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Florida Shop Owner Files 53 Lawsuits to Counter Short Pays by Insurers by Melanie Anderson
In Delray Beach, FL, Eddie Quintela, 42, owner and operator of Collision Concepts, recently spent $10,450 on filing fees for 53 separate lawsuits against insurers for short pays. Quintela says he’s not worried about the money. He will recoup court Eddie Quintela costs and attorney’s fees when he wins his cases, plus recover the compensation he
should have received in the first place for properly repairing the vehicles. To date, he and his customers have won every single case they’ve filed against insurers. According to Quintela, his plan to get insurers to pay for underpayments is pretty simple and easy to do. “If we cannot get an agreed price with an insurance company to properly repair a vehicle, we engage the customer,” said Quintela. “We give our customers a couple of options: 1) they can pay the difference, or 2) the customer can sign an Assignment of See 53 Lawsuits, Page 29
CIC Continues Discussion of Alternatives to Existing Paint and Materials Calculations
See Paint and Materials, Page 18
P.O. BOX 1516, CARLSBAD, CA 92018
A consultant whose study indicated that the vast majority of the industry finds the current way that paint and materials compensation is calculated is a poor methodology is now saying more accurate and fair calculation systems exist, are being used by some shops and are being accepted by some insurance companies. “The most important message here is that by properly presenting itemization and documentation using a paint material calculation system, we are actually able to resolve these conflicts,” consultant Steve Lanza of
Richfield Associates said at the Collision Industry Conference (CIC) held in Phoenix in April. Lanza’s firm in 2012 released its findings that compensation for paint and materials has not kept pace with increases in the costs of these products, and that 64 out of 68 industry participants interviewed think the current way paint and materials compensation is calculated is a poor methodology. Only four people (including representatives of three repairer operations and one estimating system provider) rated the current system as “adequate” or “good.”
Change Service Requested
by John Yoswick
VOL. 31 ISSUE 6 JUNE 2013
First Southern Automotive Repair Industry Conference Held in Biloxi, MS, April 26–27
Presenters included Aaron Schulenburg of SCRS, Rick Leos with Toyota Motors, Ray Gunder and his attorney Brent Geohagen. The inaugural event was held at the Beau Rivage Casino and Hotel in Biloxi, MS, and kicked off Friday night with a reception and exhibition featuring more than 18 vendors demonstrating their products and services to over 200 attendees from collision repair shops from across the Southeast. “The event can be best deJohn Mosley talking shop with Aaron Schulenburg scribed as an unqualified sucsored the first Southern Automotive cess, both in terms of information Repair Industry Conference and Ex- presented and the impressive number hibition in Biloxi, MS, on April of attendees from seven states,” said See Southern Conference, Page 20 26–27.
The Mississippi Collision Repair Association (MCRA) and the Alabama Automotive Repair Industry Society of Excellence (ALARISE) co-spon-
DEG Received 1,300 Inquiries in 2012, Up 30%, Expects More than 1,500 in 2013 In 2012, the Database Enhancement Gateway (DEG) received more than 1,300 inquiries, an increase of approximately 30% from the previous two years, DEG Administrator Arthur Harris reported. This year, DEG expects to receive more than 1,500 inquiries. The DEG was built to help address individual estimating database issues on specific vehicles. As a free service, those who use estimate systems may submit inquiries to the DEG when they encounter questions or concerns relative to estimating data. The DEG acts as a go-between for shops and information providers— CCC, Mitchell and Audatex—to improve the quality and accuracy of the data used to generate collision repair estimates and to provide feedback to information providers. As an advocate, the DEG will process all submitted database inquiries to information providers until a conclusion is reached. All issues and
responses are posted on the website and visible to all. Through feedback by repairers, the DEG can help fix footnotes, inaccurate labor times, missing parts, incorrect part numbers, and substrate identification. Upon receiving an inquiry, Harris said the question is posted on their website and forwarded to the information provider within 24 hours. Many inquiries are resolved and responded to within 2-3 days, depending on the complexity of the inquiry and responsiveness of the information provider. Response times are posted directly on the website database for clear transparency into the process times for each of the three information providers. The DEG database is a valuable tool for the collision repair industry as it provides valuable feedback on missing, unclear or potentially inaccurate data within the estimate systems, Harris said. Often, an inquiry can result in changes to the database or P-Pages. See DEG Inquiries, Page 32
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COLUMNISTS Attanasio: Google+ Is an Emerging Star for Media-Savvy Body Shops . . . . . . . . 12 Franklin: The Power of Persistence in Marketing . . . . . . . . . . . . . . . . . . . . . . 16
NATIONAL 16 Arrested in Multi-State Car Theft and Fraud Conspiracy. . . . . . . . . . . . . . . . . 46 1-800EveryRim Quick Quote . . . . . . . . . . 19 ABRA Awarded Farmers MSO of the Year Award . . . . . . . . . . . . . . . . . . . . . 21 ABRA Has Acquired 23 WA Precision Collision Centers . . . . . . . . . . . . . . . . . 22 AkzoNobel Opens its FIT Awards for Nominations . . . . . . . . . . . . . . . . . . . . 21 Alabama to Start Producing its First Acura Models . . . . . . . . . . . . . . . . . . . 32 Allstate’s Profit Dips 7.4%, Expands Esurance . . . . . . . . . . . . . . . . . . . . . . . 22 AMI Accepting Applications for Cosette/Westerlund Award . . . . . . . . . . 40 ASA Business Meeting Emphasizes Unity, Transparency, Inclusion & Collaboration . 40 Automaker, OEM and Recall News . . . . . . 26 Avery Names New CIC Standards Cmte Leaders . . . . . . . . . . . . . . . . . . . . . . . . 43 Axalta Coating Partners With Optima Automotive . . . . . . . . . . . . . . . . . . . . . 28 Axalta Coating Systems Launches Rival™ Economy Brand . . . . . . . . . . . . . . . . . . 46 BLS Stats Show Increase in Number of Body Shops. . . . . . . . . . . . . . . . . . . . . 46 CARFAX Hit by $50M Federal Lawsuit Filed by 120 Automotive Dealerships . . . . . . 22 Carlyle Group to Sell 50,000 Share Stake in Hertz . . . . . . . . . . . . . . . . . . . . . . . . 40 CARSTAR to Support “Hire Our Heroes” Campaign . . . . . . . . . . . . . . . . . . . . . . 40 CIC Attendees Overwhelmingly Support BMS Data Standard Over EMS . . . . . . 36 CIC Continues Discussion of Alternatives to Existing Paint and Materials Calculations . 1 Collision Industry Leader Matthew Ohrnstein Passes Away at Age 57 . . . . 38 Collision Repair Education Foundation and Partners Announce First of $300,000 in Student Scholarships . . . . 42 Colorado Auto Dealers Find Support in State Legislature . . . . . . . . . . . . . . . . . 40 CREF Seeks Employers For Summer
Students . . . . . . . . . . . . . . . . . . . . . . . 22 Dan Risley Appointed Interim Executive Director of ASA, Outlines ASA Position on PartsTrader . . . . . . . . . . . . . . . . . . . 45 DEG Received 1,300 Inquiries in 2012, Up 30%, Expects More than 1,500 in 2013 . 1 Deputy Restores Classic Car in Tribute to Father . . . . . . . . . . . . . . . . . . . . . . . 39 Father-Son Bodywork Bandits Team Con Seattle Seniors with Bad Body Repairs . 38 First Southern Automotive Repair Industry Conference Held in Biloxi, MS, April 26–27. 1 FL Auto Body Bookkeeper Takes Plea Deal for Theft . . . . . . . . . . . . . . . . . . . . . . . 16 Florida Shop Owner Files 53 Lawsuits to Counter Short Pays by Insurers . . . . . . . 1 Ford Adds 38 New Parts to Collision Parts Program . . . . . . . . . . . . . . . . . . . 21 GCIA Completes 2013 Collision Labor Rate Survey. . . . . . . . . . . . . . . . . . . . . 39 GEICO Foundation Donates to CREF in CA, FL, DC & NY . . . . . . . . . . . . . . . . . . . . 21 Hermanek and Ricciotti Join CREF Board of Trustees . . . . . . . . . . . . . . . . . . . . . 22 I-CAR Announces Keynote Speakers Reginald Modlin and John McElroy for Boston July Meeting . . . . . . . . . . . . 35 Industry Demonstrates Early Confidence in SEMA Show with Six Percent Exhibitor Increase . . . . . . . . . . . . . . . . . . . . . . . 30 Maine Legislature Holds Hearings on Right to Repair . . . . . . . . . . . . . . . . . . . . . . . 43 Mercedes-Benz Plans $70M Expansion, 600 Jobs in AL . . . . . . . . . . . . . . . . . . 34 MID Issues Bulletin to Insurers to Cover Feathering, Prime and Block of Damaged Cars. . . . . . . . . . . . . . . . . . . 41 Minnesota Senate Passes New Paint, Materials Tax Law . . . . . . . . . . . . . . . . 21 Mississippi’s Attorney General Hood Tells Insurance Companies to Cover Feather, Prime & Block, Etc. . . . . . . . . . . . . . . . 41 Mitchell ITR Says Collision Parts Index Declined Last Year For First Time in Ten Years. . . . . . . . . . . . . . . . . . . . . . . 44 NJ Cracks Down on Fraud . . . . . . . . . . . . 19 Only Two Small 2014 SUVs Performed Well in Front-End Crash Tests According to IIHS . . . . . . . . . . . . . . . . 44 Paint Materials: Band-Aids Won’t Help—It Needs Stitches! . . . . . . . . . . . . . . . . . . 34 Progressive Sues Other Insurers For Alleged Patent Infringement . . . . . . . . . 30 Rhode Island Industry Attorney: “Body Shops Suffer From an Image Problem”. . 8 Safelite Named in New Lawsuit Alleging Windshield Separation Due to Poor Installation . . . . . . . . . . . . . . . . . . . . . . 35 SEMA Show Enhances Services for Collision Repair Market, Adds Up to 20,000 Sq. Ft. for 2013 . . . . . . . . . . 30 Stacy Bartnik Joins Team PRP as Executive Director . . . . . . . . . . . . . . . . 30 U.S. Supreme Court Rules Against Towing Company. . . . . . . . . . . . . . . . . . 8 uParts Gets $2M in Financing . . . . . . . . . 36 VeriFacts & Airbag Solutions Create Restraint Systems Clinic . . . . . . . . . . . 36 WIN Wins Big with 2013 Education Conference in Phoenix . . . . . . . . . . . . . 10
The Texas Independent Automotive Association held a class on training firefighters on hybrid vehicles and new models. The event was held and hosted by the Chevy dealership of TIAA member Tom Benson. The goal of the class was to promote safety after a crash and 50 firefighters from the San Antonio, TX, area were in attendance. Charles
Fogleman of General Motors Powertrain and Jim Mickle, GM Wholesale instructor, were the instructors for the class. Firefighters were trained how to properly respond to an accident scene and how to disable the car correctly to help passengers exit safely. “Firefighters having knowledge about newer vehicles at the accident scene is vital to prevent the accident from having more damage,” said Charles Fogleman. “Not only to the vehicles but to vehicle’s occupants. With the advancements in vehicle technology, removing passengers can be dangerous if not done correctly. A prime example is airbags being deployed after the accident from the battery being connected.”
Jim Mickle trains firefighters on vehicle safety
Charles Fogleman talks to firefighters
Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Assistant Editor: Melanie Anderson Contributing Writers: Tom Franklin, John Yoswick, Janet Chaney, Toby Chess, David Brown, Rich Evans, Ed Attanasio, Chasidy Sisk Advertising Sales: Joe Momber, Sean Hartman, Jay Lukes (800) 699-8251 Sales Assistant: Louise Tedesco Art Director: Rodolfo Garcia
Southwest
REGIONAL DEQ Offers Free Consults to Tulsa Body Shops. . . . . . . . . . . . . . . . . . . . . . 4 OIADA Awards Rick Beck. . . . . . . . . . . . . . 4 OK Court Reverses Finding on Ford and Dealership . . . . . . . . . . . . . . . . . . . . . . . 7 OK Workers Comp Opt-Out Law. . . . . . . . . 4 Retired Auto Body Man Epitacio Salinas Passes . . . . . . . . . . . . . . . . . . . . . . . . . 4 State Farm’s Campus Project in Texas is Growing . . . . . . . . . . . . . . . . . . . . . . . 7 Texan Admits Guilt in $1.2M Chiropractic Insurance Fraud . . . . . . . . . . . . . . . . . . . 6 Texan Charged with $3.5 Million Dollar Fraud. . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Texas Franchise Bill Passes House and Moves to Senate . . . . . . . . . . . . . . . . . . 4 TIAA Hosts Firefighters Training . . . . . . . . . 3 Water is Hot Topic at NWLCRA. . . . . . . . . . 4
TIAA Hosts First Response Training
Indexof Advertisers
Contents
Serving Texas, Oklahoma, Louisiana, New Mexico and adjacent metro areas, Autobody News is a monthly publication for the autobody industry. Permission to reproduce in any form the material published in Autobody News must be obtained in writing from the publisher. ©2013 Adamantine Media LLC.
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Box 1516, Carlsbad, CA 92018; (800) 699-8251 (760) 721-0253 Fax www.autobodynews.com Email: news@autobodynews.com
A Frame Paint Booths . . . . . . . . . . . . 7 Absolute Mitsubishi-Hyundai . . . . . 38 AutoMax Hyundai Del City . . . . . . . . 4 BASF . . . . . . . . . . . . . . . . . . . . . . . . . 5 BMW Wholesale Parts Dealers . . . . 43 Car-Part Pro. . . . . . . . . . . . . . . . . . . 27 CCC Information Services . . . . . . . 17 Certified Automotive Parts Association (CAPA). . . . . . . . . . . . 9 Champion Pneumatic . . . . . . . . . . . 21 Chevyland . . . . . . . . . . . . . . . . . . . . 36 Chief Automotive. . . . . . . . . . . . . . . 19 Classic BMW . . . . . . . . . . . . . . . . . . 18 Classifieds. . . . . . . . . . . . . . . . . . . . 46 Dallas Dodge . . . . . . . . . . . . . . . . . 48 David McDavid Auto Group . . . . . . . 2 Don Carlton Auto Group . . . . . . . . . 28 Equalizer Industries . . . . . . . . . . . . 12 Ford Wholesale Parts Dealers TX, OK, LA, NM. . . . . . . . . . . . . . 33 Fowler Honda . . . . . . . . . . . . . . . . . 10 Fowler I-240 Chrysler-Jeep-Dodge. 23 Garmat USA . . . . . . . . . . . . . . . . . . . 8 GM Wholesale Parts Dealers . . . . . 44 Honda-Acura Wholesale Parts Dealers. . . . . . . . . . . . . . . . . . 24-25 Houston Auto Body Association. . . 30
Huffines Hyundai Plano . . . . . . . . . 34 Hyundai Wholesale Parts Dealers . 41 KBS Coatings . . . . . . . . . . . . . . . . . 10 Kia Motors Wholesale Parts Dealers. 37 LKQ . . . . . . . . . . . . . . . . . . . . . . . . . 47 Malco. . . . . . . . . . . . . . . . . . . . . . . . 11 Mazda Wholesale Parts Dealers . . . 45 Mike Calvert Toyota. . . . . . . . . . . . . 34 Mitsubishi Wholesale Parts Dealers. 42 MOPAR Wholesale Parts Dealers . . 31 North Freeway Hyundai . . . . . . . . . 22 Ray Huffines Chevrolet . . . . . . . . . . 35 Reliable Chevrolet. . . . . . . . . . . . . . 32 Replica Plastics. . . . . . . . . . . . . . . . 32 River Oaks Chrysler-JeepDodge-Ram. . . . . . . . . . . . . . . . . 16 SATA Spray Equipment . . . . . . . . . . 6 Scoggin-Dickey Buick . . . . . . . . . . 39 South Pointe Chrysler-Jeep-Dodge. 13 Toyota of Fort Worth . . . . . . . . . . . . 20 Toyota of Laredo . . . . . . . . . . . . . . . 29 Toyota STAR Elite Dealers . . . . . 14-15 Toyota Wholesale Parts Dealers . . . 40 Volkswagen Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . 44 Volvo Wholesale Parts Dealers . . . . 45 Young Chevrolet . . . . . . . . . . . . . . . 11
www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 3
Texas Franchise Bill Passes House and Moves to Senate
The Texas Franchise Tax Bill, Substitute House Bill 500, that will help resolve independent repairer franchise tax issues recently passed the House and moved to the Senate. Currently, automotive service and collision repair shops owned and operated by new or used car dealerships are taxed at half the rate used to tax the independently owned businesses doing identical work. The Texas state tax code classifies dealership sales as “retail” and allows their service and repair business to be included under that banner. Once passed in the Senate, this bill will allow automotive repair shops to be taxed the same amount that dealers, parts stores and tire stores are now taxed. ASA requests that Texas members send a letter to their legislators urging them to support this bill. Visit ASA’s legislative website at www.TakingTheHill.com. According to Charles Parker, executive director of ASA-Texas, “This legislation is critical in helping the independent repair shops of Texas by correcting the unfair taxation of independent repair shops throughout Texas.”
OIADA Awards Rick Beck
The Oklahoma Independent Automobile Dealers Association (OIADA) recently awarded Rick Beck, President of Eldorado Motors, Oklahoma Quality Dealer of the Year for 2013. The Quality Dealer award is the highest honor bestowed to an OIADA member, and represents a dealer who is committed to quality, excellence, outstanding customer service and improving the community. The award honors one dealer annually, chosen by a selection of previous Quality Dealers nominated from members across the state. Beck is now in contention for the National Quality Dealer of the Year award—a coveted award honoring one of the dealers nominated from each state association. Part of the Bob Moore Auto Group, Eldorado Motors is a familyowned business that opened its doors in 1981. Beck began working at Eldorado Motors nearly 20 years ago, first serving as auditor, then controller, and currently as President—a role he took in 2004. Over the past nine years, Beck grew the company’s portfolio over 300% and opened six new locations—for a total of eight stores across Oklahoma City, Tulsa and San Antonio.
Retired Auto Body Man Epitacio Salinas Passes
Water is Hot Topic at NWLCRA
Epitacio (Pete) Salinas passed away on Thursday, April 11, 2013 at the age of 77. Pete was born on October 12, 1935 in San Antonio, TX, to Santana and Maria Salinas. He was an Army veteran who served in Korea. He retired from auto body repair in 2002. He was an avid fisherman and had a love for racing and fixing cars. He was a loving father who enjoyed spending time with family and friends. His strong faith in the Lord helped him survive cancer for over 10 years. Pete is preceded in death by his parents, his brother Pepe Salinas, and his sister, Mary Lou Buentello. He is survived by his wife, Elisa Salinas; daughters, Ermelinda Salinas and Rudy Madrigal, and Elena Salinas; grandchild, Jacob; brother, Santos Salinas; sister, Lucy C. Salinas; and numerous nieces and nephews. Visitation was held April 15 at Hurley Funeral Home in Devine, TX. A funeral mass was held April 16 at St. Joseph's Catholic Church in Devine, TX. Interment followed at St. Joseph’s Cemetery.
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The Northwest Louisiana Collision Repair Association met May 7 at the Louisiana Technical College’s collision classroom. Guest speaker was Lee Jones of Kentwood Springs. Lee spoke about a very important resource—water. He is partnered with several well-known companies that provide quality beverages. He handles bottled water, coffee services and water filtration. Every collision facility has some type of water service. Members were invited to find out if they are getting the most service and best quality beverage.
OK Workers Comp Opt-Out Law
Oklahoma Gov. Mary Fallin recently signed into law legislation allowing employers to implement an alternative to the state’s traditional workers compensation system. The signing makes Oklahoma only the second state after Texas to allow employers to leave the traditional state workers comp insurance system. The law will decrease permanent and temporary total disability benefits and shorten benefit durations, which is expected to reduce Oklahoma workers comp system costs by $125 million annually, or 12.5%, according to an April report.
DEQ Offers Free Consults to Tulsa Body Shops
The Oklahoma Department of Environmental Quality is offering body shops the opportunity to receive free voluntary consultations under the agency’s Oklahoma Star program. The consultations are part of the DEQ’s outreach to auto body repair shops, said agency Environmental Program Specialist Patrick Riley. Visits with auto body shop managers increase awareness of regulatory requirements like the federal “auto body rule” that went into effect in 2011 as part of the Environmental Protection Agency’s effort to reduce hazardous air pollutants. Visits are also an opportunity to discuss environmentally friendly business practices with managers and alert them to opportunities like the Oklahoma Star program that recognizes businesses for going above and beyond in areas like conservation and recycling. “It’s kind of an opportunity to visit with them in a non-regulatory format,” Riley said. The DEQ started its outreach last year when it contacted auto body repair shops in the Oklahoma City metro area and about 50 shops participated, Riley said. Earlier this spring, the agency began focusing on shops
in the Tulsa area and is in the process of reaching out to local businesses, the Tulsa World reported. “We’re very pleased with the success so far, and we’re anxious to contact as many (shops) as possible,” Riley said. Currently about a dozen shops in the Tulsa area are participating in the program. The DEQ awarded Bill Knight Collision Repair a gold star in the Oklahoma Star program after inspecting the shop. Dustin McElyea, who works at the shop, said the recognition shows customers that the shop doesn’t generate too much waste and is responsible with the waste that it does generate. According to the DEQ, smaller facilities around the state are often unaware of regulatory requirements outlined in the auto body rule. Changes include the way businesses could clean spray guns and the locations where they could paint motor vehicles and miscellaneous parts. Now, spray guns must be cleaned in an enclosed cleaning container that collects used cleaning solvent so that the spray does not go into the atmosphere.
4 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
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Texan Admits Guilt in $1.2M Chiropractic Insurance Fraud Marion Young, 42, of Texas, recently pleaded guilty in federal court in Houston to charges that he operated a chiropractor’s office as a front for an auto insurance scam that bilked companies out of $1.2 million. Authorities say he ran the defunct office in Bryan, TX, to create fraudulent bills for treatments that were never performed. Young also recruited alleged accident victims to be represented by a Bryan-area law firm. The fraudulent billing caused the insurance companies to issue settlement checks, with the proceeds split by Young and at least four other defendants. Young, co-owner of Private Chiropractic Care, admitted he participated in the two-year conspiracy to defraud numerous auto insurance companies. He further admitted he operated Private Chiropractic Care clinic as a front to allow fraudulent chiropractic bills to be created for treatments which were never performed and then used as support for fraudulent settlement demand letters sent to auto insurance companies.
During the course of the conspiracy, Young received checks and cash from the firm totaling approximately $112,000. Once represented by the firm, clients were sent to Private Chiropractic to be evaluated by chiropractor and co-defendant Chase Lindsey, 34. Lindsey pleaded guilty earlier this year, admitting he entered into an agreement with the office manager of that same law firm. Lindsey agreed to provide medical evaluations of, and recommend treatment for, those patients in exchange for $2,000 in cash per month, which totaled approximately $58,000 during the course of the conspiracy. Lindsey routinely prescribed medically unnecessary treatment which was provided, if at all, by unlicensed, untrained and unqualified individuals and never supervised the treatments allegedly administered by these unqualified individuals. Lindsey always prescribed the same six treatments but the patients usually received only two—ice/heat packs and electric stimulation. Lindsey prescribed the treatments be done 3-4 times per week for
6 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
5-6 weeks, but the patients usually went once a week for 3-4 weeks. Young knew the patients were not receiving most of the treatments prescribed and that they were not going for treatments on many of the days reflected on the Private Chiropractic Care bills. Young also knew the false Private Chiropractic Care billing was prepared at the law firm and that the fraudulent bills were used as support for settlement demand letters sent to auto insurance companies. The fraudulent demand letters caused the insurance companies to issue settlement checks, which were spilt between Young and others. Young also participated in the scheme to defraud the insurance companies as an accident client of the law firm. Three separate checks, totaling nearly $5,000, were sent and made payable to Young and the law firm to settle an accident claim which was based on fraudulent chiropractic bills produced at the firm. Young never received the treatments reflected on the bills sent to the insurance companies.
The scheme to defraud the automobile insurance companies resulted in the submission of more than $3 million in false billing claims. The insurance companies paid at least $1.2 million in false claims during 20072009. U.S. District Judge Kenneth Hoyt, who accepted the guilty plea, has set sentencing for Sept. 16, 2013, at which time Young faces up to 20 years in prison and a possible $250,000 fine. As part of his plea agreement, Young also agreed to forfeit the $112,000 he received and to pay restitution of $1.2 million to the insurance companies victimized by the scheme. Young was allowed to remain free on bond pending his sentencing. Three remaining defendants charged in relation to this case are scheduled for trial on Sept. 24, 2013. The criminal charges are the result of a joint investigation by agents of the FBI and the National Insurance Crime Bureau. Assistant United States Attorney Al Balboni is prosecuting the case.
State Farm’s Campus Project in Texas is Growing
State Farm Insurance is building a big regional office campus in Richardson, TX, near State Hwy. 190. It is reported to become the largest office development in the Dallas-Fort Worth area. Late last year, developer KDC said the State Farm office complex would be about 1.5 million square feet. But in the almost six months since word of the project came out, the office complex has grown by almost another 1 million square feet, real estate sources say. That will make it one of the largest corporate office projects ever built in the Dallas area–on par with the huge Electronic Data Systems headquarters built in Plano starting in the 1980s. A campus that size can easily house somewhere up to 8,000 workers. General contractor Austin Commercial is building the State Farm project, the first phase of which will be ready in the fall of 2014. The almost 10-acre project is being financed by J.P. Morgan Chase. Looking around Texas, only Exxon Mobil’s new Houston campus is bigger than the State Farm project.
OK Court Reverses Finding on Ford and Dealership
An Oklahoma appellate court rejected a trial court’s decision that had found Ford Motor Company “vicariously liable” to disgruntled customers of a now-defunct dealership. The case involved an Oklahoma dealer that closed its business only seven months after Ford approved its purchase of the dealership. During its operation, the dealer’s employees executed bogus checks and failed to deliver vehicles, title certificates, or to pay balances on trade-in vehicles. The disgruntled customers sued, and the trial court found Ford vicariously liable under an agency theory and directly liable for approving the transfer of the business to an inexperienced and undercapitalized dealer. The appellate court reversed, holding that Ford’s reasonable control over its trademark did not create an agency relationship that rendered Ford liable for the dealer’s bad acts. The appellate court relied on decisions that a “manufacturer/franchisor may exercise some control or protect its national identity, reputation, and trademark from abandonment without creating an agency relationship with its dealer/franchisee.” The appellate court decided that Ford owed no duty to the disgruntled customers under Oklahoma law.
Texan Charged with $3.5 Million Dollar Fraud A Duncanville, TX, man faces federal charges in an alleged multi-million dollar staged accident fraud scheme, the Insurance Journal recently reported. The U.S. Attorney’s Office for the Northern District of Texas reported that Leroy Nelson was arrested by federal agents on felony charges, outlined in an indictment returned by a federal grand jury in Dallas. The indictment charges Nelson with six counts of mail fraud and six counts of engaging in illegal monetary transactions, according to the announcement by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. The indictment alleges that from at least 2005, Nelson and others devised a scheme to defraud multiple insurance companies by submitting false claims for fictitious automobile accidents. As part of the scheme, Nelson promised cash payments to individuals he recruited for them to falsely report to their automobile insurance company that, while driving, they damaged a piece of equipment that was on the road or that was being hauled by a trailer, according to the federal prosecutors. Nelson provided scripts to these individuals that instructed them on how to report the
damage to their insurance company. The U.S. Attorney’s Office alleged that Nelson fabricated the written claims and submitted them to insurance companies. The damaged equipment was described as very technical in nature, such as: a “Remote Aircraft Landing Marker,” a “chemical Pipeline Examiner” or a “Seismographic Probe.” The claims would include a fictitious repair estimate and a photograph of the equipment. The claimed repair expenses would usually be from $16,000 to $19,000. When insurance companies paid the claims, checks would be mailed to a warehouses he owned in Duncanville or to private mail boxes he had opened in Minnesota, Missouri, Mississippi, Washington, Arizona, Connecticut and Louisiana. Nelson then directed that the mail be forwarded to his address on Explorer Street in Duncanville. If convicted, each of the mail fraud counts carries a maximum statutory penalty of 20 years in federal prison and a $250,000 fine; each of the counts of engaging in an illegal monetary transaction carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine.
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Rhode Island Industry Attorney: “Body Shops Suffer From an Image Problem” In Rhode Island, the annual State House auto body shop war has renewed, with an exasperated Jina Petrarca-Karampetsos telling weary senators — more than four hours into a late-night hearing: “Body shops suffer from an image problem. “And that image problem is perpetuated by individuals who don’t know the facts, who portray us as greedy thieves,” the sister of former Rep. Peter Petrarca — and lawyer for her father’s Providence Auto Body — told the Senate Judiciary Committee. “We’re body-shop people. We protect your second-biggest asset,” but “we are not doctors. We are not even carpenters. We’re body-shop people so we actually are, amazingly, people that make victims of insurance companies. “Some people actually feel bad for insurance companies when they compare them to us.” She suggested the senators see the insurers instead as “unreasonable” people who “refuse to negotiate.” However, the hours-long hearing and debate drew little attention outside the two affected industries. The hearing ran more than 5½ hours. It drew executives and lobbyists from Nationwide Mutual, PCI, Amica, the American Insurance Association, among others, and from the other side, the Auto Body Association of Rhode Island and a number of its members, including John Petrarca. The battle centered on this year’s version of the right-to-sue legislation that cleared the General Assembly at 2:58 a.m. in the final hours of last year’s session, which Governor Chafee ultimately vetoed. The bill co-sponsored by Senate Majority Leader Dominick Ruggerio and Majority Whip Maryellen Goodwin would require insurers to negoti-
ate payment rates with body shop owners and give the body shops the right to sue the auto insurance companies if these negotiations do not result in an “agreed price.” This year’s bill is not identical. For example, the rewritten bill would no longer require an insurer to pay the legal bills of an auto body shop that prevailed in court. But it is substantially the same. And so are the arguments pro and con. And people affiliated with the body shops gave at least $18,850 from Jan. 1-March 31 to the campaign funds of House Speaker Gordon Fox and Senate President M. Teresa Paiva Weed and their top deputies. Campaigning for a veto last year, the American Insurance Association (AIA) issued this statement: “No other state in the nation allows auto body shops to set non-negotiable rates and attempt to force them on third party payers under threat of litigation.” In his subsequent veto message, Chafee said: “While I understand the desire to ensure auto body employees are adequately compensated for their skills and attention to safety, I believe this bill would hurt Rhode Island consumers by raising their auto insurance rates and impairing their existing contract agreements with their insurance companies. “With many Rhode Island families continuing to struggle as our state economy recovers, I do not believe it is appropriate to pass on any unnecessary additional costs to consumers,” Chafee said. Rhode Island drivers already pay the fifth-highest collision insurance premiums in the nation, $351 here compared with $290 on average nationwide, according to a March 11 “Special Report” from the Property Casualty Insurers Association of
U.S. Supreme Court Rules Against Towing Company
The U.S. Supreme Court has ruled unanimously that federal trucking laws don’t preempt a state claim against a New Hampshire towing company. The court ruled in a Manchester case involving Robert Pelkey, who had to go a hospital for an infection and then suffered a heart attack. He used a handicapped parking spot, and left his car parked there while he was hospitalized. The car was towed by Dan’s City Auto Body when it wasn’t moved during a winter parking ban and then sat in the
towing business’s lot for two months. The shop believed it was abandoned. It eventually took ownership of the car and traded it. Pelkey sued Dan’s City Auto Body under the Consumer Protection Act. The case ended up in the New Hampshire Supreme Court, which overturned a superior court’s finding and ruled in his favor. The attorney for the tow company appealed, citing federal trucking laws that were passed in the 1980s to unify trucking and tow regulations among all the states.
8 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
America. But Petrarca-Karampetsos told the senators that more than 70 of the 700 companies that write property casualty insurance in the state “pay much higher than $45 an hour. Much higher. They pay over $70 an hour.” “All it asks them to do,” she said of the legislation, “is negotiate. … It is beyond me how this is such an unconscionable controversial thing that makes us look like greedy thieves.” Goodwin is sympathetic. “I just believe [for] the auto-body industry, it’s a matter of fairness,” she said Tuesday. “These have been ongoing disputes for years and years and years between the auto-body industry and the insurance industry.” Asked why the state should intervene in a private dispute over how much repair shops should be paid, Goodwin said: “People have the right to sue all the time when they can’t come to some type of agreement. What is so wrong about going into court and having a court settle something that cannot be settled?” As for warnings that higher rates will follow, Goodwin said the insur-
ance industry “has some of the deepest pockets in America. They can battle back. … I am looking out for the small business owner, the little auto body shop and the consumer at the same time.” Added Ruggerio: “I am not concerned about it because, personally I think if the auto bodies have that leverage, then the insurance industry would deal a little more fairly if they had something like that hanging over their head.” In the weeks leading up to this year’s hearing, the Property Casualty Insurers Association of America launched a $30,000 radio ad campaign. “If you think this all sounds all too familiar, you’re right — the auto body shops are at it again!,” the ad begins. If passed, the bills “could be harmful to drivers by increasing the cost of having a vehicle repaired following an accident, potentially forcing you to pay even more for your insurance coverage.” “Let’s stop the auto body repair rip-off, once and for all,” the ad said.
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www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 9
WIN Wins Big with 2013 Education Conference in Phoenix The Women’s Industry Network (WIN) kicked off its three-day Education Conference at the Ritz Carlton Hotel in Phoenix, AZ, with a Cinco de Mayo welcome reception that included teambuilding games and events. The theme of the 2013 WIN Education Conference held on May 5-7 was “Empower the Leader Within.” The focus of the conference centered on leadership development, technology, industry trends, hiring and career progression.
Emcees (l to r) Petra Schroeder and Yolanda Sandor
According to Margaret Knell, 2013 WIN Incoming Chair, the event was well attended by over 160 women
Welcome to the ALL NEW
chard Companies, presented ters most. Fowler’s research is based “The Promise of Optimal on 6 levels of motivation: Motivation.” In her speech, 1. Disinterested (lowest level, we’re Fowler discussed how moti- not even participating) vation can be taught, learned 2. External Motivation (risky, because and nurtured as a skill. She they can be taken away) 3. Imposed Motivation (we do somesaid that instead of relying on thing because we have to) others to motivate us, we can take responsibility to motive 4. The Aligned Motivational Outlook (tied to important and meaningful ourselves, and in the process, goals) improve the quality of our WIN women participate in Cinco de Mayo welcome work, relationships and life 5. The Integral Motivational Outlook reception team building exercises (part of who we are, fulfills sense of experiences. in the collision industry, including shop deep purpose) One of her key points was that it’s owners and employees, manufacturers the quality of the motivation that mat6. The Inherent Motivational Outlook and service providers to the industry. “We’re very pleased by the attendance at this year’s conference,” Knell said. “The WIN conference provides a unique opportunity for women to network with other women in the industry and learn how to be forward thinking in a dynamic and changSusan Fowler ing industry.” On May 6, keynote speaker Recruiting, Hiring and Careers Panelists (l to r) Marie Artim, Kathy Mello and Stacee Royce Susan Fowler with The Ken Blan-
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(it’s fun and enjoyable; at this level our competence is in sync with the task at hand and we’re “in the zone”) The afternoon session on “Recruiting, Hiring & Careers” was a panel discussion with Marie Artrim, VP Recruiting with Enterprise, Kathy Mello of TGIF Body Shop, and Stacee Royce of 3M. The panel was moder-
other word of advice was to follow-up with the company after submitting a resume (via email or phone) and show interest and initiative. Ask for the job if you want it. Day two of the conference started early with a WIN Scholarship Industry Walk. Over $3,000 in donations were raised for the WIN Scholarship Fund.
Emerging Technology Trends Panelists (l to r) Rick Leos, Jim Muse and Gina Pingitore
ated by Denise Caspersen of ASA. Topics covered included what hiring managers are looking for, how to attract the best talent, and how to keep your employees engaged and committed to your company’s success. One of the key takeaways from all three panelists was that interviewees need to have the basic job qualifications, but “attitude is everything.” An-
The May 7 keynote speaker, Barb Moses, VP of Discover Leadership Training, presented “Empowering the Leader Within by the Observer becoming the Observed.” The afternoon panel session on “Emerging Technologies & Trends” included panelists Rick Leos of Toyota, Jim Muse, Director of Industry Relations with Axalta, and Gina Pin-
Young Chevrolet
gitore of JD Powers & Associates. ing break-out sessions were offered: The panel was moderated by Liz 1. “Predictive Estimating” with Rick Stein of Assured Performance. Pan- Leos of Toyota elists discussed the rapidly changing 2. “Cash Through Clarity” with Lisa auto industry (projection of a driverCherney of Conscious Marketing less car in 2020!) and the importance 3. “Laugh Yourself Healthy” with of training and access to auto repair Norma Richardson, The Body Knows information. Best Jim Muse from Axalta spoke After two full days of networking about private equities’ interest in the and learning opportunities, Christy collision repair business. He stated Jones, of R Jones Collision in Des that even though there has been a sig- Moines, IA, said, “The conference nificant decrease in the number of was well worth every cent. It was a body shops since 2006 to 36,800 great way to get out of the shop, re-enshops, the larger shops with strong op- ergize and meet other women in the erating procedures are doing very industry.” well. According to his research, the To find out how you can become a top 2,000 shops bring in 21% of the member or support WIN, please visit the total revenue. website at www.womensindustrynet“Why would private equity invest work.com or contact Margaret Knell at in a flat industry?” he asked. “For the margaret.knell@i-car.com. ability to improve the process and be more efficient.” Muse described the future state of the supply chain as: 1. Increased consolidation of the Distributor 2. Elimination of Waste 3. Improved Service Level Agreements After lunch, the follow- Representatives from WIN Sponsoring Companies
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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.
Google+ Is an Emerging Star for Media-Savvy Body Shops with Ed Attanasio
“What’s this Google+ thing I’m hearing about?” or “Should my business have a Google+ page?” and “We just figured out this Facebook thing and now we have to worry about doing Google+?” are among the comments I’ve heard recently at CAA meetings. I’ve been paying close attention to Google+ for more than a year now, watching it to see how it evolves and grows and reading blogs about it. The consensus is that Google+ is quickly becoming a go-to site for companies of all sizes. People and businesses like it because it offers exposure and interactivity without sacrificing security and privacy. Instead of Facebook which has “likes,” Google+ allows the user to create “Circles,” which can be broken down into separate groups. You can create as many Circles as you desire, including your college classmates, softball team members, co-workers, or relatives, for example. Each message or interaction can be focused and tailored to each Circle. It’s more targeted and more importantly, you’re not bothering people with news or photos of things that probably won’t interest them. Google+ also has an interesting feature called “Sparks” which are essentially a list of the user’s favorite hobbies, activities or organizations that interest them. Once these Sparks are selected on the user’s profile, Google+ will automatically suggest appropriate content to the user. These include links to pertinent and timely articles, videos, photos, podcasts and sound files that are directly related to the individual’s or company’s particular interests. Google+ also has a very popular video chat feature called “Hangouts” that enable the user to conduct video chats within their Circles. There are also “Huddles,” an online chat feature similar to what you might find on AOL or Skype. All of these features work together to engage people and keep them involved, which is the main goal of social media in general. To find a body shop that used Google+ extensively, I found Marina Auto Body, with two locations in Los Angeles. When I talked to the owner Tom Williamson, he had nothing but
positive things to say about his experience with Google + and his results. He told me about Pixel Motion, a company in Orange County, CA, that he contracted to do his web and social media work. Pixel Motion is a boutique digital agency that does marketing and web development with a focus on the automotive industry. Most of their clients are automotive manufacturers and car dealerships, but they also work extensively with a select number of collision centers and body shops. I contacted the agency’s Director of Social Media Natalie Ricker to pick her brain about social media and Google+ for automotive companies and body shops specifically. “My mentality when approaching any form of social media always is the same—will it keep people’s attention?” Ricker said. “So, I post what people want to know, which can include anything from the weather, local events happening in their area, links to articles that are related to car safety, quotes of the day, or maybe just a picture of an adorable dog. My posts vary, so the fans never see the same thing every day. When fans come across the page, they will want to like it because of how people-friendly it is. We aren’t pushing promotions. We’re showcasing the fact that we love our customers and employees; we love to have fun and keep you informed and entertained. That’s the message we want to convey.” With people getting into accidents every nine years on average, social media like Google+ is valuable for body shops that want to stay in their customers’ minds when the unfortunate does occur. “When the next collision does happen to them or someone they know, what shop do you think will be the first to pop in their head?” Ricker said. “We use this same approach with Google+. If a potential customer is searching on the web for a premier collision center near Los Angeles, will they choose the one that has a complete profile with pictures and fun posts, with people in their Circles, or will they choose the one that has an incomplete profile that didn’t bother
12 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
to personalize their page?” It’s all about the presentation with any type of social media, Ricker explained. “Body shops need to have an attractive Google + page, no question. Organically, they will rank next to other business listings that have Google places, so they need to stand out. If someone sees a picture of just a map, they move on. They want to see a picture of the body shop. It makes it feel more legitimate and professional. “One of the biggest differences between Facebook and Google+ is Google Hangouts,” Ricker said. “Body shops can use this tool to their advantage with other Google users. Let’s say a customer wants to see the progress of the repair of their vehicle. With Google Hangouts, they can email an invite to their technician to “hangout” or video chat with them. They can then see the friendly smile of the technician and interact with them face-to-face. Should the techni-
cian have time, he can also even give them a virtual tour of the progress of their vehicle with a company laptop.” Another great thing about Google is they offer amazing data that can help body shops to find out what’s working and what isn’t. “We recommend that our clients keep track of their Google+ page’s progress through Google Analytics,” Ricker said. “It’s easy to track where their visitors come from, (cities, search engines, social sites, etc.), how long they are staying on the site and which pages are the most popular. We track these analytics every month and send a report to our clients with screenshots of different data. We then provide an in-depth analysis with recommendations on how to improve. We also recommend Google Webmaster Tools, which is also full of insightful data and metrics. A lot of this information can be overwhelming, so we simplify it and explain it to our customers.”
www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 13
14 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
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www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 15
On Creative Marketing
Tom Franklin has been a sales and marketing consultant for fifty years. He has written numerous books and provides marketing solutions and services for many businesses. He can be reached at (323) 871-6862 or at tbfranklin@aol.com. See Tom’s columns at www.autobodynews.com under Columnists > Franklin
The Power of Persistence in Marketing with Thomas Franklin
One rule you’ll find in many sales and marketing books is that the average sale is made after the sixth visit or call, but the average sales person gives up after the third visit or call. This information provides a reliable way to increase sales power. The usual sale in a collision repair shop is just getting the owner of a vehicle who brings it into the shop is leave the keys and let the shop do the repairs. But generally a shop also works to sell dealerships, fleet management companies, insurance companies and more on referring business to the shop. While these sales efforts involve direct calls and visits, perhaps the most common violation of this rule is the sale to the vehicle owner who comes in for an estimate. Back in the ‘90s, I visited a shop where the owner said he had a nearly foolproof method of capturing prospects that came in for an estimate and didn’t leave the vehicle. He had a series of postcards he sent out after the prospect left. The first simply invited the prospect to come back and emphasized the shop’s superior cycle time, paint quality, customer satisfaction and more. The next offered some freebees, like a detail or wash. And the next offered a financial consideration, like a lower rate if it was self-pay or perhaps a rebate on insurance jobs. He said he captured nearly half of those he lost when they came in. In today’s
digital world where snail-mail is viewed as too slow to be of value, an immediate e-mail or Facebook or Twitter message might be more effective. But how many shops stop after the first, second or third message, if they send anything at all. And of those that follow up with a phone call, how many even go to a third call? A lot of guys might say six calls would be ridiculous. But might there be a good reason to make those six calls? Last year I wrote about the lifetime value of a repeat customer. I figured that in 15 years a driver might have a reason to visit the shop threeto-five times and generate at least $5,000 worth of business. In a shop that depends heavily on repeat business, this should be reason enough to make the calls or send messages. When it comes to making the calls, the old nemesis of sales people might come into play. It’s well-known the biggest obstacle to persisting in sales is fear of rejection. An estimator may feel that fifth or sixth call will just annoy the prospective customer and do more harm than good. If the follow-up calls are just repeats of the ones before and lack any new reason to call, indeed, the prospect could get annoyed and hang-up the phone. It’s true. No call at all is better than a totally unplanned call with no strategic reason in mind. To make the six-call
FL Auto Body Bookkeeper Takes Plea Deal for Theft
Jennifer Gretchen Vasseur, 38, who worked as a secretary and bookkeeper for A&E Auto Body in Eagle Lake, FL, pleaded guilty to grand theft and making false entries on the books of a corporation. She accepted a plea deal on charges of stealing more than $20,000 from the business. Her sentencing is scheduled to take place July 9. If Vasseur repays $20,729 in restitution by the time of her sentencing hearing, she is expected to receive six Jennifer Vasseur months in jail followed by seven years of probation, according to the plea agree-
ment. If she does not repay the entire amount, her punishment will be left in the hands of Circuit Judge Catherine Combee. The maximum punishment for the charges of grand theft and making false entries on a corporation’s books is a total of 20 years in prison. Vasseur was arrested in May 2011 after an investigation by the State Attorney’s Office in Bartow. Investigator David W. Lyon wrote in an affidavit that Vasseur wrote unauthorized checks in her name, her husband’s name and to cash.
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strategy work, every one of the calls must have a specific purpose that rings true to the prospective customer. Like the shop owner that sent follow-up postcards, the first few calls should follow the same pattern: emphasizing the shop’s superior cycle time, paint quality, and customer satisfaction. The next call could offer some freebees, like a free rental car, a detail or wash. And the next could offer a financial consideration. But at this point, if there is still no sale, the next calls have to take the push to an entirely new level. Once again, in my previous article, I quoted marketing guru Jay Abraham who says: “Until you identify and understand exactly how much combined profit a client represents to your business for the life of that relationship, you can’t begin to know how much time, effort and ... expense you can afford to invest to acquire that client in the first place.”
At some point you have to ask yourself, how much would it be worth to get this customer for a lifetime? Some shops buy jobs from tow-truck drivers. Some shops pay dealerships a monthly fee to get their work. How much would you be willing to pay the customer to get his or her business for life? That fourth, fifth or sixth call can’t be just another “canned presentation.” At this point there has to be enough on the table to really capture the prospect’s attention. For example, you might ask him or her if someone at work or among family and friends also needs body work on a vehicle. If so, it could be feasible to offer this prospect half price or less if one of the other vehicles also comes in for repair. Here is shot at getting several lifetime customers. Once you’ve gone beyond the basic three calls, these next three calls must be creative and build on the prospect’s ego or desire for the best possible deal.
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Continued from Cover
Paint and Materials The study concluded the current system is flawed in part because on smaller jobs, repairers do not receive adequate compensation, and for large repair jobs, insurers believe materials charges become excessive. It also found that while average costs for paint and materials have grown by 50% since 2005, the average compensation rates paid by insurers have risen by only 23%. Lanza said that even some repairers he spoke with who don’t currently have a problem with the system are concerned about the future given this continuing disparity in the growth of costs versus compensation. “Of the individuals I spoke with, 78% agreed that in order to keep up with industry standards and keep pace with future cost increases, we need to do something, and they agreed that a alternative calculation system has to be implemented,” Lanza said. The study, commissioned by ComputerLogic (which produces the PMCLogic paint and materials costcalculation system), included inter-
views (each 30 minutes or longer) with shops, insurers, suppliers, association executives, consultants and trade publication editors.
Continued research More recently, Lanza’s firm was retained by Highway CARSTAR Collision in Chagrin Falls, OH, a shop owned by Lanza’s father Frank, to do more research into the alternative methods of calculating paint and materials compensation. The current system, while certainly the easiest, is probably the least fair and accurate, Lanza said. Use of a paint scale with a ratio factor for other types of materials was seen as being less easy to use, but somewhat more accurate and fair. Use of a paint and materials calculator also seemed more fair and accurate and yet easier to use. But, Lanza said, not all paint and materials calculators are the same. “We took a look at over 1,000 estimates from more than 20 different shops,” Steven Lanza said. “We looked at various size jobs with various paint lines. We determined there are differences between alternative paint and materials calculation systems.”
Some of the calculators take the surface area of the panels being refinished into account, for example, Lanza said. Others are still based on refinish hours or some other system. Frank Lanza said he has researching the topic for more than three years, with data comparing the various systems on more than 3,000 estimates. He said he has tried five calculation systems, “finding different flaws in each one of them,” but that some are better than others in terms of offering a “a fair and accurate solution.” For his own shop, he said, he chose a system that uses list (or “user”) prices for paint and materials. What shops actually pay can vary based on many factors, he said, but list prices are published and consistent nationwide. “The major issue that I found with the calculators that I didn’t (choose) is they were based on cost and allowed the shop to put their own mark-up on it,” Frank Lanza said. “Well, I bet if I asked, everyone in here has a different cost depending on your volume and who your distributor is and what kind of products you’re using. And everybody has a different
idea of what the mark-up should be. So what I tried to do was to be consistent, and so that’s the reason I use the list price as opposed to cost.”
Benefit to insurers He said one thing that works in insurers’ favor with paint and materials calculators is that the system can distinguish which items have sales tax that must be charged to the insurer by the shop and which do not. “In our state, the shop has to pay sales tax on certain items that do not leave with the car,” Frank Lanza said. “What happens is if you group paint and materials all together into one item, and then it’s taxed, that is really double taxation. The insurance company might care about that.” In one example shown at CIC, for example, separating out taxable and non-taxable paint and materials would reduce by $9.25 the amount the insurer would have paid under the current system of just multiplying labor hours by a materials rate. One shop owner at CIC said the paint and materials calculators are probably a more accurate and fair way to determine compensation, but in his experience insurers won’t accept the
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itemized invoice the systems produce. Frank Lanza disputed that assertion. “There are parts of the country, where the calculator is the prevailing competitive price. Insurance companies are accepting it,” he said. “So it’s up to us to prove to the insurance company this is what we need. I’ve been in business for 41 years. I have never had an insurance company that cheated me. I never have. I would rather work with an insurance company than a customer-pay any time. Because you know with the insurance company, you’re going to get paid. If you can prove (the costs) to them, they will pay you.”
John Yoswick, a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). He can be contacted by email at: jyoswick@SpiritOne.com.
NJ Cracks Down on Fraud
In a 76-0 vote April 29, New Jersey assembly members voted to crack down on insurance fraud. Democrats Wayne P. DeAngelo and Celeste Riley sponsored the bill, which targets residents who fraudulently obtain automobile insurance in another state. “Insurance fraud is not only wrong, but it costs honest drivers money through higher premiums,” said DeAngelo. “We’ve made a lot of progress in controlling auto insurance rates, but we still have a long way to go and cracking down on fraud needs to be a big part of that continuing effort.”
1-800EveryRim Quick Quote
1-800EveryRim–OEM Wheels now offers an OEM Wheel Quick Quote System. By texting a part number or picture of a customer’s damaged stock wheel to 951-RimText, shops can obtain an accurate quote on factory original replacement wheels more quickly than placing a phone call or by searching a website. The company’s goal is to quote a replacement price before an estimate is even begun back in the office. Pictures or part numbers can be texted to the actual number 951746-8398.
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Continued from Cover
Southern Conference
Bill Fowler, MCRA member and president of Bill Fowler’s Bodyworks Inc. in Southaven, MS. On Saturday morning, vendors and collision repair shop owners and managers participated in classroom presentations specific to their respective segments of the industry. While the vendors discussed various approaches to effectively marketTony Nethery ing their products, collision repairers enjoyed presentations by Tony Nethery, Business Development Manager for Colormatch, and Mike Ganske, Regional Business Development Manager for PPG. Fowler reported that Nethery presented information designed to assist the shop in increasing their bottom line by recognizing many of the seemingly insignificant operations and parts that have been referred to as “the forgettables.” Items like re-setting electronics, tinting colors, masking interior surfaces, and many other commonly overlooked labor operations, as well as parts typically not considered significant enough to document, like clips, bulbs, and seam sealers, can contribute substantial amounts to sales figure when consistently invoiced. Blueprinting repairs before they commence, instead of simply writing the typical estimate, can streamline the repair process, allowing for increased volume in workload. Mike Ganske’s discussion, “Leading Change 2013,” gave useful statistical information that made shops more keenly aware of recent changes in the industry as well as some that are coming in the near future to help shops be up-to-date and competitive. According to Ganske, there is currently a $16 billion over capacity in the collision repair business, meaning there are too many shops vying for the same dollar, which will lead to even more shops leaving the marketplace in the near future. Using a figure of $1 million to represent average gross annual sales per shop, 16,000 shops will have to close in order for shops that manage to remain in business to maintain that average. Given that there are currently fewer than 40,000 repair shops in business today, that is an alarming figure and a difficult reality to face. Add to that the increasing com-
plexity of materials and collision avoidance systems being incorporated into vehicles currently under design, and the picture is even bleaker. There will be considerably fewer vehicles that qualify as candidates for repair, resulting in substantially fewer repairs to go around. In addition, substantial investments will have to be made in equipment, training and business management in order for any collision repair shop to remain competitive and viable. After lunch, Aaron Schulenburg, Executive Director of the Society of Collision Repair Specialists (SCRS), reported on topical issues currently in the industry. The first topic was an overview of concerns surrounding insurance mandated parts procurement programs, such as PartsTrader. Schulenburg spoke to feedback the association has received on how the various programs have been received in various markets. Schulenburg pointed out that, despite being in place for over a year in some markets, there has still been no evidence presented that the PartsTrader program is providing any of the suggested benefits to collision repairers. Schulenburg’s presentation gave an overview of communications from a variety of carriers utilizing different procurement platforms to repair facilities operating under their program, further demonstrating how cumbersome and intrusive these mandated programs can be into the repair business when it comes to managing vendors and parts. In one instance, the carrier recognized the “frustration” repair facilities experienced from being obligated to order a variety of parts from different suppliers in different states. Schulenburg also addressed the ongoing dialogue between I-CAR and repairer organizations regarding the recognition of OEM published repair procedures as the industry’s standard of repair. His presentation demonstrated the importance of such discussion as Schulenburg pointed to contrasts between “standard” programs in the U.K. and the U.S. In light of recent legislation filed in the U.S. House and Senate seeking to repeal parts patent laws, he additionally gave a slide show presentation illustrating common problems shops experience when procuring both used and aftermarket parts that lead to parts returns. From the audience perspective, the demonstration was very effective at exposing the incredible waste of time and money shops are
20 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
subjected to when attempting to incorporate unfit parts into the process. Rick Leos, Toyota Motor Sales Collision Repair Program Developer, previewed the Predictive Estimating Program that could prove to revolutionize the way estimates are written. Under development for years, the program is much more comprehensive in presenting labor operations and parts that have traditionally been overlooked. Leos said additional information is scheduled to be released in June, with a possible roll-out at the end of the year. Interest in the program has been expressed by several other manufacturers and it could prove to be a real game changer in the way estimates are prepared in the future by increasing efficiency and decreasing cycle times. Steve Lanza with Richfield Associates, and his father Frank gave a joint presentation that focused on improving negotiating skills and the urgent need to change the way shops collect for collision repair materials. Steve has extensively studied the paint and material billing method currently in use and gave the audience solid reasons why a change is needed. He cited the fact that since 2005, shops have experienced a 61.9% increase in the cost of materials
while only managing a 27.1% increase in compensation. Steve stressed the need to incorporate one of the material calculating programs currently available and predicted that failure to do so could ultimately lead to the demise of one’s business. Frank Lanza, a repair facility owner from Chagrin Falls, OH, gave a colorful lesson in negotiating skills and related several personal stories about negotiating with insurers. He stressed the importance of never losing one’s temper and being professional at all times. He shared one of his “Frankisms”—when negotiating with insurance personnel, always keep in the back of your mind: “I love you, but I love me more.” Ray Gunder with his attorney and friend, Brent Geohagen, were the last speakers of the day, addressing a crowded room about taking back the industry. They discussed their journey in taking on the insurance industry in a modern day David-and-Goliath battle to get fair and reasonable resolution to industry wide problems—short pays, steering and rate suppression. Gunder spoke of his days of desperation that led him to believe he had but two See Southern Conference, Page 28
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GEICO Foundation Donates to CREF in CA, FL, DC & NY
The GEICO Philanthropic Foundation recently donated $46,000 to the Collision Repair Education Foundation to provide $6,000 in collision student scholarships and $25,000 in special school grants in 2013. An additional $15,000 will go towards the general fund, the Collision Repair Education Campaign, which supports all Education Foundation activities including the Ultimate Collision Education Makeover grant. The scholarships and school grants will go to support students and schools located in the specific GEICO markets of southern California, southern Florida, Washington, D.C., and New York.
AkzoNobel Opens its FIT Awards for Nominations
AkzoNobel Automotive & Aerospace Coatings Americas is now accepting nominations for the 2013 FIT Sustainability Awards. AkzoNobel launched the FIT Program in 2009 in an effort to bring awareness and create a desire for change within the collision repair industry related to this critical global issue. FIT which is an acronym for Focus, Innovation and Talent, the three key criteria for the award, was established as an expansion of the Most Influential Women in the Collision Repair Industry Program. The FIT award is presented to organizations and institutions that are seeking to advance sustainable business practices within the collision repair industry. Past recipients have included the California Autobody Association, Enterprise Holdings and Keenan’s Autobody. Each of which have been forerunners in their respective areas of the industry pertaining to the issue of sustainability.Nominate by June 30, to bill.orr@akzonobel.com.
ABRA Awarded Farmers MSO of the Year Award
ABRA Auto Body & Glass has been awarded the Farmers Insurance National MSO Group of the Year. The award recognizes ABRA for its superior customer service, low cycle times, commitment to innovation, company cooperation, overall friendliness and staff professionalism, along with facility appearance. “We are extremely proud of our people, processes, and performance,” said Tim Adelmann, executive vice president of ABRA.
Ford Adds 38 New Parts to Collision Parts Program
Thirty-eight new parts were added to Ford Customer Service Division’s (FCSD) Collision Parts Truckload Program, with the list price reduction averaging 16 percent. Ford says the program plays a key role in helping collision repairers deliver “high-quality, cost-effective repairs” to their customers. The 38 part additions include eight tail lamps, six mirrors, two headlamps, four valances, four wheels, four grilles/GORs/GOPs, three isolators, three fascias, two parking lamps, one radiator and one bumper bracket. The Truckload Program currently covers more than a dozen replacement part types, including bumper fascias, steel bumpers, bumper bars, exterior lighting, mirrors, car and truck radiators, wheels, header panels, grilles/GORs/GOPs, isolators/impact pads/shafts and valances. Ford states that by offering Ford and Lincoln wholesaling dealers competitive prices on bulk purchases of high-volume collision parts, the Truckload Program allows them to compete more effectively against non-OEM copy parts and other parts specified by insurance customers. “The truckload program started 2013 with great sales momentum, after completing a record 2012,” said George Gilbert, Truckload Program manager for FCSD. “We’re competitive with the aftermarket imitation parts, which means more vehicles can be repaired with the parts that were exclusively engineered for their specific vehicle’s make and model.”
Minnesota Senate Passes New Paint, Materials Tax Law
The Minnesota Senate has passed an omnibus tax bill that includes a new section on sales tax for the collision repairers in the state. The Minnesota House passed the bill on April 24. The 354 page bill adds the sale of motor vehicle repair paint and materials to the definition of a taxable retail sale and would impose sales tax is on the gross receipts from the retail sale of paint and materials. The bill provides a long list of materials that would be considered taxable under the law including primer, paint, clear coat, thinner, abrasives, body filler, buffing pads, grinding discs, degreasers, masking tape, sealer, tack cloth, waxes, welding rods and more. If signed into law, the new tax law for collision repairers would begin on June 30. www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 21
Allstate’s Profit Dips 7.4%, Expands Esurance
Allstate, the largest publicly traded U.S. car and home insurer, said firstquarter profit fell 7.4 percent as costs tied to the most expensive storms rose. Superstorm Sandy, which lashed New York and New Jersey six months ago, cost the industry $18.8 billion, according to trade group Insurance Information Institute. Chief Executive Officer Tom Wilson, 55, has been raising prices for some coverage and changing policy terms to improve underwriting profit at Allstate’s main unit, which sells residential and auto coverage under the insurer’s namesake brand. That’s helped boost returns as he seeks to generate better results at a life unit pressured by low interest rates and spends to expand online car-insurance seller Esurance. “The Allstate brand is starting to rebuild,” Wilson said. Premium revenue in Allstate’s property and liability business rose to $6.77 billion from $6.63 billion a year earlier as the company added customers at Esurance.
ABRA Has Acquired 23 WA Precision Collision Centers
ABRA Auto Body & Glass announced that it has acquired 23 Precision Collision Auto Body repair centers in the Seattle metro area and throughout Washington State. The deal marks the company’s entry into the Northwest region. Eighteen of the repair centers are centrally located in the Seattle metro area, with five additional centers in the cities of Burlington, Mount Vernon, Wenatchee, Kennewick and Spokane. “This is a game-changing acquisition for us,” says Duane Rouse, president and CEO of ABRA. “We have an extremely strong management team, a scalable integration platform, a fantastic brand, and extensive expertise and experience in the collision repair industry. Acquiring these repair centers is just one more step in ABRA’s ongoing growth strategy to better serve our customers and insurance partners.” Greg Wright, president of Precision Collision, will join the company and assume a leadership role in the region.
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CARFAX Hit by $50M Federal Lawsuit Filed by 120 Automotive Dealerships The owners of 120 auto dealerships have filed a federal lawsuit against Carfax Inc., alleging that the vehicle history reporting company engages in anti-competitive practices and violates antitrust laws. The suit, filed in U.S. District Court for the Southern District of New York, seeks damages of more than $50 million. It also alleges that Carfax, through exclusive agreements with auto companies and popular classified auto Web sites, is “monopolist in the sale of vehicle history reports.” Larry Gamache, a Carfax spokesman, said the company is “not able to comment” on the suit. Carfax is a unit of R. L. Polk & Co. In an interview with media last December, Gamache said Carfax draws customers because it works hard to build its brand and deliver a quality product. “We have to prove over and over again that the Carfax vehicle history report is the vehicle history report of excellence,” he said. “And if we don’t do that, our partners are free to choose alternatives.” The Automotive News article was about how some dealers were angered by Carfax’s success as the dominant used-vehicle history reports provider. The lawsuit’s plaintiffs include
Hermanek and Ricciotti Join CREF Board of Trustees
Sr. VP and Chief Client Officer Don Hermanek of Insurance Auto Auctions and National Sales Manager Renee Ricciotti of 3M have joined the Collision Repair Education Foundation Board of Trustees. The Board of Trustees consists of industry members who provide guidance in the organization’s efforts to support secondary and post-secondary collision students nationwide.
dealership owners from California to Vermont. Their attorney, Leonard Bellavia, a partner at Bellavia Blatt Andron & Crossett in Mineola, NY, says more plaintiffs are expected. “I have about 25 or 50 more dealers that have sent paperwork expressing a desire to join the suit,” Bellavia says. The lawsuit alleges that Carfax provides “cash or noncash marketing support” to auto manufacturers and to classified sites Autotrader.com and Cars.com as part of exclusive agreements that shut out its competitors. The suit also alleges that Carfax charges dealers “a significantly higher price” for its vehicle history reports than other providers charge. Dealers typically pay $16.95 per report or a flat monthly fee for an unlimited number of reports per dealership location, the suit alleges. “The monthly fee ranges from $899 per dealership location for some dealers to $1,549 per dealership location for other dealers,” depending in the number of vehicles in the dealership’s inventory, according to the suit. It alleges that Carfax forces dealers to buy its vehicle history reports as a result of its exclusive agreements with 37 of 40 manufacturer certified pre-
owned programs. Virtually all of the agreements require dealers to provide Carfax reports as a condition of participating in the programs, the suit alleges. Also at issue is that Carfax has exclusive agreements with Cars.com and AutoTrader.com. Those agreements stipulate that dealers who list used vehicles for sale on those sites can only post vehicle history reports from Carfax, according to the suit. Ten firms are approved on the National Motor Vehicle Title Information System, a national data base of vehicle title information to which 41 states contribute, according to the U.S. Department of Justice Web site. Carfax’s main competitor is AutoCheck, owned by Experian Automotive Inc. Mentioned, but not a focal point of the suit, is the alleged inaccuracy found in some Carfax reports. Bellavia says that is a concern of dealers and can be cured as a byproduct of a “free marketplace.” The lead plaintiff in the suit is Maxon Hyundai-Mazda in Union, NJ. Its dealer principal, Mike Ciasulli, who is allegedly furious with Carfax but subscribes to the reports as a condition of the Hyundai certified used-vehicle program in which he participates.
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CREF Seeks Employers For Summer Students
Collision industry businesses seeking secondary or post-secondary collision students for summer employment are asked to contact the Collision Repair Education Foundation, who will communicate the employment opportunities to local collision instructors and students. Collision industry members seeking collision students for summer employment should email info@ed-foundation.org with the position details, location, and contact person.
22 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
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Fenton Honda of Longview
Honda of San Marcos
Lo n gv ie w
Sa n M a rco s
800-228-1910 903-753-5921
866-392-1313 512-392-1313
Dept. Hours: M-F 7:30-6; Sat 8-4 victor.ortega@fentonmotors.com
Dept. Hours: M-F 7:30-6; Sat 9-5 csmith@hondasanmarcos.com
Gillman Honda
Russell & Smith Honda
Walker Honda
N EW M EXI CO
OKLAHOM A
Don Carlton Honda
Garcia Honda
Tu l s a
A l b u q u e rq u e
800-722-2379 918-622-9670
800-677-6632 505-260-5002
Dept. Hours: M-Sat 7-6 hondaparts@doncarlton.com
Dept. Hours: M-F 7:30-6; Sat 8:30-5 Jscott@garciacars.com
Fowler Honda
Santan Honda
N o r ma n
C h a n d l e r, A Z
888-715-3197 405-573-5719
800-765-1353 480-285-2804
Dept. Hours: M-F 7-9; Sat 8-4 parts@fowlerhonda.com
Dept. Hours: M-F 7-5:30; Sat 7-5 wholesaleparts@santanhonda.com
Joe Marina Honda Tu l s a
800-722-0520 918-491-0110 Dept. Hours: M-F 7:30-6; Sat 8-4 parts@joemarinahonda.com
Hou st on
H o us t o n
800-999-8309 713-776-4834
800-833-0180 713-663-4266
Superior Honda
Dept. Hours: M-F 8-6; Sat 8-5 gduckworth@gillmanauto.com
Dept. Hours: M-F 8-6; Sat 7-4 rnarvaez@russellsmith.com
800-943-4227 504-368-5687
LOU IS IA NA
H a r v ey
Dept. Hours: M-F 7-5:30 parts@superiorhonda.net AC U RA T EX AS
TE XAS
OKLAHOM A
L OU IS I AN A
Don Carlton Acura of Tulsa
Walker Acura
Tu l s a
800-359-8555 504-465-8555
Autonation Acura
Gillman Acura
Leag ue C it y
H o us t o n
800-749-6227 713-371-4700
800-288-9180 281-209-4214
Dept. Hours: M-F 7-6; Sat 7-5 hoehns@autonation.com
Dept. Hours: M-F 7-6 jcastellow@gillmanauto.com
David McDavid Acura
Mac Churchill Acura
A u stin
F o rt Wo rt h
800-575-3553 512-401-5976
888-824-9634 817-806-0571
Acura of Baton Rouge
Dept. Hours: M-F 7-7; Sat 8-5 jraygo@mcdavid.com
Dept. Hours: M-F 6-7; Sat 8-5 jguin@macchurchill.com
866-733-2861 225-756-6166
David McDavid Acura
Sterling McCall Acura
Dept. Hours: M-F 7:30-6; Sat 8-5 dlavigne@acurabr.com
Pl a no
H o us t o n
972-964-6044
713-596-2337 713-596-2338
Dept. Hours: M-F 7-7; Sat 8-5 dgrajczyk@mcdavid.com
888-550-7278 918-664-2300 Dept. Hours: M-Sat 7-6 acuraparts@doncarlton.com
M e t a ir ie
Dept. Hours: M-F 7:30-6; Sat 8-2 parts@walkeracura.com
LOU IS IA NA
B at on Ro ug e
Dept. Hours: M-F 7:30-7; Sat 7:30-4 rkahl@sterlingmccallacura.com www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 25
AUTOMAKER, AU A UTO OM MA M AK AK ER OEM OEM AUTOMAKER KE R,, OEM, M,, AND AND RECALL RE R E C AL CA ALL LL EC Autobody News
Subaru Recalls 10,000 + Forester Wagons
Subaru is recalling just over 10,000 of its 2014 Forester wagons because the floor mats can interfere with the clutch, brake or gas pedals. The recall affects Foresters made from January 2013 through March. The company says the floor mats can curl when exposed to heat. The problem was discovered in cars arriving at a port in Vancouver, WA. The National Highway Traffic Safety Administration says the mats could distract the driver or interfere with operation of the car. Subaru traced the problem to improperly manufactured backing on the mats.
Honda Recalls Nearly 46,00 Fit Sport Small Cars
Honda is recalling nearly 46,000 Fit Sport small cars in the U.S. and Canada to fix a problem with the electronic stability control system. The recall affects cars from the 2012 and 2013 model years. Honda says the stability control system can let the car tilt too far before it applies the brakes to prevent a crash. The defect was discovered in government testing of models with a particular type of tires. Honda says it doesn’t know of any crashes or injuries from the problem.
Porsche 911 Coolant Leaks
U.S. safety regulators are investigating coolant leaks in Porsche 911 sports cars that could cause roadway spills and send vehicles careening out of control. The probe by the National Highway Traffic Safety Administration affects about 10,000 models with the GT1 engine from the 2001 through 2007 model years. The agency that a hose fitting can fail and cause rapid coolant leaks without warning. The coolant can cover the road and cause drivers to lose control of their cars. The agency says it has 10 complaints of coolant leaks.
TEXAS • OKLAHOMA • LOUISIANA • NEW MEXICO
Nissan Recalls 2013 Altimas for Spare Tire Inflation
A pressure regulator that over or underinflated spare tires for five days earlier this year has led to a recall of 123,308 units of the 2013 Nissan Altima. Sedans that were manufactured from March 21-26 are those possibly affected by the temporary tire snafu. Those notified of the issue can take their sedans to their local Nissan dealer, who will check the tire pressure and correct it if necessary.
NHTSA Investigates Ford Police Vehicles
The National Highway Traffic Safety Administration is upgrading an investigation into steering assembly failures on 195,000 Ford Crown Victoria police cars, the Detroit News recently reported. NHTSA said it is upgrading an investigation it started in September to an engineering analysis for the 2005-08 Ford Crown Vic Police Interceptor vehicles after six complaints and 15 total reported incidents. Ford said in a letter to NHTSA in November that it was investigating whether a prior crash or vehicle service may have an impact on the steering system issues. The Dearborn automaker began investigating after it was contacted by the Ontario Provincial Police in March 2012 after the steering system failed during routine driving. Police in Montgomery County, MD, contacted Ford about two other police vehicles that had steering system failures. Ford noted one of the vehicles had been in four previous crashes. NHTSA said the mechanical connection between the steering wheel and rack and pinion steering assembly consists of the steering column and an upper and lower intermediate shaft. Allegations of a loss of steering control are mostly related to a separation of the upper and lower shafts within the steering the column. The incident rate involving subject vehicles is 7.7 per 100,000 vehicles.
26 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
Ford to Add 2,000 Jobs at Kansas City Plant for F-150
Ford Motor Co. recently announced it would hire an additional 2,000 workers at its Kansas City Assembly Plant in Missouri to meet increased demand for F-150 pickups and for the upcoming production of the new Transit family of commercial vehicles. The increases will come in two phases. Ford will add 900 jobs and a third work crew in the third quarter to build F-150s. Starting in the fourth quarter, Ford will hire an additional 1,100 workers to gear up for production of the Ford Transit commercial van, which begins in 2014. About half the 2,000 workers will be new hires. The other half will be workers who were laid off temporarily in the second quarter of 2012 when Ford moved production of the Escape crossover from Kansas City to Louisville. The Kansas City plant is Ford’s largest in the United States and includes two separate body shops, two separate paint shops and two final assembly lines. Ford is spending $1.1 billion to retool and refurbish the Kansas City plant. The expansion includes a 437,000-square-foot stamping plant, which was completed in 2012, and a 78,800-square-foot paint shop.
480,000 Chrysler Units Involved in Recall
More than 480,000 Chrysler Group vehicles either are being recalled or are under investigation, according to the NHTSA. The recall involves the Jeep Grand Cherokee from 2005 through 2010 model years manufactured from Feb. 11, 2004 through March 9, 2010, as well as the Jeep Commander from the 2006 through 2010 model years manufactured from Jan. 31, 2005 through March 10, 2010. NHTSA officials indicated a transfer case electrical failure may result in an unintentional shifting of the transfer case into the neutral position.
www.autobodynews.com
June 2013
Chrysler Recalls Ram Trucks for Windshield Defogging
The National Highway Traffic Safety Administration (NHTSA) announced Chrysler is recalling 532 Ram 1500 pickups to ensure the windshields are being properly defrosted and defogged. Chrysler engineers observed a fault code linked to the coolant system function. The NHTSA said in the affected vehicles, the coolant bypass valve may stick in a position that does not allow coolant to flow into the heater core. Thus, these vehicles fail to conform to the requirements of the Federal Vehicle Motor Safety Standard No. 103, ‘Windshield Defrosting and Defogging Systems.’ The models were manufactured June 25, 2012, through December 12, 2012, according to NHTSA. The recall campaign impacts 498 vehicles in the U.S. and 34 in Canada, according to a Chrysler statement. More than one-third of the vehicles are still with dealers.
Suit Says Fords Prone to Unintended Acceleration
A lawsuit claims that unintended acceleration incidents are endangering owners of Ford, Mercury and Lincoln vehicles manufactured between 2002 and 2010. The suit, filed in Huntington, W. Va, charges that Crown Victoria, Escape, Taurus, Thunderbird and other models can surge out of control and alleges that they lack a failsafe mechanism to stop the vehicle. The suit targets Ford vehicles equipped with electronic throttle control and says the control can malfunction, sending the vehicles out of control. The suit claims Ford has received “hundreds if not thousands” of complaints from owners, including police departments, about the problem. Ford said it has worked with the NHTSA to address the problem, an approach it says is “far more scientific and trustworthy than work done by personal injury lawyers.”
Infiniti Launches FactorySponsored Towing Service
Infiniti North America has launched a factory-sponsored towing service to shops participating with the Infiniti Certified Collision Repair Network. Infiniti said its new towing service delivers damaged vehicles directly to Infiniti Certified Collision Repair Network shops. The purpose of the towing program is to provide Infiniti vehicle owners with confidence that the repair will meet the company’s standards. Infiniti owners can call a toll-free phone number, 800-662-6200, to initiate the towing service following an auto accident. The vehicle will be transported to any Infiniti certified shop within a 50-mile radius. Infiniti said becoming an Infinity Collision Repair Network facility offers key marketing advantages for collision shops. Infiniti said certified shops have direct access to OEM technical information, specifications, resources and tools to ensure consistent and quality repairs. Infiniti North America established the Infiniti Certified Collision Repair Network to reward and distinguish body shops that meet and exceed Infiniti standards for training, equipment, customer service and quality repair work.
Nissan Cuts Prices on Seven U.S. Models
Nissan is cutting prices on seven of its 18 models in the U.S., hoping its cars and trucks will show up in more Internet searches by shoppers. The price cuts vary with the amount of equipment on each model and will run from 2.7% or $580 on the top-selling Altima midsize car to 10.7% or $4,400 on the Armada big SUV. Other models getting price cuts include the Sentra compact car, Juke small crossover SUV, Murano midsize crossover, Rogue small crossover and the Maxima full-size car. Jose Munoz, Nissan senior vice president of sales and marketing for the Americas, said the vehicles getting the price cuts account for 65% of Nissan’s U.S. sales. The sticker prices, he said, were higher than some competitors for similar models, and that kept Nissan vehicles out of some Internet searches. “In some of the customer searches we may not appear,” Munoz said. “This is an indication that we certainly want to be on the shopping list and we want to be considered by as many customers as possible.” The company plans to reduce rebates and other discounts to offset some of the price cuts.
Nissan Gives Free Towing Service to Certified Shops
Nissan North America will deliver vehicle owners directly to the shop door. Nissan is offering a factory towing service to Nissan Certified Collision Repair Facilities, ensuring repairs are performed to Nissan’s high standards. The towing service is offered at no charge to the Nissan owner or the collision shop. For the Nissan owner, a simple toll-free phone call to 1-800-NISSAN-1 initiates the towing service. The vehicle will then be transported to a Nissan Certified Collision Repair Facility within a 50-mile radius.
Chrysler Reports First Quarter Net Income
Chrysler Group LLC reported its preliminary 2013 first-quarter results, including net income of $166 million on revenue of $15.4 billion. As anticipated, the quarter was negatively affected by the reduced vehicle shipments that resulted from key product launches, namely the 2013 Ram Heavy Duty trucks and the 2014 Jeep Grand Cherokee, as well as preparation for the second-quarter production launch of the all-new 2014 Jeep Cherokee.
Mercedes-Benz Selects SCI for Certified Repair Program
Mercedes-Benz has selected the automotive consulting firm SCI to develop and manage its Certified Collision Repair Program. SCI will ensure certified collision centers meet or exceed Mercedes-Benz’s strict set of repair standards in terms of shop training, customer handling and repair quality. SCI will help certified collision repair centers meet the standards, including ongoing audits to ensure that participating shops keep knowledge and skill sets current. SCI will also lead program management and communication. Said Bob McDonald, president of SCI, “The program will not only help shop personnel more effectively serve customer needs, but it will increase operational productivity and create an opportunity for shops to realize sustainable growth.”SCI has managed the BMW Certified Collision Repair Center Program since 2003 and has also been the administrator for the Lexus Certified Collision Center (LCCC) Program since its inception in 2006.
www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 27
Continued from Page 20
Southern Conference
choices—take a stand and fight back or close his doors once and for all. Geohagen told the audience of his original skepticism with Gunder’s story and observed that few people outside the collision repair industry would believe such an incredible story, one that is all too familiar to people in the industry.
Brent Geohagen, attorney for Ray Gunder and Eddie Quintela (see other cover story).
“Gunder’s successes are the stuff of legend and he serves as an inspiration to the rest of us. Despite overwhelming adversity, it is possible to prevail. It just takes determination,” said Fowler. “It was a perfect ending to a perfect conference.”
John Mosley, President of MCRA and owner of Clinton Body Shop in Richland, MI, said the firstever southern industry event was a big success with outstanding speakers and a great turnout. He especially enjoyed Rick Leos’ presentation about the Toyota predictive system and urges all body shop owners and managers not familiar with the new program to do their research, as the new program will be a “game changer.” He hopes next year’s event will be twice as large. Steve Plier, acting president of ALARISE, was extremely pleased that the first southern conference turned out to be such a huge success, with repairers coming from Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee. “Not only were the attendees from repair facilities pleased and enthused about the conference, but we also received great comments from our participating vendors,” said Plier. “To be the first joint effort between two state organizations resulting in a turnout that represented six southern states I feel speaks volumes that repairers are understanding issues must be addressed and the route to change is through awareness and education
Don Carlton HYUNDAI OF TULSA
918-622-2843 Fax
800-627-0705
within and of the industry.” Without the sponsors, Plier said the conference would not have been able to take place. “I would like to very much express my gratitude to the sponsors for their participation for without them the conference would not have taken place.” Sponsors included: Edwards Chevrolet, PPG (Rozars and Automotive Paint Supply), Automotive Color, Gray Daniels, National Coatings Supply, Overnights Part Alliance, Advance Equipment Solutions, All Star Auto Lights, Byrd’s Automotive Inc., CARS, ComputerLogic/PMC Logic Inc., DuPont Performance Coatings and O’Reilly’s Auto, English Color and Supply, Enterprise, LKQ, Mitchell, The Clip Man, and Urethane Supply Company. Plans for the 2014 conference are being made for April 11–13 with state organizations in Georgia, Alabama, Mississippi, Tennessee, and possibly Florida, working together to coordinate the second annual Southern Automotive Repair Industry Conference in Biloxi, MS. Special thanks to Bill Fowler for providing summary information for this article.
Don Carlton ACURA OF TULSA
918-627-6457 Fax
Member of the Tulsa Parts Connection
888-550-7278
Member of the Tulsa Parts Connection
Axalta Coating Partners With Optima Automotive
Axalta Coating Systems, formerly DuPont Performance Coatings, has partnered with Optima Automotive to work with its customers on its overall web presence marketing tactics. This will include website development/design, search engine optimization, social media management, pay-per-click campaign management and reputation management. “Mark Claypool and Optima Automotive are clear leaders in the field of web presence management,” said Steve Trapp, collision services development manager for Axalta Coating Systems. “Building brand and bringing traffic to an effective shop website are key components to ultimately getting cars to repair. Optima has repeatedly demonstrated its expertise in this area so we are excited to bring this resource to our shops across the nation.” Through this partnership Optima Automotive will hold a series of workshops and seminars to help local shops understand the importance of an effective presence online. Beginning with search engine optimization, Optima will work closely with shops to build effective websites.
Don Carlton HONDA OF TULSA
918-392-9665 Fax
800-722-2379
Member of the Tulsa Parts Connection
Largest inventory Nightly deliveries
Excellent service Competitive pricing
Knowledgeable staff First class service
9777 S. Memorial Dr. Tulsa OK 74133
4905 S. Memorial Dr. Tulsa, OK 74145
4141 S Memorial Dr. Tulsa, OK 74145
Parts Hours: Mon-Sat. 7:00am - 6pm
Parts Manager: Michael Hinton michaelh@doncarlton.com
Parts Hours: Mon-Sat. 7:00am - 6pm
www.doncarltonhyundai.com 28 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
Parts Manager: Diane Finch acuraparts@doncarlton.com
www.doncarltonacura.com
Parts Hours: Mon-Sat. 7:00am - 6pm
Parts Manager: Garry Evans hondaparts@doncarlton.com
www.doncarltonhonda.com
Continued from Cover
53 Lawsuits
Benefits or Assignment of Proceeds and I will go after the insurance company on their behalf. I’ll step into their shoes. Every customer I’ve discussed this with agrees to take the second option.” Currently, Quintela has 80 customers he is representing in court. In one week alone, he filed 53 cases. The insurance companies he’s currently in litigation with include State Farm, GEICO, USAA, Travelers, Bristol West, Infinity and others. Collision Concepts, a 10,000square-foot shop, currently has seven DRPs. Quintela and his staff of 11 work on 80–100 vehicles per month. He’s been in business since 2002. Prior to owning his shop, Quintela was an estimator for State Farm from 1994–2002. His family owned body shops while he was growing up. Over the past year, Quintela—inspired by shop owner Ray Gunder of Lakeland, FL—has been taking action against insurance companies on behalf of his customers. “The insurance companies al-
ways try to steer my customers away from me anyway, no matter what, even if I wasn’t doing this. Now that I have to fight to keep my customer to begin with, I feel like I don’t have any reason why I shouldn’t go after the insurance companies for everything they owe,” said Quintela. The business of making insurers pay what body shops feel they are owed is well worth the effort, time and expense, said Quintela. “If you were to look at this effort just as a business itself, the return on investment is great because not only am I recovering the money I should have been paid in the beginning (for properly repairing a vehicle), I’m recovering my court costs and my attorney’s fees as well. At the end of the day, I’ve recovered my investment, plus I got paid what I should have got paid to begin with.” All he said he’s spending is time, and after one or two cases, the legal steps became easy and are hardly time consuming. “Once you do one or two cases, it becomes really easy because you know how it works. It’s very routine,” said Quintela. “The file gets put on my desk once the work begins on the car
and I scan the file over to my attorney and that’s it. If it takes me more than 15 minutes, it takes a lot of time. And the best thing about it is, we fix the car right away. We write our estimate, and we don’t care what the insurance writes. Whatever the difference is is what we are suing for.” For example, Quintela and his legal counsel, Brent Geohagan of Lakeland, FL, (also Ray Gunder’s legal counsel), recently levied a lawsuit against Infinity Insurance Company on behalf of a customer for the insurer’s short pays of “reasonable and necessary” repair costs. The lawsuit claims an underpayment of $611 for the insurer’s arbitrary discount on parts, failure to provide ample consideration for numerous necessary repair processes, related materials, labor rates and quality replacement parts. Recently, Quintela received a State Farm estimate sheet that states the shop is responsible for conducting safety inspections and checks. “How can State Farm tell us that we’re responsible for conducting any necessary inspection and safety checks, but refuse to reimburse their customers for the cost of us doing
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them?” Quintela and Geohagan have already settled numerous short-pay cases and have won them all. What Quintela finds somewhat amusing is that the insurance companies will settle one day and the very next day, refuse to pay for the same things they just settled in a previous lawsuit. “We just settled with State Farm. They just paid me, plus my attorney fees and their attorney fees and court costs, and the next day they come back and do the same thing. They are still fighting it. And, I just got a check from another insurance company and the next day I am suing them for the same exact things. These insurance companies go to court, they lose, they settle, but the next day they are out doing the same exact thing. They won’t give up. They try to wear you out, hoping that one day you just go away, or they make it so hard to discourage other shops from doing it,” Quintela said. However, Quintela believes it is important for body shops to stand up for themselves and feels his efforts are helping the collision repair industry move in the right direction.
Toyota
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888-818-5176 Fax Your Order:
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Parts Dept. D Hours: Monday - Friday: 7:30am - 6pm Saturday: 8:30am - 5pm www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 29
SEMA Show Enhances Services for Collision Repair Market, Adds Up to 20,000 Sq. Ft. for 2013 The 2013 SEMA Show will include enhanced features for the Collision Repair & Refinish market, including an expanded show floor area, targeted activities both inside and outside the Las Vegas Convention Center, and an unsurpassed educational program. The upgrades come as a result of the fastgrowing interest from both exhibitors and buyers in the collision market segment. “As interest grows and the landscape changes, we continue to evolve and are excited about the plans for 2013,” said Peter MacGillivray, SEMA VP of events and communications. Last year’s SEMA Show featured 330 exhibitors in the Collision Repair & Refinish area and the Tools & Equipment area, the two sections where many exhibitors feature products for the collision market. These exhibitors were housed in over 88,000 square feet in North Hall of the Las Vegas Convention Center. For 2013, the Collision Repair & Refinish section will expand into an adjacent area of the LV Hotel, accommodating up to
20,000 square feet of additional space. “The expanded floor section makes it really easy and convenient for buyers to see all the products in the collision market within a defined area,” said MacGillivray. More than 20,000 SEMA Show buyers expressed an interest in collision repair products, and 87% of all buyers have buying influence. Those in the collision market are also able to network and expand their knowledge during several industry meetings and educational events taking place. The Collision Industry Conference (CIC), the National Auto Body Council (NABC) and the Society of Collision Repair Specialists (SCRS) are amongst the groups hosting meetings during the SEMA Show. A comprehensive Repairer Driver Education program is also presented by the SCRS. “From the impressive growth of exhibitors, to attendees who are reaching out to SCRS already looking to register and ask questions about our education, it is clear the collision in-
Industry Demonstrates Early Confidence in SEMA Show with Six Percent Exhibitor Increase
Nearly 2,000 exhibitors are confirmed to participate in the SEMA Show Priority Booth Selection Process taking place later this month. The number represents a six percent increase over the number of companies that participated in the process in 2012. “With the increased commitment exhibitors are demonstrating earlier in the year, it’s apparent the SEMA Show provides unmatched brand-building visibility and sales exposure in one venue,” said Peter MacGillivray, SEMA VP of events and communications. Manufacturers exhibit at the four-day event each year to showcase new automotive parts and accessories, and to connect with more than 60,000 buyers from throughout the world. Through programs and features such as the New Products Showcase, product demonstrations and sectionalized floor plan, exhibitors are able to connect with the most relevant buyers. “The earlier a company signs
up, the more likely they are to take part in all the added-value programs we have available,” MacGillivray said. “We’ve seen direct connections between the amount of planning a company does to the level of success they achieve.” Nearly 70 percent of buyers visit the SEMA Show with a plan and identify the exhibitors they want to meet with in advance, according to a 2012 SEMA Show survey. The most influential factors that buyers reported as having an impact on their decision to visit an exhibitor were participation in the New Products Showcase, the Show directory listing, and pre-Show contact from an exhibitor. Companies may still sign up to exhibit at the upcoming show at www.SEMAShow.com/buyabooth. Attendee registration will be available from the site in early May. The 2013 SEMA Show takes place Tuesday-Friday, November 58, in Las Vegas, Nevada at the LVH Conference Center.
Progressive Sues Other Insurers For Alleged Patent Infringement
Progressive Insurance has filed patent-infringement lawsuits against State Farm Mutual Automobile Insurance Co. and Hartford Financial Services Group Inc. over auto coverage and premiums based on vehicle usage.
According to the lawsuit, the insurers are infringing three patents that relate to vehicle monitoring and ways the monitoring is used to determine insurance rates. Both complaints were filed in federal court in Cleveland.
30 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
dustry is really excited about this year’s show,” said Aaron Schulenburg, SCRS Executive Director. Schulenburg says that the 2013 Repairer Driven Education program will include fresh and inspiring content, while continuing to remain relevant to collision repairers. “Each year we have taken feedback from past attendees and used it to amplify our upcoming offerings,” he said, noting that 2013 will be the group’s fourth year partnering with SEMA to present the educational program. “This year, we are adding to the format with designated tracks that can guide repair industry professionals through the week-long program based on their core interests in what they need for their business. Some want to better understand how to manage their business, and what makes it tick, while some are looking for ways to enhance and grow it through new business opportunities or untapped customer bases; others may be looking for ways to best position their business to make it more attractive when they wish to
sell it, or learn how to compete in a consolidating marketplace. Regardless of interest, there is something for everyone and the objective remains the same: to address real issues faced by collision repairers, while providing tangible information that they can directly apply to their business when they return home.” SEMA Show exhibitors began selecting the location for their booths during the Priority Booth Selection Process, beginning with exhibitors in North and Central Halls, followed by those in upper and lower South Halls. The 2013 SEMA Show is set for Tuesday-Friday, November 5-8, 2013, in Las Vegas, Nevada. The annual event typically attracts more than 130,000 individuals from 125 countries, making the annual show the premier automotive trade event in the world. Manufacturers come to the event to showcase products that enhance the styling, performance and functionality of cars, trucks and SUVs. For details, visit www.SEMAShow.com.
Stacy Bartnik Joins Team PRP as Executive Director Team PRP has named Stacy Bartnik as its new executive director. Bartnik most recently served as VP of opera-
tions for CARSTAR. She is the immediate past president of the NABC and as a trustee for CREF.
miere iation e r P ’ s Texa ody Assoc Auto B
• If you are serious about your business future and plan to have some say in what that future is... then the answer is clear − Become a Member of the HABA.
• Our mission is to create an environment of professionalism, respect, accountability, excellence, enthusiasm and the ability to collect fair and reasonable compensation for collision repairers who properly restore vehicles to their safe pre-loss condition.
For more information on becoming a Member, please visit our website at: www.habaonline.org
www.autobodynews.com | JUNE 2013 AUTOBODY NEWS 31
Continued from Cover
DEG Inquiries
Shops are also encouraged to submit pictures or short videos with technicians performing the task in question or related to the problem. The DEG public database has been available for five years, said Harris, who has been with the non-profit for over two years. As the administrator, Harris is responsible for daily operations of processing inquiries and is assisted by a joint operating committee. With 25 years in the industry, Harris’ background includes managing a collision center at a dealership in Rochester, NY, and in another position, working as a training and education director and liaison between the collision repair shop and insurance companies to resolve issues. “We are really excited about the 30% increase of inquiries because it means the industry is taking advantage of the resource, and that it is providing a necessary and useful tool for collision shops,” Harris said. “That said, we know we are only scratching at the surface. If you look at the number of body shops in the U.S. (ap-
proximately 35,000), 1,300 to 1,500 inquiries in a year is probably not representative of the full spectrum of data corrections that need to be addressed. We think there are more areas within the databases that can be resolved if more people were exposed to how easy it is to communicate with IPs through our process, and how effective that communication is when estimators submit issues.” In December 2012, the DEG launched a redesigned website (www.degweb.org) that is easier to navigate. Users can jump right into the inquiry process with an easily visible “Open Inquiry” button located on the home page. The most significant addition to the website is the addition of a “Top 10 List” for each of the three information providers. These lists are generated by the most frequent issues posted by users or enhancements users would like to see. In the Top 10 Lists for all three information providers, the top user concern listed for each is “Feather, Prime and Block”—users would like to see the systems generate a pop-up to add feather, prime and block labor to the estimate. The user would create the time, but the system needs the op-
tion to add it, without creating a manual entry. Another top concern is adding an option—”add for prep raw part”—for preparation time for plastic parts (in addition to bumpers) that are shipped raw or in an unprimed state. In addition, the newly designed website continues to includes links to estimating guides or “P-Pages” for each estimating system. “We are really excited about the new design of the website,” Harris said. “It gives the user the opportunity to get to a few key areas right away.” The DEG is equally funded by the Society of Collision Repair Specialists (SCRS), the Automotive Service Association (ASA) and the Alliance of Automotive Service Providers (AASP) as a free service to the industry. Sponsors include industry organizations such as Automotive Body Repair News, PPG, Washington Metropolitan Auto Body Association (WMABA), DuPont, Sherwin Williams and Keenan Auto Body. “While the service is free to use, we really rely on financial support from the industry, both in the form of sponsorships and donations from satisfied end-users. This support lessens the ongoing financial reliance on the
primary funding associations, allowing them to redirect funds to new resources that help the industry in other ways,” Harris said. “All the services that we do are free.” For more information or to submit an inquiry, go to www.degweb.org.
Alabama to Start Producing its First Acura Models
In Talladega County, Honda’s auto factory recently started its mass production of the Acura MDX SUV. This marks the ninth vehicle currently in production on Alabama’s assembly lines. It also is the first model produced in the state for Acura, which is Honda’s luxury brand. The decision to transfer MDX production to Alabama from a Honda plant in Canada was announced in 2011. Since then, the Lincoln plant has added nearly $400 million in investment and 350 jobs, partly to prepare for the new addition. The 4,000-worker plant, which also produces the Odyssey minivan, Pilot SUV and Ridgeline pickup, has been expanding its annual capacity.
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Paint Materials: Band-Aids Won’t Help—It Needs Stitches! by Ray Fisher President, ASA Michigan
Receiving proper paint material reimbursements from insurance carriers continues to be a challenge to the collision repair industry and Michigan is no different. Since hurricanes Katrina and Rita, the collision repair industry has never caught up to the increases that were incurred during this time period. Add in the challenges the industry faces when attempting to itemize and properly be reimbursed for the feather, prime and block labor operations necessary for a repaired panel and they Ray Fisher absorb even additional costs. We have been battling this for years and the solution is quite simple—shops have to use the tools that are available in the marketplace, that means the paint material calculators and insurance carriers have to be cognizant of real costs! Compare paint materials to parts pricing: When have you ever known a repair facility to have to wait 12, 18 or
24 months for a parts price increase (PPI), all the time hoping that next month they will get the PPI that was owed? Paint material increases are not any different! There are paint material calculators such as Micro Mix, Mitchell Refinish Material Calculator and PMCLogic, just to name a few that provide documentation and assessment of paint materials used on each repaired vehicle. I recently cut my hand with a tablesaw which is a different story, but I had to go to the emergency room and I was charged for the labor and the ‘parts/stitches’—including the cleaning solution. That cleaning solution wasn’t a ‘cost of doing business’ for the hospital! The customer and the insurer have to understand that we must cover the costs of these materials that are specific to the repair of that particular vehicle for that particular loss! We also cannot ignore the regulations placed upon the automotive repair industry over the past five years, such as the 6H/NESHAP rule which clearly identifies when the refinishing process occurs, but also the updates to the labeling laws from OSHA as they are being updated over the next few years. Until we see more acceptances of the paint material calculators, we must
have acceptance that any repair procedure that requires ‘spraying’ as an applicatory method translates to a refinish process, must be categorized as a refinish operation and the repair facility must be reimbursed for the materials accordingly. If the consumer or insurance carrier feels that these definitions are improper under the NESHAP/6H rule, they need to work on lobbying Washington, but in the meantime, stop expecting the repair facility to break the law or absorb the extra costs. These costs, such as feather, prime and block procedures, are NOT part of the repair process, they are the gap between the repair process and the refinish process—and they have a federal regulation that requires it to be a refinish operation.
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Mercedes-Benz Plans $70M Expansion, 600 Jobs in AL
Mercedes-Benz recently held a groundbreaking ceremony for the latest expansion at its Alabama auto plant: a 900,000-square-foot parts consolidation center. The facility will create about 600 jobs, although plans are still being finalized and it’s not clear how many of those people will be employed by Mercedes or its contractors and service providers. A combination of all three are expected to work from the facility, which will streamline logistics operations and support the receiving, handling and sequencing of parts. The plant began producing the M-Class SUV in 1997, added the GLClass SUV and R-Class crossover since then and is preparing to launch two new models: the C-Class sedan and a new SUV. “With the addition of two new products and ongoing high demand for our current vehicles, our logistics operations are becoming increasingly more complex,” said Markus Schaefer, head of Mercedes, Alabama operations.
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Safelite Named in New Lawsuit Alleging Windshield Separation Due to Poor Installation A woman who says she lost both her husband and young daughter in a rollover crash in which the windshield allegedly separated from the vehicle has filed suit against Safelite, whom she claims replaced the windshield in the vehicle. The suit was filed in U.S. District Court in Clark County, Nev., according to court documents obtained by glassBYTEs™ . The suit was filed by Iwona Patnaude, who is listed as the surviving spouse of Jason Patnaude and Victoria Patnaude, and Nancy Patnaude, Jason’s mother. The suit alleges that on December 27, 2011, Jason Patnaude was driving a Toyota Tundra westbound on I-94 in North Dakota when he began to “slide upon contacting a patch of snow and
ice on the roadway.” Both Iwona and Victoria Patnaude were passengers in the vehicle at the time of the accident. “Directional control of the subject Tundra was lost and could not be regained,” attorneys write in the court documents. “The subject Tundra crossed the highway’s median and rolled over across the eastbound lanes and off the roadway. During the incident, the windshield of the subject Tundra separated from the vehicle. During the incident, the roof of the subject Tundra collapsed. Jason R. Patnaude and Victoria Patnaude sustained fatal head injuries in the crash. Jason R. Patnaude and Victoria Patnaude died at the scene.” During the incident, attorneys allege “the windshield separated from the
rest of the vehicle, contributing to the degree of crush sustained by the subject Tundra’s roof structure. … The Safelite defendants’ negligent installation of the windshield on the subject Tundra resulted in its failure in the rollover incident.” In addition to the Safelite Group and its third-party administration arm, Safelite Solutions, Anthony J. Stark is listed as a defendant in the suit. His address is listed as Safelite AutoGlass, 62 Spectrum Blvd., Las Vegas, NV 89101. Patnaude’s attorneys allege that “as a direct and proximate result of the incident addressed in this complaint, plaintiff Iwona Patnaude sustained severe nervous shock and emotional upset secondary to her close proximity
to and observation of her fatally injured and suffering husband and daughter.” The claimants are seeking a jury trial and reimbursement for injuries as well as damages in excess of $50,000. Safelite PR manager Melina Metzger has confirmed the company performed a windshield replacement on the vehicle six years prior to the accident, but decline to comment further. Other defendants listed in the lawsuit include Toyota Motor Corp., Toyota Motor Sales USA, Toyota Motor Engineering & Manufacturing North America, Toyota Motor Manufacturing of Indiana, AutoNation USA Corp., Desert Scion/Toyota, Steve Romeo and Lisa Armstrong, as well as Centennial Toyota.
I-CAR Announces Keynote Speakers Reginald Modlin and John McElroy for Boston July Meeting
I-CAR® announced that Chrysler Group LLC Director of Regulatory Affairs, Reginald R. Modlin, will serve as keynote speaker during the I-CAR InterIndustry Conference in Boston. As Director of Regulatory Affairs, Modlin is responsible for all aspects of product safety and environmental compliance. His key responsibilities include policy development to guide reaction of legislation and regulations in the NAFTA regions vehicle emissions certification,
fuel economy strategy and reporting, and vehicle safety compliance demonstrations and resolution of compliance issues with EPA and NHTSA. Reginald Modlin has been serving in this capacity for 14 years and has been with Chrysler for 38 years. Reginald Modlin
On July 24 and 25, renowned Autoline TV host and author John McElroy will serve as moderator leading the I-CAR Conference attendees through the fastpaced, comprehensive “30,000-ft view” agenda on “The Changing World of Vehicle John McElroy
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Technology & What it Means to You.” The conference concludes with a panel who will discuss the repair and business impacts associated with today’s rapidly evolving vehicle technology landscape. I-CAR speakers include technical leaders from NHTSA, IIHS, the Center for Automotive Research (CAR), vehicle OEMs, and OEM suppliers.
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CIC Attendees Overwhelmingly Support BMS Data Standard Over EMS but Some Vague on the Differences, EMS is Functionally Obsolete Estimate Management Standard (EMS) is the open, non-proprietary system for electronic communication that was first deployed in 1994, and is now the nonproprietary estimate format used by the three major estimating systems. EMS is analogous to the old dial-up modem communication, and is obsolete. The newer Business Messaging Specifications (BMS) standard is poised to replace the over-extended EMS. It can communicate massive amounts of data in a secure and efficient manner. BMS offers collision businesses the ability to control what data is made available to the recipients. BMS utilizes the very flexible XML (markup language), which provides a consistent internet communication standard, vs. the more limited scope of EMS. As Fred Iantorno, Executive Director of CIECA, has said in the past: “Implementing the BMS will make everyone more efficient and will save the industry money.” BMS offers shops three primary benefits to the Collision Repair industry, according to Michael Lloyd, CIECA’s Vice Chairman: Security—BMS allows users to control data exchanged between its trading partners. Businesses can transmit only the data needed by its suppliers, thereby retaining the confidentiality and security of the data that is in their possession. Scalability—In the same way that the internet was designed to support the communication needs of all users, BMS simultaneously supports the needs of both small and large businesses. As a result, BMS allows all businesses to ex-
VeriFacts & Airbag Solutions Create Restraint Systems Clinic VeriFacts Academy has announced that AirbagSolutions and VeriFacts Automotive have joined together to create three new educational clinics in Restraint Systems. The clinics are now available through the VeriFacts Academy for $29 each. The clinics are designed to give technicians, damage assessors and managers the understanding of how the systems work and the skills necessary for safe repair of restraint systems. Said VeriFacts CEO, Farzam Afshar, “The worldwide recall of airbags demonstrates the importance of safe installation and repair of Safety Restraint Systems.”
change data using common data fields or definitions. Regardless of size, BMS can meet the needs of any business. Efficiency—Since BMS follows the XML standard, BMS can operate in any environment—server, mainframe, Microsoft Windows, MAC, etc. BMS eliminates the expense and inefficiencies associated with re-keying data. Once data is part of the BMS record, it does not need to be re-entered. All transaction history is retained, which allows the re-creation of an estimate from a prior time period, according to Fred Iantorno. BMS is “backward and forward” compatible, meaning that new releases and maintenance are easily implemented, providing a lower cost of operation. Participants at the April Collision Industry Conference (CIC) expressed a clear opinion that it’s time for information providers and others accessing shop estimate data to convert from the EMS standard to the BMS standard. A poll of more than 200 CIC attendees at the Phoenix meeting found that 84% supported such a move, however a similar poll at the CIC meeting in January found only one in three CIC attendees said they actually understood the key difference between the two standards. Education participants about the two standards has been led by Data Privacy Committee chairman Tony Passwater, who said the change could have significant impact for shops, insurers, parts suppliers and other industry vendors. Passwater noted that while the older EMS standard transfers all data
from the estimate—including customer, vehicle, parts and labor information—the BMS standard provides shops with more control over what data gets shared, thus making it easier for them to protect the privacy of data for customers, business partners and themselves. The current EMS standard can only transmit all the estimate data at once, no matter how little information is wanted or needed. The new BMS standard has the ability to transmit only the specific data necessary to get the particular task accomplished, such as order a part, or notify a car rental company. The BMS is also a more secure message which provides a confidential data exchange. A parts vendor, for example, can be sent just the vehicle information and parts list—not the customer’s name, address and phone number. A rental car company or CSI provider doesn’t need every line item of the estimate. Passwater said of the industry’s continued use of EMS, “There’s just unnecessary personal and business
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uParts Gets $2M in Financing
uParts, Inc. an independent cloud-based company which indentifies, locates, and procures automotive parts, has announced completion of $2M in financing led by GRP Partners and other lenders. “It is astounding that in the year 2013, repair facilities are [still] placing their part orders using the phone & fax machine” said Alex Adegan, uParts’ Founder, President & CEO. “Can you imagine faxing a list of your destination cities to airlines, then waiting for them to call back with possible routes, pricing and availability? Our powerful and intuitive platform solves this problem by allowing all part orders to be placed with a single click.”
36 JUNE 2013 AUTOBODY NEWS | www.autobodynews.com
data that is being transmitted and captured by other parties that’s not necessary.” He pointed out that EMS, which was developed in 1994 and not updated in over a decade, lacks standardized transfer of email addresses or cell phone numbers, which weren’t as ubiquitous back then. While some information providers have moved to BMS for some or all data transfer, the vast majority of transactions are still handled through EMS, Passwater said. By the end of Passwater’s presentation, 84 percent of CIC attendees said they had a better understanding of the key differences between EMS and BMS and that same percentage said information providers should move to BMS and eliminate EMS. That change, and the elimination of EMS entirely should happen quickly, according to CIC attendees; one-third said it should happen in the next six months, another third said it should happen in a year, and 22% said within two years seems reasonable. Only 10% said EMS should never be eliminated.
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Collision Industry Leader Matthew Ohrnstein Passes Away at Age 57
Matthew Ohrnstein, managing director of Symphony Advisors and cohost of the Collision Repair Executive Webcast (CREW), and formerly Caliber Collision Centers CEO, passed away suddenly on April 30 while jogging near his home in southern California. He was 57. Ohrnstein is survived by his wife of 19 years, Marcy Tieger, who was his business partner with Symphony Advisors, and sons Michael and Steven and daughters Jessica and Rose. Prior to founding his consulting firm, Symphony Advisors, Ohrnstein served as chairman and CEO of Caliber Collision Centers from 1997 until October 2004. Under his leadership, Caliber added 68 stores in California and Texas with annual revenues of more than $200 million and more than 1,600 employees. He was a featured speaker at many industry events both in the U.S. and internationally. He was a co-founder of the Collision Repair Executive Webcast (CREW), an every-other-month webcast that features a guest speaker and focuses on collision repair topics. As managing director of Symphony Advisors, Ohrnstein and his
wife Marcy assisted countless collision repair businesses with services covering mergers/acquisitions, strategic planning, litigation management, succession planning and more. In recent years, Ohrnstein traveled the world to share his experience and knowledge with industry participants as a featured presenter at events such as the NACE MSO Symposium, the International Bodyshop Industry Symposium (IBIS) in Europe, the Canadian Collision Industry Forum, and many others. A memorial service was held May 6 at University Synagogue in Irvine, CA. In lieu of flowers, the family asked that donations be made to Rady Children’s Hospital’s Heart Institute in care of Dr. John Lamberti. Dr. Lamberti conducted five heart surgeries on Ohrnstein’s son Steven. Erick Bickett, CEO of Fix Auto USA, a longtime friend and business associate, said, “Matt was a great man, father and husband. I can think of only a few people who have had the kind of positive impact for collision repairers in our industry with the heart, integrity and depth of knowledge that he possessed.”
Father-Son Bodywork Bandits Team Con Seattle Seniors with Bad Body Repairs A father-and-son team nicknamed the “Bodywork Bandits” face felony theft charges for intimidating and scamming elderly Seattle-area drivers with bad auto body repairs. King County prosecutors say Robert Mitchell and son Bryan Miller scammed 10 drivers they targeted around Seattle during the past two years, as reported by SeattlePI.com. They are alleged to have intimidated drivers, mostly elderly men, into accepting bodywork, and then demanding large payments for poor repairs. Mitchell, a 46-year-old also known as Johnny Mitchell and Robert Charmack, and his son Bryan Miller, 26, often held tools as they demanded money from drivers they approached in parking lots. They’re alleged to have made hundreds of dollars through the scam, which they’re alleged to have used across Washington and Oregon. Usually, the men approached their intended victims near their parked cars and offered to repair body damage at a low price, Seattle Police Det. Chris Young told the court. Miller and Mitchell would then apply wax or paint to disguise the damage
and request payment. “They insist the repairs are worth hundreds of dollars and the victims are intimidated into paying for the fraudulent repair,” Young said, noting that they sometimes held crowbars as they demanded money. Most of the victims were in their 60s or 70s. One 70-year-old man is alleged to have been conned out of $760 after Mitchell and Miller “fixed” his car. Both men now face a host of theft-related charges related to the scam. Mitchell has been charged with four counts of second-degree theft and one count of second-degree identity theft, as well as six other felony and misdemeanor counts. He is a fugitive from Clackamas County, OR, where he’s said to have scammed an elderly woman following a car repair. The younger Miller has been charged with one count of second-degree identity theft and five other theftrelated counts. Miller also currently faces a forgery charge filed against him in Cowlitz County, OR. Both men were arrested April 9 and confined at the King County Jail in Seattle.
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Deputy Restores Classic Car in Tribute to Father In New York’s Dutchess County, Sheriff Deputy Stephen Price Jr. recently restored his 1977 Chevrolet Nova police cruiser as a tribute to his father who died last year.
Replica sheriff's deputy cruiser, a 1977 Chevy Nova unveiled at Precision Auto Body in Lagrangeville, NY
Price, 34, spent five months repairing, restoring and repainting the two-door light blue and white vehicle to resemble a Dutchess County Sheriff's car from the 1970s. The replica sheriff’s deputy cruiser was unveiled at Precision Auto Body & Garage in Lagrangeville, NY. Price’s father was a detective whose career with the Dutchess Sheriff’s Office spanned 39 years. In addition, he was passionate about restoring old cars. Members of the Sheriff’s Office joined Price to display his newly re-
stored vehicle which was parked next to the nearly identical 1973 Chevrolet Bel Air his father left him after his death. Sheriff Butch Anderson said the county phased out the 1973 models, which had V-8 engines, to save taxpayers’ money, the Poughkeepsie Journal reported. “When a piece of equipment like this comes out, it shows you what it was like (back then),” Anderson said. “It brings back a lot of memories.” The 1977 model on display left police without many of the amenities included in modern-day police cars. There was no computer, no protective cage for police officers separating the front and back, and no rear doors. Price said he plans to use the car to represent the Sheriff’s Office at parades and car shows. On June 23, the car will be on display at the first Stephen Price Sr. Memorial Car Ride and Car Show at Freedom Park in the Town of LaGrange. All proceeds from the show will go to the Dutchess County Society for the Prevention of Cruelty to Animals in Stephen Price Sr.’s honor.
GCIA Completes 2013 Collision Labor Rate Survey
The Georgia Collision Industry Association (GCIA) recently completed their 7th Annual Labor & Materials Rate Survey for Metro Atlanta and Georgia. The Survey was conducted by CSi Complete to ensure unbiased data collection. CSi Complete is a provider of customer satisfaction indexing to collision repair, insurance companies and other service industries and you can learn more information about the company by visiting their website at www.csicomplete .com. GCIA’s goal in conducting this annual survey and sharing the results is twofold: ►To utilize an impartial company to identify and communicate statistically valid figures representing the prevailing labor and material rate for collision repair services offered in Georgia, and ►To communicate the results of the research to both collision repair facilities, insurance carriers and the appropriate parties involved in serving the consumer in the repair and claims handling process. The GCIA encourages all Claims Managers and insurance company executives to thoroughly review the 2013 GCIA Labor Rate Survey Re-
sults and urges you and your company to join the GCIA in our efforts to alleviate the variances between the actual prevailing rates (as shown in our survey) versus the rates some carriers are currently compensating collision repair shops for materials and labor in Georgia. The GCIA has conducted this survey for seven (7) consecutive years. No other industry association in the US has collected this amount of accurate data on collision materials and labor rates. This year, 305 shops participated across, and the results clearly demonstrate the actual prevailing rate in the Georgia marketplace. It is the GCIA’s intention that the information offered, be used to ensure your company is fulfilling its obligation to the policyholder, by reimbursing for the actual prevailing rates in Metro Atlanta and Georgia. If you have any questions about the GCIA, or the results of this survey, contact GCIA Executive Director, Howard Batchelor, at howard@gcia.org. For complete survey results go to gcia.org/about/labor-rate-survey/. Autobody News will summarize the data in our next Southeast issue (July, 2013).
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ASA Business Meeting Emphasizes Unity, Transparency, Inclusion & Collaboration
The Automotive Service Association (ASA) held its annual business meeting April 19–20 at the Hurst Convention Center in Hurst, Texas. The themes of the meeting were: Unity, transparency, inclusiveness and collaboration. “The board is committed to not only working more closely with each other, but also with our affiliated associations. In fact, we shortened the open board meeting to accommodate an interactive session with the affiliates in attendance,” said Darrell Amberson, AAM, vice president of operations at LaMettry’s Collision, Minneapolis, and ASA’s new chairman. “We recognize the strength of a national association goes hand in hand with the strength of our affiliated associations.” “The changes that took place at the national business meeting show that ASA is a member-driven association, and the direction and excitement that came from this meeting demonstrate that ASA is headed in the right direction and the members are in good hands with the new board,” said Jeff Lovell, AAM, executive director of ASA-Northwest. “ASA-Midwest is pleased to have had the opportunity to meet with the ASA board and Dan Risley (interim executive director) during the annual business meeting. As a result
Carlyle Group to Sell 50,000 Share Stake in Hertz
The Carlyle Group is selling its stake in Hertz Global Holdings, Inc., approximately 50,000 shares held by investment funds associated with The Carlyle Group. Goldman Sachs will act as underwriter in a registered public offering of those shares. Hertz said the sale of stock by the investment firms represents practically the entire interest the funds held in Hertz stock. Reuters reported that prior to the sales, CD&R and Carlyle were the second and third largest shareholders in Hertz, respectively, according to Thomson Reuters data. The three investment funds bought Hertz from Ford Motor Co. in 2005 for $5.6 billion. Hertz operates its car rental business through the Hertz, Dollar and Thrifty brands from approximately 10,460 locations worldwide. The company claims to have the second largest market share in the off-airport car rental market in the United States. The Carlyle Group purchased DuPont’s Performance Coatings and Service King this year.
of those conversations, we are excited about the direction and opportunities presented by the new leadership,” said Sheri Hamilton, AAM, executive director of ASA-Midwest. ASA’s board of directors also emphasized the importance of the association’s governmental affairs efforts. ASA plans to increase its visibility as the industry’s leader in the development of public policy for independent automotive repairers. In addition to the existing tools in place for ASA’s membership—grassroots support, the ASA PAC and the Washington, D.C., office located on Capitol Hill—the board reviewed a new design for ASA’s public policy advocacy website, TakingTheHill.com, which will launch soon. “We finished building the foundation for a new era at ASA and now we will be aggressively pursuing those who want to be part of the future of the automotive repair profession. The board is eager to collaborate with our existing industry partners, and excited about the potential to build new relationships within the industry that will benefit the members of ASA,” said Ron Nagy, AAM, owner of Nagy’s Collision Centers in Ohio and ASA’s immediate-past chairman. “We also have laid the foundation for a radical new ASRW with positive changes in the works for both NACE and CARS.”
CARSTAR to Support “Hire Our Heroes” Campaign
CARSTAR Auto Body Repair Experts is supporting 3M’s efforts in partnering with the Collision Repair Education Foundation’s Hire Our Heroes campaign. The initiative provides scholarships and support for collision repair training, with a goal of driving employment in the collision repair industry for America’s veterans. Enrollment to win scholarship funds from the Collision Repair Education Foundation opened on Jan. 1, 2013, and remain open through May 15, 2013. The 3M Hire Our Heroes program also will help fund rehabilitation for the wounded veterans through Operation Comfort’s Automotivation program. It provides opportunities for wounded soldiers to channel their automotive skills, or learn new ones, to restore vehicles through the National Auto Body Council (NABC) Recycled Rides program for other military veterans. Participating CARSTAR shop owners throughout the U.S. will support the campaign. For every qualifying purchase of 3M products by a CARSTAR shop owner, 3M will contribute to the campaign to reach a $250,000 goal.
AMI Accepting Applications for Cosette/Westerlund Award
The Automotive Management Institute (AMI) is now accepting applications for the Richard Cossette/ Gale Westerlund Memorial Scholarship. The scholarship honors the contributions these individuals made to AMI, ASA and the collision repair industry. The scholarship recipient will receive $1,000 toward the recipient’s expenses to attend the 2013 International Autobody Congress & Exposition (NACE) in Las Vegas, Oct. 16–18. To be eligible for the award, the following requirements must be met: ► Applicant must work in the collision repair industry ► Applicant must demonstrate an interest in self-improvement through management education ► Applicant must own or work for a business that is an ASA collision division member in good standing ► If the applicant is not the business owner, he or she must be recommended by the business owner. To request a scholarship application, call AMI at (800) 272-7467, ext. 101, or online at www.amionline.org. Applications must be received by AMI on or before Aug. 23, 2013. Winners will be notified by Aug. 30, 2013.
Colorado Auto Dealers Find Support in State Legislature
Colorado legislators voted to approve a bill that requires all automobile manufacturer franchise agreements to conform to current franchise law rather than to meet the legal requirements when the contract was signed, despite officials from the Alliance of Automobile Manufacturers (AAM) calling the measure an “extraordinary” and “shocking” shift of the balance of power. This is the fourth time in the past five years that the Colorado Automobile Dealers Association (CADA) has brought a bill to give dealers more power in their negotiations with the national and international companies that supply them their products. They included bills to bar manufacturers from requiring major dealership upgrades more than once every seven years and to require that auto makers that closed dealerships due to bankruptcy to give those dealers first right of refusal if they reopen a franchise in the area. The right-of-refusal bill resulted in a lawsuit against the state.
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MID Issues Bulletin to Insurers to Cover Feathering, Prime and Block of Damaged Cars On May 10, the Mississippi Insurance Department issued a bulletin to insurers regarding labor and materials associated with the process of feather, prime and block. The bulletin reads in part: “After the March 18, 2013, severe hailstorms hit the Jackson metropolitan area, an unusually large number of automobile claims were filed with insurance companies. The Mississippi Insurance Department (MID) has received complaints from some policyholders and auto body repair shops concerning issues related to the repair of insured vehicles. Therefore, MID is issuing this Bulletin to provide insurance companies and their adjusters with information regarding the handling of these automobile claims.” “MID has become aware that there have been issues between adjusters and auto body repair shops regarding specific repairs that are considered necessary by these manuals. Specifically, there have been issues regarding the coverage of feathering, prime and block of damaged vehicles. Currently, this repair is considered necessary by these manuals, and it is the opinion of MID that,
when necessary in view of the damage, this is a repair that should be covered by insurance companies.” The bulletin ends with these statements: “Therefore, MID directs insurance companies to inform their adjusters to review billing statements and approve any repairs and charges necessary to indemnify policyholders, including appropriate charges for feathering, prime and block of damaged vehicles, whether discovered as part of the written estimate or as part of the repair process. With respect to feathering, prime and block procedures, appropriate charges should be approved whether included in the paint/materials rate or broken out as a separate charge.” “In addition to ensuring that policyholders are treated fairly with respect to the payment of claims, MID also has the duty and responsibility to ensure that insurance rates remain fair and reasonable for all Mississippi policyholders. Consequently, MID wishes to make clear that by issuing this Bulletin, it is not encouraging payment for repairs that are not necessary, appropriate or covered by the insurance contract.”
Mississippi’s Attorney General Hood Tells Insurance Companies to Cover Feather, Prime & Block, Etc.
In the wake of a hailstorm that created havoc for Mississippi residents left with damaged homes and cars, Mississippi Attorney General Jim Hood sent a letter to all insurance companies on April 19 instructing them to cover specific procedures on vehicles damaged by the hailstorm. In the letter, Hood asks all insurance companies conducting business in the state to pay for necessary procedures to restore recently damaged vehicles to their pre-accident conditions. Hood’s office received reports that some insurance companies were not including certain procedures that would restore vehicles to pre-accident condition in their estimates. Essentially the same message was given by the Mississippi Insurance Department (see story on left). The body shops have stated that they will not make these repairs without payment from the insurance companies. The letter reads, in part, as follows: ...Our office has received reports that some insurance companies are issuing estimates that do not include certain automobile repair procedures specified by the insurance companies’
own manuals and/or software as necessary to return vehicles to their preaccident condition... ...Furthermore, our office has survey responses from over thirty autobody repair shops. The survey results indicate that claims for certain repairs specified as necessary by the insurance companies’ own manuals and/or software, such as feather, block and prime, denib and finnese, masking of jambs, broken glass clean up, and more are not being included in estimates issued to the insureds. These auto-body repair shops have not agreed to make these required repairs without payment by the insurers... ...The refusal to include in an estimate the work required by the insurance companies’ own manuals and/or software to return vehicles to their pre-accident condition has created an environment for companies potentially to take unfair advantage of insureds and/or auto-body repair shops. ...Please communicate to your staff the necessity to consult the procedure pages provided by your chosen manual and/or software and your responsibility to pay for repairs according to the labor allowances provided by your databases.
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Collision Repair Education Foundation and Partners Announce First of $300,000 in Student Scholarships, Will Be Announcing More Shortly The Collision Repair Education Foundation (CREF) announced the first round of winners which are $300,00 in scholarships given out in May 2013 by the Foundation. The Scholarship is in its sixth year and is funded by the entire collision industry through the Collision Repair Education Campaign. The Scholarships offer students financial assistance with tuition and other costs. Winners of the GEICO national scholarships and tool grants are: Kyle Wright, Chantilly STEM Academy, Chantilly, VA; Olivia Barszczewski, Alfred State, Alfred, NY; Shannon Braswell, Sarasota County Technical Institute, Sarasota, FL; and Gerardo Olivera, Cerritos College, Norwalk, CA. Each receives $1,000 cash and $1,000 (retail) in tools. Winners of the Gerber Collision & Glass student scholarships and tool grant winners are: Lino Meraz and Asare Boatneg, both of Lincoln College of Technology, Melrose Park, IL. The students received $2,000 scholarship and $1,000 in tools. Winners of the PPG Industries Foundation scholarships are: Joseph
Crawford, Arkansas State in Marked Tree, Marked Tree, AR; Justin Furman, Washtenaw Community College, Ann Arbor, MI; Jessie Jensen, Bridgerland Applied Technology College, Logan, UT; and Ryan Stenzel,Ridgewater College, Willmar, MN. These students received a $5,000 scholarship. In addition, Jonathan Thigpin, Rolla Technical Institute, Rolla, MO, won $750 for the PPG MVP Industry Student Scholarship. Winners of the Service King spring tool chest grant are: Sierra Pellettieri, EVIT (Mesa, AZ); Matthew Adams, Universal Technical Institute, Belton, TX; Jovanny Jimenez, Texas State Technical College, Waco, TX; Sherdrick Russell, Universal Technical Institute, Houston, TX; and Andreass Berryman, EVIT Trade School, Mesa, AZ. These five students each received a 7-drawer roll cabinet and five-drawer top chest, valued at $2,00 each. Winners of the Alliance of Automotive Service Providers Massachusetts (AASP-MA) tool grants are: Paul Ballota, Shawsheen Valley Technical High School, Billerica, MA; William Clough, Shawsheen Valley
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Technical High School, Billerica, MA; and Yscasia Cummings, Southeastern Regional Vocational Technical High School, South Easton, MA. Winners received $1,200 in tools. Winners of the CCC Michael Salvatore Memorial Student Repair Technician Scholarships: Brian Stevenson, Francis Tuttle Technology Center, Oklahoma City, OK. Brian won the top scholarship of $5,000; and two students won the $2,000 scholarships: Stephanie Franklin, Lansing Community College, Lansing, MI; and Diego Trujillo, Wiregrass Georgia Technical College, Valdosta, GA; Evan Scott, Pennsylvania College of Technology, Williamsport, PA. CREF also awarded several scholarships. The secondary student winner of a $5,000 award is Shelby Williams, Applied Technology Center, Rock Hill, SC. The post-secondary $5,000 award recipient is Shena White, Cape Fear Community College, Wilmington, NC. Three students won the Lon Baudoux Legacy Scholarship. Recipients of the $1,000 award are: Erick Escobar, Norwalk High School, Norwalk, CA; Tyler Hardin, OSU Institute of
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Technology, Okmulgee, OK; and Antonio Fondren, Hennepin Technical College, Brooklyn Park, MN. The Lon Baudoux Legacy Scholarship was created to honor Lon Baudoux, I-CAR Development Manager, who passed away in 2008. Lon highly valued education, especially for secondary and post-secondary students. This scholarship is funded mainly by I-CAR staff and I-CAR instructors who worked with Lon at I-CAR. Additional scholarships include the Board of Trustees Scholarship. This $2,000 award went to secondary student Brian Stade, Applied Technology Center, Rock Hill, SC, and to post-secondary student Zach Reisner, Hennepin Technical College, Brooklyn Park, MN. The Domenic Brusco–WyoTech Collision Repair Student Scholarship, a $850 award, went to Zachary Gullion, WyoTech, Blairsville, PA. The Domenic Brusco Scholarship is funded by Collision Repair Education Foundation Board of Trustee member Domenic Brusco. The Collision Repair Education Foundation will announce additional scholarship and tool grant winners.
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Avery Names New CIC Standards Cmte Leaders
George Avery, chairman of the Collision Industry Conference (CIC), has appointed several new individuals to oversee the organization’s Standards Committee in a final effort to research possible solutions for the development of industry repair standards before the committee is permanently shut down in November. Michael Quinn, senior vice president of business development for uParts Inc. and past CIC chairman, has been named chairman of the committee. Mike LaVasseur, president and chief operating officer of Keenan Auto Body, and Paul Krauss, president and CEO of Craftsman Autobody, have been named vice chairs of the committee. Brett Bailey, owner of A&B CARSTAR, will also play a key role on the committee. George Avery provided an overview of the work that the CIC Standards Committee has been charged with for the remainder of 2013 during the most recent CIC meeting in Phoenix. “The Standards Committee members have worked hard over the past few years and I don’t want that good work to go to waste. I would like to thank those who worked hard to get us this far and encourage anyone who has a passion for the subject to join the committee,” Avery said. “Having past CIC chair Michael Quinn step in as committee
chair, as well as Mike LaVasseur and Paul Krauss as vice chairs, is exciting. They bring the repairer’s perspective and overall understanding of all stakeholders in the auto body repair industry.” Avery said key issues that the Standards Committee will research include examining shop equipment and capabilities requirements, OEM repair procedures and recommendations, and possible facility inspection and verification processes. The Standards Committee will make a report on shop equipment and capabilities requirements, and will clarify issues surrounding OEM repair procedures during the next CIC meeting, which is scheduled for July 23-24 at the Westin Boston Waterfront hotel in Boston.The committee will finalize its standards work this fall. It will present findings on the research it has completed and suggest possible repair standards solutions for the future during CIC’s November meeting in Las Vegas. “After November, the committee’s work will conclude,” Avery said. “We’re not going to ‘saw sawdust’ any more with the topic because, as the CIC Mission states, ‘the forum [communicates] findings and possible solutions, and when it comes up to that point it stops.”
Maine Legislature Holds Hearings on Right to Repair
The Maine legislature recently held a hearing on LD 788, Right to Repair legislation, titled “Vehicle Owners and Repair Facilities.” The hearing was held in the Joint Committee on Labor, Commerce, Research and Economic Development. Ken Boyce, the owner of Ken’s Auto Repair Inc. in Buxton, ME, presented testimony on behalf of the Automotive Service Association (ASA). He has 29 years of experience in auto repair. Boyce made arguments in opposition to the Right to Repair legislation throughout his testimony. He said: “There are lots of conflicting opinions about the right to repair issue. In my opinion, this legislation has no purpose. All it would do is codify an agreement that was reached over a decade ago at the behest of the U.S. Congress after they expressed their desire to not inject themselves into the middle of the situation. “The existing agreement between automakers and the aftermarket was reached in 2002. It has been around so long that some of the original manufacturers involved—such as Pontiac, Mercury, Saab, Saturn and Suzuki—no longer even exist. With the formation of the National Automotive Service Task Force (NASTF),
and the introduction of the Secure Data Release Model (SDRM), the agreement is strong and in a state of continual improvement. The threat that the manufacturers might take away the information is the last-ditch cry of the flat world, yet the manufacturers’ support for NASTF has only strengthened over the past decade. There is no evidence of that ever changing. All evidence points to their continued support.” Boyce concluded his testimony with strong remarks: “I see nothing positive that will come from this legislation. It will do nothing to compel the flat world to subscribe to information or purchase tooling that the OEs already have to offer, nor will it compel any technician[s] to get the training they need. Instead, all that I can see it has to offer, through unintended circumstances, is to flatten out the round world of shops like mine. I don’t want that and my customers don’t want that. The key is proper education, proper tooling, and support of the agreement that is already in place, not legislation. If our voluntary, industry service information process fails, we will be the first in line asking for the state of Maine’s help. We see no signs of failure to date. ASA opposes ME LD 788.”
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Only Two Small 2014 SUVs Performed Well in Front-End Crash Tests According to IIHS
Subaru’s 2014 Forester was the only vehicle to get the top “good” rating in the results released by the Insurance Institute for Highway Safety (IIHS). The 2013 Mitsubishi Outlander Sport was rated as “acceptable.” But fastselling models such as the Ford Escape, Honda CR-V and Jeep Wrangler received only “marginal” or “poor” ratings from the IIHS. Small and midsize SUVs, which get decent gas mileage and have the cargo and passenger space of larger SUVs, are among the fastest-growing segments of the U.S. auto market. Sales grew 50 percent from 2005 to last year, when U.S. consumers bought more than 2.5 million of them, according to Ward’s AutoInfoBank. The IIHS ratings are influential because many auto shoppers find them while researching vehicles on the Internet. The group says its crash tests and ratings are designed to get automakers to improve crashworthiness of their vehicles. The ratings are for the institute’s “small overlap” crash test that covers only 25 percent of a vehicle’s front end. The test was added to the IIHS evaluations last year, with the institute aiming to push automakers into bolstering the
crash resistance of their vehicles. The group’s tests are more stringent than the U.S. government’s fullwidth front crash test. The institute says that in many vehicles, a crash affecting one-quarter of the front end misses the main structures designed to absorb the impact of a crash. Yet such crashes account for nearly a quarter of the collisions that cause serious or fatal injuries to people in the front seats, IIHS said. The new Ford Escape, the topselling small SUV so far this year, got a “poor” overall rating, while Honda’s CR-V, the No. 2 seller, got a “marginal” rating. Toyota’s RAV-4, another big seller, hasn’t done the testing yet because Toyota asked for a delay to improve the vehicle’s structure, the IIHS said. Other SUVs getting “poor” ratings were the Jeep Patriot, Buick Encore, Kia Sportage and Hyundai Tucsons, the institute said. The BMW X1, Nissan Rogue, Mazda CX-5, Volkswagen Tiguan and Jeep Wrangler two-door all got “marginal” ratings. The Forester and Outlander Sport each received the IIHS’ coveted “Top Safety Pick Plus” award because they performed well in multiple tests including the small offset crash.
Mitchell ITR Says Collision Parts Index Declined Last Year For First Time in Ten Years The average price paid for collision parts took a dip in the latter half of 2012—according to Mitchell’s Q2 2013 Industry Trends Report—the first time that the indexed price for parts has decreased in 10 years. “When we created the Mitchell Collision Parts Price index (MCPPI) in 2003, we wanted to track inflationary trends in parts use over a period of time,” said Greg Horn, Vice President of Industry Relations of Mitchell. His recent article provides the first 10-year-long review of inflationary trends in parts pricing. Mitchell developed the index by first creating a “market basket,” similar to how governments determine the Consumer Price Index of the commonly used goods and services. Mitchell created the market basket by selecting the 20 most frequently replaced collision parts. “Interestingly, for the first time, we saw a decrease in the indexed price for the market basket,” wrote Horn. “The 2012 decrease was not evident when we ran the index report early in 2012, so the decrease was in the latter half of 2012. That led us to the next question: what type of part or vehicle origin is driving the de-
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Dan Risley Appointed Interim Executive Director of ASA, Outlines ASA Position on PartsTrader On April 22 the Automotive Service Association (ASA) announced that Dan Risley had been named interim executive director. The announcement came a little over a month after Risley joined ASA as Executive Vice President. Risley began his 24 year career in his family’s collision repair business in Illinois, and has worked for Allstate Insurance for six years since leaving SCRS, an experience he says gave him “a completely different perspective” on insurers and how they operate, something that will benefit the association and ASA members. “My perspective on insurers is changed,” Risley told a trade industry media source recently, “I walked in there with my preconceived notions about what insurance companies do, why they do it, what influence they have, what they try to influence and what’s important to them. And some of those things were true, and a lot of them really weren’t. A lot of them were completely different than what I thought they would be. Risley’s most recent position with Allstate involved overseeing part of the insurer’s DRP network. “I was the market claim manager for the Good Hands Repair network. Basically, I had oversight [of the shops] in half of
the country and the staff that oversees them. Again, it was a very unique perspective that I was able to attain, because I got to see firsthand what was really important to insurance companies. “What motivates [insurers] with some issue, may be the completely the opposite of what you might read in the trade press or what you might hear from the industry in general. The broader perspective [I gained from working at Allstate], when we approach a particular issue, is going to allow me to maybe have a little bit different strategy and tactic in terms of how we might address that and maybe bring it to a resolve a little bit quicker.” One of those insurer related issues the association is currently engaged with is State Farm’s PartsTrader initiative. Risley believes there has been some confusion around ASA’s position on PartsTrader. He explained, “ASA does not support PartsTrader and, by the way, nor should we. As an association it’s not our role to support or endorse a given product. ASA does not support State Farm and nor should we.” “We view PartsTrader in a very similar vein as we do an estimating system or a CSI vendor. We didn’t
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support any insurance company mandating those. So this falls in that same bucket. We don’t endorse or support any insurance company mandating the use of specific products.” Risley said. Risley said that members that have participated in the pilot have shared concerns about how the system works, and that while they have concerns, they are working with PartsTrader and State Farm to improve the system. Risley explained that the association has maintained an active dialog with both PartsTrader and State Farm on the issue and he believes this ongoing dialog has led to some confusion about ASA’s position. Risley said, “We’ve very clearly heard from our membership that this has been a product that has not been a value-add. It has actually cost them more in administrative time, it’s more of a burden.” Commenting on parts e-commerce generally, Risley believes the concept is here to stay regardless of the outcome of State Farm’s pilot with PartsTrader. “We’re not going to stop parts procurement. We’re not going to stop e-commerce. That stuff is going to happen. But we can play a role in mak-
ing it better,” explained Risley. Right now, though, there are concerns about the value these new products and processes bring to the collision repairer. “Someday could it be possible that those products are driving more value back down to the repairers? The answer is ‘yes.’ It will eventually get there. But when that does happen, repairers are going to adopt them all by themselves because it’s going to help them be more efficient,” explained Risley. “If it’s not helping them be more efficient today and we’re being told we have to use them, that’s a completely different context for us. Why would we support that?” Risley has also said that ASA views the use of Most Favored Nation (MFN) clauses in DRP contracts as a much bigger concern for repairers than PartsTrader. “We’ve heard a lot of noise on PartsTrader, and heard relatively nothing on the most favored nation clauses [but] the PartsTrader piece probably affects a smaller subset of the industry, when the most favored nation clause not only affects your State Farm business, but it has the possibility of impacting every job that comes through your shop.”
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Axalta Coating Systems Launches Rival™ Economy Brand
Axalta Coating Systems, formerly DuPont Performance Coatings, has introduced a new single stage polyurethane enamel called Rival™, formulated to provide just the right mix of price and value for the economy commercial transportation segment. Rival™ is designed for dealers, independent shops, fleets and municipalities who want a cost effective finish that features good performance, good color capability, and good appearance at a maximum applied VOC of 3.5 or 2.8 lbs/gal. Designed using mixing toners from an advanced technology platform, Rival™ delivers good hiding with one cross-coat for most colors. The breadth of the Rival™ color offering includes solid and metallic colors to provide the ability to match thousands of commercial fleet color posi-
tions. Rival™ is compatible with other Axalta commercial finishes undercoats and offers a two-year warranty to AOQ-Commercial refinisher shops. “We have expanded our commercial finishes product line to give painters the flexibility to choose the best system needed for the job: from a premium quality Imron™ finish to our newest economy segment offering, Rival™, there’s a system specifically designed to deliver the performance and value they’re looking for.” said Fran Cassidy, Axalta Coating Systems commercial segment manager. In addition to providing high-performance products to the commercial segment for more than 40 years, Axalta Coating Systems products have earned more commercial and OEM approvals than any other paint manufacturer. See the website www.pc.dupont. com.
BLS Stats Show Increase in Number of Body Shops
The Department of Labor’s Bureau of Labor Statistics (BLS) estimates that the number of shops in the country grew by about 130 each quarter since the beginning of 2012. The change appears significant because the number of collision repair facilities has not grown, year over year, in any quarter since the first quar-
ter of 2002, when it was a mere 34 shops nationwide. The latest BLS estimates show that the U.S. industry grew by 402 shops in the first three quarters of 2012 alone and the trend projects more than 500 by the end of the year. There are still approximately 1500 fewer than in 2008, including the 400 new locations.
16 Arrested in Multi-State Car Theft and Fraud Conspiracy, Dealerships and Individuals Targeted
Sixteen people have been arrested on a federal indictment charging 21 defendants involved in a multi-state car theft conspiracy. The conspiracy is alleged to have utilized several different schemes to steal and misappropriate vehicles, commit bank fraud in order to obtain vehicles and obtain insurance proceeds by staging accidents and filing false theft reports, the Claims Journal reported on May 1. The indictment alleges that the defendants stole luxury vehicles, SUVs and pickups from individuals and automobile dealerships in the Eastern District of Missouri, Iowa, Illinois and Indiana, which they transported to the Eastern District of Missouri. They disabled any tracking systems, like OnStar, on the stolen vehicles so that they couldn’t be traced by law enforcement. In addition, it is charged that the defendants themselves, or “straw” purchasers, made false statements on loan applications and submitted fraudulent earnings statements in support to obtain loans to purchase typically high-end vehicles. The defendants used and then sold or disposed of the vehicles, while the loan
defaulted, either immediately or after a short payment history. According to the indictment, the defendants also practiced fraud related to the titling of vehicles, obtaining by false statements apparently legitimate ownership to vehicles they had stolen from individuals. On many occasions, the defendants falsely claimed to have done repair work which wasn’t actually performed on vehicles submitted to their businesses, inducing lien holders to pay the defendants money to avoid the issuance of a mechanics lien. Over 100 vehicles have been fully identified as being involved in the criminal activity, although investigators believe many more were actually involved. Charges include conspiracy, bank fraud, mail fraud and receipt of stolen motor vehicle. If convicted, these charges carry penalties ranging from 5 to 30 years in prison and/or fines up to $1,000,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges. Give us your opinion on matters
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