Southwest Edition Texas Oklahoma Louisiana New Mexico
29
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VOL. 28 ISSUE 10 OCTOBER 2010
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ASA Texas Warns COGS Excludes Labor ASA Texas is warning shops that labor and other services are disallowed in calculating cost of goods sold for tax purposes. All shops are allowed to claim is the actual parts used for the repair. However, because this is such a common “error” in filing among auto repairers, Texas tax authorities are going to target auto repair shops in particular. The Comptroller’s office announced it will audit 29,000 businesses for the 2008 year. It has hired, or plans to hire, almost 500 auditors. A shop owner in Tomball who was going through a franchise tax audit was unaware of this exclusion and after his CPA did recalculation of his tax liability, discovered it would cost him an additional $7300.
The Texas comptroller website has posted the following message: “Franchise tax audits for report years 2008 and 2009 are now in full swing, and we’ve noticed that many entities in the service industry are incorrectly electing to use the cost of goods sold deduction to determine margin. “Section 171.1012 of the Texas Tax Code specifically provides that, in determining the cost of goods sold, the term “goods” means real or tangible personal property sold in the ordinary course of business and does not include services. The Tax Code does not allow a cost of goods sold deduction for entities that provide services such as dry cleaners, law firms, parking facilities,
NACE/CARS’ 2010 keynote speaker Kelly McDonald—a recognized expert on multicultural marketing and a former dealership sales executive—will address increasing diversity in the workplace and a changing workforce and customer base during the Opening GenNACE keynote eral Session. Sponspeaker, Kelly sored by DuPont, McDonald the General Session is 8:30–10 AM on Monday, October 11, followed immediately by the
opening of the NACE and CARS show floor. McDonald will address the vast diversity in the workforce these days and how businesses can work cohesively with their customer base, their employees and their labor force as a whole. “The consumer really has the power of choice,” McDonald told Autobody News. She detailed how consumers have so much choice and information available to them online that businesses really need to cater to a customer’s needs, preferences and styles to win their business. For businesses, the bar is set
See Texas Tax Audits, Page 24
NACE/CARS Offers Array of Speakers
See NACE/CARS, Page 6
JOB DESCRIPTION— ● Run California’s largest consumer protection agency ● Oversee more than 1,500 insurers with 300,000 workers ● Control a tenth of our largest state’s economy TASKS REQUIRED— ● Manage 1300 employees with a $200 million budget ● Field 300,000 consumer assistance calls annually ● Handle more than 35,000 consumer complaints ● Issue 170,000 agents/brokers licenses ● Investigate 24,000 suspected fraudulent referrals ● Initiate about 1,000 arrests annually ● Recover more than $48 million per year for consumers
FULL TIME POSITION, LONG HOURS— ● Requires election by voters of California ● Need to know plenty about collision repair
Who is Assemblyman DAVE JONES and why does he want to be California’s next Insurance Commissioner?
INTERVIEW by Ed Attanasio
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Contents
REGIONAL
Other Regional Papers . . . . . . . . . . . . . . . . . . . . . .
Claims Flood Insurers After Hermine Hits Texas . . 8
Sign up for e-Newsletter . . . . . . . . . . . . . . . . . . . .
ASA Texas Warns COGS Excludes Labor. . . . . . . 1 Dollar Thrifty Auto Group Raises 2010 Outlook . . 8
OK Body Shops Hail-Damage Backlogged . . . . . . 4
NACE/CARS coverage . . . . . . . . . . . . . . . . . . . . . . Search our thousands of articles . . . . . . . . . . . . . .
Sherwin-Williams’ A-Plus Workshop . . . . . . . . . 10
NATIONAL
Texas Dealer Association Groups Merge . . . . . . . 8
280 Car Charging Stations Set for Michigan . . . . 34
Texas: Misuse of Insurance Settlement Payments. 4
Texas-Based Service King National Expansion . . . 7
2011 Ford Focus’ New Airbag Technology . . . . . 38 Aftermarket Parts Industry to Consumer Reports 11
Texas Recycling Facility Acquired. . . . . . . . . . . . . 4
Ameriprise Fined $71K For Discount DRP . . . . . 10
COLUMNS
August Sales Down vs. C4C . . . . . . . . . . . . . . . . 7
Autoland: Mobile Airbag Co. Relies on Scanners 19
ASRW Says 2011 Event Remains in October . . . 10
CARSTAR Calls for Nationwide Recall System . . 27
Amaradio - Aftermarket Parts, the Same? . . . . . 35
CARSTAR Media Conference . . . . . . . . . . . . . . 27
Evans - Finishing the Red Mist Car . . . . . . . . . . 37
EPA Postpones Final Decision on Smog Rule . . . 26
Gonzo - It Can Still Be A Small World . . . . . . . . 21
Highway Deaths Fall to Lowest Level . . . . . . . . 18
Williams - Management Training Series . . . . . . . 12
Marchionne Targets Chrysler IPO in Q2 of 2011 . 26
Chess - Porsche Collision Certification Program. 30
Franklin - A Person-to-Person Approach . . . . . . 16
Mattei: Seventy-five Years of Leadership . . . . . . 22
Yoswick - Access and Use of Shop Data . . . . . . 28
Yoswick - Automaker Announcements . . . . . . . . 14 www.autobodynews.com
California Insurance Commissioner . . . . . . . . . . . .
CARSTAR Recognizes its Four Top Stores . . . . . 27 Ford Uses Cadavers to Test Inflatable Seat Belts. 38
Kia’s Top Executive Resigns After Recalls . . . . . 34
NACE/CARS Offers Array of Speakers . . . . . . . . . 1
Percentage of Deaths from Distracted Driving. . . 36 Progressive’s Round Two Against Coccaro . . . . . 4
Volkswagen Predicts EV 500 Mile Range . . . . . . 21
Southwest
Indexof Advertisers
Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Editorial Assistant: Erica Schroeder Contributing Writers: Tom Franklin, John Yoswick, Lee Amaradio, Dan Espersen Janet Chaney, Toby Chess, Mike Causey, Tom McGee, David Brown, Rich Evans, Ed Attanasio Advertising Sales: Joe Momber, Christina Shubert (800) 699-8251 Sales Assistant: Kristy Mangum Art Director: Rodolfo Garcia
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. ©2010 Adamantine Media LLC.
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Aegis Tools . . . . . . . . . . . . . . . . . . . . . . 16 Allen Samuels Dodge Katy . . . . . . . . . . 10 Auto Body Guru . . . . . . . . . . . . . . . . . . 15 Autoland Scientech. . . . . . . . . . . . . . . . 20 B & B Equipment . . . . . . . . . . . . . . . . . 27 BMW Wholesale Parts Dealers . . . . . . . 31 Chacon Suzuki . . . . . . . . . . . . . . . . . . . . 3 Chassis Liner. . . . . . . . . . . . . . . . . . . . . 18 Chevyland . . . . . . . . . . . . . . . . . . . . . . . 12 Classifieds . . . . . . . . . . . . . . . . . . . . . . . 39 David McDavid . . . . . . . . . . . . . . . . . . . . 5 Ford Wholesale Parts Dealers TX, OK, LA, NM . . . . . . . . . . . . . . . . . 17 Fredy Kia . . . . . . . . . . . . . . . . . . . . . . . . 22 Gene Messer Hyundai . . . . . . . . . . . . . 16 Garmat USA . . . . . . . . . . . . . . . . . . . . . . 4 Global Finishing Solutions . . . . . . . . . . 13 GM Wholesale Parts Dealers . . . . . . . . 39 Honda/Acura Wholesale Parts Dealers 30 Huffines Hyundai Plano . . . . . . . . . . . . 36 Hyundai Wholesale Parts Dealers . . . . 33 Kia Motors Wholesale Parts Dealers . . . 25 LKQ . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Malco. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Mattei. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Mazda Wholesale Parts Dealers . . . . . . 24 Mercedes-Benz of Oklahoma . . . . . . . . 30 Mike Calvert Toyota. . . . . . . . . . . . . . . . 36 Mitsubishi Wholesale Parts Dealers . . . 32 MOPAR Wholesale Parts Dealers . . . . . 29 Nissan/Infiniti Wholesale Parts Dealers . . . 38 North Star Dodge . . . . . . . . . . . . . . . . . 12 Parkway Family Mazda . . . . . . . . . . . . . 24 Performance Radiator . . . . . . . . . . . . . . . 8 Ray Huffines Chevrolet . . . . . . . . . . . . . . 2 Replica Plastics . . . . . . . . . . . . . . . . . . . 35 SATA . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Scorpion . . . . . . . . . . . . . . . . . . . . . . . . . 6 SCA Appraisal Company . . . . . . . . . . . 22 Southwest Autogroup . . . . . . . . . . . . . . 14 Subaru Wholesale Parts Dealers . . . . . . 9 Suzuki Wholesale Parts Dealers . . . . . . 35 Toyota Wholesale Parts Dealers . . . . . . 28 VIM Tools. . . . . . . . . . . . . . . . . . . . . . . . 37 Volkswagen of Tulsa . . . . . . . . . . . . . . . 32 Volkswagen Wholesale Parts Dealers . . . 34 Volvo Wholesale Parts Dealers . . . . . . . 38 Walcom . . . . . . . . . . . . . . . . . . . . . . . . . 26 Young Chevrolet . . . . . . . . . . . . . . . . . . 34
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www.autobodynews.com | OCTOBER 2010 AUTOBODY NEWS 3
OK Body Shops Hail-Damage Backlogged
Repair shops in Oklahoma are still trying to catch up with the colossal amount of work created by the May 16 hail storms which left thousands of cars in the area damaged, according to reports made by The Oklahoman. Almost 4 months later, some body shops are just getting caught up with the work. Cars made up about $80 million worth of damage costs for insurers, Southwest Insurance Information Services President Jerry Johns said. “From an insurance perspective it will go down as one of, if not the most significant weather-related events since 1999,” Johns said. “Obviously much of it was roof damage and things like that but vehicle claims were extremely high for those not fortunate enough to shelter their car or truck before it hit.” Some customers waited for weeks and even months to get their hail-damaged cars repaired, most body shops in the area were having people come in and schedule an appointment months in advance. “We’ve slowed down quite a bit, to about 1/3 of what we had initially, but there’s still a lot of work to be
Texas Recycling Facility Acquired
IESI Corp., a subsidiary of IESI-BFC Ltd., has announced that it has acquired Central Texas Secure Shredding and its recycling facility in Pflugerville, Texas. Central Texas Secure Shredding, which operates a document destruction business in a 20,000square-foot building, provides document destruction services throughout the central Texas area. In addition to shredding services, the company processes 150 tons of recyclables per day. The release notes that with the acquisition the facility will change its name to IESI Central Texas Shredding and Recycling Facility. IESI says that it plans to expand the facility’s current document destruction processing services to incorporate a fully integrated single stream recycling process to serve the Austin, Texas area by the third quarter of 2010. IESI, along with parent company IESI-BFC Ltd., have diverted more than 500,000 tons of material from landfills, including more than 300,000 tons of paper. IESI’s Seneca Meadows Tire Recycling center has processed more than 1.5 million automotive tires for re-use.
done,” said Bob White, Manager for Body Works Inc. in Oklahoma City. White said the focus after the storm was on cars that weren’t drivable because of broken windshields. Now the focus is on less-serious hail damage, such as dented hoods. “We’re still pretty scheduled out until November but we’re managing the jobs better than we were. Right after the storm we were scheduled out until December,” said White, “We’ve even been able to call some people in ahead of schedule now that the jobs have tapered a little bit more than in the beginning.” White also mentioned that Body Works has been able to start working back with some of their collision work that had to be put on hold after the spring storm. Some cars that haven’t been repaired might have remained on the road and could potentially pose hazards. It’s up to officers to decide whether to cite a driver for a cracked windshield, which is against the law in Oklahoma. Tickets are most likely to be written when the vehicle damage might impede someone’s ability to drive safely.
Texas: Misuse of Insurance Settlement Payments Increasing
The Texas Department of Insurance has issued a bulletin stating that misdirection, misapplication and improper use of insurance settlement payments appear to be on the rise, according to reports made by Insurance Journal. The bulletin is in response to a report from the State Bar of Texas that such incidents are increasing. In the one-year period ending in August 2009, the Bar’s Client Security Fund, which compensates clients whose funds were used improperly, paid over $266,800 to such clients. The department is encouraging all insurance companies issuing settlement payments, payable to both the insurance claimant and the claimant’s representative, to provide written notice to the claimant at the same time payment is made to a claimant’s representative. Such notice should state the amount and method of the payment and the name and address of the party to whom the payment is made. This process, called “Payee Notification,” notifies claimants whenever a settlement payment is made to both the insurance claimant and the claimant’s representative, but is issued to the claimant’s representative.
4 OCTOBER 2010 AUTOBODY NEWS | www.autobodynews.com
Progressive’s Round Two Against Coccaro On December 6, 2010, the legal team representing Progressive Insurance, headed up by Michael Nelson will once again travel to West Chester County, New York to present their claim of $2,800 in fraud stemming from the $34,000 repair of a one-year old Mercedes in 2005. The case had originally been tried in 2008 when a New York judge found in favor of the shop, North State Custom, and its owner, Greg Coccaro. The judge found that Progressive did not present sufficient and credible evidence to support the insurer’s claims of fraud against Coccaro and dismissed the case before the defense called their first witness. But the case now heads to trial once again after Progressive appealed the decision and won the chance to retry its case. “We are disappointed that the appellate court saw fit to overturn the judge’s decision,” said Coccaro. “I am confident that Judge Smith will see through Progressive’s scheme to discredit me and my company. I appreciate all the support and encouragement. We will see this thing through no mat-
ter what it takes so that consumers know they have a quality repair facility to go to that works for their best interest.” Coccaro’s attorney in the original case, Tony Mamo, had explained that under New York law, if Coccaro wins, he cannot recover his legal expenses, nor can he be awarded any money from Progressive. “If he wins, he just gets to walk away exonerated,” said Mamo. The highly publicized legal battle between Coccaro and Progressive Insurance involves not only Progressive’s charges of fraud in this case set for trial in December, but also involves a multimillion dollar lawsuit filed by Coccaro against Progressive for alleged deceptive business practices and patterns of violations of NY law. The discovery phase of the deceptive business practices case is nearly complete, according to Coccaro, and the depositions have also been completed. Coccaro said he expects that case to go to trial sometime early next year. Manhattan firm Anderson Kill & Olick has agreed to represent Coccaro in his case against Progressive.
DAVID McDAVID T H I S B R A N D S TA N D S F O R S AV I N G S
ACURA OF AUSTIN • Over $400,000 Parts Inventory • 15,000 Parts in Stock • Trained Experienced Crew
• In State Next Day Shipping w/Quick Local Delivery • Great Discounts
Hour: Monday - Friday 7 AM - 7 PM • Saturday 8 AM - 5 PM • Sunday Closed
Wholesale Parts Specialist: John Raygo 512-401-5976 Watts 800-575-3553 Parts 512-401-5976 Fax 512-401-5988 jraygo@mcdavid.com
ACURA OF PLANO • Over $500,000 Parts Inventory • 15,000 Parts in Stock • Trained Experienced Crew
• In State Next Day Shipping w/Quick Local Delivery • Great Discounts
Hour: Monday - Friday 7 AM - 6 PM • Saturday 8 AM - 5 PM • Sunday Closed
Wholesale Parts Specialist: Danny Waide Phone 972-964-6000 972-964-6044 Fax 972-964-6070 dwaide@mcdavid.com
LINCOLN MERCURY OF PLANO • Over $400,000 Parts Inventory • 8,000 Parts in Stock • Trained Experienced Crew
• In State Next Day Shipping w/Quick Local Delivery • Great Discounts
Hour: Monday - Friday 7 AM - 6 PM • Saturday 7:30 AM - 4 PM • Sunday Closed
Parts Manager: John Keith Phone 972-964-5000 Fax 972-985-3114 jkeith@mcdavid.com
HONDA OF FRISCO • Over $600,000 Parts Inventory • 11,000 Parts in Stock • Trained Wholesale Crew: Mario, Phillip
• In State Next Day Shipping w/Quick Local Delivery • Great Discounts
Hour: Monday - Friday 7 AM - 7 PM • Saturday 7:30 AM - 5:30 PM • Sunday 11 AM - 4 PM
Parts Manager: Dan Zieber Phone 972-731-3175 Toll Free 1-866-442-2711 Fax 972-731-3179 dzieber@mcdavid.com
HONDA OF IRVING • Over $900,000 Parts Inventory • 17,000 Parts in Stock • Trained Wholesale Crew: Gary, Marie, Jim
• In State Next Day Shipping w/Quick Local Delivery • Great Discounts
Hour: Monday - Friday 7 AM - 9 PM • Saturday 8 AM - 5 PM • Sunday 11 AM - 6 PM
Parts Manager: Dan Zieber Phone 972-790-6008 Toll Free 1-800-492-4464 Fax 972-790-6066 hondaparts@mcdavid.com
HONDA OF HOUSTON • Over $1,000,000 Parts Inventory • In State Next Day Shipping • 100,000 Parts in Stock w/Quick Local Delivery • Trained Experienced Crew • Great Discounts Hour: Monday - Friday 7 AM - 9 PM • Saturday 8 AM - 5 PM • Sunday Closed
Parts Manager: Scott Bentley Phone 800-444-1263 Fax 713-948-1949 wwood@mcdavid.com
NISSAN OF HOUSTON • Over 1.3 Million Parts Inventory • 28,000 Parts • Trained Experienced Crew
• Texas & Louisiana Next Day Shipping • Great Discounts
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Hour: Monday - Friday 7 AM - 6 PM • Saturday 8 AM - 5 PM • Sunday Closed
Parts Manager: Dick Graham Phone 800-231-9657 Fax 713-948-1949 nissanparts@mcdavid.com
www.davidmcdavid.com www.autobodynews.com | OCTOBER 2010 AUTOBODY NEWS 5
Continued from Front Page
NACE/CARS
higher than ever and the customer is fully in charge: they have specific expectations about service, convenience and communication. The multilingual needs of our country are more apparent than ever and the businesses that meet those needs will have a significant competitive advantage in the marketplace. McDonald’s presentation will be focused upon key generational segments and the Hispanic consumer. Attendees will learn about the Four Levels of Acculturation and the importance of relating to different cultures. Kelly McDonald is a recognized expert on multicultural marketing and business trends. McDonald also worked in the automotive industry for over 20 years with brands like Toyota, Nissan and Subaru in their sales and advertising department. She has knowledge of parts and services as well as industry terminology. McDonald’s speaking client roster includes: Toyota, Sherwin-Williams, Harley-Davidson, State Farm Insurance, AAA Travel, BlueCross BlueShield, and dozens of financial organizations and associations. McDonald will not be holding any seminars after her keynote speech titled; “The Changing Face of Your Business—Inside and Out” but will be moderating one of the forums on Sunday, October 10. More information about McDonald’s services can be found at www.mcdonaldmarketing.com. McDonald will be publishing her first book, “How to Market to People who Are Not Like You” in March of 2011. Other speakers that will host some industry seminars are: Angie Kilbourne, Bob Cooper, Tony Passwater, Chris Ortiz and Richard Flint. Chris Ortiz will speak on October 12th from 4:00 PM–5:30 PM on Introduction to Lean Auto Body. The seminar will focus on the 8 Wastes of Lean, Body Shop Performance Metrics, 5S and the Visual Body Shop, Kanban and Material Replenishment and Repair Flow. Ortiz will also speak on October 13th from 7:30 AM–10:30 AM on 5S and the Visual Shop. This course is a highly detailed curriculum covering the implementation of 5S and the vi-
sual workplace. 5S is an aggressive organization and cleanliness philosophy that has a profound impact on productivity and maximizing time. It is the foundational element of LEAN auto body and will be the catalyst for future ongoing improvements. Highly visual with lots of pictures of body shops and non-body shops. This is the most important LEAN auto body course. Chris Ortiz, President Kaizen Assembly, LLC, can be contacted at 360-715-2129 or 360-224-9245 or chrisortiz@kaizenassembly.com. Visit www.kaizenassembly.com. Bob Cooper will speak on October 10 from 1:30 PM–4:30 PM on THE BEST PAY PROGRAMS ON EARTH!™. Bob Cooper is an expert on keeping em-
6 OCTOBER 2010 AUTOBODY NEWS | www.autobodynews.com
ployees producing at peak performance. Cooper’s company works with successful shop owners and dealerships around the world. He will share some of their best-kept secrets when it comes to compensation programs. Cooper will also speak on October 12 from 7:30 AM – 10:30 AM on STOP DREAMING & START ACHIEVING™. Cooper will share the
leadership skills he’s learned from the most successful clients, and then used throughout his own career. Starting off as a technician, Cooper has grown a company that now spans the globe. Nowdays he speaks to many Fortune 500 companies, universities, and to the United States Army. Cooper is the founder and president of Elite; a worldwide company
that helps auto shop owners build more profitable, successful businesses. Cooper was one of the first to predict automobile leasing, the trend toward maintenance, the growth in remanufactured components and the resurgence in dealerships targeting the service business. To learn more about Bob and Elite, visit their website at www.EliteWorldwide Store.com or call (800) 204-3548. For additional event information, contact Hanley Wood Exhibitions at P.O. Box 612128, Dallas, Texas 75261-2128 or call 888.529.1641 or 972.536.6444. NACE and CARS run from Oct. 10–13. For more information about NACE and CARS go to nacexpo.com and carsevent.com.
TX-Based Service King Plans National Expansion Dallas-based Service King plans to embark on an ambitious national expansion led by new president Cathy Bonner that could double revenue over the next five years according to reports in the Dallas Morning News. The chain of collision-repair centers, founded in 1976 by company chairman Eddie Lennox, recently opened seven shops in Houston and the success of those centers—some were profitable after three months— prompted Lennox to consider the leap outside Texas. Most of Service King’s 31 shops and 1,000 employees are in the Dallas area. The privately held company, which says it has a 20 percent market share in the area, expects to repair about 70,000 vehicles and earn $150 million in revenue this year. “We were able to experiment with a lot of things in Houston that might work for us nationally,” said Lennox, 57, a former body-repair man who started Service King in a three-bay tin building in West Dallas. Bonner, a Dallas native, has no experience with auto repair. But she served as executive director of the
Texas Department of Commerce from 1991 to 1994, founded The Women’s Museum in Dallas and has started and managed three marketing and communications firms. She also is Lennox’s sister-in-law so she knows the Service King culture, Lennox said. Bonner’s primary responsibility will be to develop a strategic plan for growth, determining which markets Service King should enter and overseeing that plan. “This relates to growth and getting someone who can help us achieve it — and not ex-technicians like myself,” Lennox said. He believes that planning for major growth requires knowledge that he and his managers don’t have. “Eddie approached me and convinced me I don’t need to know how to fix a car,” said Bonner, 60, a finalist in 2007 for The Dallas Morning News’ “Texan of theYear” award for her work to pass legislation creating the Cancer Prevention and Research Institute of Texas. “I just get to build on their success.” Bonner said she intends to have a growth strategy plan completed by the
first of the year. “I had a lot of experience identifying new markets and bringing in corporations when I was with the state,” said Bonner, who was part of a team of officials in the early 1990s that helped convince General Motors Corp. to not close its assembly plant in Arlington. Service King offers several programs that Lennox says are unique— including a computer program developed by vice president Jeff McFadden that allows insurers to monitor and audit the entire repair process. “We also have some operations programs that [vice president] Danny McKinley put into place that no one else does, and those products really made me more bullish on growth,” Lennox said. Despite its moves to get larger, Service King has no interest in going public, said Lennox, who holds 80 percent of Service King’s stock along with his wife. Managers throughout the company own the remaining 20 percent. “We’re well capitalized, and we have good banking relationships,” he said. “We envision doubling our revenue in three to five years.”
August Sales Down vs. C4C
Automakers struggled through another disappointing month in August, as weak housing and other economic data discouraged consumers from making big purchases. Auto sales tumbled from prior-year levels, as expected. Compared with August 2009, when the government’s “cash for clunkers” program fueled a surge in demand, last month’s sales were down 21 percent. But the selling pace also slowed from the previous month, slipping to 11.47 million cars and light trucks, on an annual basis, from 11.54 million in July. The selling rate last August was 14.17 million vehicles, with cars accounting for 57.6 percent, according to Autodata Corp. This August, as gas prices held steady in a sluggish economy, light truck sales accounted for 49.7 percent of the total, up from 42.4 percent a year ago. Chrysler Group LLC, Hyundai Motor Co. and Ford Motor Co. fared best in a difficult market. Chrysler was the only major automaker to report a sales increase last month, a jump of 6.9 percent, because automaker hardly benefited from the “cash for clunkers” program last summer.
www.autobodynews.com | OCTOBER 2010 AUTOBODY NEWS 7
TX Groups Merge into Largest Dealer Association
The new-car dealer groups in Dallas and Tarrant counties have merged into the Dallas Fort Worth Metropolitan New Car Dealers Association according to reports made by the Dallas Morning News. Dealers voted overwhelmingly to approve the merger, which is significant because the association will represent about 250 dealers in 11 counties with annual sales of more than $10 billion. The new association is the largest dealer group in the state and should have a strong voice in state and national legislative affairs that affect the auto business. “D-FW is now viewed as a single market, with many of our dealers having franchises in both Dallas and Tarrant county areas,” said Sam Pack, former chairman of the New Car Dealers Association of Metropolitan Dallas and a driving force in the formation of the new group. Pack, who owns Ford dealerships in Dallas, Tarrant, Collin and Denton counties, and other dealers began considering the merger about nine months ago after Drew Campbell retired as president of the New Car Dealers Association of Metropolitan Dallas after a 25-year tenure.
Lee Chapman, 50, the former president of the Tarrant County dealers association, will head the new association. The primary goals of the new association are largely unchanged — promoting and representing new-car dealers. “I’m really excited,” said Chapman, who was president of the Tarrant County group for 26 years. “This is one marketplace, and we want to help dealers sell more cars and help consumers have a positive sales experience.” Among other initiatives, the new association intends to call more attention to dealers’ good deeds — “everything they return to the community, from supporting Little League teams to donating to hospitals,” Chapman said. Fort Worth and Dallas-area dealers will still put on separate new-car shows. With annual sales approaching 400,000 vehicles, dealers in the Dallas-Fort Worth region sell as many vehicles as those in some small states. “It just made sense to combine two smaller associations into one of the biggest and strongest in the nation,” said Tom Durant, a board member of the former New Car Dealers Association of Greater Tarrant County and owner of Classic Chevrolet in Grapevine.
Car rental company Dollar Thrifty Automotive Group, Inc. raised August 31 its corporate adjusted EBITDA forecast for the full-year 2010, citing strong operating performance in the months of July and August, and the continuing projections of lower fleet costs. The company also provided an update on fiscal 2011 outlook. The Tulsa, Oklahoma-based company raised its fiscal 2010 forecast for corporate adjusted EBITDA, excluding merger-related expenses, to a range of $240 million to $260 million from the prior guidance in the range of $200 million to $220 million. The company had earlier raised it guidance in early July. Dollar Thrifty attributed the increase to projected lower fleet costs, and the continued strength in operations and ongoing cost control efforts at the company. The company also noted that it continues to expect vehicle rental revenue for the full year of 2010 to increase 1% to 2% from last year. Meanwhile, the company lowered its expected fleet cost target to a range of $230 to $240 per unit per month from the prior forecast of $245 to $255 per unit per month. Meanwhile, the company also lowered its estimate for vehicle de-
preciation per unit per month to a range of $270 to $290 for the third and fourth quarters of 2010 from $300 to $310 per unit per month, citing continued strength in residual values and favorable trends in vehicle disposition results. For fiscal 2011, Dollar Thrifty reaffirmed its previously announced fleet cost estimate of $300 to $310 per unit per month. The is expected to lead to corporate adjusted EBITDA for the full-year 2011 to range between $186 million and $198 million. The company added that it expects the used car market in 2011 to be based on solid fundamentals, though less robust than now, as demand for used cars is expected to be firm, while supply is expected to be somewhat constrained. Car rental companies are slowly recovering from the recession, which battered demand from business and leisure customers, after having struggled in recent years due to reduced travel budgets, falling used-car prices and large debt loads. DTG closed Tuesday’s regular trading session at $47.04, down $0.69 or 1.45% on a volume of 1.18 million shares, higher than the three-month average volume of 0.89 million shares.
Dollar Thrifty Auto Group Raises 2010 Outlook
8 OCTOBER 2010 AUTOBODY NEWS | www.autobodynews.com
Claims Flood Insurers After Hermine Hits Texas The storm that dumped several inches to more than a foot of rain on many parts of south and Central Texas on the night of September 8 has also left insurance companies with a rising number of damage claims according to the Texas Statesman. Austin, San Antonio and Killeen were hit exceptionally hard with record rainfall from the storm, according to the Insurance Council of Texas, a trade association of about 500 property and casualty insurers. As of 1 p.m. September 8, State Farm policyholders in Texas had filed about 960 property claims and about 50 auto claims, said Patti Kelly, a spokesperson for the state’s largest insurer. The property claims included 170 in Austin, 50 in Georgetown, 30 in Round Rock and 18 in Cedar Park, Kelly said. Kelly said updated figures would be available at a later date. Allstate also has seen a spike in claims, said Kristen Beaman, a company spokeswoman in Irving. “Travis County is one of our hardest-hit areas in the state, as far as claims and property damage are concerned,” Beaman said, though figures were not available.
Allstate and State Farm declared the event a catastrophe, meaning the companies are sending in additional employees to answer questions and help customers file claims as quickly as possible. Farmers Insurance executives said September 8 that the company had mobilized a team of specialized claims workers and equipment to help customers throughout Texas who were affected by the rain and strong winds stemming from the storm. Mark Hanna, a spokesman for the Insurance Council of Texas, said wind and flood claims were more prevalent south of San Antonio, while areas to the north were seeing more flood- and rain-related claims. Meanwhile, the southern point of Texas was also watching the path of Hurricane Karl as it made its way along the Gulf Coast of Central Mexico September 16. Although Hurricane Karl is quite a bit smaller than Hermine, it still could bring heavy rains to southern Texas as it makes its way north which could cause flooding and mudslides in coastal areas. For more information and hurricane watch maps please visit http://www.nhc.noaa.gov/.
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www.autobodynews.com | OCTOBER 2010 AUTOBODY NEWS 9
Ameriprise Fined $71K For Discount DRP Incentives The Colorado Division of Insurance (CDI) has levied a fine of $71,100 against Ameriprise Auto & Home Insurance Co. for steering by offering discounts on deductibles for utilizing direct-repair program (DRP) auto repair shops, according to a report from the CDI. According to the report, Ameriprise offered an incentive program between September 2006 and January 2010 in which customers received a $100 discount off their collision deductibles for using one of the insurer’s DRP facilities. A total of 711 consumers participated in the program during that period, and Ameriprise’s $71,100 fine is comprised of $100 for every consumer that received the discount in return for using one of its shops. In addition, the company has been ordered to pay a 10 percent surcharge of $7,100 directly to the CDI. CDI initially received a complaint in January 2010 from an Ameriprise customer who said that he/she was offered the $100 discount for selecting a repair facility on the insurer’s DirectRepair Program (DRP), and an investigation was launched shortly after, according to the final order. “The Division alleges that … the deductible reduction is considered an
inducement by incentive to utilize a repair facility participating in the DRP,” writes CDI in its official report. In addition to the fine, Ameriprise was ordered to cease use of the incentive immediately, and the fine is due within 30 days. “While the repair shops contracted with Ameriprise may have done good work, the anti-steering law ensures that consumers, not insurance carriers, are in the driver’s seat to decide where they want repairs done,” says Marcy Morrison, Colorado insurance commissioner.
ASRW Says 2011 Event Will Remain in October
Automotive Service and Repair Week (ASRW) announced its 2011 event will be held Monday, Oct. 17- Weds., Oct. 19, 2011, at the Mandalay Bay Convention Center in Las Vegas, NV. The 2011 ASRW education program will begin on Sunday, October 16. “In a year filled with changes in the automotive industry, we feel it’s important everyone knows ASRW, NACE and CARS are here to stay,” states Ron Pyle, ASA president, adding “we feel this event deserves its own week.”
10 OCTOBER 2010 AUTOBODY NEWS | www.autobodynews.com
Sherwin-Williams Announces Next A-Plus Workshop
Sherwin-Williams Automotive Finishes announced it will hold its next A-Plus™ University ‘Winning the Keys’ Estimating and Profitability Workshop in New Orleans on October 26 and 27, 2010 at the Renaissance New Orleans Arts Hotel in Louisiana. To meet the challenges collision repair facilities face in today’s economic climate, Sherwin-Williams designed its ‘Winning the Keys’ workshop to specifically increase business at the front end of the body shop. It focuses on three critical profit areas of importance to a successful collision facility: customer service, selling skills and estimating. The workshop has been specifically designed for collision repair facility owners, managers, estimators and customer service representatives who are interested in improving their closing ratio and creating loyal customers. Attendees will learn to utilize proven sales techniques that have been custom-tailored to the collision repair industry and designed to improve the effectiveness of their selling skills during the estimating process. The workshop also provides each attendee with detailed information and the tools necessary to write and
negotiate more profitable estimates. “Winning the Keys is a great class. I have already tripled the amount of money spent on the class in the first three days on additional charges we were not being paid for,” said Dennis Johnson, Body Shop Manager, Freedom Super Body Shop, Chesapeake, Va. The ‘Winning the Keys’ course has been built by leading collision repair industry professionals and will offer attendees the opportunity to share best practices with their industry peers throughout the two-day learning session. Breakfast and lunch will be provided each day with a group dinner scheduled for the first evening. Course curriculum includes the following: Achieving Service Excellence, The Road to Sales Success and Estimating Solutions for Profit. “We are very excited about this A-Plus University offering,” said Brandon Devis, A-Plus Network Program Manager for Sherwin-Williams Automotive Finishes. To register for the A-Plus University ‘Winning the Keys’ workshop online, go to www.sherwin-automotive.com. For more information on the A-Plus Network, call (216) 332-8580.
Aftermarket Collision Parts Industry Responds to Consumer Reports Article The October issue of Consumer Reports ran an article called Are low-cost replacement bumpers safe? in which it stated “some safety experts are concerned about the internal bumper parts: a bumper beam, bumper isolators, foam, crush cans, brackets, and radiator supports. In a frontal crash, those pieces work together to properly transmit the crash pulse, or vibrations from impact energy that moves through the vehicle, to air-bag sensors and away from the passenger compartment to reduce or prevent injury. “There’s a lot of engineering that goes into making a crash-protection system,” says David Zuby, chief research officer for the Insurance Institute for Highway Safety. “You can’t willy-nilly change those parts because the system may not work the way it was designed.” The article went to say that “Ford reported that its engineers had found alarming differences in two aftermarket parts tested. One bumper bar was made of mild steel, instead of the ultrahigh-strength steel that the original Ford part uses. A radiator support was
made of plastic instead of the magnesium used in the Ford part. In computer-simulated crash tests, the fakes changed the timing of the crash pulse, which might affect air-bag deployment. “Differences in material could result in a difference in the timing of the air-bag deployment,” says Mike Warwood, Ford’s parts marketing and remanufacturing manager. “The air bag might deploy earlier than it should or later than it should. Or it might deploy when it shouldn’t or not deploy at all when it should.” “Ford’s testing follows a demonstration last year by Toby Chess, a master collision-repair instructor, who used a reciprocating saw to easily slice through an aftermarket bumper bar. The saw couldn’t cut through the original automaker bumper bar.” Now a major automotive aftermarket association, ABPA, has responded to the Consumer Reports article. Eileen A. Sottile, co-chair of the ABPA Legislation & Regulation Committee, issued the following statement: “As a publication that purports to provide a “reliable source of informa-
tion consumers can depend on to help them distinguish hype from fact and good products from bad ones,” Consumer Reports has sorely missed the mark with its piece, “Are low-cost replacement bumpers safe?,” featured in the October 2010 article, “Save on car insurance.” The aftermarket collision parts industry maintains the highest standards of quality and safety in the parts we provide to the collision repair industry. In doing so, we also ensure that there is an economical parts option available in the marketplace — a benefit that is extremely important to most Americans, whether they are fixing their own vehicle or having work done by a repair facility. The availability of aftermarket parts also helps keep the prices of car companies’ replacement parts lower, allowing for more vehicles to be repaired rather than declared total losses, thus avoiding the financial stress car owners face when they are left to pay the balance due on the loans of their totaled vehicles. Consumer Reports bases its highly questionable recommendation
that consumers “demand that they [aftermarket parts] be replaced with original equipment,” on egregiously unscientific tests and unwarranted criticism from organizations that have a significant financial stake in the outcome of the debate on aftermarket parts: Ford Motor Company’s hypothetical assertions supported only by computer simulations of a couple of parts merely represent one more play by the company to create a monopoly for its own replacement parts; and quotes from the Insurance Institute for Highway Safety appear to be based on presumption rather than actual research and factual data. Rather than providing a reliable source of information for consumers, Consumer Reports is doing nothing more than re-reporting unsubstantiated hype from fierce competitors. I expect this magazine to be held to a higher standard, and hope that Consumer Reports will involve the aftermarket industry in any future reporting on this issue and uphold its responsibility to draw its own unbiased conclusions.”
www.autobodynews.com | OCTOBER 2010 AUTOBODY NEWS 11
Management Training Series: When Expressions Come True
I write this story as an example of what not to do. I also write this story as a fable, to protect the indignant. Therefore, it starts like this:
Once
upon
a
time, in a far off land, there was a Larry Williams kingdom which had existed for two generations. The business of this kingdom had grown over the years, and the castle was now far too small to fulfill all of the kingdom’s needs. The present king needed to expand his castle. He called in all types of workmen, and they labored together for many weeks in order to enlarge the castle. In the course of their various labors, they attempted to communicate and coordinate with each other. Most of the time things went well, but occasionally there were breakdowns. This is the story of the result of one of those communication errors. Long, long ago, the king’s father had decided to install over his ground
floor office, a small apartment with a bath, a bed, and a private stairwell. The present king used it primarily for storage, but valued the privacy of his own bathroom. He was a quiet man, happy at his desk, and few of his subjects cared to disturb him. During the expansion of his castle, there were of course, necessary changes made to the existing infrastructure. Intermittently, the subjects would lose their water, power, and other services, but most of the time there was warning of these events, and they were dealt with as almost routine. This particular day, however, was not routine. Unknown to anyone except for two of the workers, it became necessary to reroute the plumbing from the old apartment area. These pipes were located in the area between the first and second floors of the castle. Here is where the communication breakdown occurred. The workers assumed that the old pipes were seldom used, and that there would be no need to climb down and find the overseer; post notices, etc. They thought that their repairs would be completed
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quickly and that no one would notice or even care about their work. They were sadly mistaken. They had completed half of their work, and clean, fresh water was again available to the old apartment. Now it was lunch time. Both men took a well deserved break, as working in the crawl space between floors was extremely difficult. They relaxed and talked to each other, listening to the sounds of the other subjects working below. Those subjects had no idea of their existence, and took no notice of them, even though the work was directly over their heads. Now it came to the king the urge to use his apartment’s facilities. He saw no need, nor had he been informed of any need, to change his normal habits. He climbed the stairs, and sat upon his throne. For many moments there was nothing unusual, and all went well. The king finished his duties, and performed the final gesture, disposing of the evidence. At this point, my story brings fantasy to life. Several gallons of the king’s bounty went down the pipe as usual,
until it came to the severed end of the pipe, between the floors. It missed the two men eating their lunch and all would have been well, except for two things. The men naturally shouted in alarm, but their noises did not have the desired effect. Instead of dispersing the subjects below, their shouts drew the attention of all in the vicinity, gathering them to the source of the shouting. The second problem was the force of gravity. This force pulled everything down from the crawl space, through the false ceiling panels, and onto the heads, bodies, and workspace of the subjects below… yes, at that moment every crude joke, tagline, and job description came true. You can understand, no further work was accomplished that day. Every fable needs to teach a lesson. You might assume this lesson to be one about communication, planning, or other such items; it is not. The lesson from this fable comes after the event. The king, who must have been informed of the results of his actions, never said a word to his
See Management Training, Page 15
www.autobodynews.com | OCTOBER 2010 AUTOBODY NEWS 13
John Yoswick is a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). He can be contacted by email at jyoswick@SpiritOne.com.
Industry Insight
Automaker Announcements Carry Implications For Repairers with John Yoswick
A number of automakers in recent weeks have issued bulletins, launched programs or made announcements that could impact collision repairers —whether at dealerships or independent shops. Here’s a wrap-up of this recent news from the OEMs.
Mercedes The slight rebound in vehicle leasing in the last few years is seen as good news for collision repairers because consumers tend to have damage on leased vehicles repaired. But Mercedes-Benz now offers a new lease protection product that waives up to $7,500 in wear-and-tear charges and up to $200 in missing parts on a vehicle being returned at the end of a lease. Unlike other lease protection plans, this waiver doesn’t require the consumer to wait to get reimbursed for the wear-and-tear charges they pay out of pocket. That’s likely to make
the program more popular with dealers, who have found any money the customer has to pay out just decreases their down-payment on the next vehicle.
Volkswagen Volkswagen of America has launched a certified collision repair facility program for its dealers and independent body shops. The automaker says the national launch follows a pilot program with 15 shops. Certification under the program requires nomination by a dealer, specific technician training, use of VW-approved equipment, and an onsite inspection. Certified shops will be listed on VW’s website and will have access to vehicle-specific training on a dedicated program website. Volkswagen will also provide customers with free 24hour towing of vehicles under warranty to its certified shops. Dealers
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can nominate a shop (or independent shops can request more information) by contacting Volkswagen at VWcollisionparts@VW.com. Ford Ford’s latest findings regarding nonOEM structural parts have been widely reported. But while non-OEM part advocates are quick to point out that Ford’s testing involved only “computer-simulated” crash testing, Ford hasn’t ruled out doing some actual crash testing. In discussing such testing, Paul Massie, collision product marketing manager for Ford, said he recognizes there is ample competition within the company for the research time and funds that would require. “Our engineers, our resources, our safety department are all dedicated to building the next generation of Ford vehicles,” Massie said. “There
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aren’t extra resources to stop what they’re doing and look backwards, so [looking at it] shows you the importance of this issue.” Honda American Honda is urging collision repair shops to check for any applicable safety recalls when repairing a Honda or Acura vehicle. The automaker attempts to notify the current registered owner of any vehicle being recalled, but said not all owners receive such notices. Recall information from Honda is available by VIN at www.recalls.honda.com or www.recalls.acura. com. Recall information for all makes of vehicles also is available through the Big Three estimating systems or through the NHTSA (www-odi.nhtsa. gov/cars/problems/recalls/recallsearch.cfm). Positions on Parts Honda, Hyundai, Toyota and Nissan
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are among the automakers to recently issue bulletins or position statements regarding the use of crash parts used in the repair of their vehicles. “Hyundai Motor America does not support the use of aftermarket, imitation or recycled collision repair parts,” the company’s statement reads. “The use of such parts or other non-original Hyundai equipment for the repair of any collision-damaged vehicle may negatively affect crashworthiness and occupant safety during a collision therefore is not supported by Hyundai. Additionally, Hyundai does not support the use or re-use of components removed or recycled from an existing collisiondamaged vehicle.
Like the Hyundai statement, the Nissan memo to its dealership parts managers states warns that the parts of the vehicle are designed to work together as a system and integrating non-OEM parts into these systems can change the crash performance in a future collision. Nissan said this is particularly true “with regard to safety and structural components. American Honda earlier this year issued a position statement, similar to one from Toyota late last year, that it does not support the use of non-OEM or used structural parts or supplemental restraint system parts in the repair of its vehicles. But in August, Honda also issued a bulletin more broadly cautioning against the use of “aftermarket, coun-
terfeit or gray-market” parts in the repair of Honda or Acura vehicles. That prompted the Automotive Aftermarket Industry Association (AAIA) to complain to the Federal Trade Commission (FTC). The AAIA says Honda’s statements violate the Magnuson-Moss Warranty Act by saying failure to use Honda replacement parts will cause consumers to lose warranty coverage on their vehicle. Honda’s position statements do not say the use of non-OEM or salvage parts void the vehicle’s warranty. They say Honda’s warranty does not cover any part not purchased from an authorized Honda dealer, and that Honda is not responsible for “any subsequent repair costs associated with
vehicle or part failures caused by the use of parts other than Honda parts purchased from an authorized Honda dealer.” But Kathleen Schmatz of AAIA is asking the FTC to force Honda to retract the statements, saying they are using unsubstantiated warnings. “To our knowledge, Honda has provided no specific evidence to support their claim that there are problems with use of non-Honda aftermarket parts for their vehicles, or that use of such parts creates warranty-related issues for their customers,” Schmatz said.
www.autobodynews.com Continued from page 12
Management Training
subjects. Without any word from the king, the subjects were free to think the worst. They waited in vain for any sign of his distress, embarrassment or concern. Understand that it was never his intention to initiate this event, it was an accident. But the result of his silence was even worse than the event itself. He was perceived as uncaring and cold. He lost the respect of his entire kingdom. Even the relatives of the subjects working in that department were offended. Construction slowed, permits were delayed, sales slowed; subjects left for better lands. The moral is clear. If you are a manager, at any level, and an employee suffers due to your actions, apologize. An apology costs the giver nothing, and gives the receiver everything. Admitting responsibility for your actions—even accidental ones—is a sign of moral character. Your employees will know that you care, and will return your consideration with their loyalty. You have the power. Your decision in a crisis can change an event from a catastrophe into a shared joke, or just as easily destroy or enhance your reputation. See Larry’s previous articles go to www.autobodynews.com > content > distinctive-dealerships.html Larry Williams is an innovative parts manager with national awards and over 30 years of experience in creating and managing profitable departments. He can be reached for consultation at ljoew2@gmail.com.
www.autobodynews.com | OCTOBER 2010 AUTOBODY NEWS 15
On Creative Marketing
Tom Franklin has been a sales and marketing consultant for forty-five 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
Can a Person-to-Person Approach Bring in Business? with Thomas Franklin
A reporter in Washington D.C. recently reported that Illinois Republican Congressman Timothy V. Johnson makes one hundred or more phone calls to his constituents every day. He calls from home, the office and the airport. He calls while waiting in traffic in his car, while working out on his treadmill, and while walking through the Capitol. He says, “I think a good many of my colleagues spend too much time talking to each other and not enough time talking to the people they represent.” Many years ago I briefly worked with a charitable organization that had every employee who had a few free moments call some prior contributors. Another private school I came in contact with had a similar policy of having idle employees personally call prior and potential students. Both of these organizations attributed a large
degree of their success to these phone calls. In this day of unwelcome “robocalls” and uninvited phone solicitations, can calls like this be effective? The fact that the calls continue already tells you that they must produce results or they wouldn’t be continued. Could a body shop produce similar results if idle employees called prior customers? A shop owner might complain, “I have thousands of prior customers. I couldn’t possibly call them all.” Congressman Johnson has 653,647 constituents. If he called 100 of them every day for four years, he would still only reach 25% of them, but the calls he has made have kept him getting re-elected for years. Obviously for a body shop it would be most effective to call the repeat and most profitable prior cus-
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tomers, but an old sales law says the volume of business coming in is directly proportional to the amount of communication going out. Any calls going out would be better than none at all. So, assuming you decided to try this calling approach, what do your people say when they call? A prior client of mine had a practice I haven’t run across in any other shop. After every repair he told the customer he would be calling in about a month to have him or her bring the vehicle back to buff and polish the repaired area. For one thing, he said this allowed him to make one more check on the quality of the repair and catch any potential problems, plus he could use the opportunity to press for possible referrals to an employer, employees or just family and friends. But when they came in he also suggested they do a complete detail of the entire vehicle,
and he frequently sold the customer on doing it. Even a year after a repair, very few customers would refuse an invitation to come in to have a repair checked for durability and possibly a free buff and polish. The cost of this free service should be more than offset by detail sales. Best of all, these calls can be made by just about any employee since no technical knowledge is needed. The next level of call could be considered to actually be a sales call, but disguised as an information call. Prior customers are called to inform them of new services and technology available at the shop now. If the shop has added or upgraded alignment equipment, the customer can be invited to come in for an alignment at a discount. Since more car owners are now upgrading their existing vehicle rather than buying new, the call could See Person-to-Person, Page 24
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Highway Deaths Fall to Lowest Level Since 1950 Traffic deaths have plummeted across the United States to levels not seen in more than a half-century, spurred by technology, safety-conscious drivers and tougher enforcement of drunken driving laws according to reports made by the Associated Press. The Transportation Department said September 9 that traffic deaths fell 9.7 percent in 2009 to 33,808, the lowest number since 1950. In 2008, an estimated 37,423 people died on the highways. Government and auto safety experts attributed the improvement to more people buckling up, side air bags and anti-rollover technology in more vehicles and a focus in many states on curbing drinking and driving. Economic conditions were also a factor. Transportation Secretary Ray LaHood called the new data “a landmark achievement for public health and safety” but cautioned that too many people are killed on the road each year. “While we’ve come a long way,” he said, “we have a long distance yet to travel.”
Forty-one states, the District of Columbia and Puerto Rico saw reductions in highway fatalities, led by Florida with 422 fewer deaths and Texas, down 405. The rate of deaths per 100 million miles traveled also dropped to a record low. It fell to 1.13 deaths per 100 million miles in 2009, compared with 1.26 the year before. Year-to-year declines in highway deaths have occurred in previous economic downturns, when fewer people are out on the road. Traffic deaths decreased in the early 1980s and early 1990s when difficult economic conditions led many drivers to cut back on discretionary travel. Last year’s reduction in fatalities came even as the estimated number of miles traveled by motorists in 2009 increased 0.2 percent over 2008 levels. Barbara Harsha, executive director for the Governors Highway Safety Association, said the new data was “particularly encouraging given that estimated vehicle miles traveled actually increased slightly in 2009,
18 OCTOBER 2010 AUTOBODY NEWS | www.autobodynews.com
thus exposing the public to greater risk on our roadways.” LaHood said the weak economy was a contributing factor as many Americans chose not to go out to bars and restaurants after work or on the weekend. But he said many motorists are more safety conscious behind the wheel. About 85 percent of Americans wear seat belts while benefiting from safety advances found in today’s cars and trucks. Side air bags that protect the head and midsection are becoming standard equipment on many new vehicles. Electronic stability control, which helps motorists avoid rollover crashes, is more common on new cars and trucks, while some luxury models have lane departure warnings and other safety features. Dave McCurdy, president and CEO of the Alliance of Automobile Manufacturers, which represents General Motors, Toyota, Ford and others, said the improvements were “the payoff from years of manufac-
turer-driven safety improvements, like antilock brakes and electronic stability control systems” along with efforts by law enforcement to keep the roads safe. LaHood, a former Illinois congressman, has also sought to crack down on distracted driving, urging states to adopt stringent laws against sending text messages from behind the wheel, as well as other distractions. The annual highway safety report also found: -Motorcycle fatalities broke a string of 11 years of annual increases, falling by 16 percent, from 5,312 in 2008 to 4,462 in 2009. -The number of people injured in motor vehicle crashes fell for a 10th consecutive year. An estimated 2.2 million people were injured in 2009, a 5.5 percent decline from 2.3 million in 2008. -Alcohol-impaired driving deaths declined 7.4 percent in 2009 to 10,839 deaths, compared with 11,711 in 2008. Alcohol-impaired fatalities fell in 33 states and Puerto Rico.
Service, Service, Diagnostic Di Diagnostic gnostic and an d Mechanical M e chanical ch aniccal al NEWS nd Mec echanical Mech ech ec hanical ca
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Mobile Airbag Company Relies on Autoland Scanners Autobody News
by Ed Attanasio
An essential piece of equipment can make or break any company. If a body shop has problems with a lift or a
October 2010
works for require either troubleshooting or diagnostics to re-set airbag lights before they can complete the repair and return the vehicle to the customer, he said. Car dealers and in-
Rod Salas relies on his iSCAN II to run Airbag Tech, his LA County-based mobile airbag repair and service company
paint gun, it can slow down their production significantly. That’s why Rod Salas, owner of an airbag mobile service company in Southern California, knows that his scanners have to work on every service call or he’ll lose time and of course, money. That’s also why he said he’s happy to use scanners made by Autoland Scientech, a worldwide leader in diagnostic tools since 1990. Salas, 46, has been working in the airbag industry since 2000, and in 2003 he started Airbag Tech in Downey, CA, servicing all of Los Angeles County. It’s a small company with two vans and several on-call part-time employees, including his son Rod Jr., 20, but the company is busy even in a recession, he told Autobody News. Half of Airbag Tech’s clients are collision repair companies and most of the time the body shops Salas
dividuals who find him on the Internet make up the remainder of his business, Salas said. In the beginning, body shops in L.A. weren’t getting involved with installing airbag systems, Salas said. “They would call me and say can we do an installation or come in to see what this vehicle needs. We would give them a list and they would buy the parts, so they could make some money. And then we’d come back and do the work. Now, to make more money, body shops are doing their own installations themselves, but sometimes they make mistakes. That’s when they call me and I’ll either service the airbag, perform troubleshooting and/or do the diagnostics to find the problem and clear the light.” It’s always about the light, Salas explained.” 99% of the time the light is on and they don’t know why. Most
of the time it’s the last thing they’ve done and they’re in a rush to get the vehicle ready for the customer. So, I get down there as fast as possible, half-hour to 45 minutes most of the time, to check those codes and do whatever I need to do to get the job done. That’s why I have the Autoland scanners, because they work well for almost all of the cars we encounter.” Salas was initially introduced to Autoland’s scanners a decade ago, he said. “When I started working for an airbag company ten years ago, I began to use one of Autoland’s scanners and I learned how to use it very quickly. The technology was a lot different back then and it was a little black scanner that would just read the codes. We had to look up the codes and figure out what the problem was. “So, when I started my own business, I invested in all Autoland scanners,” Salas said “First I had the iSCAN and then later I got the iSCAN II. Ease-of-use and great cov-
they’re only for backup purposes. I use the iSCAN II for pretty much all the cars I diagnose. When it comes to Honda, Mercedes-Benz, Audi, Volvo and BMW, the iSCAN II is the only one I will bring with me to the customer’s shop.” Was his investment in his Autoland scanners a good one, we asked Salas. “They’ve paid for themselves many times over by now, definitely. It cost us roughly $6,000 for the iSCAN and the package that comes with it, but it also includes a great warranty and software updates as long as we have the device.” Salas is obviously enamored with his iSCAN scanner, a tool that he can use to make money on a daily basis, but he also values the thorough support that Autoland offers him, so that he can make sure his device will work well even under heavy usage, he said. “They can train you how to use these scanners over the phone. One of my part-time guys learned how to operate the scanners in less than one
The software associated with Autoland Scientech’s iSCANII system supports 40 automotive manufacturers
erage—those are probably the best things about these scanners. I have some other companies’ scanners, but
day. It was a very simple step-bystep process and they make it very easy to understand. Also, I can get
www.autobodynews.com | OCTOBER 2010 AUTOBODY NEWS 19
my iSCAN II updates downloaded directly over the phone every 3-4 months free for three years. The support offered by Autoland is very good and we’re never worried about getting stuck out in the field without one. Richard Zenteno, the Marketing Director for the Americas for Autoland Scientech U.S.A., said he has recently seen a movement throughout the country in which body shops are using companies such as Airbag Tech to clearing codes and servicing their airbags. And many shops are also buying Autoland scanners themselves to do all their diagnostics in-house, he said, to retain more control of the repair and capture more revenue in the process. Autoland Scientech was founded 20 years ago, developing engine analyzers initially, Zenteno said. “We’ve been doing something right in this business for two decades to be around this long. We’re leaders in this area and our excellent reputation is the result of hard work.” Zenteno has seen body shops thrive in the world of diagnostics by embracing his company’s line of scan-
ners, he said. “The iSCAN II is a multi make scan tool that offers comprehensive coverage ranging from engine, transmission, ABS and most importantly airbags. In the body shop, it is essential to have a low cycle time and this tool helps lower the cycle time plus keep the profits in house. With our tool you’ll be able to read the current fault codes on many systems allowing you to quickly understand the problems the vehicle.” Autoland’s scanners are designed for ease-of-use and to be easily understood, Zenteno said. “The iSCAN II is a very intuitive scan tool that is fast and easy to learn. We have online step-by-step instructions to perform certain procedures and various visual guides to enable the customer to quickly get up to speed with how to connect. I believe this is one of the most feared obstacles to overcome however scanning and erasing a vehicle is very easy. You simply must connect to the vehicle, select the make and model and the system that you want to diagnose the select the function like reading or clearing codes and you are on to the next vehicle. This can be done in
20 OCTOBER 2010 AUTOBODY NEWS | www.autobodynews.com
less than five minutes and you can charge one hour for diagnosis and save the time to send two people to the dealer and wait for the vehicle to be ready.” Buy a iSCAN II and you can forget about your scanners for a long time, Zenteno said. “Autoland designs products that are very durable and most of our customers have had our tools for 10-15 years. When you invest in a machine of any type in a body shop, you don’t want to have to questions as to whether it will perform each time you use it and that’s why we’ve built these scanners to hold up in any environment.” By using Autoland scanners, can body shops build their business and improve their reputation for doing everything in-house, including diagnostics? “Like I mentioned before, cycle times is a critical compo-
nent of the operation if you want to keep a good a stable relationship with the insurance carriers,” Zenteno said. “The other critical component for the business is profitability. With our scanning equipment you are attacking both subjects simultaneously.” Does Salas think he’ll be using the Autoland scanners in 10-15 years? “The technology will change, but diagnostics and airbags will be around for a long time,” he said. “I am sold on the quality, support and coverage of my ISCAN II, so I will be using these products as long as I can. Autoland Scientech USA 1001 Cypress Creek Rd. Ste 101 Cedar Park TX 78613 (512) 336-5152 www.autolandscientechusa.com www.autotechforum.net
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Gonzo’s Toolbox
This is a new story by Scott “Gonzo” Weaver as posted on his website, www.gonzostoolbox.com. See his book “Hey Look! I Found The Loose Nut”, which provides a Good Laugh for Mechanics of Any Age. The book is available at amazon.com. Contact Gonzo at Gonzosae@aol.com
Even in a Big City It Can Still Be A Small World with Gonzo Weaver
I’ve been in private business long enough to gain quite a following from all over the city and surrounding areas. Most of it good, I hope… and then there are some of my customers that once they get to know me they’ll bring just about anything into the shop for me to repair. Just the other day I had one of my regulars bring in a huge lawnmower for me to look at. It has a Caterpillar diesel engine on this huge grass cutting machine the likes of which I’ve never seen before. But as with anything mechanical/electrical if given the right tools and the proper information I’ll take on the challenge. It wouldn’t start; the first thing I could tell about it was the starter bendix was out of it. It would hit the flywheel spin a quarter turn and then nothing. The bendix would stay engaged and the starter motor was spinning like mad but the bendix never moved. Each time I would turn the key the same thing would happen. The engine would spin just a bit and then the bendix would just stop turning. I took the starter off and gave him a call. Since his place of business was just around the corner it didn’t take him long to show up. “I’ll go get it rebuilt,” he said, as he grabbed the starter and headed out the door.
A few hours later he was back, but the starter wasn’t repaired. He had taken it to two different starter overhaul shops and both said it was Ok… I thought that was a little strange… this thing was in dire need of a bendix. I muscled the engine over with a pry bar just to make sure there was no issues there, it was fine. I was very certain the bendix was at fault, there was no mistake about it. But, if the overhaul repair shops have as good a reputation for their work as I have, I’ll have to take another look at this whole thing and be sure I’m not diagnosing it wrong. I stuck the starter back on and as I expected the same thing was happening to the starter. I decided to skip this little problem and try to determine if anything else was wrong… because according to the owner the starter probably wasn’t the only problem wrong with it. He had already tried a new ignition switch but when that didn’t do the trick he brought it to me. After checking the wiring diagram it was clear that one wire was on the wrong post on the replacement ignition switch. I asked the owner if he made sure he put the wires back correctly when he changed the switch, he not only was extremely sure that he had them in the same place, he also took a photo of the old switch wiring
so that there was no mistake about where each of the wires went. With that information it had to mean only one thing… the ignition switch had to have been wired wrong from either a previous repair attempt or from the factory. Because, the way it was hooked up the starter solenoid was engaged the whole time the engine was running. I went ahead and moved the wires to the right spots and gave it one more try. When, I could get the starter to stay engaged long enough to spin the engine, there still wasn’t any voltage at the fuel cutoff solenoid. Something else had to be wrong with it. Time to consult the wiring diagrams again. Now it was only a matter of following the road map of a wires and trace out how all the individual safety cutoff switches played a part in the starting and running of this beast. Sure enough, one of the fail safe switches was faulty. It should start now, that is, if you could get the crazy starter to engage long enough to throw the engine over top dead and create enough compression to keep itself going. It took several attempts of flicking the key on and off to get it to happen but it did finally start. Once it started I knew why no one noticed the starter bendix was still stuck out against the flywheel… you couldn’t hear a thing
dicted that within the next 10 years electric vehicles will have a range of 500 miles or more. He went on to explain that at the point the further development of fast charging infrastructure will be unnecessary as most drivers rarely drive more than 500 miles in a day. Volkswagen plans to sell 300,000 electric vehicles a year by 2018, which would translate to 3% of all sales. VW’s hybrid ambitions could lead it to overtake Toyota as the world’s largest automaker within eight years. Key details of Volkswagen’s strategy include introducing the company’s first hybrid electric vehicle the Toureg 2010, and in 2013 three EVs,
likely to be versions of the Jetta, Golf, and the Up. At ERL, Eberhard’s main focus is the development of the lithiumion battery packs for the Golf bluee-motion and E-Up all-electric vehicles—both of which are destined for trials and eventual sale in the U.S. The batteries being developed at ERL are the 18650-type lithium-ion cells commonly found in laptops and they will also be used for the more premium Audi e-tron electric vehicles as well. Eberhard explained that the common 18650-type battery is at the forefront of electrical storage technology. There’s also a cost factor; the
with this huge motor blaring away (ear protection is in order) Now, the owner only had one more task to do. Take the starter back one more time to the rebuild shop and get a new bendix installed. I offered to install a new bendix for him, but he insisted on going back to the overhaul shop and tell them about it. He said there was something about “putting a board in the bendix” which seemed to be the way both places checked to see if the bendix was any good. I’ll bet it would hold a board… but I don’t think a little old piece of wood jammed into the starter nose cone was any match for this big diesel motor. I just hope my reputation has gotten to that end of the city, because he planned on telling them who said the bendix was bad. Even though the starter overhaul shop was convinced it wasn’t the bendix… he was going to insist on having one replaced. A day later he had a new bendix and the big old grass munching beast was as good as new. Sometimes, all it takes is experience and a reputation to get your point across. Just make sure you can back it up with clear evidence and good diagnostic skills. It’s an excellent way of gaining a good reputation, even in the big city or the small world we live in…
Volkswagen Predicts EV Success, 500 Mile Range By 2020
Volkswagen is intent on becoming the world’s leading automaker by 2018 and that means being the top dog in every segment, including hybrid and electric vehicles according to reports made by Autocar and the Huffington Post. In fact, the automaker is so serious about its electric car efforts that it recently announced plans to start building its own electric powertrains, and enlisted the help of Tesla co-founder Martin Eberhard. Eberhard is the electric vehicle engineering director at Volkswagen’s Electronics Research Laboratory (ERL) in Palo Alto, California, and speaking recently with Autocar he pre-
18650-type battery, for example, costs about half of that used by the Nissan Leaf. Incidentally, in addition to electric drive systems, the engineers at ERL are also working on new driver assistance systems and human-machine interface technologies, as well as improving the multimedia functionality and connectivity for the different Volkswagen Group brands. Some of its latest developments, for example, are the autonomous Audis that competed in the DARPA Challenge as well as the Google Earth functionality for the sat-nav systems featured in the new Audi A8 and A7 models.
www.autobodynews.com | OCTOBER 2010 AUTOBODY NEWS 21
Ed Attanasio is an automotive journalist based in San Francisco, California. He can be reached at era39@aol.com.
Company with Ed Attanasio Connections Mattei: Over Seventy-five Years of Compressor Leadership Italy makes amazing race cars (Ferrari), top-tier watches (Bulgari) and luxurious shoes (Gucci) and they also make some of the finest air compressors on the planet, respected by auto body and mechanical shops throughout the world. Mattei’s General Manager Jay Hedges knows air compressors inside and out after two decades in the industry. He’s been with Mattei for nearly three years, overseeing North American Operations for the company that developed the first rotary vane compressor in 1958. For nearly a century, Mattei’s machines have been in use worldwide for industrial and automotive applications. Body shops throughout North America have embraced the company’s rotary vane compressors because they’re more efficient and durable than comparable products on the market, Hedges said.
Mattei’s General Manager Jay Hedges showing body shop owners the company’s products at their Collision Repair Compressed Air Training Center in Baltimore, Maryland
Mattei was founded in 1919, when a young Italian Army Engineer named Enea Mattei, started explor-
ing the compressed air industry, an industry that hadn’t even been fully born yet. In 1934, he invented the
world’s first portable air compressor and after many years of growth and technological advances, his namesake company become a leader in the world of compressed air technology. Hedges cited several reasons for Mattei’s success worldwide: “We developed the technology, so we’re in a good position. Recent patents generated by our research & development department are evidence of our drive to continually exploit proprietary vane technology and advantages. Collision repair facilities benefit from the performance and efficiencies of our rotary vane compressors versus traditional rotary screw compressor systems. With a focus on both current and future compressor models, Mattei will reduce maintenance and energy costs while delivering ever increasing efficiencies.” Mattei’s compressors are sold in the U.S. exclusively through distributors and a handful of re-sellers, such
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as Keystone Automotive and a network of 200 independent distributors throughout the country. Big collision chains that currently use Mattei’s compressors include Caliber Collision and Cook’s Collision, Hedges told us. “Big collision chains are attracted to these rotary vane compressors because they can save a lot of money through the machine’s ability to conserve energy and the low maintenance required. Large companies want a reliable compressor, that when routine maintenance is performed by qualified techs it will not cause unscheduled downtime. Any equipment failure costs you money, but when your compressor is down you are essentially shut down. It’s obviously critical for operational consistency. It’s rare for a compressed air user to have 100% back-up air compressors at the ready. Therefore, corporations can’t tolerate a compressor failing. Whether you’re fixing 50 or 500 cars monthly, the compressors in any size shop must be reliable because if they go down, it will obviously affect their production.” Cubic feet per minute (CFM) is the key power rating when it comes to compressors and Mattei’s rotary vane
compressors lead the industry in that regard. “More air with less energy; that’s our reputation and we are proud of that. Our machines produce more CFM per horse power than any other rotary or piston compressor on the market. This is one reason why our compressors are
Mattei’s AC tank-mounted units like this one are highly respected by body shops worldwide
great, because they represent a value for body shop owners and that’s why they’ve been a big success in the collision industry as a whole.” Mattei’s rotary vane compressors are more efficient than screw rotary compressors and deliver 90% mechanical efficiency, according to Hedges. “As the speed decreases, the compressor’s efficiency increases, offering straight-line energy savings,”
he said. “And they’re more durable, because our vane compressors are designed for low speeds and long life and backed by a revolutionary 10year warranty. Our vanes are designed for 100,000 hours of service without bearing changes or rebuilding an airend, twice the life of most rotary screw compressors. They just don’t break down, because they feature direct drive and in-line operation, while using fewer moving parts.” Mattei’s Optima Series is ideal for high-volume body shops, according to Hedges. “The variable speed feature is highly coveted by collision repair companies because they will optimize energy savings for collision facilities with varying levels of plant air demand. One of the best things about Mattei’s vane technology is that this machine has no ball or roller type bearings because there is no thrust loading. Thrust bearings are subject to B-10 and L-10 design life considerations and the thrust forces deteriorate those bearings making them the mostcommon parts to fail in rotary screw compressors. This is a big deal.” Dan Wittenberg is the general manager of Keystone Automotive in St. Cloud, Minnesota. He has seen a spike in popularity of Mattei’s rotary compressors within the last few years, and he tells us why: “We’re seeing more body shops in our region making the transition to using waterborne paint, and these Mattei rotary air compressors are ideal for waterborne, because they provide more airflow. Plus, they’re greener overall when compared to piston-type compressors. They will shut down automatically when demand for air drops so it won’t pump air all the time. A smaller shop requiring intermittent usage is a perfect application for a Mattei rotary compressor. “It’s easy to operate and maintain and the new computer-based rotary vanes are on the technology’s leading edge,” Wittenberg said. “The three major advantages of the Mattei rotary vane compressors over the rotary screws are: 1) They cost less to operate, because the motors will run less. With the cost of electricity, this is a big deal for a body shop watching its bottom line and 2) Durability—the rotary vane compressor will last longer and it can handle any amount of usage you can throw at it. 3) They’re quieter than any other compressor on the market. You can stand right next to this machine and have a conversation, which
is a breath of fresh air, that’s for sure.” Wittenberg and Keystone performed extensive product research while looking for a better air compressor and he discovered that Mattei’s rotary compressor is the best on the market, he said. “We always do our homework before we take on a new product, and the Mattei was a no-brainer. Keystone has been researching products for 85 years in this industry, so we know what our customers want. The Mattei rotary is in the big leagues and the package is very reasonable, so we’re excited to be carrying them.” The extensive support and handson service provided by Mattei is another big plus of working with a leader, Wittenberg said. “The customer service is exceptional. When we call Mattei for any reason, we get a well-trained individual on the phone
Mattei’s Stacked ERC compressor is an ideal fit for body shops who value the machine’s durability and energy-saving features
and the follow-up is the best we’ve encountered. They won’t leave you on hold and they speak our language. We needed a part recently and they got it to us the very next day.” Will Keystone be selling more Mattei rotary air compressors in the U.S. in the future? Wittenberg agrees enthusiastically. “It’s a beautiful unit and with the easy set-up we’ll definitely be selling a lot more as this region starts changing over to waterborne more aggressively. Once shops find out about these compressors, they will see the value and they’ll want one or more, because it will save them money and last longer. Mattei Compressors Inc. 9635 Liberty Ave., Suite E Randallstown, Maryland 21133 (410) 521-7020 http://www.matteicomp.com/
www.autobodynews.com | OCTOBER 2010 AUTOBODY NEWS 23
Continued from front page
Texas Tax Audits
rental services, towing companies, etc. Franchise Tax Rule 3.588(c)(8) does allow a cost of goods deduction for transactions that contain elements of both a sale of tangible personal property and a service; however, an entity may only subtract as cost of goods sold the costs otherwise allowed in relation to the tangible personal property sold. For example, an auto body shop offers the service of car repair and in the process of the repair, replaces some of the car’s parts. If the auto body shop elects to use the cost of goods sold to determine margin, the shop can only deduct the cost of the car parts. The labor related to the repair of the car is not allowed as a cost of goods sold. If an entity that is not eligible for the cost of goods sold deduction elected to use this method for prior years’ reports, the entity must amend the reports. The compensation deduction, however, is not available for the prior years’reports. The election language in Tax Code Section 171.101(d) does not allow a change in the method of computing margin to a
cost of goods sold or compensation deduction after the due date of the report. These entities that originally elected to use the cost of goods sold method must amend and use the 70 percent method to determine margin or, if total revenue is not more than $10 million, may use the E-Z Computation to determine tax due. The E-Z Computation does not allow a cost of goods sold or compensation deduction in computing margin but instead applies a lower tax rate of 0.575 percent directly to apportioned total revenue. In future years, entities that do not sell real or tangible personal property in the ordinary course of business may choose the compensation deduction over the 70 percent method or the E-Z computation. The compensation deduction, detailed in Franchise Tax Rule 3.589, includes W-2 wages and cash compensation paid, net distributive income reported to natural persons and employee benefits provided.” ASA wants to address this interpretation of cost of goods sold by contacting the Ways and Means Committee of the Texas House and our representatives. Contact Charles Parker, Director, ASA Texas at cparker@asatx.org.
Person-to-Person
focus on equipment that is now standard in new vehicles, like GPS systems, back-up lights and systems, and updated cosmetic improvements. Rather than pushing for a sale over the phone, a better approach would be inviting the customer in to come in to see a display of available upgrade equipment. While not as likely to be welcome to every person called, asking for participation in a brief two or three question survey will get the attention of some prior customers. A good place to start would be telling the customer the shop was intending to make some improvements and add some new services. The caller then asks the customer what additional services he or she would like to see offered by the shop. The second question would ask if the customer were planning to upgrade their existing vehicle or to buy a new one. This opens the door to talking about the upgrade options already available at the shop.
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Will employees be willing to make these calls? If business is slow, this may be a chance to save their job. Phone solicitation is generally a very tough job. A large percentage of people called simply hang-up or angrily tells the caller not to bother them. Fortunately a shop employee calling a prior customer has the advantage of being able to say this call is from the shop that recently repaired their vehicle and it is simply a follow-up information call. After that is made clear, it is vital to then ask the customer: “Do you have just a few moments to talk now, or would there be a better time to call?” This shows courtesy and concern for the person’s time. That should minimize hang-ups and avoid damaging the shop’s relationship with the customer. And it may also bring the customer back to the shop for those additional services.
Continued from Page 16
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Marchionne Targets Chrysler IPO in Q2 of 2011
Chrysler Group LLC will probably hold an initial public offering in the second half of 2011 as investors approved Fiat SpA’s plan to spin off its industrial business September 16 according to reports made by Bloomberg News. “I don’t think it’s the first part; I think it’s a second part of the year event,” Sergio Marchionne, chief executive officer of both carmakers, told reporters in Turin today when asked when in 2011 a Chrysler share sale would take place. Fiat, which acquired a 20 percent stake in Chrysler in June last year, September 16 announced the approval by shareholders to separate CNH Global NV, Iveco and some industrial and marine operations into a new company called Fiat Industrial SpA, leaving Fiat Auto and luxury brands Ferrari and Maserati in the new Fiat SpA. The separation would allow Marchionne, 58, to focus on carmaking and would give Fiat an entity to facilitate future alliances. The spinoff, the most sweeping corporate reorganization in Fiat’s 111year history, will resolve an issue that’s been a “thorn in the side” for
Italy’s largest carmaker, Marchionne told shareholders today. Fiat Industrial, which will start trading in Milan next January, may be valued at 8.38 euros a share, according to the average projection of five analysts surveyed by Bloomberg News. That’s 49 percent more than the 5.64 euro value estimated by the analysts for the new Fiat SpA, which will include auto-making operations and the Ferrari and Maserati luxury brands. “Fiat Industrial is undervalued by investors and will benefit from a recovery of the capital goods market,” said Gabriele Gambarova of Banca Akros SpA, who is ranked No. 1 among Fiat analysts tracked by Bloomberg and based on relative returns of the stocks they covered in the past year. “Investors will be more cautious on Fiat auto, which will have to invest to complete its commercial offer.” Before today, Fiat had risen 34 percent since the Chrysler deal and was down 1.6 percent since the spinoff announcement on April 21. Fiat auto may double its trading profit to 1.2 billion euros, according to the business plan presented in April.
26 OCTOBER 2010 AUTOBODY NEWS | www.autobodynews.com
EPA Postpones Final Decision on Smog Rule Until Late October The U.S. Environmental Protection Agency (EPA) announced recently that it had postponed final rule on the National Ambient Air Quality Standard (NAAQS) to late October. The agency had originally planned to finalize rules on the ozone standard by the end of August, but it decided on late October because it wanted to spend more time reviewing public comments on the proposal. In January of this year, the EPA proposed revisions to the Bush administration’s 2008 ozone standard. The EPA advocates that its proposal would enhance the eight-hour standard created to protect citizens’ health, shifting the requirement from 0.075 parts per million (ppm) to a range of 0.060 to 0.070 ppm, as well as create an all-new secondary standard designed to protect environmental resources. The EPA, environmentalists, states and industry went to court over the Bush administration’s rejection of these proposals in March of 2008. The litigation, State of Mississippi v. EPA, is currently before the U.S. Court of Appeals for the District of
Columbia Circuit, awaiting the Obama administration’s final revisions. The proposed restrictions and tightening of the ozone standard has received some opposition from a bipartisan group of seven senators, who urged the EPA not to tighten the ozone standard. In a recent letter to Lisa Jackson, administrator of the EPA, the senators said they “believe that changing the rules at this time will have a significant negative impact on our states’ workers and families and will compound the hardship that many are now facing in these difficult economic times.” Supporters of the EPA’s proposal are concerned about delay of the final rule, and they believe that postponing the agency’s final decision could dilute the final rule. EPA said the proposal would cost $19 billion to $90 billion to implement. But it said it would save $14 billion to $100 billion from healthcare bills for asthma, lung damage, and other diseases and lost work costs. To view the seven senators’ letter to the administrator visit: www.TakingTheHill.com.
CARSTAR Media Conference Outlines Changes and Forecasts for 2010 CARSTAR held their 2010 National Media Conferences on Tuesday, September 14, to discuss the changes the company is making in order to better compete in the current economy. Chairman and CEO Dick Cross began the conference call by outlining CARSTAR’s forecast for the coming year. He said that the successful shops are going to need to not only provide extraordinary performance, but also be able to document it and be prepared to show it to customers. “We think our collision industry is going to change,” said Cross. Dan Bailey, President and COO for CARSTAR, also discussed some of the trends facing the collision repair industry in this economy, including several of the mergers going on between companies and the consolidation of multi-location networks. Both Bailey and Cross talked about how although CARSTAR has lost some stores in the last few months, that a lot of the stores lost were not participating as much as they could have been in the CARSTAR
system. They also mentioned how a lot of stores had been defeated by their balance sheet; that some stores couldn’t balance their debt with the loss of value that a lot of things had after the economic downturn. Cross and Bailey acknowledged that about eight of its franchises have closed in recent months but they said others have doubled their revenue or acquired struggling or closing shops as additional locations. Bailey and Cross also fielded questions about steering; both felt that shops needed to hold their ethics about customer choice. “We’re on the sidelines with that issue. We promote that every customer has the right to choose where to have their repairs done but we are not on one side or the other on this issue,” said Bailey. But Cross also mentioned that stores that have DRPs are likely to get a bigger piece of the repair work available, if the customer does not speak up about a preferred shop they would like to use. Cross and Bailey both stressed
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CARSTAR Calls for Nationwide Recall System for A/M Parts CARSTAR has announced its position on aftermarket parts. CEO Dick Cross said that CARSTAR is willing to use aftermarket parts so long as they meet standards. “We have a long way to go before we’re 100 percent satisfied with putting aftermarket parts on the cars we repair,” said Cross. “There’s no recall process to take them out of the marketplace if there is an issue.” Cross reiterated CARSTAR’s point of view by saying that CARSTAR will take the position on behalf of consumers and consumer safety on the
that body shops are entering an era where shops are compared through objective performance-based competition. There is a smaller body of work to compete for and shops need to excel in order to receive business. CARSTAR has confirmed that going green can make economic sense these days, Bailey and Cross said that CARSTAR has two shops that are green certified and 35 stores that are spraying waterborne paint.
issue of aftermarket parts. Bailey and Cross continue to express concern over shortfalls in fit, form and function from aftermarket parts, calling for a nationwide recall system. “I don’t care if Betty Crocker makes it, if it’s of like, kind and quality,” says Bailey, lamenting a lack of overall accountability regarding faulty aftermarket components. “There’s no recall process to take them out of the marketplace. We track them to try to get them out of the marketplace with some success, but not as much as I’d like.”
Cross wrapped up the conference by saying that CARSTAR is attempting to get all of their shops on a similar store software. CARSTAR has been working on this for over a year and is now in talks with Mitchell for an appropriate program. “We still have some road to go before we can launch,” said Cross, adding that CARSTAR is shooting for Q1 of 2011 to launch the program. For more information please visit carstar.com.
CARSTAR Recognizes its Four Top Stores
CARSTAR celebrated its 21st anniversary and honored its top performing stores and representatives across the United States.at the annual awards ceremony held at the Homestead in Hot Springs, VA. CARSTAR CEO Dick Cross and President Dan Bailey toasted each winner on stage and presented their award. In the category for overall operations, technical excellence, office performance and facility performance, four CARSTAR stores were honored, with one store taking home two top awards. The winners included:
Franchisee of the Year Franchisees of the Year were Kurt and Terri Mueller, owners of Kurt’s CARSTAR in Maryville, Ill. Franchisee of the Year is the highest award given in the CARSTAR system. This year’s winner was chosen on criteria including using all vendors possible, attending conference , being image compliant, submitting reports on time online, and delivering consistently high CSI in the Top Ten for the month and quarter periods. His past five quarters of CSI have been: 98.7%, 99.2%, 99.1%, 99.5% and 99.4%. Kurt’s CARSTAR was also the recipient of the Extraordinary Individual
Contribution to the Make-WishFoundation. Kurt joined CARSTAR in October of 1993 as a member of the St Louis Business Group.
Rookie of the Year The Rookie of the Year in the CARSTAR family was Marshall’s Autobody CARSTAR owned by James and Dawn Marshall in Billerica, MA.This award is given in recognition of the newest CARSTAR franchisees as they get “up and running” with CARSTAR. To qualify for the award, a franchisee must have been with CARSTAR less than three years, be well underway of achieving Tier 1 compliance and enthusiastically embrace the CARSTAR culture with active participation.
Outstanding Facility Performance Outstanding Facility Performance went to Exhibition CARSTAR owned by Jeff and LaVada Middleton in Kent, WA. The award is for consistently high ratings in Sales, Gross Profits, CSI, COS, Tier compliance and active involvement both in the community and within CARSTAR. Exhibition CARSTAR also is very active in the community, providing enormous support for Make-A-Wish
www.autobodynews.com | OCTOBER 2010 AUTOBODY NEWS 27
Industry Insight
John Yoswick is a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). He can be contacted by email at jyoswick@SpiritOne.com.
Access and Use of Shop Data Raise Privacy Concerns for the Industry with John Yoswick
all the ramifications of that,” Passwater Concerns about data privacy prompted said. the formation this spring at the ColliThe topic was also highlighted by sion Industry Conference (CIC) of a a panel during the CIC Insurer-Retaskforce focused on the subject. At Ed Attanasio pairer Relations Committee, which CIC in Chicago inwith July, Tony Passwater, an industry discussed a “data rights” proposal crafted by another CIC committee. trainer and executive director of the That statement says no third-party should capture or use in any way data Indiana Auto Body Association, said produced by a shop—even if developed using or transmitted over a thirdthat the new taskforce that he chairs party’s software or network—without the specific authorization of the shop. has in recent weeks Tony Passwater been discussing The intended use of the data and who will have access to it must be clearly and finalizing its objectives. The primary issue, he said, is that stated, the proposal reads. as the industry’s information providers Aaron Schulenburg, executive move toward “cloud computing” sysdirector of the Society of Collision tems—in which a shop’s estimate and Repair Specialists (SCRS), said the even management system information problem isn’t that information providers don’t get shops’ permission is stored on the system provider’s computers rather than the shop’s— to aggregate and sell their data. It’s concerns are being raised about access more that shops aren’t given any choice but to sign away that right if to and use of the data. they want to use any of the Big Three “I don’t think the current data priestimating systems, he said. Granting vacy policies and terms-of-use address
Shop Showcase
permission for the shop data to be used should be an option for the shop, not a requirement, Schulenburg said. “We all need aggregated data,” Mike Lloyd of California Casualty said. “But as far as the individual repaier’s data, I believe that belongs to the shop. You should have that in the agreement with the vendor that Mike Lloyd you’re using. You should also have in the agreement that if you move to a different vendor, how do you get your data back so you can put it in your (new) system?” That’s an issue several people on the panel brought up. One panelist, for example, said he was aware of an multi-shop operator who closed one location and could not get the data created for that location back from the information provider because the sub-
scription for that location was no longer maintained. Passwater said information providers argue that they should have some rights to estimate data prepared by users that are based on the information provider’s labor times and other data. But he compared it to buying lumber, saying that doesn’t allow you to own the land the wood was grown on nor give the lumber yard any right to the house you build with it. It’s my house. At some point in time, I should have the right to say what I do with my house,” Passwater said. Scott Biggs, of Assured Performance Network, said some shops might not be overly concerned about this issue but likely will be if down the road the information providers charge a shop for access to the shop’s own aggregated data that the shop currently has access to as part of its management software system fee.
What shops want from parts vendors A new survey found that when it comes to
But perhaps discouraging to OE Con-
parts suppliers, collision shops prize order
nection and InfoMedia was the fact that the
electronic parts ordering, and are not very
an average importance rating of 7.32, indi-
accuracy most, aren’t overly interested in
satisfied with the quality of remanufactured
or non-OEM parts.
The survey by phone and fax of 300
ability to order parts electronically received cating that 17 of the 21 other attributes were more important to shops.
Still, nearly 3 out of 5 shops respond-
shops was commissioned by the Collision
ing say they use one or both of the elec-
earlier this year. It asked shops to rate nearly
they don’t use them because they prefer the
Industry Conference (CIC) parts committee
tronic parts ordering systems. The rest said
two dozen attributes of a parts vendor on a
personal contact with the vendor by order-
dicating a higher level of desirability.
ever, also cited a lack of dealer participation
scale of 1 to 10, with the higher number inPerhaps not surprisingly, order accu-
racy, quality parts, competency and help-
ing via phone or fax. Some non-users, howas the reason they don’t use the systems.
With regard to non-OEM parts, the sur-
fulness of the parts personnel, timely
vey found that over half of the shops said their
list of shop’s desires.
information on a particular part. Eighty-two
delivery and undamaged parts topped the A large parts inventory – something
vendor does not supply them with return-rate
percent rated the quality of non-OEM parts as
many dealers tout in their advertising to
“7” or lower on a scale of 1 to 10.
21 attributes.
better, with 37 percent rating their quality
shops – finished about in the middle of the Least important to shops among the
attributes were the proximity of the supplier to the shop, and promotions or trips and
merchandise awarded for purchase loyalty.
Verso ‘10
Remanufactured parts fared slightly
as an “8” or higher.
Complete findings of the study are
available on the CIC website at: www.CIClink.com.
28 OCTOBER 2010 AUTOBODY NEWS | www.autobodynews.com
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Toby Chess is an I-CAR program instructor, Welding specialist, and former salvage yard operator. Toby is universally known in the collision industry for his charitable works, worthy causes, and magic tricks. He can be reached at tcspeedster@yahoo.com
Hey Toby!
Attending the Porsche Collision Certification Program with Toby Chess
Hey Toby—We are repairing at 2007 Porsche Cayman and the insurance company wants us to recon the wheel. Do you know if Porsche has a position statement on reconditioned wheels? —Mick from Marina Del Rey.
was available since the end of 2005. The system continuously monitors the air pressure on all 4 tires. When you change a wheel, the system needs to recalibrate itself which is done by test driving the vehicle and checking the display unit for proper function. Finally, Porsche wants new valve stems when replacing a wheel. If the vehicle is equipped with the TPM System, then a special valve system must be used. Next the group looked at the rear spoiler on the Boxter and Cayman models.
California Autobody Association
Hey Mick—I didwith not know the answer David McClune when you e-mailed me, so I called Mike Kukavica from Porsche Cars of North America (PCNA), and he Figure 1 said that Porsche only allows refinish- ments. Only after passing the test, the ing of their wheels, but nothing else. specific tire will get an “N” designaHe invited me to attend the introduc- tion. You can purchase a Michelin tory course for Porsche collision cerPilot Sport with and without the “N” tification program, which I accepted. designation. You may have to purAfter attending the week long pro- chase another tire if there is more 30 gram, there are a couple of other items percent difference in the wear. that you need to with know about replacing John YoswickPorsche states that mixing tires is not wheels and tires on Porsches. permissible and will affect vehicle First, all production tires need to performance, safety and can affect the be passed by Porsche’s engineering vehicle’s warranty. Another item that department for handling, hydroplanyou need to be aware of is the Tire ing and high speed durability requirePressure Monitoring System, which
Figure 3
Figure 3 shows the rear body panel of a Cayman set in place. The po-
Year in Quotes
Figure 2
Figure 4
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sition and angle of the rear body panel is critical to the correct operation of the rear spoiler. Without the knowledge and angle setting tool, the rear body panel can be placed in a position that the spoiler will not operate correctly.
had to remove the rear spoiler from a new Turbo.
Sean Vlaszof of DC Autocraft in Burbank, CA, reinstalling the rear spoiler on the Turbo (Fig 7). One afternoon session was the removal and installation of the front windshield.
tionary about safety, I had the guys remove their safety glasses for the shot. Porsche policy is to wear safety glasses when working on their vehicles.) The windshield was test-fitted and it’s location marked prior to the final installation.
Figure 6
Figure 5
The hole is used to secure the hydraulic piston for the rear spoiler (Fig 4). There is no adjustment for the part, so how does tech know the proper angle of the hole before securing the rear body panel. Porsche has a special jig that aligns the part in its proper position (Fig 5). The jig secures the rear body panel with eight different location bolts and pins. After the jig and part has been installed, the part is tack welded before the final welding operation. Speaking of spoilers, the group
Mike Kukavica demonstrated the operation and explained the correct removal of the rear spoiler (Fig 6). Porsche has a special tool the fits in to inner and outer mounting rings.
Scott Cramer-Bornemann of DC Autocraft repositioning the removal tool. (Before anyone emails me a cau-
Figure 7
Figure 9
Figure 8
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Figure 10
Porsche sells its own windshield adhesive kit. One last item on the windshield. Part of the Porsche certification program is to have a tool to set the proper angle of the wiper blades (Fig 11). Improper blade angle will cause the wiper blades to chatter. Another whole afternoon was devoted to structural repairs. The group assembled a front lower frame rail. Two complete rails were used.
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www.autobodynews.com | OCTOBER 2010 AUTOBODY NEWS 31
Porsche procedure is to weld bond the two sections together. A specific structural adhesive is spelled out in the repair manual.
Figure 12
mends weld-thru primer to all bare metal mating surfaces that are to be welded (except when weld bonding). MIG spot welds are made through a 7mm diameter hole.
only an open butt joint (no butt weld with backers). Porsche also wants epoxy primer applied to all bare metal surfaces. Furthermore, all sealant must be applied over primed surfaces. In other words, no direct to bare metal sealants. Finally, when installing an outer panel over 2 interior panels (quarter panel, for example) that have been weld bonded, Porsche recommends spot welding over existing spots welds. Porsche does not want welding through cured adhesive. Note the three weld bonded panels on the Cayman.
entirety. Rivet bonding is also permitted as outlined in the repair manuals.
Figure 15
Some notes on Ultra High Strength Steels in Porsche vehicles. No straightening or reshaping UHSS parts. UHSS parts are replaced in their
Another afternoon was devoted to the Panamera. The group had to remove the inner door cassette.
Figure 14
Figure 16
Figure 11
George Pedroza from Estorgas Collision Center, Long Beach, CA is applying the specified Porsche adhesive to the inner mating surface of the frame rail (Fig 12). Prior to the installation of the adhesive, a special adhesion promoter is applied to the bare metal surface. Porsche also recom-
Figure 13
Agasee Bagoumyan from DC Autocraft welded the frame rail utilizing a Porsche approved resistance spot welder (Fig 13). Porsche recommends
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Stephen Hurt from Park Place Bodywerks, Dallas Texas, removing the driver’s side trim panel on the 2011 Panamera (Fig 15). There are four aluminum bolts the secure the cassette. These bolts need to be replaced and torqued to 10 Newton meters. The side air bag sensor is located in the door trim panel. It is a pressure sensitive sensor (Fig 17). It is imperative that the cassette is totally sealed. The pressure builds between the outer shell and trim panel on a side impact, which sets off the side air bags.
door cassette (Fig 18). The group removed door handles that required spe-
Figure 20
The graduating class of week of September 17th. Front row (l to r) Agasse Bayoumyan, Ricardo Sandoval and George Pedroza. Second Row: Moses Mora, Sean Vlaszof, Scott Cramer-Bornemann, Stephen Hurt, Sergio Barba and Mike Kukavica
Figure 18
cial tools and techniques from Cayman, Cayenne and Panamera.
Figure 17
Any air leaks will prevent the side air bags from working properly. Sergio Barba from Estorgas Collision Center and Moses Mora from European Auto Body, Escondido, CA, holding the passenger’s side
Figure 19
Figure 21
The group removed the front and rear bumpers from a new Cayenne and Panamera. Stephen Hurt reinstalling the front bumper on the 2011 Panamera (Fig 21). The front bumper to hood is checked with a 1mm gauge. The front bumper is suppose to be flush with the hood, but 1 mm higher. The week-long class looked at the entire Porsche Automobile line.
The front rails on the Panamera are aluminum and the replacement requires special tools, materials and techniques. This will be the next class for the techs.
(Ed—We’re not sure, but we don’t believe the author drove away in this car.)
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Kia’s Top Executive Resigns After Recalls
The top executive at Kia Motors has resigned after the company recalled more than 100,000 vehicles worldwide over defective wiring, the automaker said September 6 according to reports made by the Associated Press. Chung Sung-eun, vice chairman and CEO of South Korea’s No. 2 automaker, stepped down on September 3, according to company spokesman Michael Choo. “His resignation comes in the light of the recent global recall issued by Kia Motors,” Choo said, without elaborating. He said no successor has been named. Chung was one of two Kia CEOs. Kia Motors Corp. is an affiliate of South Korea’s top automaker Hyundai Motor Co. Together they form the world’s fifth-largest automotive group. Chung’s resignation comes amid a wave of recalls that have shaken the global auto industry since Japan’s Toyota Motor Corp. began calling in vehicles in October last year. South Korea’s Yonhap news agency reported that Hyundai Motor Chairman Chung Mong-koo asked Chung to step down to take respon-
sibility for the recalls as they suggested possible quality problems. Neither Choo nor Hyundai Motor spokeswoman Song Meeyoung could confirm the report. Chung, the former Kia executive, is no relation to the Hyundai chairman, Choo said. Early this month Kia issued a global recall totaling 104,047 vehicles for a defect in electric wiring that controls mood lighting inside the car and could cause heat-related damage, according to Choo. Of that total, 35,185 vehicles were recalled in the United States, he said. Seoul-based Kia has a complex management system. Though Chung held the top rank, day-to-day operations come under the control of two presidents: Hank Lee for overseas operations and Seo Young-jong for domestic operations, according to Choo. Seo also holds the title of CEO, said Pamela Munoz, a Kia spokeswoman. Kia, which posted a 61 percent surge in second-quarter net profit, manufactures vehicles in South Korea as well as at overseas plants in China, Slovakia and the U.S. Kia shares tripled in value in 2009.
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280 Car Charging Stations Set for Michigan
About 4,600 electric vehicle charging stations will be installed throughout the country — including 280 in Michigan — under a federally funded program, ChargePoint America, designed to build a fueling network for electric cars, industry and state officials said September 2 according to a report made by the Detroit News. Detroit’s alternative energy incubator, NextEnergy, in the New Center got the state’s first charger under the program but more are expected to go up in Dearborn, Flint, Ann Arbor and other parts of Detroit. Homeowners, businesses and communities are eligible to apply for a charging station. Those chosen get the station for free. The $37 million program, partially funded by a $15 million federal stimulus grant, aims to help communities prepare for a possible influx of electric vehicles with the first appearing in dealer showrooms later this year. “It will get a kick start from the government with these grants,” said Coulomb Technologies CEO Richard Lowenthal. “But in the end, it’s up to you to go out and buy these vehicles.”
The charger, which resembles a parking lot pay station, was built by Coulomb Technologies of Campbell, Calif. The company is working with Ford Motor Co. and General Motors Co. as they prepare to bring plug-in electric vehicles to market. The first 4,400 Chevy Volt buyers also will be eligible to receive a free 240-volt home charging station made by Coulomb or San Francisco-based ECOtality. The Volt is expected to go on sale in November and will allow drivers to go about 40 miles on an electric charge before the gas engine kicks in. The Coulomb stations retail between $1,700 and $5,000, depending on where they’re installed. The retail price doesn’t include installation, which can cost from $250 to several thousand dollars, Lowenthal said. Some utilities, such as DTE Energy in Detroit, already have programs to help electric car owners defray the cost of installing home charging stations. Legislation has been introduced in Congress to offer tax credits and other incentives for installing charging stations.
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Action Counts with Lee Amaradio Jr.
Lee Amaradio, Jr. is the president and owner of “Faith” Quality Auto Body Inc. in Murrieta, California. Lee is president of the CRA as well as an advocate for many other industry groups. He can be contacted at lee@faithqualityautobody.com
Aftermarket Parts: Are they the Same? Are they Safe? Is there a Problem? and I am compelled to speak out. I What gives me the right to comment on any of the above issues and why have ten years of documented proof with Amaradio Jr. with photos and invoices to would I want to bite Lee the hand that along prove that what I am saying is true. feeds me? If there were no problems Aftermarket crash parts are NOT the with aftermarket crash parts why same as OEM unless they are made on would I even care? I am in business to make money, the same assembly line to the same and to stay in business I need to treat exacting standards. my customers fairly and honestly. Part with Sheila Loftus Recently (last week) I had a 2010 Toyota Tacoma come in for a repair. of being in business responsibly is serving my customers by giving them The estimate listed all A/M parts, even good and honest value for their for the front impact bar. This customer money. If there were no problem with did not even know that there was an these parts I would embrace them and A/M parts clause in his policy. The difference out of his pocket was $400 present them to my customers as an withbeSheila Loftusplus a deductible. He contacted his inadded value. I would an advocate, not a critic, of the aftermarket part. surance company, but to no avail. He Some readers have wondered was told, in effect, “too bad.” This is why I am able to speak out as I do on the type of policy you bought—but the industry with boldness and confi- they will guarantee the parts specified as long as he owns his vehicle. dence. Because I know that I speak the He asked us if the parts were the truth and its hard to argue with that. withwith Janet Chaney same and we had to tell the truth. We I am concerned the diminished value of my customer’s vehicles told him ‘no, they were not the same.’
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If we answered any other way then we would be liable because the Toyota dealer will depreciate this 2010 Tacoma upon trade in. I have a big problem with this deceit when I am the one expected to do the deceiving. There is a big difference between allowing a well-informed discerning customer to make this decision and one who is not informed, but the former is almost never the case. Normally I am expected to be the one to convince my customer that these parts will make their car as good as new. The problem is that it’s just not true. It’s a problem for me when the customer is trusting me and my name and reputation is going on the repair. Do you really think I will keep this Toyota Tacoma owner as a customer if he realizes one day that I lied to him? What about when trade-in time comes, and he and his wife go to the dealer to pick out their new car and
find out that their 2010 Tacoma can’t be traded in without a substantial loss? I wonder if he would blame his insurance policy, or care about the guarantee of these parts then, or would he just be upset with me, the guy who put the parts on his truck? The problem with aftermarket parts is more in the deceit that must accompany them rather than with the part itself. Because NO ONE, and I mean NO ONE, would choose these over OEM parts if cost were not a factor. The problem is that the use of these parts have far have superseded proper business ethics and the manufacturers want the collision industry to become a party to what are deceitful marketing and sales tactics. Safety is the issue, but many in the aftermarket crash part industry are bold enough to say this is all fabricated and blown out of proportion. I have been around long enough to say that colli-
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www.autobodynews.com | OCTOBER 2010 AUTOBODY NEWS 35
sion repairs are really not investigated, so to say there is no safety issues at this point is risky foolishness not unlike marketing cigarette smoking. People were getting cancer from cigarettes years long before anyone was able to prove smoking was responsible.
Either way, safety is not the only issue. There is substantial diminished value, and the parts are not the same, as many of our state laws require. When will the truth about these crash parts reach the public and when will the insurers properly inform their
policyholders of the facts? When will use of these parts be banned from late model vehicles? Since when did fit and finish mean nothing in a collision repair? When will the major insurers realize that using aftermarket crash parts will eventually cost them their
customers? Why is the collision industry still held liable for the repair when we really don’t control the decisions in the repair process? When will we quit being the advocates of deceit and tell the whole truth and nothing but the truth.
Percentage of Deaths Linked to Distracted Driving Remains Steady Distracted driving claimed the same percentage of overall traffic deaths in 2009 as in 2008, according to numbers released September 19, meaning it’s still a big problem across the country, Transportation Secretary Ray LaHood says. “These numbers show that distracted driving remains an epidemic in America, and they are just the tip of the iceberg,” LaHood said. According to reports made by CNN Money, the report from the National Highway Traffic Safety Administration shows crashes linked to distracted driving claimed 5,474 lives and led to 448,000 injuries across the United States in 2009. That amounts to 16 percent of the traffic fatalities in 2009, the same percentage as in 2008. The proportion of fatalities associated with driver distraction has in-
creased from 10 percent in 2005, the report says, and the greatest proportion of distracted drivers was in the under-20 age group. A bright note in the report is that overall traffic fatalities fell in 2009 to their lowest levels since 1950. The report was released one day before Lahood is scheduled to convene a National Distracted Driving Summit in Washington. On September 21, leading transportation officials, safety advocates, law enforcement personnel, industry representatives, researchers and the family members of victims of distraction-related crashes will gather to address challenges and identify opportunities for national anti-distracted driving efforts, according to the Transportation Department. In January, federal safety regulators proposed a set of guidelines for
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states to create laws that would ban text messaging while driving. The proposed legislation, prepared by the traffic safety agency and industry advisers, would authorize law enforcement officers to stop a vehicle and issue a citation to drivers who are texting while driving. “This language, which we created with a variety of safety organizations, is another powerful tool in our arsenal to help the states combat this serious threat,” LaHood said. Under the proposed guidelines, drivers caught typing on a handheld device while behind the wheel would face a minimum fine of $75 and unspecified action against their driving privileges. In cases resulting in serious injury or death, a driving while texting offense could be considered a felony. A ban on texting behind the
wheel has already been enacted in 19 states and the District of Columbia. Seven states have banned the use of all handheld devices while driving. Regulators said texting is particularly dangerous because it distracts drivers in three ways: visually, manually and cognitively. The sample state law is modeled on rules implemented last year directing federal employees not to engage in text messaging while driving government-owned vehicles or with government-owned equipment. In addition, the Department of Transportation announced federal guidance earlier this year to prohibit texting by drivers of commercial vehicles such as large trucks and buses. Truck and bus drivers who text while driving commercial vehicles may be subject to civil or criminal penalties of up to $2,750.
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Custom Corner
Rich Evans is the owner of Huntington Beach Bodyworks and an award winning painter and fabricator. He offers workshops in repair and customization at his facility to share his unique talents. For contacts and design samples visit www.huntingtonbeachbodyworks.com
Finishing the Red Mist Car from the Movie Kick-Ass with Rich Evans
Soft-Sanders™ blocks. I conCustom Corner tinue to use the same blocks,
with my color sand system. I’m going to cut it down with 800, then cut with 1000 followed by 1200, then 1500, 2000, and finally 2500 sand paper. I come over it with the with Thomas Franklin 6 inch DA on the areas I can reach with 3000. That just makes my buffing system a lot easier. So after 3000 (with the help of the 3M five step sysThis column is part three, continued tem that they call Perfect Finish. The with2010 Thomas Franklin from our September issue titled 3000 grit sand paper is usually on a Building a numbered car exactly like hook back, so I’m using a foam disk the Red Mist in the movie “Kick-Ass.” with the p3000 (PN02085, without the To read the previous parts to the foam backing is PN02075). column go to www.autobodynews.com After that we’re ready for buff> columns > Rich Evans. ing. The first step is going to be the As with lastwith month’sDick (part two) arcompound, this will buff to remove Strom ticle I’m going to go into some detail sand scratches completely and this on the finishing of Woody’s Red Mist. system is for a faster cut and less heat, We left off with sanding with the use 3M Super Buff 3 wool pad
with Rich Evans
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Opinions Count Opinions Count with Dick Strom
Action Counts with Lee Amaradio Jr.
Action Counts with Lee Amaradio Jr.
Your Turn with Sheila Loftus
Your Turn with Sheila Loftus
Shop Showcase with Janet Chaney
(PN05703). I like to use the 3 wool compounding pad, (PN05719). You want to wheel it up until you get your gloss back and then we’re going to move to step 4 which is the perfect machine polish (PN06064 or 06065) to remove compound swirl marks. The pad that you’re going to use is a perfect plus foam polishing pad (PN05738), using medium pressure. Suggested buffing speed is in the range of 1200 to 2000 rpm. Then you want to come back and wipe with a yellow 3M perfect detail cloth (PN06016), then we’re ready for step five, ultrafine machine polishing (PN06068 or 06069) to eliminate fine swirl marks, even on dark-colored vehicles. Polish with a medium pressure, ultimate foam polishing pad (PN05733) and then we’ve got a completed project. As always I want to tell you about new products that I’ve come across recently which I’ve job tested and really like. I found a universal pad washer which reduces scratches. It is phenomenal, made by Grit Guard. I learned about this at the Auto Geeks show in Florida. If you don’t have one of these pad washers you have got to get one. It saves money and time washing out your pads and cleaning them, and it also improves your finish. This does everything for you and doesn’t make a mess. Go to gritguard.com and see all the different things they offer you. It’s guys like these that are saving us time and money and always just going to that extent of how we can make it easier for the end user (that’s us). How we can make our jobs go faster and better is by using quality product that solves problems. I’ve been using it for over 5 months now and it’s a great product. You need it in your shop. So our pads are staying clean, and we’ve got a buffed vehicle. Now 3M’s got a perfect clean and shine (PN06084) with which I clean up all the compounds on the edges so we’re not applying scratches. After the car is buffed is I’m putting the graphics on to match
the graphics in the movie Kick-Ass car. They want this car to look just like it so basically I used my vinyl plotter, get the measurements, and I asked Larry White come by and set them up in the computer. All we have to do then is push a button. We get our graphics laid out where I want them. I use a masking paper, then transfer paper to transfer it to the car. Just like applying stickers. So now we’ve got our design laid out, I gave Sims a call for their hot rod flat, my buddy Gabe over there supplied us with the product. I’m just going to apply two wet coats and with those flats you really want to lay it downwet on wet, otherwise you’ll get zebra stripes in it. That’s the key to shooting the single stage flats. I applied two wet coats and when you unmask it, you’ve got your graphics. I’m ready to add the yellow letter “M”, surrounded by yellow. So we put a white base down, mask everything up. I use a 3M fine line, and I number my pull strings because after I
put the white down then the yellow, I put one coat of clear on it, because we’re not burying these graphics under the clear. They are pretty much sitting on top of the paint. You’re going to want to pull the lines so that See Finish the Red Mist Car, Page 39
www.autobodynews.com | OCTOBER 2010 AUTOBODY NEWS 37
Ford Uses Cadavers to Test Inflatable Seat Belts
A highly-promoted feature in the 2011 Ford Explorer are its new inflatable rear seat belts. The not-so-highlypromoted working stiffs that helped make it happen? Human cadavers. Here’s how automakers still quietly use dead people to make your car safer according to reports made by the automotive blog Jalopnik. When automakers show off the results of crash tests, they inevitably run video showing empty vehicles or crash test dummies; back in the 1980s, they even turned the dummies into lovable cartoon characters. What the industry doesn’t like talking about is how much of the safety innovation in vehicles was built around testing cadavers. “It’s still very important,” said Priya Prasad, a former top safety researcher at Ford. “Even though we have very good math modeling of dummies, human modeling hasn’t reached that state yet.” Automakers don’t have the medical resources that cadaver tests require, but universities do. The National Highway Traffic Safety Administration funds scores of cadaver tests at schools across the country every year; many of those schools also get grants from automakers. And
the data they gather can be shared widely. That’s the case with Ford’s inflatable seat belts, an idea it’s been testing for several years. The 2011 Explorer will be the first vehicle in the world to offer them, and Ford has made the belts a highlight of the safety features offered to compete against other family haulers. Most of Ford’s tests used the family of dummies developed by the industry, including ones that mimic children. But without a cadaver test, Ford couldn’t know for sure how the inflatable belt would affect internal organs and tissues. Typically in cadaver tests researchers swaddle the body in stockings, including one over its face, partly for scientific reasons and partly out of respect. The arms and hands, if still attached, are bound in place to keep them from moving during a simulated crash, and sensors record the forces on various parts. After the test, researchers would likely have used x-rays to examine how much damage the cadaver sustained. Ford shared the results with NHTSA but deemed them confidential business information so they are not available to the public.
2011 Ford Focus Launches New Airbag Technology The all-new 2012 Ford Focus will launch exclusive airbag technologies that enhance protection for front seat occupants in the most common frontal and side crashes. The suite of new innovations includes Ford’s next-generation driverside airbag with enhanced chest protection technology. The new airbag uses a reconfigured curve-shaped tether system that pulls in the lower section to create a “pocket” to help lessen the impact of the airbag on the driver’s chest and ribs in frontal crashes. Ford’s innovative side airbags feature unique shoulder vents that stay open and reduce pressure for smaller occupants who typically benefit from reduced forces. Taller occupants whose shoulders block the vent could benefit from the higher pressures. Focus also will be Ford’s first car ever to feature front passenger airbags with adaptive venting technology that diverts some of the gas from the airbag inflators through vents outside of the airbags. The restraints control module — the control center of Ford’s advanced safety systems — adjusts the level of venting based on seat position.
The new passenger airbag is designed to help enhance head and neck protection by better matching deployment force with occupant size. This innovative system uses a small pyrotechnic device to force open the vent and can provide less pressure in the airbag when it’s sufficient to help protect the occupant. “This is Ford’s most advanced airbag system we’ve ever equipped a car with, and it is designed to help protect occupants even better in the most common types of crashes,” said Sue Cischke, Ford group vice president, Sustainability, Environment and Safety Engineering. “Each of these airbags uses innovative technologies to help better customize airbag protection to the occupant.” The new airbag technologies debut as standard equipment on the all-new 2012 Ford Focus, which goes on sale early next year in North America. They will be rolled out to other Ford vehicles in the next few years. For more information please visit www.ford.com.
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volvo Genuine parts 38 OCTOBER 2010 AUTOBODY NEWS | www.autobodynews.com
Continued from Page 37
Finish the Red Mist Car
clear doesn’t make such a big dry edge. Let it meld itself in there. To number the fine line, I use quarter inch on this and number them sequentially so you know which one to pull first and avoid a mess. Now we’ve got the “M” painted, it’s assembly time. It took me about 8 hours to assemble this car, give it a full detail, go back over it, judge myself. Obviously we painted some wheels for this vehicle as well to match the vehicle in the movie. I added my little touches to it. I put red caliper covers on (MPG Rich Evans caliper covers from mgpcalipercovers.com, or you can just go to calipercovers.com and visit Mike Barland). My website can link straight to them. I’ve got the car ready, judged it, everything looks good, ready for shipping. I got a super charger for it. The owner, Woody Frees and his two sons, 13 and 15, are installing that, along with other finishing items. They took delivery of this car on the 25th of August. I’m excited to see the car get de-
livered and have one of my cars being seen in Florida. This car is number 7, (93 more to go), and we’ve got two more in the works now. I thought this one was pretty special. I really liked the story behind it: a father and sons
wait to show off some of the new cars I’m doing. Go to Mopar.com, to follow my build on a custom Challenger. I’m teaming with Mopar to bring some product so you can trick out your own car. It’s a lot easier than these Mus-
I’d like to thank my sponsors on this project, Sherwin-Williams, 3M, Grit Guard (call 866-592-5925, or see their demo at the 2010 SEMA Show in Las Vegas, Booth #12645 and #12639), and Soft-Sanders™.
project. It’s a great bonding project and it’s something that they’ll remember for the rest of their lives. They’ll have a scrap book of 799 photos that shows me doing every step prior to them getting the car. As a builder that means everything to me. I’m excited to see another one done, and always waiting for the next one. We’re moving closer to SEMA, I’ve got six vehicles going and I can’t
tangs. The parts I’m creating for the Challenger can be bolted on within two hours. You can fully change the look of your Challenger, not that they aren’t cool already, but cooler is always better. We’re supposed to be done with that October 1.
Thanks to Woody and his family for giving me the opportunity to do a great project. Alright, see you guys at SEMA next month. You can follow progress at my websites, huntingtonbeachbodyworks.com and Richevansdesigns.com.
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