Autobody News July 2011 Southeast Edition

Southeast Edition Florida Georgia Alabama Mississippi

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Texting While Driving Still Allowed in FL, AL, and MS Florida, Alabama, and Mississippi are among the 17 states that have no general prohibition against texting while driving—except for novice drivers (16, or 17 w/ Intermediate License <6 months) in Alabama.

Mississippi bans only School Bus Drivers and learners from texting while driving. Florida has no restrictions on any driver. The other 33 states, including Georgia—where it is a primary offense, now have bans.

Indiana and Maine become the latest states to ban texting while driving, Florida drivers, however, cannot be pulled over for talking or texting while behind the wheel.

Thirty-four states, plus the District of Columbia and Guam, have texting bans, according to the Governors’ Highway Safety Association.

Thirty states, D.C., and Guam have primary enforcement—an officer may cite a driver for using a handheld cell phone without any other traffic offense taking place; the others, secondary.

Nine states, as well as D.C. and the Virgin Islands, prohibit all drivers from using handheld cell phones while driving. Except for Maryland, all laws are primary enforcement. No state bans all cellphone use while driving.

by John Yoswick Special to Autobody News

and for our customers,” Risley said.

Risley’s discussion of the forthcoming change was just one of recent news items related to insurance companies that will likely be of interest to shops. Here’s a wrap-up of some of this news.

Insureds are shopping. Consumers shopped and switched auto insurers more agDan Risley gressively in 2010 than they have for 14 years, according to preliminary survey findings from McKinsey & Co. The survey analysis authors told

See TWD in Florida, Page 13

Allstate to Open Electronic Communication with Non-DRP Shops

See Allstate, Page 14

Change Service Requested

P.O. BOX 1516, CARLSBAD, CA 92018

Allstate Insurance will soon roll-out technology that will enable shops that are not part of the insurer’s direct repair program to communicate electronically with the insurer, much as its DRP shops currently do.

Dan Risley, a project manager for Allstate at the company’s Illinois home office, said this new “Transactional Non-DRP” system will enable any shop to upload estimates and digital images to Allstate, receive insurerwritten estimates from Allstate.

“We realize not all customers use a network shop, and we want to make it easier to do business for those shops

VOL. 2 ISSUE 5 JULY 2011

Georgia Collision Industry Association (GCIA) Reveals 2011 Labor Rates Survey Results The Georgia Collision Industry Association (GCIA) conducted their 5th annual labor rates surveys for body shops in the metro Atlanta area earlier this year.

CSi complete conducted the surveys, which were available online, over the phone and in a mail-in format in March and April of 2011. Turnout slightly decreased from the 2010 survey results in which 291 shops participated.

“With over 500 shops in the Metro Atlanta area, to only have 230 respond is disappointing,” said GCIA President Howard Batchelor, “Shops need to realize that this survey is intended to help establish a fair market rate in the marketplace.”

Businesses were asked to submit their posted door rates for body labor,

paint labor, frame labor, mechanical labor, paint and materials rate and storage rate.

Paint and materials rates saw the largest increase over last year’s surveys with a 3.28 percent increase. Mechanical rates also saw a dramatic increase over 2010 with a 2.07 percent increase.

“According to this year’s results, there was little change over last year, although the paint & material rate did go up by 3.28%. This clearly shows that the increase in raw material costs is affecting the shops profitability on paint and materials,” said Batchelor.

Shop identities were not published with the results of this survey and will remain confidential. Names were used to track demographics and

REGIONAL ARTICLES in this issue...

See Labor Rates, Page 4

GCIA Reveals Labor Rates Survey Results . . . . . . . . . . . . . . . . . .p. 1 Alabama Auto Parts Maker Faces $179K in OSHA Fines . . . . . . .p. 4 Joplin, MO, GM Dealer Bolsters Community After Tornado . . . . .p. 6 Florida Judge Rules Red Light Cameras Unconstitutional . . . . .p. 7 Volkswagen Opens Chattanooga, Tennessee Plant . . . . . . . . . . .p. 9

NATIONAL ARTICLES in this issue...

Toyota to Face First US Sudden-Acceleration Test Trial in 2013 .p. 16 SUVs Now Safer Than Compact Cars in an Accident, IIHS . . . . .p. 18 Prevalent Airbag Fraud Prompts Increased Penalties in New CA Law .p. 19 Eileen Sottile and the Quality Parts Coalition Legislation . . . . . .p. 21

COLUMNS in this issue...

Schroeder — Chatham Parkway Collision Center in Savannah, .p. 12 Franklin — How to Survive a Summer Slump . . . . . . . . . . . . . . . .p. 15 Weaver — A Homemade Air Bag Light—Brilliant Stupidity . . . . .p. 17 Insurance Insider —The “Neutral Information Provider” . . . . . . .p. 20 Williams — Apathy a Danger to Parts Managers . . . . . . . . . . . . .p. 22 Attanasio — Body Shops and Yelp: It’s a Love-Hate Relationship .p. 27 Cheney — Auto Recyclers Host Collision Repair Panel . . . . . . . .p. 28

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Contents 2011 GCIA Annual Golf Tournament

Coming in October . . . . . . . . . . . . . . . 10

COLUMNISTS

Attanasio - Body Shops and Yelp: It’s a

Love-Hate Relationship . . . . . . . . . . . . 27

AL Home Insurer Drops 73K Policies

Chaney - Auto Recyclers Host Prominent

Alabama Auto Parts Maker Faces $179K

Danalevich - Business Financial Security

Auto Insurance Proposal Takes Aim at

Franklin - How to Survive a Summer Slump . 15

in OSHA Fines . . . . . . . . . . . . . . . . . . . . 4 AL’s Uninsured. . . . . . . . . . . . . . . . . . . . 4

AL Auto Insurance Verification System Gets

Final OK. . . . . . . . . . . . . . . . . . . . . . . . . 4

FL Judge Questions Tickets in Red Light

Camera Debate . . . . . . . . . . . . . . . . . . . 7

Collision Repairers in Panel Discussion . 28 Preventive Maintenance . . . . . . . . . . . . 24

Insurance Insider - Telling the Tale of the

“Neutral Information Provider” . . . . . . . 20

Schroeder - Chatham Parkway Collision Center in Savannah, GA, is All About

Dealer Partnerships . . . . . . . . . . . . . . . 12

Fort Lauderdale, FL, Gets First Electric

Weaver - A Homemade Air Bag Light—

GA Insurance Agent Pleads Guilty to

Williams - Apathy, the Real Opponent in

Georgia Auto Repair Tax Bill Still Alive

Yoswick - Allstate to Open Electronic

Car Charging Station . . . . . . . . . . . . . . . 4 Fraud Charges . . . . . . . . . . . . . . . . . . . . 7 in House . . . . . . . . . . . . . . . . . . . . . . . 11

Georgia Collision Industry Association (GCIA) Reveals 2011 Labor Rates

Survey Results . . . . . . . . . . . . . . . . . . . 1

Inspector Gadget—Making a Light Inspection Tunnel to Find Paint Defects . . . . . . . . . 26

Jackie Cooper Imports Hosts Grand

Reopening in Tulsa, OK . . . . . . . . . . . . 11

Joplin, MO, Dealer Works to Bolster Community & Employees After

Tornado . . . . . . . . . . . . . . . . . . . . . . . . . 6

Brilliant Stupidity . . . . . . . . . . . . . . . . . 17 the Wholesale Parts Business . . . . . . . 22

Communication with Non-DRP Shops . . 1

NATIONAL

Auto Lender Ally, Formerly GMAC, Delays

IPO Due to Market Conditions . . . . . . . 29

Boyd Gerber Group to Acquire 28 Locations of Cars Collision LLC, Total Now 164 in

North America . . . . . . . . . . . . . . . . . . . 23

CARSTAR Auto Body Repair Experts Hold

Third Annual Soaps It Up! Car Wash for

Make-A-Wish Foundation . . . . . . . . . . . 29

Kia To Boost Capacity At West Point,

Chevy Volts Selling at Inflated Prices, But

Liberty Tire Helps with Atlanta Clean Up

Eileen Sottile and the Quality Parts Coalition

Lost Car Claims in MO Tornado Start to

Hyundai, Kia Face Fair Trade Commission

Georgia Plant . . . . . . . . . . . . . . . . . . . . . 6

at Art Center . . . . . . . . . . . . . . . . . . . . . 8

Come to Insurers . . . . . . . . . . . . . . . . . 10

New Heavy-Duty Shredder Coming to

Ft. Lauderdale, FL . . . . . . . . . . . . . . . . . 9

GM Says Volt Will Be Cheaper . . . . . . . 25

Offer Legislative Update . . . . . . . . . . . . 21

Antitrust Probe on Auto Parts Pricing

After Allegations . . . . . . . . . . . . . . . . . 29

Nissan Suit Goes to Federal Court . . . . . . . 8

Nissan Adds Solar Charging Stations to

Prevalent Airbag Fraud Prompts Increased

Nissan Leaf Production Could Be Delayed

School Uses Nanotechnology to Convert

Texting While Driving Still Allowed in FL,

SUVs Now Safer Than Compact Cars in an

Volkswagen Opens Chattanooga, Tennessee

Toyota to Face First US Sudden-Acceleration

Tennessee Plant. . . . . . . . . . . . . . . . . . . 8

at Smyrna Plant . . . . . . . . . . . . . . . . . . 10

AL, and MS . . . . . . . . . . . . . . . . . . . . . . 1

Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

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

Following Storms. . . . . . . . . . . . . . . . . . 7

Penalties in New California Law . . . . . . 19

Exhaust Heat into Electricity . . . . . . . . . 16

Accident, IIHS Report Says . . . . . . . . . 18

Test Trial in 2013 . . . . . . . . . . . . . . . . . 16

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. . . . . . . 6 Autoland Scientech. . . . . . . . . . . . . 17 Bill Penney Toyota. . . . . . . . . . . . . . 14 BMW Wholesale Parts Dealers . . . . 27 Chief Automotive. . . . . . . . . . . . . . . . 7 Classifieds. . . . . . . . . . . . . . . . . . . . 31 Delray Honda . . . . . . . . . . . . . . . . . . 8 Don Mealey Chevrolet . . . . . . . . . . 20 Don Reid Ford. . . . . . . . . . . . . . . . . 23 Equalizer Industries . . . . . . . . . . . . 21 Ford Wholesale Parts Dealers FL, GA, AL, MS . . . . . . . . . . . . . . . 2 Galloway Mazda . . . . . . . . . . . . . . . 25 Garmat USA . . . . . . . . . . . . . . . . . . 11 Global PDR Solutions . . . . . . . . . . . . 9 GM Wholesale Parts Dealers . . . . . 25 Gus Machado Ford . . . . . . . . . . . . . 24 Honda Wholesale Parts Dealers. . . 10 Hyundai Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . 19 Kia Motors Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . 32

Mazda Wholesale Parts . . . . . . . . . . 8 Mercedes-Benz Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . 27 MOPAR Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . 15 NACE / CARS Registration . . . . . . . . 5 Nalley BMW. . . . . . . . . . . . . . . . . . . 10 Nissan Wholesale Parts Dealers. . . 18 Palmers Toyota . . . . . . . . . . . . . . . . 21 Porsche Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . 26 Safety Regulation Strategies . . . . . 11 Scorpion . . . . . . . . . . . . . . . . . . . . . 13 Serra Mazda . . . . . . . . . . . . . . . . . . 12 Southtowne Hyundai . . . . . . . . . . . . 4 Subaru of Gwinnett . . . . . . . . . . . . . 18 Subaru Wholesale Parts Dealers . . 23 Tameron Hyundai . . . . . . . . . . . . . . 15 Toyota Wholesale Parts Dealers . . . 22 VIM Tools. . . . . . . . . . . . . . . . . . . . . 28 Volkswagen Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . 30

www.autobodynews.com | JULY 2011 AUTOBODY NEWS 3

Continued from Front Page

Labor Rates

ensure that only one survey was cast per Repair Facility location.

No rates were used that may exist between a repair facility and any contracted customer such as a Fleet Account or Insurance DRP Program; the reported values represent the posted door rate.

For more information please visit gacollisionindustry.wordpress.com.

The PDF tablet of the survey’s full results can be seen at www.autobodynews.com.

The source for timely information that every body shop needs!

CALL 800-699-8251 Start Your FREE Mail Subscription.

Alabama Auto Parts Maker Faces $179K in OSHA Fines

Auto parts supplier Saehaesung Alabama Inc. in Andalusia, AL, has been cited for eight safety violations by the Occupational Safety and Health Administration, according to the Birmingham News.

OSHA said it proposed fines totaling $179,300.

Citations were issued after OSHA conducted a follow-up inspection to evaluate whether violations found during a 2009 inspection had been corrected.

Saehaesung Alabama was cited for two willful violations, which exists when an employer has demonstrated disregard for the requirements of the law or indifference to employee safety, OSHA said.

The company, which produces chassis and body parts for Hyundai and Kia, can contest the citations.

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Auto Insurance Proposal Takes Aim at AL’s Uninsured Alabama has consistently been ranked as having one of the highest statewide uninsured-motorist rates in the nation, and lawmakers are pushing forward legislation aimed at reducing that rate, according to Auto Insurance News.

By state law, Alabama residents must have a liability policy in place in order to drive legally and are required to carry proof of insurance cards with them in their vehicles. But despite the $500 first-offense fine that can be levied on motorists who cannot provide this proof of coverage, a large percentage of them still go uncovered.

The Insurance Research Council estimated that, in 2007 and 2009, between about 1-in-4 and 1-in-5 drivers in the state were uninsured.

To identify these uninsured drivers and discourage others from dropping coverage, lawmakers have given their approval to a bill that would establish an electronic auto insurance verification database.

The database would match up valid policies with cars registered in the state, allowing police officers and the Department of Revenue to quickly check whether a given vehicle is currently insured.

The bill that would establish the database would also bolster other

practices already being used to find uninsured drivers.

Currently, auto owners who go to register their cars must say in writing that they have coverage in place. But the bill, SB 137, would allow the Department of Revenue access to the database in order to check whether this is actually the case.

Differences in the house and senate versions of the bill still need to be ironed out. If both houses manage to do so through a conference committee, it will be sent to the governor’s desk.

Update: Auto Insurance Verification System Gets OK

On June 14 Gov. Robert Bentley signed into law the legislation that will set up the Alabama car coverage verification database and will give police and other government officials online access to information regarding the coverage status of residents, according to Online Auto Insurance News.

The new law will also make verification of coverage a necessary step in the automobile registration process. The system is slated to be in working order by 2013.

Fort Lauderdale, FL, Gets First Electric Car Charging Station

Car Charging Group, Inc., a provider of electric vehicle (EV) charging services with the mission to own and build a nationwide network of EV charging stations, and Stiles Property Management, South Florida’s third largest property management firm, have partnered to provide downtown Fort Lauderdale’s first EV charging services at AutoNation’s headquarters, also known as The AutoNation Building.

“This is an exciting project for us,” said Car Charging Group CEO Michael D. Farkas. Through a partnership with Stiles Property Management, who manages nearly all of the office towers on the iconic Las Olas strip and is recognized for their firstclass sustainability program. “Adding to the excitement is that the project is intended for Fort Lauderdale’s largest corporate tenant, AutoNation, who also markets EV vehicles as the country’s largest automotive retailer.”

Miami, Florida-based Car Charging Group will install a Level ll, 240-volt Charging station for electric vehicles. The charging station will be housed on the first floor of The AutoNation Building’s parking garage at 200 Las Olas Circle.

“In addition to enhancing the amenities we provide to our tenants at

The AutoNation Building, this EV charging station demonstrates our long-term commitment to sustainability and our ability to lead the market in designing, developing, constructing and managing environmentallyconscious commercial structures,” said Terry Stiles, chairman and CEO of Stiles Property Management.

Car Charging Group, Inc., based in Miami, Florida, is an owner and provider of electric vehicle (EV) charging stations with the mission to build-out a nationwide infrastructure, enabling EV and PHEV owners to charge their EVs anytime, anywhere.

As part of its strategy, the company owns, provides, installs and maintains electric vehicle charging units and works with its landowner partners to identify appropriate locations for its charging stations.

The company provides convenient, safe and affordable charging stations away from home in customer-friendly public locations, including municipalities, shopping malls, parking garages, multi-family residential, and commercial properties.

AutoNation Inc., America’s largest automotive retailer, owns and operates 243 new vehicle franchises in 15 states.

4 JULY 2011 AUTOBODY NEWS | www.autobodynews.com

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Joplin, MO, GM Dealer Bolsters Community and Employees After Tornado Devastation Crossroads Chevrolet-Cadillac in Joplin, MO, served as as a collection point for community donations of clothing, food, water and other supplies for those hit hard by the May 22 tornado.

A cluster of General Motors franchise dealers in and near Joplin recently weathered quite a storm and are continuing to pick up the pieces and do the best they can to support their local community in healng.

The dealers also recently broke out their checkbooks and more to help the community recover from the single deadliest tornado in national history.

Crossroads Chevrolet-Cadillac was spared by the killer twister, but the automaker said the storm’s wicked winds touched the lives of “nearly everyone working there.”

Dealership owner Dan Auffenberg explained on the Faces of GM blog that on the day after the tornado struck May 22, nine or 10 employees showed up for work. Aufffenberg immediately recognized the severity of the situation and sent them home, saying, “You don’t need to be here. You need to be home helping your families,” according to Auto Remarketing News.

As of that point, five employees of Crossroads had lost their homes to the storm, and the service manager’s wife had lost her mother.

“We’re doing everything we can to help the employees of Crossroads Chevrolet come back from this tragic storm,” Auffenberg said according to Auto Remarketing News, adding that he has committed $50,000 to help his

employees deal with the storm’s aftermath.

Auffenberg said the money is dedicated to making sure his employees “make it through.”

Meanwhile, Crossroads Chevrolet-Cadillac also served as a collection point for community donations of clothing, food, water and other supplies for those hit hard by the tornado and its aftermath.

“Everywhere you look is rubble, devastation and destruction,” GM officials observed.

The town in southwest Missouri saw a death toll of more than 140 people, and the tornado destroyed scores of homes and buildings, including the local hospital.

“Yet, as you look closer, you see people attempting to clear a patch of land, an American flag snapping in the breeze and a sign of thanks,” GM management highlighted. “At that point, you realize that Joplin, Missouri, is going to survive because of the residents who live here and the assistance from people around the country.” And some of these people from throughout the country include Crossroads’ dealer colleagues from neighboring areas.

Chevrolet area sales manager Gabriel Ismaio doesn’t live in Joplin, but it is part of his territory.

When he first arrived the day after the tornado hit, Ismaio admitted it was difficult to grasp what he was observing.

“When you see it on the news, you only see it for a few seconds, then it goes away. But when you’re here in real life, it hits you pretty hard,” Is-

Kia To Boost Capacity At West Point, Georgia Plant

Kia Motors Corp. said June 2 it will increase the production capacity of its West Point, GA, assembly plant by 20%, to help the company keep up with demand for its vehicles, according to the Wall Street Journal.

The Korean car maker says it will begin expansion projects at its Georgia factory that will raise its total annual capacity to 360,000 vehicles by the beginning of next year.

The boost follows an announcement earlier this year at the New York International Auto Show that the automaker would begin producing its Optima mid-size sedan at the US plant.

The planned expansion includes the plant’s stamping, welding, paint

and general assembly shops.

The expansion will make room for the 2012 Optima to join the company’s Sorento crossover utility vehicle which is already built at the plant.

Kia and its parent company Hyundai, who have long fought to be taken seriously by rivals and consumers in the US, have hit their stride with efficient attractive and desirable vehicles that appear to be bargains compared with competitors’ products.

The company has also been able to step ahead of other foreign automakers due to the shortages of Japanese vehicles resulting from the March earthquake and tsunami in that country.

6 JULY 2011 AUTOBODY NEWS | www.autobodynews.com

maio said, according to Auto Remarketing News.

So Ismaio and Chevrolet zone manager Ken Sadowski contacted other dealers in their region.

“They all stepped up to the plate and they all helped,” said Ismaio, who noted other GM dealers came through with a total of $80,000 for the relief effort.

Previously, the GM Foundation provided a $100,000 donation to the American Red Cross, and two fullsized Chevrolet vans were presented to the local YMCA. Built at the Wentzville, MO, plant, these vans were to be used by the Children of the Storm program, which provides a safe place for youngsters to go while their parents rebuild the families’ shattered lives.

All told, contributions to the Joplin community from the GM family of dealers, employees and the corporation now total more than $250,000.

“We’re here to help moving forward,” Auffenberg said. “It’s going to take a long time to rebuild this community, and we’re here for our em-

ployees and for the city of Joplin.”

Moreover, the National Automobile Dealers Association Charitable Foundation continues to actively assist dealers in recovering from this tornado as well as other devastating weather and flooding.

“We’ve been very active,” said Bruce Kelleher, NADA executive vice president. “We’ve already sent checks to dealers in Iowa and Alabama to present to their employees.”

Since 1992, the foundation’s Emergency Relief Fund has contributed more than $5 million to nearly 6,500 dealership employees victimized by natural disasters.

“In letters and phone calls we’re receiving, dealers and their employees are telling us that they’re so grateful for receiving financial assistance,” Kelleher added. “They’re just so appreciative that the foundation is there to provide some help and relief.”

Dealership employees who experience financial hardships caused by natural disasters can contact the foundation at (800) 252-7233 to apply for assistance.

FL Judge Questions Tickets in Red Light Camera Debate

A Broward judge has ruled that law enforcement officers cannot ticket drivers for running red lights, according to Insurance Journal.

It’s another piece of legal wrangling in the ongoing dispute over red light cameras in the state.

County Judge Fred Berman recently ruled that tickets for running red lights are unconstitutional when issued by an officer because the fine is higher than fines imposed on drivers caught running through lights on camera.

Drivers are fined about $260 in officer-issued citations, while camera-issued violations are $158.

Attorney Ted Hollander said Berman’s ruling sets a legal precedent for judges hearing officer-issued tickets in Broward County. He represented a driver cited by a Davie officer.

Officials said the ruling doesn’t change the law just yet.

A spokeswoman said Florida’s attorney general will appeal the ruling, so this legal battle will continue.

GA Insurance Agent Pleads Guilty to Fraud Charges

Insurance Commissioner Ralph Hudgens announced on June 14 that a Macon insurance agent has pled guilty to insurance fraud charges.

Broadus W. Marshall Jr., 58, was sentenced to ten years of probation, ordered to pay restitution, and do community service.

Marshall also voluntarily surrendered his license as part of the plea agreement.

Marshall was indicted on 7 counts of insurance fraud for allegedly keeping premiums paid to him for auto and business liability insurance from his clients.

Marshall was a licensed insurance agent for Marshall Insurance Agency in Macon.

“This type of fraud is nothing new,” Hudgens said, according to Insurance Journal. “The outcome is always the same. Whenever agents are tempted to keep premium money, they should realize that sooner or later they’re going to get caught.”

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AL Home Insurer Drops 73K Policies Following Storms

Alabama’s second largest insurer of homes, Alfa Insurance, said it will not renew policies on one out of every six homes it insures in Alabama.

The company said it will send notices involving about 73,000 homes when they come up for renewal over the next 16 months.

Alfa’s general counsel, Al Scott, said most of the policies are with landlords who own multiple rental houses.

Some are on individual homes where the owners don’t have any other insurance with Alfa.

Scott said customers with homeowners insurance and either auto or life insurance won’t be affected.

Alabama’s deputy insurance commissioner, Ragan Ingram, said no other major insurer in Alabama has announced similar changes.

Alfa officials predict the tornadoes in late April will result in about 25,000 claims totaling $425 million to $475 million, which would make it the costliest storm ever for the Montgomery-based company.

Alfa President Jerry Newby said the storm’s damage is well within the coverage of Alfa’s reinsurance program, and the net impact on the company will be no greater than Hurricane

Ivan in 2004. But he said the storms over the last few years prompted a review of Alfa’s procedures.

“While Alfa remains a financially strong insurance company, the increased frequency and severity of storms over the last decade have highlighted the need for Alfa to review its overall property portfolio,” Newby said.

After dropping the 73,000 policies, Alfa will still have about 330,000 policies on homes and 20,000 on businesses and churches, spokesman Jeff Helms said.

Scott said Alfa customers will get notice at least 120 days before their policies aren’t renewed, and Alfa will help them find other insurance companies.

Scott said the changes apply only to Alabama, but the company will be reviewing its policies in Georgia and Mississippi.

After the tornadoes hit in April, Alfa decided it would no longer write new policies on homes over 10 years old.

Scott said that was to put a hold on new business while the company reviewed its procedures, and that will likely be modified.

www.autobodynews.com | JULY 2011 AUTOBODY NEWS 7

Liberty Tire Helps with Atlanta Clean Up at Art Center Pittsburgh-based Liberty Tire Recycling, a provider of tire recycling services, has donated tire collection and reclamation services to help an Atlanta area arts center facing a dilemma.

Crews from Liberty Tire’s plant in Atlanta have collected and recycled as many as 1,000 scrap tires that were illegally dumped on the property of The Arts Exchange in Atlanta. The reclamation is taking place in midMay of 2011.

“When the center contacted us to tell us what they were facing, we were happy to offer our assistance at no charge,” said Dewey Grantham, regional sales manager for Liberty Tire Recycling. “The warmer months are upon us, and abandoned tire piles can be a haven for vermin and insects.

They can also cause a fire hazard. The Arts Exchange certainly doesn’t want to face such a situation when they host outdoor activities for children.”

Employees at The Arts Center have been working to resolve the situation since they discovered the tire piles in the fall of 2010. When they began making inquiries into how to

remove the tires, they learned that the center could be charged as much as $2 per tire for removal.

“We are a non-profit arts center that aims to provide affordable work space for visual and performing artists,” said Lisa Tuttle, a board director for The Arts Exchange and a studio artist. “Our tenants include African dance companies, an online digital arts magazine, and a youth steel band. As you might imagine, we have limited resources. We are pleased that Liberty Tire is willing to perform this service to us and to the community at no cost.”

Once the tires are collected, Liberty Tire Recycling will shred and grind them into crumb rubber and other saleable commodities, such as rubber mulch for landscaping and playgrounds; infill for synthetic athletic fields; and rubberized asphalt.

“Liberty Tire Recycling has a well-deserved reputation for remediating illegal tire dumps across the country,” said Jeff Kendall, CEO of Liberty Tire Recycling. “We are hoping that a few hours of work at The

Arts Exchange will go a long way toward creating a safer environment for the people who rely on the center.”

More information on Liberty Tire Recycling, which recycles some 130 million passenger tire equivalents (PTEs) annually, can be found at www.libertytire.com.

Nissan Suit Goes to Federal Court

Canton’s lawsuit seeking to invalidate a state law that bars the city from annexing the Nissan plant site is now in federal court. The Clarion-Ledger reported attorneys for Nissan North America moved the case from Madison County Circuit Court because the city raised new issues in an amended complaint. A federal judge can hear a case involving questions of state law if opposing parties are citizens of different states. Nissan North America is headquartered in Tennessee though it is incorporated in California.

Canton officials say the 2000 legislation prohibiting the city from annexation violates the equal protection clauses in the US and state constitutions. The case is assigned to U.S. District Judge Carlton Reeves. A hearing date has not been set.

Nissan Adds Solar Charging Stations to Tennessee Plant

Nissan announced May 27 that it will add 30 solar-assisted charging stations to its plant in Smyrna, Tenn. and to the company’s nearby US headquarters.

The Smyrna plant will also be the future home of the business’ Nissan Leaf production.

The charging stations will be available to Nissan employees and visitors, starting in July.

The Smyrna car plant is undergoing some retrofits that will let the company build the Leaf, which is currently being built solely in Japan alongside the Infiniti JX and Nissan Rogue crossovers.

The plant will be able to produce 150,000 Leafs a year.

Nissan is also building a lithium-ion battery plant adjacent to the car plant that will be able to produce 200,000 battery packs a year for electric cars like the Leaf.

Nissan plans to produce Leafs at the plant by the end of 2012.

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New Heavy-Duty Shredder Coming to Ft. Lauderdale, FL The U.S. Shredder and Castings Group, Trussville, AL, has begun installation of its heavy duty shredder, complete with a 98115 downstream system, at a scrap yard in Ft. Lauderdale, FL. The shredder project is a joint operation of U Pull It, Davie, FL, Garden Street Iron and Metal, Ft. Myers, FL, and Cimco Recycling of Sterling, IL. The shredder will be the third shredder installed within the group’s operations.

According to a release, U.S. Shredder’s Engineering Services Division will provide the turnkey engineering for all aspects of the installation, including the motor house’s design, hydraulic and electrical systems and civil and foundation requirements.

According to a U.S. Shredder release, the entire system will be operated under roof.

“The decision to install a U.S. Shredder system was made after our group completed an extensive review of all shredder systems available,” says Larry Danielle, owner of U Pull It. “We concluded the shredder is the industry’s heaviest, and U.S. Shredder’s support and installation services were the best in the industry.”

The shredder will consist of a heavy duty disc rotor. Castings and wear parts will be provided by the company’s wear parts division.

The system will be driven by a 4,000 hp DC drive system supplied by AmeriMex, Houston. All system conveyors and structures will be supplied

by U.S. Shredder’s sister company US Conveyor, Mackinaw, Ill. All drum magnets, eddy current separators and sensors will be supplied by SGM Magnetics, Sarasota, Fla. Completion of the installation and commissioning is expected to be completed by September 2011.

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Volkswagen Opens Chattanooga, Tennessee Plant

Volkswagen is jumping into the U.S. auto market by opening a new plant in Chattanooga, TN. At the grand opening of the plant on May 24, the German automaker presented the 2012 Passat as the key to building U.S. sales to 1 million units by 2018. The $1 billion plant has been producing cars since April.

The new Passat will go on sale in Q3 of 2011 for $20,000 a car.

That’s about $7,000 cheaper than current models built in Germany and close to the prices of such competitors’ models as the Ford Fusion, the Toyota Camry, the Honda Accord and the Hyundai Sonata.

Jonathan Browning, president and chief executive officer of Volkswagen Group of America, said the automaker wants to make German engineering more accessible to North American buyers.

“The Passats produced here in Chattanooga will be a key enabler to our growth, allowing us to compete in the core of the midsize sedan segment,” Browning told reporters before the unveiling of the plant, according to the Associated Press.

Volkswagen intends to produce 150,000 sedans annually at Chattanooga for the American market, a

big jump for a car that has only hit a peak of 80,000 units annually sold in the U.S. in its history.

“Das auto is finally back in the States,” declared Martin Winterkorn, chairman of the board of management for Volkswagen AG, the parent company of Volkswagen, according to the Associated Press.

The plant itself has energy-efficient design measures including LED lighting and rainwater recycling.

Frank Fischer, who heads VW’s Chattanooga plant, told the Associated Press that the complex uses 35 percent less energy than a standard automotive plant.

When Volkswagen selected Chattanooga as the site of their new American plant, they knew that the only way to make a dent in the US car market was producing American cars, said Fischer.

“You have to be a local producer to also be in the market,” said Fischer.

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Nissan Leaf Production Could Be Delayed at Smyrna Plant The March disasters in Japan continues to take its toll on worldwide automotive production; the end-result of the disaster yet to be fully realized on a global scale.

On June 14, Nissan announced that the natural disasters could affect the timetable for building the company’s electric Leaf in the US, according to Ward’s Automotive.

Nissan’s Smyrna, TN, assembly plant, where the Altima, Maxima and Nissan’s SUVs are built, is undergoing some remodeling that will let the car company build roughly 150,000 Leafs in the US each year.

The plant was scheduled to start full-scale production in late 2012, but now Nissan is reigning in those expectations.

“The earthquake is putting [the Smyrna plant] in a very difficult situation, but we are not giving up yet. Is there potential to delay it? There may be. We’re assessing right now,” Hideaki Watanabe, Nissan’s vice president of zero-emissions vehicles, told Ward’s.

Until the US plant is ready to manufacture the electric vehicle, Leaf production will be limited to a sole factory in Japan. That factory has the capacity to build 50,000 Leafs a year,

which would be shared between American, Japanese and European buyers.

For the US, Nissan had promised a nationwide rollout of the Leaf by 2012, but Watanabe now says a nationwide rollout will depend on consumer demand and dealer readiness, according to Ward’s.

All of these delays are further aggravating already annoyed customers who pre-ordered the Leaf, according to Ward’s. Some are reporting that the automaker has bumped them off the waiting list and asked them to reapply. Others complain that the expected-delivery date for their EV has fluctuated dramatically.

Nissan expects to deliver about 6,000 to 7,000 Leaf cars to the US by the end of summer. In May, deliveries for the EV increased dramatically to 1,142 units, which is up nearly 100% over April sales. Despite the increase, the automaker had hoped to deliver 20,000 Leafs to customers in the US by summer’s end.

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2011 GCIA Annual Golf Tournament Coming in October

The Georgia Collision Industry Association (GCIA) will host their 15th annual Invitational Golf Tournament on October 12, 2011.

The group promises a fun day of golf and fellowship at the Trophy Club of Atlanta in Alpharetta, GA. The registration deadline is October 7. A playing fee of $75 per person includes lunch & dinner, unlimited supply of drinks and snacks, trophies, Hole in One Car and chances at over $1000 worth of door prizes.

The group is also looking for sponsors, please contact Howard Batchelor at (770) 367-9816 for more information.

Download the information flier which includes the registration form, directions to the club, and Sponsorship form at www.autobodynews.com The association will also hold their monthly members meeting on July 14th at the Crowne Plaza Perimeter Atlanta NW at 6:30pm.

Patrick Delaney from Summit Consulting International will be the guest presenter. His presentation will cover how to measurably improve the processes that impact the profitability and customer loyalty of a shop

Lost Car Claims in MO Tornado Start to Come to Insurers

Joplin, MO, residents trying to rebuild after losing everything in last months devastating tornado are finding a lack of transportation to be one of the difficult obstacles they’re faced with. City officials estimate the tornado damaged or destroyed 18,000 vehicles. About 9,000 insurance claims for vehicles already have been filed, The Springfield News-Leader reported June 1.

Some residents are using rental cars paid for through insurance and others have borrowed cars from friends or relatives. Others are taking advantage of the city’s trolley system, which has been expanded and is free of charge during the disaster, City Manager Mark Rohr said according to Claims Journal.

Towing companies have been working almost nonstop to deal with the towns damaged vehicles. James Cain of Corner’s Wrecker said his company towed about 160 vehicles last week, compared with about 55 in a normal week according to Claims Journal. He said he’s tried to help people, towing about 40 cars for free for customers who had no insurance or whose insurance didn’t cover the cost.

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Georgia Auto Repair Tax Bill Still Alive in House

Georgia House Bill 388, which aims to create a sales tax on services of many small businesses including auto repair shops, is still alive in the Georgia Legislature.

If passed, the bill could have negative repercussions on the automotive service industry. The Automotive Service Association (ASA) and the Georgia Collision Industry Association (GCIA) oppose this legislation.

Despite the fact that no action was taken on Georgia H.B. 388 before the Georgia Legislature adjourned, the legislation could be considered during the special session later this summer.

The ASA and GCIA are asking Georgia independent automotive repairers and consumers to contact their respective representatives in opposition to the legislation.

Visit gacollisionindustry.wordpress.com or www.takingthehill.com for more information.

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Jackie Cooper Imports Hosts Grand Reopening in Tulsa, OK Jackie Cooper Imports, an Oklahoma dealership specializing in luxury import cars, hosted their grand reopen-

ing celebration on June 16 at the dealership's location in Tulsa, OK. The dealership has been serving the Tulsa market since August of 1991 and hosted this reopening to celebrate the dealership’s remodel and new building addition.

The event ran from 6 to 8, and included food and live music from Cynthia Jesseen and the Jambalaya Jass Band. The expanded, remodeled Mercedes-Benz Autohaus now encompasses 8869 square feet.

The addition allowed the dealership to expand and add an expanded Mercedes loaner fleet, a larger show-

room and customer lounge (with more services including media enhancements & refreshments), inside delivery area, expanded service area and scheduling capacity, enlarged service drive, and a full-time concierge.

The building’s architecture was designed by Michael Dwyer and came

The theme of the event was “An Evening of Burlesque” and the dealership was able to entertain the over 600 attendees throughout the evening.

Guests were welcomed by costumed greeters with party favors (garters and rhinestone necklaces), entertained by a 7-piece band and costumed singers and enjoyed clothing and jewelry fashions presented by Saks Fifth Avenue.

The opening coincided with the arrival of the 2012 Mercedes-Benz CLS.

Jackie Cooper Imports left to right: Richard Wasson, Mercedes Sales Manager, Steve Lujan, General Sales Manager, Andy Truman, Porsche Sales Manager, Greg Kach, Managing Partner, Jackie Cooper, Partner

to life through Contractor Stava Construction of Tulsa.

The dealership is located on 93rd and Memorial Drive in southeast Tulsa.

Some of the event’s over 600 attendees lined up to watch the 7-piece band

For more information please visit www.jackiecooperimports.com.

www.autobodynews.com | JULY 2011 AUTOBODY NEWS 11

Shop Showcase

Erica Schroeder is a writer and editorial assistant for Autobody News in Oceanside, CA. She can be reached at eschroeder@autobodynews.com.

Chatham Parkway Collision Center in Savannah, GA, is All About Dealer Partnerships with Erica Schroeder

Chatham Parkway Collision Center has been serving Savannah, GA, for the last

cians have been trained to Toyota factory standards as well as ASE and ICAR,” said Iaco.

Part of the requirements for the certification are for the body shop to have the most cutting edge equipment, including welders, spray booths and lifts. Chatham uses two Blowtherm ultramix down-draft spray booths.

Chatham Parkway Collision Center on Park of Commerce Blvd.

Iaco said Chatham seven years. The body shop is owned is the only Toyota Certified Collision by the nearby Chatham Parkway SubCenter in the low-country Savannah aru/Lexus/Toyota/Scion dealership but area. Their equipment and level of is run independently so they are able to technical knowledge is what sets them service all makes and models. apart from their competition.

The whole crew at Chatham stands outside the building

The body shop partners with the dealership, taking in customers that have been referred to them for service.

“We get a lot of business that way, but we do all makes and models,” said Joanie Iaco, Body Shop Manager. Chatham is able to see an average of 180 cars per month.

Chatham employs 16 people in their 11,000 squarefoot space including; 5 body men, 5 painters, 3 estimators, one office manager, one body Body Shop Manager shop manager and Joanie Iaco one porter who assist technicians on the shop floor.

Chatham is also a Toyota Certified Collision Center, meaning they have to meet certain Toyota benchmarks and standards in 10 different areas, including training and shop materials. Body shops must qualify annually for this certification.

“From a customer’s point of view it’s great—they know all the techni-

Chatham switched to PPG waterborne paint in 2009. According to Iaco, the paint distributor for PPG made the change very easy by providing on-site technical support throughout the transition from solvent-based paint.

“We always welcome the opportunity to use a “greener” product and improve quality at the same time,” said Chatham’s Fixed Operations Director Tom Ryals.

The distributor provided on site technical support for Chatham as long as necessary, accoding to Iaco.

The paint technicians really like the new waterborne system.

Lead painter Jeff Cooper said “the paint match is a lot easier than with Painter Bob Emiry solvent-base. You don’t get dye back or shrinking like with solvent-based paint.”

Painter Bob Emiry added “What you see is what you get—a quality finished product.”

12 JULY 2011 AUTOBODY NEWS | www.autobodynews.com

“These guys here really love it,” Iaco said of the waterborne paint system, “they had a really easy time making the switch.”

Painter Jeff Cooper

Iaco also believes the collison industry is a great career route for women that is often overlooked; she worked her way up through the ranks at JM Lexus in Margate, FL, for 17 years before moving up to Savannah about 6

months ago. She originally wanted to work as a title clerk for the dealership, but got hired in the body shop instead.

“I really enjoy it; this is a great shop, a great area and the technicians are all wonderful,” said Iaco.

The technicians work in teams on the shop floor at Chatham, making finishing the heavy work load this shop brings in easier for everyone.

“We do a lot of Lexus work here, so that quality just has to be there,” said Iaco. Chatham focuses on quality and they believe that starts with their technicians.

Chatham Parkway Collision Center 41 Park of Commerce Blvd.

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Continued from Front Page

TWD in Florida

Some states, such as Maine, N.H. and Utah treat cell phone use and texting as part of a larger distracted driving issue. In Utah, cellphone use is an offense only if a driver is also committing some other moving violation (other than speeding).

Writing in the Ocala Star-Banner, Melinda Carstensen details how the Florida Legislature considered several bills concerning the use of handheld devices during its recent session, which ended May 6. One would have required the Department of Motor Vehicles to make sure driver education programs include information about the dangers of using handheld devices while driving. Another would have banned handheld cellphone use while driving for drivers younger than 18. The latter died in the Communications, Energy and Public Utilities Committee. The former passed the Legislature but died when Gov. Rick Scott did not sign it into law.

Sen. Evelyn J. Lynn, R-Ormond Beach, was one of the authors of yet another bill, SB 80, which would have established the Florida Ban on Texting While Driving Law and would have made texting while driving a secondary offense. It died in the Transportation Committee.

“I think there needs to be a penalty attached to texting while driving,” Lynn said. “I think anywhere in the country, if people are looking down to text, then they don’t have their eyes on the road and that is certainly dangerous.”

According to a July 2009 study by the Virginia Tech Transportation Institute, talking on or listening to a cellphone while driving increases the likelihood of a near-crash or crash.

Texting and driving makes a nearcrash or crash about 23 times as likely as they would be with non-distracted driving.

Of all forms of cellphone use while driving, researchers said, texting was the riskiest. In Florida, distracted driving is the cause of 0.20 percent of fatalities and 1.22 percent of injuries, according to Ann Howard, press secretary for

the Florida Department of Highway Safety and Motor Vehicles.

In 2009, four people were reported killed and 1,532 were reported injured due to various distractions while driving, including toying with the radio, texting or talking to a passenger.

But Howard said it’s difficult to pinpoint the accurate number of crashes that have resulted from distracted driving.

“You’ve got to understand, somebody’s not gonna hop out of the car after a crash and say they were texting. That’s just not gonna happen,” Howard said. “Unless the officer can prove it or sees something, it’s not something they can track easily for that same reason.”

The Legislature’s decision not to ban texting while driving isn’t anything new: In 2010 it considered 11 bills regarding distracted driving but passed none, according to the National Conference of State Legislatures, an organization that tracks state legislation.

Although many opponents of texting bans certainly don’t advocate distracted driving, they customarily have

argued for no government interference on the issue, saying some of the legislation’s measures already are in place.

For example, before beginning drivers can earn their learner’s permits, they must take a written test that includes questions about distracted driving.

A March 2011 poll in the magazine Consumer Reports indicated that youth were most likely to text behind the wheel. Of the 1,026 respondents, 30 percent said they texted behind the wheel.

However, surprising to some, texting bans don’t necessarily decrease the number of crashes, according to researchers at the Highway Loss Data Institute, which draws statistics from insurance claims.

The institute in September 2010 said it studied insurance claims from drivers in California, Louisiana, Minnesota and Washington before and after bans were introduced. It found that in three of those four states, the number of crashes actually increased after the ban.

According to a prior study by the same institute in January 2010, bans See TWD in Florida, Page 26

www.autobodynews.com | JULY 2011 AUTOBODY NEWS 13

Continued from Front Page

Allstate

Auto Insurance Report that the percentage of consumers who got a quote from another insurer was up 23 percent last year, and the percentage of those who actually changed to another insurer was up 56 percent. Only 48 percent of consumers have been with the same insurer for six or more years, down from 53 percent in 2008.

The economy is certainly prompting some of this trend. Many people are looking to shave household costs, and may be willing to switch for far less in savings than it may have taken them to bother just a few years ago.

But another reason for the shopping may be that auto insurance advertising soared 22.6 percent to a record-high $5 billion last year, according to analysis by Dowling and Partners Securities. That reversed a 4.2 percent decline in advertising in 2009.

Prior to 2009, the industry had increased advertising spending for seven straight years. In the past decade, insurance industry advertising —the vast majority of which focuses on auto insurance—has grown 211 percent from $1.6 billion in 2001. The biggest jump in advertising last year was by Farmers Insurance, which spent $505 million, up 125 percent from the previous year.

Insureds are confused. Although motorists may be shopping for insurance, they don’t necessarily know what they are buying. More than onethird of U.S. drivers who have read at least part of their auto insurance policies have had trouble making sense of them, according to an online Harris Interactive poll commissioned by InsuranceQuotes.com.

About 87 percent of the 2,079 insured drivers surveyed said they had read at least some portion of their policies, but 36 percent of those drivers said those policies were somewhat or very difficult to understand.

Insurance rates outpace labor rates. Increases in auto shop rates are not quite keeping up with overall inflation—but pricing for auto insurance is rising faster.

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. 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 (paint labor rates rose similarly). 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 (CPI) for autobody 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. The CPI for auto insurance rose an average of 2.6 percent per year, and the CPI for vehicle parts and equipment (other than tires) rose an average of 3.92 percent per year.

But data for the first four months of 2011 tells a different story. The overall CPI seems to be rising faster than that for autobody work, and the CPI for auto insurance is staying even above that.

State lawmakers consider insurance-related bills. As legislative sessions wrap-up for the year in many states, bills regulating insurers in ways that impact shops continue to be passed, considered or rejected.

A bill approved by the Nevada Assembly to establish a program to help low-income drivers get low-cost auto insurance coverage died in that state’s legislature in late May because it failed to come up for a vote in the Senate within 110 days of introduction.

North Carolina Insurance Commissioner Wayne Goodwin is urging motorists to oppose three bills in that state that would strip his office of its ability to cap auto insurance rates.

“We hear the insurance companies calling it auto rate modernization,” Goodwin said. “Well, if making your rates skyrocket is modern, then you can just call me old-fashioned.”

Wisconsin Gov. Scott Walker has signed a law cutting the minimum property damage coverage that drivers in that state must carry from $15,000 to $10,000.

And in appointing insurance company executive Kevin Clinton as the new insurance commissioner of Michigan this spring, Gov. Rick Snyder made clear his priorities for Clinton. Snyder, a Republican, said Clinton must “make sure consumers are protected by making sure financial institutions are sound,” and will “lead our effort to eliminate burdensome

14 JULY 2011 AUTOBODY NEWS | www.autobodynews.com

regulations that are preventing the (financial) industry from growing.”

More federal oversight coming.

The U.S. Department of the Treasury in May announced plans to create a Federal Advisory Committee on Insurance to provide guidance to the new Federal Insurance Office created as part of federal Wall Street reforms.

Half of the committee’s members will be reserved for state and tribal insurance regulators; other members will be chosen from the various insurance industries, the agent and broker community, public advocates and academia.

Allstate looks to change a downward trend. Allstate’s acquisition of Esurance (and Answer Financial, an insurance quote service) from White Mountains Insurance Group is widely viewed as a good move for the insurer, which has seen its marketshare drop the past two years. The buy should help Allstate, as the country’s secondlargest auto insurer, better compete with No. 3 GEICO and No. 4 Progressive which, like Esurance, sell directly online and which have been gaining marketshare ground as Allstate has faltered. GEICO’s 5 percent growth in total premiums last year

E S ALLE SA LLE E O H O W WH S

PART S

puts it on track to catch Allstate (if Allstate’s rate of decline in recent years continued) by 2013.

Esurance, founded in 2005, sells policies in 30 states and has seen its total premiums grow on average by 20 percent a year for the past five years.

Anti-texting effort continues.

With Indiana recently becoming the 32nd state to approve insurer-supported bans on texting-while-driving (Pennsylvania lawmakers are considering a similar ban), State Farm offers a free widget for the Android phone that it hopes will help drivers avoid the urge to read or send a text while behind the wheel.

The “On the Move” widget allows users to compose and reload customized messages—such as, “I can’t respond right now because I’m driving”—that are sent as automatic responses to incoming text messages.

Collision repairers needn’t be overly considered with such efforts, however. Research by the Highway Loss Data Institute showed last year that accident rates aren’t reduced by laws prohibiting drivers from texting or from using hand-held cell phones.

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On Creative Marketing How to Survive a Summer Slump with Thomas Franklin

In my neighborhood, several shops are saying they’re having a “summer slump.” Maybe it’s the economy.

Maybe people have gone on vacation ignoring needed repairs. With gas prices sky high people are driving less and having less accidents. Whatever the case, it can come down to less business for the moment. What can a shop owner do to survive this down time?

Perhaps one bright spot is all of this is the fact that with less jobs to do, you may have more time to improve marketing and sales and maybe squeeze more profits out of the jobs you do get. This could be an ideal time to take a closer look at previous estimates (and estimators) to see if revenue and profits were slipping through the cracks. Today we have computer software to go through an estimate to find missed opportunities for revenue, but not every shop uses it, or takes the time to use it even if it’s available. Periodically a wise manager will review

a few estimates to see how his or her estimators are doing. A summer slump can be a perfect time to get this done.

When business is slow, less money is coming in. It’s also a good time to look for costs that can be cut without harming the bottom line. Since personnel pay is usually the largest expense at a shop, laying people off is often the first choice in cost cutting, but it may not be the wisest. Cutting back on advertising and marketing during a slow time is not a good idea, but this can be a good time to get more bang for your marketing buck. Today Yellow Page listings and ads are outrageously expensive—unless they’re really bringing in customers. One shop did an inventory of Yellow Page ad responses to see how many calls actually produced business. The largest percentage of calls was from vendors trying to sell the shop some service or product. Hardly any calls produced even an estimate. This is a good place to start cutting costs.

Tom Franklin has been a sales and marketing consultant for fifty years. He has written numerous books and provides marketing solutions and services for many businesses.

He can be reached at (323) 871-6862 or at tbfranklin@aol.com.

See Tom’s columns at www.autobodynews.com under Columnists > Franklin

Another area to examine while you have the time is closing ratios.

How many estimates are resulting in work orders? Are your estimators capturing every possible job? I recall one shop I visited that often had a potential customer walk through some selected areas of the shop to look at highly precise repair operations like frame measurement and color matching. I was told that a little sales talk on the superiority of the shop’s expertise often convinced the customer that this was the best place to leave the car for repairs. This down time could also be a good time to get a couple of display areas highly polished for customer viewing.

Reviewing prior marketing efforts may also produce some unexpected opportunities. One shop I visit has repaired police vehicles for years, but he says when the sergeant in charge of repairs changes, there is always a danger of that individual hav-

ing his own favorite repair facility.

Losing that repair business could be very costly so he makes it a top priority to get to know a new sergeant immediately. A change in personnel at any key business source can represent either a danger of loss or an opportunity for gain. During this summer slump there may be time to call on some dealerships, commercial prospects or potential government agencies to get to know the person responsible for outsourcing vehicle repairs. It can be a good time to make change your ally.

Another good use of extra time can be checking out your neighborhood for ways to get more visitors to your shop. Schools, churches, health clubs and gyms and other organizations where a substantial number of people come can provide an opportunity to host an event at your shop. One shop offered a teacher at a church See Summer Slump, Page 25

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School Uses Nanotechnology to Convert Exhaust Heat into Electricity Autobody News

July 2011

FLORIDA • GEORGIA • ALABAMA • MISSISSIPPI

No one is happy about rising gas prices, and to make matters worse, up to 60 percent of each $4 gallon is wasted, lost as heat that pours out of the exhaust pipe.

But what if some of that heat could be collected and converted back into electricity that can recharge the battery that powers the lights, wipers, power steering, or even the electric motor in a hybrid vehicle?

The technology to do just that exists, but it’s still a work in progress.

The solution lies in thermoelectric devices, and engineers at the A. James Clark School of Engineering, University of Maryland, are challenging previous assumptions about the behavior of the nanoscale materials used to build them. Create better materials, they say, and cars will make much better use of that expensive fossil fuel.

But contrary to the common assumption in nanotechnology, “better” in this case may not always mean “smaller.” That realization may change the way engineers develop future thermoelectric devices.

A material whose response to a change in temperature generates electric potential, or vice versa, exhibits what is known as the thermoelectric effect. Thermoelectric devices can generate electricity when heated by

an external source, or quickly cool or heat their environment when powered with electricity.

So why doesn’t every car have a thermoelectric power generator?

“The reason thermoelectric devices have so far been limited to niche markets is that their efficiency is still too low,” said graduate student Jane Cornett (Department of Materials Science and Engineering). “The goal of our work is to design thermoelectric materials that convert energy from one form to another more efficiently so we can promote the widespread use of products that recycle waste heat and effectively reduce our consumption of fossil fuels.”

For example, cars manufactured or retrofitted with a thermoelectric device placed around the exhaust pipe can use waste heat to generate electricity, improving their overall miles per gallon, especially when a powerdraining system like the air conditioning is in use.

If the device is too bulky and inefficient, however, it will consume more energy than it contributes.

To tackle the problem, Cornett and her advisor, Professor Oded Rabin (Department of Materials Science and Engineering and Institute for Research in Electronics and Applied Physics), had to challenge some popular theories.

“Previous models told us that the use of nanomaterials at small dimensions would lead to an improvement in power generation efficiency,” said Cornett. “The models also predicted that the smaller the nanostructure, the more significant the improvement would be. In practice, people weren’t seeing the gains they thought they should when they designed thermoelectric devices with nanoscale components, which indicated to us that there might be an issue with the interpretation of the original models.”

Cornett and Rabin have presented a revised thermoelectric performance model that confirms that smaller is not always better. Using advanced computer modeling to investigate the potential of thermoelectric nanowires only 100 to 1000 atoms thick (about 1000 times smaller than a human hair), they demonstrate that in the set of the tiniest nanowires, measuring 17 nanometers or less in radius, decreasing their radii does result in the increased thermoelectric performance previous models predict. In nanowires above 17 nanometers in radius, however, an improvement is seen as the radius increases.

“The surprising behavior in the larger size range demonstrates that a different physical mechanism, which was overlooked in previous models,

is dominant,” said Cornett.

“People were looking for solutions in the wrong places,” said Rabin. “We’ve created a better understanding of how to search for the best new materials.”

Thermoelectric devices are currently used in a few consumer products, including refrigerators and CPU coolers in computers. They could eliminate the need for fluorocarbon refrigerants, giving rise to fluid- and compressor-free cooling systems that pose fewer health and environmental hazards.

Cornett and Rabin’s research is supported in part by the Minta Martin Foundation and the ARCS Foundation.

For More Information: See “Thermoelectric figure of merit calculations for semiconducting nanowires.” Jane E. Cornett and Oded Rabin. Applied Physics Letters 98(1), 182104 (2011) or visit http://apl.aip.org/resource/1/applab/v98/i18/p182104_s1.

The Clark School of Engineering, situated on the rolling, 1,500-acre University of Maryland campus in College Park, Md., is one of the premier engineering schools in the US, with graduate and undergraduate education programs ranked in or near the Top 20.

The Clark School garnered research awards of $171 million in the last year.

Toyota Motor Corp. will face the first test trial in February 2013 of lawsuits combined in federal court that claim a defect causes the company’s vehicles to speed up uncontrollably, a judge said according to Bloomberg News.

U.S. District Judge James V. Selna in Santa Ana, California, said in a “tentative order” that the first bellwether trial would be of claims by the families of two people killed in a Nov. 5, 2010, crash in Utah. Paul Van

Alfen died when his 2008 Toyota Camry crashed into a wall. Passenger Charlene Lloyd died the next day.

Toyota, the world’s largest automaker, recalled millions of U.S. vehicles starting in 2009, after claims of defects and incidents involving sudden unintended acceleration. The recalls set off hundreds of economic-loss suits and claims of injuries and deaths.

“The conduct of a trial in the first quarter of 2013 will markedly ad-

vance these proceedings,” said Selna, who is overseeing most of the federal suits. A bellwether case is used by the court and lawyers for both sides to test evidence and liability theories before moving on to other trials or limiting future litigation. Selna picked the Van Alfen case from six submitted by lawyers for the company and plaintiffs.

In February, the National Highway Traffic Safety Adminis-

tration said their probe of possible electronic defects found no causes for unintended acceleration other than sticking accelerator pedals and floor mats that jammed the pedals.

“We are pleased that the initial bellwether will address plaintiffs’ central allegation of an unnamed, unproven defect in Toyota vehicles,” Celeste Migliore, a Toyota spokeswoman, said in a statement.

Toyota to Face First US Sudden-Acceleration Test Trial in 2013

16 JULY 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.

Gonzo has been serving the Tulsa area at Superior Auto Electric for over 27 years. See his book “Hey Look! I Found The Loose Nut”, which provides a Good Laugh for Mechanics of Any Age. The book is available at amazon.com. Contact Gonzo at Gonzosae@aol.com.

A Homemade Air Bag Light—Brilliant Stupidity with Gonzo Weaver

Sometimes I wonder if the things I find wrong with some cars are there for me to find out how ridiculous some people can be. I’ve got to question the thought process and not-sobrilliant ideas that some people have, just before total stupidity takes over. I gotta ask … “What were you thinking?”

The other day I had a late 90’s GM in the shop. The owner had recently bought it from a small car lot, and had no idea of the history of the vehicle. It was one of those “great deals” that he couldn’t pass up. Why is it these great deals always have some sort of catch to them? Maybe it would be a good idea to have it checked out before you buy it. After looking at it, I might tell you to “pass it up.” Honestly, I’ll never understand why someone will buy a used car when they know nothing about it, or decide after they buy it to finally have it checked

out … but they do.

This particular creation had some strange problems. It had a strange battery drain. At first glance all the instrument cluster warning lights, interior lights, and all the electrical functions seemed to be working correctly, but there was a drain strong enough to drain the battery in a day or so. Finding the solution was going to lead to an even bigger problem.

Narrowing it down by watching the amp meter for the parasitic draw value, and pulling fuses till the numbers dropped back into factory specs was the next procedure. Of all things, it ended up back to a crossed up circuit between the air bag system and the charging system. I decided to check the air bag system for codes.

This was interesting, it was offline. No communication with the crash box. Hmmm, I’m a little confused, because I know I saw the air

bag light come on and go off when I pulled it into the shop. Turning the key off, and then restarting the car didn’t help me much, because the air bag light was on and then off. But then again, maybe it did help. Like I said, the light came on, and then went off … Hey, wait a minute isn’t there supposed to be a few seconds before it goes off? Isn’t this how it verifies its systems are functioning properly? So, what’s going on here?

As a technician I’m trying to follow the codes, the diagnostic charts, and the operating description of the system I’m working on. This particular problem wasn’t following any typical scenarios. Take into account this whole thing started off because of a battery drain … I’m really starting to scratch my head over this one.

I had a lot of different ways to go with this one. I could try and follow the draw a little further, or I could

chase the problem from the air bag side of it. Maybe, it will all lead to the same problem. I think I’ll work on it from the air bag side of the problem.

The air bag fuses were all good, and the light did come on in the dash.

So, I decided to pull the air bag diagnostic module out and pin check the leads to see if that would go anywhere. My first check on any system is the positive signals and then the grounds. Why? Because a loss of ground can be seen as an open lead, and if the positive signals are there, you’ll actually find a voltage signal on the open ground. That’s what electricity wants to do: find ground, and take the shortest path back to the source of the voltage.

In this case they were all there, but when I checked the leads to the instrument cluster the voltage was coming towards the crash box rather than See Airbag Light, Page 19

www.autobodynews.com | JULY 2011 AUTOBODY NEWS 17

SUVs Now Safer Than Compact Cars in an Accident, IIHS Report Says Sport utility vehicles are now safer than cars of the same weight, thanks to anti-rollover technology, according to a recent study.

The Insurance Institute for Highway Safety said in a report issued June 9 SUVs in the 2006-09 model years had a driver fatality rate half that of cars.

“The rollover risk in SUVs used to outweigh their size/weight advantage, but that’s no longer the case,” thanks to electronic stability control, said Anne McCartt, the institute’s senior vice president for research, according to the Detroit News. “Pound for pound, SUVs have lower death rates.”

In assessing risk, the study counts the number of years that each model has been on the road and multiplies that by the number of that model’s vehicles.

SUV driver deaths totaled 28 per million registered vehicle years, compared to 52 for trucks and 56 for cars.

Among all vehicles, minivans again had the lowest driver fatality rate: 25 per million registered vehicle years, according to the new report.

The last time the institute con-

ducted a similar study, in 2007, large minivans had 66 deaths per 1 million vehicle years, while very large ones had 39, the lowest overall fatality rates among mainstream vehicles.

Researchers say minivans tend to have the lowest fatality rates in part because drivers are more likely to be carrying young children and are more careful.

The relative risk of different types of vehicles has changed, as automakers have worked to make SUVs more stable and less prone to rollovers.

When the insurance institute conducted its 2007 study, for 2002-05 models, car death rates were lower than SUVs in every weight class but one. In the latest study SUVs in all weight classes had a lower driver death rate.

In 2007, the National Highway Traffic Safety Administration required all vehicles to be equipped with electronic stability control, or ESC, by the 2012 model year.

By the 2008 model year, ESC already was standard on 65 percent of cars, 96 percent of SUVs and 11 per-

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will total $985 million, $111 per vehicle with antilock brakes and $479 for those without ABS. But the benefits far outweigh the costs, according to NHTSA. “Thanks to this technology, we anticipate the number of rollover fatalities to drop by thousands every single year,” NHTSA Administrator David Strickland said in a statement.

Rollover crashes, he said, are the deadliest of all wrecks.

When it adopted the ESC regulation in 2007, NHTSA predicted the technology could reduce rollovers by 84 percent, preventing between 5,300 and 9,600 deaths and as many as 238,000 injuries a year. Rollovers, which had exceeded 10,000 for years, fell to under 8,300 in 2009.

The insurance institute study said ESC reduces the risk of a fatality in a single-vehicle crash by 49 percent and 20 percent in multiple-vehicle crashes.

It also lowers the risk of a deadly crash by 33 percent overall, and cuts the risk of a fatal single-vehicle rollover by 73 percent. Federal rules

cent of pickups. The technology helps avoid skidding, as well as maintain control when drivers swerve.

ESC senses when a driver may lose control and automatically applies brakes to individual wheels to help stabilize the vehicle and avoid a rollover. Motorists often have no idea ESC has kicked in to protect them.

The Alliance of Automobile Manufacturers, the trade association that represents Detroit’s Big Three, Toyota Motor Corp. and eight other automakers, said the new study shows that ESC has become extremely valuable.

“As automakers, safety and innovation are two of our most important values, and our actions back that up: Automakers were introducing ESC before the government rulemaking on it,” alliance spokesman Wade Newton said to the Detroit News. “ESC is considered so effective that NHTSA has previously estimated that the technology can potentially prevent 71 percent of passenger car rollovers and 84 percent of SUV rollovers.”

NHTSA estimated the cost to the automotive industry of adding ESC

See SUV Crashes, Page 31

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Prevalent Airbag Fraud Prompts Increased Penalties in New California Law Consumers must navigate a number of potential dangers when considering a used car. They have to make sure the mileage is accurate, determine if the engine is in reasonable condition, and ensure that the brakes and suspension are in working order, to name just a few.

However, even the most conscientious buyer may not think about whether the airbags are in their original condition, especially if the buyer is purchasing a car with a salvage title (a car that had previously been in an accident). Because of this naivety, airbag fraud is becoming increasingly common.

National Highway Transportation Administration (NHTSA) issued a report on fatal crashes in 2008 that revealed troubling information about used airbags. In 255 of 1,446 fatal accidents, airbags had not been replaced after a previous crash. In nearly 50 percent of all fatal crashes with nondeployed airbags, these safety devices were defective or simply missing. So while non-deployments are rare, fatalities are likely when airbags do not work as intended.

In the abstract, airbag fraud occurs when the original airbag is not replaced or calibrated to its previous condition.

Airbags are expensive materials and the replacement process is a delicate exercise. Unscrupulous used car dealers more likely to shirk this process to save time and money in getting cars ready for resale. By reducing the amount of money put into a car, the potential profit increases. Repair shops also engage in this practice for the same reasons. They stand to make more money by purchasing airbag parts very cheaply over the Internet, yet they can charge a customer or insurance company full price for the parts and labor.

As such, airbag fraud has two distinct components: insurance fraud, where the airbag cavity is stuffed with concealable materials such as rags, foam or paper towels while the insurance company is billed for actual airbag parts; and refund scams, where a body shop actually orders a new airbag for a customer but never installs it. Instead, the shop bills the cusSee CA Airbag Law, Page 31

Continued from Page 17

Airbag Light

to the cluster. What now? (Here it’s helpful to remember: I love my job, I love my job, repeat as necessary.) I guess I better pull the cluster and check the wiring from there back to the crash box and see if that goes anywhere.

After pulling the dash it didn’t take a rocket scientist to see what the problem was. On the back of the instrument cluster somebody had cut the circuit board line to the air bag light, and then added a soldered-on wire to the charge light. So when the charge light was on, so was the air bag light.

Once the car started (provided the charging system is working correctly) the charge light would go out, and so would the air bag light. Huh???

You can imagine my “mechanical language” was not for the faint of heart when I found out what was going on. It seems some genius didn’t want to replace the air bag module, so they invented their own air bag warning light instead. Brilliant stupidity…

I think that’s the best way to explain

it. I can’t imagine somebody went through all the trouble to deceive the buyer of this car for a safety issue such as air bags. It should be a criminal offense and it is in some states (see adjacent story this page.)

After undoing the homemade airbag light, the draw was completely gone. Now the only thing to do was to replace the air bag module to bring it back up to working order.

Leave it to some unscrupulous dork out there to try something like this. I’m not saying anybody would have caught the problem at first glance. It was a well thought out deception. If you were not intentionally looking for an air bag light delay, I don’t think you would have caught the problem. But, I still think it is a good idea to have any car checked out prior to buying it. Maybe, just maybe, you can spot problems like this before you own the problem.

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www.autobodynews.com | JULY 2011 AUTOBODY NEWS 19

Inside Insurance

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

Telling the Tale of the “Neutral Information Provider” with The Insurance Insider

In the Middle Ages, civilians didn’t have computers, television, radio, Pong, or even ping-pong. So what did they do for entertainment? One tradition was story-telling. The great thing about telling such tales was that you were forced to use your imagination. Although it’s important to note that you weren’t expected to believe everything that was being said.

Fairy tales often have a happy ending and tell us about a world where

anything is possible. The tale I’m about to tell you is about the “neutral information provider.”

This tale begins in the 1980s, around the time of the first electronic estimating system. For decades prior to the advent of electronic estimating, shop and insurers slaved away preparing handwritten estimates. Along came a brilliant man named Maximillion. He believed that there was a faster and more accurate way to prepare an estimate. He thought he could equally help body shops and insurance companies through the use of technology. Because this new idea would benefit both parties, he thought he would be able to sell this new product to two different customers. In fact, he could charge the same amount to each. It was the beginning of the now over-used term “win-win.” All he had to do was find a way to take the data from printed estimating books and put it in an electronic format.

In a matter of three weeks, he created a robust software application.

He spent the next few months selling his product to insurers and repairers

alike. Everyone in the country adored him. He was a hero living the American dream. He was making far more money than he ever dreamed possible.

Life was grand. Who would have imagined that putting a book into a computer could make so many people so happy?

If we were in Medieval Times, our story would have ended there and the hero would ride off into the sunset with a beautiful maiden on the back of his horse. But because we’ve witnessed computers, television, radio, Pong and pingpong (and even Beer Pong, a newer non-technology-driven version of Pong fueled by alcohol), we have something else they didn’t have in the Middle Ages: “reality.” It’s difficult to use your imagination and dream big when you know it’s virtually impossible to have a happy ending with an information provider.

Our story resumes with our superhero Maximillion looking to expand his very profitable business. The challenge is that he now has competition. As a result, he is losing customers. Max is faced with making his first big decision since deciding to go into business. Does he sell his product one at a time to 60,000 body shops spread all across this free and beautiful country, or does he sell it to a handful of insurance companies? I think we all know which route Max took—the path of least resistance, of course.

The insurance companies purchased the estimating system and required shops to buy the program as a prerequisite to be on their direct repair programs. Maximillion’s profits soared and so did the insurance company’s leverage.

Here the fairy tale ends and the nightmare begins for the shops. Maximillion is trying to serve two masters.

Unfortunately, it’s not possible. Shops

20 JULY 2011 AUTOBODY NEWS | www.autobodynews.com

and insurance companies have different interests and needs. The once-neutral information provider is being pulled in two different directions.

I think everyone knows who prevailed. Maximillion could lose millions if he chooses to side with the shops. Right or wrong, he is heavily influenced by the insurance companies. Although he attempts to remain neutral, it’s nearly impossible in a world where cost drives most decisions.

Now let’s use our imagination as to what happens next. Over the next 30 years, the strong influence of the insurance companies is evident in all three major estimating systems.

We’ve witnessed and experienced the so-called enhancements to the systems, enhancements that were clearly designed for one purpose—to appease the demands and suggestions of insurance companies.

This isn’t a fairy tale. It’s the reality of what has transpired. Shops should be outraged. They should be sending a strong message back to the information providers and take action where appropriate. For the information providers, being neutral should not be a choice but a requirement.

Shops and insurers alike pay a lot of money to the information providers. The estimating software should not be influenced by any one group or groups. These companies should provide information—not a service where the highest bidder decides what’s added or modified to the database or system.

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.

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Our Customers, Our Friends

Eileen Sottile and the Quality Parts Coalition Offer Their Legislative Update The Quality Parts Coalition (QPC) is a group of about 80 representatives from different companies and associations that focuses on preserving competition of auto repair parts by supporting the availability of lowercost alternative collision repair parts for consumers and insurers.

Eileen Sottile, a representative for QPC who has been instrumental in getting legislation together for the organization to present to Congress, gave a legislative update to Eileen Sottile Autobody News on the group’s upcoming endeavors now that there is a new Congress on the hill.

QPC came about in response to a 2005 patent infringement suit that Ford brought to the International Trade Commission (ITC) against Keystone, alleging design patent infringement of exterior collision repair parts for the 2005 F-150.

It was after this case that coali-

tion members realized they “needed a permanent change to the patent laws,” said Sottile.

According to Sottile, up to that point people in the aftermarket crash part industry didn’t think they would have design patent issues on cosmetic parts.

Ford brought yet another lawsuit against LKQ/Keystone following the F-150 case, and Sottile said that without a change in the patent laws carmakers can continually come back with lawsuits on a part-by-part basis and bankrupt the aftermarket parts industry.

Sottille says QPC was created in response to these issues to try to find a solution. This group represents all aspects of the repair industry, including; insurers, collision shops, seniors, retailers and aftermarket parts companies and manufacturers.

Some consumer groups have also voiced their support for QPC’s legislative endeavors, although they are not QPC members.

“In most cases we didn’t feel they even deserved a patent,” said

Sottile. The cosmetic parts in question are so similar to their aftermarket counterparts that Sottile said that

QPC has a hard time seeing how they rose to the standard of getting a design patent.

According to Sottile, the car companies currently have a “near monopoly” on the crash parts market with 72% control of the market and these design patents will only increase that holding.

QPC is gathering support for legislation the group may introduce in Congress sometime this year.

QPC originally introduced a bill into Congress in 2009; it aimed to make the act of providing a part solely for the purpose of repair exempt from design patent infringement. It was based on current laws in Australia and the UK known as “repair clauses.”

That bill did not get voted on by the full Senate and House before their ses-

sion closed.

QPC is currently working in a bipartisan manner to explore potential legislative solutions to the design patent issue for introduction to the current Congress that is in session.

QPC has had several meetings with Congress, including a meeting with the House Intellectual Property Subcommittee and a full Judiciary House meeting. According to Sottile, the support for reforming design patent laws with a repair clause is there, the group is just awaiting reintroduction in Congress.

“If a patent is awarded, competition in the secondary market should still be permitted,” said Sottile.

Sottile drew the distinction that QPC has no intention of prohibiting the protection a patent provides primary competitors against each other with the legislation—”but in the secondary market, when the part is only provided for repair, we don’t think it should be subject to design patent enforcement,” said Sottile.

For example, QPC believes that See Quality Parts Coalition, Page 23

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www.autobodynews.com | JULY 2011 AUTOBODY NEWS 21

Parts Profiles

Larry Williams is an innovative parts manager with national awards and over 30 years of experience in creating and managing profitable departments. He can be reached for consultation at ljoew2@gmail.com

Apathy, the Real Opponent in the Wholesale Parts Business with Larry Williams

APATHY – absence of passion, emotion, or excitement.

I hate to say this, but this word seems best to describe the attitude of many parts managers I have spoken to. It’s not their fault, just their response to their daily input of negative information. Every day they get another dose of pressure, criticism, and doom. They worry about the dealership’s future, loss of customers, rising costs and falling profits. All this on top of the daily stress of filling orders, creates the natural response, “please just let me survive.” They exist on a short term basis, hour by hour, day by day, and month by month. This is how it has been for over three years, since the start of the last economic crash.

We have lost 15% of our dealerships. The weak have perished, and the strong have survived. Here is the good news… things seem to be getting better. According to the L.A. Times, we’ve had a 20% increase in auto sales so far this year! This is the start of a new growth cycle. Smart survivors are taking this opportunity to shed their fears and expand their operations. I say smart because this is the best time to get aggressive and go after new business. The survivors have less competition, and should see steadily increasing sales.

We will always have a minimum level of business. Our customer’s lifestyle demands transportation. Our communities are designed with separate living and commercial areas, and walking between them is not an option. We must have our cars! Maintaining and repairing a modern automobile requires trained technicians and expensive equipment. Very little work can be done by the average owner. Money for maintenance is still short, but repairs are a necessity. That means steady work for all of us.

Now is the time to be positive.

Shake off that dull, negative attitude.

Aggressive solicitation of new customers will pay off for those dealers that move now. Take some time and visit your best customers. Congratulate them for their tenacity and tell them you will be with them for the good times ahead. Partners who sur-

vive hard times always find their bonds stronger. Keep an eye out for customer opportunities that you may have overlooked. Be ready to serve the new customers that will be calling you.

There is another major negative assumption to overcome. Several parts managers have told me of their loss of interest in the wholesale market. The main reason for this is the lack of profit. It seems that there is constant pressure to reduce costs, starting at the corporate level. I am talking about the insurance companies that cover most of today’s repair costs.

In a never-ending search for investor earnings, quality, care, workmanship, and pride are considered to be unnecessary. The only thing that matters to these corporations is their bottom line.

They constantly push the repair shop to reduce the cost of the repairs. The shops cannot reduce their labor cost any lower; employees are already at the poverty level. The only place to cut is the cost of materials. The solution for some shops is the use of cheaper parts. These shops adopt the practices of the corporations, and consider only the cost of materials. Save a dollar, no matter what method you use.

We need to fight back! Quality in both parts and service needs to be worth more than a 5% discount. For example, sheet metal has been a center of concern for several years. Cheap replacement imported metal has found customers, at the cost of quality. Numerous organizations have come out to support the use of original parts only. We all agree on the value of quality in this area. How about the rest of the operation? How about quality of service?

I have never advocated sacrificing service and quality for cost. I believe if you pay less, you get less.

There is a minimum everyone must pay for quality service. The competition should be for better service, not cheaper prices. I believe that servicing the wholesale market is still a rewarding job. Our final goal, happy customers, is a worthy goal and customer satisfaction brings us our own happiness.

22 JULY 2011 AUTOBODY NEWS | www.autobodynews.com

Autobody News has always supported quality in our industry, promoting the best products, materials, and service, never “less for less.” In keeping with this philosophy, I would like to offer an opportunity for those dealers who believe in the quality of their service to speak out. I would like to promote those dealers who still believe in customer satisfaction.

Strong, optimistic leaders deserve recognition and support. Any of you that believe as I do, and want to spread their message of quality service; contact me at ljoew2@gmail.com.

I will include you in my column, and promote you as a truly distinctive dealership, a good partner in the auto body repair industry.

Take an active, aggressive role now in your local community. Attend as many local business meetings of the auto industry as possible. Take a stand for quality service above all

else. Our customers deserve our best efforts, and our best efforts will bring us more customers. This is an opportunity for a “win-win” for all.

Advertise in our CLASSIFIED SECTION for $50 per column inch!

Place an ad in our Autobody Marketplace section of Autobody News.

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Boyd Gerber Group to Acquire 28 Locations of Cars Collision LLC, Total Now 164 in North America

Continued from Page 21

Quality Parts Coalition

design patent laws should prevent BMW’s signature grille from Ford recreating it and using it on their Fiesta, but it should not prevent aftermarket parts companies from recreating the BMW grille for replacement on a damaged BMW vehicle.

Sottile also argues that the preservation of competition in the parts market in this manner ultimately allows for the consumer to benefit.

“There’s a big cost difference between these parts; about 25 to 60 percent,” said Sottile. “The timing is critical in this economy.”

For more information about QPC and their legislative endeavors please visit keepautopartsaffordable.org.

The full text of the QPC’s past legislation can also be seen at www.autobodynews.com.

www.autobodynews.com CHECK IT OUT!

Boyd Group Income Fund announced June 20 that it has entered into a definitive agreement to acquire the 28 locations of Cars Collision Center of Colorado, LLC and Cars Collision Center, LLC, in a deal valued at approximately $21 million U.S. Cars is a private company that operates 14 locations in Illinois, eight locations in northern Indiana, and six locations in Colorado. It generated sales of approximately US$65 million in the 12 months ended April 30, 2011.

Subsequent to the acquisition, Boyd will have a total of 45 locations in the Chicago-area market, up from 23.

This is the company’s second major acquisition in about year. Last summer, Boyd announced its acquisition of the 37 locations of True2Form Collision Repair Centers for $18 million U.S. One year ago, prior to the True2Form acquisition, Boyd had a total of 56 U.S. locations. Following the True2Form deal, this latest Cars acquisition and a number of individual deals since last summer, the company has more than doubled the size of its U.S. operations to 127 stores. The company has not acquired any additional locations in Canada.

“We are very pleased with the planned acquisition of Cars, as we con-

tinue to execute on our stated strategy of growing our business,” said Brock Bulbuck, President and Chief Executive Officer of the Boyd Group. “By

Boyd Group North American Coverage

our estimates, the acquisition will position Boyd as the largest multi-location collision operator in North America, not only in terms of number of locations, but also in terms of annual sales. After completing this transaction, Boyd will have a total of 164 collision repair centers across 13 U.S. states and four Canadian provinces.

Bulbuck said, “We expect to see substantial benefits from the transac-

tion, including expanded critical mass and presence in one of our key markets, an expanded national footprint which translates into enhanced value to our U.S. insurance company clients, as well as additional synergies.

We are confident that the similarities between the business models of Boyd and Cars, as well as each company’s vision for the future, will result in an excellent strategic fit. While we are continuing our growth strategy of adding eight to 13 new locations per year, this acquisition represents a unique and attractive opportunity to acquire another strategic multilocation repair business and achieve accelerated growth.”

The transaction is expected to be completed by July 1, 2011, subject to certain closing conditions being fulfilled. Funding for the transaction will be through a combination of cash, U.S. bank debt, third-party financing, and a seller take-back note. Boyd said the company will not be issuing any new equity to fund the transaction.

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1875 SOUTH ORLANDO AVE AVE. – MAITLAND, MAITLAND FL 32751 www.autobodynews.com | JULY 2011 AUTOBODY NEWS 23

Shop Strategies for Savings

Walter Danalevich, AAM, has been the owner of Santa Barbara Auto Refinishing since 1979. Contact him at: sbarbody@earthlink.net.

Business Financial Security Preventive Maintenance with Walter Danalevich

Earlier this year (Autobody News, February, 2011) I wrote a shop savings article (Credit Card Processing Fees—Dings, Dents, and Crashes at Your Bottom Line) for ABN readers warning about credit card host processing fees which could significantly ding their bottom lines. My February article pointed out that these fees can be very substantial for body shops.

If you missed the article, you can read it along with my other columns in my column section www.autobodynews.com/columnists/danalevichwalter.html.

Now I would like to re-emphasize the importance of taking extreme caution with authorizing Credit Card hosting agreements and specifically their cancellation fees. A body shop owner contacted me to share his story involving a nightmarish experience pertaining to a cancellation fee he got sucked into compliments of his prior Merchant Credit Card processing Host.

This body shop owner read my ABN article and phoned me to express his frustration during the past five months as a result of his shop cancelling a merchant credit card host service. His shop had recently signed a service agreement, based on the credit card host’s friendly telemarketing sales pitch: “we will give you the lowest credit card processing fee rates on Earth.” Here’s what happened.

The shop’s bookkeeper was continuously aggravated by the credit card host’s customer service department. When she called with questions they were consistently tossed back and forth between service reps. None could provide adequate explanations of the reason for transaction fee deductions from their business checking account.

Soon afterward, the owner and bookkeeper accepted an offer from another Credit Card host, who also offered “the lowest processing fee rates on earth.” The new credit card host sweetened the deal by agreeing to pay the cancellation fee up to $400.

Sounds good, right?

The shop owner proceeded to send an e-mail to his existing credit card host giving written notice for cancellation of service. A couple of

months later the bookkeeper performing account reconciliation noticed an unfamiliar automatic withdrawal on their business checking account and informed the shop manager. He assumed the fee was taken by the prior credit card host which he had cancelled months ago. The shop owner inquired with the Credit Card Host and was told they have not received a cancellation notice and were continuing to actively withdraw monthly minimum usage fees as per the user agreement.

The shop owner had fortunately kept a hard copy of the cancellation email and read it to the credit card customer service rep. The credit card rep made it sound as if fault was with the body shop and not the credit card host, and wanted the shop to send a “signed letter” of cancellation of services.

Shop manager complied and sent the same e-mail letter previously sent and attached his signature.

About a month later the shop manager received a phone call from the fast talking credit card host representative indicating that a new cancellation fee of nearly $1,000 was due.

The shop owner told him he was crazy (using some colorful language) and that he wasn’t responsible for their inadequate customer service. The credit card host rep acknowledged that customer service changes had taken place. The manager requested a breakdown of the proposed cancellation fee charges and was told he would receive them that very same day. No cancellation fee invoice was received that day.

A couple of days later the shop received a copy of the initial service agreement, signed by the manager, which stated in tiny size 6 print that there was a $900 minimal cancellation fee if service was terminated before three years had elapsed. There was also a cancellation fee of $250 disclosed in the terms and conditions manual. This was the fee the shop was planning on forwarding to the new credit card host for reimbursement.

Also received was a cancellation form invoice for $1,235 which had absolutely no explanation attached.

By now the shop owner was not feeling any love for the self-pro-

24 JULY 2011 AUTOBODY NEWS | www.autobodynews.com

claimed “lowest credit card processing fee on Earth” company. He was worried that the credit card host had possession of his business checking account bank routing number and knowing the credit card host could easily insert a large “dent” into his business checking account balance at any time.

The body shop owner had a meeting with his bank manager to discuss the best solution and some peace of mind. The bank manager said a stop payment could be placed that would prevent any future unauthorized withdrawals. However he cautioned that there are common ways the credit card host can easily get around this security tool. The bank manager recommended that the body shop owner permanently close his bank account and open a new account. The shop owner followed his bank manager’s advice and now sleeps without the

worry of having automatic withdrawals made to his account without his authorization.

This story is a cautionary tale for avoiding crashes to your bottom line and a reminder for us all to be careful who we allow access to our banking and other financial information. Oh yeah, watch out for the #6 or smaller size print before you sign anything.

Ed—Anyone considering a new credit card processing provider should start with a review website comparing fees like that at credit-cardprocessing-review.toptenreviews.com and proceed with due diligence from there. Your mileage may vary.

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Chevy Volts Selling at Inflated Prices, But GM Says Volt Will Be Cheaper

Continued from Page 15

Summer Slump

school an opportunity to bring her class to the shop for an educational tour to see what collision repair is like.

Many shops have a large open space that isn’t used on a Saturday or Sunday afternoon. Offering a space for a bake sale or group meeting can get local people familiar with the shop and its activities. Most people prefer to patronize a familiar business.

Another way to benefit from checking out your neighborhood is noticing what signs are eye-catching.

Many business owners are proud of their display efforts and would be willing to share information on what signs and displays have been most effective for bringing in new customers.

Although these are reaching customers for a different kind of business, the odds are good that this information may open your eyes to a new way to reach local people. It’s unlikely you would ever try these outreach efforts when business is good, but taking advantage of this time to reach out may help you survive the “summer slump.”

Several Chevrolet dealerships around the country are pricing this already expensive vehicle as much as $20,000 above the Suggested Retail Price, according to GreenTech. Some dealers are reportedly selling Volts as used vehicles so they can pocket the $7,500 tax credit.

Gas prices have caused a number of new car buyers to seek to buy the Volt and other electrics and hybrids.

Some dealers and Chevrolet reps claim that such practices are “exaggerated.” AutoNation has, even, asked its dealers not to charge a premium for the Volt. In some cases, however, GM has had to intervene and has encouraged dealers to take the long-term view or approach to this opportunity.

Some say this is capitalism at its worst while others retort that the practice of marking up hot vehicles may be termed “un-American”—but hot vehicles have always been marked up for years. What is ironic and even hard to understand is that there are indications that potential buyers are actually not being turned off or even angry about such pricing practices—which just does not seem to ring true.

This kind of conduct by Chevrolet dealers is really ironic as well as self-defeating particularly since the public generally still regards the dealer

GALLOWAY MAZDA

body to be not always trustworthy, transparent, or timely with good guy sales tactics, according to GreenTech.

Basically, these dealers are blowing a great opportunity to demonstrate to new car buyers, particularly, the kind of people who can afford to buy a Volt, that they are fair and above board in the sales process for a new Chevrolet.

Actually, it is very annoying, frustrating, and even surprising that we keep seeing automotive retailers behave like this. This is price gouging and an illegal sales practice. These dealers are preying on people who want to be responsible citizens and to be green by buying a Volt.

The even more confounding aspect of this price manipulation is that some dealers will seek to “devalue” the trade of the green vehicle buyer by suggesting that their three year or more old vehicle is a gas hog and therefore not worth even what Kelley Blue Book says it should be.

General Motors said June 10 that dealers in all 50 states can take orders for the 2012 Chevy Volt, which will come in a model priced just below $40,000.

The plug-in hybrid Volt is now available in six different models, rather than three, with the lowest listed at $39,995, or about $1,000 less than the 2011 price. The high-end model with

leather, backup camera, navigation system, and other features is $46,265.

Prices include the destination fee but not other taxes and fees.

Buyers can benefit from a federal tax credit of $7,500 for plug-in vehicles with batteries the size of the Chevy Volt's. GM is already working on bringing down the cost of the electric powertrain in the Volt, as the price is still higher than that of traditional hybrids.

Significantly for GM, the Volt will now be on sale nationwide, rather than in just seven states and the District of Columbia. The company took a regional rollout approach in an effort to work out kinks in the selling and home charging station installation process.

Since GM and Nissan, which makes the all-electric Leaf, started delivering their plug-in sedans about six months ago, auto industry watchers have been tracking the monthly sales totals, with both carmakers about even in total sales for the year to date, according to GreenCarReports.com.

GM said it expects to sell 45,000 Volts to fleet and retail customers in 2012. The Volt refresh will include a handful of new features, including three years of OnStar navigation service, and the same eight-year/100,000 mile warranty for its battery.

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www.parkwayfamilymazda.com www.samgallowaymazda.com www.autobodynews.com | JULY 2011 AUTOBODY NEWS 25

Inspector Gadget—Making a Custom Light Inspection Tunnel to Find Paint Defects

by Janet Cheney

What happens when two brainiacs spend time together? At Autocraft Bodywerks in Austin, Texas it happens to be a Light Inspection Tunnel, used to find defects in the painting process and perfect the standard of their work in this high end collision repair facility. Owner John Borek and his IT guy, Dan McLaughlin, of Next Technologies, designed and built this Light Inspection Tunnel.

The Light Inspection Tunnel came about through John Borek’s continual quest for improvement in his business. He believes that if OEM’s are manufacturing automobiles, and collision repairers are in the business of remanufacturing automobiles then certain technology should apply.

Borek realized it was becoming more difficult to find imperfections in refinish. He also recognized the challenges for paint buffers to reach the lower half of refinished panels to properly cut and polish cars. He thought through the process; how do the manufacturers build, refinish and examine the cars?

A Light Inspection Tunnel, similar to the OEM’s would work well in this high end collision repair center, helping deliver customer perfection.

The information Borek was looking for was not available from the manufacturers, (tunnel lighting technology is not revealed to the public), so he developed a plan. He went to iTunes and downloaded all National Geographic

The Light Inspection Tunnel designed by John Borek, Autocraft Bodywerks in Austin, Texas

Channel’s ‘Ultimate Factories’ and studied the auto manufacturer segments. He joined SAE, the Society of Automotive Engineers, and extensively researched and found several articles on automotive paint defects and paint inspection lighting. Information from various sources were gleaned to perfect the project. Borek found many

Regardless of legislation, Howard, from the Florida Department of Highway Safety and Motor Vehicles, said drivers should use their beton handheld cellphone use while driv- ter judgment and keep their eyes on ing also didn’t decrease the likelihood the road when they are behind the of crashes. wheel.

“There’s no question that texting “Our advice to the general drivand driving is a serious distraction,” ing public is you do not have to wait said Russ Rader, spokesman for the for legislation to come about that Insurance Institute forto Highway helps you act right in the car,” Want to Contribute this Southwest Edition?

Safety, which administers the data inHoward said. stitute. “The question is what will be “Every driver can make the conthe best strategy for dealing with it, scious decision to pay attention to publisher@autobodynews.com and so far it doesn’t appear that the what they are doing in the car — and laws are going to be an effective soluthat’s driving.” tion.”

Rader pointed out that although Promote your business with Promote your business with technology seems to be one cause of an an exclusive article featuring exclusive article featuring distraction, and thus the cause of some crashes, also couldorbeservices. the solution your products or services. your itproducts to prevent crashes.

In addition to some new car features that alert drivers when they are not paying attention, hands-free texCALL: Joe Momber for details!

Call for details! ting applications, available on many smartphones, also encourage safer 800-699-8251 driving.800-699-8251

articles on the subject, one written by Charles Lloyd, “An Objective Measure of Severity for Small Topographical Defects in Automotive Paint,” who worked with Ford Motor Company. He found Ford has done extensive research on paint inspection lighting and has implemented by managing and measuring through baseline tests.

After a careful and long discovery process, The Light Inspection Tunnel at Autocraft Bodywerks started to come together, taking over a year to design and build.

Everything was custom designed and built to order. Nova Verta USA built the frame of the inspection tunnel. LDPI Lighting Solutions designed and built the lights, which include mirrors in the lights, delivering the technology for defect free refinish. The Tunnel is controlled by a computerized low voltage touchscreen panel designed by Next Electronics. It also has a 3 foot lift built into the floor to bring the cars to a better position for inspection, buffing and polishing. The finished product is working well in this shop and is also a

handsome piece of engineering and does what it was designed to do – deliver the best product to Autocraft Bodywerks customers.

Autocraft Bodywerks is a well established Austin, Texas collision repair center. They specialize in Lexus and Honda, however, work on all models. The quality of repair and customer service at John Borek’s shop is First Class and the distinctive offering of the Light Inspection Tunnel is a tool used to deliver the best repair to his valued customers.

The Light Inspection Tunnel is just one of John Borek’s innovative creations. If you drive by his house during the Halloween season you will see a life size flying saucer that looks like it ‘just landed’ and Klatu from ‘The Day The Earth Stood Still’ will be stepping out to join the Trick or Treaters.

Borek, who has been in the business since high school in 1984, is an innovator and ongoing student of collision repair, “Everyday I learn something, when you think you know it all is when you need to get out.”

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Social Media for Shops

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

Body Shops and Yelp: It’s a Love-Hate Relationship with Ed Attanasio

The other day I overheard a woman talking on her cell phone. I couldn’t help it. She was upset and yelling.

“Try me, buddy,” she screamed into the phone. “I will Yelp you right

posted. Some shops are suing the San Martin Zurada, a San Francisco out of business!”

Francisco startup or considering doing attorney who has represented several Wow, I thought. ‘Yelp’ is now a so. They allege that the website ma- collision repair companies in different verb (like ‘Google’), and obviously a nipulates customer reviews while the capacities over the years, is currently part of some people’s daily language.

If you don’t know about Yelp, it’s in the process of putting together a civil suit on bea nationwide review site where people half of Gene Crozat, post comments about their experiences with particular businesses. It owner of G&C Auto Body, with seven locapromotes itself with the tagline: Real tions in Northern CaliforPeople. Real Reviews. It’s easy to find nia. at Yelp.com.

For many companies, including Zurada has been body shops, Yelp can boost a business watching the Yelp situawith great reviews or damage their bottion for quite some time Original BMW Parts tom lines with snarky comments andNorth County BMW and he believes the weblow ratings from unhappy customers. site is manipulating its reThe problem is that those ‘unhappy view system to benefit CAA Santa Clara Chapter President Shawn Saidi and his wife bmwusa.com Lisa have very mixed feelings. They’ve encountered some itself and generate incustomers’ might really be jealous com-(800) 564-8222 questionable practices by Yelp, yet they realize they receive a creased revenues as a repetitors, terminated former employees, fair amount of new business from the website Original BMW Parts ex-spouse or two.

North County BMW sult. or a disgruntled “As a business owner, the InterYelp is currently getting unfavorcompany claims that their system is able reviews from a lot of body shops done by computers, not people with net has a lot of power, obviously, bebmwusa.com throughout the country due to their(800) 564-8222 an agenda, such as Yelp advertising cause people are Googling, Yahooing policies on editing the reviews that are salespeople, for example.

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San Francisco Attorney Martin Zurada is putting together a suit against Yelp on behalf of G&C Autobody, contending that the website is manipulating customer reviews to generate revenue for the startup

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www.autobodynews.com | JULY 2011 AUTOBODY NEWS 27

Industry Overview with Janet Chaney

Janet Chaney has been involved in the collision industry as shop owner and business consultant. She serves her clients through Cave Creek Business Development.

Contact her at jchaney.cavecreek@gmail.com.

Auto Recyclers Host Prominent Collision Repairers in Panel Discussion URG, the United Recyclers Group, hosted a Body Shop Panel Discussion at their 2011 annual conference in Englewood, CO, April 15. A lot of com-

effectively communicating.

Facilitator Don Porter, of State Farm Insurance opened up the discussion, asking panelists to introduce

There is the beginning of a solution available that could reduce the ‘condition’ problem. The Automotive Recycling Association, in concert with CIECA, has developed a standard set of damage codes to be used by repairers and recyclers. with John Yoswick They are established and accepted, through CIECA, by both industries. However, the panel came to the conclusion that no one is using them.

The participating panelists, who represent a very large segUnited Recyclers Group hosted its first Auto Body Panel Discussion in April: (l-r) Facilitator, Don Porter, State Farm Insurance; Gary Boesel, CARSTAR, Denver, CO; Gary Wano, G.W. and Son, Oklahoma City, OK, Dan Stander, Fix ment of the collision Auto, Jerry Standerswith Collision; Bob Jones, RJones BODYPROS, Des Moines, IA; Clark Plucinski, True 2 Form/Gerindustry, reported that Janet Chaney ber; Tim Adelman, COO ABRA Body and Glass they found no one acmon ground was discovered in this themselves and say a little about their tually using the damage codes and URG panel discussion, which was ac- business. Porter made sure the audi- few people knew about them. Reknowledged by everyone in the room. ence of recyclers was involved, say- pairers noted that condition codes on The hour-long panel discussion was ing “You don’t have to be nice to effective in its goal of honest dialogue me—just be nice to these people,” rediscussing needs and opportunities beferring to the collision repairer pantween these two industries. All stake- elists. holders want to do better business and Everyone on the panel shared althe repairers and recyclers would like most the same story about the ‘condito do business better, together. Over tion’ of parts and on-time delivery 800 recyclers attended the two-day dates. In today’s collision repair marevent. ket, shops are measured (by insurers) “We have grown (our indus- by what proportion of alternative parts tries) together from mom and pop they use, cost effectiveness, and most organizations to the large conglom- importantly—cycle time. Cycle time erates we are today,” said Clark was recognized by this panel as the Plucinski, Executive Vice-President most critical component in their busiof Sales and Marketing at True 2 ness operations today. If a used part is Form—which recently became a delivered to a shop that is expecting part of the Boyd Group/Gerber col- an undamaged part and they receive a lision repair chain. Plucinski re- part with undisclosed damage, that is minded everyone in the room that a significant cost to everybody.

“We are now all inter-connected in Bill Abold, of A&P Auto Recybusiness-to-business relationships.” cling in Cicero, New York, shared the In resolving difficulties, Plucinski frustration he and other recyclers exasked for patience. “These processes perience. “We work with our collision are working, but it is like pushing a customers, train our staff, but when rock up a hill [which keeps rolling parts are found electronically and the back]. We just have to be patient and price is the lowest common denomikeep doing the same thing.” nator, then the shop is going to get that Gary Boesel, owner and operator cheapest part and they are not going of two CARSTAR collision repair to accept it. We then have to work centers in the Denver area, concurred. through the price difference with the “[Things have evolved] over the years shop and the insurance company. That and are different than they used to be,” doesn’t work for anyone.” This statesaying that somewhere, somehow, ment triggered an ovation from the collision repairers and recyclers quit 300 attendees in the room.

Industry Insight

Industry Interview

28 JULY 2011 AUTOBODY NEWS | www.autobodynews.com

parts found through third party locaters had no meaning to them at all.

The Damage Code information discussion was positive for both groups, recognizing that they have something to work towards.

Gary Wano, owner/operator of G.W. and Son Auto Body in Oklahoma City, OK, said, “Have a little patience with us please, sometimes our concept of a usable part may be different than your sales staff’s, but we are working on this.”

Tim Adelman, Executive Vice President of Business Development for ABRA Auto Body and Glass, shared these first quarter 2011 statistics from 100 ABRA locations. On a scale from 1–10, 10 being the highest, measuring overall CSI, OEM scored 9 and Recyclers scored 7.5. For overall quality of parts received, Recyclers: 7.4, Accuracy of the Part, Recyclers: 8.2 and On-Time Delivery, Recyclers:

6.8. “We survey parts people for supplier improvement opportunities,” explained Adelman.

For the shops on the panel, relationships with a good quality recycler was the most important criteria. Shops are looking for a good product and want it to be delivered on time. “The goal at our shop is to spend less time on the phone and on email,” said Dan Stander, General Manager of Fix Auto Highlands Ranch. “It is more time effective and we don’t have any confusion about descriptions.”

The formal panel ended but dialogue continued throughout the halls most of the day. Bob Jones, owneroperator of R Jones Body Pros, in Des Moines, Iowa, put it succinctly, “You guys want to sell us the correct part and we want to buy the correct part.”

The inter-industry communication initiated at the April meeting should help collision repair and auto recycling industries start working for the common goal: better business for everybody.

Hyundai, Kia Face Fair Trade Commission Antitrust Probe on Auto Parts Pricing After Allegations

South Korea’s antitrust regulator has begun a probe into allegations that Hyundai Motor Group forced its auto parts suppliers to lower product prices, a person familiar with the matter said June 9 according to the Detroit News.

The Fair Trade Commission this month visited the offices of Hyundai Motor Co., Kia Motors Corp. and Hyundai Mobis Co. after sending the companies, all members of the Hyundai Motor Group, notice of the probe, the person said.

It wasn’t clear which auto parts and which suppliers are involved.

Hyundai Motor Group, the world’s fifth-largest car maker by sales, dewww.autobodynews.com clined to comment.

CHECK OUT!and Kia Motors HyundaiITMotor usually have price-setting negotiations with around 2,000 subcontractors twice a year.

Given their size, Hyundai and other South Korean conglomerates have enormous leverage in setting prices negotiations with their Toduring advertise callsubcontractors.

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More on the Panelists’ Credentials The credentials of the panelists brought together by the URG was impressive.

In 2010, Boesel was selected as Small Business Person of the Year by the Aurora, CO, Chamber of Commerce and he sits on the CARSTAR National Advisory Board.

Wano’s family owned business is a Mercedes Benz, Jaguar, and Volvo Certified shop. He is Immediate Past Chair of the Society of Collision Repair Specialists (SCRS) and in 2008 was Body Shop Business’ Executive

CARSTAR Auto Body Repair Experts Hold Third Annual Soaps It Up! Car Wash for Make-A-Wish Foundation

More than 2,000 volunteers at 140 of for forcing its parts suppliers to reCARSTAR's stores across the US and duce component prices.

Canada washed cars to raise funds for The antitrust watchdog’s latest the Make-A-Wish Foundation® and move comes as the government is exKids with Cystic Fibrosis. pected to place more emphasis on On June 11, thousands of volunsupporting small and midsize compateers across the United States and nies, many of which continue to exCanada washed vehicles at perience tough times even as the CARSTAR locations in hopes of nation’s conglomerates power the breaking the Guinness World Record country out of the 2007-2008 global for “Most Cars Washed – Multiple financial crisis.

Venues” the franchise set in 2009 by With South Korea recovering washing more than 4,000 vehicles in quickly from the crisis, President Lee Give us your opinion onsingle matters affecting eight hours. the industry.

Myung-bak, whose five-year In the process, CARSTAR hoped term ends in early 2013, has urged to raise funds to help grant wishes for South Korea’s conglomerates to try to the Make-A-Wish Foundation of share the “warmth of the economic reAmerica and serve children with cyscovery” with their smaller peers and publisher@autobodynews.com tic fibrosis in Canada. Themed “Wash prosper together with them. for a Wish”, the third annual Soaps It Up! Car Wash was held on June 11, 2011 and tickets were sold at participating CARSTAR stores in the U.S. for $10, with 100 percent of the ticket purchase benefiting the selected charities.

To advertise The source for timely While across North Amercall stores Joe Momber at: information that every ica participated, the host for the 800-699-8251 record-breaking attempt was at body shop needs!

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of the Year.

Dan Stander is ASA’s National Collision Division Director.

Both Bob Jones and Clark Plucinski are Collision Industry Conference, “Hall of Eagles” members.

Jones is a founding member and past Chairman of SCRS. Plucinski serves on numerous Industry Boards and was voted Body Shop Business’ Collision Shop Executive of the Year in 1996.

Tim Adelman now leads ABRA’s industry relations and serves on numerous industry advisory boards.

Keith Foster. The repair facility, located at 731 State Route 28, in Milford, OH, held special events throughout the week in Cincinnati and led the countdown on washing the car that broke the record.

“Over the first two years, the Soaps It Up! Car Wash has been able to unite the CARSTAR family across North America to help thousands of children in need,” said David Byers, CEO of CARSTAR Auto Body Repair Experts.

Want Contribute to this S “We’re to grateful that CARSTAR is doing so much to help us improve the quality of life for our wish kids and their families through a wish experience,” saidpublisher@autobod David Williams, Make-A-Wish Foundation of America president and chief executive officer.

CARSTAR stores in Canada have been conducting the “Soaps It business Up!” CarPromote Wash foryour the past seven with an exclusive article years, and this is the third timefeaturing the program has beenproducts done in theor US. The your services.

2009 event was the first attempt for any group to set the record for the largest car wash across multiple locations. For more information on the “Soaps It Up!” Car Wash, visit CALL: Joe Momber for details www.CARSTAR.com.

write

Auto Lender Ally, Formerly GMAC, Delays IPO Due to Market Conditions Mail Subscription.

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Start Your FREE

Ally Financial Inc. has decided to lic.

The US Treasury Department delay an initial public offering (IPO) because of weak market Seeconditions, the NEWplans to raise $5 billion as part of a $6 two people briefed on the matter said billion offering when Ally goes public. The Treasury Department owns a to the Detroit News on June 10.

The mortgage and auto lender controlling 74 percent stake in Ally as and bank holding company was ex- part of the $17.2 billion bailout during www.autobodynews.com pected to launch a road show ahead of the financial crisis. an IPO planned before the July 4th Ally filed the paperwork March holiday.

31 in order to launch an IPO. Ally deThe IPO could come in late July clined to comment on June 9. or early August, or be pushed until The Treasury is expected to sell after the Labor Day holiday, when some shares. Other owners such as much of Wall Street returns from va- General Motors Co., which holds a 9.9 percent stake in Ally, and Cerberus cation, said the officials on June 9.

Capital Management LP, which holds They asked for anonymity because the information had not been made pub- a 9 percent stake, do not plan to sell

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shares. fers retail banking products through Treasury has received about $4.9 its online arm. billion in returns from AllyYour to date,Email inRegister forAlly, Our which was known as cluding $2.2 billion in dividends and GMAC Inc. until last year, was interest. founded by GM more than 90 years The company reported a $1.1 bilago as its in-house finance arm. It sold lion profit in 2010. a 51 percent stake in the company in at www.autobodynews.com Citi, Goldman, Sachs & Co., J.P. 2006 to Cerberus Capital ManageMorgan and Morgan Stanley are all ment LP in a $7.4 billion deal. advising Ally on its initial public ofAlly said it raised its percentage fering. of new car lending to 9.9 percent in With more than $172 billion in 2010, up from 6.1 percent, to jump assets as of Dec. 31, 2010, Ally operfrom third highest to the leading auto ates as a bank holding company. lender.

Ally also has operations in mortBad market conditions may also gage and commercial finance, and the delay other planned IPOs, including company's subsidiary, Ally Bank, ofTroy-based Delphi.

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www.autobodynews.com | JULY 2011 AUTOBODY NEWS 29

Continued from Page 27

Body Shops and Yelp

and Yelping all the time and looking at your business online,” Zurada said.

“We know that people are going to read the reviews, but the business owners are rarely given an opportunity to respond to any of the reviews or comments being posted, or at least test these claims online.”

Zurada questions the accountability of a site that allows anyone to post reviews without offering a chance to question their reasons. “The motives of these customers are never discussed in these reviews.

For example, you might have a disgruntled vendor who is upset with you because you didn’t pay them on time, and so now they’re writing bad reviews on Yelp. An angry customer will write a negative review and it could potentially be there forever. You can’t respond to the validity of these claims, so the only way a business owner can get satisfaction is via the legal route. But, it’s a long and expensive process to take them to court and collecting is even more difficult.”

Suing Yelp successfully is a tricky proposition for many reasons, Zurada explained. “Some businesses have tried to sue them, but the problem is that the content provider is merely posting what someone else is saying. They have a certain degree of immunity based on basic Internet laws, so Yelp is not directly liable for items posted on their website. If everything online was contested, of course, there would be no Internet, so they have to be protected to a certain degree. If they’re posting someone else’s claims, we have no issue with that. But, with Yelp passively accepting, organizing, and indexing these opinions from the community, what they’re doing is essentially manipulating content in such a way to make money. At that point, they’re no longer a passive content provider.

Now they’re actively disparaging your business. Many companies, including body shops, have encountered a situation where Yelp will call them or visit their business and tell them if you sign up, we will help you. It just seems like businesses who don’t sign up with them have more bad reviews appearing more often while positive reviews seem to disappear.”

Zurada has encountered this scenario more than once, he said.

“With G&C, we’ve seen it happen—favorable reviews of Crozat’s shops fall off after 30 days, while a small handful of unfavorable reviews are still listed there from 2008, for example. I don’t know what Yelp’s secret algorithm is, but it allegedly detects reviews that are real vs. fake ones. It seems that companies who won’t sign up with Yelp have more bad reviews and when good ones are posted, they identify them as fake.

Good reviews are suppressed and bad ones stay there forever. That’s our main issue with Yelp. Yelp denies it and says they’re neutral, but there has been some considerable litigation against them already along this vein.”

Zurada is in the process of researching former civil suits that have been filed against Yelp, in order to devise the best strategy, he said. “We’re in the process of analyzing these other suits, to see how they were approached and what was either successful or not in pursuing Yelp.

“Of course, Yelp has gotten very good at defending these cases, so it’s not an easy task. How do you prove damages? Yelp defends itself by saying, hey, we don’t know how these reviews actually affected your business, because you can’t prove who stayed away based on bad reviews or not. Potential customers might not choose your shop, because they don’t like the photos of your facility or any of a hundred other reasons. It’s a lawsuit of some definite complexity, but Yelp is not immune to being sued and if they are manipulating this data to make profit, they’re liable for it and body shops need to be remunerated for their damaged revenues.”

Recently, a group of 66 business owners filed a lawsuit against Yelp, alleging that the website has been running an “extortion scheme” and has “unscrupulous sales practices” in place to generate revenue. They claim that Yelp’s representatives regularly call businesses demanding monthly payments in the guise of advertising contracts, in exchange for removing or modifying negative reviews. The companies involved in the litigation contend that Yelp informed them that bad reviews would disappear by signing an advertisement agreement with the site.

One of the plaintiffs in this current law suit against Yelp is John Mercurio, the owner of Wheel Techniques, a 25year-old company that repairs and does in-house cleaning, polishing and

30 JULY 2011 AUTOBODY NEWS | www.autobodynews.com

custom painting of wheels in Santa Clara, California.

It all started with a phone call, Mercurio explained. “The people at Yelp contacted me and told me if I purchased an advertising plan with them, they’d help me to get rid of the bad reviews or at least get them knocked down the list,” he said. “But, when I told them no way, they immediately removed a total of roughly 50 5-star reviews off my page. We were looking at Yelp.com while we were talking to them, and within a few minutes the positive review that was formerly at the top was gone and a one-star review suddenly appeared in its place” Mercurio felt used and was very upset at what he saw as a kind of extortion. “It was pretty obvious to us that they’re in control and what can we do? In my opinion, the laws haven’t caught up to the Internet yet, and that’s why it’s hard to sue them and even tougher to win.

“We’ve got a ton of proof, because we’ve been documenting everything along the way and I pull reports from Yelp twice per week. They filter my reviews so that my overall rating

sits at 2.5 stars. One week, I received three reviews that were all at 5 stars, yet my rating remained at 2.5, because I won’t buy advertising from them.

The 5-star rankings are taken off all the time without any reason, and these are 100% legitimate customer reviews. We need to prove that Yelp’s so-called automated system is bogus, and we have evidence that some of these reviews were done manually.

They wanted $1,000 per month, which is ridiculous. Yelp has cost me a lot of business, up to a one third, I estimate.

I know for a fact that a lot of people look at our Yelp reviews every month, so it has hurt my business in more ways than we can ever know.”

Shawn Saidi owns Active Auto Body in Sunnyvale, Calif., a highly successful shop located in a 13,300 square-foot facility and fixing 75–90 vehicles monthly. He is also the current president for the Santa Clara Chapter of the California Autobody Association.

Saidi says Yelp brings him customers, but he is also wary of the site, for several reasons. “They actually generate a lot of business for us. Customers tell us that they see us on Yelp

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all the time. Most of our reviews on their site are excellent, but we have a few that are really bad. One was from a customer who brought his car to us around five years ago. About three months ago he wrote a lengthy review that reads like a novel. When you read his review, you can see that we tried to do literally everything we could to make him happy. But, five years later, he’s still not satisfied. A few months ago, we let an employee go and right after that, we got a bad review that was obviously written by this vengeful former employee. It contains a bunch of false information, but there it sits for all to see.”

Saidi isn’t a social media expert, but he can clearly see that something is peculiar in the way his reviews are managed by Yelp, he said. “I don’t know how their system works, but we’ve had more than 100 positive reviews taken off. One of our customers called me and told me that they put his positive reviews aside. This is a legitimate customer and we’ve repaired two of his vehicles, so why are his comments deleted? So, we contacted Yelp and asked them why. They told us that their system goes through the

reviews to analyze them for authenticity. If it’s a 5-star review and the user has never posted before, it gets set aside. Then, they tried to sell me advertising—again!”

The anonymity of the reviews on Yelp protects the users, but it also creates a situation fostering unaccountability, Saidi, he explained. “If one of my customers has an issue with one of our repairs, we can sit down and rectify it. I’m not going to email the person, sharing comments back and forth—I’d prefer to sit down with them and handle it properly person-to-person. We always do whatever we can to make it right and we’re proud of our work, but if they’re only commenting online and won’t bring their vehicle back, we can’t help them.”

Yelp was invited to respond to this story but declined to do so.

Next month: How can you defend your reputation when it’s been disparaged online?

Law Offices of Martin Zurada 785 Market Street, Floor 16 San Francisco, CA 94103 (415) 637-8483

Continued from Page 19

CA Airbag Law

tomer for the part and returns the airbag to the manufacturer.

Unfortunately, there are no hard statistics detailing the prevalence of airbag fraud, but insurance officials are concerned about the warning signs driving this trend. Jim Quiggle, Director of Communications for the Coalition Against Insurance Fraud says, “Airbag fraud is a black hole for data,” and, “Nobody knows how widespread it is, but the warning signals are everywhere.”

The coalition’s executive director, Dennis Jay, is concerned with online sites selling nonconforming airbag parts in violation of state law. He explains that there are enough instances for consumers buying used cars to be concerned, because there is a potential for a vehicle to not have a functioning airbag.

To address this growing concern, the California Senate recently passed the Automotive Repair Act (Senate Bill 869), which established the Bureau of Automotive Repair. Among the many regulations the Bureau will enforce, auto repair shops would now be re-

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quired to return airbags to their original operating condition when replaced during collision repair. Under the new statute, a repair shop or dealer who prepares a written estimate for the replacement of a deployed airbag, and who fails to repair and fully restore it, is guilty of a misdemeanor that is punishable by a $5,000 fine, by one year imprisonment in a county jail, or by both that fine and imprisonment. A number of automakers, including Honda, Mitsubishi, Hyundai and Toyota, applauded the legislation. They found it clarifies repair shops’ responsibilities, reduces fraud, and promotes driver safety.

Even with the new law in place, drivers should take the following steps to make sure that airbag repairs are properly completed. For used car buyers, checking a vehicle’s Carfax or Autochex history is an important step.

This report will indicate whether a car has been in an accident, which would lead buyers to do a VIN number check on each of the car’s airbags. For owners having cars repaired, when the car starts, an airbag indicator should appear instantly and then go out. A continuous flashing light may indicate an airbag system malfunction. If the light never turns on, the airbag may be missing. Information in this article was provided by the Venardi Law Firm. Please visit www.vefirm.com.

Continued from Page 18

SUV Crashes require ESC systems to prevent oversteer and understeer.

In January, NHTSA issued additional regulations intended to protect motorists in rollover wrecks.

Those rules, to reduce the number of people partially or completely ejected through side windows during rollover crashes, will begin phasing in during 2013.

NHTSA issued new rules in April 2009 to toughen roof strength during rollovers. Rollovers account for less than 2 percent of all crashes, but 40 percent of all fatalities. The rules doubled the roof strength requirements for vehicles to 6,000 pounds. Heavier vehicles from 6,000 to 10,000 pounds, which have never been regulated, must now meet roof strength standards. The phase-in schedule, which begins in September, will be completed for all affected vehicles by the 2017 model year.

www.autobodynews.com | JULY 2011 AUTOBODY NEWS 31

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