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Allstate Will Buy Esurance and Answer Financial In a bid to capture more business from customers who shop online, Allstate Corp. has agreed to buy two popular online insurance sellers—Esurance and the associated site, Answer Financial. Allstate will pay a total price of about $1 billion– $700 million plus the tangible book value of the two firms acquired at close. Esurance is the third-largest provider of online auto insurance quotes through its website and a 24/7 call center. It sells in 30 states. Over the past five years, Esurance has more than doubled policies in force and grown premiums on average 20 percent per year, according to the company, which advertises heavily. It also
sells other personal lines coverages. Answer Financial provides auto insurance quote comparisons from 20 brand-name auto insurance companies to buyers in all 50 states. The carriers it represents include Esurance, Travelers, Progressive, Safeco, Met Life Auto & Home, Unitrin and The Hartford. In July, it reported having 324,000 policies in force. Alltstate is buying the firms from White Mountains Insurance Group, Ltd., a Bermuda-domiciled financial services holding company with interests in property/casualty insurance and reinsurance, including OneBeacon.
Tornadoes ripped across the southeast portion of the US brought destruction in April and May. States
and Arkansas, and now Missouri. Alabama was the hardest hit in April with over half of the fatalities. As of end of April 28 the confirmed death toll was at least 250, but that will rise as of the May 22 Joplin monster tornado. “It looked like it was probably a mile wide,” Birmingham, AL, Mayor William Bell said of the funnel cloud to CNN. Tuscaloosa, AL, mayor Walter Maddox predicted it would take months for the town to recover. President Barack Obama had already expressed condolences by phone to Alabama Gov. Robert Bent-
See Allstate, Page 13
Tornadoes Devastate South, Halting Local Automakers’ Plants, Inundating Insurers
See storm video at autobodynews.com
hardest hit were Alabama, Mississippi, Tennessee, Georgia, Virginia
See Tornadoes, Page 4
VOL. 2 ISSUE 4 JUNE 2011
Gunder Supporters Release Infinity Insurance’s Voice Recordings, Insurer Apologizes Barrett Smith, with Autodamage Experts, has released a voice recording of a call made by a representative of Infinity Insurance to one of Ray Gunder’s customers. Listen for yourself by downloading the WAV file at www.autobodynews.com. The recordings have been widely quoted in the appealed case which was recently resolved in favor of State Farm. Smith comments: “This type of underhanded practice goes on more often than most are aware or would like to believe and needs to be curtailed, and one sure way is for it to be exposed to the masses and for those who conduct themselves in this way to fear exposure. “For those of you who know Ray Gunder and the manner in which Gun-
SPECIAL INSERT
der’s Auto Center operates, listening to this recording will likely make your blood boil... it did mine. This “supposed” claim professional is trying their best to interfere with and undermine the relationship between Gunder’s and at least one of its customers. Who knows how many times this takes place? Continues Smith, “One has to ask themselves, what type of person has the lack of conscience and nerve to lie to a customer about a shop in which this claim-person has never dealt with or have first hand information to support what they say? “The simple fact is she doesn’t and it is apparent she is merely doing as told and reading from a prepared word track intended and designed to disparage Gunder’s good name and See Gunder Recordings, Page 6
Shop and Product SHOWCASE
REGIONAL ARTICLES in this issue...
Gunder’s Responds to Infinity Insurance Recordings . . . . . . . . .p. 1
Florida Bills Will Distribute Liability in Automaker Lawsuits . . . .p. 8 AL Auto-Scrapping Bill Curtails Scrap Industry . . . . . . . . . . . . . .p. 9
Hyundai to Expand AL Engine Plant . . . . . . . . . . . . . . . . . . . . . . .p. 18
COLUMNS in this issue...
Chess — Getting OSHA-Compliant Part 2 . . . . . . . . . . . . . . . . . . .p. 10
Espersen — The Value of Service Repair Information . . . . . . . . .p. 16
Yoswick — Industry Trends at WIN Conference . . . . . . . . . . . . . .p. 20
Insurance Insider — Allstate Deserves Credit for DRPs . . . . . . .p. 21
Schroeder — The Body Shop Garage Opens in Woodward, OK .p. 22
Danalevich — Total Loss Fees Are Profits to be Gained . . . . . . .p. 24
Amaradio — The Good Old Days . . . . . . . . . . . . . . . . . . . . . . . . . .p. 26
Evans — Repairing a Quarter Panel, Bumper, and Molding . . . .p. 28
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Contents Alabama Auto-Scrapping Bill Curtails Auto
Scrap Industry . . . . . . . . . . . . . . . . . . . 9
West Virginia Insurance Commissioner to
Retire . . . . . . . . . . . . . . . . . . . . . . . . . . 4
BASF Single Line Distributors Come
COLUMNISTS
Florida Able to Arrest 53 Suspects in
Chess - Getting OSHA-Compliant on
Florida Bill Will Limit Lawsuits Against
Danalevich - Total Loss Fees Are Profits
Florida Shop Licensing Program Survives
Espersen - The Value of Service Repair
Ford Motor Company Expands Local
Evans - Repairing Quarter Panel, Bumper,
GA Auto Repair Tax Bill Still Moving
Insurance Insider - Allstate, Founder of
Together for ColorSource Conference . . . 7 Alleged Staged Car Crash Schemes . . . 14 Automakers . . . . . . . . . . . . . . . . . . . . . . 8
Deregulation Efforts by House Bill 5005. 18 Support to Atlanta Community . . . . . . . 15 Through House . . . . . . . . . . . . . . . . . . 19
GA Passes Bill Regulating Insurance
Amaradio - The Good Old Days . . . . . . . . 26 Signage, Electrical and Power Tools . . . 10
to be Gained, Not Given Back. . . . . . . . 24
Information . . . . . . . . . . . . . . . . . . . . . 16 and Molding: No Time, No Money . . . . 28
DRPs, Deserves Some Credit for
Improving Repair Industry . . . . . . . . . . 21
Certificates . . . . . . . . . . . . . . . . . . . . . 14
Schroeder - The Body Shop Garage Opens
Georgia Shop. . . . . . . . . . . . . . . . . . . . . 7
Weaver - Shift Happens: The Story of the
Green, KY, Plant . . . . . . . . . . . . . . . . . . . 7
Yoswick - Industry Trends and Changes in
GM to Invest $131 Million at Bowling Gunder Supporters Release Infinity
Insurance’s Voice Recordings, Insurer
Responds . . . . . . . . . . . . . . . . . . . . . . . 1
Hail Storm Brings Influx of Repairs for
TX Shops . . . . . . . . . . . . . . . . . . . . . . 19
in Woodward, Oklahoma . . . . . . . . . . . 22
Three Transmissions and a Limp KIA . . 17
Future Vehicles at WIN Conference. . . . 20
NATIONAL
AGRSS Promotes Fixing Damaged
Windshields. . . . . . . . . . . . . . . . . . . . . 31
Hyundai to Expand Alabama Engine Plant,
Allstate Will Buy Esurance and Answer
Infinity Insurance Apologizes for Gunder’s
ARA, Congress to Ensure Flood Damaged
LA Insurance Agent Sentenced in
CCC Announces 2011 Crash Course
Porsche North America HQ to Leave Sandy
CIF Makes Donation to Japan Tsunami
Create Over 200 New Jobs . . . . . . . . . 18
Auto Center Customer Recordings . . . . 6
Fraud Case . . . . . . . . . . . . . . . . . . . . . . 6
Springs, GA, for Nearby Ex-Ford Plant
Financial . . . . . . . . . . . . . . . . . . . . . . . . 1 Vehicles Don't Enter Used Market . . . . 31
in April. . . . . . . . . . . . . . . . . . . . . . . . . 30
Relief . . . . . . . . . . . . . . . . . . . . . . . . . 31
in Atlanta . . . . . . . . . . . . . . . . . . . . . . . 19
National Average for Body and Paint Labor
Still Under Investigation . . . . . . . . . . . . . 7
School Auto Body Programs Compete for
Local Automakers’ Plants, Inundating
Xirallac Pigment Plant to Relocate from
Suspicious Fire At Tulsa Auto Body Shop Tornadoes Devastate South: Halting
Insurers . . . . . . . . . . . . . . . . . . . . . . . . . 1
Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Assistant Editor: 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, Chasidy Sisk Advertising Sales: Joe Momber, Sean Hartman (800) 699-8251 Sales Assistant: Kristy Mangum Art Director: Rodolfo Garcia
Indexof Advertisers
Gerber Collision and Glass Acquires
Rates Up Only Modestly Since 2006 . . 16
$50K Makeover . . . . . . . . . . . . . . . . . 30
Japan to Germany Following Tsunami . 30
Southeast
REGIONAL
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.
Autobody News
Box 1516, Carlsbad, CA 92018; (800) 699-8251 (760) 721-0253 Fax www.autobodynews.com Email: news@autobodynews.com
Arrigo Dodge-Jeep-Chrysler. . . . . . . 8 Autoland Scientech. . . . . . . . . . . . . 17 BASF . . . . . . . . . . . . . . . . . . . . . . . . . 5 Bill Penney Toyota. . . . . . . . . . . . . . 23 BMW Wholesale Parts Dealers. . . . . 14 Chief Automotive. . . . . . . . . . . . . . . 19 Classifieds. . . . . . . . . . . . . . . . . . . . 31 Delray Honda . . . . . . . . . . . . . . . . . 24 Don Mealey Chevrolet . . . . . . . . . . 14 Don Reid Ford. . . . . . . . . . . . . . . . . 20 Equalizer Industries . . . . . . . . . . . . 12 Ford Wholesale Parts Dealers FL, GA, AL, MS . . . . . . . . . . . . . . 32 Galloway Mazda . . . . . . . . . . . . . . . 21 Garmat USA . . . . . . . . . . . . . . . . . . 10 Global PDR Solutions . . . . . . . . . . . 13 GM Wholesale Parts Dealers . . . . . 27 Gus Machado Ford . . . . . . . . . . . . . 22 Honda Wholesale Parts Dealers. . . . . 30 Hyundai Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . 15 Kia Motors Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . . 2 Mazda Wholesale Parts . . . . . . . . . 22
Mercedes-Benz Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . 26 MOPAR Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . 23 NACE / CARS Registration . . . . . . . 11 Nalley BMW. . . . . . . . . . . . . . . . . . . 27 Nissan Wholesale Parts Dealers. . . 24 Palmers Toyota . . . . . . . . . . . . . . . . 21 Porsche Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . 20 Quality Stainless Products . . . . . . . . 8 Safety Regulation Strategies . . . . . 12 SATA Spray Equipment . . . . . . . . . . 9 Scorpion . . . . . . . . . . . . . . . . . . . . . . 7 Serra Mazda . . . . . . . . . . . . . . . . . . . 4 Southtowne Hyundai . . . . . . . . . . . 25 Subaru of Gwinnett . . . . . . . . . . . . . . 6 Subaru Wholesale Parts Dealers . . 26 Tameron Hyundai . . . . . . . . . . . . . . 25 Toyota Wholesale Parts Dealers . . . 30 VIM Tools. . . . . . . . . . . . . . . . . . . . . 28 Volkswagen Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . 18
www.autobodynews.com | JUNE 2011 AUTOBODY NEWS 3
Continued from Page 1
Tornadoes
ley when he approved his request for emergency federal assistance on April 28. In Hueytown, AL, shop owner Jason Wilson was in his business— Jimmy’s Auto—when he heard the tornado warning sirens. He gathered his family, including his two children, and decided to ride out the storm in the shop. About an hour afterward, Wilson stood in the parking lot, stunned, look-
The front of the building after the storm
Tana Malerba, “No one was in the building at the time that the tornado hit. We also found a temporary location six miles down the road from where we were located while we rebuild.” The tornado took off the entire roof of Coats brick building and both side walls of the building collapsed. The bays and shop floor were The front of Coats’ Raleigh location before the storm hit no longer separated from ing at the roof of the store. The roof the outdoors after the storm. had been blown off the building as One thing that did survive the they huddled inside, he said. storm was the shop’s Garmat spray “We was fixing to go home and booth. The booth did sustain some heard the siren,” he said to Alabama damage, but all mechanical compowebsite al.com. “We took cover. It’s nents and the attached mixing room about all you can do. And then it just were saved despite the all but deblew the roof off.” stroyed building that housed the Wilson, his wife, his father and booth. Between Coats’ employees and his two children escaped without a local vendors, Coats was able to move scratch. their business to neighboring Garner, NC, within eight days. Malerba said the business is just waiting on some outside vendors to complete their work before the shop will be back running at 100%. The Garner location will be a temporary home for the business until they can rebuild their original Raleigh location. Insurers also began the daunting task of tallying the home and auto damages of their clients on April 29. Inside Coats’ Raleigh location before the storm hit Alabama Insurance CommisCoats Auto Body and Paint in sioner Jim Riding said that he is reachRaleigh, NC, experienced an intense ing out to the state’s property insurers tornado on April 16 that caused major to provide a coordinated response to damage to the shop. the storms as soon as possible. “Even though the building has “We want to hit the ground runbeen condemned and is now gone, ning to deliver an effective response we are blessed,” said Co-Owner to all Alabamians affected by these
West Virginia Insurance Commissioner to Retire West Virginia Insurance Commissioner Jane L. Cline will step down from her post on June 30. Acting Gov. Earl Ray Tomblin announced Cline’s retirement on May 18. He did not name a successor at that time. Cline says she is retiring after 30 years in state government. She has served as insurance commissioner for
the past decade. Cline was appointed insurance commissioner in 2001 by then-Gov. Bob Wise. She also served as Division of Motor Vehicles commissioner during the 1990s. During her tenure Cline oversaw the privatization of West Virginia’s workers’ compensation program and addressed medical malpractice and other insurance issues.
4 JUNE 2011 AUTOBODY NEWS | www.autobodynews.com
tragic storms,” he said to Insurance Journal. “As soon as the companies settle on locations for their disaster response headquarters, we will share that information with the public.” State Farm Spokesperson Jim McCullen said that said by April 28 the insurer already had 3,300 claims in Alabama and the count continues to rise, according to Insurance Journal. He said that the company was somewhat fortunate in that it already had teams working in Arkansas in the
Toyota Motor Manufacturing Alabama
wake of a series of tornadoes that went through the South Central portion of the country in early April and a quick response should ensue. The dangerous conditions also halted production at the Toyota and
Mercedes-Benz plants in Alabama as of April 28. A Mercedes plant spokeswoman said April 29 that Mercedes had halted operations because suppliers were unable to deliver parts due to the storms, according to the Tuscaloosa News. A spokeswoman for the automaker also told Automotive News the plant would remain down until May 2 following the tornado. Toyota spokesman Mike Goss said the engine plant stopped work April 27 when it lost power. He said the power could be out at least through May 1. Other automotive factories in the region, including Hyundai Motor Manufacturing Alabama in Montgomery, and Honda of Alabama Manufacturing in Lincoln, reported no direct damage from the tornadoes. However, representatives for Honda said the automaker is evaluating the storms impact on their suppliers all across Alabama, which may affect the company’s output later this spring. Coats Auto Body and Paint 434A US 70 Highway East Garner NC 27529 (919) 833-6877
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www.autobodynews.com | JUNE 2011 AUTOBODY NEWS 5
Continued from Front Page
Gunder Recordings
destroy the confidence the customer had in selecting Gunder’s. A selection based upon their experience in having their vehicles repaired at Gunder’s more than once in years past, and have earned their respect! “This so-called claim professional likely considers herself to be a honest and ethical person who cares for her family and attends church on Sunday; but on Monday, goes to work and does things that she is told….regardless if right or wrong and does so despite her personal, ethical or moral convictions, just as a mercenary or a paid assassin would go about their business, hiding behind the corporate Infinity Badge. “So one has to ask why a large insurance company would do this? Simple, because they have an agenda to control the collision industry and they have done so without being held accountable and have reaped huge profits. Profits that were once the collision repairers. “The very scary part; they and others who chose to conduct business in this manner will continue to do so to discourage any repairers who choose to step up and say no to un-
derpayments for necessary processes and materials needed to properly serve their clients.” Ray Gunder adds, “Know this and take serious heed. As long as the rewards outweigh the risks, like a child sneaking cookies, insurers will continue to increase their efforts to profit off the backs of others’ hard work and sweat while avoiding the liabilities that come with underpaid repairs. And if you don’t merely submit and allow them free reign over your business, you too will become a victim of this vile and unethical practice of lies and deceit about you and your business. “Just like slapping the child’s hand for taking too many cookies, or punching the bully in the nose when he comes to take your lunch money, it’s only when the risks begin to outweigh the rewards that bad behaviors will change. “Each repair professional out there needs to make a conscientious choice to either become a part of the solution or remain part of the problem. The choice is yours. Use it wisely. “As for Gunder’s, we will continue to do our part to instill accountability and deter insurers from harming us and our customers. There is strength in numbers and together we con conquer these types of practices in a short time frame… regard-
Infinity Insurance Apologizes for Gunder’s Auto Center Customer Recordings
On May 3, Infinity Insurance’s Regional Claims Manager, Tim Waldron, called and spoke to Ray Gunder of Gunder’s Auto Center in Lakeland, FL, and repeatedly apologized for the recent comments made by an Infinity claims person to one of Gunder’s customers who captured it on a recorder. The voice heard is that of Infinity Insurance Claim Person, Lisa Whitehurst saying the following word track to one of Gunder’s Auto Center’s customers: “I spoke with our re-inspector, who went out and re-inspected the vehicle at the body shop,” Whitehurst said in the message. “He said that this body shop has been known to give us issues in the past with other vehicles that they’ve repaired and apparently they are known for overcharging a great deal for the amount of damages and trying to add things that aren’t relevant to, you know, the repairs. They’re also known for holding the vehicle hostage until all the payment is made.”
As a result of the egregious statements made by Infinity’s representative, Ray Gunder immediately contacted his legal counsel, Brent Geohagan, who promptly sent a letter placing the insurer’s claims manager on notice and demanding that Infinity Insurance agree and confirm, in writing within 10 days, that such wrongful conduct on behalf of any Infinity Insurance representative will cease and desist immediately with no re-occurrences. In response, Tim Waldron, Infinity Insurance Company’s Regional Claims Manager, called and spoke to Ray Gunder personally and repeatedly apologized for the recent comments and conduct of the claims person and her manager and advised Ray that this was an isolated incident and further assured him that the matter would be addressed and that no such conduct would take place in the future with Gunder’s nor any other repairers stating: “this is not the way Infinity conducts its business.” Ray Gunder says he has accepted the apology.
6 JUNE 2011 AUTOBODY NEWS | www.autobodynews.com
less, you can be assured I’ll continue to “Pound That Rock.” The person or persons responsible for these slanderous, outrageous lies (Lisa Whitehurst being one of them) will be held personally accountable. I have to wonder if she knows the effect her hurtful lies could have the twenty-five families dependent on work at Gunder’s Auto Center, all of which are honest, hardworking, ethical people. Is it okay to hide behind her “Infinity Corporate Badge” and attack anyone she’s told by management to suppress their voice? Opinions welcome.”
LA Insurance Agent Sentenced in Fraud Case A Plaquemine, LA, insurance agent has been sentenced to more than four years in federal prison for mail fraud that cost several of his clients nearly $1.4 million. U.S. District Judge Brian A. Jackson ordered 67-year-old William J. Coury to report to federal prison on May 29. Coury will serve an additional two years under the supervision of federal investigators after he completes his 51-month prison term, according to U.S. Attorney Donald J. Cazayoux Jr. The judge also ordered Coury to pay full restitution of $1,375,121.87 to his Jefferson Parish victims, who are listed in court records only by their initials. The former insurance agent admitted he used investment money for personal purposes unbeknownst to six of his clients, who trusted Coury to place it in annuities or other insurance products. In his guilty plea on January 27 Coury said from at least 1996 through 2006, he solicited funds from clients for investment in annuities and other insurance products but instead kept the funds for his own use.
Ray Gunder Gunder’s Auto Center (863) 688-7897
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Gerber Collision and Glass Acquires Georgia Shop
The Boyd Group announced the opening of a new repair center in McDonough, Georgia, on May 3. The center, previously known as McDonough Collision, was recently acquired by the Boyd Group and now operates under the Gerber Collision & Glass trade name. The new facility is approximately 26,000 square feet in size, with 24,000 square feet of production space. With this addition, the Boyd Group is now able to serve consumers and insurance clients in the county seat of Henry County, 30 miles south of Atlanta. The Boyd Group now owns and operates 12 repair centers in Georgia and a total of 99 in the U.S., including 37 repair centers that operate under the True2Form trade name. “We continue to execute on our strategy of expanding into select markets and growing our network of repair centers across North America,” said Tim O’Day, President and COO of the Boyd Group’s U.S. Operations. “The new McDonough repair center helps us introduce the Gerber Collision & Glass brand to an additional Georgia market and we are very pleased to be able to serve new customers in this location.”
GM to Invest $131 Million at Bowling Green, KY, Plant
General Motors Co announced that they will invest millions into revamping a Kentucky factory to produce a new version of the iconic Chevrolet Corvette sports car, the automaker said on May 4. “It has a completely different look. Don’t ask me how or what, but people will be really surprised, in a good way,” GM’s North American president Mark Reuss told Reuters. GM would not say when the new Corvette would be introduced, but automotive insiders have speculated that it will make its debut in 2013. The automaker will invest $131 million in the Bowling Green, Kentucky plant to retool the factory for production of the seventh generation of the Corvette. The company also plans to hire an additional 250 employees along with the plants remodel. Reuss told the plant’s nearly 400 production line workers that GM has invested $3.4 billion and created 9,000 jobs at its U.S. plants since mid-2009, the year it went through a $52 billion U.S. government-sponsored bankruptcy. GM said the current-generation Corvette will be made in Kentucky for at least the next two model years.
BASF Single Line Distributors Come Together for ColorSource Conference BASF Automotive Refinish announced the completion of its annual ColorSource Conference, a three-day interactive conference for single line distributors of BASF refinish paints and coatings. During the conference held April 27 – 30 in Clearwater Beach, FL at the Sand Pearl Resort, BASF re-launched the ColorSource PREMIER Program and shared annual objectives in addition to networking and strategic activities. “Gathering all ColorSource PREMIER partners together enables collaboration and development of strategic initiatives for continued market growth,” stated Denise Kingstrom, Strategic Accounts Manager for BASF Automotive Refinish. “It provides an opportunity outside of our day-to-day activities to recognize industry progress, and share best practices.” ColorSource PREMIER distributors are single-line BASF distributors that benefit from a unique association with BASF, allowing them a competitive edge. BASF ColorSource PREMIER members distribute only BASF refinish paint products,
and are recognized by the company as important strategic partners in the aftermarket automotive refinish industry. To learn more about becoming a ColorSource PREMIER distributor, please contact Denise Kingstrom at denise.kingstrom@basf.com or 248632-2420.
Suspicious Fire At Tulsa Auto Body Shop Still Under Investigation The cause of a fire at North Tulsa auto body repair shop remains under investigation after it was sparked at the business on April 20. Tulsa Fire was dispatched to the shop at 1:30 am on April 20 at 46th Street North and Peoria. Firefighters were able to contain the non-injury fire from spreading and most of the damage was to the inside of the shop. A small window had been broken in the building, leading firefighters to believe the cause of the fire may be suspicious.
www.autobodynews.com | JUNE 2011 AUTOBODY NEWS 7
Florida Bills Will Distribute Liability in Lawsuits Against Automakers The Florida Senate and House Panel approved a bill on May 23 that makes it more difficult for injured plaintiffs to win product liability damages from auto makers and other manufacturers. The Senate measure was approved by a vote of 80-35 and has been sent to Republican Gov. Rick Scott for his signature, according to the Associated Press. The bills, which have been approved by the Florida Senate and the Florida House Civil Justice Subcommittee, neutralize a 2001 Florida Supreme Court decision against Ford that said evidence of the primary cause of a crash, such as driver error or drunkenness, cannot be introduced in product liability cases. The bills, SB 142 and HB 201, are aimed at fairly distributing liability in cases where manufacturer defects may have played a part in a crash. These bills will take actions on the part of the driver that could have contributed to the accident in question into consideration when making a ruling as well. According to the new law, juries
would have to “consider the fault of all persons who contributed to an accident when apportioning damages in a products liability action.” “Not giving the jury all the details, including a critical piece of information about the driver’s condition, is unfair and absurd,” said Barney Bishop III, president of Associated Industries of Florida, the state’s lobby for big business, according to the Associated Press. “Correcting this inequity will now open the doors to automotive manufacturing companies that previously had not considered Florida as a base of operation,” Bishop added. The legislation on the “crashworthiness doctrine” was the focus of a lobbying duel between trial lawyers who represent injured parties and business interests led by Ford Motor Co. Under that doctrine, if, for example, “an airbag fails to deploy during an initial collision and the driver subsequently collides with the windshield, the manufacturer may be liable for damages attributable to the
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second collision caused by the defective airbag,” according to a staff analysis. Democrats have argued the bills would shift medical costs for seriously-injured crash victims to taxpayers and that manufacturers should be held accountable for their mistakes. “See how much they paid to make sure this happens,” state Rep. Richard Steinberg, D-Miami, said in debate, referring to Ford’s and other business interests’ campaign contributions to Republican lawmakers. “What this bill says is, if you don’t put on a seatbelt, it’s your fault,” Steinberg added. “But if the seat belt doesn’t work, it’s not their fault.” But state Rep. Larry Metz, RYalaha, said the “doomsday scenario” that deserving plaintiffs would go empty-pocketed from the courthouse was unfounded. “Judges can still make rulings about quality and weight (of evidence),” he said. “We shouldn’t shield relevant evidence from juries.” The law overrules the decision in the case of Karen D’Amario, whose
then-teenage son was badly burned and lost three limbs when the car he was riding in crashed into a tree and exploded. The driver was killed. D’Amario alleged her son’s injuries were due mostly to the explosion caused by a defective relay switch on a fuel pump. The jury sided with Ford, which argued the switch was fine and blamed the fire on the collision because it ruptured the car’s oil pan. The justices ruled that the jury was confused by evidence that the driver was drunk and speeding, instead of focusing on the product liability allegation. The opinion reversed the jury’s verdict and said such evidence should be excluded from future cases that allege “enhanced” injuries.
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Alabama Auto-Scrapping Bill Curtails Auto Scrap Industry Alabama state laws have scrap yard owner David Hickman dealing with frustrated customers when he tells them that he can’t take their junk cars without a valid title. “Lots of times customers want to argue with us when we tell them they have to have it,” he said to Alabama website al.com. “But that’s the law, we can’t take a car without title.” As of 2010, people selling cars to scrap have had to have the title in order to sell. This has caused some friction as owners of junk cars often don’t have an official title in their name, either because it’s been lost or because the car was signed over to them by a previous owner, Hickman said. The requirement has all but killed the auto recycling part of the scrap business, according to Hickman. Hickman isn't the only one feeling the pain; the law has affected every link in the recycling food chain. Materials from junk cars feed low-level parts dealers and car crushers, which feed auto-shredding operations like Hickman’s. Scrap metal generated by the shredders also feeds
mills and manufacturers like SSAB in north Mobile County and Huron Valley Steel Corp. in Anniston. The title requirement law took a bite out of all of those industries, said Graham Champion, a lobbyist for the Alabama Recycling Association, a lobbying association. The recyclers are pushing a bill in the Legislature that would ease the title requirement to make it easier for scrap dealers to buy junk cars. The would hopefully increase business for recyclers and bring more scrap metal into the state. Efforts of the recyclers, however, have pitted them against local law enforcement officials, who say the new rules would lead to increased car theft. “They basically want to legalize a fencing operation,” said Deputy Chief James Barber of the Mobile Police Department to al.com. “This legislation is outrageous and only serves to increase crime in our communities for the benefit of the scrap and salvage industries at the expense of Alabama citizens.” Prior to the enforcement of the title law, thieves with tow trucks were
scooping up broken down cars off of the street and bringing them directly to the scrap dealers, said Sgt. Michael Womack, who polices the scrap yards in Mobile. When the police department began enforcing the title requirement, car thefts fell by 20 percent, basically overnight, Barber said. The percentage of stolen cars that police were able to recover also improved, he said. Requiring a title for a car before it is scrapped allows for better tracking of vehicles coming into recycler's yards. Officials from the Mobile County Sheriff’s Office, the Mobile County District Attorney’s Office and the Police Department have been lobbying against the proposed law for the past several weeks. Supporters of the bill say the law enforcement officials aren’t taking into account all the safety measures built into the legislation. The bill would only remove the title requirement for cars more than 12 model years old and worth less than $1,000, said Philip Bryan, chief of staff for Sen. Del Marsh, who is sponsoring
the bill in the Senate. The bill would also create an e-verify system to track what cars are being scrapped at the point of sale. Before shredding or crushing the vehicle, scrap dealers would have to give the Vehicle Identification Number (VIN) to the state Department of Revenue, which would check to see if it had been reported stolen. The seller would also have to sign an affidavit swearing that he was the vehicle’s legal owner. Womack said the safeguards in the bill are inadequate. By the time a car is reported stolen and entered into the national database, it could already be reduced to an untraceable scrap. Customers heading to Mississippi Prior to the title rule, Alabama recycled about 200,000 to 300,000 cars every year, now many of those cars are simply going to neighboring states that have less laws relating to scrapping vehicles. Hickman lives in Biloxi, which doesn’t have a title requirement. He said he used shred about 30 cars a day; now he does three.
www.autobodynews.com | JUNE 2011 AUTOBODY NEWS 9
Hey Toby!
Toby Chess is an I-CAR program instructor, Welding specialist, and former salvage yard operator. Toby is universally known in the collision industry for his charitable works, worthy causes, and magic tricks. He can be reached at tcspeedster@yahoo.com
Getting OSHA-Compliant on Signage, Electrical and Power Tools with Toby Chess
The other day I was teaching I-CAR’s workers protection program and I had the techs show me their blowers. (I’m referring to the nozzle blowers on air hoses here, not hand-held dryers.) I found 3 illegal ones. I asked the question “How much is the OSHA fine for these blowers?” and the production manager said it was $7000. I was in Arizona, not California, at the time. I inquired if the shop had been fined and his reply was “I read your article and I am in the process of getting OSHA approved blowers.” It made me feel that all this work is worthwhile. Let’s get started on the second installment of the article.
Electrical • Check all extension cords for damage (repaired with electrical tape and broken grounds are a big no no). • All high voltage boxes labeled with a DANGER Sign? • All outlet covers installed? • Are all energized parts of electrical circuits and equipment guarded against accidental contact by approved cabinets or enclosures? • Make sure there is a 3 foot barrier marked around all electrical boxes.
• Do you have a spill containment container (absorbent material in a small garbage can works, but it must be marked and placed in accessible area.) Safety & Signage
• Do you have an OSHA approved first aid kit?
Walkways • Make sure that all in ground pulling pots are flush with surface when not in use. Most of the time the covers are
bent and they are out on the floor, which creates a tripping hazard.
You will also need the proper signage. Speaking of signage, here are
10 JUNE 2011 AUTOBODY NEWS | www.autobodynews.com
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• Does the facility have enough fire extinguishers as per city ordinances? • Are all fire extinguishers charged and are properly tagged (you also have someone in the some of the more common ones that are needed in the body shop.
Flammable and Combustible Materials • Is proper storage practiced to minimize the risk of fire including spontaneous combustion? • Are all hazardous drums with flammable materials grounded? • Are all flammable liquids kept in closed containers when not in use? • Are stored oxygen tanks separated by 25 feet from flammable stored gas cylinders?
shop check and sign the tags once a month)? • Do you have a class D fire extinguisher for a magnesium fire?
Here is a chart of the symbols on the fire extinguisher and what materials it can be used. • Are all fire extinguishers free from obstruction? • Is a fire extinguisher mounted within 10 feet of
12 JUNE 2011 AUTOBODY NEWS | www.autobodynews.com
any inside storage area of flammable materials? Power Tools • Are portable fans provided with full guards or screens having openings of ½ inch or less? • Do all power tools have grounded cords?
Batteries • Are batteries stored on a spill containment tray? The next article will deal with MSDS
sheets and safety programs that are necessary for OSHA compliance.
Continued from Front Page
Allstate
Allstate, which has seen its personal lines business shrink, said the deal lets it expand its service to consumers who prefer to buy direct online rather than through personal agents. It allows it to compete with Progressive and Geico, which have strong web insurance shopping sites. “Consumers today expect to have their specific needs met by their insurance companies. Our strategy is to focus on individual preferences and utilize different value propositions for distinct consumer segments,” said Thomas J. Wilson, Allstate’s president, chairman and chief executive officer. Wilson said Allstate agencies do “an outstanding job of serving customers who want a local personal touch and prefer to purchase a branded product.” But Esurance will expand the company’s ability to serve customers who are “more self-directed but still prefer a branded product.” Wilson also said Answer Financial will strengthen Allstate’s of-
fering to individuals who want to be offered a choice between insurance carriers and are brand-neutral. The move has some Allstate agents concerned. “Many Allstate agents are viewing the proposed acquisition suspiciously. The company has been hell-bent on growing its direct channel for years, but only recently has it had any success,” said Jim Fish, executive director of the National Association of Professional Allstate Agents, Inc. “Who knows, the success of the Esurance business model and technology platform could ultimately improve and transform Allstate’s direct channel into a powerhouse. Should this come to pass, Allstate agents would feel more expendable than ever.” According to Fish, Allstate is shedding seasoned agencies in favor of larger agencies with more staff. “[S]o adding this acquisition to the agents’ woes, can only create more angst. Without a doubt, the agents want Allstate to be successful – but not at their expense,” he said. Allstate said Esurance and Answer Financial will retain their brand
names. Esurance has some 1,7000 employees and 14 regional offices. Wilson said Allstate would now be the only company serving all of these consumer segments with unique insurance offerings. “This transaction is also attractive for our shareholders. Association with Allstate will improve Esurance’s marketing effectiveness and it can leverage our world-class pricing and claim capabilities. This also offers us two additional sources of growth and an immediate increase in customer relationships,” Wilson said. Premiums for policies sold by both Esurance and Answer Financial were $1.2 billion in 2010. Gross premiums written by Esurance were $839 million for the year. Esurance had 839,000 policies-in-force, including 328,000 policyholders at Answer Financial. The Esurance segment added approximately 65,000 policies-inforce during 2010, an increase of 8 percent, according to the company. The transaction has been approved by both companies’ boards of directors and is expected to close in fall 2011. The transaction is subject to regulatory and other customary closing
conditions, including review by antitrust authorities and state regulators. White Mountains Chairman and CEO Raymond Barrette said the online insurance operation Allstate is acquiring has grown from a start-up to rank among the top online insurers in 10 years. “We have happily invested significant capital in what we believed was a unique business. Allstate agrees and can now take it to a new level,“ Barrette said.
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GA Passes Bill Regulating Insurance Certificates Georgia Gov. Nathan Deal is expected to sign into law a bill putting heavier requirements on certificate of insurance forms. The bill will require the forms to be filed with approval from the state insurance commissioner. Agent groups and insurance companies have had longstanding problems with certificates that are often used to falsely show proof of coverage or amend the coverage to include provisions outside the terms of the certificate holders’ policy. Earlier this year, Insurance Commissioner Ralph Hudgens issued a directive restating that certificates are for information purposes only and confer no rights on the certificate holders outside the terms of their policies. The directive also reminded agents and policyholders that the intentional misuse of certificate is against the law. Following Hudgens’ action, the Independent Insurance Agents of Georgia and Professional Agents of Georgia created a joint task force to turn the directive into legislation. “This legislation is very important to our members,” said Gould
Hagle according to Insurance Journal, lobbyist for the Independent Insurance Agents of Georgia. “Its passage is the culmination of a full year’s work.” The bill, entitled HB66, is sponsored by Rep. Maxwell Howard and has been approved by both the Georgia House of Representatives and Senate, before being sent to Gov. Deal for his signature. The bill clarifies that a certificate is a synopsis of coverage as it exists on the date the certificate is issued and is only intended for informational purposes. The bill also spells out that a certificate is not an insurance contract or a document that alters coverage. If signed by Deal, the bill would make two substantive changes to current law. In addition to requiring that certificate forms to be filed with and approved by the insurance commissioner, the new law places certificate holders under the regulatory authority of the commissioner so that any violations would be covered under the state’s insurance code. For more information please visit www.ok.gov/oid. Original BMW Parts
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Florida Arrests 53 Suspects in Alleged Staged Car Crash Schemes Tampa-area authorities say a fivemonth investigation into local staged car accidents and insurance fraud culminated in arrest warrants for 53 people. The Hillsborough County Sheriff’s Office said that search warrants were served at four medical clinics as part of the operation. Tampa and Florida both have very high rates of staged accidents for insurance fraud compared to other regions in the country. Authorities said the clinics scammed insurers out of $1 million to $2 million during the course of the investigation, according to Insurance Journal. Some suspects are accused of participating in crashes, others of running clinics involved in insurance scams relating to injuries sustained in the fraudulent accidents. Deputies said the charges range from conspiracy to commit racketeering to filing false insurance claims. The suspects include clinic owners and managers as well as general employees, massage therapists and participants in staged crashes. The National Crime Bureau
(NICB), the Hillsborough County Office of the State Attorney Department and the Florida State Department Financial Services cooperated in the probe. Officials said deputies noticed a pattern of questionable vehicle crashes beginning in September 2009. Undercover detectives then developed confidential informants and learned which medical clinics were being used in this fraudulent activity. Detectives were also able to identify the recruiters and coordinators who would solicit individuals to conduct staged crashes. Then the participants would be directed to a particular medical clinic to sign blank medical forms. At the clinics, crash participants would be coached on how to describe their injuries or pain to physicians. The NICB reported that last year Florida had more questionable PIP claims that any other state, with Tampa as the leading city. Statewide, PIP claims increased by 119 percent between 2008 and 2010. In Tampa, the number of claims jumped by 491 percent. This was the second major PIP bust in two years in the area.
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Our Customers, Our Friends
Ford Motor Company Expands Local Support to Atlanta Community Ford Motor Company Fund is contributing more than $1 million in the Atlanta area over two years to support non-profits and various educational initiatives with the addition of $600,000 of new contributions this year as part of its Operation Goodwill. Since 2000, Ford has contributed more than $23 million to Atlanta area charitable organizations benefiting the broader community at large. Ford has contributed more money in more communities over its 107-year history than any other automaker. Ford Motor Company and its community relations arm, Ford Motor Company Fund (Ford Fund), announced that with the addition of $600,000 of new contributions this year, the Ford Fund will exceed $1 million in donations during the two year period of 2011-2012 to support community initiatives. Through its Operation Goodwill Atlanta project, Ford Fund and local Ford and Lincoln dealers are expanding their engagement with non-profit partners in areas of community need.
Ford Fund already has contributed more than $23 million to Atlanta-area charitable organizations since 2000. Ford has contributed more money in more communities in its 107-year history than any other automaker. “My customers, employees, family and friends are very proud to say they are connected to Ford Motor Company in ways they never imagined. It is so nice to see a company give back to the community and actually get involved on a local level,” said Mike Vigil, dealer at Allan Vigil Ford Lincoln. A portion of this contribution will go to support the Atlanta Community Food Bank which provides more than 25 million pounds of food and grocery products annually to more than 700 partner nonprofit agencies throughout metro Atlanta and North Georgia. Ford Fund’s contribution will provide transportation and operation assistance to bring food to more families in need. “We are committed to helping meet the growing needs in this com-
munity during these challenging times,” said Jim Vella, president, Ford Motor Company Fund and Community Services. “Ford Motor Company has been investing in Atlanta for decades, and we are committed to continuing our role as an important corporate citizen in the community.” Other organizations receiving support include Zoo Atlanta, Georgia Tech, Imagine It! Children’s Museum of Atlanta, Juvenile Diabetes Research Foundation and more. Bill Bolling, Executive Director of the Atlanta Community Food Bank, notes: “Ford Motor Company Fund understands the needs of our community and has been here to support the Atlanta region for many years. The contributions made by the Ford Fund will greatly benefit citizens of our community, and we are very grateful for Ford to continue this support despite tough economic conditions. Ford is a company that truly cares about the communities where it does business.” In addition Ford Fund has brought the award-winning teen safe driving program “Ford Driving Skills
for Life” to Atlanta, which provides hands-on skills training for new teen drivers; and the “Ford Partnership for Advanced Studies” (Ford PAS), a high school curriculum that provides students with the academic and 21st–century workplace skills needed to be successful in college and high-wage, high-skills jobs in a global economy.
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www.autobodynews.com | JUNE 2011 AUTOBODY NEWS 15
Service, Service, Diagnostic Di Diagnostic gnostic and an d Mechanical M e chanical ch aniccal al NEWS nd Mec echanical Mech ech ec hanical ca
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ALL OEM Information
Dan Espersen is ALLDATA® CollisionSM Program Manager. Dan is a Gold Pin Member of the Collision Industry Conference (CIC) and holds an AA Degree in Automotive Technology. He has 35 years of experience split between the collision industry and in the mechanical automotive industry.
The Value of Service Repair Information with Dan Espersen
With the ever changing complexity of today’s vehicles that confront you and your team on a daily basis, access to manufacturer’s repair information is and will be one of the most important tools you will utilize on a daily basis. Whether you are an Estimator, Manager, Insurance Adjuster, Technician or part of the Production Team, proper repair procedures from the manufacturer will allow you to identify, negotiate and explain key repair plan thought processes. It will also assist and manage critical business Indicators such as cycle times, hours per day, sublet repairs, technician efficiencies, overall productivity and profits. Many considerations arise when preparing a repair plan for your customers whether they are your Insurance Partners, everyday customers, or Technicians. Issues such as minimal supplements, factory recommendations correct documentation, customer satisfaction and a cost effective repair are only a few issues that one needs to consider. Questions such as these will confront you or your staff daily. ● Should I section this or replace the entire panel? ● How do I handle this Hybrid? ● What SRS parts do I need to replace after the accident? ● Can we reset the Tire Pressure Monitoring System? ● Does my Technician know how to remove the trim panel on this vehicle? The national average for body and paint labor rates has risen only modestly year-over-year since 2006, according to figures from CCC Information Services.
● Can we repair this suspension here at our shop? ● How can I provide my customers
June 2011
detailed repair documentation if they require it? Documentation will be the most critical link you will have when determining a repair strategy. So when is the best time to access or source this valuable repair information? Pre-Production or During the Production phase of repair? The answer to both of these is ‘yes,’ based on your collision operation and processes. Accessing Manufacturer repair information during the Pre-Production phase or at the time of the repair plan is an effective way of properly identifying critical repair decisions. You noticed I said “repair plan” and not estimate? Often times a certain repair procedure may be available and if you don’t know it, the vehicle can halt in production due to supplements, authorizations, parts orders, or sublet repairs. Whenever a vehicle is stopped or delayed during the production process, cycle times will increase, efficiencies decline and
overall shop profitability is affected. If thought was given to proper repair techniques, locations and practices during the repair plan or prior to production, these critical performance indicators would ultimately benefit. For example: You are developing an estimate on a 2007 vehicle that has structural damage to the front. Do you know if the structural component can be repaired or should it be replaced? If you have to replace it, can it be sectioned and where? Without the correct repair procedure, you may develop your estimate based on prior experience, here say, Industry accepted practices or the ever popular guess. As the vehicle moves into production, parts have been ordered, the estimate has been sent or uploaded and approved and the technician is diligently disassembling it. Upon further examination after disassembly, your technician states that the damaged structural component cannot be repaired with the method on the estimate due to the fact that he or she thinks the component is made of advanced high strength steel. Production stops, a supplement is generated, approval for additional repairs are pending and parts are re-ordered. If the proper repair and identification procedures were accessed from the Manufacturer at the time of the repair plan, this scenario could have been avoided. Now ask yourself, “How much time are you now spending reacting to the estimate that was
prepared incorrectly utilizing the prior scenario” and would you ultimately generate less work for yourself if you performed repair research prior to production or when developing a repair plan? During the production phase, a technician ultimately benefits by being efficient or keeping his hands on the vehicle. Locations of components, testing procedures, disabling operations, material identification and overall proper repair procedures are only a small portion of what today’s collision technicians face day in and day out. By providing them with access to Manufacturer’s information, can they increase their overall productivity and efficiencies? Ask yourself this question the next time that your technician cannot locate a component or remove a certain part without instructions. If they had access to the procedures would they limit or eliminate these time consuming scenarios? In summary, vehicle complexity is changing at a rapid pace and in order to be current with all of the complexities, we need to utilize the latest repair strategies and procedures that are available to us. A proactive approach, a proper repair plan and an awareness and utilization of published procedures from the manufacturer are effective ways to manage our time and your team. This will ultimately provide a safe and accurate repair to our valued customers. Isn’t this what we are all in business for?
The average body labor rate rose from $41.42 in 2006 to $44.67 in 2010, up an average of 2.1 percent per year. The national average hourly rate for paint materials rose slightly faster,
from $22.26 in 2006 to $25.37 in 2010, an average increase of 3.5 percent per year. Overall, according to the U.S. Bureau of Labor Statistics, the Consumer Price Index for auto-
body work rose an average of 3.44 percent per year for that 5-year period. By comparison, the CPI for all products rose an average of 2.2 percent per year.
National Average for Body and Paint Labor Rates Up Only Modestly Since 2006
16 JUNE 2011 AUTOBODY NEWS | www.autobodynews.com
Gonzo’s Toolbox
This is a new story by Scott “Gonzo” Weaver as posted on his website, www.gonzostoolbox.com. See his book “Hey Look! I Found The Loose Nut”, which provides a Good Laugh for Mechanics of Any Age. The book is available at amazon.com. Contact Gonzo at Gonzosae@aol.com
Shift Happens: The Story of Three Transmissions and a Limp Kia SUV with Gonzo Weaver
Jo was a new customer referred by an old-time regular. Her little Kia SUV had a transmission problem that seemed to be getting the best of the transmission shop. The story goes that the Kia was constantly in limp mode, and would never shift properly—ever. As always seems to be the case when a simple problem can’t be solved simply, somebody started the diagnostics off in the wrong direction. Little did I know this was a simple problem. But, as I see it, each and every type of diagnostic work that you do requires a certain step by step procedure that you must follow. Missing a step, or completely overlooking a step, usually means you’re going to miss that simple problem all together. This was no exception. From what information I could gather the person who diagnosed it at the transmission shop wasn’t the
same person who installed it. So after the tech put the last bolt in the transmission, he set the car out front, and told the front office, “Got the transmission in that Kia.” The front office considered it done, and the call went out for Jo to pick it up. She didn’t make it around the block before she was back at the front counter in a “not-so” pleasant mood. You can just imagine the situation at the counter, not happy I’m sure. After some deliberation, and very little diagnostics the transmission shop came to the conclusion that it must be a bad transmission. Luckily, the ride that had brought Jo there was still in the parking lot, so she left the Kia for them to re-do the whole job. A week later, it was supposedly done. This time a different tech had installed the second transmission. Un-
fortunately, he made the same mistake as the first tech. When Jo came to pick up her car the shop owner took her for a ride to be sure that the repairs were made to her satisfaction. It was a short drive. This time, the owner said he was going to pay for the transmission, and would even purchase one from the dealership just to be sure it wasn’t their mistake in rebuilding it. But even the dealer transmission failed to shift properly. The tranny shop was at a loss, they decided to make a few calls for some help, and that’s when my phone rang. Now, I’m not one to diagnose anything over the phone. I just don’t think it’s a smart way of taking care of such problems, because you never quite know what you’re getting into. But the tranny shop owner sounded desperate, and now the repair costs were coming out of his pocket.
From his frantic explanations of no codes, no shift, and no idea of the problem, he kind of put me on the spot, so … I suggested a computer. Heck, why not… ya changed the tranny three times for Pete’s sake, obviously that ain’t it. I probably shouldn’t have done that, but I think he wanted to try and save as much money as possible without resorting to taking it to another shop. Well, a new TCM didn’t work either. Now, the car is finally coming my way. Jo was a little unsure whether or not there was anyone out there who could find the problem, but her friend told her that it couldn’t hurt to let me see what I could do for her. I’ll give it a try. When the car showed up at the shop I took it around the block once to verify the condition, and then put it up on the lift. While it was on the lift See Three Transmissions, Page 25
www.autobodynews.com | JUNE 2011 AUTOBODY NEWS 17
Hyundai to Expand Alabama Engine Plant, Create Over 200 New Jobs
Florida Shop Licensing Program Survives Deregulation Efforts by House Bill 5005
Language in Florida House Bill 5005, Hyundai Motor Co. will invest $173 Hyundai has recently spoken at least entitled “Deregulations of Professions million in expanding and modifying informally with at least three U.S. and Occupations,” that would repeal an engine plant in Alabama starting in states, including Alabama, about plans Florida’s law requiring the registration 2012, the state said on May 16. for a second plant in the southeast of of motor vehicle repair shops, the The expansion, which is ex- the United States. Motor Vehicle Repair Advisory Counpected to be completed in the fall of Officials in South Carolina and cil, and the regulation of motor vehi2012, will allow the plant to make the Mississippi expressed interest in lurcle repair has been omitted in a budget engine for the small Elantra sedan ing the automaker to place new proconference report. being produced at the automaker’s duction in those states, the sources The Automotive Service AssociMontgomery, AL, plant. added. ation (ASA) organized a grassroots efThis would boost production caHyundai Motor’s chief financial fort in Florida to support the current pacitythe for the Hyundai Santa Fe and Want officer, Won-hee, said affecting industry. toLee Contribute to that thistheSouthwest Edition? shop registration law. the Kia Sorrento models manufac- company may consider building anThe Florida Motor Vehicle Retured at the Kia Motors Corp. assem- other U.S. production plant if the marpair Act was created to assist conbly plant at West Point, Ga. ket continued to improve, but that no sumers with matters relating to motor “The enhancements to the engine formal plans are in place, according to ews.com publisher@autobodynews.com vehicle repair shops. The Motor Vehiplant will not only increase our engine Automotive News. cle Repair Advisory Council was escapacity by 300,000 units per year, it tablished to advise and assist the will also provide us the opportunity to Department of Agriculture and Conimplement new manufacturing techPromote your business with Promote yourinbusiness sumer Services carrying outwith and renologies,” Hyundai Motor Manufacviewing the rules relating to the turing Alabama LLC CEO Deuk Lim an exclusive article featuring an exclusive article featuring Florida Motor Vehicle Repair Act. The said during a news conference May 16 your products orofservices. your products or services. law applies to dealers new and used according to Automotive News. To advertise cars, trucks and motorcycles; garages; The investment will also create call Joe Momber at: service stations; self-employed per214 new jobs at the plant, the state 800-699-8251 sons; truck stops; and paint, body, said according to Automotive News. brake, muffler, transmission, mobile In addition to this announcement, e-mail: repair Call and glass a second Hyundai U.S. assembly plant CALL: Joe Momber for details! forshops. details! jmomber@autobodynews.com If the bill had been passed as was is rumored to follow at some point. originally drafted, motor vehicle reSources told Reuters that www.autobodynews.com 800-699-8251 800-699-8251
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pair facilities would be deregulated. Before 1993, there were approximately 5,500 consumer complaints per year related to automotive repair. Resolutions for these complaints went through the state court system, a twoto three-year expensive process. During fiscal year 2009-2010, there were only 1,743 complaints for the year, a 70 percent decrease since the start of the program. With the Florida population increasing 35 percent during that time, the effective decrease in complaints was actually closer to 80 percent. The Florida Motor Vehicle Repair Act is self-funded by the automotive service industry, and helps to offset much of the cost for the call center for all of the motor vehicle related programs. The annual cost of the program for 90 percent of the shops is $50 per year. There are more than 22,000 auto repair shops in Florida. The program as part of the Florida Motor Vehicle Repair Act is effective, and successfully arbitrates nearly 70 percent of all complaints within 60 days. ASA supports the Florida legislature’s decision to delete these provisions from House Bill 5005.
Porsche North America HQ to Leave Sandy Springs, GA, for Nearby Ex-Ford Plant in Atlanta
Porsche is expected to move its North American headquarters, and hundreds of jobs the plant provides the northern Georgia suburb it currently calls home, from Sandy Springs to the old Ford plant site near the Hartsfield-Atlanta International Airport in Atlanta. Porsche is expected to build offices where the plant was demolished and a test track similar to its Porsche Silverstone facility in England. Fulton County Commissioner William “Bill” Edwards said Hapeville’s mayor and city council have been working hard to fill the plant site and it makes good economic sense for Porsche, with the site’s proximity to the airport and interstate. “This is just the first step,” Edwards said to the Atlanta JournalConstitution. “South Fulton has always been misrepresented as a bunch of poor black folks and poor white folks. Other people are finding out that it’s a diamond in the rough.” The move does have its downsides; Porsche will be leaving the Central Perimeter business district that has several MARTA rail stops and is close to neighborhoods favored for housing and schools by employees. The former
Ford plant site, which was closed in 2006, currently is not served by a direct MARTA rail stop, though the city has mentioned arranging a stop from either a future commuter rail line or the airport’s people mover system. Porsche’s move is likely to take several years, as the office building and track would be built from scratch. The company’s current lease in Sandy Springs is set to expire in 2013. Porsche has been a major tenant of Lakeside Commons, a 14-story tower in Sandy Springs built in 1998, where the automaker is currently headquartered. Porsche occupies about 2-1/2 floors of that building and would empty about 10 percent of the building if it moves. Currently, the building is 85 percent occupied. The track would emulate Porche’s three-year-old Silverstone facility in England, which offers coaching for drivers on a track imitating realistic driving conditions. A Porschethemed restaurant and special events space accompanies the track. Jacoby Development bought the ex-Ford plot in 2008 and has finished removing contaminated buildings and soil from years of industrial use.
Hail Storm Brings Influx of Repairs for TX Shops Although hail that came through central Texas in late April was much appreciated by firefighters fighting fires throughout the state, local auto body repair shops were unexpectedly inundated with work following the storm. Lines started forming early April 25 at auto repair shops, as thousands of cars in Abilene got hammered with hail on April 23 and 24. Reports ranged from pea to softball sized hail in the part of the state west of Dallas. Abilene fireman J. Sanders reported the damage done to his station’s SUV to Abilene’s KTXS News, including a cracked window, cracked paint, several large dents and it even hit the GPS antenna. “I parked it under a mesquite tree,” Sander told KTXS News, “but the tree is half gone.” Wade Keeling told KTXS News he had already been waiting 4 hours to get broken windows fixed on his truck with no guarantee he would be seen, “It’s very frustrating.” Abilene Auto Glass, one of many repair shops in town, estimated they would see more than 400 cars the week following the storm.
GA Auto Repair Tax Bill Still Alive in House
Georgia House Bill 388 is still alive in the Georgia Legislature. HB 388 aims to create a sales tax on services of many small businesses. The bill, if passed, could be devastating to the automotive service industry according to ASA— placing additional tax burdens on automotive maintenance, repair, auto body repair, equipment installation services, brake repair, oil changes, motor tuneups, and engine repair and replacement, to name a few. Despite the fact that no action was taken on Georgia HB 388 before the Georgia Legislature adjourned, the legislation could be considered during the special session later this summer. ASA has opposed the proposed automotive repair tax, and is calling on Georgia independent automotive repairers and consumers to contact their respective representatives in opposition to the legislation. To view full text of the bill and to see how to send a letter to members of the Georgia state legislature, visit ASA’s legislative website at www.TakingTheHill.com.
www.autobodynews.com | JUNE 2011 AUTOBODY NEWS 19
John Yoswick is a freelance writer based in Portland, Oregon, who has a body shop in the family and has been writing about the automotive industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). Contact him by email at jyoswick@SpiritOne.com.
Industry Insight with John Yoswick
Industry Trends and Changes in Future Vehicles at WIN Conference
“So we’re potentially in for a Current industry trends—and a look ahead at the electric, fuel-efficient and pretty significant impact as we get to early summer in the reduction of acciChinese vehicles that could be showing up in collision shops in the coming with Ed Attanasiodents and repairable cars,” Horn said. years—were the focus of one speaker’s He said insurer data indicated an uptick in claims in the third- and fourthpresentation at the recent Women’s Inquarters of last year, boosted in part by dustry Network (WIN) conference. some extensive hail and storm damage Greg Horn, vice president of inin several regions of the country. dustry relations for Mitchell InternaShops also have benefited from a tional, told about 160 attendees at the WIN event in San Diego, that one sizable rise in the value of used vehipositive trend for collision repairers cles, which allows for higher repair costs before a vehad been the rebound through early hicle reaches the this year in the total miles driven by total loss threshU.S. motorists. old. Horn said the “But we’re starting to see the efaverage vehicle fect of gas prices impact the miles we appraised in the drive,” Horn cautioned. first quarter of He said that MasterCard Spend2011, for example, ingPulse, which tracks gas purchases Greg Horn, had an actual cash at hundreds of U.S. locations, reported Mitchell VP, value of $12,772, in early May that the 4-week average Industrial Relations up from the same of retail gas demand had dropped for quarter a year earlier even though the the sixth consecutive time.
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average age of the vehicles appraised in 2011 was almost a year older than that in 2010. “So a car is older but worth more in value,” Horn said. “That’s a good thing for us in the collision repair business because that means we have more opportunity to repair the cars. We’ll put more in the repair column than we will the total loss column.” The percentage of vehicles declared a total loss dipped slightly in 2010, and Horn and others expect that trend to continue this year. Higher gas prices and the vehicle production disruption caused by the earthquake and tsunami in Japan continue to buoy demand and prices for used vehicles, he pointed out. “That 3-year-old Honda Accord is 20 percent more valuable than it was last September, and the 3-year-old (Nissan) Sentra is up 12 percent,” Horn cited as examples.
Horn also discussed the impact that increases to federal fuel economy standards are having on automakers. In late 2009, the Corporate Average Fuel Economy (CAFE) requirements were changed to require each au-
ScionIQ, a new microcar was to have sold in the US in late summer, has nine airbags
tomaker by 2016 (rather than by 2020, as earlier established) to sell a fleet that averages 35.5 miles per gallon. “That is an ambitious goal,” Horn said. “A lot of auto manufacturers for See WIN Conference, Page 27
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Inside Insurance with The Insurance Insider
The Insider is a corporate-level executive with a Top 10 auto insurer in the U.S.. Got a comment or question you’d like to see him address in a future column? Email him at Auto.Insurance.Insider@gmail.com
Allstate, Founder of DRPs, Deserves Some Credit for Improving Repair Industry “The Insider” is an auto insurance should do some research before you company executive who wishes to re- say it. A wise man once said, “Better main anonymous in order to speak to keep your mouth shut and let everyfreely. This column offers an unvarwith Chasidy Rae one Siskassume you’re stupid, rather than nished look at various issues impact- open your mouth and remove all doubt.” ing the collision industry from the Insurers aren’t raking in doubleinsurance perspective—Ed. digit profits on the backs of the body Who benefits the most from direct repair programs? Insurers will tell shops. Insurance companies capitalize a marketplace that has shops willyou the consumer. Repairers will say with Chasidy Rae on Sisk the insurance company. The consumer ing to provide discounts for volume. has no idea and doesn’t care. They just You wouldn’t do anything different if want their car fixed correctly and in a similar position. Do insurance companies profit quickly. from insureds using the direct repair In my humble opinion, the shop receives the biggest benefit. The in- program? Of course they do. Insurers benefit from the reduction in severity surance company does benefit but not and rental car expense, for example. If more than the shops on the program. Yes, many insurance companies insurance companies weren’t making report millions in profit every quarter, money, DRPs wouldn’t exist. Do the shops make money from but do you really think they make participating in a given DRP? You bet. their money by not paying for things such as block, prime, and fill or for If shops weren’t making money participating in direct repair programs, OEM parts? If you believe that, you
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For every shop owner I see struggling to keep their doors open, I can provide a secondary list of those that are very well-heeled. Don’t misinterpret what I’m saying: I don’t begrudge anyone financial success and independence. But I don’t have the patience or desire to listen to a shop owner complain about losing money as he or she drives to the airport in a new Mercedes for their vacation in the Bahamas.
Even though insurance companies make a lot of mistakes, DRPs aren’t one of them. DRPs took an archaic body shop trade and transformed it into the collision repair industry. For decades, the body shop trade didn’t change. In fact, it has been suggested that the early caveman provided the same level of service that customers received from shops pre-DRP. I was unable to validate that, but it’s difficult to argue a lack of differences between the caveman and the 1970s shop owner. For those who are long in the tooth, it seemed like yesterday that the body shop trade with rife with uneducated technicians running their own businesses. There was a “mom and pop” body shop on every corner. The training you received as a body man was from the old guy coughing up a lung as he sanded a 10-foot-long quarterpanel that was supposed to be reSee Inside Insurance, Page 27
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Erica Schroeder is a writer and editorial assistant for Autobody News in Oceanside, CA. She can be reached at eschroeder@autobodynews.com.
The Body Shop Garage Opens in Woodward, Oklahoma with Erica Schroeder
Kevin Ham looks at his shop—The for another shop in the area and built Body Shop Garage—in rural Wood- custom hot rods out of the shop-inward, OK, and sees a lifelong dream progress. coming true. While it took almost four with John Yoswick Woodward is a small town of years for the 45-year-old body man to about 10,000 with only 3 competing get his own shop running, it’s some- repair shops in the area, so buzz that thing that he’s wanted to accomplish Ham was trying to own his own shop since he was 16. “I’ve just always known I wanted to have my own shop,” said Ham. Ham has worked body withfor Edother Attanasio shops in the area for the duration of his career and really began making steps towards having his own business in 2007. He bought a building on the end of Main Street from his cousin’s wife’s grandfather and began the The front of The Body Shop Garage building in lengthy process of getting the shop 1946 ready for his business. Ham rewired soon started to circulate the town. the entire place, installed better lightOne year ago, Ham bought the ing, sandblasted brick pillars and rebuilding connected to the one he was painted. During the 3 years it took Ham to restoring to make his shop space bigrefinish the shop he continued to work ger. Then after almost four years of re-
Industry Insight
finishing the place, the small business loan he applied for went through and he was able to finally get his place running. “Since it’s been going I’ve hardly stopped,” said Ham, “It doesn’t even seem real.”
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The front of The Body Shop Garage today
The business now sits at about 6,100 square-feet, although Ham is also eyeing another adjacent building and may expand there in the near future. Ham, one other full-time repair man and one part-time repair man,
have seen 6–8 cars each week since the shop opened in the first week of March. Ham’s son Kurt also helps with the shop work. Ham projects that the business will be able to gross about $500,000 per year, based on two years of estimates and invoices of his own work he saved while working at another shop. Ham wanted to estimate how much work he could produce by himself while finding out if owning his own shop would be financially feasible. “I’m really an ‘Owner/Operator’ —the business depends on my production too,” said Ham. The business has really taken off since it opened, and Ham has decided that he won’t be taking any DRP contracts in his shop. “I’ve really resisted that [DRPs]; there’s supposed to be no steering but as far as I’m concerned that’s what it is,” said Ham.
Ham feels as though DRP programs put the insurance adjuster’s job on the body shop, and that the quality of his work is all he needs to rely on to bring plenty of work into his shop. Ham also feels that the ‘benefits’ of a DRP for a shop—the supposed increase in business from insurance companies driving customers to their DRP shops—isn’t all it’s cracked up to be.
The inside of the shop floor area; the CocaCola sign on the left wall was in the building originally and Ham has decided to restore it to preserve some of the buildings history
“How do they know I wouldn’t get 80% of the business they’re supposedly driving to my shop on my own?” asks Ham. Ham says he is confident in his abilities and his work as well as his ability to get work into his shop.
“I’ve already got so much going on, I can’t do the adjusters’ job for them too,” said Ham. Ham grew up in Woodward and met a lot of industry people while working for nearby shops over the years, making finding new customers and vendors for his own shop much easier. Ham relied on English Color and Supply (see Autobody News May 2011) to supply him with all his paint needs, but they went above and beyond what was expected. “They’re people that will really stand behind you,” said Ham. Ham buys his paint—BASF brand—as well as a spray booth and a used frame machine from English Color. They also supplied him with some items he needed on consignment; a new paint bank, cabinet, scale, a computer and paint shaker. Ham thought they were going to provide these materials used but they came through with all new supplies for the shop. The biggest obstacles Ham ran into while getting his business started mostly had to do with securing a small business loan. He applied for the loan in May and was not approved until November.
“I really wanted to get this thing body shop end of the business he’s started in the summer because I knew still been getting calls and requests for the winter would slow things down,” his hot rod services—the chief reason said Ham. But with the bank loan taking so long Ham had no choice but to start getting the business running in the winter. Starting in the winter slowed a lot of the supply deliveries Ham needed and made some of the final building renovations difficult. Capital improvements like pouring new concrete and laying a new roof were put on hold because they are temperature- (l-r) Body man Steven Ferguson, Body man Hunter Wellman, Kurt Ham and owner Kevin Ham all wore Marines T-shirts to sensitive tasks. pay tribute to our armed forces Ham also found a lot for his desire to purchase a third conof the local and state coding enforcement to be a hurdle for opening the nected building and further expand his business, but ever since it’s been open business. “I can’t turn off the hot rod busiHam has had a steady stream of work. “There’s just been this buzz,” ness,” said Ham, “It’s part of me.” said Ham, “I never thought I could do The Body Shop Garage it—and now I’m getting to do it.” Ham’s hot rod business has not 518 Main St stopped either. Although he’s been try- Woodward, OK 73801 ing to focus more on the commercial, (580) 334-4071
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Walter Danalevich, AAM, has been the owner of Santa Barbara Auto Refinishing since 1979. Contact him at: sbarbody@earthlink.net.
Total Loss Fees Are Profits to be Gained, Not Given Back with Walter Danalevich
As an auto body shop owner for over driver must have experienced one 30 years, I understand total loss vehi- heck of a distraction to cause so much cles are a part our industry’s day to damage to the right front of his vehiday business. With addition of cle.Insider withtheThe Insurance more and more electronic gadgets, Upon closer inspection we disgizmos, and the installation of addi- covered the right front frame was tional air bags it is not unusual to have kinked enough to require replacement an insurance company choose to total of the frame rail. The engine would a vehicle, and retain the auction salneed to be removed to install the vage, rather than roll the dice on the frame rail which resulted in additional with Chasidy Rae labor Siskplacing the car in the total loss possibility of a multi-thousand dollar supplement and being held responsi- category. ble for other liability issues. This is While the appraiser was leaving usually the standard insurance game our repair facility he commented his plan unless you come across a naive insurance company is very attracted to insurance appraiser who does not low mileage fuel-efficient compact value his job. with Chasidy Rae vehicles Sisk such as this one. Later that Recently our body shop in Santa day, I went out to the Scion and noBarbara, California, was involved in ticed there was a tag on the windshield an insurance claim involving a cus- stating the vehicle now belonged to tomer’s 2005 limited edition Scion the insurance company. I asked myself XB which accidentally ran into a how this could be when the vehicle shopping center wall while exiting a owner has not been notified or given shopping mall parking structure. The information on his options of retain-
Inside Insurance Northeast News Shop Showcase
ing the vehicle or accepting full retail value from his insurance company. Even more intriguing, the next day I received a phone call from the Insurance Salvage Auction company requesting to pick up the Scion. I was surprised at what felt like a decision to essentially steal the low mileage Scion instead of getting notification from the owner on what he has decided. Soon after receiving the 24-hour is-the-vehicle-released call from the salvage auction company, I contacted our customer and reported the aggressive efforts by his insurance company who seemed to have overlooked providing us with a completed itemized repair estimate. Neither did they make a reasonable offer of retail value settlement to their insured. The customer responded he would prefer having his car repaired. I advised him to request a copy of their repair estimate. I also
recommended he do his homework in obtaining some comps on the value of his low-mileage vehicle. I advised him not to be “intimidated” or feel rushed by the insurance company who had already sent him an e-mail declaring they will “limit their storage fees to only two days.” A couple days later, the customer received the insurance repair estimate and forwarded the attachment to our shop where we confirmed the vehicle as a total loss. Vehicle valuation #1 was also sent to the insured who asked if I would assist in the settlement process. Upon reviewing the valuation report I noted there were several listed comps, which were not from our area, resulting in a lowering the settlement value offered to the insured. Another major item, to the insurance company’s advantage, was there was no mileage posted on any of the
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vehicles reported. This alone can significantly reduce the value of the insurance company’s settlement offer. I reviewed the posted locations and values with five of the proposed comparable listings and discovered four vehicles had significantly higher mileage and sold for almost $1,000 more than what was reported in their #1 valuation report. This got the attention of our customer and he proceeded with his own follow-up on the posted listings. I recommended he speak to the insurance company, report his findings, and dewww.autobodynews.com clare several of their valuations not CHECK IT OUT! valid. A second valuation was soon received allowing for a $1,500 buy back from his final settlement cost to retain the vehicle. The customer e-mailed the insurance company creating a paper trail of their inaccurate comps and requested To advertise valuation #3. About four days call Advertising Sales at: later the customer forwarded me 800-699-8251 a copy of a new valuation which provided an increase ofe-mail: over $500 from the first valadvertising@autobodynews.com uation which the insurance company www.autobodynews.com insinuated he accepts. Here’s something to think about, calculate how much would result if each insurance
Continued from Page 17 company total loss claim was shorted by $500—Gee, what a nice investment fund that would create. The customer was still undecided I decided to drop it into gear and about accepting the full insurance setcheck it against the scanner. tlement offer or go with a ‘buy back.” To my surprise, it shifted perAfter a few days he came to a decision fectly. I’m not kidding—absolutely to let his baby go to the “Auto Aucperfect. I dropped it back on the tion Heaven” and accept the increased ground, and went for a ride again. I settlement offer. didn’t even make it around the first This month’s article savings mescorner before it got stuck in limp sage is about assisting your customer Give us your opinion on mattersmode affecting the industry. just as it was before, this dang in their time of crises and not being inthing can’t pull itself out of a pot hole. timidated by the insurance “SCREW Back up on the lift, and wouldn’t U CUSTOMER CARE HOTLINE.” ya know it, shifts perfectly—AGAIN! You have now publisher@autobodynews.com gained a customer for What’s the deal here? I did it several life while adding to your bottom line times, just so I could be sure of the refor teardown, labor, and storage fees. sults I was getting. After a few trips I checked the wiring to the transmission while it was on the ground. Uh-oh, the main ground to the TCM wasn’t To there. How in the world advertise The source for timely was it there it was in the call when Joe Momber at: air? information that every Ah-ha! It’s moving the wire! 800-699-8251Yes, it body shop needs! was moving the wire all right, and a e-mail: fewjmomber@autobodynews.com more than just the TCM ground CALL 800-699-8251 lead. www.autobodynews.com The locator page showed the Start Your FREE TCM ground wire was bundled with Mail Subscription. several other ground leads that were
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all attached to the main chassis ground, which wasn’t attached to a thing, but was dangling by the battery box. Turns out the whole problem started when she had her battery changed at a department store repair shop, and they didn’t have the right size to fit the car. They disconnected the chassis ground wire, so the taller battery would fit. When I told Jo what I found, the Want to Contribute to this two of us pieced together the how and why it happened. Her only comment was, “Well, shift happens.” All said andpublisher@autobod done with, the transmission shop paid for the entire repair, and gave her back what she spent with them. Everyone involved was glad to have thePromote problem solved, and the carwith your business back onan theexclusive road as good as new.featurin article I like this gal, she’s become a your products or services. regular at the shop these days. What a card! Always has some sarcastic comment for me, but at the same time a very understanding nature and takes life in stride. I’dJoe loveMomber to have a for couple CALL: details of dozen customers just like her. As she always tells me… “If you 800-699-8251 can’t live on the bright side of life… start polishing the dull one.”
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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
The Good Old Days with Lee Amaradio Jr.
Action Counts
The danger in focusing on the past is until I heard some rumors that we that we sometimes forget to deal with were in financial trouble. People had with Lee Amaradio Jr. to draw their own conclusions the present in a productive manner. By begun this I mean that we want everything to because we had tightened up so much. be as is was and keep thinking that Yes, we needed to adjust and things soon will return to the way they tighten things up, but we were far were pre-recession. from any financial trouble. Other than I’m not trying to say things won’t complaining about my credit lines getreturn to our past prosperity we ting cut nothing I said ever implied with SheilabutLoftus cannot let it control our actions today. that we were in any financial trouble. I took a look at my shop recently and But simply because we had begun to realized that I was putting off neces- watch everything and make everyone sary maintenance on almost every- accountable people drew their own thing. My mindset was ‘as soon as we conclusions. get the extra money I will get that The danger is that perception can with Loftus done’ or ‘I will buy thatSheila extra piece of become reality, to many people, so to equipment.’ Without realizing it, I had say, “don’t worry, we are fine” didn’t put everything on hold. seem to boost my staff’s confidence. I I was also unconsciously sending had an employee meeting to try to kill a message to my staff that things were any rumors. That seemed to help but much worse that they actually were. there was still a sense of uneasiness This in turn created a trickle down ef- amongst my staff. This was amazing with Janet Chaney fect that affected the morale of the enbecause what concerned them the tire shop. I didn’t realize any of this most was something that I hadn’t even
Your Turn Your Turn
Shop Showcase Shop Showcase
thought about, which was their future employment. As a leader, I was so focused on tightening up that every time anyone ask to spend money on anything I just complained and said ‘no.’ So the result of my attitude created insecurity among those I employed. The attitude I had taken to belt tightening gave them the feeling that they may be my next cut, which was not the case at all. This doesn’t mean that I wouldn’t terminate a deadbeat employee but unconsiously I was making everyone nervous and this was not my intention. I was adding additional stress to my crew and I was neither a good leader nor helping them produce, as they should. I’ve realized now that even though times are different they are really better than any of us want to admit. What I mean is that things could be much, much, worse. Everything comes down to how we look at things. The
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Industry Insight
message we send our employees with our attitude as owners can really change how they see things. I started doing some much-needed maintenance and purchased some more key pieces of equipment. I haven’t thrown caution to the wind because we need everything we have done or purchased but I let employees know it was happening. The payoff is already evident because I am watching my staff’s attitude become more focused and more relaxed. I am seeing that no matter how often told them ‘everything is fine’ they needed to see action to feel comfortable about their future with me. I was sending the wrong message by not moving ahead because I was looking back all too often. Now, all of my plans are for the future and where we are heading. Because the “good old days” will only be the “good old days” as long as we allow them to be. Look to the “Good New Days” Ahead…
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Industry Interview 26 JUNE 2011 AUTOBODY NEWS | www.autobodynews.com
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Inside Insurance
placed, according to the handwritten, illegible estimate. Insert DRP here. That’s when the industry was transformed. In other words, every shop owner in this country should personally thank Allstate for starting what is largely viewed as the industry’s first nationwide DRP. DRPs have done more to change and improve this industry than any other single factor. You may dispute it, but shops without DRPs are like Sonny without Cher or the Patriots without Tom Brady. Okay, I’m being a little overdramatic. But the fact remains that if you had a toolbox and a cave, before DRPs you too could be a shop owner. DRPs caused the body shop trade to grow into a legitimate business and industry. You had to change the way you did business or you couldn’t compete. Insurance companies were looking for professional, well-maintained shops. Most shops, for example, purchased an electronic estimating system because it was required it as part of a DRP. Why purchase the equip-
ment and software to upload electronic images of the damaged vehicle? If you guessed that an insurance company required it, you are right. Hopefully, you are starting to see a pattern. The collision repair industry doesn’t change very quickly, especially when there is an associated cost. Unless an insurance requires something as part of a DRP, most body shops won’t do it. Before anyone drops to their knees to praise Allstate, I should state that the advent of DRPs also spawned a monster called the unethical adjuster. That probably warrants an article itself. I guess you need to take the good with the bad, and to me, the good that DRPs brought significantly outweighs the negative impact caused by the unethical or immoral behavior of some. The point of this article was to make you think about one thing: Who has benefited the most from the direct repair programs that some shops swear were the demise of this great industry? The answer is obvious: Body shops. Collision repairers would still be using a hammer and chisel is it wasn’t for insurers demanding a quality, costeffective repair.
Continued from Page 20
WIN Conference
whom it takes four years to get from the drawing board to the showroom floor, are in a state of panic.” Global automakers, Horn said, are looking at the most fuel-efficient cars they sell elsewhere in order to bring those vehicles into the U.S. market. Though its late summer debut has been delayed indefinitely by the situation in Japan, the Scion IQ is one example of new micro-cars coming to U.S. streets. The tiny vehicle, powered by a 90-horsepower, 1.3-liter 4cylinder engine, will be sold as a 4-passenger vehicle even though the headrests for those in the backseats butt up against the back glass. Horn said to help the vehicle meet federal safety standards, it has nine airbags. “The good news is you’re going to survive the crash. You’ll suffocate afterwards, but you’ll survive the crash,” Horn joked. Similarly, Chevrolet is introducing the Sonic, a less-well-equipped version of the Aveo, Horn said, and Nissan is introducing the $9,000 Micra (on which the radio and air condition-
ing are options). Chrysler will bring in the Fiat 500, which is four inches shorter than a Mini Cooper, and Mini is showing a concept vehicle that is a foot shorter than its existing vehicles. The problem with many such vehicles for collision repairers, Horn said, is their low values will tend to put them into the total loss category even with only minor damage.
Ford Fiesta’s replacement headlights cost $480 each
The Ford Fiesta is coming back into the U.S. market at about $14,000, Horn cited as one example. One of the vehicle’s distinctive features are its long Xenon headlights, which stretch much of the length of the fender and, as Horn said, “are about half an inch from the edge of the front bumper cover.” Replacements sell for $480 each. See WIN Conference, Page 29
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Custom Corner
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
Repairing Quarter Panel, Bumper, and Molding: No Time, No Money with Rich Evans
Challenges—they seem like they’re always coming up. Since I did the Car Warriors TV show, where we were always fighting the clock with only 72 hours to build a complete car, it seems like everybody wants to hit me with a time challenge. My buddy, Diggity Dave, you might know him from the
the quarter panel still had a spot weld holding it to the inner structure. This way when I come in with the slide hammer the quarter panel is still going to move, because otherwise I’ll have to put this up on the frame rack and pull it. I needed to avoid all that because of the time constraints.
then you’ve got to watch the rest of the metal. If you see it start to suck in, get your nail gun and pull out your low areas. Every time you weld it, check it. This will save you a lot of time and a lot of Bondo™. A lot of guys want to slap Bondo™ over it but try to outsmart the metal. That gives you more seat
because I don’t have a lot of time to metal finish it completely with a file. So I shape it with a skim coat. I usually never skim coat anything any more than twice—once just to get the 36 grit scratches out and any pinholes. Using the 3M Dynamic Mixing System is key for me. Ever
This actually worked out pretty Pimp My Ride TV show, called me up to throw out a challenge. well. I got my window in there, cut Dave backed his 2002 with DickEscalade Strom out the damaged piece of metal. Now into a brick wall and ripped about a I can flatten out the piece that I cut out three inch tear down the right quarter to use as a pattern. I get another piece panel. He also hit the rear bumper and of metal, I use the break and bend it. I tore the right molding. Here’s the real clamp the piece I cut out of the metal problem: Dave’s got to have his SUV on there, scribe it, come back, cut it back the following day, which is exactly out. I actually keep them both together 24 hours, because he’s got a big meetand use the nibbler to follow around it ing for a new movie he’s doing and he as close as I can get it and then follow can’t show up with his ride damaged. up with the grinder. That means it’s Now he’s asking to get this fixed exactly the shape and size I need. in 24 hours (seemingly impossible, If you’re putting your template on right?) so I’m thinking how to create a the outside, you’re going to be a little with Lee Amaradio Jr. process that can make this happen in bit smaller on the inside because where 24 hours. I’ve got to replace the quarthat break is. It’s actually going to ter panel, the rear bumper and the cause you to be a 20 gauge short so molding. To top it off, he says, ‘I’ve make sure you keep the length at the got zero budget’ so this is a ‘bro deal.’ end if you’re coming from the inside. I’ve got to do what I’ve got to do and If you want to use the pattern on the inuse what I have on the table. side then you’ll be an 1/8th inch longer Here are the steps and the because you want this piece to fit. processes that I used to beat the clock. So you can either TIG weld it or You can judge if I was successful. The MIG weld it. You’ve got to take your first thing I decide is ‘no parts,’ we’ve time either way. I’m going to TIG weld got to fix everything. I see that I need to it. I’ll actually put it in with the MIG with Sheila Loftus cut a window—try to keep everything welder just to get it set where I need it as small as possible—especially to cut and then come back with the TIG and replace a piece with another piece welder but before that I need to shape of metal. The metal was actually 20 the metal with the English Wheel and gauge, so I checked the gauge of metal flatten it all out. To get it the right shape to make sure I was replacing it exactly. you’re going to need to fit it a couple I cut a piece out of the quarter times, go back and forth, fit it until panel, then cut the ripped area out of you’ve got your contour right. that so I can flatten the panel. I was As soon as it’s fitting as close as able to get inside it and get the struc- you can get it, you’re ready to tack it in. ture part of it straight using a slide Take your time as you weld it. Weld hammer. When I cut my panel I made very small areas, keep heat control besure that the top and the lower part of cause you don’t want it to warp and
time under your belt to where you can utilize this process on another project. So after getting it welded in, I have a little metal finishing to do. I’ll do a skim coat of mud over it just to true it in, get some of those low spots
since I started using it I don’t have any pinholes. I don’t have to mix Bondo™, I don’t have to worry about the mixture, don’t have to worry about air making the pinholes. If you don’t know about the 3M Dynamic Mixing
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28 JUNE 2011 AUTOBODY NEWS | www.autobodynews.com
System, check it out. It’s a big time saver and gives you better quality results, less waste, more productivity. It’s everything you need in one gun. Once I get the body work done, I’m come back in with some PCL Primer. I’m going to load the primer up and hit it with some 80 grit, 3M longboard. Then I’m going to come back and get rid of the 80 grit scratches with 150. Then I guide coat it again, come back with 400 wet. Now I’m ready for paint. I’m going to apply the sealer, the base coat and the clear coat. Whatever
a stronger bond then a weld. This stuff is amazing. Technology is changing and you’ve got to change with it. The gun makes it a lot easier to apply it. I’m usually feeling pretty spoiled by 3M, they’re definitely the go-to for me when it comes to new products, anything and everything. 3M just about carries it all. Getting back to the body work, I lay the panel bonding adhesive on the damage area—the bumper—instead of using Bondo™. This is going to adhere and it’s not going to shrink. I sand it with 80 grit on the plastic. I shape it just like the Bondo™. You
Now we’re down to about three hours before Diggity comes to pick this vehicle up and that gives me just enough time to put the bumper and the bumper sensors on, apply the molding, and get the tail light back in. That’s another project, another clock, another challenge under my belt. Diggity comes and is just blown away that I ‘pulled another rabbit out of the hat’ as he put it. I tell people ‘never think negative, always go with the positive.’ Think “hey, I can do that,” put yourself to the challenge. Make sure you keep your quality because that’s
money to fix it or if you owe a favor to somebody, this is a good way to utilize the money because this job would run about $4,000 maybe $4,500 by the time you got done buying the rear bumper, quarter panel, tail light, molding, and all the materials involved in it. So Diggity Dave came up $4,500 to the good. He owes me a favor now so I’ll hit him up when I’m ready for my favor and maybe I’ll have to put him through the same test he put me through. A challenge on the table, race against the clock, at the end of the day, his car’s done in 24 hours and I’m on to the next one—that’s
system you guys are using in your shop, go with that. I still have the bumper and the side molding to fix. I don’t know how many guys are using the 08115—the panel bonding adhesive—but I love this stuff. Every day I find a new use for it. This stuff sands really well, it dries and hardens really true, and it’s flexible—so I’m using it as a plastic repair product. It usually takes 24 hours to cure but if you hit it with a heat lamp you can get it to cure within an hour or two. I know a lot of guys use it for putting quarter panels on, which is a better process, less welding, less work. It’s a better repair at the end of the day because when you’re priming each side of the panel and the inner structure of the quarter panel then it’s taking the place of corrosion protection, less welding, less sparks, less interior that has to come apart. It’s actually
want to heat these panels first, shape it, get its best shape, take all the low areas out, file it down with some 80. Come back for the cracks and any low areas, and fill it with the panel bonding adhesive. I sand it with 80, feather everything with 150, then 320 around that. Then back with the PCL flexible primer. It’s more a flexible, durable product for anything moving. You want to make sure you use the right products, especially on a project like this where I don’t have any extra room to breathe. I can’t take any chances of something messing up on me. Next is getting into the paint booth, getting my color on, come back in with my Transtar clear with the HT hardener, zap that on there. I didn’t use a two-hour clear which is a bit more yellowish. I apply my three coats as I always do.
everything. Make sure you do your fits, stay at your level, ask questions. I’m glad I was able to help a good buddy out, Diggity Dave from Pimp My Ride. Hopefully, this will help some of you guys in similar situations when you get into a time constraint or even
what I live for. Live, breathe and eat building cars, fixing them—never too good to work on anything. My daily focus is waking up and having something else to work on and always trying to get the cooler projects. If you don’t use it you lose it, that’s the key to my game. I’m never too good to do something and I expect you guys to be the same way, always try to better yourself at what you do, everyday try to learn something new. I want to thank 3M for their products, especially what I call the ‘Bondo gun’: the 3M Dynamic Mixing System, and the panel bonding adhesive. Tune into Car Warriors every Wednesday night on Speed channel, go to my Facebook fan page, Rich Evans Designs, and stay up with me on my daily challenges and projects. We’ll talk to you next month!
Continued from Page 27
WIN Conference
“In a couple years when those cars are valued at about $10,000, rearending someone and having the bags blow and the windshield and both of those headlights go? You’re not going to be fixing a lot of those Ford Fiestas,” Horn told the audience at the WIN conference. Automakers also will continue to try to shed weight from vehicles in an effort to meet tougher fuel economy standards, Horn said. That’s why shops are already seeing increased use of exotic alloys, titanium and alu-
minum. BMW cut 50 pounds from its 5-series by making the engine cradle out of plastic, Horn said. “This is going to change how we put cars back together,” Horn cautioned. “The B-pillar for the Volkswagen Passat comes from the factory laser-welded in. Most techs would open the doors, look at the number of welds, drill out the welds and try to weld it back in. Volkswagen does not allow for that. In the collision repair environment, their requirement is that you use adhesive bonding to put the two pieces, the inner and outer B-pillar, back together. Because it’s a boron-alloy steel, if you weld it back in and you apply too much
Rich shows Diggity Dave the cutouts he did to repair the quarter panel
if you want to save a few bucks if you’re doing this for a friend or family or somebody that doesn’t have the
heat to it in the MIG welding process, you can actually weaken the structure of that metal, throw off the pillar airbag sensors, and potentially cause some severe harm to the passengers in a subsequent collision.” Horn closed his presentation with a look at some of the vehicles that Chinese automakers—a number of which have plans to enter the U.S. market—currently produce. Horn said Great Wall Motors is predicting a U.S. launch in 2015, following the model used by Kia some years ago, with sales in several states and entry into the rental fleet. The company will use feedback from that limited launch to
make improvements before selling on a broader scale. Horn said the expected low cost of early Chinese vehicles in this country will likely lead to more totals than repaired vehicles. But the success of any of the Chinese automakers here will largely be dependent on their ability to set up the replacement parts infrastructure that is needed, Horn said. Sterling Motors and Daihatsu, he said, failed largely because a lack of parts availability led to repair delays and total losses. “The folks that have the best infrastructure for supporting their brand will be the Chinese brands that survive going forward,” Horn said.
www.autobodynews.com | JUNE 2011 AUTOBODY NEWS 29
Xirallac Pigment Plant to Relocate from Japan to Germany Following Tsunami ®
Xirallic® pigments from Merck create glitter and sparkle in automotive coatings and provide a distinct shimmer to enhance color intensity and color purity. Xirallic® pigments are suited for exteriors due to their additional layer, which provides improved weather resistance. The only place where Xirallic is made is in Onahama, Japan, about 45 km from Tokyo Electric Power Co’s Fukushima reactor, which was closed soon after the March 11 magnitude 9.0-earthquake. The shutdown of the plant affected many of the world’s auto makers, including Ford, Chrysler, Volkswagen, BMW, Toyota and GM. Previously Chrysler told dealers that the company plants to limit orders for vehicles in 10 different colors that employ Xirallic pigment. Ford had already told dealers it could no longer take orders for F-150 trucks and other models using “tuxedo black” and three shades of red. The plant will be one of the first Japanese parts facilities that will move elsewhere as a result of the disaster. Germany’s Merck said May 10 it will shift production of Xirallic pigments from Japan to Germany.
Tsunami and radiation damage forced Merck to halt production in March. Operations at Onahama resumed May 8. Regular production output is expected by June. It will continue until Merck has readied its plant in Germany. According to The Nikkei, timing and location for the new site have yet to be determined. “Our top priority is to ensure as soon as possible an uninterrupted supply of Xirallic pigments to our customers around the world,” said Peter Halas, Head of the Pigments and Cosmetics unit at Merck. These parameters no longer fit a plant 35 miles from the Fukushima reactor, and in a town, where tsunami waves as tall as buildings were observed.
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CCC Announces 2011 Crash Course in April
In April CCC Information Services Inc. announced the availability of its 2011 Crash Course, titled “Changing Expectations of the Connected Consumer.” In addition to an analysis of traditional market trends, the document developed by CCC Lead Analyst Susanna Gotsch focuses on new technology’s ability to provide transparency to the companies and customers doing business in the autophysical damage industry. “Peoples’ willingness to be much more transparent as potential customers, means they expect their demands/needs at a minimum will be met,” said Gotsch. “But companies that go beyond simply meeting demands to delight their customers will see their efforts rewarded. A company demonstrating that it knows a customer’s needs/desires, meets them, and exceeds them, is creating an experience that the customer will want to talk about with family and friends.” In addition to the Adobe® PDF version of 2011 Crash Course available on the CCC News and Insight page, Gotsch presented a Crash Course webinar on April 21st. For more visit www.cccis.com.
School Auto Body Programs Compete for $50K Makeover You can help your local secondary and/or post-secondary collision program receive a $50,000 Makeover through the Collision Repair Education Foundation's 2011 Ultimate Collision Education Makeover school grant. The application is available to download online and must be postmarked by August 31, 2011. The winning school will be announced during SEMA 2011. In 2009, the non-winning Makeover grant applicant schools received close to $200,000 in product donation. Yes, the non-winners! Through the Makeover's application, the schools must list an itemized $50,000 wish list and through these lists, the Foundation can seek out industry supporters and companies to donate these requested items for the schools. Over 50 schools from across the country applied for the 2010 Makeover grant. In total, 35 schools each received an average of $5,000 in products, supplies, and equipment for a total value over $175,000. Please contact Brandon Eckenrode at Brandon.Eckenrode@edfoundation.org or 847.463.5244.
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ARA, Congress to Ensure Flood Damaged Vehicles Don't Enter Used Market
The Automotive Recyclers Association (ARA) is calling on Congress to review implementation and enforcement of the National Motor Vehicle Title Information System (NMVTIS). As many of the nation’s waterways hit historic crests, thousands of motor vehicles from Illinois to Mississippi have been submerged under these waters. Now more than ever, it is essential that NMVTIS be fully implemented and the underlying statute enforced to help prevent the unknowing sale of these flood-damaged vehicles. NMVTIS, a national electronic system that provides consumers with valuable information about a vehicle’s condition and history, can play a crucial role in helping ensure that these flood-damaged vehicles are not sold to unsuspecting consumers in the used-car market. “After Hurricane Katrina, the Department of Justice (DOJ) reported that truckloads of flooded vehicles were being taken out of Louisiana to other states where they were dried out, cleaned, and readied for sale to unsuspecting consumers in states that do not brand flood vehicles”, said Michael Wilson CEO of the ARA .
“NMVTIS must be fully implemented and utilized now so that similar events are not repeated, and flood damaged motor vehicles can be efficiently tracked before unsuspecting consumers purchase these vehicles”, Wilson added. Flood damaged vehicles are considered ticking time bombs, slowly being eaten away as water corrodes onboard computers and other vital components like airbags systems. These vehicles are deemed unfit by insurance companies, but too often are given token repairs and sold to unsuspecting consumers. NMVTIS helps prevent vehicle histories from being “washed” or concealed because it serves as a national repository of vehicle brand information. Fully implemented, NMVTIS will have data from every state and will be queried before any state issues a vehicle a new title, making it extremely difficult to wash a “flood” designation from a motor vehicle. Such fraudulent and unsafe practices can only be stopped if all states participate fully in NMVTIS and all “individuals” and “entities” that are required to report to the system are held accountable. “Regrettably, DOJ has limited resources to do this. Con-
gress should intercede and permit individual state enforcement agencies to work more closely with DOJ to identify and implement efficient methods to increased participation. One way to enhance the program’s success is to allow the fines collected from NMVTIS violators to be directly allocated back into the program and its law enforcement activities. Only with sufficient resources can DOJ and the appropriate state law enforcement colleagues target all businesses/individuals whom are operating under the radar and fulfill their obligations under the statute”, Wilson asserts. Since 1943, the Automotive Recyclers Association (“ARA”) represents an industry dedicated to the efficient removal and reuse of “green” automotive parts, and the proper recycling of inoperable motor vehicles. ARA represents the interests of over 4,500 auto recycling facilities in the United States and fourteen other countries around the world. With programs such as the Certified Automotive Recycler Program (CAR) and other partnerships, ARA members continue to provide consumers with quality, low-cost alternatives for vehicle replacement parts.
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CIF Makes Donation to Japan Tsunami Relief
The Collision Industry Foundation (CIF) is proud to announce its donation of $1,650 to the American Red Cross to benefit the victims of the Japan tsunami from the donations made through the Collision Industry Conference (CIC). The donations were collected at the CIC meeting held at the Meadowlands Expo Center in New Jersey this past March after industry member Toby Chess suggested a collection for those in need. “It’s always heartwarming to see people, even in these hard times, reach out to help others who have lost so much” said Bill Shaw, President of the CIF Board of Trustees. Relief and clean-up efforts are ongoing in Japan due to the catastrophic levels of devastation that resulted from the earthquake and subsequent tsunami back on March 11, 2011.
AGRSS Promotes Fixing Damaged Windshields
As shop owners and techs know, car maintenance isn’t just under the hood. A cracked windshield is a safety risk. It can impair the driver’s vision and put passengers at risk. Most automotive safety experts rank the windshield as the third most important safety component in today’s vehicles, behind seatbelts and airbags. Laws require seatbelt use and prevent tampering with airbags, but there are no laws that govern replacement windshield installation. The Auto Glass Replacement Safety Standards Council (AGRSS) promotes safe auto glass industry standards, which an auto glass technician should follow. Consumers should ask these questions before a replacement windshield installation: • Will the old adhesive be removed from the vehicle frame? If the adhesive isn’t removed down to the adhesive manufacturer’s recommended level, the fit may not be tight and the new adhesive won’t bond correctly. • Will the technician wear gloves to keep from contaminating the glass? If oil and dirt get on the edges, the new adhesive (called urethane) may not bond correctly. • Will the new urethane adhesive stand up to the high deployment pressure of airbags? The best available manufacturer equivalent urethane adhesive should be used, not butyl tape. Ask for adhesive made by Dow, Sika or the original car maker’s adhesive supplier. • How long does the urethane adhesive need to set until the vehicle can be driven? Every urethane has a “safe drive-away time.”
www.autobodynews.com | JUNE 2011 AUTOBODY NEWS 31
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