitrary rules that someone throws on you to use ‘X’ amount of this and ‘X’ amount of that,” Biggs said. Rick Tuuri, who last year chaired the “Repairer-Insurer Relations Committee” said that group has See CIC Committees , Page 15
www.autobodynews.com | MARCH 2011 AUTOBODY NEWS 13
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
‘Consistency’ May be Boring—But It’s Also Profitable with Thomas Franklin
As we get rolling in this New Year, we see a multitude of new ways to market the shop: A website, e-mail, Facebook and other social media sites, like Twitter. Should we ignore these new ways to reach potential customers? Certainly not, but there can be a tendency to discard tried and true ways when we jump on the bandwagon for the new ones. And that can be a serious mistake. Customers who have been coming to your shop for years may now be getting a bit older. And they may not all share the younger generation’s enthusiasm for these new approaches to communication and media. If they have kept coming back, they must have liked whatever it was you were doing to stay in touch with them. You may not know immediately what that was that pleased them, but of course you can always ask. You can also be fairly certain that they are like consumers of other services. There are some standards that never change.
What Keeps Customers Coming Back? As I noted in an article more than ten years ago, if there’s one thing that customers value in a business, it’s consistency. We go back to the same restaurant, the same hair-dresser, the same mechanic over and over because we come to know what to expect of them. We know the level of service we’ll receive for the price we expect to pay. When a place changes hands, we dread the changes we’ll probably encounter. The menu we enjoyed suddenly no longer has the choice items we preferred. The barber or hairdresser we liked best has moved on because he or she didn’t get along with the new owner. And the reputable mechanic we trusted to do an honest job on our car has been replaced by a fast-talking, slick sales type who wants to sell us unneeded extras. The consistency that we val-
ued has gone and we must go in search of a new place that will service us in the manner we have come to expect. Chances are that you can deliver consistency. You’ve been there a long time. You’ve built a good customer base. They know what to expect from you. All you have to do is make certain That you don’t change what your clients or customers value most, and that you let them know that, in a world of fleeting consistency, you are still here delivering the same predictable message and quality you always have!
Consistency: Promoting Your Business Think about the advertising power of the consistency of major brands. How long have we heard “You’re in Good Hands With Allstate” or “BMW, The Ultimate Driving Machine?” Even though the specific ad may change, these consistent messages are always present. What is your consistent message? Do you have one? Shops that have been in business a long time are wise to capitalize on that longevity in their advertising and promotion. A line that says “Quality Collision Repair Since 1981” tells a customer at a glance that you have survived in business for 30 years. The clear implication is that you must have been doing something right to be around that long. If you are relatively new in business, it’s still probable that you have been somewhere in the industry for a while. You may be able to use a line like: “Service by professionals with more than 20 years of experience.” If you have survived in this industry for any length of time, you must have some element of consistency in how you approach collision repair. That consistency may be the most valuable commodity you have to sell. Now is the time to capitalize on it in your advertising and promotion!
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More Than One Way To Communicate Consistency I was startled, one day, when I walked into an auto body shop office in an outlying area. The walls were completely covered with photos of before and after repair jobs. It would have taken hours to examine the multitude of before and after photos this shop owner had accumulated over the years. While it’s unlikely there would be many shop owners who would adopt this approach to displaying proof of consistency in repair, it is a sound idea to somehow convey the enormous number of quality repairs that a shop has done. This is the idea behind the message that McDonald’s “has served more than five hundred million hamburgers.” Publicizing a long history of high volume seems to convey a message of consistency although it may not necessarily be true. That wall cov-
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ered with photos was one effective way to communicate that consistency. That same shop owner gives the customer a before and after photo when the job is finished as a reminder of the quality of work that has been provided. Some shops have a photo album in the waiting area with before and after photos. One shop I visited had an album filled with impressive letters from satisfied customers who owned a BMW, a Porsche, a Mercedes Benz, a Lamborghini or a Rolls-Royce. The unspoken but obvious message was “we do a consistent, superior job on the ultimate in high-end cars.” Your website, e-mail, Facebook page and Twitter feed can also be used to communicate your consistency without neglecting to emphasize your new qualities and awareness of the new communication tools we have at hand.
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Continued from Page 13
CIC Committees
already been asked for revisions to the “digital imaging best practices” document finalized just last year. Ron Guilliams, who had chaired the CIC Definitions Committee, received a standing ovation at the first meeting he has attended in more than a year. Guilliams, who was seriously ill and in a coma for a number of months in 2010, thanked CIC participants for the support he and his family received during his illness and recovery. “I’m really glad to be here,” Guilliams said, drawing laughter from CIC attendees. “I can guarantee you I wouldn’t be standing here today with the same outlook and view of life if it wasn’t for all the support from you in this room. I just want to thank you from the bottom of my heart.” He said he would serve as vicechair of the Definitions Committee in 2011, and that the committee planned to review CIC’s long-established definition of a “Class A shop,” would work to define a “green shop,” and would review CIC’s glossary of in-
dustry terms. The committee also may develop some best practices or guidelines for the communication to customers from shops and insurers. “Is it, for example, right for the shop to be the one who informs someone their vehicle is a total loss, or that damage is not related to this particular claim,” Guilliams said. “In many instances, those lines of responsibility have been blurred. So one of the things the committee has been asked to look at is to try to get consensus on both sides on what really is the best practice, so we can standardize that.” Other existing CIC committees that will continue in 2011 will include “Education and Training,” “Governmental and Regulatory,” and “Human Resources.” CIC’s ad-hoc Marketing Committee reported in Palm Springs that its surveys after CIC’s last two meetings found that 87 percent of those responding said the presentations at the meetings had “good” or “very good” value for their business. More than 91 percent said the quality of the meeting content and the networking opportunities at the meetings were good or very good.
BASF Official Show Sponsor of NORTHEAST 2011 The Alliance of Automotive Service Providers of New Jersey (AASP/NJ) has announced that BASF Automotive Refinish has signed on as the official show sponsor of their 34th Annual NORTHEAST(TM) Automotive Services Show at the Meadowlands in Secaucus, New Jersey. NORTHEAST 2011 takes place March 18,19, and 20. “Having BASF come on board to sponsor NORTHEAST 2011 just adds to the national influence and perception our show is gaining,” AASP/NJ President Jeff McDowell said from his shop in Fords, New Jersey. “BASF’s decision to be the official show sponsor of NORTHEAST 2011 was really an easy one,” explained Darlene Eilenberger, Marketing Director for BASF Automotive Refinish. “We have displayed at NACE and SEMA, but we’re well aware that there is also a very important customer base who may not always be able to travel to Las Vegas. The NORTHEAST show is an optimal place for us to catch up with our customers in the Northeast region while showcasing our newest products. Given the increasing growth and in-
fluence of NORTHEAST, we wanted to show our support of this year’s event in a big way,” Eilenberger continued. BASF is also looking forward to participating in the educational portion of the show. “With environmental legislation pending in the Northeast region,” Eilenberger added, “we felt 2011 was the perfect year to actively participate in NORTHEAST — not only to increase visibility on our line of waterborne refinish products, but also to educate and network with the thousands of repair professionals who will be directly impacted by it. We are very excited to showcase our brands and meet with NORTHEAST Show attendees.” “This is the first time in all the show’s years that we have had a sole event sponsor for NORTHEAST,” McDowell said. “We are honored that such a prestigious company as BASF would incorporate its brand with NORTHEAST 2011, and we hope this is the start of a long and prosperous tradition.” For more information on the NORTHEAST 2011 show and AASP/NJ, visit: www.aaspnjnortheast.com and www.aaspnj.org.
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Toyota Unintended Acceleration Probe Finds No Electronic Flaws Autobody News
March 2011
An intensive 10 month investigation into possible causes of unintended acceleration in Toyota cars found no fault with the automaker’s electronic throttle control systems, the Department of Transportation announced February 8, according to reports made by CNN Money and the Los Angeles Times. U.S. Transportation Secretary Ray LaHood said, “We enlisted the best and brightest engineers to study Toyota’s electronics systems, and the verdict is in. There is no electronicbased cause for unintended highspeed acceleration in Toyotas.” NHTSA enlisted the help of NASA scientists and engineers. The agency said their expertise in areas such as computer controlled electronic systems, electromagnetic interference and software integrity would be a big help. Despite a string of recalls for other problems Toyota has long insisted that the electronic controls in its cars are safe. Toyota recalled nearly 8 million vehicles in 2008 and 2009 for defects related to gas pedals — including sticky pedals and floor mat obstruction — as a result of complaints of unwanted acceleration. Some critics of the automaker, at the time. were not satisfied that those two problem were the only ones to blame for for the growing number of
reports that Toyotas were accelerating out of control and pointed to the electronic throttle control system as another possible culprit. A common feature in newer vehicles, electronic throttle control uses sensors and computer chips to pass commands between the vehicles’ gas pedal and the engine to control a car’s speed instead of the simple mechanical connection used in older cars. Congress ordered the DOT to investigate whether there might be a problem with those electronic controls. The study was launched last spring. As part of the study, the agencies ran tests at a Chrysler Group LLC testing facility in Auburn Hills, Mich. headquarters in which researchers bombarded Toyota vehicles with electromagnetic radiation to see if they could cause any malfunctions that might lead to unintended acceleration. Toyota Motor Co. has also provided NASA software engineers with “unrestricted access” to the computer code used to control the electronic throttle control systems. The software engineers have been combing through the code looking for anything that might cause a car to accelerate out of control under any circumstances, NHTSA said.
Also, scientists at NASA’s Goddard Space Flight Center and NHTSA East Liberty, Ohio, research center have been examining cars and Toyota throttle systems, searching for any defects that might cause unwanted acceleration. This summer, NHTSA released the results of some investigations into Toyota sudden acceleration incidents. Those investigations specifically looked into 58 alleged unintended acceleration cases. These investigations suggested that drivers themselves may have been partly at fault. At that time the agency stressed that the results were preliminary. Although Toyota sales have suffered much of the automaker’s sales decline is due to an aging model lineup more than concerns over safety problems, analysts say. Toyota now includes “brake override” on all its new vehicles. This system automatically cuts engine power as soon as the brake pedal is pressed in order to prevent unwanted acceleration. Toyota is currently facing hundreds of lawsuits over alleged unintended acceleration, most of which have been grouped together in a single California court. Toyota Motor Corp. will also use the results of the
study as evidence that a sudden acceleration class action suit against it should be dismissed. In a filing in federal court in Santa Ana this month, the automaker argued that the study is proof that its vehicles have no defects and the lawsuits are therefore without merit. “Plaintiffs are chasing a phantom theory of defect that only last week NASA and NHTSA, after an extensive investigation, jointly confirmed does not exist,” Toyota outside counsel Lisa Gilford wrote in a motion filed on Feb. 14. She asked judge James Selna to dismiss the suit, which consolidates scores of claims from Toyota and Lexus owners alleging that the presence of defects in their vehicles negatively affected the value of their vehicles. Even if the NASA and NHTSA findings hold up in court, plaintiff attorneys argue that Toyota still could be on the hook for the lack of a brake override feature in its vehicles, which is designed to prevent sudden acceleration in cars with electronic throttle. That technology has been employed by other automakers, including Nissan and Volkswagen, for years, but Toyota did not begin adopting it until last year. A hearing to review the dismissal motion is scheduled for April 29, court filings show.
The U.S. House voted overwhelmingly to bar the Environmental Protection Agency from moving ahead with allowing a higher blend of ethanol in the nation’s gas tanks, according to reports made by the Detroit News Washington Bureau. February 19 the House voted 286-135 to block the EPA from spending any money to carry out a waiver to allow E15 to be sold at the nation’s
fueling stations. Currently, most gas stations sell E10 — which is 10 percent ethanol. The EPA has granted a waiver to allow a blend of 15 percent of ethanol to be sold for vehicles from the 2001 model year and newer. Rep. John Sullivan, R-Oklahoma, introduced an amendment to the bill to fund government operations through Sept. 30, to block EPA from moving ahead.
“The EPA has completely ignored calls from lawmakers, industry, environmental and consumer groups to address important safety issues raised by the 50 percent increase in the ethanol mandate issued over the past year. Putting E15 into our general fuel supply could adversely impact up to 60 percent of cars on the road today leading to consumer confusion at the pump and possible engine failure in
the cars they drive,” Sullivan said. Automakers have expressed concerns about using a higher percentage of the ethanol blend that could corrode engines. Before E15 can be sold, the EPA must finalize a labeling rule to warn consumers that the higher blend is only for certain vehicles. All major automakers filed suit in December in the U.S.
House Votes to Block E15 from Pumps Due to Potential Engine Failure
16 MARCH 2011 AUTOBODY NEWS | www.autobodynews.com
Chrysler Group’s Mopar Division to Expand Accessories Portfolio in 2011
Vehicle buyers are spending more and more to personalize and accessorize their rides. Consumer spending for Mopar accessories on Chrysler, Dodge, Jeep and Ram vehicles nearly doubled in 2010. “More of our customers are driving out of our dealerships with Mopar accessories on their vehicle,” said Pietro Gorlier, President and CEO of Mopar, Chrysler Group’s service, parts and customer-care brand. Mopar currently offers more than 8,000 proven, quality-tested accessories. Following is a list of Mopar’s top-10 selling accessories in 2010: 1. Wheel Lock Kit: Wheel locks are available for most models and have an exclusive key code for maximum protection. Available in one- and twopiece styles, kits include four or five chrome-plated locking nuts, and one exclusive Mopar key. The kit protects against wheel and tire theft without affecting wheel balance. 2. Roadside Safety Kit: Safety kit includes flashlight, fleece blanket, six-gauge jumper cables, safety triangle, screwdrivers, pliers, two bungee
4. Mopar Electronic Vehicle Tracking System (EVTS): lMopar’s industry-first Electronic Vehicle Tracking System (EVTS) works 24/7 with nationwide coverage to keep track of your vehicle. This GPS-enabled real-time tracking system includes a $1,000 Theft Protection Warranty and is transferable. Optional upgrade plans provide Emergency Service Dispatch and an OnCall™on-board panic button. Features such as setting speed and distance parameters with text alerts, unlimited online tracking, and full concierge service are also offered. 5. Premium Carpet Floor Mats: Thick, durable and colormatched for a strong, inMopar Electronic Vehicle Tracking System (EVTS) works 24/7 tegrated appearance. with nationwide coverage to track your vehicle Front mats feature a rublate a fuel-efficient route, integrated ber-nibbed backing to keep them hands-free Bluetooth® wireless techfirmly in place and are custom-connology with a built-in microphone and toured for an exact fit. speaker, integrated FM traffic re6. Slush Mats: Custom-fit mats feaceiver, and free lifetime traffic upture deep grooves that help prevent dates. water, snow, and mud from ruining
cords and gloves. 3. Mopar Portable Navigation System: This Garmin nuvi® 1490T premium system packs a ton of features into a slim design with a 5-inch screen. The system includes lane-assist with junction view, pre-loaded maps, pedestrian navigation options, traffic alerts, ecoRoute™ that calcu-
vehicle’s carpet. Mats are available for front and rear compartments depending on vehicle model. 7. Molded Splash Guards: Mopar splash guards offer long-lasting durability. They are custom-contoured for a stylish flare and deflect gravel, salt and other road debris away from the vehicle. 8. Mopar Bedliners: Skid Resistor bedliner’s ribbed construction helps keep cargo from shifting and promotes drainage from bed. Mopar liners are molded of a high-density polyethylene blend for added durability. Tailgate cover also included. Also available for Ram 1500 RamBox. 9. Chromed Tubular Side Steps: Mopar’s heavy-duty premium steps are built to last and are available in chrome or black depending on vehicle. Side steps feature slip-resistant step pads for easy vehicle entry and exit. 10. Hitch Receivers and Towing Accessories: In addition to hitch receivers for a range of vehicles, Mopar also offers hitch balls, receiver plugs, and ball-mount adaptors. Visit www.mopar.com.
www.autobodynews.com | MARCH 2011 AUTOBODY NEWS 17
Shop Strategies for Savings
Walter Danalevich, AAM, has been the owner of Santa Barbara Auto Refinishing since 1979. Contact him at: sbarbody@earthlink.net.
“It’s a Misunderstanding”—Insurance Appraiser Boot Camp with Walter Danalevich
Those of us who are active in the auto body industry understand there is much skill involved negotiating with insurance company appraisers in arriving at an “acceptable” (profitable) repair bottom line. During my 30 year auto body career, I have written thousands of auto body repair estimates mastering the “the art” of negotiating with a variety of insurance appraisers. It’s only natural to have a “preference of which insurance appraisers we welcome into our auto body shops. Commonly we find some insurance appraisers are consistently easier to work with and arrive at a profitable “bottom line.” Then there are those appraisers that make us feel as though they are paying for the repairs out of their own pockets. Recently, our body shop in Santa Barbara, Calif., had an insurance claim where the issuance of the supplement was an experience I have never encountered in over thirty years of owning and managing a body shop. On the day the insurance appraiser representing a well known company arrived, I noted this appraiser had never been assigned an appraisal inspection at our shop before. Therefore I had some concern we did not have any history of a working relationship. The insurance appraisal inspection involved a 2002 BMW 323cic. Upon introducing herself the appraiser began taking photos of the claimant’s vehicle and making notes pertaining to the damaged left rear door and quarter panel. I listened attentively to the often heard we-can-only-pay-forthis-procedure speech. Days later, we completed the repairs and submitted a supplement to the insurance appraiser. During my follow up on the supplement confirmation, I received a phone call from the appraiser saying “her supervisor has now decided not to pay for the rear $130 bumper moulding she had originally approved to be replaced on her preliminary insurance estimate. By the way, the “non returnable” part has been installed on the customer’s vehicle. My initial reaction was I could not believe what I was hearing. If this was ten years ago I feel certain this appraiser would have been on the
receiving end of some colorful language. Instead, I phoned the vehicle owner and informed him there is an insurance delay in delivering his car today. I said it appears the insurance company does not mind paying for “additional” rental car expenses over the weekend because of an unsettled new policy which I never experienced before. I explained the “we would pay for it yesterday but not today” response. The vehicle owner phoned the insurance appraiser expressing his concern about the delay as he needed his car returned for an upcoming trip. That same day I received a phone call from the insurance appraiser who stated I would need to call their company’s supplement hotline to “negotiate” an agreement for full payment concerning the $130 moulding. I thought to myself there is nothing to negotiate here—the insurance company owes us full price for the part! On Monday morning I then phoned the insurance company’s 1 (800) SCREW U hotline. I’m sure many of you know the supplement hotline which I am referring to. This particular hotline did not have a human voice, only a voice recording instructing you to fax your supplement to 1(800) SCREW U 2. Feeling frustrated, I then phoned the insurance appraiser and learned she had this Monday and Tuesday off, probably for meeting the insurance company’s quota of withdrawing parts and labor from the original written estimates. Near mid-day Monday, I received a phone call from the insurance supervisor who appeared to be “shadowing” this claim. He told me the claimant had phoned seeking his assistance to arrive at a settlement which resulted in unnecessary delays in releasing the vehicle to the claimant. I explained to the insurance supervisor the problem initiated by their appraiser, specifically, the $130 bumper moulding part which had been withdrawn from their proposed supplement. Upon further discussion the claim supervisor replied his decision of withdrawing allowance for the part was based upon thinking the part in question was a door side moulding not the bumper molding! Say What!? At that point, I had to ask how long his
18 MARCH 2011 AUTOBODY NEWS | www.autobodynews.com
appraiser, has been employed. He replied about “Two months”! Like, No Kidding! According to the insurance supervisor’s explanation this was all a “misunderstanding”!
Is it a misunderstanding or a mistake when hiring someone who is not experienced enough for the position to make confident decisions? As a result of my efforts in standing up to the insurance supervisor we were paid in full ($181) for supplement parts and labor pertaining to the withdrawn bumper moulding from the original insurance repair estimate. Have you ever had a 1 800 SCREW U 2 “misunderstanding”? If so, drop me a line I would welcome you to share your memorable insurance “misunderstanding” experiences. Walter Danalevich sbarautobody@earthlink.com www.sbautobody.com
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Hyundai’s 25th Anniversary in U.S., Lifts Southeastern Job Market Economy with Kia Hyundai Motor America celebrated its 25th anniversary in the U.S. the weekend of Feb. 19th. The automaker reports that it has sold 6,608,208 models in the U.S. in that time, and more than 4,350,000 units still are on the road today. Last year, Hyundai recounted that its sales surpassed 538,000 units, making the Korean company the sixth best-selling brand in the country behind only Toyota, Honda, Nissan, Ford, and Chevrolet. To handle demand, the company has expanded production capacity to more than 400,000 units—specifically the Sonata, Elantra and Santa Fe that are manufactured in modern assembly plants in Montgomery, Alabama, and in Georgia. Hyundai pointed out that its engines and transmissions are produced in the U.S., too. U.S. employment now includes more than 4,000 workers, with total employment including suppliers and dealers coming in at more than 45,000. Hyundai has declared that its commitment to the U.S. market in-
cludes engineering, design, testing, production, sale and marketing. In all, Hyundai's investments in the U.S. total $1.7 billion.
Local Presence Boosts SE Economy Few people in Mongomery, AL, 800 miles south of Detroit cared much about the auto industry until Hyundai announced it would build cars here nine years ago, according to reports made by the New York Times. At Hyundai‘s Montgomery plant, rarely do more than a few weeks pass without word that another parts supplier has dozens of new positions to fill, typically offering good benefits and double the pay that the average Alabaman earns. Hyundai and its sister company, Kia, which opened a plant last year just across the Georgia state line, have brought thousands of well-paying jobs to the region and even helped nurture a little Korean culture in Montgomery, the first capital of the old Confederacy. Hyundai is running its Montgomery plant almost nonstop. Rarely
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do more than a few weeks pass without word that another parts supplier has dozens of new positions to fill, typically offering good benefits and double the pay that the average Alabaman earns. Hyundai, which will observe its 25th anniversary selling vehicles to American drivers on Sunday, was little more than an ambitious, secondtier brand when it chose to build its first United States car factory just south of Montgomery. But during the recent recession, the South Korean company thrived as Americans sought out cheap cars just as Hyundais were improving in quality. In 2010, Hyundai and Kia each posted their highest sales in the United States and, taken together, surged ahead of Ford Motor to become fourth-largest automaker worldwide. Hyundai built 300,000 cars in Montgomery last year and sold most of them in the United States. “If folks looked deeply at how far we’ve gone so quickly, from having no U.S. production five years ago to
where we are today, it’s amazing,” John Krafcik, chief executive of Hyundai Motor America, said. “I don’t know that any company has gotten to such a high level of local assembly as Hyundai that fast.” While Michigan’s dependence on the auto industry caused it to have one of the nation highest unemployment rates in recent years, the presence of Hyundai and Kia has helped Alabama keep its jobless rate among the lowest in the Southeast even as textile mills continue to close. “As far as the pay, nobody else around here can compete with them,” said Richard Watson, a former auto mechanic who was out of work for a year and a half before getting a temporary job at the Kia plant in West Point, GA, last fall. He said some of his co-workers drove two hours each way because the plant’s jobs were in such demand. Hyundai is running its Montgomery plant, which employs 2,650, around the clock on weekdays and ocSee Hyundai, Kia, Page 23
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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
Setting the Record Straight on Ford vs. Aftermarket Parts Testing with Lee Amaradio Jr.
I read about the aftermarket parts test- pany that did the testing should answer first. ing conducted by ABPA (ABPA Says with Outperformed Lee Amaradio Jr. 1) Ford showed up at a public Aftermarket Bumper Ford Counterpart in Crash gathering and came equipped with photos, videos, sensor reading data. Test—Next page this issue) and I have to say that I expected as much. Not They even brought their engineers to unlike CAPA certification, the results answer questions. Plus they brought will always favor the aftermarket part. in the actual parts so we all could see In the article they stated that is some with with Sheila Loftus our own eyes what was being excases the aftermarket performed “betposed. Ford was willing to answer ter than the OEM.” questions (and did a very good job), Wow, I guess I will need to re- they also made their test results pubthink my standards regarding all af- lic and published them on CIC’s webtermarket safety-related parts, and site (www.ciclink.com). Where is maybe we should all lobby to have ABPA’s evidence? I need to see this with Loftus the OEM’s recall theirSheila vehicles so first hand so I can quit making a fool we can install these superior afterof myself. market parts. We know that the con2) The article (this issue) said that sumers’ safety is our primary part of the OEM-rebarred Mustang’s concern so now that the cat is out of bumper fell off? This baffles me bethe bag what should we do? After all, cause if they actually did the testing as I have been installing OEM rebars they claim then they should know with Janet Chaney that have been “proven” (?) to be in- there is no part that can fall off. What ferior to the aftermarket rebars. I part could fall off? There is nothing to think we should probably take it one this part but a beam and two brackets step further and start testing head- and the bolts go all the way through. lights and other parts because the This makes me question all the testing poor consumer with has been dupedChaney into they describe. Janet thinking that the manufacturer’s 3) Ford ran two separate tests, parts are best for the safe repair of both a set of 5-mph crash tests and a their vehicle. set of 8-mph test. Ford’s 5-mph crash There is only one problem that test showed there was more intrusion we still need to address and that is to damage and a higher cost of repair “test” the actualwith test results. with the Aftermarket verses the OEM JanetI mean Chaney before I go to the Insurance Commisvehicle, which contradicts the ABPA sioner’s Office and tell him that I have test. Ford’s 8-mph test with the afterbeen wrong all along about the safe market bumper beam revealed the repair of vehicles today I better know most dangerous evidence of “AIRmy facts. So a couple of questions BAG DEPLOYMENT” when it come to mind that maybe the Chaney com- “SHOULD NOT DEPLOY.” Why with Janet
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didn’t ABPA do the 8-mph test? This raises concerns for me, (it’s not ‘apples to apples’.) Does the term “like kind and quality” come to mind? It’s uspicious at best. 4) Ford’s damage estimates were very detailed, listing all of the parts used. The ABPA report glosses over these details completely, “the truth lies in the details,” and who wrote the damage assessments? Some “highly regarded” shop? What kind of answer is that? Why aren’t they identified? 5) Ford videotaped the entire teardown process and created some serious evidence which contradicts the ABPA test. Where is their video? I want to see it made public. After all, they are implying that Ford is the one with the skewed results. ABPA needs to put its money where its mouth is. 6) I know that Ford didn’t modify anything but it is possible to modify an entire vehicle to make it crash
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better (look at Nascar reinforcements for racing safety, for example). We need to see this so-called ABPA evidence made public and give Ford and the other OEMs a chance to rebut it. Maybe we should present both tests to Congress and let them decide. After all, this is a serious safety issue. What I have read in this article seems like another effort to mask the truth. The facts are the facts and I say let’s compare apples to apples and bring everything out in the open. Then we can give the information to the public and let them decide. But this question still remains: “Why are we using these parts when we know they have not been tested nor proven to be equal to the original manufacturer’s specifications as the law “requires.” We are assuming an awful lot with respect to someone else’s safety.
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Industry Overview Industry Overview
Ford to Ax Another 100 Lincoln Dealers
Insight Ford Motor Industry Co. confirmed February marketplace,” Czubay said. Ford is
6 it wants to cut another 100 Lincoln offering financial buyouts to Lincoln withback John dealers as it pares its Yoswick luxury dealers. “We’re working with every brand network. In October, published dealer to help them evaluate their reports quoted dealers as saying Ford business plan. We’re not forcing anywanted to shrink its 500 dealers in one out. This is strictly voluntary,” 130 major markets to 325, according Czubay said. “It’s a tough personal to the Detroit News Washington Bu- decision that they have to make.” with John Yoswick Most luxury brands in the United reau. Ken Czubay, Ford’s U.S. sales States have 250 to 300 dealers. Linchief, said the company said the 500 coln has 1,200 — and it has the oldest dealers in 130 major markets had average buyer among luxury brands been reduced to 434 as of Dec. 31, — older than 60. Ford says it is necand he confirmed the 325-dealer tar- essary to reduce the number of dealget. ers to make the remaining dealers with JanetofChaney “That’s our evaluation the more profitable.
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20 MARCH 2011 AUTOBODY NEWS | www.autobodynews.com
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ABPA Says Aftermarket Bumper Outperformed Ford Counterpart in Crash Test
ABPA says a laboratory crash test performed in December 2010 by MGA Research Corporation determined that an aftermarket bumper reinforcement bar outperformed its original equipment supplied (OES) equivalent, the Automotive Body Parts Association (ABPA) announced. The trial involved sled-testing a pair of 2007 Ford Mustangs into a front-end barrier at 5 mph (the same test presented by Ford at the Collision Industry Conference last November), measuring the effectiveness of the reinforcement bars and estimating the costs of repair to the aftermarket and OES-equipped vehicles. “We decided to incur the expense of further testing to illustrate comparable performance and to disprove the claim that it costs more to repair aftermarket-equipped vehicles than those with only OEM or OES parts,” said Eileen A. Sottile, co-chair of the ABPA Legislation & Regulation Committee. “Tests have consistently demonstrated that aftermarket parts perform just as well as
original equipment components, and consumers should feel good about having these parts on their vehicles.” While both parts effectively absorbed the impact and protected the vehicle occupants, a piece of the bumper fell off of the Mustang outfitted with an OES reinforcement bar. The low-speed test did not result in the deployment of the air bag systems on either vehicle. Two repair shops which ABPA says are “highly regarded” were asked to calculate the costs of repair to the test vehicles without knowledge of the parts used in the crash test. One of the shops gave an identical estimate for repairs, while the other (a Ford dealer body shop) estimated that it would cost approximately $200 less to repair the aftermarket-equipped vehicle than the one with original equipment parts, which sustained more damage, according to ABPA.
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“When aftermarket and OEM parts performed equally well in trials at 35 mph, some industry members complained that the tests were conducted at too high a rate of speed, making all rebars ‘toast’ even though the government requires tests at 35 mph in order to test for occupant safety,” said Sottile. “Now that this low-speed test has vindicated the aftermarket in terms of quality, safety and damageability, the focus should return to preventing more cars from becoming total losses, which means everyone wins — the repairer, the insurer and, most importantly, the vehicle owner.” Sottile has previously said “The aftermarket industry is a thriving part of the American economy and will continue to be," declared Sottile. "Consumers benefit when they have choice about which parts they use for car repairs, and competition prevents car company monopolies from charg-
ing excessive prices to line their pockets.” The ABPA says it will perform additional testing and also make those results public.
About the ABPA The more than 150 members of the Automotive Body Parts Association (ABPA) occupy more than 415 separate collision parts distribution, bumper sales, recycling facilities and manufacturing plants. Collectively, they are responsible for distributing more than 75 percent of independently produced aftermarket collision replacement parts sold to the collision repair trade. ABPA members warrant the products they sell and endorse the concept of Complete Customer Satisfaction which not only extends to the quality of the product lines but also encompasses product availability, product service, product price and service after the sale. Visit www.autobpa.com. See www.autobpa.com and www.mgaresearch.com.
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CA Paint Jobber NDI Sues BMW North America After the Automaker Implemented its own BMW Paint Line
Nicolosi Distributing Inc. (NDI), a ships to paint BMW vehicles with any branded paint products. This issue aping litigation.” paint jobber in the San Francisco bay other paints, blocking jobbers across plies only to BMW automobiles, and The trial date is set for October area, filed a lawsuit against BMW of the country out of the market of selldoes not apply to non-BMW automo24, 2011 at 8:30 a.m. North America earlier this year alleging paint supplies to these places. biles. Nicolosi is expecting other jobing intentional interference with a Nicolosi said that NDI sells bers who feel they have lost business contract with a BMW-certified shop. DuPont paints, and the BMW paint is because of this program to come forNDI accuses BMW of North also made by DuPont. ward and join the lawsuit. America of interfering with a contract “A lot of jobbers across the counthe jobber had with a BMW-certified try lost a lot of business because of Nicolosi Distributing Inc. Give us your Want to Contribute to this Sout shop for paint supplies. The suit perthis,” said opinion Nicolosi. on matters affecting the industry. San Jose location: (408) 573-7146 tains to a contract signed between NDI is also accusing BMW San Carlos location: (650) 413-0150 NDI and German Motor Collision North America of interfering with a Email: NicolosiCo@aol.com w.autobodynews.com Center, a BMW-certified collision prospective economic advantage, viopublisher@autobodynew CHECK IT OUT! to the BMW of San lation ofpublisher@autobodynews.com center connected California’s Anti-CompetiStephen Bledsoerepresenting BMW Nicolosi Distributing Inc.’s San Carlos location Francisco dealership in May of 2005. tion Act, Business and Professions (816) 561-7007 The contract was a multi-year agreeCode Section 17200 and violation of Franck went on to say that the coment that BMW of North America Business and Professions Code Secercion in the industry is that it is “unPromote your business with was aware of before German Motors tion 16727 in which a business’s ac- thinkable not to have that (BMW) an exclusive article featuring Collision Center signed it. tions lessen competition and create a certification” according to German your products or services. NDI contends that “BMW intenmonopoly on a trade or line of comMotors Collision Center, so the BMW To advertise To advertise source for timely tionally interfered with NDI’s con- The merce. certification is really tied to using Advertising Sales at: call Joe Momber at: tractual relationship with German information Nicolosi is asking for damages of BMW-certified paint. that every 800-699-8251 800-699-8251 Motors Collision Center... by the fol$75,000 for the first and second claim, When asked about the litigation body shop needs! lowing conduct: BMW has decided to exemplary damages from Federal by Autobody News, BMW North e-mail: e-mail: CALL: Joe Momber for details! tising@autobodynews.com product its own paint line ... BMW re-CALL Court,800-699-8251 injunctive relief from the third jmomber@autobodynews.com America’s legal representative quires auto body shops painting a and fourth claims, attorneys fees, Stephen Bledsoe said, “It is BMW’s w.autobodynews.com www.autobodynews.com 800-699-8251 Your FREE BMW automobile to only use BMW Start other relief from the Business and policy not to comment on any pendSubscription. paint. BMW forced German Motors Mail Professions Code violations, court Collision Center to enter into a writcosts and other relief as judged by the ten agreement ... which requires Gercourt. man Motors to use BMW on any On February 7, 2011, BMW of See thepaint NEW Register Your Email for Our BMW car painted at German Motors.” North America filed a motion for “BMW North America told Gerjudgment on the pleadings, which man Motors that they had to buy from sought to dismiss the entire action. www.autobodynews.com at www.autobodynews.com them under this new program, no matThe Court Denied the motion in part, ter what other contracts they had, or and granted the motion in part. US else they would lose their certificaDistrict Judge Susan Illston ruled that tion” said NDI’s owner, Tony Nithe intentional interference with a concolosi. tract, interference with a prospective economic adTHESE DEALERS ARE GENUINE vantage and unWHOLESALE PARTS SPECIALISTS. fair competition complaints would go ahead to court, while AL ABAMA the claim for an unlawful tying agreement was dismissed with Bill Penney Toyota Palmers Toyota German Motors Collision Center in San Francisco leave to refile, HUNTSVILLE MOBILE German Motors Collision Cenwhich Nicolosi will do on February 256-837-1111 800-874-2777 ter’s contract with NDI stated: “All 25, according to NDI’s lawyer Her256-890-8229 Fax 800-475-9091 Fax paint materials, DPC products and man Franck. Mon. Fri. 7am 6pm Mon. Fri. 7:30am 6pm; supplies will be purchased exclusively According to Franck, NDI will Sat. 8am - 4pm Sat. 8am - 4pm through Nicolosi Distributing Inc. amend the complaint to describe the www.billpenneytoyota.com/parts wnettles@palmersairporttoyota.com Materials purchased by BMW of San particulars of an illegal tying arrangewww.palmersairporttoyota.com Francisco will not be bought through ment whereby BMW of North Amerany other vendor.” ica coerces body shops into Under this new program BMW purchasing BMW branded pain prodNorth America does not allow any of ucts by withdrawing BMW certificatheir certified body shops or dealertion unless they purchase BMW
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Hyundai, Kia
casional Saturdays to keep up with demand. Last summer, it moved production of its Santa Fe sport utility vehicle 95 miles northeast to the Kia plant to free capacity in Montgomery. Kia recently hired 600 additional workers to operate a second shift for the Santa Fe and plans a third, with 1,000 more jobs.
Both carmakers expect to easily top their 2010 sales in the United States this year. Hyundai’s sales were up 22 percent in January; Kia’s rose 25.6 percent, the highest among the industry’s larger players. Together, the two sold more than 65,000 vehicles, about 5,000 short of surpassing Chrysler. Hyundai makes its own engines in Montgomery, and transmissions for its cars come from a Hyundai-owned
Arkansas Legislature to Ban Cell Phone Usage in School, Work Zones The Arkansas Legislature has given final approval to a ban on drivers using hand-held cell phones in school and work zones, according to reports made by Insurance Journal. The House has approved the legislation on a 52-41 vote. The proposal would exempt the use of hands-free phones and GPS devices. A violation would be a secondary offense, meaning drivers could only be cited if they were first pulled over for a primary offense such as speeding. It would apply to school zones during school hours when children
are present, and highway work zones when a highway worker is present. The proposal now heads to Gov. Mike Beebe’s desk, and a spokesman said he plans to sign it into law. It would take effect Oct. 1. For more information please visit www.insurance.arkansas.gov.
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company, Powertech, which is attached to the Kia plant. Alabama lists 138 suppliers that support the Hyundai plant, directly or indirectly. (Some also do business with the Honda and Mercedes plants near Birmingham and the Toyota engine plant in Huntsville.) “These jobs have good salaries and good fringe benefits, and are more self-fulfilling” than the ones that have left the area, said Seth Hammett, di-
rector of the Alabama Development Office. “The automobile business has really been good for Alabama.” Near the car plant on the south edge of town, a Hyundai subsidiary that makes electrical transformers is building a factory that was originally supposed to create about 500 new jobs. Even before construction began last year, the company had doubled that estimate, to 1,000. See Hyundai, Kia, Page 30
General Motors January Sales Rise 23 Percent
General Motors dealers in the United Johnson, vice president, U.S. Sales States reported 178,896 total sales in Operations. “Our results were driven January, a 23-percent increase from a by gains across the board in all segyear ago for the company’s four brands. ments, with our newest models leadThe gain was driven by solid retail sales ing the way.” which were 36 percent higher than a Combined sales for GM’s newest strong January a year ago. vehicles – Chevrolet Equinox, SilverFor the month, overall GM fleet ado HD, Cruze and Volt; Buick sales were down 7 percent with sales LaCrosse and Regal; GMC Sierra HD to rental fleets declining 11 percent, and Terrain; and Cadillac SRX, CTS while sales to commercial customers Wagon and CTS Coupe – increased rose 7 percent. Retail sales of GM’s 31 percent, while retail sales surged cars, trucks and crossovers all rose 34 61 percent for the month. percent or more during the month, up Month-end dealer inventory in us34your on matters affecting industry. 39Give percent, percentopinion and 35 percent, the United States the stood at about respectively. 510,000 units, which is about 1,000 “January was a good month and lower compared to December and signaled a solid start to the new year about 124,000 higher than January for each of our divisions,” said Don 2010. publisher@autobodynews.com
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www.autobodynews.com | MARCH 2011 AUTOBODY NEWS 23
Inside Insurance Not All “Referrals” are Created Equal with The Insurance Insider
I want to thank everyone who took the time to respond to my previous column on steering. I hope to address some of those comments and questions in future columns. A related issue is understanding what a referral is. “Referral” carries many meanings—positive or negative —depending on who you are talking to. Shops that participate in direct repair programs consider referrals to be as natural as the air we breathe. Simply stated, shops that are heavily-laden with direct repair work would die without the referrals, just as we would suffocate without air. With that dependence, they typically forget who their customer is, and how to market to consumers. Shops that don’t rely on work from direct repair programs view referrals as taking food off their table. They define a referral as a process in which the vehicle owner is potentially illegally steered to another body shop. What’s ironic is that the insurance industry (health care providers in particular) uses the word referral as a means for a patient to gain prior approval to see a particular doctor. Why don’t we view that type of referral as illegal or unjust when it’s essentially the same thing? You are told which doctors you can see and if you want to go outside of the network it may cost you more money. Hmmmm, sounds like a direct repair program. While there is a fine line between referring and steering, the latest direct repair programs to hit the industry can be viewed as referrals-on-steroids. It’s one thing to refer a customer to a particular shop. It’s quite another thing to completely remove the shop from its own business. Many insurance companies have immersed themselves into the collision repairer’s business like no other time in the industry’s history. Why? The business of insurance has become extremely competitive and costly as evidenced by the ungodly sums of money spent to entertain us with the gecko, Flo and Mayhem. The bottom line is the button line: In a shrinking market, you better retain your existing customers and try to steal some of the competition’s policyholders. All of that said, “If you want something done right, do it yourself.” Insurers believe that they can do a better job of servicing the customer’s needs than the
repairer. Having spent time on both sides of this fence, I believe there may be some truth to that. But one fact that can’t be argued is that there is a direct correlation between the vehicle owner’s experience with the body shop and their perception of the insurance company. This was probably a motivating factor for Allstate
buying Sterling. Allstate believed that if it could control the customer’s repair experience, they probably would see an increase in CSI and policyholder retention. The Progressive (Concierge) and GEICO (RX) direct repair programs have taken things to a completely different level. In the Progressive model, unless customers ask, they may not have any interaction with the shop. The Concierge program virtually eliminates the shop from the entire process other than the actual repair work. This is not a typical referral. This is more indicative of slave-master relationship. We, the insurer, will give you the cars we want to and you will do what we say. If you don’t agree, we will give the work to another body shop that appreciates the work. While many of you may say that’s the case with all direct repair programs, I can assure you that this is different. If as a shop you don’t have the ability to build a relationship with the customer, you not only lose that person as a potential future customer, but also any residual benefit from their word-ofmouth advertising for your shop. I personally would not recommend any repair facility building their business on repairing vehicles through a Concierge-like program. Here today, gone tomorrow! The GEICO RX program is a little more palatable. In this model, the customer actually drops his or her vehicle
24 MARCH 2011 AUTOBODY NEWS | www.autobodynews.com
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
off at the shop where there is a GEICO adjuster with a desk and office who handles the GEICO customer from drop-off to pick-up. Although the interaction with the shop is limited, the integrity of the shop and vehicle owner relationship is somewhat maintained. The challenge with this model is how quickly a shop becomes beholden to GEICO. GEICO virtually doubles the shops revenue overnight. Larger-producing RX shops can expect to get eight or more referrals per day. This quickly creates an imbalance for most shops where GEICO becomes greater than 50 percent of their business. As you can imagine, the shop has limited ability to negotiate with GEICO, and the master-slave relationship becomes a reality. The shop is working for GEICO and not the vehicle owner. What’s the answer? There isn’t
one. The fact is insurance companies are going to continue to trend in this direction for several reasons. First and foremost, insurers are a copycat industry. Second, to be competitive you need to be innovative and change in a shrinking market as evidenced by the activities of some of the industry’s largest carriers. Repairers need to look at referrals as one means of growing their businesses. I’m not advocating for or against direct repair programs. The majority of the people reading this article rely on referrals for business. But if Original BMW Parts you are going to live by the sword, North C make sure you don’t die by it. Referrals can be healthy for a body shops bmwusa.com business. If you want referrals, make (800) 56 sure that you never forget who your Original BMW Parts are, how to market to North C real customers your customers, and how not to lose yourself in the process. bmwusa.com More on direct repair programs in (800) 56 my next column.
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Ed Attanasio is an automotive journalist based in San Francisco, California. He can be reached at era39@aol.com.
G&C Autobody Seizes Opportunity to Expand in Northern California with Ed Attanasio
While many body shops in the country are battening down their hatches financially, operating with skeleton crews and going into survivor mode, Gene Crozat, the multiple location owner of G&C AutoBody in Marin and Sonoma counties, CA, is buying land, building new facilities, and signing up more DRPs. Crozat is aggressively looking to gain more of the market, while exploring further expansion opportunities in areas where he sees potential for growth and profitability. With six body shops, another one in construction and a large mechanical repair shop, G&C AutoBody is Northern California’s largest collision repair chain north of the Golden Gate Bridge. G&C has been family-owned and operated since 1972, and has become synonymous with quality repairs and exceptional service, according to G&C’s Director of Pub-
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lic Relations Peter Bizaca. The company did $20 million in 2010, up from 2009; employs 65 people and fixes more than 500 cars monthly, Bizaca reported.
sale price and has built the 15,000 square-foot facility from the ground up at an enormous overall savings, he said. Some body shop owners considered him insane for building new
their newest location. “There are 26,000 people in Windsor and it will double in size within the next decade. We discovered that the entire town had just one body shop and many of our Santa Rosa customers were coming from Windsor. So, it was an ideal situation—a growing area with a need and prime real estate available at a good price.” Simply finding good locations for new shops isn’t the only way to succeed, Crozat says. By embracing the communities in which he operates, G&C is able to capture a lion’s share of the available business in each region. While the business environment G&C Autobody’s newest shop in Windsor, CA. is betting on a city that is poised for double-digit is waning across the board, Crozat and growth in the next decade his team are looking at the positives A good example of Crozat’s “exshops in a recession without any relief rather than the negative reports we pand rather than contract” approach in sight, but the 50-year industry vethear almost every day in the media. can be illustrated by its newest location eran knows that timing is everything. “Other body shops out there are in the small town of Windsor, CA. “Some see a recession as a time cutting costs and laying people off, so Crozat bought the land at a recession to sit back, but I see it as an opportuwe’re asking ourselves, who is going nity instead of an obstacle,” Crozat to fix all these cars? Just because the reasons. “You can sit around all day economy is sluggish doesn’t mean long, frightened and paralyzed by this drivers are going to suddenly avoid tough economy, or you can use it to getting into accidents.” The prices of real estate, construction, labor and even advertising are at alltime lows, Crozat has realized. “We’re saving 35–40% across the board over what it would have cost us to do the same thing four years ago. Interest rates are way down and the construction G&C has spent more than $6 million to buy the land and built their bids were extremely newest shop in Windsor, California tight, because conyour advantage, and that’s what we’ve tractors are hungrier than ever.” done. In 1999, we also went through Timing is everything in any ina recession, and I opened new shops dustry, but even more so in collision, during that time as well.” Crozat said. “The best time to buy a While many body shops have exboat is in January, not in June. Tight perienced substantial downturns since times are the perfect time to buy and 2008, G&C’s volume is up and growbuild. It behooves us to take a chance ing. In the last two years, their busiduring a down economy, because I ness is up 23%, while the national know that if I can build a world-class average in collision repair is down shop in a prime location where the 30% across the board, Crozat said. business environment is healthy, it’s After doing extensive market rean easy decision.” search, Crozat’s team determined that Part of the G&C plan involves See G&C Autobody, Page 28 Windsor was a prime situation for
www.autobodynews.com | MARCH 2011 AUTOBODY NEWS 25
Industry Insight with John Yoswick
John Yoswick is a freelance writer based in Portland, Oregon, who 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). He can be contacted by email at jyoswick@SpiritOne.com.
Ten Things to Consider When Designing a New Shop, Remodel, or Expansion Anyone who has worked in a shop for terial should be included in the walls even just a matter of months can prob- surrounding these types of noisy ably quickly list a half dozen or more equipment. things that workwith reallyEd well in that 3. Get adequate lighting, air supAttanasio shop in terms of its physical design ply and electrical sources. Technicians and layout—and a equal number of rarely complain that a shop has too things they’d change about it if given much light. the opportunity. Consider the use of skylights and Whether building a new shop high-efficiency lighting that will refrom the ground-up, or preparing to duce power consumption and in some expand or remodel an existing facility, cases (if replacing existing light here are 10 things to consider when sources) offer opportunity for tax mapping out your plans. credits that offset part of their cost 1. Think about the customer ex- (check with your utility or state energy perience. As early in the process as department). possible, consider the entire design Electrical and air supply drops at and layout from the perspective of each stall allow for maximum technihow a customer will interact with it. cian efficiency—and far fewer trip hazIs the building situated on the site to ards or potential damage to cords and maximize visibility and “curb appeal” hoses stretched across the shop floor. from the street? Is it clear where a cusIn stalls where resistance spot tomer enters the property and where welding will take place, 3-phase they are to park or leave their vehicle? power is required. Can they drop-off or pick-up their veFor the office, dedicated electrihicle under cover or out of the ele- cal circuits for computer equipment ments? Is there adequate customer will help protect computers and peparking close to the office? ripherals from spikes, sags and other power fluctuations. High-end surge protectors are still recommended, with an uninterruptible power supply (UPS)—which serves as a short-term battery back-up, allowing for safe shutdown in the case of a power outage—for key computer servers. Keep in mind, too, that communication cables for phones or linking The office and customer areas computer networks can be subject to often seem to be an afterthought in electrical interference, so such cables many shops where production space is should not be run parallel with electriconsidered paramount. But in addition cal wiring or near lighting fixtures. to staff office space, consider including a quiet area for customers to wait with adequate furniture and amenities like a water cooler, television, customer-only restrooms, children’s play area or work space for those wanting use of a phone, computer or Internet access. 2. Take noise into account. Some shop processes—like grinding—and Choose a compressor and air drysome equipment—like air compres- ing system adequate for your current sors—are particularly noisy. Try to sit- air supply needs—plus a little more as uate these processes in a way that growth or unexpected needs arise. isolates the noise from the office and Discuss with suppliers how it should rest of the shop. A compressor room, be set up to ensure that heavy use of for example, should be placed at the air—by a paint booth, for example, rear or the building or if possible in an doesn’t lead to inadequate air elseexternal space. Noise-deadening mawhere in the system.
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26 MARCH 2011 AUTOBODY NEWS | www.autobodynews.com
4. Get the bay size right. Although the natural inclination is to get as many working bays or stalls in a building as possible, those bays need to give technicians adequate space to
safely and efficiently move themselves and tools, equipment and parts around the vehicle. For bays with surface or aboveground lifts, a minimum bay size of 12 feet by 25 feet is generally sufficient, but for work on larger vehicles, a 13foot width is ideal. In-ground lifts can generally be accommodated in bays
that are 11 feet or wider. If your market includes a lot of full-size pick-ups, you may want at least some larger bays, with a 14-foot width and 27-foot length. Some equipment, like frame racks, generally require longer or wider bays, so get the specifications of the equipment you plan to install and choose locations for this equipment accordingly. Allow 24 feet wide by 27 feet long for each paint booth. 5. Get the proportions right. One paint company shop layout consultant uses a 10-2-1 ratio: For every 10 body stalls, there should be two paint prep stalls and one booth. 6. Leave room for parts. Shop layout consultants recommend an area equal to about 10 percent of a 15,000square-foot collision repair center be dedicated for parts. (This percentage could drop for larger shops.) See Things to Consider, Page 28
2011 Equus
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Class Actions
GEICO systematically underpays on its auto-accident claims by omitting necessary repairs from vehicle-damage estimates. This practice, he alleged, violates GEICO’s contractual promise to restore the insured’s vehicle to its preloss condition and constitutes statutory and common-law fraud. GEICO removed the case to federal court under the Class Action Fairness Act (“CAFA”). The district court dismissed the statutory consumer-fraud claim without prejudice. Greenberger amended his complaint and again the court dismissed the statutory claim, this time with prejudice (meaning it could not be refiled), and also denied Greenberger’s motion to file a third amended complaint. Greenberger’s other claims, however, were allowed to proceed. The court eventually granted GEICO’s motion for summary judgment on the breach-of-contract and common-law fraud claims, and accordingly did not address the issue of class certification. After an unsuccessful motion for re-
consideration, Greenberger appealed. Greenberger’s suit seeking class status alleged, in the court’s words, that GEICO “systematically underpays on its auto-accident claims by omitting necessary repairs from vehicle-damage estimates,” which Greenberger said “violates GEICO’s contractual promise to restore the insured’s vehicle to its preloss condition and constitutes statutory and common-law fraud.” The court ruled that the fact that the one piece of physical evidence, Greenberger’s car, is long gone means that the suit cannot proceed. “Greenberger gave away his car, and without it, he cannot prove that what GEICO paid him was inadequate to restore the car to its pre-loss condition,” the court wrote in its opinion. The court cited Avery v. State Farm, a decision out of the Illinois Supreme Court, in ruling that Greenberger could not preclude on his claim. “Among other important holdings, Avery established the common-sense proposition that a policyholder’s suit against his insurer for breach of its promise to restore his collision-damaged car to its pre-loss condition can-
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not succeed without an examination of the car. Greenberger gave away his car, and without it, he cannot prove that what GEICO paid him was inadequate to restore the car to its preloss condition,” the court wrote. Avery also made clear that fraud claims must contain something more than reformulated allegations of a contractual breach. Greenberger alleged that GEICO never intended to restore his car to its preloss condition and failed to disclose that it regularly breaches this contractual promise. These are breach-of-contract allegations dressed up in the language of fraud. They cannot support statutory or common-law fraud claims. Among the repairs not included in GEICO’s original estimate were “masking openings to prevent overspray,” “covering the vehicle to prevent overspray onto glass,” “checking seatbelts to ensure they worked properly,” and “cleaning the car for delivery to customer.” Though legally distinct, Greenberger’s contract and fraud claims are all premised on the same basic factual allegation: that GEICO systematically omits necessary repairs from its collision-damage estimates in violation of the promise to restore the policyholders vehicle to its preloss condition. The district court sidestepped the class-certification question, dismissed the statutory consumer-fraud claim, and then entered summary judgment for GEICO on the breach-of-contract and common-law fraud counts. Perhaps the most puzzling aspect of the case from the plaintiff’s perspective, is that he should have known better. Greenberger graduated from Yale Law School and currently works as an Associate Professor, and Associate Dean, at DePaul Law School in Chicago. In addition, Greenberger once worked as a clerk for the Seventh Circuit, the court that eventually threw out his case. Progressive vs. Blue Ash et. al. Prepped for Appeal The Progressive vs. Blue Ash case has resulted in a summary judgment on two of the six counts filed against it by a group of independent body shops in Ohio. The shops have also agreed to dismiss the remaining four claims against Progressive, but the suit will continue. In 2009, Blue Ash Auto Body, Finney Automotive, and Valley Paint and Body filed suit against Progressive
claiming that independent repairers (those not part of the insurer’s DRP program) are injured by Progressive’s claims handling practices. The shops charged that Progressive’s actions include illegally steering consumers to its network shops, illegal suppression of price, interfering with professional collision repair judgment, misusing estimating database information (including the use of a special version of the Mitchell estimating system created by Mitchell specifically for Progressive’s use), and the refusal to pay for necessary repairs on behalf of consumers. The case is currently in the hands of Attorneys Bill Markovits and Terry R. Coates of Waite, Schneider, Bayless & Chesley. Markovits told Autobody News that the gist of the claims was Progressive’s failure to pay for standard procedures as taught in any auto body tech program or textbook. Essentially Progressive was saying “we’ll pay for steps one, two, and five, but not for three and four.” When the case was originally filed, plaintiff’s attorney Stan Chesley of Waite, Schneider, Bayless & Chesley, said, “This case is corporate arrogance at its worst. Progressive just walks all over these independent shops, and is trying to prevent them from performing the repairs that any reasonable consumer would expect.” On January 19, Hamilton County Judge Steven E. Martin entered a summary judgment in favor of the insurer on two of the six counts claimed in the suit. Those two counts, claiming breach of contract and unjust enrichment, primarily claimed that Progressive increases its profits at the expense of repairers by refusing to pay, or severely underpaying, for specific repair procedures that are commonly required to repair collision damaged vehicles. The judgment will be appealed by the shops however, and according to attorney Erica Eversman, some legal maneuvering was necessary in preparation for an appeal, including dropping the remaining four counts against Progressive. Eversman explained, “We wanted the decision to be immediately appealable. A judge can put that language in an order, that it is immediately appealable, but the appellate court doesn’t have to accept that. Sometimes they don’t and send it back down to the trial court and tell the appealing party to wait until the entire case is over. So in See Class Actions, Page 31
www.autobodynews.com | MARCH 2011 AUTOBODY NEWS 27
Continued from Page 25
G&C Autobody
getting onboard with each community they open a new shop in, for several reasons, Bizaca explained. “We are involved in a wide range of community groups in every city in which we operate, because we don’t just want to be a business that takes money from the residents without giving something back. We want to be part of the fabric of the community rather than a just a company doing business there.” To that end, G&C is already involved with several community organizations, local schools, and planning to sponsor Little Leagues teams in Windsor, even though they’ve only been open since December, Bizaca said. “We’ve already been out to the schools talking to the students and we invited the band at Windsor Middle School to play at our grand opening,” Bizaca said. “Seventy children and their teachers, as well as many of their parents came to the event attended by more than 400 Windsor residents. Continued from Page 26
Things to Consider
7. Keep safety in mind. Employee and customer safety must be key considerations in planning any new or expanded facility. Access to the production area by customers should be carefully controlled, and areas where customers can walk be should be clearly delineated. Adequate ventilation for exhaust and solvent fumes is required. Many fire extinguishers are rated to handle only two or three of the four types of fires that could occur. Shops should have extinguishers rated for Class A (wood and paper), Class B and C (flammable fluids and electrical) and Class D (special agents, combustible metals). Make sure there’s an extinguisher no more than 50 feet away from any point in the shop, that signage clearly indicates where they are, and that they are easily accessible (mounted between 36 and 60 inches off the floor). Also plan for smoke and carbon monoxide detectors, and one or more eye-wash stations. 8. Consider parking needs.
We’re also working closely with the Rotary Clubs, the Chamber of Commerce and doing other forms of community outreach. “Don’t just work in the town, be part of the town,” Crozat advocates.
everyone else is doing, you’ll just be another one of them. And that’s why I have always gotten the best equipment, top technicians and the best products I can find. You can’t do today’s work with yesterday’s tools.”
With 15,000 square feet, G&C’s facility is hoping to fix 50-70 cars monthly at its new Windsor, Calif. location
“It’s just a philosophy. Everyone looks at life from a different paradigm, but I’ve always thought that if we don’t do it, then who will? It’s good for us business-wise obviously, but it also gives our industry as a whole a better name.” “Get the best buying power in the marketplace and pass it on to the consumers and to the insurance companies as well. If you do whatever
Building top-quality facilities also helps G&C to get DRPs and retain them over the long run, Crozat argues. “People say they don’t like DRPs, but they represent 90% of the work. Why wouldn’t you cater to these insurance companies that are trying to get the best prices they can, in order to keep their rates down? We have two full-time in-house reps who work full-
When planning building size, consider how much external parking will be needed for customers, vehicle storage and vendors (for deliveries). If inclement weather or concerns about theft or vandalism are issues at
to get another out of a stall or to another part of the shop is wasted time. While more overhead doors allow easier vehicle access in and out of the building, they also make it more difficult to maintain a comfortable
your location, some outdoor parking could be sacrificed in order to have more indoor space for vehicle storage. Or consider whether rooftop parking—or multi-level vehicle storage units—can help increase your capacity without expanding your property’s footprint. 9. Go with the flow. One of the keys to shop efficiency is minimizing the movement of vehicles that is necessary. Time spent moving one car just
working temperature in the shop during hot or cold weather. Where adequate aisle space within the building is available, fewer doors are needed. A building width of at least 70 feet allows the shop to have 23-feetlong stalls on one side, 26-feet-long stalls (to allow for larger equipment, for example) on the opposite side and still an adequate center aisle (21-feet wide) down the middle. A 25-foot wide aisle will even more easily ac-
28 MARCH 2011 AUTOBODY NEWS | www.autobodynews.com
time dealing with the insurance companies and their agents, because DRPs are a big part of our business. I learned many years ago—don’t fight the direction of the DRPs. Instead, provide them with the best deal in the marketplace, by providing the best service, the best cycle times and the best image you can establish. That’s why we have cycle times that average six days, while the national average is 14 days.” Gene Crozat has always maintained that if any other body shop owners want to visit his facilities to see what he’s doing and glean information from his business model, he’s anxious and pleased to help them in any way he can. “People don’t believe it when I say it, but there have never been secrets or closed doors around here. I won’t be in this business forever and if I can make the industry better overall, it will benefit my children and my grandchildren down the road. Give me a call and I’ll do everything and anything I can to help you. I’ve done it many times before and that will never change.” Call Santa Rosa shop: 707525-3520. E-mail: Peter Bizaca: pbizaca@gandcautobody.com. commodate the turning radius of larger vehicles. 10. Think green. A new shop or expansion offers a great opportunity to incorporate “green building practices” or equipment and systems that will help you tread easier on the environment—while saving money and providing a potential marketing opportunity. Easy access to overhead door closure switches, for example, can help encourage technicians to reduce heat loss in cold weather. Tax incentives often are available that can help make installation of solar or other alternative energy sources competitive with traditional sources. Waste water collection systems can not only meet local ordinances but also include oilwater separators, or allow reuse of “grey water” for landscaping or other uses. Consider the energy-efficiency of the various brands and models of equipment you are purchasing. Check the website of the nonprofit Coordinating Committee for Automotive Repair (www.ccar-greenlink.org) for more information on building and operating a “green” shop —and an opportunity for earning national recognition for doing so.
Custom Corner with Rich Evans
Rich Evans is the owner of Huntington Beach Bodyworks and an award winning painter and fabricator. He offers workshops in repair and customization at his facility to share his unique talents. For contacts and design samples visit www.huntingtonbeachbodyworks.com
The Rich Evans Designs-Mopar Kit for Dodge’s Challenger, Part 2 That way when I do my graphics, This article is a continuation from Rich’s column last month. For an archive of they’re going to line up. So I do the same with the hood, deck lid; I really Rich’s columns please visit www.autodon’t have to worry about the fendbodynews.com/columnists/Rich Evans. A lot of times when I’m taking ers—on some projects you do, but on parts off the car and putting them back this one I don’t. So after getting the graphics layed on, from mock up position I’ll go into the doors and the hinges and drill two out, it’s time to tear it back down again. Thomas Franklin Now I’m ready for my graphic color, 1/8th inch holes.with That way I can stick True Blue Pearl part number PBC36AB. On the silver I applied three coats. I just do that on all my projects, I have a system and I apply it with a SATA 1.4 tip gun and I use 27 psi, 3 heavy coats, then I seal it with a House of Kolor sealer. The reason for using three coats is so if it ever got in a wreck and I had to redo this job I know how I did it so I do that routinely on all my vehicles. If for some reason I change my withthrough, Dick Strom two 1/8th inch dowels tighten patterns from normal spraying I’ll write up the parts and then they’re right back it on the back of the file so when the car comes back in I can repeat exactly to where I was before so I don’t have to what I did and get to as close of a color take the time to re-line everything up.
On Creative Marketing
match as possible. With the True Blue, I’m going to do six light coats just for coverage so I don’t get the blotchiness with a high build. I’ll do a half trigger using 27 psi. I do six coats to get a nice, dark, even feel. I’m painting everything in pieces so it needs to match. You’ve got to remember how you’re applying it, how close your gun is, to be able to paint cars in pieces. It gives me a better result.
Opinions Count
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Shop Showcase with Janet Chaney
After adding my six coats of the True Blue Pearl, now I de-mask everything, and add six coats of House of Kolor’s clear. Six good coats allows me to cut two coats off and not have any edges on my graphics. I’m ready for color, sand, and buff. On my color sanding method I will use all 3M products. I start with 800 grit sand paper, then 1000 grit, 1200, then 1500, 2000, then to 2500. Also I am using Soft-Sanders blocks along with their new sand paper. All their sand paper is wet from 800 all the way on up, and it’s sticky-back so that is a great time saver. Visit softsanders.com and check out the sandpaper products. They don’t wrinkle up, last a long time, and you can get them all the way from 400 grit up. Their blocks are also great, good for sanding out scratches and unbeatable for getting into curves. I use the combination of 3M and Soft-Sanders products. 3M doesn’t have the sticky-back sand paper all the way up to 2500 grit so Soft-Sanders is the way to go. I burned through a lot of sandpaper on this project. I’m ready for buffing, I do use the 1-23 step from 3M. That gives the fastest and best results that I have come across to date. Check out 3m.com and check out the 1-2-3 step buffing process. It’ll save you time and give you best results. We created a headliner and I’m going to send it over to Rivo at Stitchcraft Interiors. I sent them a design to
use in Katzkin Leather. I’m looking forward to seeing how it comes out and they’re also going to do the door panels. Katzkin styled me out with doing Rich Evans designed seats for this and Katzkin just does a phenomenal job. Visit www.katzkin.com and stitchcraftinteriors.com. They’re both great individuals to work with. I’m at the point when I’m ready to put this project together and get it over to SEMA. I called Mike Curtis over at Curtis Speed Equipment. I had him cut me off some one-off wheels, created a center cap for it, and then gave it to Mike. He’s just over the top in his wheel cutting experience. I collaborated with Mike on the grill. You can just bolt these grills right on top of yours. It takes only eight screws to and you can change the whole look of your Challenger with just adding these inserts. They look cool and you can order them to color or just plain aluminum as you see them on my original. Visit Richevansdesigns.com and get your grill inserts, your scoop, your wing, your lower front spoiler, left and right rocker, left and right flares, your rear bumper lower spoiler, your rear wing and your hood scoop. Even your headliner and grill inserts can be found at huntingtonbeachbodyworks.com and richevansdesigns.com and we’ll have these parts available for you. At the Mopar booth at 2010 SEMA, the Challenger was on stage on the turntable and people were loving it. I had a great time working with the Mopar Aftermarket team and I had a great time working with all the sponsors and utilizing the Mopar parts on this build — it just brought this Challenger to a whole other level. If you want to give this project a name it would be “modern muscle to the max.” We ended up with a name, calling it the Beast; 451 CID HEMI, pushing over 550 horsepower. Visit my site for more photographs or you can visit Mopar’s site and find some photographs on there. The car is on tour with Mopar for the next nine months. If you guys want me to turn your car into a modern muscle car, look me up. I hope you guys enjoyed the build, I definitely enjoyed every minute of the 3-month build. See you next month!
www.autobodynews.com | MARCH 2011 AUTOBODY NEWS 29
Houston Auto Body Association Hosts Legislative Breakfast for Texas Reps
Trey Perdue and his wife with David Walla of Walla & Co
The Houston Auto Body Association (HABA) hosted a legislative breakfast event on February 16 at the Capitol Grill in the Texas State Captiol. The event allowed attendees from the collision
HABA members got a chance to chat with their Texas representatives at the event Continued from Page 23
Hyundai, Kia
The factory will undoubtedly receive a crush of job applications, much as Hyundai did when it was first increasing production. “It was like a rock star was coming to town,” said Ashley Frye, vice president of production for Hyundai Motor Manufacturing Alabama. Mr. Frye said that when he wore his Hyundai jacket or shirt around town, people often approached him to ask, “Are you hiring? What can I do to get a job out there?” For more than a year, workers at the Hyundai plant have been putting in 10 hours of overtime a week as part of their regular schedule, plus occasional Saturdays. With an average regular wage of about $20 an hour, the additional overtime hours mean workers here are earning more than many workers at the unionized plants up north. The United Automobile Workers union has long tried to organize plants in the United States operated by foreign carmakers, most of which are in the South, but has yet to succeed anywhere. For 2011, Hyundai is working to
increase the plant’s output by an additional 10 percent, or 30,000 vehicles, Mr. Krafcik, the chief executive, said. The plant builds the Sonata midsize sedan and the newly redesigned Elantra compact car. Hyundai is opening its new stateof-the-art headquarters in Fountain Valley, CA, late next year. Officials said the new campus doubles the size and capacity of the current building, “giving Hyundai and its employees an environment conducive to growth as it prepares to help write the next chapter of a great American success story.” John Krafcik reminisced that “As far as we’ve come since 1986, we still feel we're in the early stages of connecting the Hyundai brand to the U.S. consumer. “We’ve always challenged convention—from our powertrain strategies, to our consumer partnership programs, to our unique Genesis and Equus retail approach,” Krafic stated. “It’s authentically Hyundai to question the status quo and pursue our own vision of how things should be in order to best serve our customers. This willingness to challenge convention will continue to guide us these next 25 years.”
30 MARCH 2011 AUTOBODY NEWS | www.autobodynews.com
repair industry to meet and discuss issues with their state representatives. The entire legislature was invited to the event that ran from 8:30 AM to 10:30 AM.
“On a side note, the Automotive Service Association (ASA) was there and making their rounds trying to gain support for HB 429 concerning the Franchise Tax law revision which would allow Independant Automotive and Collision shops to be taxed at the same rate as Dealer owned Automotive and Collision Shops which we support as well,” said Brown. Breakfast was Chuck Greer of Parts Express talking to legislative staff included in the “The breakfast was a success event which was sponsored by HABA with around 200 in attendance, we and the Automotive Parts and Service also visited all 150 State RepresentaAssociation. tives offices and all 31 State SenaFor more information please visit tors,” said HABA’s President James www.habaonline.org. Brown. HABA passed out individual letters to each representative that detailed HABA’s mission and code of ethics, along with gift bags containing www.autobodynews.com a coaster and acrylic car with HABA’s CHECK IT OUT! website and logo on them.
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Feds to Decide on Vehicle Grades by July 2011
The Environmental Protection Agency plans to decide by the end of July whether to require vehicle emissions grades on all new vehicles, according to reports madeby the Detroit News Washington Bureau. Margo Oge, the director of the EPA’s Office of Transportation and Air Quality, said the agency was sympathetic to concerns raised about the proposed “A” through “D” grades that the EPA and the Transportation Department may require on all new vehicles. “We want to make sure we give the auto industry plenty of lead time, no matter what the decision is,” Oge told The Detroit News after a forum in Washington. The timetable suggests that the new labels won’t appear on new vehicles until the 2013 model year, which would begin in the fall 2012. Oge declined to confirm when the new labels would appear on vehicles. The labels — first proposed in August as one of two possible revisions — would give 40 percent of the vehicles on the roads C’s and D’s.
Automakers oppose the grading system and back a more modest redesign that’s also under consideration. The final decision is up to EPA administrator Lisa Jackson and Transportation Secretary Ray LaHood, Oge said. Environmentalists back the grades and say they will prod more people into buying more fuel efficient models. They compare them to grades for restaurant cleanliness in changing behavior. In December, more than 50 members of Congress sent a letter urging the EPA and Department of Transportation to stick with fuel efficiency labels that highlight miles-per-gallon on stickers. Rep. Steven LaTourette, ROhio, called the grades “some loopy new green curve they’ve devised where cars are graded from A+ to D based on fuel economy and greenhouse gas levels.” “Those who live in planet reality might need a minivan or SUV to haul around four kids in child and booster seats, and have room for luggage and
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a family dog. Thanks to the EPA, they’ll be lucky to find a vehicle that gets a C.” Rep. Dale Kildee, D-Flint, said the grades would “tip the scales unfairly against many fuel efficient SUVs and trucks, relegating them to a C or C+ grade.” Separately, Oge noted that as EPA works with the National Highway Traffic Safety Administration on 2017-2025 fuel economy and emissions requirements, she said the government hasn’t made any decisions. It has said it’s reviewing a range of requirements — from setting a fleetwide average of 47 to 62 mpg by 2025. “There are environmental groups on one side calling for 62 mpg, and the last time I checked, they hadn’t done any work to show why that’s the case,” Oge said. Gloria Bergquist, spokeswoman for The Alliance of Automakers, the trade association representing Detroit’s Big Three, Toyota Motor Corp. and eight others, said: “We all want to put the most fuel-efficient vehicles as possible on the road, but for the 2017Continued from Page 27
Class Actions
order to make those two claims immediately appealable, we agreed with Progressive that we would “voluntarily dismiss the remaining claims without prejudice” which means we can refile them later, depending on the outcome of the appeal. The four claims that were dismissed include: Count 1: Deceptive Trade Practice (primarily involving tactics used to steer customers); Count 4: Tortious Interference; Count 5: Civil Conspiracy, Use of Unregistered Body Shops; and Count 6: Civil Conspiracy, Unlawful Conduct with DRP Shops.
About the Avery vs. State Farm Case Avery was a nationwide class action against State Farm challenging the company’s practice of not using OEM parts to repair vehicles. The plaintiffs claimed that using aftermarket parts breached State Farm’s promise to restore vehicles to their preloss condition. The Illinois Supreme Court reversed a lower court ruling in favor of the plaintiffs, holding that in order
2025 rulemaking, policymakers still need to gather and analyze much data to determine the maximum feasible fuel economy standards that avoid negative impacts on affordability, safety, jobs and vehicle utility. No one knows what the 2025 target should be yet, and the data needs to drive the rulemaking.”
$7,500 EV Credit May Change
You might have heard it during the State of the Union address January 25, but President Barack Obama's wanting 1 million electric vehicles on the road by 2015 is more than just a talking point. January 26 the White House released a plan to achieve this goal, and at the top of the list is a giant incentive for prospective EV buyers. The Obama administration wants to turn the current $7,500 EV tax credit into a straight-up $7,500 rebate you get at the point of purchase. That would drastically alter the confusion around how the current tax credit is applied. This new proposal would be a rebate, similar to how Cash for Clunkers worked.
to establish a breach of contract, the plaintiffs would have to show that the parts specified or used by State Farm did not restore the vehicle to its preloss condition. That case was watched very closely by the collision industry at the time, because the initial Avery verdict seemed to vindicate repairer concerns about aftermarket parts quality and would have established a more stringent standard for insurance companies relative to returning a vehicle to its preloss condition. In the GEICO case, the final Avery verdict was used to refute all of Greenberger’s claims, particularly since his vehicle was no longer available for examination. “Among other important holdings, Avery established the common-sense proposition that a policyholder’s suit against his insurer for breach of its promise to restore his collision-damaged car to its preloss condition cannot succeed without an examination of the car,” said the 7th Circuit ruling in the Greenberger case. The court also noted that the higher estimate issued by the body shop did not establish a breach of contract, although it would be admissible as supporting evidence.
www.autobodynews.com | MARCH 2011 AUTOBODY NEWS 31
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