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Southwest Edition Texas Oklahoma Louisiana New Mexico

31

YEARS

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State Farm & PartsTrader Meet with Industry As Program Rolls Out in the Southwest

by John Yoswick

Shop and vendor concern and unhappiness about State Farm’s mandated use of PartsTrader was evident at a packed Automotive Service Association (ASA) of Arizona meeting in Phoenix in August, the same week the program was being rolled David Priest out in that market.

We feel you’re using your size and intruding into our business through the shops with PartsTrader,”

David Priest, parts director for Brown & Brown Chevrolet in Mesa, AZ, told State Farm’s George Avery at the meeting. “You’re asking me to pay a fee for a program that will probably decrease OEM part usage. How do you perceive that PartsTrader for an OEM dealer is an effective tool?”

Dale Sailer of Dale Sailer PartsTrader, who also spoke at the meeting, pointed out that dealers can now see and quote See PartsTrader Rollout, Page 20

‘Fax-Only’ Parts Ordering Option will End by September For Shops Using PartsTrader 2.2

change was made in preparation for the full state rollout of PartsTrader in Arizona beginning on August 12, according to her statement.

The fax option will remain in the other pilot cities of Grand Rapids, Chicago, Birmingham, and Charlotte until the end of August or September 1, Smith said.

The fax-only option was originally added to the PartsTrader system so that Select Service facilities could still place orders with their preferred vendors, even if those vendors refused to participate in the PartsTrader program. If a See Fax-Only Ending, Page 4

Change Service Requested

P.O. BOX 1516, CARLSBAD, CA 92018

PartsTrader held a webinar on Aug. 1 to discuss several changes to the parts ordering application, including the end of the “fax-only” ordering option.

In the new 2.2 release, which went live on August 1, PartsTrader has made several changes that will affect users of the electronic parts marketplace developed for State Farm’s Select Service DRP. (See previous cover story.)

Lucy Smith, Product Manager at PartsTrader, said that—with this release—the option to place orders through PartsTrader by fax will no longer be available in the Tucson, AZ, market effective immediately. The

VOL. 31 ISSUE 9 SEPTEMBER 2013

Texas Passes Two Bills That Could Impact Insurance for Shops, Other Small Business Two pieces of insurance legislation, passed during the 83rd Texas Legislative Session, could be of great significance to businesses in Texas. SB 1332 relates to classifying business as small and large employers for health insurance purposes, and SB 734 relates to the creation of captive insurance companies in Texas. A captive insurance company is essentially a private insurer that is a wholly owned subsidiary of another company.

Senate Bill 1332 Senate Bill 1332, sponsored by Sen. Robert Duncan (R-Lubbock) and Rep. John Smithee (R-Amarillo), amends Texas law to allow the inclusion of part‐time employees to classify businesses as large or small employers.

The bill allows the definitions to be based on total number of employees

instead of the previous “eligible” employees, which were those who worked at least 30 hours per week.

This will bring the state in line with federal definitions regarding how businesses are sized for the Affordable Care Act. The change in law applies only to health benefit plans delivered, issued for delivery, or renewed on or after January 1, 2014. It is important to note that under federal law, as of January 2014, small employers will be classified as one to 100 employees, but according to TDI, because Texas specified that small employers would be kept to 50 and under, small employers will remain up to 50 employees in Texas, with large employers at 51 employees and above.

The ACA’s “pay or play” provision requiring employers with more See Two Texas Bills, Page 13

See Correction to July 2013 Article on Felder’s Collision Parts v General Motors et al. . . . . . . . . . . . . . . . . . . . . . . . .p. 3

Texas Court Orders Settlement Conference in Fair Labor Standards Case v. Safelite A judge for the U.S. Northern District of Texas, Dallas division, has ordered that a face-to-face conference between plaintiff David Trent and Safelite be held this month to discuss a possible settlement to allegations that Safelite Fulfilment Inc. violated Fair Labor Standards (FLSA) by not compensating for overtime.

“Individual parties and their counsel shall participate in person, not by telephone or other remote means,” orders U.S. District Judge Reed O’Conner in court documents. “All other parties shall participate by a representative or representatives, in addition to counsel, who shall have unlimited settlement authority and who shall participate in person, not by telephone or other remote means.

“If a party has liability insurance

coverage as to any claim made against that party in this case, a representative of each insurance company providing such coverage, who shall have full authority to offer policy limits in settlement, shall be present at and participate in the meeting in person,” he continues.

Within seven days of the conference the parties must “jointly prepare and file a written report, who was present and whether “meaningful progress toward settlement was made, and a statement regarding the prospects of a settlement,” the judge writes.

Trent filed a class action complaint against Safelite earlier this year, specifically listing times when he alleges he worked through his lunch break but was not compensated.

See Settlement Ordered, Page 17

Presorted Standard US Postage PAID San Bernardino, CA Permit #2244

2 SEPTEMBER 2013 AUTOBODY NEWS | www.autobodynews.com

COLUMNISTS Attanasio - Autobody-Review.com—Where Yelp Meets Reputation Defender . . . . . . 38 Franklin - Don’t Mess With My Marketing! . 22 Sisk - Education Foundation Draws On the Industry’s Generosity to Support Next Repairer Generation . . . . . . . . . . . . . . . 50 Sisk - Reaction to CIC in Boston Shows Conflicting Goals and Priorities. . . . . . . 26 Yoswick - September Retrospective on the Collision Industry . . . . . . . . . . . . . . 46

NATIONAL ‘Fax-Only’ Parts Ordering Option will End by September For Shops Using PartsTrader 2.2 . . . . . . . . . . . . . . . . . . . 1 1-800-Radiator Gets Financing. . . . . . . . . . 8 3M’s New Body Protection System Cuts Time Needed on Panels . . . . . . . . . . . . 16 A Matrix of Parts Procurement Features Won’t Help Shops If They Have No Choice on Usage . . . . . . . . . . . . . . 42 AAPEX to Address Warehouse Distributor Management . . . . . . . . . . . . . . . . . . . . 49 AASP/NJ Reacts to PartsTrader’s Ending of Fax-Only Option, Criticizes CIC Leadership. . . . . . . . . . . . . . . . . . . . . . 44 American Honda Launches Body Repair News . . . . . . . . . . . . . . . . . . . . 35 ASRW Creates Free App for Event Information . . . . . . . . . . . . . . . . . . . . . 22 AUTODATA has a New Manual . . . . . . . . . . 9 Avery v State Farm is Back in the News, as a RICO Case making the Judge the Issue . . 32 Axalta Expands its Coatings Technology Center in DE . . . . . . . . . . . . . . . . . . . . . 6 BASF to Show Custom Bel Air at Woodward Dream Cruise . . . . . . . . . . . . 6 BMW Considering Mexico- based Assembly Plant . . . . . . . . . . . . . . . . . . 30 BMW i8 Series will be first to use Corning’s Gorilla Glass . . . . . . . . . . . . 30 BMW to Recall 1,500 09-10 X5s for Fuel Filter Heaters . . . . . . . . . . . . . . . . 31 Body Shop Improvements May Earn Image Award . . . . . . . . . . . . . . . . 18 CARSTAR Becomes First Corporate Member of ASA . . . . . . . . . . . . . . . . . . 12 Charging System Maker Says it May File Bankruptcy . . . . . . . . . . . . . . . . . . 18 Chief Expands its 3rd Qtr Training Schedule . 25 Chrysler and Ford to Exhibit at 2013 ASRW Rotunda . . . . . . . . . . . . . . . . . . 30 CIC Committee Deletes Reference to “Class A” Shop . . . . . . . . . . . . . . . . . . . 3 CIECA Announces New Standards

for Mobile/Cloud . . . . . . . . . . . . . . . . . 12 CIECA Launches CIECA-TV . . . . . . . . . . . . 9 Connecticut Body Shop Fined a Total of $54,300 for Repeat Violations by OSHA Did Not Contest Citations . . . . . . 40 Dealerships Continued to Lose Body Shops in 2012 . . . . . . . . . . . . . . 24 Federal Court Refuses to Stop Auto Parts Antitrust Class Action in Michigan . . . . 32 FIX Auto National Conference is Sept. 15–18 in Scottsdale . . . . . . . . . . . 6 Garmat’s Sharp Shooter Contest is Back, Winners Get a Free Trip to SEMA and a SATAjet 4000B . . . . . . . . . . . . . . . . . 17 GM Adds Production Week on Cruze, Yr on Yr up 70% . . . . . . . . . . . . . . . . . 31 GM Wants to Improve Volt Electric Range by 20% . . . . . . . . . . . . . . . . . . . 30 Herkules Wins IAMG 2012 Vendor of the Year Award. . . . . . . . . . . . . . . . . 50 Honda Aces Crash Test, Kia and Nissan Less So . . . . . . . . . . . . . . . . . . 10 Honda to Invest $180M more in Anna, OH, Engine Plant . . . . . . . . . . . . 30 Hyundai Recalling Santa Fes . . . . . . . . . . 31 Hyundai to Recall 239K of its 05-10 Sonatas in ‘Rust Belt’. . . . . . . . . . . . . . 31 I-CAR Honors Tom Moreland with Chairman’s Award . . . . . . . . . . . . . . . . . 6 Jim Sowle Appointed to SCRS Board of Directors . . . . . . . . . . . . . . . . . . . . . . 6 Kevin Flynn, Nine Year LKQ Board Member, Passes Away . . . . . . . . . . . . . . . . . . . . . 8 Kinnetech Lawsuit Dropped by Plaintiff Williams & Lake. . . . . . . . . . . . . . . . . . 12 LKQ Corp. Acquires 5 U.K. Paint Distributors . 8 Mercedes-Benz to Offer Head-up Windshield Display . . . . . . . . . . . . . . . 30 Mitchell Brings 5 New Add-Ons to Repaircenter Tools . . . . . . . . . . . . . . . . 18 Mitchell Opens New Technical Research Center in San Diego to Focus on 3D and Interactive Data . . . . . . . . . . . . . . . 52 NABC Award of Distinction Nominations Still Open. . . . . . . . . . . . . . . . . . . . . . . 18 NABC is Accepting Nominations for Seven Open Board Seats . . . . . . . . . . . 10 NACE MSO Symposium Open to Some Single Shops . . . . . . . . . . . . . . . . . . . . 49 NACE Panels to Review Parts Procurement, Certification. . . . . . . . . . . . . . . . . . . . . 48 New Ford Workshop Manuals Feature More Collision Repair Sections and 3D Graphics . . . . . . . . . . . . . . . . . 34 New Test Fails Half the Small Cars Tested. 10 NHTSA to Require OEMs to Provide Online VIN Search . . . . . . . . . . . . . . . . 40 Nissan Sees Triple Last Year Leaf Sales, Boosts Output . . . . . . . . . . . . . . . . . . . 31 OSHA Focused on Preventing Summer Heat Illness, Isocyanates Ongoing Concern . 24 OSHA Withdraws Proposed Rule Amending on On-site Consultation Program Citing Concern About Employer Participation . 47 Plaintiffs Join Class Action on BMW Sunroof Case. . . . . . . . . . . . . . . . . . . . 12 PPG MVP Conference Registration is Now Open . . . . . . . . . . . . . . . . . . . . . . . 9 PPG Passes Milestone, PaintManager at 5K . 21 Progressive Evaluates Snapshot Campaign, Expresses Surprise that 40% Say ‘No Way’ . . . . . . . . . . . . . . . . . . . . . . . 16 SAAR Increases to 15.8 Million . . . . . . . . . 8 SEMA Show Expands to Three New Exhibitor Areas . . . . . . . . . . . . . . . . . . 48 Tesla Model S Gets 5 Stars . . . . . . . . . . . 30 The PARTS ACT—The Pros and the Cons from ABPA’s Salamy and ASA’s Amberson . . . . . . . . . . . . . . . . . 36 Toyota Expects to Sell 2.25M Vehicles in U.S. in 2013 . . . . . . . . . . . . . . . . . . 30 Toyota Recalls 342K Pickups . . . . . . . . . . 30 U.S. Auto Parts Network Has Loss Over 2nd Quarter 2012 . . . . . . . . . . . . . 9 UniCure Spraybooths Joins CREF Leadership Circle . . . . . . . . . . . . . . . . . . 9

Dismiss and allowed the suit to proceed. The rest of the story is correct.

The error was brought to our attention by the law firm for the Plaintiff: Sher, Garner, Cahill, Richter, Klein and Herbert LLC of New Orleans, who pointed out the error and wrote: We thank you for reporting on the lawsuit and the important issues involved in the lawsuit. We remain steadfast in our confidence in the merits of this case and look forward in continuing to assist our client in the pursuit of remedies for its damages incurred at the hands of the Defendants.

Autobody News will continue to monitor developments in the case and report in future issues.

CIC Committee Deletes Reference to “Class A” Shop

Since CIC first compiled its definition of a “Class A” collision repair facility in the 1980s, the Definitions Committee has periodically updated the document, adding to or changing the list of equipment, training, compliance issues and other elements that CIC participants believed distinguished the nation’s top shops.

But at CIC in Boston, the com-

mittee presented its final draft of the revised document, with the term “Class A” no longer in the title. The line items in the definition are largely unchanged from the 2005 version, but it now defines simply the, “recommended equipment and capabilities for a collision repair facility.”

Several CIC participants in Boston See Class A Shops, Page 44

Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Contributing Writers: Tom Franklin, John Yoswick, Janet Chaney, Toby Chess, David Brown, Rich Evans, Ed Attanasio, Chasidy Sisk Advertising Sales: Joe Momber, Sean Hartman, Bill Doyle (800) 699-8251 Sales Assistant: Louise Tedesco Art Director: Rodolfo Garcia

Southwest

REGIONAL Columbia, SC, and Dallas, TX, to be Next Sites of Sherwin-Williams Collision Facility Digital Marketing Seminar . . . . . 18 Company Connections - Valspar Partners with Gas Monkey Garage, Improves Color Matching . . . . . . . . . . . . . . . . . . 14 Edmunds.com Sues Humankind Design For What it Says Are Bogus Reviews on Edmunds.com Website . . . . . . . . . . . 4 Ford not Liable in Fraud Action by OK Dealership . . . . . . . . . . . . . . . . . . . . 6 July Article on Felder’s Collision Parts v General Motors et al. was Wrong About the Lawsuit Being Dismissed . . . . . . . . . 3 San Antonio Lawyer Faces 22 Counts of Health Care Fraud, Ohio Connection to Case . . 40 Service King Makes Two New Executive Promotions . . . . . . . . . . . . . . . . . . . . . . 4 State Farm & PartsTrader Meet with Industry As Program Rolls Out in the Southwest . 1 Texas Court Orders Settlement Conference in Fair Labor Standards Case v. Safelite . 1 Texas Law Limits Liability in Hiring Employees with Criminal Records, Not Full Protection from EEOC . . . . . . . . 8 Texas Passes Two Bills That Could Impact Insurance for Shops, Other Small Business. 1 Texas Unemployment Rate is Virtually Flat in 2013 . . . . . . . . . . . . . . . . . . . . . . 4

Autobody News regrets an error in our article (Federal Anticompetition Lawsuit Against GM Program Dismissed Again but Amended Complaint is Allowed) published in the July 2013 Issue which stated that: “A federal judge in Louisiana has again dismissed an aftermarket parts retailer’s lawsuit challenging GM’s ‘Bump the Competition’ program designed to boost sales of original-equipment parts at dealerships, but he gave the plaintiff, Felder’s Collision Parts Inc., permission to amend its complaint.”

The statement that the suit was dismissed is wrong. Rather the judge denied the Defendants’ Motion to

Indexof Advertisers

Contents

July Article on Felder’s Collision Parts v General Motors et al. was Wrong About the Lawsuit Being Dismissed

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.

Autobody News

Box 1516, Carlsbad, CA 92018; (800) 699-8251 (760) 721-0253 Fax www.autobodynews.com Email: news@autobodynews.com

A Frame Paint Booths . . . . . . . . . . . 21 Absolute Mitsubishi-Hyundai . . . . . 38 AutoMax Hyundai Del City . . . . . . . 35 BASF . . . . . . . . . . . . . . . . . . . . . . 7, 15 BMW Wholesale Parts Dealers . . . . 46 Car-Part Pro. . . . . . . . . . . . . . . . . . . 31 CCC Information Services . . . . . . . 19 Certified Automotive Parts Association (CAPA). . . . . . . . . . . 23 Chevyland . . . . . . . . . . . . . . . . . . . . 25 Chief Automotive. . . . . . . . . . . . . . . 25 CJ, Inc. - Signature - Star-A-Liner . . 12 Classic BMW . . . . . . . . . . . . . . . . . . 34 Classifieds. . . . . . . . . . . . . . . . . . . . 54 Dallas Dodge . . . . . . . . . . . . . . . . . 56 David McDavid Auto Group . . . . . . . 5 Dent Tools Direct USA . . . . . . . . . . 17 Don Carlton Auto Group . . . . . . . . . 24 Equalizer Industries . . . . . . . . . . . . . 6 Extractor . . . . . . . . . . . . . . . . . . . . . 14 Finnegan Chrysler-Jeep-Dodge . . . . 2 Ford Wholesale Parts Dealers TX, OK, LA, NM. . . . . . . . . . . . . . 41 Forklift Wrecker . . . . . . . . . . . . . . . . 18 Fowler Honda . . . . . . . . . . . . . . . . . 26 Garmat USA . . . . . . . . . . . . . . . . . . 17 GM Wholesale Parts Dealers . . . . . 53 Herkules Equipment Corporation. . 20 Honda-Acura Wholesale Parts Dealers. . . . . . . . . . . . . . . . . . 28-29 Houston Auto Body Association. . . 40 Huffines Chrysler-Jeep-Dodge Lewisville . . . . . . . . . . . . . . . . . . . 16

Huffines Hyundai Plano . . . . . . . . . 51 Hyundai Wholesale Parts Dealers . 49 KBS Coatings . . . . . . . . . . . . . . . . . 10 Kia Motors Wholesale Parts Dealers. 45 LKQ . . . . . . . . . . . . . . . . . . . . . . . . . 55 Malco. . . . . . . . . . . . . . . . . . . . . . . . 13 Mazda Wholesale Parts Dealers . . . 52 Mercedes-Benz . . . . . . . . . . . . . . . . 11 Mike Calvert Toyota. . . . . . . . . . . . . 36 Mitchell International. . . . . . . . . . . . . 9 Mitsubishi Wholesale Parts Dealers. 48 MOPAR Wholesale Parts Dealers . . 37 North Freeway Hyundai . . . . . . . . . 44 PreFab Ads . . . . . . . . . . . . . . . . . . . . 4 Ray Huffines Chevrolet . . . . . . . . . . 39 Reliable Chevrolet. . . . . . . . . . . . . . 32 Replica Plastics. . . . . . . . . . . . . . . . 51 River Oaks Chrysler-JeepDodge-Ram. . . . . . . . . . . . . . . . . 22 Scoggin-Dickey Buick . . . . . . . . . . 42 SEMA Trade Show . . . . . . . . . . . . . 33 South Pointe Chrysler-Jeep-Dodge. 27 Starlite Coatings . . . . . . . . . . . . . . . 13 Subaru Wholesale Parts Dealers . . 52 Toyota of Fort Worth . . . . . . . . . . . . 47 Toyota of Laredo . . . . . . . . . . . . . . . 43 Toyota Wholesale Parts Dealers . . . 50 Urethane Supply Company . . . . . . 35 Volkswagen Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . 53 Volvo Wholesale Parts Dealers . . . . 54 Walcom USA . . . . . . . . . . . . . . . . . . . 8 Young Chevrolet . . . . . . . . . . . . . . . 47

www.autobodynews.com | SEPTEMBER 2013 AUTOBODY NEWS 3

Edmunds.com Sues Humankind Design For What it Says Are Bogus Reviews on Edmunds.com Website Edmunds.com has filed a lawsuit against online reputation management company Humankind Design Ltd. for attempting to post fraudulent reviews on the site, according to a petition filed in Texas after it discovered that Humankind tried to register almost 2,200 fake members on the its website, Edmunds.com said.

Humankind, of Friendswood, Texas, helps companies with reputation management. According to the company’s Web site, it can help a company improve its Google results, in part by pushing out negative reviews that show up on the first page with good ones and by fixing problems and improving ratings on third-party review sites.

Edmunds said it identified 25 dealers who hired Humankind to fill out reviews. The company declined to give those dealers’ names or locations.

Justin Anderson, owner of Humankind, said Edmunds.com has not contacted his company about the allegations and he has not seen a copy of the lawsuit. He found out about the lawsuit through journalists calling asking for a comment.

“I can say that we completely disagree with the assertion that we are posting fraudulent reviews online,”

Continued from Cover

Fax-Only Ending

parts vendor chose not to sign-up for the online quoting system, PartsTrader would generate a fax order and forward it to that vendor on the shop’s behalf.

With that feature no longer available, Select Service shops in Arizona using the fax option have just two choices: encourage their preferred suppliers to sign up for, and use, the PartsTrader application, or find a new parts supplier for State Farm repairs.

According to an industry source, an email sent to repairers in Arizona, PartsTrader Support said that after July 31, suppliers which have not yet begun to use the PartsTrader application as “a fully active participating supplier,” will no longer appear on the system as an available vendor, and therefore will no longer be able to receive orders placed in PartsTrader. During the webinar, Smith said, “The users in our pilot markets felt that [the fax option] disrupted their process and took some of the efficiencies out because they still had to call those suppliers to see if they were actually going to get the part. When they submitted an order, we would [fax]

Anderson said.

Anyone who posts a review on Edmunds.com is required to go on the site and agree to its membership agreement, Kenneth Levin, general counsel for Edmunds.com, said. This agreement forbids using profanity and posting anything that isn’t based on the reviewer’s personal experience.

Edmunds monitors all of its reviews before they are posted on the site, and all reviews must conform with the membership agreement in order to be posted. Humankind posted its first fake review on Edmunds.com on Jan. 22., an Edmunds spokeswoman said.

In early March, Edmunds employees monitoring the reviews identified a large number of registrations that were generating reviews that were not real, and traced those reviews back to Humankind, Levin said.

Anderson said Humankind does not post fake reviews, but it is part of Humankind’s service to post comment cards from customers at dealerships.

Anderson said Humankind posts all the cards sent to them, so it would be on the dealer if negative cards were left out.

“We felt that we were within Edmund’s terms of service, obviously they would disagree,” Anderson said.

the order to the supplier, but then the repair shop would still have to call to verify prices, update the prices in their estimating system [and] we found that they were running duplicate processes.

Other changes in the PartsTrader system presented by Smith included new functionality for users, including a vendor star rating system, a VIN decoder, the ability to save draft parts orders, and a new welcome page with access to training videos. The VIN decoder, available for vendors, was developed in conjunction with CompNine.

The star rating system, announced in April by PartsTrader, is now beginning to be rolled-out. “We’ve been collecting this information for three months and now we have enough feedback to start displaying ratings,” Smith said.

With this release, each shop and vendor will be able to see the star rating for their own business only, and in a later release the star ratings will eventually be visible to all users.

Users of the system are rated on items such as quoting accuracy, party quality, communication, business practices, and, for shops, how fast they pay their bills.

4 SEPTEMBER 2013 AUTOBODY NEWS | www.autobodynews.com

Service King Makes Two New Executive Promotions

Service King Collision Repair Centers announced two executive promotions: Brent McKinney has been promoted to Executive Vice President of Operations and Dan Michaelis has been promoted to DFW Market Vice President.

“We are blessed with a talented and tenured leadership team, which is a differentiator for Service King,” said Chris Abraham, Chief Executive Officer for Service King. Both McKinney and Michaelis have long histories with Service King.

McKinney joined Service King in 2000 as a store manager and quickly moved up to a regional manager. As Executive Vice President of Operations, McKinney will oversee all market vice presidents, lead new market integration and oversee market and company performance in all operational areas.

Michaelis joined Service King Accounting Department in 1990. He then moved on to become the Service Advisor and then Location Manager in Plano, Texas, the largest Service King location at the time. As DFW Market Vice President, Michaelis will oversee the operational growth and development of Service King’s largest market.

Texas Unemployment Rate is Virtually Flat in 2013

The latest job numbers show the Texas unemployment rate has remained virtually flat so far through the year.

The Texas Workforce Commission on Friday said the July unemployment rate shows it’s remained unchanged for the third consecutive month at 6.5 percent.

Over the prior three months the rate stood at 6.4 percent and in January was 6.3 percent.

Nationally, unemployment for July was 7.4 percent, a slight drop from the 7.6 percent rate recorded the prior month.

State officials say the Texas economy added 19,900 nonfarming jobs in July, for a total of 293,000 positions added since July 2012.

Midland had the state’s lowest unemployment rate in July at 3.5 percent. The highest was in the McAllen-Edinburg-Mission area at 11.3 percent.

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Honda of Irving

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Parts Manager: John Keith Phone 972-964-5000 Fax 972-985-3114 jkeith@mcdavid.com

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Phone 972-790-6008 Toll Free 800-492-4464 Fax 972-790-6066 hondaparts@mcdavid.com

www.autobodynews.com | SEPTEMBER 2013 AUTOBODY NEWS 5

Jim Sowle Appointed to SCRS Board of Directors

The Society of Collision Specialists (SCRS) announced the appointment of Jim Sowle of Sewell Lexus to its 2013–2014 Board of Directors. Sowle will serve the remainder of Immediate Past Chairman Aaron Clark’s elected term on the board. The board placement is a procedural appointment necessitated by the association bylaws in instances when the outgoing Chairman has remaining time left to serve on their term.

“As a repairer, both I and my organization have benefitted from the work SCRS does,” said Sowle.

“SCRS is involved in many significant activities throughout the industry, but their work with the Database Enhancement Gateway (DEG) and raising awareness on repair procedures is invaluable and exemplary of the kind of work that I want to be part of.”

Sowle served management roles in both the Service Center and Body Shop, prior to being named Body Shop Director for Sewell Lexus Certified Collision Center in 2006. The Sewell organization boasts one of the largest Certified Lexus Collision Centers in the U.S.

BASF to Show Custom Bel Air at Woodward Dream Cruise BASF will do its part to add to the colorful and classic atmosphere of the 2013 Woodward Dream Cruise by displaying a custom 1956 Chevrolet Bel Air painted with BASF’s RM Diamont paint.

BASF’s Dream Cruise display will be located at Morisette Automotive on Woodward Ave., just south of 13 Mile Road in Royal Oak, MI. In addition to the custom Bel Air, BASF will also feature artwork from airbrusher Jeffery James. He will have a display showing car parts painted with colors from BASF’s Carizzma paint line—a low-volatile organic compound (VOC) refinishing solution offering a wide range of colors and virtually limitless effects, according to the company. Carizzma is supported by BASF’s R-M Refinish System.

“The Dream Cruise is the perfect venue to spotlight the results of our vibrant paint colors,” said Vitor Margaronis, marketing director for BASF Coating Solutions. “It’s the largest one-day automotive event in the country and we love being out here supporting the industry and the community.”

I-CAR Honors Tom Moreland with Chairman’s Award

I-CAR has named Tom Moreland as the recipient of its 2013 Chairman’s Award, which recognizes an individual or organization whose contributions to I-CAR have been significant or extraordinary. The Chairman’s Award recipient is selected by the Executive Committee of the I-CAR International Board of Directors. “I-CAR would not be where it is today without the leadership and volunteer efforts of people like Tom Moreland,” said William Brower, Chair of the I-CAR International Board of Directors. “Through his significant contributions to the ICAR board and his continuing support of industry education, Tom has been a tireless advocate of I-CAR’s Mission and Vision and is well-deserving of this honor.” Moreland’s distinguished career in the collision repair industry has spanned more than 30 years, including over six years of service as a member of the I-CAR International Board of Directors. He has participated on a variety of I-CAR board committees, was a member of the I-CAR Executive Committee, and is a Past Chairman of I-CAR. The Award was presented as part of the I-CAR Awards Ceremony to kick off the 2013 I-CAR Conference held in Boston, MA.

Ford not Liable in Fraud Action by OK 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. Thornton v. Ford Motor Co. The Oklahoma Court of Appeals ruled that Ford Motor Company was not liable to customers for the fraudulent actions of one of its dealerships. The dealership in question had forged checks and failed to deliver vehicles, leading to lawsuits by several customers.

At trial, the customers won on a theory of apparent agency, arguing that Ford’s actions led them to believe that the dealership was acting as an agent of Ford rather than as an independent dealer. The appellate court overturned this ruling, however, finding instead that customers could not reasonably have believed that the dealership was acting under Ford’s authority.

Although Ford’s internal documents showed a more substantial connection to the dealership, the court said that the documents could not have induced reliance on the part of customers because it was not observable by customers at the time of sale.

6 SEPTEMBER 2013 AUTOBODY NEWS | www.autobodynews.com

FIX Auto National Conference is Sept. 15–18 in Scottsdale

The 11th annual Fix Auto National Conference is scheduled for September 15–18 at Boulders, a Waldorf Astoria Resort in the desert foothills of Scottsdale, AZ. This year’s theme, which focuses on marketing to create differentiation for repairers, is infused in the program. Highlights: ▪ The Brand Change Challenge— Changing a brand isn’t easy for any size business, but the stakes were especially high for DuPont Performance Coatings as they transitioned to the Axalta Coatings Systems brand.

The company’s North America Marketing Manager, Michael Bennett, will discuss what it took to ensure a smooth changeover.

▪ The Future of Collision Parts — Parts have always played a critical role in the collision repair process, but their availability, procurement and quality continue to be at the heart of heated debate. This panel discussion will feature insight into the parts world from a variety of industry experts.

▪ Keynote Speaker Jim Abbott will reflect on the challenges he has met and overcome, which he has distilled into a presentation especially relevant to collision repairers: “ADAPT: Overcoming Adversity.”

Axalta Expands its Coatings Technology Center in DE

Axalta Coating Systems, a leading global supplier of liquid and powder coatings, has invested $5 million in a new pilot reactor that has begun operations to support coatings polymer research and scale-up activities at its Coatings Technology Center (CTC) in Wilmington. The state-ofthe-art reactor system is coupled with a complete process automation and control system to enable precise control of ingredient amounts and critical process conditions such as temperature and pressure. The expansion will enhance product development capabilities and accelerate the manufacture and introduction of the next generation of polymers that offer improved performance properties to meet customer expectations.

The polymers produced from the pilot reactor can be used for both traditional solvent based and more environmental friendly water-based coating products.

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www.autobodynews.com | SEPTEMBER 2013 AUTOBODY NEWS 7

Kevin Flynn, Nine Year LKQ Board Member, Passes Away

LKQ Corp. Acquires 5 U.K. Paint Distributors

SAAR Increases to 15.8 Million

1-800-Radiator Gets Financing

Kevin F. Flynn, a nine-year member of the LKQ Board of Directors, passed away on August 12, 2013. He was key to LKQ’s formation and facilitated a number of acquisitions and financings. “We are shocked and deeply saddened by the sudden death of our colleague,” said Robert Wagman, President and Chief Executive Officer of LKQ. “Kevin will be sorely missed.” Joseph Holsten, Chairman of the Board added, “Kevin’s death is a tragedy for his family and a great loss to our company.”

The annual revision to the seasonal factors used in calculating the industry's seasonally adjusted, annualized selling rate, or SAAR, increased July’s rate to 15.8 million. The new data reduced June’s rate from 15.98 million to 15.91 million. The lower figure still represents the highest SAAR since the end of 2007. It also erases what had looked to be a conspicuous sales dip in April, the only month in which the SAAR came in at less than 15 million since October.

The revised SAAR for April is 15.19 million, rather than 14.91 million.

LKQ Corporation announced that it has acquired five paint distributors with a total of 26 locations throughout the United Kingdom. The acquired distributors include Bee Bee Refinishing Supplies Halstead, JCA Coatings, Milton Keynes Paint & Equipment, Premier Paints and Sinemaster Motor Factors. “This acquisition furthers our commitment to expand Euro Car Parts collision parts business,” stated Robert Wagman, President and Chief Executive Officer of LKQ Corporation.

Independent commercial finance company NXT Capital has provided $20 million in senior secured financing to recapitalize 1-800-Radiator & A/C. 1-800-Radiator & A/C is a leading North American distributor of aftermarket automotive heating and cooling parts. Founded in 1982 and based in Benicia, CA, 1-800-Radiator & A/C has more than 200 franchised locations serving every major market in the U.S. and Canada. The company recently started offering fuel delivery products and plans to expand into additional part categories.

Texas Law Limits Liability in Hiring Employees with Criminal Records, Not Full Protection from EEOC The Texas Legislature has taken an important step to help protect employers who are willing to give applicants with a criminal record a second chance. House Bill 1188, which takes effect Sept. 1, 2013, will limit the liability of employers who hire applicants with a criminal record. The new law provides that a “cause of action may not be brought against an employer, general contractor, premises owner, or other third party solely for negligently hiring or failing to adequately supervise an employee, based on evidence that the employee has been convicted of an offense.”

HB 1188 will benefit both employers and those with criminal records who are seeking employment, who often have difficulty finding a job. According to the National Institute of Corrections, about 5 million Texas adults have criminal records and hundreds of thousands of Texans who are no longer on probation or parole have felony convictions on their records. As inmates leave prison and try to gain self-sufficiency, they are often met with resistance by employers who are concerned that hiring exoffenders may expose them to liability.

While this statute provides some protection from negligent hiring or supervision claims, it is vital that employers understand the laws and vet applicants and employees to the maximum extent permissible under those laws. Employers should carefully and thoroughly review their current policies and be prepared to provide the EEOC with specific reasons to support why the information relied upon from a background check in connection with an employment decision is “job related and consistent with business necessity,” which is the standard for defending such a practice.

As the EEOC continues to increase its efforts to combat systemic discrimination, employers should work with their employment counsel to review and revise their background-check policies to ensure they are consistent with the EEOC guidance while still protecting the employer from potential liability. While the new Texas law will ease many employers’ concerns of potential liability for hiring applicants with criminal records, it will not completely insulate employers from all claims of negligent hiring or supervision resulting from employment of such individuals.

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UniCure Spraybooths Joins CREF Leadership Circle

UniCure Spraybooths has joined the Collision Repair Education Foundation’s donor Industry Leadership Circle by donating more than $10,000 worth of equipment and uniforms for collision students. Wiregrass Georgia Technical College in Valdosta and Tennessee Technology Center in Shelbyville both received donated equipment that included intake and exhaust filters, JetAir waterborne fans, and additional miscellaneous items. UniCure will also sponsor 100 sets of Cintas work shirts and pants uniforms for collision students. “It is a privilege to work with these schools. I am glad that we are able to provide them with products and support that will enhance their paint departments. It is always rewarding when you get to give back,” said Allen Jenkins, president of UniCure Spraybooths/Interstate Marketing Corporation.

AUTODATA has a New Manual

AUTODATA has released 2013 Maintenance Reminder Reset Procedures. The new manual guides technicians through the specific steps required to reset vehicle maintenance reminder alerts, which must be reset after any maintenance work.

U.S. Auto Parts Network Has Loss Over 2nd Quarter 2012

U.S. Auto Parts Network has reported net sales for the second quarter ended June 29, 2013 of $67.9 million, compared with net sales of $80.7 million for the second quarter ended June 30, 2012, a decrease of 15.9 percent. Second quarter 2013 net loss was $9.6 million, compared with second quarter 2012 net loss of $1.7 million. “We believe in the strategies that we have implemented to return to profitable growth and increase customer traffic, and expect these strategies to overcome the challenges of the past year,” said CEO Shane Evangelist.

CIECA Launches CIECA-TV

The Collision Industry Electronic Commerce Association (CIECA) introduces of CIECA-TV. CIECA will publish videos monthly, covering a range of topics from news and events to actual implementation case studies from collision industry leaders.

The first production video is available on CIECA’s YouTube channel and provides an overview of CIECA. More information can be found on the CIECA website or by emailing CIECA executive director Fred Iantorno at fred@cieca.com.

PPG MVP Conference Registration is Now Open

PPG has announced that registration is now open for the Fall MVP Business Solutions Conference at the Omni Amelia Island Plantation Resort Sept. 810 in Amelia Island, FL. Expert speakers from both outside and inside the collision repair industry will discuss a mix of topics, and there will be numerous networking opportunities with other collision repair professionals.

“The pace of dynamic change in the collision repair industry is increasing at a light-speed rate, and we know that our customers’ needs and requirements are growing at a similar pace,” says Jim Berkey, director of MVP Business Solutions for PPG. “The business acumen, the vehicle technology, production processes and leadership knowledge all are playing an elevated role in performance, which makes it imperative that we develop and deliver the educational elements that assist our customers drive to out-perform competition and be best-in-class in their marketplace.”

The conference schedule is highlighted by prominent keynote speakers Scott Deming, David Horsager and Michael Hoffman.

In his keynote address titled “Perceptual Reality,” Deming, a customer service and emotional brand building guru, will challenge the audience to know what their customers or clients are

thinking: how they perceive your company and your service and using their perception as reality, not yours. He will also discuss the impact of using outside vendors or suppliers to serve your customers and how to keep them tightly within your brand strategy, brand integrity and service commitment.

Horsager is an author, entrepreneur, professor, and award-winning keynote speaker who researches and speaks on the bottom-line impact of trust. His presentation discusses why trust has the ability to accelerate or destroy any business, organization or relationship. With greater trust comes greater innovation, stronger brands, increased retention of good people, higher morale, multiplied productivity, better results and a bigger bottom line when you gain the “Trust Edge.”

“Igniting Performance in the Tornado of Business” is the closing keynote headline, and Hoffman’s real-world approach will deliver concepts and topics such as “Sales Secrets of the One Percenters,” “Anything You Do Is Everything You Do” and “Coaching within the Tornado: Ignition for Leadership.”

The conference is open to owners and managers of collision centers using PPG Refinish products. MVP conferences are biannual events by invitation only.

www.autobodynews.com | SEPTEMBER 2013 AUTOBODY NEWS 9

Honda Aces Crash Test, Kia and Nissan Less So

The Honda Civic earned top scores in the Insurance Institute for Highway Safety’s new “small overlap” crash test, but similarly sized cars from Kia and Nissan fared poorly.

The Institute put 12 new compact cars through the test, including two- and four-door versions of the Civic and two Kia models. The Kia Soul and Forte, as well as the Nissan Sentra, earned the worst possible rating of “Poor” in the test.

Kia and Nissan both pointed out that their cars have performed very well in other Insurance Institute and government crash tests. Kia also noted that the “small overlap” crash test “goes well beyond federal requirements.”

Both automakers said they would review the test results as they seek to make further safety improvements in their cars. This was the first time compact cars were subjected to this new type of front crash test. In it, the cars are propelled at 40 miles an hour and strike a crash barrier with just one quarter of the front bumper on the driver’s side. That concentrates impact forces into a small area that often falls outside crash protection structures built into the cars. The impact also spins the car violently. The test mimics a type of impact that ac-

counts for nearly a quarter of all front crashes with serious or fatal injury to front seat occupants.

“In the worst cases safety cages collapsed, driver airbags moved sideways with unstable steering columns and the dummy’s head hit the instrument panel,” David Zuby, the Institute’s chief research officer, said of the test results in a written statement.

Also, side curtain airbags sometimes didn’t deploy or they didn’t provide coverage far enough forward in the car to be of any help, he said.

In the case of the two Kia models, the cars’ seatbelts spooled out too much, allowing the crash test dummy to move too far forward. At the same time, the side curtain airbags didn’t provide protection that far forward in the car, allowing the dummy’s head to hit the windshield pillar and instrument panel. The Kias’ steel structure also provided insufficient crash protection in the tests, according to the Institute.

When the IIHS put a group of luxury cars through the same test in August, the first time results for the new test were released, only two cars out of 11 got top marks. The Institute has also put mid-sized cars and small SUVs through the new test.

NABC is Accepting Nominations for Seven Open Board Seats

The National Auto Body Council (NABC) is now accepting nominations for seven open board seats to be elected at its upcoming Annual Meeting at the SEMA Conference this Fall in Las Vegas. Deadline for third-party nominations or self-nominations is Friday, September 6. To be eligible, nominees must be a designated representative of a current National Auto Body Council member company. Board members are elected for three-year terms.

“As a result of strong active Board leadership, our membership has grown significantly over the past few years as more and more companies experience the value and benefits of participating in NABC initiatives,” said Chuck Sulkala, NABC Executive Director. “We welcome nominations from all segments of the collision industry for leaders who are willing to invest the time and effort to help guide the organization in our ongoing mission to identify, develop, and implement community based initiatives that promote a positive image of our industry.”

NABC initiatives include the successful and popular Recycled Rides program. Almost 800 vehicles have been donated to deserving individuals and nonprofit organizations since the program’s inception in 2007. Other NABC community service programs include

First Responder Emergency Extrication (FREE), the Distracted Driving initiative, and support for disabled veterans through Operation Comfort’s AutoMotivation program. NABC also annually recognizes individuals or organizations that demonstrate excellence or selfless service to others through its Award of Distinction and Body Shop Image Award. NABC Board members whose terms are ending this year may also seek re-election. These Board members include: Brandon Devis, Martin Senour Paints - Sherwin Williams Automotive Finishes; Craig Camacho, Keenan Auto Body; Dave Henderson, See Progress; Bill Mayer, Insurance Auto Auctions; National Auto Body Council 7044 S. 13th St., Oak Creek, WI 53154, 888667-7433, (Fax) 414-768-8001 David Merrell, Parts Trader; Ron Reichen, Precision Body and Paint, Inc.; and Renee Ricciotti, 3M Automotive Aftermarket Division. Nominations for NABC board seats must be submitted in writing: Email info@autobodycouncil.org or Executive Director Chuck Sulkala at chucksulkala@msn.com. Fax NABC administrative office at (414) 768-8001 Mail to: National Auto Body Council, 7044 S. 13th St Oak Creek, Wisconsin 53154, Attn: Mary Annen. For more information about NABC Board members contact Chuck Sulkala directly.

10 SEPTEMBER 2013 AUTOBODY NEWS | www.autobodynews.com

New Test Fails Half the Small Cars Tested

Six of the cars tested in the new IIHS test, most of which were 2013 models, were rated “poor” or “marginal.” GM’s Chevrolet Sonic and Cruze each received marginal scores, while Kia Motors Corp’s Soul and 2014 Forte were rated “poor” in the results released by the Insurance Institute for Highway Safety. Nissan Motor Co’s Sentra also was rated “poor,” while Volkswagen AG’s Beetle was ranked “marginal.”

The IIHS increased the rigor of its tests last year to include crashes that involve only a front corner of a vehicle. The insurance group said nearly one-fourth of U.S. front-of-vehicle crashes that result in serious injury or death involve only a single corner that strikes another vehicle or an object like a tree or utility pole. The IIHS continues to score vehicles on side, rear, rollover and front-end crashes that impact more than just a corner.

“This is a challenging new crash test and it’s not surprising that some vehicles are earning marginal and poor ratings,” IIHS spokesman Russ Radar said of the small overlap front crash test.

“This crash scenario doesn’t lend itself to a Band-Aid fix so for most manufacturers the countermeasure will have to be built in when there’s a

full redesign,” he added.

Vehicle manufacturers in the U.S. market often design and engineer their models to score well on IIHS safety tests and use the results in their marketing.

“It matters because in today’s world cars are so competitive that all you need is a small flaw and your competition can exploit it,” Kelley Blue Book senior analyst Karl Brauer said.

Most of the 12 small cars tested were already in production before the IIHS increased the rigor of its front crash test last year. However, Radar said IIHS alerted the companies to the work the group was doing on small overlap research in 2009.

The specifications of the test were not finalized until the last year, which is late in a car’s development process, Brauer said. All automakers will eventually redesign their cars to meet the standards to pass the new crash test, he said.

In the tests, IIHS crashes a vehicle at 40 mph into a 5-foot-high barrier on the driver’s side that overlaps one-quarter of the vehicle’s width.

The small car segment was the fourth group of cars rated using this new test, and most of the groups have fared equally badly.

www.autobodynews.com | SEPTEMBER 2013 AUTOBODY NEWS 11

CARSTAR Becomes First Corporate Member of ASA

The Automotive Service Association (ASA) and CARSTAR Auto Body Repair Experts jointly announced their new relationship.

ASA’s new corporate membership provides industry-leading companies an opportunity to strengthen their ties between ASA and the leadership in the collision and mechanical service repair industry.

The program is said to be a key piece of ASA’s overall strategic growth initiative, forging relationships that allow ASA to better represent and serve its members and their franchisees.

“ASA is proud to have CARSTAR as its first corporate member. CARSTAR has embodied the model of professionalism and leadership throughout its history. As such, it’s our privilege to welcome CARSTAR and their leadership team,” said Dan Risley, ASA executive director.

Said David Byers, CEO of CARSTAR Auto Body Repair Experts. “By partnering with ASA as its inaugural corporate member, we can ensure our company and our franchisees continue to lead the industry in collision repair.”

Kinnetech Lawsuit Dropped

by Plaintiff Williams & Lake

Automotive aftermarket safety product developer Kinetech announced the patent infringement lawsuit filed against the company by Williams & Lake, LLC was voluntarily dismissed by the plaintiff. The complaint, which was initially filed months ago in the U.S. District Court for the District of Arizona, was never served.

“While we never for a moment lost confidence in the strength of our intellectual property, this news definitely validates our position in the marketplace.”

“Kinetech and its team remain dedicated to providing our highly-rated safety products to our customers,” said Mark Olson, president of Kinetech.

“While we never for a moment lost confidence in the strength of our intellectual property, this news validates our position in the marketplace.”

Kinetech’s product is an awardwinning, active automotive safety device that improves the reaction time of drivers, especially distracted drivers, by creating an attention-getting alert when cars are slowing down or stopping. The product is designed and manufactured in the U.S. and sold and installed by new car dealerships across the nation.

Plaintiffs Join Class Action on BMW Sunroof Case

Two BMW owners have voluntarily dismissed their lawsuit against the automaker without prejudice in the U.S. District Court, Central District of California, after BMW gave notice of a second, similar case filed in California. The original lawsuit alleged the sunroof in several BMW models are defectively designed, which allows water to come in and cause damage.

Attorneys for Walter Chang and Annie Stubbs filed the dismissal after BMW gave notice of a similar putative class action that has been filed against the company in the U.S. Central California District Court. The related case is Monita Sharma and Eric Anderson versus BMW North America.

Attorneys for Chang and Stubbs alleged that the defective sunroofs were a safety hazard due to potential flooding. They claimed the cost to repair the sunroofs is “exorbitant.” They had demanded a jury trial and sought reimbursement as well as compensatory, exemplary and statutory damages, including interest. They also sought class action status for owners in Florida and California.

CIECA Announces New Standards for Mobile/Cloud

The Collision Industry Electronic Commerce Association (CIECA) announced Aug. 15 that it will begin the development of new standards for mobile and cloud computing.

The new standard, BMSmc, is the third generation of CIECA standards, messages and codes, and will be available in late 2014.

CIECA is initially focusing on repair status, first notice of loss (FNOL) and scheduling during development in Java Script Object Notation (JSON). This will allow CIECA members to develop standards, messages and codes for server-to-server applications and mobile-to-mobile device and server applications.

Three teams have already been chartered to develop the new BMSmc messages.

“This is an exciting time for CIECA. Implementations have been increasing and CIECA is extending its business message suite to include mobile and cloud standards, messages and codes,” said Fred Iantorno, executive director of CIECA. More information can be found at www.cieca.com..

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Continued from Cover

Two Texas Bills

than 50 employees to provide insurance coverage will still apply.

SB 1332 was a legislative priority of the Texas Association of Health Underwriters. The measure was also supported by the Texas Association of Business and National Federation of Independent Businesses.

“Our goal in championing the legislation was to help this group of Texas employers avoid premium rate shock as a result of changes in federal law,” said Kelly Fristoe, president of TAHU. Fristoe continued, “The ACA will bring tough changes for many Texas businesses, but SB 1332 will help ease the burden for thousands of employers, workers and their families. We applaud and thank Sen. Duncan and Rep. Smithee for their leadership in providing this relief for Texas businesses.”

Senate Bill 734 Senate Bill 734, authored by State Sen. John Carona, R-Dallas, amends the Insurance Code to set out provi-

sions governing captive insurance companies. It authorizes the formation of pure captive insurance companies in Texas and sets out provisions relating to the operation and tax liability of such companies.

For the first time authorizes domestic captive insurers in Texas. The bill, known as SB 734, allows Texas businesses to realize the advantages, including tax benefits, of forming and operating a “pure” captive insurance company without the burden and cost associated with an out-of-state captive.

A captive insurance company is formed for the purpose of providing insurance for the parent company and related entities. A “pure” captive insurance company exclusively insures the risks of its affiliates. More than 30 states have statutes that specifically authorize captive insurance companies to be organized under those laws.

These statutes generally subject captive insurance companies to different regulations than traditional insurance carriers.

Texas does not currently have a captive insurance statute and supporters of the bill highlighted that a number of large companies domiciled in

Texas currently have captives that have been formed in other states with captive-enabling legislation. This situation, they argued, creates additional expenses and administrative burdens for Texas companies because other states typically impose a number of obligations on out-of-state companies.

Industry experts note that an insurance commissioner typically has significant discretion to regulate and set a captive’s minimum financial requirements based on the financial strength of the captive’s owner.

The Texas law authorizes only single parent captives and requires, as a condition to being issued a certificate of authority to form a captive in the state, that affiliates of the captive insurance company have “significant operations” in the State of Texas. The Texas law will not permit captive insurance companies to reinsure certain types of risk, including accident and health insurance or workers’ compensation insurance. Minimum capital and surplus for a pure captive will be $250,000. Premium taxes will be charged on all business written by the captive at an overall rate of .5% (subject to variances by line of business) and capped at $200,000. The new law

goes into effect on September 1, 2013, as long as the governor does not exercise his veto.

The chapter will define the forms of business organization under which a captive can operate, the minimum qualifications for its board of directors, and the features of the captive’s certificate of formation.

A domestic captive insurance company will apply for a certificate of authority from the Texas Department of Insurance (TDI) and pay a $1500 application fee. It will be required to have significant operations in Texas, hold at least one meeting of its board of directors in Texas each year, and maintain its principal office and records in Texas. A foreign captive may also transfer its domicile to Texas upon approval of the TDI.

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Company Connections

Valspar Partners with Gas Monkey Garage, Improves Color Matching Valspar Automotive announced that Discovery Channel series “Fast ‘N Loud” shop, Gas Monkey Garage, is exclusively using Valspar Automotive’s De Beer Refinish line of paint and refinishing products on the popular car restoration show.

“Fast ‘N Loud” star Richard Rawlings and show painter KC Mathieu are using Valspar Automotive’s De Beer Refinish products to help them take old hot rods from neglected cars to unique automotive restoration show pieces. “Fast ‘N Loud” featuring De Beer Refinish products currently airs on Monday evenings at 9:00 p.m. EST. on the Discovery Channel.

Rawlings, the owner of Gas Monkey Garage and visionary behind the “Fast ‘N Loud” creations, is revved up about incorporating De Beer products into the show’s work this season.

“Valspar Automotive’s De Beer Refinish products help bring our creative visions to life—no matter how crazy or wild those visions might be,” said Rawlings. “I’d personally pick these products to restore a car of my own, so I’m really excited to incorporate De Beer into Gas Monkey Garage and ‘Fast ‘N Loud.’”

Rawlings, Mathieu and the crew at Gas Monkey Garage are using the De Beer BeroBase 500 high-quality basecoat system. This complete system allows all solid, metallic and pearl/mica car color formulations, and it can be applied with both conventional and high efficiency techniques.

“There’s no better way to show off the high-impact quality of the De Beer 500 Series than by using this product to refinish unique hot rods,” said Peter Willman, General Manager of Valspar Automotive. “If anyone can show the versatility and uniqueness of this product, it’s Richard Rawlings,

KC Mathieu and the crew in Dallas.”

Valspar Automotive Introduces New Spectrophotometer and Color Information Maps Valspar Automotive recently introduced two new tools that make it easier for auto body professionals to match colors more accurately.

Valspar Automotive Spectrophotometer takes color matching a step further by providing a computer-based interface that works with Valspar Color Software to instantly formulate solid base coat colors and also calculates and displays color match accuracy on effect colors. The Valspar Color Information Maps allow professionals to match colors using chips that are sprayed with Valspar Automotive paint to accurately depict the applied finish.

“These new tools were developed with extensive input from body shop professionals and address the critical need of depicting how a particular automotive finish will look,” said Peter Willman, General Manager of Valspar Automotive.

Painter KC Mathieu and Richard Rawlings

“Valspar Automotive prides itself on providing the best in color-matching technology, support and service.”

The Valspar Spectrophotometer The Valspar Automotive Spectrophotometer offers a precise color match with the click of a button, even colors that prove difficult to match. It is a versatile alternative when compared to other color matching tools in the market, offering a Smart Formulation Option that ensures a color match can

14 SEPTEMBER 2013 AUTOBODY NEWS | www.autobodynews.com

be made in a variety of lighting conditions. The user-friendly interface ensures anyone in the body shop can use the Spectrophotometer to make an accurate color match. This means body shops can benefit from making the best color match possible with less rework and optimized profitability.

Richard with mechanic Aaron Kaufman

“Body shops must adhere to a high standard when it comes to detail, and this resource empowers those shops to easily make an exact match for the color they need,” said Will-

man. “We’re pleased to offer this tool to our customers.”

Valspar Color Information Maps Valspar Automotive Color Information Maps are available in three different color books to represent solid colors, single stage colors and base coat effect colors. Professionals can search for colors by family, or match colors without a code. Additionally, the maps can be used to provide customers with a wide variety of color options when selecting a finish.

“Our new Color Information Maps are a great addition to our lineup of body shop tools,” said Willman. “These maps are a straightforward way for professionals in the field to find the right finish.”

More information about De Beer Refinish can be found at www.debeer.com. For additional information about Valspar Automotive visit: www.valsparauto.com.

www.autobodynews.com | SEPTEMBER 2013 AUTOBODY NEWS 15

Progressive Evaluates Snapshot Campaign, Expresses Surprise that 40% Say ‘No Way’ Progressive Corp., the fourth-largest U.S. auto insurer, is searching for the right message to attract customers to its Snapshot product that tracks a person’s driving to set rates, Chief Executive Officer Glenn Renwick said.

Surveys of prospective customers have shown that “you get about 30 percent of people saying, ‘Yeah, why not?’; you get another 30 percent of people saying, ‘Maybe, I need to know more’; and you get about 40 percent of people saying, ‘No way in hell,’” Renwick said on a conference call to discuss results at the Mayfield Village, Ohio-based company.

Progressive has sought to build acceptance for Snapshot after a campaign that Renwick called “very acceptable, but short of a breakout” in a letter to investors this week. The insurer has been counting on the technology to encourage safer habits behind the wheel and help identify the most valuable customers. Some have shunned the product, citing privacy concerns, Renwick said. Selling Snapshot has been “a bigger burden” than many in the company would have assumed given that it can lower customers’ rates, he said. “Intellectually, I kind of go ‘Why wouldn’t 100

percent of people take this option?’”

The insurer has increased the percentage of its customers at its direct channel who have tried Snapshot to about 35 percent from 20 percent two years ago, he said. Part of that gain has come from advertising how people who don’t take advantage of the product could be subsidizing others. In one “Rate Suckers” television spot, a spokeswoman says people who behave worse behind the wheel make “driving more expensive for the rest of us.”

The base of premiums from the product total $1.8 billion, Progressive said in a report on second-quarter results. Premium revenue from individual clients was about $14.4 billion in 2012, a total that includes policies covering autos, motorcycles, watercraft and other vehicles. The direct channel includes customers who sign up by Internet, rather than through agents.

Renwick said there is more work to be done on Snapshot. “We’re body-punching here,” he said. “We’re trying to find the message that actually moves the needle. I think we now understand how significant a burden it is to try to educate consumers to do something that was not the natural

16 SEPTEMBER 2013 AUTOBODY NEWS | www.autobodynews.com

buying or engagement process.”

Progressive has sought an edge over competitors as it fights for an increasing share of the $175 billion in annual U.S. auto insurance premiums. The company has gained scale along with the GEICO unit of Warren Buffett’s Berkshire Hathaway Inc. in recent years by emphasizing low prices and selling directly to consumers over the Internet.

Snapshot helped open a new front in the competition for customers. Progressive patented the device and has been asserting its intellectual property rights. It struck a deal in June with the United Services Automobile Association to license the technology.

Advertising costs for auto insurers have shot up in recent years.

GEICO spent more than $1 billion in 2012, according to data compiled by SNL Financial. Allstate Corp. was No. 2 at $828.8 million, followed by State Farm Mutual Automobile Insurance Co. at $777.9 million, followed by Progressive with $526 million, the data show.

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3M’s New Body Protection System Cuts Time Needed on Panels

3M has announced the release of the new 3M Body Protection System designed to make it easier for automotive professionals to match textures on rocker panels. The technology includes a pressurized spray gun (3M Accuspray HGP spray gun) and a rocker protector pouch available in 3-ounce and 5.5-ounce sizes.

According to 3M, the new system cuts application time in half with the ability to adjust pressure and spray pattern to better match OEM textures. The new pressurized 3M Accuspray spray gun can be sprayed at any angle and the pouch sizes allow estimators and repair techs to improve estimates.

The 3M Body Protection System helps painters spray low viscosity textured finishes with fine, medium, coarse and splattered patterns.

“As the use of these textured finishes continues to expand for sound deadening on thinner substrates, the need for the 3M Body Protection System will increase,” said Steve Widen, U.S marketing supervisor, 3M Automotive Aftermarket Division.

Garmat’s Sharp Shooter Contest is Back, Winners Get a Free Trip to SEMA and a SATAjet 4000B

Back for the third year, GARMAT USA has announced the return of its immensely popular Garmat Sharp Shooter contest for shop owners and paint techs.

This contest which began in 2011, was designed to recognize quality paint techs and shop owners that use Garmat equipment. Grand Prize includes a trip for 2 to the 2014 SEMA Show in Las Vegas and a SATAjet 4000B Camouflage Limited Edition Paint Gun. “We are amazed at the response we have gotten with our Sharp Shooter contest in the past two years and the feedback from the techs that use our equipment is invaluable,” says Johan Huwaert, Garmat USA’s general manager. “The shop owners appreciate the contest too, as it provides the added benefit of validating their commitment to quality by showcasing their choice of equipment and capabilities of their technicians.”

The Garmat Sharp Shooter Contest will run from July 25 -September 30, 2013. Paint techs and their managers will have the opportunity to tell their Garmat Story in either video testimonial or written statements. Judg-

ing is based on the shop owner and paint tech’s dedication to providing quality paint jobs, superior customer service, attention to safety and overall equipment knowledge. Bonus questions include an inquiry on how Garmat can improve their Garmat experience with product improvements.

In addition to the Grand Prize of a free trip to the SEMA SHOW in Las Vegas, SATA has generously provided 2 SATA Camo Paint Guns to be presented to the top two entries. Five finalists will each be awarded two Samsung Galaxy Wifi tablets, (one for the contestant and one for the owner/manager), and the first 100 entrants will receive a custom Garmat Sharp Shooter Cap. Contest rules and regulations can be found at www.garmat.com.

The 2012 Garmat Sharp Shooter Winners can be found on www.facebook.com/GarmatUSA.

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Continued from Cover

Settlement Ordered

He worked as an auto glass repair technician specialist at one of Safelite’s Dallas/Fort Worth-area locations from June 9, 2004 to October 12, 2012.

In a response to Trent’s complaint, Safelite denies the plaintiff has any basis for the complaint. The company’s attorneys write in court documents, “This case is not appropriate for a collective action because the plaintiff is not similarly situated to other members of the purported class.” In the initial complaint, Trent’s attorneys listed all qualifying class members as “All auto glass repair or installation technicians who worked for the defendant within the last three years who were classified as non-exempt employees, who, as a result of working through their lunch periods, worked in excess of 40 hours in one or more workweeks and were not compensated at one and one-half times their regular rate of pay for all hours worked in excess of 40 hours in one or more workweeks.”

Safelite’s attorneys respond by asserting that, “Plaintiff and any members of the putative class were

properly compensated for all hours worked and for any hours worked over 40 in a work week.”

The judge has not yet ruled on the proposed class action or on Safelite’s request for dismissal.

The judge ordered the parties meet for a settlement conference and also set a deadline for any parties joining the lawsuit or making amendments to the pleadings as July 30, 2013.

Judge O’Conner writes that a pretrial conference will be set “if necessary,” and scheduled a trial date for July 28, 2014.

He also ordered that “the parties jointly select a mediator and mediate on or before January 29, 2014.”

“Within seven days after the mediation, the parties shall jointly prepare and file a written report, which shall be signed by counsel for each party detailing the date on which the mediation was held, the persons present (including the capacity of any representative), and a statement informing the court of the effect of their mediation and whether this case has been settled by agreement of the parties,” the judge wrote.

www.autobodynews.com C

www.autobodynews.com | SEPTEMBER 2013 AUTOBODY NEWS 17

Columbia, SC, and Dallas, TX, to be Next Sites of SherwinWilliams Collision Facility Digital Marketing Seminar

The Sherwin-Williams Automotive Finishes A-Plus™ Network University and Summit Software and Marketing Solutions will be taking their successful Digital Marketing Advanced Business Class—specifically created for collision repair facilities—on the road Sept. 5, 2013 to Columbia, S.C. (Columbia Marriott) and Oct. 9, 2013 to Dallas (Sherwin-Williams Training Center in Grand Prairie, Texas). Facilitated by Frank Terlep the program is designed to meet the challenges body shop decision-makers face in today’s rapidly changing digital and information age. The workshop is recommended for all collision shop owners and managers, and those involved with marketing shop services to their customer and prospect base.

The workshop will include the following strategies and tactics: ● What is digital marketing? ● Why is digital marketing a requirement for success in today’s world? ● Who is a shop’s potential digital marketing audience? ● What benefits can a shop expect to receive from digital marketing? ● What’s the importance of a digital marketing database? ● What digital marketing tools are available? ● Why your website is your online lobby● SEO, PPC, SEM, and other online marketing tools ●

Charging System Maker Says it May File Bankruptcy

Ecotality, Inc. said Aug. 12 that it may need to file for bankruptcy, citing adverse developments that may impact its ability to meet ongoing obligations and also fund anticipated operating losses. The company’s shares are down more than 74 percent in the regular trading session. The San Francisco-based maker of electric vehicle charging and energy storage systems said in a filing with the Securities and Exchange Commission (SEC) that while it is exploring options for a restructuring or sale of its entire businesses or assets, it may file for bankruptcy as part of any such process in the very near future. The company said that recent adverse developments include, among others, failure to attain sales volumes of its commercial electric vehicle service equipment or EVSE that were needed to support the company’s operations in the second half of 2013. In addition, the U.S. Department of Energy informed Ecotality that it was suspending payments to the company in connection with the EV Project. The company noted that the suspension has had a significant impact on receivables that were anticipated to be collected from the DOE.

Email, Text messaging, Smart phones; phone apps ● Mobile internet marketing ● Online reputation management; Customer reviews and ratings ● Digital ads, promos and coupons: Groupon, Living Social and other social commerce sites ● Location based services and marketing ● A review of the latest social media: Facebook, Twitter, YouTube, Google+, Yelp, and others ● Using digital marketing tools to generate revenue and profit from previous customers ● The importance of digital marketing processes ● Who in the shop should “do” the digital marketing ● How much time and money should a shop spend on digital marketing ● Creating your digital marketing strategy and action plans The Sherwin-Williams Automotive Finishes A-Plus Network offers several social and digital media partner programs, in addition to co-hosting the digital marketing advanced business management course. Register online at www.sherwin-automotive.com /customer-programs-services/a-plusnetwork/calendar-of-events/ for the upcoming Columbia, S.C. or Dallas digital marketing workshops or contact Francine Schaefer at (216) 332-8524.

For more information on the A-Plus Network, call (800) 798-5872.

NABC Award of Distinction Nominations Still Open

The National Auto Body Council is still accepting nominations for the 2013 year. Do you know someone who deserves this great award? Someone who has gone out of their way to promote the image of the Auto Body industry. They could be a vehicle manufacturer, supplier/vendor, educator, insurer, independent appraiser or trade association. Send all nominations in before September 15, 2013!

The Award of Distinction has been given for bravery, philanthropy, charity, and selfless acts of kindness. It transcends the rigors of daily business to uncover those helping the world around them without a thought of recognition for themselves. Any individual, business organization, or group employed in a collision industry-related segment such as collision repair facility, manufacturer, supplier/vendor, educator, insurer, independent appraiser or trade association is eligible.

The winner will receive a trip for two in the continental US, 2 nights stay, and some spending money, with the whole trip package capped at $1,500. For more information contact: Kent Seavey, NABC Award Chairman, Phone: (201-448-5158) or e-mail: KBseavey@gmail.com.

Body Shop Improvements May Earn Image Award

The National Auto Body Council is still accepting Body Shop Image Award nominations for the 2013 year! The competition, which runs through early-September, applies to any body shop remodeling project completed during the calendar year 2013 and also 2012! One winner and three runners-up will be recognized. Each will receive visual recognition on the NABC website.

The name of every facility entering the competition will be listed on the website, as well. In addition, the winner will receive a trip for two in the continental US, 2 nights stay, and some spending money, with the whole trip package capped at $1,500. Those wishing to submit a shop for consideration should submit a nomination form to the NABC with three exterior images and one interior image of the facility (before and after pictures, so eight total images should be submitted). A form and a complete description of the nominating process is available at http://www.autobodycouncil.org/files/NABC_nominate_imageaward.pdf

www.autobodynews.com

Mitchell Brings 5 New AddOns to Repaircenter Tools

Mitchell has announced the release of five new add-ons to the RepairCenter ToolStore. The company says these add-ons bring extensive functionality from third-party partners into Mitchell’s RepairCenter platform. They will be joining a wide selection of other add-ons in the ToolStore catalog, where all the addons can be browsed and added instantly.

“Shops will now have even more expanded and powerful capabilities at their fingertips with Mitchell’s RepairCenter through their ToolStore add-ons,” said Brian Elmi, senior product manager, auto physical damage solutions.

“The third-party services that shops use on a day-to-day basis will now be available to them all in one place, through easy-to-use add-ons in their RepairCenter. With these new add-ons, shops will be able to do everything from shipping and ordering parts, to managing their parts inventory with third-party services in their RepairCenter.”

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Continued from Cover

PartsTrader Rollout

prices for an entire parts list for each job, whereas currently they may not know about parts that a shop contacts only a recycler or non-OEM parts vendor about. Avery agreed that PartsTrader gives dealers a chance to see

other potential business and shop customers.

“The performance of those who provide parts has an impact on repairers, and repairers have an impact on our shared customer,” Avery told Priest and other parts vendors at the meeting. “So you’re in the game. If you’re not on PartsTrader, it’s your decision. But you need to decide if those repairers that are working with me are repairers you want to deal with. Be-

cause I’m asking them to use PartsTrader.”

Priest noted that dealers could just as easily lose business through PartsTrader as gain new business, and that any number of different insurers could require different electronic parts procurement systems.

“How many fees am I going to pay? How many hoops am I going to jump through,” Priest asked.

“We have the slimmest margin of anyone in the room, yet we have to pay for the program. State Farm should pay for the program. It’s going to benefit them.”

New Information on Fees About 130 people, including two Arizona state legislators, attended the meeting, which also offered some new information about PartsTrader.

Sailer said 1,400 shops and 2,300 suppliers are now using PartsTrader following its roll-out in early August in major markets in Arizona, Colorado, New Mexico and Texas. He said major markets in California, Nevada and Utah will follow on September 9, with markets in Michigan and Ohio following in October.

20 SEPTEMBER 2013 AUTOBODY NEWS | www.autobodynews.com

Sailer said 56 percent of shops using the program are using it for at least some non-State Farm work; this is up from the 30 percent Sailer reported at a meeting in May. Use of the system for jobs other than State Farm work is something PartsTrader is counting on given its planned fee structure. PartsTrader is currently free to shops and Sailer said the company doesn’t “expect to ever charge a shop to use the system.”

Sometime next year, however, suppliers will be given 60-days’ notice ahead of the start of a monthly fee for their participation; Sailer would say only that the fee would be “modest” and “less than you’re used to paying today for comparable products.”

The supplier also will pay a yetto-be-determined fee per transaction, Sailer said, but there will be no transaction fee charged on State Farm jobs.

“Our success is dependent on shops finding value in using PartsTrader beyond State Farm,” Sailer said. “That is an absolute must for us.”

State Farm Defends Mandate Avery was asked several times about the elimination of the “fax-only” option in PartsTrader, which had allowed

a shop to use the system to buy from a vendor even if that vendor didn’t participate in PartsTrader. If State Farm went back on its assurance that shops could buy from any vendors they want, Avery was asked, might the insurer also step back from its assurance that shops aren’t required to buy the cheapest part the system locates?

Avery responded that the “fax-only” option was available only George Avery during the pilot testing of the program in five markets, and insisted that shops still can use the vendors of their choice provided they are on the system – something that can only happen if a shop “nominates” those vendors to participate. In terms of other changes to the system or requirements down the road, Avery encouraged shops to remember that State Farm doesn’t require the use of nonOEM parts, doesn’t require discounts unless they are given to another insurer, doesn’t have paint caps, and “has a pretty good book of business.”

“You’re going to have to decide for yourself as to what sort of partner

State Farm is,” Avery said. “There’s nothing else I can say. I will tell you: There is no value in pushing you to take the cheapest part. It doesn’t make sense. If (your Select Service score) is balanced between quality, efficiency and competitive price, and I put pressure on you for the price, it’s going to hurt what? Your efficiency. It’s going to slow you down if you get bad parts.

So that decision about what parts to choose is in your hands.”

Other Concerns Raised Bob Schubert of Impact Auto Body in Mesa, AZ, was among the Select Service shop owners who spoke at the meeting. He challenged Sailer’s introductory comments in which Sailer compared PartsTrader to travel websites like Expedia or Orbitz, which allow users to see all the available options and make a choice based on the factors they see as most important.

“Plane tickets and collision parts are nothing alike,” Schubert said. “I’m sorry, but it’s a terrible analogy. Anybody, a 10-year-old, can get online and figure out how to buy a plane ticket. Not so with collision parts. Not so with the people who fill the orders.”

He said he found it “kind of insulting” that State Farm felt the industry “wasn’t smart enough to order parts efficiently, get them there on time and have single-digit return ratios.” He noted that no one has addressed how Select Service shops Bob Schubert with automaker certifications will reconcile the conflicting requirement some of those programs have for using a particular parts sourcing system. And he criticized PartsTrader for not providing parts suppliers with more than vague explanations of what fees they will eventually have to pay.

“Once these dealers are signed on, they’re signed on, they’re hooked,” Schubert said. “They’re not going to get off of it. They won’t be able to. They have a right to know what their costs are going to be, or at least a range, before they sign on to it.”

Schubert conceded that, as was pointed out earlier in the meeting, no one is forcing a shop or vendor to use the system. But he said just as parts

manager Priest said State Farm jobs account for at least 20 percent of his collision parts sales, Select Service is a significant part of his repair shop’s business.

“This is just one in a long line of control we have lost in our shops,” Schubert said. “We’re a Select Service shop in defense as much as anything else. You can act like we’re stupid for doing it, and by gosh, I might agree with you. But sometimes the alternative is even uglier.”

John Yoswick, a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork. com). He can be contacted by email at: jyoswick@SpiritOne.com.

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PPG Passes Milestone, PaintManager at 5K

PPG Automotive Refinishes recently announced that it now has 5,000 subscribers of its PaintManager software color retrieval and management program that have chosen to use the Internet instead of traditional CD releases to update their systems.

“Getting fast and accurate color and program updates is critical, and we are very pleased to see our customers embracing this online option to enhance their PaintManager software,” said Mary Kimbro, global color director of PPG. The PaintManager software delivers color formulas that match OEM colors and manages the paint mixing operation through touch screen technology that can be configured by any distributor or collision center.

“With PaintManager software, shops are getting fast network access to color information, new products and program improvements.

Equally important, they’re getting the data that keeps their managers and technicians aware of all aspects of the repair business,” Kimbro said.

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On Creative Marketing Don’t Mess With My Marketing! with Thomas Franklin

My first glimpse of malicious competitors was seeing a runner for one body shop remove a competitor’s business cards in an insurance agent’s office, and replace them with his own.

In a highly competitive market, some shops may be striving to steal other shop’s business when the number of jobs in the area is declining. In addition to the straightforward attempts to push a shop out of a dealership deal in order to gain the authorized repair center designation, I’ve seen some shops stoop to discrediting a competitor in every way possible. Sometimes signs are defaced, taggers sent to put an ugly image on a shop’s fences and exterior, and more. If you spot someone taking photos of your shop or vehicles parked in your lot or in the vicinity of your shop, get that person’s name and file a police report at once.

These days a common malicious practice is placing phony complaints against a shop on Yelp and local referral websites. One shop suspected a competitor of having a vehicle brought into his shop and deliberately sabotaged to create an insurance company and Board of Auto Repair complaint and a vicious story to be sent to the press and put on-line. The shop owner suspected he was under attack when an anonymous tip also sent OSHA inspectors into his shop for supposed code violations. Anonymous complaints are most difficult to defend against, but even a complaint by someone giving his or her name could still be someone connected to a competing shop. One shop that was bro-

ken into resulting in the loss of numerous radios, GPS systems and more, suspected a competitor of either arranging the theft or at least providing information on how to get into the shop at night.

How far will a malicious competitor go to undermine a shop he wants out of the way? In the famous fictional industrial espionage tale, “Willy Wonka and the Chocolate Factory,” author Roald Dahl has the evil Slugworth trying to steal Wonka’s secret recipes by bribing young visitors to get them from the Oompa Loompa sweets maker. Do body shop owners have trade secrets? Could a competitor squash a shop’s marketing strategy efforts if he knew them in advance?

Hacking into a company’s computer system may be the most modern way to steal trade secrets, but experts say most thefts still occur the old fashioned way, by sneaking into a company’s offices and making off with classified information.

Ira Winkler, a top corporate security analyst, in his book “Spies Among Us: How to Stop the Spies, Terrorists, Hackers, and Criminals You Don’t Even Know You Encounter Every Day,” Winkler estimates American companies lose as much as $300 billion a year to pirating, counterfeiting and other corporate theft. He says inside jobs are another tried-and-true method. We just saw an example of that when several people were busted as they attempted to sell Coca-Cola secrets to rival cola giant, Pepsi.

Could a competitor pay off an em-

ASRW Creates Free App for Event Information

Automotive Service and Repair Week (ASRW) has created a free mobile application allowing participants to quickly access event information. The app is available for iPhone, Android and Blackberry users and can be downloaded by searching ASRW2013 in your device’s app store.

The app will allow ASRW participants to search the exhibitor list and access the floor plan in addition to searching all educational sessions and events. It is integrated with registration, includes a calendar, shows

alerts, and has social integration with Twitter and Facebook.

Additionally, users can access their hotel reservations and information on local restaurants and attractions in Las Vegas.

“Based on feedback from last year, we’ve upgraded the technology used in our app to provide a better user experience for our attendees,” said Shelby Hausler, ASRW associate show manager. “There’s no better way to access all the critical information from the show website while you’re on the go or on site.”

22 SEPTEMBER 2013 AUTOBODY NEWS | www.autobodynews.com

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

ployee in his target body shop to report on planned marketing activities?

How could a shop owner defend against a devious attack of this nature?

One news article reports that experts say the best defense against corporate theft is to thoroughly vet employees who have access to sensitive information. Then make sure that that information is secure. If a breach occurs, report it to law enforcement as soon as possible. Corporations often hire a security analyst to perform simulated espionage to test the company’s security system. While few shops have the kind of sensitive information that a competitor might try to steal, there are many more basic ways to mess with a shop’s marketing and to try to discredit their image.

Where it is still common for accident victims to try to get three estimates, I’ve heard of a shop owner deliberately sending a prospective repair customer to the worst two other

shops he could think of, where he could be sure the customer would get a high or faulty estimate. Some have mastered the fine art of tactfully badmouthing the competition to instill enough doubt about their integrity and reliability to eliminate them from the running.

One shop owner I know was stunned when he lost a couple of dealership deals he had for many years. He simply wasn’t prepared for the aggressive attacks on his quality that were made. Just running a shop is a full-time job and that doesn’t leave a lot of time to be policing business relationships and marketing maneuvers.

But in a highly competitive business environment, it’s naive to assume all competitive moves will be honest and above board. Thomas Jefferson said “Eternal vigilance is the price of freedom,” but, in a body shop, constant vigilance may well be the price of survival.

www.autobodynews.com | SEPTEMBER 2013 AUTOBODY NEWS 23

OSHA Focused on Preventing Summer Heat Illness, Isocyanates Ongoing Concern

Heat Illness OSHA has made heat stress and its impacts on workers a priority problem this summer. Since 2008, there have been several heat related fatalities throughout the country, including some in southern Wisconsin and northeastern Illinois. As a result, OSHA has implemented a nationwide Heat Illness Prevention Campaign.

Heat stress results when the body cannot naturally cool itself. As a consequence, a variety of heat illnesses can occur, ranging from minor heat rash to serious—and sometimes fatal—heat stroke. Some people are more susceptible to heat illness than others. Persons who work outside and/or perform strenuous work activities in heavy clothing are most at risk for developing a heat-related illness.

The protection of these more susceptible workers is a priority for OSHA. OSHA’s heat awareness program is summarized by “Water, Rest, Shade.”

Specifically, if workers are in an environment that could produce heat stress, OSHA recommends that they: ● Drink water every 15 minutes, even if not thirsty; ● Rest in shade to cool down; ● Wear a hat and light colored clothing;

● Learn the signs of heat illness and what to do in a heat-related emergency; ● Keep an eye on fellow workers (in stressful conditions a buddy system is recommended); and; ● Acclimate to conditions slowly. ● Use sunscreen protection with a sun protection filter (SPF) of 30 or more.

Isocyanates Isocyanates are chemical compounds containing the isocyanate group (–NCO). Isocyanates in the form of raw materials are incorporated into numerous polyurethane products, such as foams, paints, spandex fibers, insulation materials, car seats, mattresses, under carpet padding, packaging materials, polyurethane rubber, adhesives and fiberglass.

Many industries in addition to collision repairers use polyurethane products (and isocyanates), including automotive interiors, medical care, printing, plastics, mining, textiles, paints, food, building construction and electronics. Thus, isocyanates are widely used and are found in many of the products we use.

The health effects of isocyanates include irritation of skin and mucous membranes, difficulty breathing and

Don Carlton HYUNDAI OF TULSA

918-622-2843 Fax

800-627-0705

Member of the Tulsa Parts Connection

chest tightness. OSHA and similar regulators have developed occupational exposure limits for eight isocyanate components. One isocyanate, 2,4-toluene diisocyanate, has been classified as reasonably anticipated to be a human carcinogen.

OSHA and its counterpart agencies also have prepared several reference documents addressing isocyanates.

On June 20, 2013, OSHA released a new Instruction for the Field Operations Manual (Instruction Manual) regarding isocyanates. The Instruction Manual describes policies and procedures for implementing a National Emphasis Program on Occupational Exposure to Isocyanates to identify and reduce/eliminate the incidences of adverse health effects associated with occupational exposure to isocyanates. OSHAʼs Instruction Manual sets forth a system that targets multiple industries and focuses on evaluating inhalation, dermal and other routes of occupational exposure to isocyanates.

If you have employees who work with polyurethane (and isocyanates), you should consult the Instruction Manual.

See https://www.osha.gov/OshDoc/Directive_pdf/CPL_03-00-017.pdf

Don Carlton ACURA OF TULSA

918-627-6457 Fax

888-550-7278

Member of the Tulsa Parts Connection

Dealerships Continued to Lose Body Shops in 2012

According to the Mitchell International Third Quarter 2013 Industry Trends Report, the number of dealership body shops continues to drop.

Citing research from the National Automobile Dealers Association (NADA), Mitchell estimated that 34 percent of dealerships featured onsite body shops in 2012, a decline from the 36 percent estimated to have had shops in 2011.

NADA reported approximately 6,314 dealers operating on-site body shops in 2011. By those numbers, Mitchell estimates there were 5,996 operating in 2012. This is a sharp decline from the 8,692 shops NADA estimated to be in operation back in 2006.

Based on a preliminary estimate of independent repair facilities in the U.S., Mitchell pegged the total collision repair facility population at 40,448 facilities in 2012 with approximately 14.8 percent being onsite dealer facilities.

Despite the decreasing number of shops, the total amount of bodywork performed by all new-vehicle dealerships was up slightly from $6.78 billion in 2011 to $6.9 billion in 2012.

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Chief Expands its 3rd Qtr Training Schedule Chief University, the training arm of collision repair industry leader Chief Automotive Technologies, has added 14 classes to its remaining third quarter schedule, including one new session of its flagship Design Based Repair course. A total of 26 classes will be taught in August and September at a variety of locations across the United States. Courses combine classroom learning with hands-on training using recently damaged vehicles.

Class offerings are updated frequently. A partial schedule of available classes is below. For the most up-todate schedule, course descriptions and to register, visit www.chiefautomotive.com/training/chiefuniversity.asp.

Technician/Estimator/Appraiser Design Based Repair Sept. 10-11 Orem, UT

Technician, Computerized Measuring Aug. 13-14 Charlottesville, VA Aug. 20-21 Kansas City, MO Aug. 27-28 Altoona, PA Sept. 10-11 Norwalk, CA Sept. 17-18 Denver, CO

Full Frame Analysis & Repair Planning Aug. 19-20 Collegeville, PA Aug. 22-23 Kansas City, MO

Unitized Body Analysis & Planning

Aug. 6-7 Troy, NY Sept. 19-20 Kansas City, MO

Estimator/Appraiser, Structural Damage Analysis Aug. 21-23 Portland, OR Sept. 10-12 Windsor, CT Sept. 24-26 Collegeville, PA Advanced Frame Analysis Aug. 6-7 Houston, TX Aug. 8-9 Walla Walla, WA Aug. 15-16 Charlottesville, VA Aug. 27-28 St. Louis, MO Sept. 17-18 Windsor, CT Sept. 24-25 Lakewood, CO

Advanced Steering/Suspension Analysis Aug. 6-7 Walla Walla, WA Aug. 8-9 Houston, TX Aug. 29-30 St. Louis, MO Sept. 12-13 Norwalk, CA Sept. 12-13 Orem, UT Sept. 19-20 Windsor, CT Sept. 26-27 Lakewood, CO

Most Chief University classes cost $655.

Structural Damage Analysis is a three-day course that costs $985. To register for a class or find more information, visit www.chiefautomotive. com or call (800) 445-9262. See twitter.com/ChiefAutomotive, www.facebook.com/ChiefAutomotive, www.youtube.com/ChiefAutomotive.

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Reaction to CIC in Boston Shows Conflicting Goals and Priorities

by Chasidy Rae Sisk

When I attended the CIC meeting in Boston at the end of July, I was struck by the lack of unity amongst attendees. Each topic that was introduced resulted in a wide range of opinions, raising the question of how valuable these meetings really are in finding any kind of consensus in the industry. While it’s not really surprising to find such a wide range of reactions from a meeting that included so many facets of the industry, I sought out several of the more visible attendees to find out what they experienced. Several industry leaders were willing to contribute their viewpoints.

George Avery, Chairman of CIC and P&C Claims Consultant for State Farm, said he felt the meeting went well, including each of the presentations. “I was particularly impressed with the Standards Committee presentation which provided a great overview of the work that has already been done.

I really look forward to the information that will be provided in November.”

Avery also mentioned that CIC introduced the “Open Microphone Flip Chart” at the Boston meeting, which he sees as another useful way for participants to get important issues in front of the CIC body. Avery expresses his gratitude to attendees for their participation; “All in all, I appreciate the professionalism and passion of the CIC participants which allows me to run a well-organized meeting.”

In contrast, Tony Ferraiolo, President of Auto Body Association of Connecticut, was not pleased by the meeting; “this was my first and maybe last. I think it was a waste of my time.” He objects to the lack of repairers in attendance, noting “I would like to see more repairers, rather than insurance companies, suppliers and others.. Repairers should be the only one in the room. We are the ones that should run this conference, free of insurer involvement.”

Ferraiolo said he was disappointed in what got accomplished and the priorities established for the meeting. He would prefer to see more insight into repairer issues, such as procedures not accepted by insurers and the ongoing issue of insurers’ involvement in the repair process.

According to Ferraiolo, the most valuable portion of the meeting was

the Repairers’ Roundtable, hosted by AASP-MA. “As far as I’m concerned, the roundtable was the only productive part of the conference.”

He was particularly interested in the conversations about Public Service Announcements and standardized association advertising on anti-steering as he feels it is imperative to educate consumers on the concept of “your car, your choice.”

Overall, Ferraiolo insists he didn’t get much benefit from the conference. He doesn’t “like the future of this industry as forecasted by the conference. The whole industry seems to be buying into the DRP model. The shops are getting larger and need more market share to survive. This is exactly what the insurance industry wants: for them to be dependent on large volumes of work. In the meantime, the independent shops cannot compete with the training, equipment and expense on this level. This will be the downfall of the smaller independent shop.”

Tony Lombardozzi, President of theCCRE, was generally in agreement with Ferraiolo. He attended CIC’s meeting because he wanted to see what’s going on and if it interferes with the proper way for the industry to operate. He believes “CIC is supposed to be an open forum to discuss issues, but if a conversation gets heated, the topic is swept under the rug to be taken up at a future meeting.”

Lombardozzi also felt that his time was best spent at the Repairers’ Roundtable since it provides an opportunity to get things done, unlike the general CIC meeting where “nothing gets accomplished; we’ve been discussing the same issues for 20 years!

It’s counter-productive at times.”

Furthermore, Lombardozzi notes that the average repairers cannot afford to take time away from their businesses to attend CIC, so the focus should be on bringing the issues to the people. This also results in a lack of collision repairers at the conference, other than DRP and MSO shops which are heavily influenced by insurer involvement.

Instead, Lombardozzi notes, “stakeholders (ie. insurers and suppliers) are very involved, but we’re meeting with the people who are our adversaries. This allows them to find ways to counteract the issues because they see what’s com-

26 SEPTEMBER 2013 AUTOBODY NEWS | www.autobodynews.com

ing – it’s like playing football and allowing the opposing team in your huddle as you call plays… You can’t accomplish anything with them in your huddle because they’re prepared for your next move. Working together is part of the problem!”

According to Lombardozzi, CIC used to be productive, but now they need people who want to get the real message out to the people, not to police that message. This mentality teaches repairers to “believe this is how things have to be done, but it’s not true.

You’re the business owner, not the insurance company.”

Executive Director of ASA, Dan Risley, took a more neutral stance on the event, stating “CIC provides a venue to openly discuss issues in the industry with industry leaders and many of the stakeholders in attendance. Often times, gaining clarity of those issues allows individuals and companies to take action and resolve them independently or collectively.”

Regarding the topics discussed, Risley was most interested in the presentation by the Definitions Committee. “There seemed to be a change in

Welcome to the ALL NEW

the direction of the Minimum Requirements for a Class A Shop. It’s a document that is used and has been used by state regulatory agencies and insurance companies for many years.

Several in the audience expressed concern with what they believed was a change in the committee’s direction to update and use this document. This document should be updated, and the Committee should also look to create a Class A document for insurance companies, parts suppliers, technology companies etc… Creating a Minimum Requirements Document for those stakeholders will assist in better identifying those that are leading the industry from those that are creating barriers.”

For the most part, Risley sees CIC as a forum where the entire industry can flush out many of the industry’s most challenging issues as leadership from the various segments of the industry are present; however, he did find one thing lacking. “There were specific issues that required more dialogue from dissenting parties that wanted to articulate their position and See CIC in Boston, Page 34

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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

Toyota Recalls 342K Pickups

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Tesla Model S Gets 5 Stars

Toyota Motor Corp. is recalling 342,000 Tacoma pickup trucks to fix defective seat belts. The models involved are Tacoma Access Cabs equipped with rear-hinged rear doors, built from 2004 to 2011. Toyota said a screw could come loose in the front seat belts on some of those trucks, causing the belts to malfunction. If the screws loosen completely, Toyota said the seat belt pre-tensioner and the retractor spring cover could detach from the seat belt retractor, which can affect retractor and pre-tensioner performance.

The Tesla Model S got a rave review from the National Highway Traffic Safety Administration’s crash test.

NHTSA gave the Model S its top fivestar rating for each safety category: front-end crash, side crash and rollover crash. NHTSA had not previously tested the Model S or Tesla’s other model, the Tesla Roadster. While triple 5-star ratings are not rare, there are plenty of models that do not get that top score, an accomplishment for a new automaker that has not had years of vehicle designs and safety measures to fall back on.

GM Wants to Improve Volt Electric Range by 20%

Chrysler and Ford to Exhibit at 2013 ASRW Rotunda

General Motors, working on the next generation of the Chevrolet Volt plug-in hybrid, is aiming to improve the electric-only range of the car by at least 20 percent, said CEO Dan Akerson. The first-generation Volt, which was introduced in 2010, can travel an estimated 38 miles on battery power before a gasoline engine engages. Akerson wants more, as he told Automotive News.

“We hope to extend that significantly,” Akerson said during an interview on Bloomberg Radio to be broadcast in September. “For something to be significant to me, I've got to get at least a 20 percent improvement in performance. If we can get it up to 50, 60 miles or more, we will, but that's going to be another three to four years out.”

BMW Considering Mexicobased Assembly Plant

BMW is studying expanding its North American manufacturing footprint with an assembly plant in Mexico.

Ludwig Willisch, CEO of BMW of North America, said that the automaker has been in preliminary discussions with “local governments” in Mexico about the possibility of building a factory in their districts. He declined to specify which areas of Mexico that BMW is studying or which vehicles the automaker would build there.

Chrysler will exhibit at 2013 ASRW in the all-new OEM Rotunda area on the show floor.

“We are so pleased to welcome Chrysler and Mopar back to ASRW, and are grateful for their support of this year’s show,” said Dan Risley, ASA executive director. “We are focused on making changes to ASRW to provide exactly what our attendees want, engaging with the OEMs on the show floor. Their presence is critically important to the success of the show.”

Darrell Amberson, AAM, ASA chairman, said, “Our industry starts and stops with the car manufacturers.

Their support of the show is a clear indication of their commitment to support those who repair their vehicles.”

Ford will also return to ASRW this year. Chrysler and Ford will be joining I-CAR in the OEM Rotunda.

The OEM Rotunda is one of the newest additions to the ASRW show floor.

“We value the opportunity to meet face-to-face with the automotive service/repair community and discuss Chrysler and Mopar’s role in service information, parts procurement and new vehicle technologies,” said Patrick Dougherty, vice president, Mopar Sales and Field Operations.

For more information, please visit asrwevents.com.

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Honda to Invest $180M more in Anna, OH, Engine Plant Honda North America intends to invest another $180 million in its Anna, Ohio, engine plant to boost aluminum die-casting and engine parts production. Honda said at the 2013 CAR Management Briefing Seminars that the investment will support “engine parts production related to the new Honda Earth Dreams Technology engines and transmissions.”

Earth Dreams is Honda’s umbrella classification for a new generation of more fuel-efficient high-output engines that range in size from 1.3 liters to 3.5 liters. The Earth Dreams concept was unveiled in late 2011. It includes gas and diesel engines, a hybrid engine system, a battery-powered electric drive system and a continuously variable transmission.

The investment follows other moves to bring parts of the Earth Dreams initiative to Honda’s Ohio plants, including a new direct-injection engine and the pulley components that are at the heart of the new CVT transmission.

Honda also said it will invest $35 million to build a 160,000square-foot office and technical training center in Marysville, Ohio. The new building will open in fall 2014.

Toyota Expects to Sell 2.25M Vehicles in U.S. in 2013 Toyota Motor Sales U.S.A. has again increased its 2013 sales target.

At Toyota’s recent national dealer meeting in Atlanta, Bob Carter, senior vice president, told dealers he expects Toyota and Scion divisions to sell more than 2 million units this year. Including Lexus, the tally should exceed 2.25 million.

Toyota has increased its industry forecast to 15.5 million units for the year. At the beginning of 2013, Toyota predicted the industry would finish around 14.7 million sales. In April, Toyota bumped its 2013 industry estimate to 15.3 million.

www.autobodynews.com

September 2013

BMW i8 Series will be first to use Corning’s Gorilla Glass

The i8 will be the world’s first volumeproduced vehicles to be equipped with chemically hardened glass or Gorilla Glass as it’s called in the smartphone world. It will be used to separate the passenger compartment and trunk of the i8 and is comprised of two layers, each 0.7 millimeters thick with acoustic sheeting between.

Gorilla Glass is the registered trademark for an alkali-aluminosilicate sheet toughened glass manufactured by American glassmaker Corning, Inc. Engineered for a combination of thinness, lightness, and damageresistance, it is used primarily as the cover glass for portable electronic devices including mobile phones, portable media players, laptop computer displays, and some television screens. It is manufactured using ion exchange to produce compressive residual stress at the surface to prevent cracks from propagating.

Mercedes-Benz to Offer Head-up Windshield Display

Mercedes-Benz has done a 180 on head-up display and now plans to offer the feature on its redesigned S class and C class. The redesigned Sclass flagship arrives in showrooms in September. Head-up display is expected to be added as an option to both the S class and C class in the fall of 2014. Mercedes’ system will project speed, navigation data and certain warning lights onto the windshield.

The system likely will include a warning function if a pedestrian is detected by the vehicle’s night vision system.

Today head-up display systems are offered by several carmakers and the technology comes in various degrees of sophistication. BMW launched head-up display in 2003. Audi offers it on the A6 and the A7. Mercedes is somewhat late to the game. Daimler engineers have previously thought headup display to be a potential driver distraction, but this assessment has been reversed.

Nissan Sees Triple Last Year Leaf Sales, Boosts Output

Nissan plans to begin building more all-electric Leafs as dealers ask for more of the once slow-selling car.

Retailers have been selling about 2,000 Leafs a month which is triple its volume of a year ago, before the car was moved into U.S. production.

Through July, Nissan sold 11,703 Leafs in the United States—a 230 percent increase over the 3,543 units sold during the seven months last year. The company sold 1,864 of the cars in July, compared with 395 during July 2012.

Nissan is already taking measures to increase its output of electric motors from its engine factory in Decherd, TN, Bill Krueger, Nissan Americas vice chairman.

Battery prices worldwide have decreased Nissan’s outlay for the Leaf, allowing it to check costs. Nissan is the only North American automaker that produces an all-electric car, its battery module and the electric motor that powers it.

Competitor GM Volt has announced a $4K rebate on the 2013 Volt and $5K on the 2012, of which it has 6000 in inventory and says it will carry over to the 2014 Volts.

Lease prices have also been reduced.

GM Adds Production Week on Cruze, Yr on Yr up 70%

General Motors has added a week of production at its Chevrolet Cruze factory in Lordstown, Ohio, to meet growing U.S. demand for the compact car. The Lordstown Assembly plant was originally scheduled to be closed the week of Aug. 26, UAW Local 1112 said on its Web site. Now, workers will continue to assemble the cars “as normal” that week, the union local said.

“Sales have been brisk,” said GM spokesman Annalisa Bluhm.

“We didn't want to lose momentum so we decided to abstain from taking the week off.” In July, U.S. sales of the Cruze shot up 70 percent to 25,447 vehicles over July 2012, according to the Automotive News Data Center.

Hyundai Recalling Santa Fes

Hyundai is recalling certain model year 2013 Santa Fe Sport vehicles manufactured July 13, 2012, through March 12, 2013; and equipped with 2.4 liter engines, due to a manufacturing issue, the right front axle shaft may fracture, resulting in a loss of power to the wheels. Without the parking brake applied, it may roll away.

Hyundai to Recall 239K of its 05-10 Sonatas in ‘Rust Belt’

Hyundai is recalling certain model year 2006-2010 Sonata vehicles manufactured March 1, 2005, through January 21, 2010; and model year 2006-2011 Azera vehicles manufactured September 27, 2005, through November 22, 2010 originally sold in, or currently registered in, Connecticut, Delaware, Illinois, Indiana, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, West Virginia, Wisconsin and the District of Columbia. Road salt and water can enter portions of the rear crossmember, leading to corrosion of the crossmember steel.

This may lead to detachment of one of the rear control arms.

Control arm separation may suddenly change the rear wheel alignment, affecting the handling of the vehicle, increasing the risk of a crash.

Hyundai will notify owners, and dealers will repair or replace the crossmember assembly. The recall is expected to begin by the end of September 2013. Hyundai’s recall number is 113.

BMW to Recall 1,500 09-10 X5s for Fuel Filter Heaters

BMW is recalling certain model year 2009-2010 X5 xDrive35d vehicles equipped with a diesel engine and manufactured from June 13, 2009, through November 9, 2009.

The fuel filter heater, which is used for warming up the diesel fuel during vehicle operation at low outside temperatures, could experience an electrical overload condition and become permanently activated.

The fuel filter heater could remain activated even when the ignition is off and lead to a dead battery.

The unit could also overheat, possibly resulting in a vehicle fire.

BMW will notify owners, and dealers will replace the fuel filter heater, free of charge. The safety recall is expected to begin in August 2013.

Owners may contact BMW customer relations at 1-800-525-7417.

This recall is an expansion of safety recall 11V-441. Owners may also contact the National Highway Traffic Safety Administration Vehicle Safety Hotline at 1-888-3274236 (TTY 1-800-424-9153), or go to www.safercar.gov.

www.autobodynews.com

www.autobodynews.com | SEPTEMBER 2013 AUTOBODY NEWS 31

Avery v State Farm is Back in the News, as a RICO Case making the Judge the Issue A sitting Illinois Supreme Court justice, Lloyd A. Karmeier, may have been compelled to testify under oath about allegations that he voted in 2005 to overturn a $1 billion verdict against State Farm because the company secretly funded a multi-million dollar campaign to help him get elected to the state supreme court. The 2004 Illinois Supreme Court race was the most expensive campaign for a single judicial office in U.S. history.

Lawyers whose plan to depose Illinois Supreme Court Justice Lloyd Karmeier became public now say they will do it later or maybe not at all. On Aug. 14, they told U.S. District Judge David Herndon that they would not rush into it if he lifts a temporary stay on discovery in their fraud and racketeering suit against State Farm.

In 1998 in the Avery v. State Farm case, the original plaintiffs won the largest verdict ever against State Farm for requiring the use of “imitation” crash parts in its auto repairs. After years of appeals, the verdict was reversed.

On May 29, 2012, three plaintiffs from Avery v. State Farm filed a new class action lawsuit, claiming that the

insurance company acted as the hub of an enterprise designed to defraud millions of policyholders out of a $1 billion judgment.

Mark Hale, Todd Shadle and Carly Vickers Morse, all of whom live out-ofstate and were class members to the unsuccessful 1997 class action suit against State Farm, brought their complaint in May in the U.S. District Court for the Southern District of Illinois.

The trio’s lawsuit named State Farm; William Shepherd, an attorney at the insurance company; Ed Murnane, president of the Illinois Civil Justice League; and Justice Lloyd Karmeier’s campaign committee, Citizens for Karmeier, as defendants, however the judge, David Herndon since dismissed Citizens as a defendant.

Tennessee attorney W. Gordon Ball, who serves on the plaintiffs’ legal team, said his clients’ RICO suit is very simple: “Shepherd, State Farm and Murnane used the Illinois Civil Justice League as an enterprise to basically buy an Illinois Supreme Court justice.”

On August 5, 2013, the plaintiffs in Hale v. State Farm told the judge hearing the case that their “stated in-

In one of the world’s largest antitrust price-fixing actions, a group of auto parts manufacturers continues to face claims of bid rigging and price fixing in a multidistrict litigation (“MDL”) following a Michigan federal judge’s refusal to dismiss federal antitrust claims.

Direct and indirect purchasers in the putative class action of In re Automotive Parts Antitrust Litigation accuse the manufacturers of conspiring to fix the prices of wire harness systems in automobiles. The allegations track a U.S. Department of Justice (“DOJ”) investigation into the auto industry, which has already resulted in guilty pleas involving the manipulation of wire harness pricing during secret meetings.

Judge Marianne Battani of the U.S. District Court of the Eastern District of Michigan dismissed indirect purchasers’ antitrust claims brought under the state laws of Massachusetts, Missouri, and Illinois, among others.

The court, however, declined to dismiss direct purchasers’ federal antitrust claims accusing defendants of

creating a global conspiracy to control pricing and manipulate bidding.

In an independent order, separate from the order dismissing the state claims, the court concluded that the federal antitrust allegations could survive because the direct purchasers had sufficiently informed defendants of the substance of the claims, and that the allegations provide “a reasonable expectation that discovery may reveal further evidence of an illegal agreement.” The class action complaint was sound, the court concluded, because it sufficiently identifies the products involved and the methods of communication utilized by conspiring competitors during the secret meetings. The court also reasoned that the allegations are consistent with the guilty pleas entered in the DOJ action.

This ruling on the wire harness portion of the MDL is only a fraction of the claims in this massive antitrust action. Similar claims have been brought concerning alleged anticompetitive conduct in the manufacture and sale of other automotive parts, including instrument clusters, fuel senders, heater controls, and alternators.

Federal Court Refuses to Stop Auto Parts Antitrust Class Action in Michigan

32 SEPTEMBER 2013 AUTOBODY NEWS | www.autobodynews.com

tention” was to ask Justice Karmeier to address the allegations in a deposition. The plaintiffs contend that State Farm violated the Racketeer Influenced and Corrupt Organizations Act (RICO) by using the U.S. Chamber of Commerce, the Illinois Republican Party, and other entities as conduits to conceal its role in funding and operating the justice’s campaign. RICO allows plaintiffs to sue persons or entities involved in a conspiracy to engage in improper activities such as bribery, fraud, or violent crimes. In May of this year, a federal judge denied State Farm’s motion to dismiss the lawsuit and ruled that the plaintiffs can continue with discovery. The trial could unearth more details about the extent of State Farm’s involvement in Justice Karmeier’s 2004 campaign.

The events that form the basis of Hale v. State Farm arose in 1997, when more than 4 million aggrieved policyholders filed a class-action lawsuit in an Illinois state court against State Farm. The 1997 lawsuit—Avery v. State Farm—concerned a clause in State Farm’s automobile insurance contract that stipulated that the com-

pany would pay for replacement parts of “like kind and quality” to restore a vehicle to its pre-loss condition after an accident. State Farm was accused of breaching this promise by installing inferior replacement parts. A jury in Williamson County, Illinois, agreed with the plaintiffs in Avery v. State Farm and awarded them $1.18 billion.

The verdict amounted to around $300 for each of the 4 million plaintiffs.

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New Ford Workshop Manuals Feature More Collision Repair Sections and 3D Graphics Ford Motor Company has begun rolling out new-and-improved workshop manuals, including more sections for collision repair procedures, new 3D graphics and the addition of a feature that allows repairers to view two procedures at the same time.

The enhanced treatment of collision repair procedures means the old body repair section (501-35) has been expanded to seven sections covering the following specific areas: body repairs (general and vehicle-specific information); front-end sheet metal repairs; roof sheet metal repairs; sidepanel sheet metal repairs; rear-end sheet metal repairs; and paint (general information).

Along with the new collision sections, the standard graphic line-art has been replaced with advanced 3D renderings, giving repairers a far superior look at important vehicle details. A new “window-within-a-window” feature has been added as well, letting repairers view two separate but related procedures simultaneously. This also allows for direct links to the applicable wiring diagram cell or connector location when performing pinpoint tests.

Gerry Bonanni, Ford’s senior damageability engineer, has long ad-

vocated the need to research the repair procedure before any work is done, and believes the revamped manuals can help that process.

“As more and more advanced materials and metals are used in vehicle construction, researching the repair will only grow in importance, and we think these improvements will allow repairers to do a more thorough job,” says Bonanni.

Additional enhancements include a new service information section with safety warnings, a symbols glossary, diagnostic methods and explanations of the various colors used in the graphics and illustrations throughout the manuals, and better indexing than previous versions.

The redesigned format is being used on manuals worldwide as part of

an effort to globalize Fordís official repair procedures and information. So far, the new manuals have been released for the following vehicles: • 2013 Fiesta • 2013 C-MAX / C-MAX Energi Plug-in Hybrid • 2013 Fusion / Fusion Hybrid • 2013 Focus / Focus Electric • 2013 Lincoln MKZ / MKZ Hybrid Manuals for the upcoming 2014 Escape, Transit and Transit Connect will also employ the new format and features, while those for all other vehicles will be updated as the vehicles undergo significant revisions.

Direct questions on any Ford Motor Company body-repair procedure to Gerry Bonanni at (313) 317-9000 or gbonanni@ford.com) or the Ford Collision Parts Hotline at cphelp@ford.com.

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Continued from Page 26

CIC in Boston

thoughts. Due to time constraints, some of those issues were tabled for the next CIC.” A more recent addition to CIC’s meetings is the inclusion of the Audience Response System—wireless keypad “clickers” used to poll attendees. Avery has “received a lot of feedback about how the keypads improve the quality of the Committee presentations, provide everyone with an opportunity to participate, and keep the group engaged.” The other three respondents agree that the keypads are useful, though Ferraiolo and Lombardozzi add a condition to that praise; they are useful IF they are used accurately and truthfully.

Ferraiolo noted that the meeting was run efficiently regarding Avery’s focus on keeping the meeting on task and on time, and Lombardozzi agrees, though “the agenda is something repetitious and boring.” Risley adds, “George does a great job moving the meeting along, but there were a few instances where he should have allowed the discussion to continue.”

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American Honda Launches Body Repair News American Honda has announced that the first two editions of Body Repair News, a new collision industry communication covering new Honda and Acura model body repair information is now available.

The inaugural issues cover the 2014 Acura MDX and 2013 Honda Accord. Copies can also be accessed by independent shops at American Honda’s Service Express website at techinfo.honda.com or techinfo. acura.com. Click on “Industry Position Statements & Body Repair News,” and then scroll down.

Body Repair News, free to independent collision repair shops, are part of a series of American Honda publications that will be created to support new models that are constructed with significant amounts of high strength steel, and various other new technologies.

Body Repair News publications are also planned for the following new models that have already gone on sale: ● 2014 Acura RLX ● 2014 Honda Odyssey.

An edition of Body Repair News will be issued for every future new model. Any minor model

change where significant body design changes are made will also have a body repair publication issued.

This publication is being issued as part of American Honda’s current initiative to enhance the ability of body shops to make safe and complete collision repairs on Honda & Acura vehicles through easier access to an increasing amount of collision repair information.

The company notes that Body Repair News summarizes new body and vehicle technology that may affect collision and other body repairs.

It is not intended to replace the detailed information contained in the body repair and service manuals.

Rather, it simply helps collision repair industry personnel understand why using the factory service information is so important to make safe and complete repairs.

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The PARTS ACT—The Pros and the Cons from ABPA’s Salamy and ASA’s Amberson US design patent terms for car components are set to shrink dramatically if a new package of laws goes into force. This proposal has drawn international attention to US patent law and its impact on the rest of the industry.

Jo Russell, an English Radio Commentator, interviewed two representatives from both sides of the argument to get to the pros and cons from two major industry groups. Here is her interview.

Measures have been reintroduced to US Congress that will amend current design patent law in the motor [vehicle] sector. The Promoting Automotive Repair, Trade, and Sales (PARTS) Act is sponsored by Orrin Hatch—the prominent Senator who, in the 1980s, set the ball rolling for the Drug Price Competition and Patent Term Restoration Act. While that piece of legislation provided branded pharmaceutical products with shortterm patent extensions, PARTS takes an altogether different road—aiming to cut the length of time for which manufacturers of collision repair parts can enforce the designs of their products against alternative suppliers.

It would be quite a dramatic cut, too—pulling terms of protection back from 14 years to just two-and-a-half.

Unsurprisingly, the Act has proven controversial, and has polarised opinion. Those in favour believe that it will open up a more dynamic marketplace with greater scope for competition, and encourage more regular car repairs among motorists. Others however, argue that it would weaken any incentive for innovation, reduce quality, and jeopardise safety. New Legal Review explores the arguments further, with help from two leading stakeholder groups.

The Automotive Body Parts Association (ABPA) comprises 140 member firms that are responsible for distributing around 75% of aftermarket parts sold in the US. It takes the view that reducing design-patent protection on replacement parts would enhance competition in the field and benefit consumer choice. Meanwhile, the Automotive Service Association (ASA) has spent the past six decades representing the interests of America’s collision-repair experts and car workshop owners. It believes that those interests are best served by ensuring that workshops use replacement parts with

patent protection, which it says offers an assurance of quality and safety.

Why I support the Act ABPA executive director Edward T. Salamy

The PARTS Act is needed to protect US consumers and businesses in the automotive parts field. For more than 60 years, the automotive aftermarket has provided American car owners with access to more affordable options when faced with costly collision repairs. Neighbourhood distributors and collision-repair shops—economic drivers in their own right—are able to offer quality, lower-cost alternative exterior repair parts, ranging from bumpers and hoods to fenders.

However, a number of major automotive companies with significant presence in the US have been taking action to increase their near-monopoly of the auto-parts industry. Even though they already control more than 72% of the market, they are now trying to increase their market share even more by seeking and enforcing design patents—at the expense of consumers and businesses.

After one company secured enforcement of its design patents through the International Trade Commission (ITC), competition was effectively eliminated for seven parts of a pick-up truck for a significant period of time.

Soon after, that same company filed a second case with the ITC for another popular vehicle.

If this practice continues, it will curb competition in the marketplace, reduce availability of parts, and drive up prices, ultimately forcing customers to delay—or even forgo—repairs, and leading to fewer cars for collision repair shops to repair.

Roughly 13% of car owners pay collision-repair costs out of their pockets—with older or lower-income Americans disproportionately affected. With increased parts prices, insurance companies would be forced to declare more damaged vehicles as ‘total wrecks’. As troubling as those trends are, they are even more worrisome in a down economy, when every sale matters, every dollar counts and every day can make or break small businesses and the people they employ.

These alternative parts not only present consumers with a wide range of repair options, but the competition

36 SEPTEMBER 2013 AUTOBODY NEWS | www.autobodynews.com

would also keep prices in check: on average they cost 25-50% less than parts sold by the car companies. According to financial think tank Microeconomic Consulting & Research Associates, that’s about $1.5 billion in savings every year.

If the PARTS Act is defeated, those options and savings may disappear. That’s why passage of this legislation is so important.

Why I oppose the Act ASA chairman Darrell Amberson

The PARTS Act raises some significant concerns—not least in the area of quality and product safety. In the US, we have a certification system that attempts to provide an assurance of quality, equivalent to an original equipment manufacturer (OEM) patent-protected part. This certification system reviews only a small fraction of the aftermarket parts in the marketplace.

In addition, some aftermarket vendors use confusing verbiage such as ‘validated’ to imply that goods are certified when they are not. I have seen videos of cars being crash tested, in

which aftermarket components behave differently—for example, different timings on the deployment of airbags— which is concerning. Unfortunately, while federal regulators monitor OEM parts, there is no process in place for similar reviews of aftermarket crash parts—even though the regulators have the authority to establish that process.

We need to look more closely at the quality of aftermarket crash parts—and reducing the assurance of quality that patent protection provides is a step in the wrong direction.

The current provision of patent protection for 14 years may seem a little outdated, given that the average age of a car in the US is 10 years. But manufacturers of original car parts have incurred costs attributable to original design, research and development (R&D) and product-safety testing. It is therefore right that they have the ability to sell those parts themselves during a time period that reflects their endeavour. Reducing the patent protection period to 30 months is not sufficient compensation, or encouragement for further innovation.

See PARTS Act, Page 43

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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.

Autobody-Review.com—Where Yelp Meets Reputation Defender with Ed Attanasio

Every time I talk to body shop owners about social media issues, they invariably bring up three things: Yelp, Facebook and how to defend their reputations online, in that order. They either smile or frown when they mention Yelp, look perplexed when they discuss Facebook and then get plain mad when they talk about how they’ve been wronged online, normally by their competition or a former disgruntled employee.

Recently, the marketing manager of a large MSO told me about Autobody-Review.com, a consumer web site designed specifically for reviewing body shops and described it as ‘Yelp meets Reputation Defender with enhanced SEO.’ I polled some other shops about the service and the feedback was substantial. So, I contacted the company’s President/CEO Chuck Nixon to learn more about Autobody-Review.com and why it’s created a buzz.

ABN: Shops are very concerned with Yelp, because they claim that many of their reviews are not written by real customers. Tell us why your product is different from Yelp?

CN: Autobody-Review.com is unique in that we connect to repair facilities’ customer databases. We gather reviews through two verified processes. Upon completion of the repair performed on the customer’s vehicle a delivery status message is delivered to the client allowing them to enter a review on their positive and negative experience with that company. The ease of using it is the key. The customer completes a paragraph or more conveying their true sentiment of the experience and then it’s scored by our proprietary sentiment engine giving the comment a Google approved Star Rating. Many of our clients are gaining insight into their customers’ experience and ultimately measuring the final performance

which did not align with what was being reported to non-verified review sites such as Yelp. This created request for us to create a truly verified customer review site. It all comes down to verifiability and accountability, two things lacking with Yelp.

ABN: Search Engine Optimization (SEO) is a huge concern for body shops, because they hate seeing their competition ranked higher than them on Google or Bing. Tell us about how your system maximizes SEO for your subscribers?

CN: Not only does our system gather and preview verified reviews about a facility but we also provide social media interface allowing a facility to push reviews directly to their Facebook business page, Twitter and soon Google+. These plug-ins are designed to push reviews to the shops’ page when consumers are most active on

social media sites. This increases the facilities engagement score as well as social media SEO ranking. We also back link the facilities business website to their Autobody-Review business landing page. This two-way back linking, along with our current daily traffic and other blog back linking, helps to drive the facilities’ own back linking initiative. Lastly we provide a website widget allowing the facility to post their rotating reviews directly on their own business website. This widget is designed in a manner that is providing web crawlers to find new content on their page. All of these connections and back linking help to drive not only the shop Autobody-Review landing page SEO ranking but also their own sites SEO ranking.

ABN: Big-name MSOs are signing up for Autobody-Review.com in large numbers, but can independent shops can reap the same benefits from your site?

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CN: Many MSO’s through our system have identified that larger isn’t better with SEO ranking. Since the release of Google’s most recent update (they’re calling it Penguin) local search ranking is vital. The same applies to Bing and Yahoo. So we advise both MSO’s and independent facilities to focus on local initiatives.

We advise large brands to create individual Social pages as the Search Engines are designed to respond best to local traffic. We recommend that each facility create and connect to local listing pages such as Google+, Yahoo and more. As the search engines continue to change, they still tend to support local listings and activity. This means that the larger brands no longer have an advantage.

Independent shops through verified review sites such as Autobody-Review.com now have the ability to compete with the big boys.

Now large MSO’s are joining at a high rate, because they see that Autobody-Review.com is driving local traffic in a manner that their corporate strategies in the past have overlooked.

Our consultants provide new insight that is valuable to both independents and the larger chains.

ABN: Another aspect of your system allows users to verify shops’ certifications and awards. Some shops list certifications on their sites and in many cases they’re not current or valid. How are you going to be able to verify these certifications from groups like I-CAR, ASE and all of the car manufacturers, for example?

CN: We’re 100% committed to providing only verified reviews, and that also includes verified industry certifications. We’re connected with companies such as Verifacts and I-CAR and they’ve given us a direct feed to their verified list of approved facilities. This allows us to add and remove certifications and ensure that consumers are accurately informed of the hard work and investment an organization has made into their training.

ABN: How do you aggregate all of the “true” customer reviews for your subscribers?

CN: All reviews are scored through our natural language sentiment engine and then displayed directly on our site.

Both good and bad reviews are displayed. This transparency provides a

verified and reliable source to help them make a better educated decision when selecting a body shop. We not only collect reviews but we also provide an integrated proactive alerting system helping the facility to improve their future results and reviews.

ABN: Tell me briefly the history of your company and what you have planned for the immediate future?

CN: Our company started in the business of providing proactive communication through an opt in text messaging solution. We created a unique two-way message system that supported a lean process indicative for many service businesses. Through the insight we gained front the two-way communication we quickly realized we were gaining and providing insight to body shops about their consumer experience throughout the process that had never been available in the past. This quickly gained the attention of many leaders in not only the collision industry but insurance carriers nationally. Our customers’ customer satisfaction scores were skyrocketing. We then formed a relationship with CCC and Mitchell International which provide us the

RAY HUFFINES

ability to interface directly with facilities Management systems. About a year later CCC approached us to exclusively license our status software and integrate it directly into their workflow and estimating platform. We then created an integrated electronic CSI solution deliverable through both email and text messaging. This led us to create our proactive sentiment engine which mines and provides early insight into the customer experience.

Our proprietary sentiment alerting and scoring system allowed us to discover that our customer where provide valuable insight and eventually true reviews directly from actual customers.

This is what led us to develop Autobody-Review.com.

Autobody-Review.com also features articles designed to improve your shop performance. See, for example, Five tips to prevent a bad online review for your auto Body shop.

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San Antonio Lawyer Faces 22 Counts of Health Care Fraud, Ohio Connection to Case A San Antonio-area lawyer has been indicted on charges that he defrauded $12 million from third-party insurance administrators by failing to provide their clients stop-loss coverage as requested.

Attorney Hugh Lappe Scott Jr., 62, whose specialties are oil, gas and international law, dabbled in the reinsurance or stop-loss insurance industry, which provides coverage of claims that exceed a set amount in selffunded or hybrid insurance plans.

He and an alleged accomplice, Deborah Suzanne Williams, 42, are accused of defrauding a handful of third-party administrators and their clients in a Ponzi-like scheme. Scott also is facing disciplinary hearings by the bar’s Office of the Chief Discipli-

nary Counsel, court records in Fort Worth show.

“I’ve got no comment; you’ll have to speak to my attorney,” said Scott, of Hollywood Park. His lawyer, Mark Stevens, also had no comment.

Scott is charged with 22 counts of health care fraud and 20 counts of theft from a health care benefit program.

Scott’s indictment, obtained after an investigation by the Department of Labor and the U.S. Attorney’s Office in San Antonio, said Scott ran companies that included United Re AG, Vado AG and Texcessre Inc., the latter of which often did business as United Re Trust.

Williams, United Re’s former operations director, is described as having a lesser role, and her indictment charges

her with 19 counts of theft from a health care benefit program. Both are ordered to appear in federal court on Aug. 21.

Williams, of Stonewall, told a reporter she did not want to comment.

The indictment alleges Scott falsely told clients that no more than 20 percent of what they paid his companies would go to “management and administrative services” and that the remaining 80 percent would be for reinsurance.

But Scott instead utilized much of those proceeds for personal use, Assistant U.S. Attorney Bill Harris said in the indictment.

Scott and his companies were sued in Ohio by the Washington County Board of Developmental Disabilities over a $95,000 self-funded health in-

number (VIN) starting next year. Updated weekly, consumers can instantly determine whether action is required for uncompleted safety recall for their personal vehicles. While several automakers already offer this feature, those who do not will have until Sept.

14, 2014 to do so.

Available through safercar.gov, the new system of searching by VIN numbers will allow consumers to tell what work has been done on a specific vehicle. Currently, consumers are limited to general searches by vehicle make and model year on the NHTSA website.

NHTSA to Require OEMs to Provide Online VIN Search The U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) announced Aug. 14 its plans to require automakers and motorcycle manufacturers to provide consumers with a free online tool that will enable them to search recall information by vehicle identification

Connecticut Body Shop Fined a Total of $54,300 for Repeat Violations by OSHA Did Not Contest Citations Hoffman Auto Body Shop was cited in March 2013, by the U.S. Department of Labor’s OSHA Division for nine alleged violations of workplace safety standards at its Connecticut Avenue facility in East Hartford. OSHA proposed fines totaling $54,300, mostly because of repeat citations, the agency said. OSHA’s Hartford office had seen problems in an inspection in 2011, and a December 2012 inspection did not find the problems had been corrected, the agency said.

The agency also said the body shop had an improperly located electrical outlet, which could cause a shock hazard to workers, and a fire-suppression system switch was blocked by a cabinet. The electrical outlet problem was remedied during the inspection in December, documents show. The three serious violations resulted in $14,300 in proposed fines. A serious violation occurs when there is substantial probability that death or serious physical harm could result from a hazard about which the employer knew or should have known.

Equipment and materials, some of it flammable, were stored near paint spray booths and electric panels. The stored materials limited access to extinguish potential fires, presented fire

and shock hazards and impeded cleaning around the booths, which allows potentially combustible materials to accumulate. These conditions resulted in the issuance of two repeat citations with $40,000 in proposed fines. A repeat violation exists when an employer previously has been cited for the same or a similar violation of a standard, regulation, rule or order at any other facility in federal enforcement states within the last five years.

“The bulk of these fines stem from recurring hazards identified during this latest inspection,” said Warren Simpson, OSHA’s area director in Hartford. “Workers at the facility remained exposed to potential hazards. This employer needs to take effective action to correct these safety issues and prevent their recurrence.”

The company did not contest the citations. “The Hoffman family considers the safety of our employees a top priority and all issues identified

by OSHA regulators in December of 2012 were rectified immediately and completely,” said a statement released by the company in March. “We will make whatever changes are appropriate to continue to ensure a safe workplace for our employees.”

40 SEPTEMBER 2013 AUTOBODY NEWS | www.autobodynews.com

surance plan it purchased for its employees in 2006.

An Ohio judge found it did nothing but fund a Ponzi scheme, and ordered Scott’s companies to pay $200,496 for unpaid claims and an additional $400,000 in punitive damages.

“He was robbing Peter to pay Paul,” alleged Ethan Vessels, the board’s lawyer. “My great worry and belief is he took the money he was (allegedly) pilfering and squirreled it in an account overseas.”

Scott faces up to 10 years in prison on each of the 42 counts and $12 million in restitution. Williams also faces up to 10 years in prison on each of the 19 counts she faces and restitution that is yet to be determined.

“Safety is our highest priority, and an informed consumer is one of our strongest allies in that effort,” said U.S. transportation secretary Anthony Foxx.

“Owners and potential buyers alike will soon be able to identify whether a safety recall for their specific vehicle is incomplete, using our free online search.”

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A Matrix of Parts Procurement Features Won’t Help Shops If They Have No Choice on Usage

by John Yoswick

The Collision Industry Conference (CIC) Parts & Materials Committee came to the CIC meeting in Boston in July looking for input from the assemblage for a survey it plans to conduct about electronic parts procurement systems. What it heard was an impassioned request to look at another Randy Stabler aspect of the issue.

The committee is working to produce a matrix that would help shops or other users of the systems understand the capabilities and features each system offers. At the Boston meeting, the committee shared the questions about the systems that it plans to ask the providers, and asked CIC participants at the meeting whether the questions would provide information about the systems that would be helpful.

But as the committee was completing its presentation, California shop owner Randy Stabler drew applause when he told the committee that un-

derstanding the differences between the various electronic parts procurement systems won’t matter if shops are being required to use a particular system.

“Everybody in the room, I believe, thinks that free market forces create the best value for consumers,” Stabler said. “I hear insurers talk about that a lot. They want to have competition and free market forces to drive the

best value for them. I think for the purposes of parts procurement, the difficult question is how do we allow free market forces to create a tool that is most efficient for the industry and allow body shops and insurers to choose the tool that allows them to reduce their operating costs and create internal efficiencies? We don’t have free market choices with the direction

that parts procurement is going.”

Stabler called electronic parts procurement systems “a necessary tool,” but said efficiency and features— rather than “external forces”—should be driving which systems are used.

“Let the people who want to make a parts procurement engine build the best tool, and let the marketplace decide which one is the best,

Automaker Rep Says Parts Procurement Systems Should Benefit All

Paul Massey of Ford Motor Company said shops and insurers choosing an electronic parts procurement system should think about the party on the other end of the exchange. Saying he was speaking on behalf of dealerships and maybe other parts suppliers, Massey told those at the Collision Industry Conference (CIC) in Boston in July that if the system Paul Massey takes away from the parts supplier’s efficiency, that will cost purchasers in some other way.

“There’s no free ride here,” Massey said, saying deal-

ers are now having to hire people to administer multiple parts ordering tools. “They’re either going to have to take it out of the services they provide, or they’re going to have to add cost to the prices they offer.”

As they have in the past, parts suppliers can provide all the parts that are needed, Massey said.

“So this either has to make it more efficient or more streamlined for them or help them reduce costs, or otherwise there’s no benefit to them,” Massey said.

“Of all the systems I’ve seen presented, the funding model is always to get a little more out of the supply base. So they’re the ones who are being asked to bear the burden and cost of someone else’s efficiency.”

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rather than being forced,” Stabler said.

Aaron Schulenburg, executive director of Society of Collision Repair Specialists (SCRS), agreed.

“I don’t think there’s anything wrong with the survey or the questions, but I don’t think this touches on what we need to talk about,” Schulenburg told the committee. “For more than a year now, this committee has been asked, at least by individuals of this body, for a very serious discussion about the entry-to-market (of the systems),” he said. “It keeps being avoided, frankly. I think we really need to have that before we just ask how they work.”

Massachusetts shop owner Chuck Sulkala also urged the committee to examine that aspect of the topic.

“I understand you’re trying to put a matrix together. But the fact is, if you don’t have the free enterprise opportunity to use the matrix to determine what you’re going to use, what good is the matrix,” Sulkala asked. “If I’m told, ‘Here’s what you have to use, it doesn’t matter what you’re telling me in the matrix.”

CIC Chairman George Avery said the committee should continue its work on the matrix, but acknowledged that “it

Continued from Page 36

Who Attends CIC?

An electronic audience response system (clickers) being used this year for the first time at the Collision Industry Conference (CIC) meetings is offering a new way to gauge who attends CIC. Each of the last two meetings have had well over 200 attendees. At the meeting in Phoenix this past spring, about 30 percent indicated they were repairers, 10 percent were information providers and about 4 percent were insurers. But that survey lacked enough other categories, so the majority of attendees (55 percent) got lumped together as “other.”

The survey at the Boston meeting in July was a bit more refined. Again, about 29 percent of those responding clicked in as repairers. Likely because the meeting was held in conjunction with I-CAR’s annual conference, insurers made up a larger percentage (7 percent) than at the Phoenix meeting.

Consultants accounted for 9 percent of attendees, automakers 6 percent, and suppliers 29 percent. The category of “other” was still selected by about one of every five attendees. seems like we jumped ahead,” and that “it’s prudent that we facilitate the discussion that I think is being asked for.”

He said he would work with the past chairs of CIC to develop a panel discussion on the topic for the next CIC meeting, being held in Las Vegas November 6-7, during the SEMA show.

John Yoswick, a freelance writer based in Portland, Oregon, who has

been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). He can be contacted by email at: jyoswick@SpiritOne.com.

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The most important element in this is predictability. Repairers can rely on the quality and durability of an OEM part with patent protection, and can pass on those assurances to their customers.

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AASP/NJ Reacts to PartsTrader’s Ending of Fax-Only Option, Criticizes CIC Leadership The following article comes directly from a post on AASP/NJ’s website

As PartsTrader and State Farm continue to roll out their parts procurement program across the country, the announcement of the removal of the shops’ option to order from any vendor they choose comes as no surprise to the Alliance of Automotive Service Providers of New Jersey (AASP/NJ).

From day one, AASP/NJ has been one of the country’s biggest opponents of the program.

“Are we surprised by this?”

AASP/NJ President Jeff McDowell asks. “Hell, no. We have been expecting these kinds of changes from the start. This program is all about control and money and taking both of those things away from the shop owner.

What we are surprised about is how quiet the industry has gotten since this was first implemented. Back then, there was widespread outrage, but State Farm waited it out like we knew they would. Now, with what seems like little resistance from our industry, they are steamrolling through states and changing the rules in their favor as they go. It’s only going to get worse.”

According to Collisionweek.com [subscription only], the fax option was originally added to the PartsTrader system so that Select Service facilities could still place orders with their preferred vendors, even if those vendors refused to participate in the PartsTrader program. If a parts vendor chose not to sign up for the online quoting system, PartsTrader would generate a fax order and forward it to that vendor on the shop’s behalf. With that feature no longer available, Select Service shops using the fax option have just two choices: Encourage their preferred suppliers to sign up for (and use) the PartsTrader application, or find a new parts supplier for State Farm repairs. In an email to repairers in Arizona, PartsTrader Support said that after July 31, suppliers that have not yet begun to use the PartsTrader application as “a fully active participating supplier” will no longer appear on the system as an available vendor, and therefore will no longer be able to receive orders placed in PartsTrader.

While a disturbing number of industry professionals seem to be tak-

ing a “wait and see” approach to PartsTrader’s expansion, several trade associations (such as SCRS) haven’t given up the fight. AASP/NJ Executive Director Charles Bryant has been one of the loudest voices in the shrinking PartsTrader resistance.

“Last year, in a State Farm B2B video, State Farm’s George Avery, who also happens to be the chairman of the Collision Industry Conference (CIC), said that ‘… repairers are in control of who provides your parts, regardless of the part type. We have worked with PartsTrader on a process that [enables] you to maintain your relationships and negotiated deals with your vendors. We understand that relationships with your suppliers are important in managing your business, much in the same way we value our relationship with you.’

I guess I am supposed to act shocked? OK, I’ll try. Here goes…

WOW, I can’t believe that the person that CIC chose as their leader would have made such a blatantly untrue statement in an effort to get the industry to buy into the PartsTrader concept.

“Once again, CIC needs to get their priorities straight and select a leader from the collision industry to lead the CIC, not a leader from the insurance industry to lead the collision industry to slaughter. That one untrue statement alone from the State Farm consultant, George Avery, should be enough of a wake-up call for CIC to immediately remove Mr. Avery from the position of chairman, before it’s too late.

“Look, a lot of people thought we were like the boy who cried wolf when we first raised our concerns about this program,” Bryant adds. “But every month, PartsTrader gets deeper and deeper into our pockets. If we don’t fight back NOW, pretty soon there will be no pockets; pretty soon it will be too late. We’ve won these kinds of battles before, and we can win this one.

But we have to stay together and stay strong. It looks like Arizona is the first to fall. We, as an industry, cannot let it go any further.”

For more information on AASP/ NJ, please visit www.aaspnj.org. For more information on the NORTHEAST™ Automotive Services Show, please visit: www.aaspnjnortheast.com.

44 SEPTEMBER 2013 AUTOBODY NEWS | www.autobodynews.com

Continued from Page 3

Class A Shops

questioned that change.

“What we tried to do over the years was distinguish those who step up to a higher level,” CIC Administrator Jeff Hendler told the committee.

“Now just to be in the collision business I’ve got to meet all this? But what do we do about those who don’t? What do you call those guys?”

As he did at CIC earlier this year when the committee presented a draft of the document, Aaron Schulenburg of the Society of Collision Repair Specialists (SCRS) noted that the definition includes things like a shop management system and ongoing CSI documentation that top-tier shops may need but that aren’t required by every shop.

But Definitions Committee chairman Chris Evans of State Farm said the committee had input from all segments of the industry as it did its work on the definition. He also pointed to a vote at CIC in January which he said showed support for the change in the document’s name. At that meeting, about 45 percent of CIC participants voted to rename it as the “minimum requirements” for a shop, but over half were split among the other alternatives

offered, including keeping the definition unchanged from the 2005 version, revising it but maintaining it as the definition of a “Class A shop,” or deleting it altogether from the CIC website.

As a “conference” rather than a formal organization, CIC has no bylaws nor formal voting requirements.

But traditionally before any committee’s work product is considered finalized and published on the CIC website, a floor vote is taken.

Although no vote to approve the 3-page document was taken in Boston, CIC Chairman George Avery said he felt the committee had completed its work (which began last year), and the finalized definition could be turned over to the CIC Standards Committee.

“Let’s see where it fits in the work they are doing,” Avery said, although later in the meeting he said that the topic could be reviewed then or next year. “And now let’s move it into what’s happening with this process with the Standards Committee.”

As with all its work, CIC has no ability to implement the definitions or recommendations it develops. But the “Class A” shop definition has been among the CIC documents most widely used in a variety of ways over the years by insurers, associations, government agencies and other organizations.

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Historical Snapshot

—John Yoswick is a freelance writer based in Portland, Oregon, who has a body shop in the family and has been writing about the automotive industry since 1988.

He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). Contact him by email at jyoswick@SpiritOne.com.

September Retrospective on the Collision Industry with John Yoswick

20 years ago in the collision repair industry (September 1993) In a unanimous vote, the Automotive Service Association (ASA) Collision Division Operations Committee rejected a proposal by CCC Information Services to have ASA endorse the new CCC Collision Center Connection program.

The CCC marketing program requires a shop to pay $499 verification fee to sign up for the program. The business is then charged a $30 to $50 referral fee for each insurance claim directed by CCC to the shop.

“Quite simply, the costs for adjusting a claim are the responsibility of the insurer, and this attempt to shift this burden to the repair facility is clearly not in the best interests of our members, the consumer or the repair industry,” said Bob Anderson, chairman of the ASA committee.

“ASA has been involved in extensive industry research that con-

cludes that the claims handling system utilized today by most insurers is archaic and inefficient,” Anderson said. “This (CCC) referral program in its current form does little to alter the status quo.

Since this thirdBob Anderson, 1993 party intervention does nothing to streamline the claims handling process, it is likely that even more friction (costs) will occur.” — from Automotive Dateline

15 years ago in the collision repair industry (September 1998) A court ruling in West Virginia gives that state one of the strictest laws in the country regarding parts used in collision repair. Judge Charlie King wrote in a court opinion that insurance companies must pay for new OEM parts to fix body damage on newer vehicles.

King ruled that repairs on vehicles still covered by a manufacturer’s warranty and less than three years old need to be made with new factory parts.

“I think it’s a real good decision for consumers in West Virginia,” Assistant Attorney General Doug Davis said. “If you get into a wreck in a car, insurance companies can’t force you to accept junkyard parts.”

The ruling apparently settles a heated dispute among insurance companies, automotive recyclers and the state Attorney General’s office. The case was brought to the court by a consortium of insurance companies that wanted a judicial interpretation of s state law. That law requires the use of “genuine crash parts,” and the insurance companies contended that this included new parts and OEM parts taken from wrecked vehicles. The state Attorney General’s office challenged that interpretation. ► A judge in West Virginia last

year issued a injunction against Liberty Mutual to force the insurer to stop using remanufactured, reconditioned and used parts in violation of this state law; the judge also ordered the insurer to release the names of vehicle owners who had their vehicles repaired with salvage parts.

10 years ago in the collision repair industry (September 2003) Allstate Insurance Company and Sterling Collision Centers have filed a lawsuit challenging the new Texas law prohibiting insurers from purchasing further interest in collision repair shops.

In the pleading, Allstate claims that HB 1141 “stops dead in its tracks a promising, market-based mechanism for improving customer satisfaction, providing efficient, cost-effective auto collision repair services, and eliminating incentives for waste and fraud in auto repair estimates and ac-

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tual repair work.”

Allstate asserts that forbidding insurers from acquiring, expanding, supporting or promoting its interstate network of Sterling collision repair shops is a violation of the corporation’s protected free commercial speech.

The real purpose of HB 1131, according to the lawsuit, is “to turn the American business model—where competition brings out the best—on its head by protecting and insulating local Texas autobody shops from having to compete with Allstate’s (or any other insurance company’s) own collision repair operations.” ► As reported in Autobody

News. The legal battle over the Texas law lasted until 2008 when the Texas Supreme Court rejected Allstate’s request to consider the insurer’s challenge to the law. ASA’s Bob Redding predicted that other states, which had previously considered legislation similar to that of the Texas bill, would pass such restrictions on insurerowned shops after the Texas law was upheld, but none have. Unlike other larger MSOs, Sterling has added relatively few new shops since 2008.

5 years ago in the collision repair industry (September 2008) Following a similar decision by State Farm back in June, Allstate an-

nounced this month it would no longer specify full-body sectioning (or “clips”) on its estimates.

“Furthermore, only when a collision repair facility is confident that a full-body section is the appropriate repair, has the proper training and equipment to facilitate a quality repair, and has the approval of the customer or claimant for such repair, will the adjuster authorize it,” the Allstate policy states.

Allstate’s Tech-Cor research center developed full-body sectioning procedures in the 1980s, but the insurer now says “changing vehicle construction techniques” and “the varying metallic composition of some modern

business employers who are working to improve their workplaces,” said Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels. “We remain committed to encouraging participation in this program.”

The On-site Consultation Program offers free and confidential safety and health advice to small- and mediumsized businesses across the country, with priority given to high-hazard work-

sites. Employers who successfully complete a comprehensive on-site consultation visit, correct all hazards identified during the visit and implement an ongoing safety and health program to identify and correct workplace hazards may achieve status in OSHA’s Safety and Health Recognition Program (SHARP). Exemplary employers who receive SHARP status receive an exemption from OSHA’s programmed inspection schedule during a specified

vehicles may prevent collision repairers from facilitating a quality repair” using such procedures.

As with State Farm, Allstate had been pushed on the issue of clips by Pam Pierson of Princeton Auto Body in Princeton, Ill. Just days before Allstate’s announcement, the Alliance of Automotive Service Providers of Illinois said that based on Pierson’s efforts, it had appealed to Illinois State Representative JoAnn Osmond to ask the state Attorney General to provide a legal written opinion on the use of full-body sectioning. ► from CRASH Network (www.CRASHnetwork.com), September 22, 2008

OSHA Withdraws Proposed Rule Amending on On-site Consultation Program Citing Concern About Employer Participation

The Occupational Safety and Health Administration (OSHA) announced its decision not to amend its regulations for the federally-funded On-site Consultation Program citing concerns that proposed changes, though relatively minor, would discourage employers from participating in the program.

“The On-site Consultation Program, including recognition through the Safety and Health Recognition Program, is a valuable way to assist small-

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For more about the OSHA OnSite Consultation Program at: www.osha.gov/dcsp/smallbusiness/ consult.html.

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SEMA Show Expands to Three New Exhibitor Areas In addition to 11 designated floor sections, the 2013 SEMA Show will include three different areas where First-Time and Featured Exhibitors can be found.

“In order for us to accommodate the more than 2,400 companies exhibiting at the 2013 SEMA Show, we’ve expanded our footprint,” said Peter MacGillivray, SEMA vice president of communications and events.

“Collectively, the First-Time and Featured Exhibitor areas include hundreds of new and innovative manufacturers that represent all markets in the industry. These are must-see areas for everyone in the industry.”

While the SEMA Show has included a First-Time and Featured Exhibitors area in previous years, 2013 marks the first time that the Show will include three such areas: Upper South Hall, east end near the New Products Showcase: This is the same area where First-Time and Featured Exhibitors were located in 2012.

Bridge, between Central and South Halls: Many Showgoers will

know this area because of the Media Center, the Center for International Commerce and the Show Office. For 2013, the Media Center will move to N109 (Meeting Rooms to the east of the Grand Lobby), and the Center for International Commerce will be located in N255 (second floor above the Grand Lobby).

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NACE Panels to Review Parts Procurement, Certification

Automotive Service & Repair Week under-defined. This session should (ASRW) is pleased to announce two help attendees learn about the variety 90-minute panel discussions will take of certifications available so they can place during ASRW|NACE|CARS make the decision as to what works addressing electronic parts procure- best for their businesses,” said Lou ment and certification programs. DiLisio, Automotive Industry ConASRW will take place Thursday and sulting, and moderator of the TH17 Friday, Oct. 17–18, with education session. beginning Wednesday, Oct. 16, at the Registration for ASRW is availMandalay Bay Convention Center in able online at http://www.asrwLas Vegas. events.com.

Both sessions included Give us your opinion on matters affecting the are industry.

Understanding Today’s e-Com- in the purchase of a Super Pass regismerce Parts Solutions (session WE10) tration, which includes one ticket per takes place Wednesday, Oct. 16, at timeslot to the ASRW Conference Pro10:30 a.m. “With the constantly gram, an Expo Pass to walk the show publisher@autobodynews.com changing e-commerce parts procure- floor, one ticket to the Opening Genment and search engine environment, eral Session/Industry Forum, one ticket it is critical that collision repairers un- to the Welcome Party, and a 2013 comderstand the impact to their business,” memorative pin. Sessions may also be stated Roger Wright, vice president purchased individually for $70 each. of operations for Sterling Autobody Additionally, all ASRW exhibitors are Centers, and moderator of the WE10 offering a discount of $50 off any consession. ference purchase, and attendees are enTo advertise The source for timely Certification Programs: Are couraged to contact any exhibitor call Joe Momber at: They For You? (session TH17) takes directly to redeem. information that every place Thursday, Oct. 17, at 3 p.m.

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NACE MSO Symposium Open to Some Single Shops NACE has announced that the 3rd annual MSO Symposium will take place Wednesday, October 16 at the Mandalay Bay Convention Center in Las Vegas. Attendance to this highly sought after event will again be limited to qualified collision repair multiple-location operators (MSOs) with two or more locations. However, new this year, the symposium will open 75 seats on a first-come, first-served basis to single collision repair owners interested in expanding their business.

Registration is open and the fee to attend is $200 or $250 after August 22.

Group-rate registrations are also available for repair organizations with multiple executives who wish to attend.

NACE’s MSO Symposium now open to expansion minded shop owners.

“The MSO Symposium is designed to provide a unique array of content specifically for the collision repair multiple location operator segment,” said Vincent Romans, The Romans Group, producer of the MSO Symposium. “Based on ongoing feedback and input, we are busy finalizing an agenda that we believe will be of interest to MSOs,” added Romans.

Content highlights for this year’s symposium will include topics related to leadership, business continuity and

succession planning, private equity, MSO panel presentations and discussions on their business, market, financial and strategic focus, and development and insight about international MSOs. Additional details regarding the content will be released in the coming weeks.

Also new this year, a portion of the symposium will be open to the press. Members of the press will also be invited to attend the evening networking reception at the conclusion of the symposium.

The 2013 MSO Symposium is produced by ASA, The Romans Group and NACE. Sponsors of the symposium to date include Axalta Coating Systems, AudaExplore, BASF, BB&T, CCC Information Services, Enterprise Rent-aCar, Mitchell International, The Romans Group and UniCure Spraybooths.

Details regarding the agenda and speakers for the symposium are forthcoming. Visit e.hanleywood.com/ e/15182/ee-Home-KeyEventsMSOSymposium/57ps8/281231005 for the latest details surrounding the symposium.

The 2013 MSO Symposium is produced in memory of Matthew Ohrnstein, who produced the event in 2011 and 2012.

AAPEX to Address Warehouse Distributor Management Well-known professional experts on distribution and management will be presenting topics of particular interest to warehouse distributors (WD) in Learning Forum sessions during the 2013 Automotive Aftermarket Products Expo (AAPEX). AAPEX is set for Tuesday, Nov. 5 through Thursday, Nov. 7, at the Sands Expo Center, Las Vegas, NV. The Learning Forum WD Management sessions cover: how to achieve profitability and success; future forces in B2B markets; sales and marketing optimization; building tomorrow’s workforce; and trends affecting distribution businesses.

Featured speakers leading the WD Management sessions include: ● Garrison Wynn, Wynn Solutions — “The Real Truth About Success: What the Top 1 Percent Do Differently and Why They Won’t Tell You” and “Being the Best vs. Being Consistently Chosen” ● Steve Diest, Indian River Consulting Group — “Channel Evolution: Lessons from Other Industries” and “Future Forces in B2B Markets” ● Barry Lawrence, Texas A & M Distribution Program — “Optimizing Distributor Profitability: Best Practices for Improving Return on Investment” and “Sales and Marketing Optimization:

Driving Growth and Market Share” ● Gene Marks, The Marks Group — “Economic, Political and Tech Trends: 10 Things Happening Today That Will Affect Your Business Tomorrow” ● Dan Schawbel, Millennial Branding — “Building the Workforce of Tomorrow: How to Recruit, Retain and Grow Your Young Talent” This year’s Learning Forum will feature nearly 40 free sessions, the highest number ever offered at AAPEX. Sessions will start on Monday, Nov. 4, the day before the official start of AAPEX, and continue throughout the event. Attendees are encouraged to make their travel plans accordingly. All sessions are accredited by the University of the Aftermarket toward the Automotive Aftermarket Professional (AAP) and Master Automotive Aftermarket Professional (MAAP) designations. Sessions will be held at the Venetian Hotel, on the Venetian/ Palazzo Congress Center Level 1, Marco Polo Rooms 701–707. Since the sessions are free-of-charge, seating is first come, first served. For a list of topics, speakers, session descriptions and a schedule, visit the AAPEX Learning Forum. See www.aapexshow.com or e-mail: info@aapexshow.com.

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www.autobodynews.com | SEPTEMBER 2013 AUTOBODY NEWS 49

Northeast News with Chasidy Rae Sisk

Chasidy Rae Sisk is a freelance technical writer from Wilmington, Delaware, who writes on a variety of fields and subjects, and grew up in a family of NASCAR fans. She can be contacted at crsisk@chasidyraesisk.com.

Education Foundation Draws On the Industry’s Generosity to Support Next Repairer Generation Over the past six years, the age of the Alliance, until 2008 when curriculum sales and support moved to I-CAR, alaverage collision repairer has increased to 38.7 years old, which means with Chasidy Rae lowing Sisk the Foundation to focus exclumany repairers will be retiring in the sively on acquiring and distributing near future. In turn, this creates a dire donations to schools and students in the need for entry-level repairers, and in form of scholarships and grants. Now, anticipation of this crisis, the Collision the Foundation is a purely philanRepair Education Foundation has taken the proactive step of supporting training programs for future repairers.

Brandon Eckenrode, Director of Development, believes this is imperative because “the more actively engaged the industry can be with the high school and college collision programs, instructors and students, the brighter the industry’s future will be.”

Established in 1991 to develop, promote and distribute a curriculum thropic organization with the sole purprogram to ensure entry-level employees received training on needed skills, pose of raising money to support and the Education Foundation continued to educate future collision repairers.

Though I-CAR still plays a key role in sell curriculum and provide educaallowing the Foundation to operate as a tional support through various programs, such as CRIN and the Training four-person organization, they changed

Shop Showcase

their name in 2010 to distinguish their organization from I-CAR as a way of clarifying that I-CAR training tuition fees do not support the Education Foundation.

Their mission is “to secure donations that support philanthropic and collision repair education activities that promote and enhance career opportunities in the industry.” According to Eckenrode, “it’s a full circle from support to staff- the collision industry provides monetary and in-kind donations to the Foundation, which are then distributed to high school/college collision programs, and these donations help assist in providing the best technical education possible for the students, and then these students are ideally hired into the industry.”

The Education Foundation’s current goal is to educate the industry on

Mainstream Media

Herkules Wins IAMG 2012 Vendor of the Year Award

Herkules Equipment Corporation was awarded “Vendor of the Year” by the International Autobody Marketing Group (IAMG) at the annual IAMG Vendor/Warehouse Distributor meeting banquet.

“Herkules Equipment Corporation is a top-notch proactive partner to the Group and we honor them for their outstanding service, support and professionalism.” says Lloyd Fields, President of IAMG (International Autobody Marketing Group). “They offer exceptional Herkules IAMG products, continAward ued marketing efforts, and excellent value to our industry with a dedicated commitment to their customers. We are pleased to award them with our 2012 vendor of the Year Award!”

Kevin Prost, Vice President of Herkules, accepted the award from Lloyd Fields. “We are deeply honored to be presented with this award and we are proud to be part of a very special industry. This award recognizes the efforts of Russ Terry, our National Sales

Manager, Kris Fairbrother, our Director of Marketing, our sales reps, and our production staff that build high quality products here in the USA.” The IAMG is a leading, full-service corporation that delivers strategic solutions and high-quality products to the automotive aftermarket since 1992.

As a leader in Paint, Body & Equipment distribution, IAMG constitutes 14 individual warehouse Members across the United States and Canada, 47 distribution centers, and over 350 salespeople, according to their website, www.iamgaz.com.

Herkules Equipment Corporation, established in 1984, is a leading manufacturer for the Automotive Paint & Body Repair industry, having designed, manufactured, and patented the first Paint Gun Washer.

The company has been manufacturing quality vehicle lifts and scissor lift tables for close to 30 years, providing many different industries ergonomic solutions for countless applications. Herkules also supplies Air Jacks, Handling Equipment, and Crushing Equipment.

For more product information, please contact Herkules at 800-4444351, or at info@herkules.us or visit their website at www.herkules.us.

50 SEPTEMBER 2013 AUTOBODY NEWS | www.autobodynews.com

who they are and who they support, in addition to getting more industry members involved in order to raise the level of support they provide. Eckenrode hopes that they will help place entry-level students in a more organized way in the future, in addition to providing a higher level of financial support. They’ve already begun to educate guidance counselors on the industry, teaching them about the great career opportunities students can find in the collision repair industry. According to Eckenrode, “through an increase in support, specifically with monetary donations, we can fill in the gaps within these instructors’ collision budgets and ensure that they have all of the proper tools, equipment and supplies needed to teach the students.”

Eckenrode is the sole full-time fundraiser for the Education Foundation, focusing his efforts on locating supporters within the industry as well as working in communications to in-

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form the industry of the Foundation’s efforts. When asked if his work is rewarding, Eckenrode notes, “Rewarding doesn’t fully describe the work for me. I believe we are ‘facilitators of this industry’s generosity,’ and when you hear instructors get choked up because you were able to send them a box of safety glasses for his/her students or get to inform a student that they are the recipient of a $5000 scholarship, it makes you proud of our industry for making that possible.”

Eckenrode fondly recalls their Cintas technician shirt project when they provided promotional shirts to students attending NACE several years ago. The project led to the distribution of nearly 10,000 shirts, and he has been amazed to hear how this “uniform” has transformed students’ attitudes, giving them a sense of professionalism and pride. As such, he hopes to expand the program even further.

Melissa Marscin serves as the Foundation’s Director of Grant Programs, distributing the donations received, whether those donations are in-kind product donations, school grants or scholarships. Distribution plays a vital role in their mission as they strive to ensure that received support is dis-

speak to the instructors or students in person, and then hear how the Foundation has changed their life.”

When Marscin was asked for an example of a rewarding experience, she said, “my favorite story is one about a recent $3 million donation to the schools which included basic things like sandpaper. The donation came late in the school year, and one of the instructors who received the items said he literally had no budget left for supplies this year, and he was worrying about how he would finish out the school year.

Then, this box of materials showed up, and he said he felt like he won our $50,000 grant! It’s amazing what a difference a small item like sand(l to r) Brandon Eckenrode, Mark Dellinger & Melissa paper means to schools, Marscin especially with their budget see that my work is helping to im- challenges. The Education Foundation prove the collision programs which, in has been called Santa more than once, turn, help to produce better entry-level and it is always a great feeling to see technicians for the industry. It is ex- that we are making a difference.” tremely rewarding to have a student or The Collision Repair Education instructor call me and say ‘thank Foundation receives donations from you’… you really never realize how industry supporters nationwide, and much of a difference you are making both products and monetary donations until you receive those notes and are then distributed to high schools, tributed where it is most needed; their application process is critical in providing information on where support is needed and what exactly the need is.

Marscin says, “I have the best job in the world because I am able to give out scholarships and grant funds to deserving schools and students. And the best part is that I am able to directly

technical schools and college collision programs, instructors and students in all 50 states. All segments of the collision repair industry, and any outside entity as well, are invited to donate products and scholarship money to the Foundation. Eckenrode encourages such donations; “donated tools, equipment, supplies, and other materials greatly assist collision school instructors who are working with very minimal budgets. In 2012, we raised a record $4.9 million, and we are tracking slightly above (3%) that amount half way through 2013 so far.”

In 2013, 126 schools applied for the Foundation’s “Ultimate Collision Education Makeover” grant, a huge increase from the 72 applications submitted last year. Marscin believes this grant is very important because “as school budgets continue to decrease, schools need a way to supplement their budgets, and the Makeover is a perfect solution to this. The winning schools get $50,000 worth of tools, supplies, and equipment for their collision program, and we have hundreds of smaller prizes to help schools get supplies to better teach their students. Every school that applies does get some donations out of See Education Foundation, Page 54

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Mitchell Opens New Technical Research Center in San Diego to Focus on 3D and Interactive Data Mitchell has opened its new Technical Research Center (TRC) located in San Diego, CA. The TRC was built to improve and develop Mitchell’s ability to collect data and vehicle dimension

lision repair industry that collects its own data. This ensures the flexibility and responsiveness demanded by customers who want more than yes-or-no answers to queries on specific repair

information and to focus on the next generation of accurate, interactive vehicle data.

Mitchell collects automotive frame measurements and chassis diagram data to provide to various industry constituents, including repair shops, collision and body shop centers. Mitchell says it is the only company in the col-

procedures or parts. The new center, equipped with 3D scanning technology from FARO, will provide Mitchell customers with the broadest set of dynamic data, rather than only static vehicle dimension data, the company says.

“Today’s vehicles incorporate the newest technologies and require

highly accurate information in order to repair them back to pre-accident condition. Repair shops recognize the importance of quality to insure a proper repair, and Mitchell’s accurate, up-to-date databases enable them to do this,” said John Bachman, manager, auto physical damage, at Mitchell. “Our new center now includes 3D scanners, which allows us to start building databases for the future.

We’re the only company in the industry to leverage this next-gen technology and we’re excited about the potential it brings to the claims and repair process and beyond.”

Mitchell sees a lot of potential beyond collision repair for this kind of 3D data such as consumer car buying sites that might project a 3D image of a car, auction companies with the ability to validate whether a report on the status of the car is accurate or not, or accident reconstruction where the ability to scan parts or wreckage pieces can help law en-

forcement identify the make and model of a car.

“We rely on Mitchell’s robust information in its TechAdvisor solution to ensure we accurately repair any car that comes into our shop,” Corky Deenik, collision repair manager at BMW of Escondido told a reporter.

“More than almost any other industry, customer service and reputation are

the lifeblood of a shop’s growth and we need a partner who focuses on these values to ensure we’re able to keep our credibility high. We see the next-gen technology provided by the TRC as being the future of the industry. This data will enable us to repair cars and trucks to original condition,

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due to the accuracy provided to us by Mitchell.”

How the 3D Scanners Work The infrared laser scans the entire vehicle and generates a 3D point cloud of everything in it. By moving the scanner around the vehicle, the laser can take several scans, each collecting 84 pictures as well as millions of points, each one 2 mm apart. The scanner has a range from half a meter (1.5 ft) up to 120 m (over 300 ft). The complete 3D point cloud has the ability to measure virtually anywhere on the vehicle. Mitchell is the only company in the industry to leverage this technology, and is excited about the potential it brings to the claims and repair process. Some high potential areas have been identified and include: ● Deformation-Based Estimating ● Fraud Detection ● Consumer Self-Service

Deformation-Based Estimating It is sometimes difficult to detect damage that you cannot see during an initial inspection, especially when there may be only millimeters of deformation. With 3D scanning technology, an estimator could take an image of a

damaged vehicle and then view a color map that would highlight the extent of the impact. In effect, a damaged vehicle could be compared to a “clean” undamaged vehicle that is in the database in order to identify impacted areas.

Since the system is able to detect even

of technology could be used to prevent incidences of fraud or overpayment.

Similar to a crime scene investigator that is able to identify exactly how a transgression occurred, a 3D scan of the vehicle could identify if the vectors of damage match the facts of loss re-

the smallest dent, an appraiser would be able to identify hidden damage before writing the estimate—potentially preventing the need for a supplement or reinspection.

ported to the insurer. If the damage does not match, an alert could be sent to the desk reviewer with a notification of the potential for fraud on the claim.

Fraud Detection In addition to helping ensure that estimates are right from the start, this type

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Consumer Self-Service Another potential area for this technology is in the use of photo-based estimating. A consumer could take a

picture of his vehicle and upload it to his insurer via a smartphone. From there, the insurer could com - pare the uploaded image to the 3D scan of the vehicle available in the Mitchell database to see how much damage occurred. If the damage is under $1500, the insurer could opt to place the claim on a fast-track settlement path with an automated value or photo-based estimate in order to reduce loss adjustment expense.

In addition to providing 2-D and 3-D data to the repair industry, Mitchell’s proprietary database can be used for the following use cases: ● Consumer-facing car buying sites—projects a 3-D image of a car so an individual can look at a vehicle from all angles ● Auction companies—provides the ability to validate whether a report on the status of the car is accurate or not ● Accident reconstruction—gives the ability to scan parts or wreckage pieces to help law enforcement identify the make and model of a car ● Infrastructure improvements—assists in improving the safety of roads by quickly giving highway patrol the average heights of cars in order to properly update guardrail heights.

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Continued from Page 51

Education Foundation

this program, so it is beneficial for every collision school to apply!”

Any school offering a collision repair program is eligible for grants by filling out an annual survey that helps the Education Foundation collect important data on trends and statistics within the industry.

According to Eckenrode, “the Collision Repair Education Foundation plays a vital role within the industry as we are supporting its future professionals. The more actively engaged the industry can be with the high school and college collision school programs, instructors and students, the brighter the industry’s future will be… Supporting the schools, instructors and stu-

dents is vital, but we also need to collectively do a better job in showcasing this industry as a great career choice to students/parents at an early stage in their education.”

It’s easy to make a monetary, taxdeductible donation or in-kind product donation. Simply visit the Foundation’s website, or email Eckenrode who invites “any and all industry members to reach out to us to help them find a collision school program in their area and get involved. The industry taking an active role with their local schools assists in these students being able to graduate as efficient, productive entry-level workers.”

Why would a collision repair facility want to support the Collision Repair Education Foundation? Eckenrode’s answer is simple; “to donate to the Foundation is a re-investment in the industry’s future.”

Collision Repair Education Foundation http://CollisionEducationFoundation.org 5125 Trillium Boulevard Hoffman Estates, IL 60192 888-722-3787 Brandon.Eckenrode@ed-foundation.org

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