Western Edition California Nevada Arizona
30
YEARS
Industry News You Might Have Missed in 2011 by John Yoswick
So much happens in the collision repair industry that it can be hard to keep up on everything. A few big stories get plenty of attention, but sometimes it’s the lesser-known stories that can have as big an impact on your business. As a new year kicks off, here’s a wrap up of some of the news stories from this past year that might have flown under your radar amid the dayto-day challenges of running your shop, but that could prove helpful for you to know about.
► 1 The Federal Trade Commission last year issued a consumer bulletin
related to the Magnuson-Moss Warranty Act. It states that use of nonOEM parts in itself cannot void a vehicle warranty. “Still, if it turns out that the aftermarket part was itself defective or wasn’t installed correctly, and it causes damage to another part that is covered under the warranty, the manufacturer or dealer has the right to deny coverage for that part and charge you for any repairs,” the bulletin states. For a copy of the bulletin, visit: http://tinyurl.com/3zvas3w
► 2 The Society of Collision Repair Specialists (SCRS) last spring released its findings into whether the See Might Have Missed, Page 18
Western Collision Industry’s 2011 Redux
NACE / SEMA / CARS / AAPEX
2011 RECAP
Where We Stand—The U.S. Automotive Sector by Scott Corwin, Evan Hirth, Jan Miecznikowski, Brian Collie, Patrick Mulcahy, and Mike Beck, at Booz & Company
For U.S. automakers and suppliers, the past year can best be described as 12 months of mixed results, leaving unanswered questions about the future direction of the industry and what is required for manufacturers and suppliers to thrive. In 2011, U.S. light car and truck sales will exceed 12.5 million, a nice bump from 11.6 million in 2010 and 10.4 million in 2009. And though the most optimistic analysts forecast that
U.S. vehicle sales will rise to more than 14 million in 2012, that’s a far cry from 17.3 million at the turn of the millennium. Last year’s U.S. sales figures might have been higher if not for the tsunami and earthquake in Japan and flooding in Thailand, which forced Toyota, Honda, and, to a lesser extent, Nissan to curtail production in virtually all of their assembly plants around the world. Auto sales growth is far more rapid in emerging nations such as China and India, with average annual sales gains since 2001 of 23 percent and 15 percent respectively. See Where We Stand, Page 34
Mike’s Auto Body Benevolence Program by Ed Attanasio
Christmas arrived a little early for the 11th straight year when five deserving families in Contra Costa County received refurbished vehicles from Mike’s Auto Body in Antioch, CA. The presentation ceremony on December 14 was attended by more than 200 people representing body shops, in-
surance companies and community leaders. Over the past decade, Mike’s Auto Body has presented a total of 30 cars to families in need and non-profit organizations through its very own Benevolence Program. Sal Contreras is the marketing director at Mike’s Auto Body and has been the main force beSee Mike’s Auto Body, Page 32
See Industry Wrap-Up, Page 42
P.O. BOX 1516, CARLSBAD, CA 92018
From standards to stand-offs, economic hardship to expansion, the collision industry has certainly seen its fair share of issues this year. As everyone involved in this industry stares down the promises and hope a new year can bring, we asked some to look back and take a hard look at some of the issues they saw in 2011, and some they’d like to see less of in 2012. Rodney Pierini, President & CEO of the CA/NV/AZ Automotive Wholesalers Association (CAWA), spoke briefly with Autobody News
about his take on this year’s industry issues. “The big issues as we (CAWA) see them are ongoing and are probably the same nationally. For us, the use of aftermarket parts is under siege by the car companies who are trying to protect their market share by making unfounded claims regarding aftermarket parts quality,” said Pierini, “The CA Department of Insurance is contemplating regulations on the use of aftermarket parts in insurance repair work. A preliminary meeting has been held and we are awaiting further developments. We will defend after-
Change Service Requested
by Erica Schroeder
VOL. 30 ISSUE 1 JANUARY 2012
www.autobodynews.com ww ww.autobodynews.com
Marie Green and her four daughters react to their 2005 Honda Odyssey van donated by AAA Insurance at Mike’s Auto Body’s annual Benevolence Program. Watching on the right is guest Santa, Ed Attanasio
Presorted Standard US Postage PAID Ontario, Ca. Permit No. 1
2 JANUARY 2012 AUTOBODY NEWS | www.autobodynews.com
Contents 2012 NABC Annual Fundraiser Coming in
January . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Ben Clymer’s The Body Shop Donates Ride
to Riverside-Area Woman . . . . . . . . . . . . . . 6
CAA’s East Bay Chapter Hosts 14th Annual Toys for Tots Model Truck Customizing
Competition . . . . . . . . . . . . . . . . . . . . . . . . 8
CARB Regulations to Reduce Greenhouse
Gases by Putting 1.4M Electric and Hybrid
Cars on Roadways . . . . . . . . . . . . . . . . . . . 4
CARSTAR Sets Stage for Expansion in CA, TX, GA with Expanded Business
Development Team. . . . . . . . . . . . . . . . . . 16
Defense in 2009 Salinas Auto Body Shooting Accuses Deputy of Planting Gun on
Williams - Stockton Honda in Sandy, Utah,
Cultivates Long Term Relationships. . . . . . 43
NATIONAL
AAMP Acquires American International,
Maker of Audio Installation Kits. . . . . . . . . . 9
AAPEX Buyers Select New Product Showcase
Winners . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARA Cautions Giving Automotive
Manufacturers Carte Blanche Power
Over Repair Procedures . . . . . . . . . . . . . . 13
ASRW Responds to Insider’s Comments in his Columns: ‘Can NACE Survive as a Traveling Regional Trade Show?’ and
‘Industry Undecided Which Organization
Will Prevail’ . . . . . . . . . . . . . . . . . . . . . . . 48
Defendant . . . . . . . . . . . . . . . . . . . . . . . . 10
Auto Groups Fight Recall Fees Hike in front
Panels at Three Locations. . . . . . . . . . . . . 16
AutoNation CEO Says No Double-dip
Five Restored Vehicles to In-Need Families
Black Friday Increases U.S. Car Sales to Best
G&C AutoBody Will Spend $2M on Solar
Golden State Collision Centers to Provide
in Sacramento, CA . . . . . . . . . . . . . . . . . . . 4
of Congress . . . . . . . . . . . . . . . . . . . . . . . 30 Recession Coming . . . . . . . . . . . . . . . . . . 52 Since ‘Clunkers’ in 2009. . . . . . . . . . . . . . 26
Hybrid Taxis Now On Duty at San Diego’s
BMW Working on Lazer Beam Headlights,
Insurance Companies Boost CA’s Economy
Brownsville, TX, Man Runs Smuggling
Lexus Mulling Headquarters Move to
China to Levy New Tariffs on U.S. Vehicles . 52
by Billions . . . . . . . . . . . . . . . . . . . . . . . . . 6 Torrance, CA . . . . . . . . . . . . . . . . . . . . . . . 6
Lito Auto Body in Napa, CA, Repairs Vehicle
for Local Family in Need . . . . . . . . . . . . . . . 6
Energy Efficient . . . . . . . . . . . . . . . . . . . . 30 Operation Out of Body Shop . . . . . . . . . . . 48
Delray Beach, FL, Shop Owner Opposes
GEICO’s 10% Deductible on Domestic
OEM Parts . . . . . . . . . . . . . . . . . . . . . . . . 24
Micthell Moves into AIS Data Center in
Fiat 500 Gets Only 3-star Safety Rating
Mike’s Auto Body Benevolence Program. . . . . 1
GM Partners with Japanese Carbon Fiber
San Diego, CA . . . . . . . . . . . . . . . . . . . . . 12
Valley Motor Center, in Van Nuys, CA, Hosts
Another Successful Vehicle Donation . . . . 10
Western Collision Industry’s 2011 Redux . . . . 1 COLUMNS
Attanasio - Yelping Back, an Interview with
from NHTSA. . . . . . . . . . . . . . . . . . . . . . . 52
Supplier to Improve Composites . . . . . . . . 30
Honda Recalling 300,000 Vehicles for
Airbag Flaws . . . . . . . . . . . . . . . . . . . . . . 30
Houston City Council Set to Vote on Auto Repair Ordinance, Draft Not Favorable
to Shops . . . . . . . . . . . . . . . . . . . . . . . . . 20
Yelp’s Business Outreach Manager . . . . . . 44
Industry News You Might Have Missed
Don’t Happen Without Major Effort . . . . . 36
NHTSA Proposes Panic-Stop Ignition
is a Breakthrough Product . . . . . . . . . . . . 50
Nissan’s LEAF to be Sold in More U.S.
Chess - Life Changes or Industry Changes
Evans - Solution Finish’s Brings Black Back™
Franklin - An Effective Marketing Focus. . . . . 40
Insurance Insider - Sure, OEMs Set the
Standard, But Who Fills the Gaps Left
by OEMs? . . . . . . . . . . . . . . . . . . . . . . . . 46
Schroeder - Jim and Jack’s Collision Center in El Segundo, CA—Over 45 Years of
Expertise . . . . . . . . . . . . . . . . . . . . . . . . . 14
Weaver - A Picture Worth a Thousand Words
Most of Which We Can’t Print . . . . . . . . . . 31
Indexof Advertisers
Lindbergh Field. . . . . . . . . . . . . . . . . . . . . 12
in 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Standard for Cars . . . . . . . . . . . . . . . . . . . 51
Markets . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SCRS Asks Repairers to Submit Parts Quality
Complaint Form . . . . . . . . . . . . . . . . . . . . 22
Texas DOI Investigating ANPAC Insurance for Possible Fraudulent Document in Shop
Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Where We Stand—The U.S. Automotive
Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Assistant Editor: Erica Schroeder Contributing Writers: Tom Franklin, David Brown, John Yoswick, Lee Amaradio, Rich Evans, Janet Chaney, Toby Chess, Mike Causey, Tom McGee, Ed Attanasio, Chasidy Sisk Advertising Sales: Joe Momber, Sean Hartman (800) 699-8251 Sales Assistant: Kristy Navarro Art Director: Rodolfo Garcia
Audi Wholesale Parts Dealers . . . . .46 Autoland Scientech . . . . . . . . . . . . .31 Automotive ID . . . . . . . . . . . . . . . . . . .4 BMW of Vista . . . . . . . . . . . . . . . . . .18 BMW Wholesale Parts Dealers . . . .37 Classifieds . . . . . . . . . . . . . . . . . . . .54 Completes Plus . . . . . . . . . . . . . . . .14 Crevier BMW . . . . . . . . . . . . . . . . . .20 CSS USA, Inc. . . . . . . . . . . . . . . . . .13 Downtown Motors of LA (Audi, VW, Porsche) . . . . . . . . . . .27 Drew Hyundai-Volkswagen . . . . . . .24 DuPont . . . . . . . . . . . . . . . . . . . . . . . .5 Elk Grove Toyota . . . . . . . . . . . . . . .16 Enterprise Rent-A-Car . . . . . . . . . . .49 Equalizer Industries . . . . . . . . . . . . . .6 FiltersForBooths.com . . . . . . . . . . . .9 Ford Wholesale Parts Dealers AZ, CA, & NV . . . . . . . . . . . . . . . .23 Galpin Motors . . . . . . . . . . . . . .25, 35 Garmat USA . . . . . . . . . . . . . . . . . . .32 Glenn E. Thomas Chrysler-JeepDodge . . . . . . . . . . . . . . . . . . . . .15 GM Wholesale Parts Dealers . . . . . .47 Honda-Acura Wholesale Parts Dealers . . . . . . . . . . . . . . . . . .28-29 Hyundai Wholesale Parts Dealers . .43 Innovative Tools & Technologies . . . .8 Kearny Mesa Subaru-Hyundai . . . . .12
Serving California, Nevada and Arizona, 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. ©2011 Adamantine Media LLC. Autobody News P.O. Box 1516, Carlsbad, CA 92018 (800) 699-8251 (760) 721-0253 Fax www.autobodynews.com Email: news@autobodynews.com
Western
REGIONAL
Kia Motors Wholesale Parts Dealers .33 LKQ . . . . . . . . . . . . . . . . . . . . . . . . .55 Mazda Wholesale Parts Dealers . . .40 MINI Wholesale Parts Dealers . . . . .41 MOPAR Wholesale Parts Dealers . .19 Moss Bros. Chrysler-Jeep-Dodge . . .7 Nick Alexander BMW . . . . . . . . . . . .11 Nick Alexander MINI . . . . . . . . . . . .56 Nissan Genuine Parts . . . . . . . . . . .21 Nissan/Infiniti Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . .52 PPG . . . . . . . . . . . . . . . . . . . . . . . . . .2 RealParts.com . . . . . . . . . . . . . . . . .10 Replica Plastics . . . . . . . . . . . . . . . .34 Riverside Metro VW-Honda-HyundaiNissan-Mazda . . . . . . . . . . . . . . .38 Safety Regulation Strategies . . . . . .36 Shingle Springs Nissan-Subaru . . .39 Sierra Chevrolet-Honda-MazdaSubaru . . . . . . . . . . . . . . . . . . . . .26 Solution Finish . . . . . . . . . . . . . . . . .50 Subaru Wholesale Parts Dealers . . .45 Timmons VW-Subaru . . . . . . . . . . . .22 Toyota Wholesale Parts Dealers . . .53 VeriFacts . . . . . . . . . . . . . . . . . . . . . .41 Volkswagen Wholesale Parts Dealers .48 Volvo Crash Wholesale Dealers . . .53 Weatherford BMW . . . . . . . . . . . . . .17 Zurada Law Group . . . . . . . . . . . . . .40
www.autobodynews.com | JANUARY 2012 AUTOBODY NEWS 3
Golden State Collision Centers to Provide Five Restored Vehicles to In-Need Families in Sacramento, CA
Golden State Collision Centers, Inc. presented five rehabilitated vehicles to families in need in Sacramento, CA. The vehicles were presented during their annual “Giving Back to the Community Benevolence Event” at 8:30 a.m. on December 13, 2011, at the Golden State Collision Center, 7407 Roseville Road, Sacramento, CA. The Golden State Collision Centers’ “Giving Back to the Community Benevolence Event” has benefited thirteen local families over the past four years with restored vehicles. This year, in conjunction with Farmer’s Insurance Group, GEICO Insurance, Cottage Housing, Inc. and Roseville Home Start, refurbished vehicles were once again presented to in-need families from the Northern California area. “Each year, we come across cars that are written off by either the owner or the insurance company. Often these older vehicles are simply in need of mechanical or body work to get them road-ready and safe to drive. In these economic times, Golden State believes there are people who really need them,
and this is the basis of this annual program,” said Dave Finkelstein, owner of Golden State Collision Centers, Inc. “We are delighted to be able to not only continue this program but also to increase our donation amounts in a time where people are still suffering economically. The gift of a vehicle is one that truly changes lives and we are honored to be able to connect with our local community in effecting a positive change.” Local vendors, including AutoWest Dodge, Car Quest, LKQ, Keystone Automotive, Ertl’s Automotive, The Dent Shoppe, John L. Sullivan, Standox, Enterprise Rent-A-Car, Farmer’s Insurance Group, GEICO Insurance, and employees of Golden State Collision Centers, Inc. donated their time and services as part of this program. Golden State Collision Centers’ mission is to provide honest, highquality vehicle repair service to its valued customers. This vision of exceptional auto body service began over 25 years ago. For more information please visit www.goldenstatecollision.com.
On December 7 California’s air quality regulator proposed sweeping new regulations to reduce greenhouse gas emissions from vehicles; these revisions include putting 1.4 million electric, plug-in and hydrogen cars on the state’s roads by 2025, according to Automotive News. In addition to curbing climate warming gases, the program will also save drivers $22 billion in fuel costs, according to the state’s Air Resources Board. The proposals are part of the Golden State’s aggressive plan to reduce climate warming emissions by 80 percent by 2050 and the Obama administration’s goal of increasing auto fuel efficiency to 54.5 miles per gallon nationwide by 2025. The ARB will consider adoption of the rules at a meeting on Jan. 26. California is the biggest U.S. car market and because of this has had the distinction of being able to set policy independent of federal rules. The United States developed its new greenhouse gas standard for 2017 vehicle models and beyond jointly with California, which has long had separate, more stringent regulations. The new standard will reduce greenhouse gas emissions from vehicles by 34 percent compared to 2016 levels.
The state also said that though fuel-sipping technologies will increase the cost of a new vehicle by about $1,900, those costs will be offset by $6,000 in fuel cost savings. About 40 percent of California’s greenhouse gases come from vehicles, and the state’s new rules also aim to increase production of zero-emission vehicles, or ZEVs, which include cars that run on electric batteries and fuel cells. The state wants ZEVs to make up more than 15 percent of new vehicle sales by 2025. But the state said plug-in hybrids would be transitional vehicles, adding that 87 percent of cars will have to be pure ZEVs by 2050 for the state to achieve its goals. The target is an aggressive one considering that ZEVs make up well below 1 percent of the market, and California has been forced to scale back its ZEV goals in the past because vehicle technology lagged the state’s hopes for putting clean cars on its roads and highways. “With more than 30 models of electric cars expected from automakers in the next few years, California should feel confident enough to eliminate special credits that could undermine the proposal and set a 30 percent more aggressive sales target,” said Don Anair, senior engineer with the Union of Concerned Scientists.
CARB Regulations to Reduce Greenhouse Gases by Putting 1.4M Electric and Hybrid Cars on Roadways
4 JANUARY 2012 AUTOBODY NEWS | www.autobodynews.com
2012 NABC Annual Fundraiser Coming in January The National Auto Body Council (NABC) has selected January 11, 2012 for its upcoming annual golf event fundraiser, which will again take place at the Tahquitz Creek Golf Resort in Palm Springs, California. The event is held in conjunction with the NABC’s open board meeting, which will take place the previous day, January 10. Because it is a major source of funding for the NABC, the fundraising event plays an integral part in providing the resources that support the organization in its mission of improving the image of all dedicated collision industry professionals. Not only does it help NABC implement the programs and activities that define it and give shape to this purpose, it helps reduce the cost of NABC’s programs for participants, making them more affordable. The fundraising golf event is open to both individuals and teams, and will be played using a four-person scramble format. Breakfast will be served at the course prior to the 10 am shotgun start and the event will conclude with a buffet reception, awards ceremony, and prize package drawings. Transportation
will be provided to and from the Palm Springs Hilton, the conference hotel, to the Tahquitz Creek Golf Resort. “As this event is the one and only fundraiser for the National Auto Body Council, we are excited that the new start time will allow for an entire day at the course,” said David Merrell of CSi Complete, who with Domenic Brusco of PPG is the NABC fundraising committee co-chair. “Without this event and the industry’s support we could not continue the mission and vision of the NABC.” Making the event even more special will be a vehicle gifting presentation which is part of NABC’s Recycled Rides® program. The vehicle gifting will take place at the golf course before play begins. Visit www.autobodycouncil.org to register.
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www.autobodynews.com | JANUARY 2012 AUTOBODY NEWS 5
Lexus Mulling Headquarters Move to Torrance, CA
In a step toward possibly moving Lexus’ global headquarters out of Japan, the automaker has decided to transfer its global marketing functions from Japan to a new decision-making center in Torrance, California. According to Automotive News, the shift begins in January with the creation of an office at Toyota Motor Sales USA Inc.’s campus in Torrance. It will handle creative marketing and some brand communications worldwide, said Karl Schlicht, head of Lexus’ global product and marketing planning division. The decision was made last summer and only one person has been appointed to open the unit. The automaker plans to expand staff to three in January. Executive Vice President Yukitoshi Funo said the move is part of Lexus’ attempt to remake itself as a “transnational”—rather than Japanese—brand. Lexus aims to bolster its brand image by strengthening its performance credentials and assuming a more international flavor. As an example of the new mentality, one executive cited the decision not to serve sushi at a Lexus dinner reception. He said: “We don’t want to be blatantly Japanese.”
Insurance Companies Boost CA’s Economy by Billions
California’s property/casualty insurance industry boosted the state’s $1.9 trillion economy in 2008, according to a report from the Insurance Information Institute issued November 29. In 2008, insurers contributed $34.7 billion to California’s gross state product, accounting for about 2 percent of the state’s GSP, according to reports made by Insurance Journal. According to the report: California employs more insurance professionals than any other state, with property-casualty insurers providing 287,270 California jobs in 2009; California insurance jobs accounted for about $20 billion in compensation; In 2010, property and casualty insurance claims payments totaled $29.4 billion in California, while life insurance claims and benefits payouts in California totaled almost $38.9 billion; California collected $2.2 billion in premium taxes from insurers in 2010, 64 percent higher than the next leading state; Californians insure substantially more cars—roughly 24 million in all —than drivers in any other state.
Ben Clymer’s The Body Shop Donates Ride to Riverside-Area Woman
A Riverside woman has another reason to be thankful this holiday season; a local body shop and AAA gave her the gift of a reliable transportation to celebrate the spirit of Thanksgiving. “You hear of stories of people winning the Lotto or hitting the jackpot, I just never thought things like that really could happen in real life,” said car recipient Nancy Ibarra. The vehicle holds special meaning for Ibarra because before November 30, she didn’t even have access to a car, and her high-travel job demands she commute around the Riverside area frequently. “Some of these distances are far, from Mira Loma to Temecula, even out to Blythe, so this is really going to help me in my new job,” said Ibarra. But as much as this was a day about getting, it was also about giving because the 2009 Toyota Corolla was a gift. The car was found in a scrap yard and donated by the Auto Club. The engine was OK, but the back end of the car needed a lot of work. And that’s where Ben Clymer’s The Body Shop in Riverside, CA, helped out. “As a family in the business for 21 years, this community has always fed us, it has always taken care of us,
and so we wanted to do something to give back to them,” said Clymer. Ibarra was one of a number of people who applied for the car giveaway. Applicants had to write an essay for the contest, and Ibarra’s submission won. But Ibarra didn’t only get a new car on November 30, the trunk of the car was also filled with food. “I think we understand that it’s not just giving to ourselves, but giving to others. Today represents that at its best, of taking what success and blessings we have and helping someone else out,” said Riverside Mayor Ron Loveridge. And in the spirit of helping someone else out, Ibarra offered her assistance at the end of the event. “And if anyone needs a ride home or back to the office, come talk to me, I’ll gladly take you anywhere you need to go,” said Ibarra. “Thank you once again!” This is the third year now that Community Connect has worked with the city of Riverside, the Auto Club of Southern California and Ben Clymer’s The Body Shop to provide a refurbished vehicle to an individual in-need for the holidays. For more information about Ben Clymer’s The Body Shop please visit www.benclymers.com.
6 JANUARY 2012 AUTOBODY NEWS | www.autobodynews.com
Lito Auto Body in Napa, CA, Repairs Vehicle for Local Family in Need Lito Auto Body Inc., along with a number of other businesses local to the Napa, CA, area, repaired and donated a car to a local family in need this month according to the Napa Valley Register. Randy and Georgene Lichau, co-owners of Lito Auto Body refurbished and donated a 2003 Saturn to a needy local family. Gustavo Infante and Lorena Reyes were very excited and grateful to receive this gift of reliable transportation. Gustavo, Lorena and their two children received the refurbished Saturn sedan at Lito Auto Body on December 8. Their 11-year-old daughter Deysi and son Gustavo, 9, merrily hopped in the back seat of their new family vehicle while Reyes flashed a toothy and indelible smile through the front passenger window. Surrounded by Lito mechanics, suppliers and shop co-owners Randy and Georgene, Infante and his family took delivery of the gift in front of the repair shop. “Here you go; you don’t have to wait for Christmas now,” a grinning Georgene said as she handed them a basket of gas and gift cards—presents for the children—and the keys to the Saturn, its beige roof adorned with
gift bows. The ceremony was the result of months of planning, and a couple’s decision to help a local family in their own special way. “We had a good year last year and decided we wanted to give back to the community,” Randy Lichau said. The couple began with a 2003 Saturn L300 that an agent from Allied Insurance spotted six months ago at a Benicia salvage yard. Suppliers working with Lito donated their labor along with tires, auto glass, paint and other items, bringing the midsize car to a near-showroom look. Next came the decision about who should receive the gift. Calls to various social service groups produced a list of about a dozen families. The Children’s Health Initiative suggested Infante, a vineyard worker for 27 years, and Reyes, a mother of two who for nearly a year has walked an hour-long round trip to attend English lessons she hopes will help land the family a second income. “Since they’re working to better themselves, it’s something we want to promote by helping them,” Georgene Lichau said. Georgene also hinted at more such auto donations in the future, perhaps as a regular Christmastime event.
www.autobodynews.com | JANUARY 2012 AUTOBODY NEWS 7
CAA’s East Bay Chapter Hosts 14th Annual Toys for Tots Model Truck Customizing Competition
truck bids, for the food eted title and this year’s first place banks of Contra Costa went to Crocketts Premier Auto Body The California Autobody Associaand Alameda. We had of Pinole, Calif. Shop Owner Dan tion’s East Bay chapter hosted its 14th all the alumni trucks in Welsh left the work to his highly creannual Toys for Tots Model Truck the lobby, not under ative crew and they delivered in a big Customizing Competition on Nov. 15 glass, so everyone way. By thinking outside the box, the at the beautiful Blackhawk Museum could get a good look artisans at Crocketts created a Bugatti in Danville, Calif. Amongst some of at them.” with its trailer, modeled after an actual the most coveted cars in the world, Ten Bay Area body vehicle on display at the museum. In 250 people enjoyed the evening in the shops and auto repair addition, Crockett won the People’s This “Cars” themed entry landed second place for T.G.I.F. Body same room with a 1909 Winton Tourschool programs enChoice award for receiving the most Shop of Fremont, Calif. ing Model 17, a 1911 Mercedes tered the competition votes from the people in attendance. Labourdette Skiff, a 1968 Bizzarrini Falaschi Delahaye, part of the muwith high hopes for tro“Once again, the collision repair 5300 S.I. Spyder, and a 1937 Figoni et seum’s 90-car collection. phies and accolades. Each was given shops that care about their craft step Michael Govette an identical Nylint from FinishMaster die-cast truck that in Concord, Calif. they could modify has been running and customize for the contest. Silent-aucthis highly successtion bids were taken ful event since 1997 on every vehicle and and this year was no exception, he said. at times the bidding “We had a really was back and forth between primarily fine show and we gathered over 300 competing shops. There were some The crew at Crocketts worked many hours to create the winning toys for the Marines model. Back Row (from left) Keith Griffin, George Pezzolo, Mike Toys for Tots pro- amazing trucks, but Govette from FinishMaster, Jared DeMello and Louie Bain. First Crocketts Premier Auto Body in Pinole, Calif. created this Bugatti with gram and raised only one can walk Row (from left) Craig Bower, Edwin Dominguez, Mario, Aguilarits trailer, a vehicle modeled after an actual car on display at the Black$3,500.00 from away with the cov- Elias, Carlos Lopez, Fabricio Padilla, David Colomy and Ryan Welsh. hawk Museum. It obviously wowed the crowd and won the first prize by Ed Attanasio
8 JANUARY 2012 AUTOBODY NEWS | www.autobodynews.com
up in a big way at Christmas time,” Govette explained. “Besides raising money for the food banks and Toys for Tots, we presented $3,400 to the local R.O.Ps and local colleges at a time that they clearly need it most.
From left, Antonio Alejanre, Melanie Martin and Martin Barragan from TGIF Body Shop in Fremont built this “Cars” theme truck that won second place
Building these toy trucks is a great team-building project for the body shops. It’s a win-win, because we help the community and the collision in-
dustry supports the effort enthusiastically every year.” Second place in the competition went to T.G.I.F. Body Shop of Fremont, Calif. Shop owner Kathy Mello deferred to her skilled technicians to make a “Cars”-themed truck based on the popular Pixar animated features. The design was fun and funky and incorporated a working lamp into the trailer. Third place was awarded to Mission Valley R.O.P. of Fremont, Calif. With Instructor John Cimino advising his collision students, they did all of the work while they created a stunning Christmas-themed truck. Mission Valley R.O.P. also won the Best of Class award, given to the top student-constructed model truck. Sponsors for the evening included PPG Industries, LKQ, Audatex, Hertz, National Auto Parts, Lehmer’s of Concord, Dublin Chevrolet, Sherwin-Williams and OwenDunn Insurance. Special thanks to Melody Walker who has created remarkably artistic posters for the Toys for Tots Model Truck Customizing Competition for the past two years. See Toy Trucks, Page 13
AAMP Acquires American International, Maker of Audio Installation Kits AAMP of America, Inc. announced it completed the acquisition of American International—a California-based maker of car audio installation kits and accessories. Additionally, the company announced it hired Ken Wiseman, formerly of Elettromedia-USA (maker of Hertz and Audison high end brands) as Director of Sales of the Phoenix Gold brand of amps, speakers and subs. Wiseman’s role will be to develop new markets and sales opportunities. He will also be tasked with training, reinforcing relationships with existing customers, and developing sales programs, said Aamp. Wiseman spent 6 years at Elettromedia-USA where he was Director of Sales & Marketing. Prior to that, he served at Eclipse as a regional and national sales manager. He also spent 10 years with Sony Mobile as a key account sales manager. As for American International, Aamp said it acquired the company in part for its manufacturing capability and expertise in molded plastic installation accessories. Aamp CEO Ron Freeman, said, “As a US-based manufacturer of innovative car audio installation products, American International has expertise that will be invaluable in creating fu-
ture solutions for the 12-volt industry.” American International products range from car stereo installation kits to wire harnesses and antenna accessories, and are sold worldwide to car audio professional shops. American International will continue to operate all aspects of sales and manufacturing out of its Camarillo, California facility. As for Phoenix Gold Mobile, it was acquired by Aamp in 2009 and was positioned as a protected brand for independent specialists in 2010. Wiseman said, “Phoenix Gold is introducing some outstanding new products at this year’s CES, and I couldn’t be joining the team at a better time. In the 80s and 90s, Phoenix Gold had a reputation as an industry mainstay. I think we’re on the right track with products, and with the proper sales programs and distribution….” Aamp of America is a portfolio company of Audax Group, which has offices in Boston and New York. Aamp now owns brands including Stinger, Phoenix Gold, iSimple, Pacific Accessory Corporation, Sound Quest and Amercian International. Also, Aamp, recently merged 2 car audio accessories makers, Peripheral Electronics and Pacific Accessory Corporation. It now has 6 US facilities.
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Valley Motor Center, in Van Nuys, CA, Hosts Another Successful Vehicle Donation Valley Motor Center has proudly held another successful charity event. As part of giving something back to the
Sue Weitkamp of New Horizons, Cindy Cohen, Client Services Manager for Valley Motor Center and Anna Eskanderian of New Horizons
communities the business serves, Valley Motor Center completely refurbished a 2006 Toyota Sienna minivan, and on November 21, 2011, donated it to New Horizons, a local organization dedicated to helping adults with developmental disabilities reach their potential and fulfill their dreams. Attending this year’s event were representatives of insurance companies, vendors, parts and paint suppliers, car rental companies and community leaders. On hand to help kick off Valley Motor Center’s charitable donation
were Assemblyman Bob Blumenfield, Detective Bill Bustos - Valley Division LAPD, and Jason Levin of Senator Fran Pavley’s office, who all spoke, as well as Marsh Gluchow, owner of Valley Motor Center, Sue Weitkamp, Board Member & Past President of New Horizons, and Matt Williams, Material Damage C.A.R.S. Manager of Mercury Insurance. Valley Motor Center was honored to have Malissa Moreno sing, and Adam Sher and Lisa Bronet speak, all clients of New Horizons.
Marsh Gluchow, owner of Valley Motor Center, Cindy Cohen and Assemblyman Bob Blumenfield
Guests enjoyed food, photos, and of course the vehicle donation.
of this vehicle. We’ll work diligently to Valley Motor Center has always make sure the van they are donating to believed in giving back and getting inus is put to its very best use, and allows volved in the communities they serve. us to help as many people as we can.” The company feels that today, during this economic downturn which has affected everyone, they’re so fortunate to be able to do a little extra by fully refurbishing a vehicle previously owned by Mercury Insurance, and donating it to such a worthy organization. “Our goal is to help as many people in our local Marsh Gluchow and Matt Williams of Mercury Insurance with community as possible by clients and employees of New Horizons donating a vehicle to New Horizons, an Valley Motor Center has provided organization that operates right here in expert auto collision repair since 1944, the communities we serve.” states and through all those years of experiMarsh Gluchow, owner of Valley ence, has earned the highest levels of Motor Center. “It is truly our privilege integrity, quality repairs, customer to be a part of this wonderful cause.” care, reliability and safety. “We are excited about participating Every one of the employees at Valin Recycled Rides,” states Holly Rasey, ley Motor Center has such a strong VP for development & Marketing for commitment to their customers that New Horizons. “Valley Motor Center “You Will Be Satisfied” is engraved in has a long history of helping those in stone in their Customer Care Center. need in their community, and we’re For more information please visit proud that they chose us to be a recipient www.valleymotorcenter.com.
Defense in 2009 Salinas Auto Body Shooting Accuses Deputy of Planting Gun on Defendant
Proceedings in a case pertaining to the shooting of an auto body shop owner by a gang task force officer were under way in December, according to the Herald Salinas Bureau. The case details actions that took place almost three years ago; auto shop owner Carlos Fletes pointed something at a gang task force officer and got shot for it. The question before a jury is whether he was holding a gun or a spray nozzle he was using to paint a bumper. Jury selection got under way December 5 in the trial of Fletes and his friend Jose Villarreal, who sheriff’s deputy Jesse Piñon allegedly was chasing the night Fletes was shot. Fletes, 31, and Villarreal, 26, are charged with multiple counts of assault with a deadly weapon, exhibiting a firearm in the presence of a peace officer, street terrorism, being a felon in possession of a firearm and possession of ammunition and a concealed weapon. Judge Russell Scott, prosecutor Jim Panetta and defense attorneys Miguel Hernandez and Charles Murphy selected an appropriate jury and began proceedings on December 6.
On Jan. 15, 2009, Piñon and another officer were looking for two cars connected to recent shootings when they cruised by Fletes’ Salinas auto body shop, according to testimony at a preliminary hearing in the case. They were in an unmarked car and were wearing street clothes under black task force vests. In the open bay door of the business they saw two men, one of whom they recognized as Villarreal, a known Sureño gang member. Piñon testified he made a U-turn and passed by the business again. Looking in his rear-view mirror, he said, he saw Villarreal reach into a stack of tires and tuck a gun into the back of his pants. After waiting for backup in a marked vehicle, Piñon returned to the business a third time. When Villarreal ran, he chased him inside. Suddenly, Piñon testified, Fletes stood up from a crouched position behind a car and pointed a gun at the deputy, who shot the weapon out of his hand. It was allegedly found under a car a few feet away. Fletes and defense attorney Hernandez allege the gun was found when Piñon and sheriff’s deputy Bryan Hoskins placed it there to See Salinas Shooting, Page 12
10 JANUARY 2012 AUTOBODY NEWS | www.autobodynews.com
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Micthell Moves into AIS Data Center in San Diego, CA
Continued from Page 10
Salinas Shooting
cover Piñon’s mistake. Fletes testified he was painting a bumper when he heard the commotion and stood up, spray-paint nozzle in hand. The bullet passed through the back of his hand into his stomach. If he were pointing a gun, Hernandez has said, the bullet would have struck his fingers. And the gun would have had blood on it. Unlike the spray nozzle that Fletes’ family found lying in a pool of his blood the next day, the gun was clean. Another gun and ammunition were also found on the premises, according to prosecutors. The defense attorneys have maintained those, too, were planted. Fletes has served a prior prison term for being a felon in possession of a firearm. Villarreal has not testified in the case, but Hernandez and the Long Beach man’s former defense attorney said he was an unarmed witness to the shooting. Believing Piñon was a gang member planning a drive-by shooting, they said, Villarreal had moved to a corner inside the building when Piñon burst in and opened fire on Fletes.
Mitchell International moved into American Internet Services (AIS)’s Enterprise-Class Lightwave Data Center in San Diego on November 29. AIS, a provider of enterpriseclass data center and connectivity services, said its data center, provides Mitchell with flexibility, reliability, security and room for growth—along with fixed costs for easier budgeting. The data center is also conveniently located just 10 miles from Mitchell’s corporate headquarters. AIS said its established change management and incident management procedures, which were developed using the Information Technology Infrastructure Library (ITIL) architecture for establishing and operating IT service management, was a key reason the company was selected by Mitchell. ITIL is the global standard in the area of IT service management. It is a comprehensive, non-proprietary and publicly available set of guidelines for best practices in IT service management. “The company had grown to the point where we began to look for a new headquarters. At the same time, we were seriously con-
A fleet of about 30 Toyota Prius hybrid taxi cabs began service at San Diego International Airport November 21 under a program designed to help the environment and save money, according to reports made by CBS 8 San Diego. Operators of hybrid taxis in San Diego will receive a combination of rebates, reduced taxi permit fees and a special financing and maintenance program, said Chuck Colgan of the California Center for Sustainable Energy. The program is a partnership between the CCSE, San Diego County Regional Airport Authority, Mossy Toyota, the Metropolitan Transit System and taxi operators. The new taxis are the first commercial use of the Prius V, according to Colgan. The CCSE estimates that taxi operators switching to hybrid cabs will save up to $1,500 a month, depending on miles driven. There are about 1,000 cabs in operation in San Diego, including 300 at the airport, Colgan said. The hope is that this fleet of 30 hybrid taxis will grow in the future.
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sidering whether to continue owning our own data center or to partner with a leading industry partner and further strengthen our already best-in-class hosting services,” said Erez Nir, CTO of Mitchell. “AIS proposed an ideal solution for us right here in our back yard with the connectivity, flexible power and security we needed, plus we’d be able to maintain the control of the data center as though it were inhouse.” “Mitchell had reached a crucial stage with its growing business where it could benefit from working with a trusted partner offering enterpriseclass services to alleviate the headaches of maintaining a capital equipment intensive data center,” said Tim Caulfield, CEO of AIS. “We were able to map out a solution that let them accomplish their goals and maintain control of their data center along with their operating and capital expenditure costs.” AIS is an enterprise-class data center, cloud and connectivity services company. The organization has data centers in Los Angeles, San Diego and Phoenix. For more information, visit americanis.net.
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ARA Cautions Giving Automotive Manufacturers Carte Blanche Power Over Repair Procedures The Automotive Recyclers Association (ARA) is calling on the collision repair industry to proceed cautiously in recognizing only automotive original equipment manufacturers(OEM) published repair procedures, as the official industry sanctioned “Repair Standards” for collision repair. Recently, several prominent collision repair groups issued and signed a joint statement officially recognizing OEM published repair procedures as the collision industry’s repair standards. While the collision repairers' statement did afford a limited role for the Inter-Industry Conference on Auto Collision Repair (I-CAR), a significant concern of ARA centers on recent auto manufacturers' activity which could be viewed as aggressively pushing the limits of antitrust laws and the Magnuson-Moss Warranty Act. Over the last three years an increase in the use of recycled OEM automotive parts has reduced the market for new OEM replacement parts. As a result, automotive manufacturers have become more aggressive by releasing revised collision repair position statements that are even more biased and based on weak or no apparent scientific
research claiming the recycled OEM parts are inferior to new OEM parts. In making these types of statements, auto manufacturers seem to be attempting to exclude recycled OEM parts from the market which would result in only one source of parts and procedures for the repair of consumers’vehicles—the auto manufacturers. “We believe that the goal of the manufacturers is to discourage the use of recycled OEM parts and secure a market that establishes automakers as the only source of parts and procedures for the repair of consumers’ vehicles,” said ARA CEO Michael E. Wilson. Use of recycled OEM parts has been widely accepted for decades and there is a long track record of their successful use. Recycled OEM parts are fully functional OEM parts and are in most cases identical to the OEM parts automobile manufacturers recommend for repairs. In addition, recycled OEM parts have several additional benefits compared to new parts. Recycled OEM automotive parts are typically 30 to 70 percent less expensive than comparable new parts. Recycled OEM parts are much better for the environment than new parts because no additional resources or energy are used to create them.
Continued from Page 9
Toy Trucks
The organization also gave several educational institutions money for their auto repair programs. Eden Valley R.O.P. received $500, Mission Valley R.O.P. also got $500 and both Contra Costa College, and the College of Alameda all received $1,200 each from the CAA East Bay chapter. “It’s great when organizations like CAA reach out and help schools like ours,” said Peter Locke, department chair of the automotive programs at Contra Costa College. “We need these types of donations to keep our programs thriving.”
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AAPEX Buyers Select New Product Showcase Winners
The winners of the Automotive Aftermarket Products Expo (AAPEX) 2011 New Product Showcase were selected by more than 3,600 votes by pre-registered AAPEX buyers. Prior to AAPEX, buyers reviewed entries displayed in the online 2011 AAPEX Product Extra and voted digitally for their favorite new products in nine categories: • Cool Cars: Philips Automotive Lighting, GoPure Automotive Clean Air System • Fixing It Right: Striker Hand Tools, FLEXiT Work Light • Good Sense: Berryman Products, Inc., B-104 Towelettes • Innovation: Heat N Clean Products, Inc., Heated Wiper Blades • Individuality: Matrix System, Ultra Leather Renu • Making It Better, Scrubblade LLC, Washer Fluid Tablets • Safe & Sound: Old World Industries, PEAK® Rear-view Mirror Back-Up Camera • Smooth Sailing: Federal-Mogul Corp., ANCO Profile Wiper Blades • Work Smart: ShowMeTheParts.com Mobile App
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Shop Showcase with Erica Schroeder
Erica Schroeder is assistant editor at Autobody News in Carlsbad, CA. She loves to talk with owners about their shops and goings on in their areas. Contact her at eschroeder@autobodynews.com, or 800-699-8251
Jim and Jack’s Collision Center in El Segundo, CA—Over 45 Years of Expertise Jim and Jack’s Collision Center, one of the largest single-location body shops in the nation, started out as a mechanical shop at a gas station.
The entire office staff at Jim and Jack’s Collision Center in El Segundo, CA
things to do for the day. According to Richie, this is the only efficient way to keep track of the momentous amount of work coming into Jim and Jack’s. Work is given to teams according to their past productivity, that way each employee is responsible for their own production. Richie monitors their production the same way insurers monitor Jim and Jack’s production as a whole—through cycle time and KPIs. “We rarely have come backs,” said Richie, “We have too many measures in place to have a car come out of our shop with quality issues.” At Jim and Jack’s the business also has three employees in charge of quality control—they do a final quality check of each vehicle that is repaired at the shop. These three employees have been with Jim and Jack’s for over 25 years and are certified technicians and inspectors; they are definitely valued by the company. Jim and Jack’s also does a full, showroom quality detail to each vehicle that they repair before it is returned to the customer. “60 percent of our staff have been with us for more than 15 years,” said Richie, “They’re people who have given their lives to this company.” Richie said he is blessed to have the employees he does, employees that are very passionate and who treat
Founders Jim and Jack Kizirian opened the business in 1967 at the same location the business currently resides in. Taleen and Richie Kizirian, niece and nephew of the original owners, now run the business. Since taking over the business in 2004, Taleen and Richie have been able to quadruple the business in size. “It was my job to come in and modernize, computerize and put systems in place,” said Richie, who has a business degree in finance and accounting from Loyola Marymount University in Los Angeles. Taleen, who is a licensed Certified Public Accountant, handles the business’s accounting and administrative functions. Jim and Jack’s is able to see 100s of cars per month in their 150,000 square-foot, 5-acre facility; they work with 17 frame machines and 5 spray booths on their shop floor. The Technicians at Jim and Jack’s are also certified in various different European, Asian and American brand auto repair techniques. “You name it, we have Jim and Jack’s new Hermosa Beach, CA, satellite location it,” said Richie. According to Richie, the business the business like their own. rarely sublets any of the work they “That’s something you just can’t do—it is all done in house including buy,” said Richie. airbag work, glass repair and replaceRichie also stressed that he has ment and mechanical work. been very blessed to have some great “I’m a very hands-on owner,” industry relationships. said Richie. Technicians work in One month ago Jim and Jack’s teams at Jim and Jack’s and after a opened a satellite location in Hermosa production meeting each morning, Beach, CA, in order to feed more each team has an itemized list of work to their main location.
14 JANUARY 2012 AUTOBODY NEWS | www.autobodynews.com
“Our new location has been very has several fleet accounts and receives well received in the community,” said work from more than a dozen DRP reRichie. The Hermosa Beach location lationships with insurers. They also receive a large amount of walk-in traffic was created to help the business from customers paying out of pocket. branch out to more of the Los Angeles area market share. According to Richie, there are not a lot of other body shops in the area near the new location. The satellite is also located on the Pacific Coast Highway, so it sees a lot of traffic. In their first month of operation they have already received multi- Cars line the bays at Jim and Jack’s in El Segundo, CA, awaiting metal work ple offers from insurers to negotiate DRPs for the satellite loca1605 E. Grand Ave tion, said Richie. El Segundo, CA 90245 According to Richie, Jim and (310) 322-5733 Jack’s is able to bring in business from everywhere—”Our chips are all over 555 Pacific Coast Highway Hermosa Beach, CA 90254 the place.” Jim and Jack’s is the exclusive (310) 322-9475 collision center for 4 local dealerships, www.jimandjacks.com
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G&C AutoBody Will Spend $2M on Solar Panels at Three Locations G&C AutoBody, with 7 locations in northern California, is spending $2.09 million installing photovoltaic power arrays on three of its seven locations to write off the whole project cost in one year under a special 2011 tax incentive for capital investments, according to reports made by the North Bay Business Journal. The multiple-shop operation, which is Northern California’s largest collision repair chain north of the Golden Gate Bridge, intends to have installed a $1.3 million system on its Santa Rosa main offices and shop and a $450,000 array on its Petaluma store by the beginning of 2012. This past summer a $340,000 system was installed on a year-old location in Windsor, CA. (See Autobody News March 2011 Edition). With several federal and state incentives on renewable-energy projects, the 100 percent bonus depreciation federal deduction for “qualified property” projects in 2011 and the potential to offset electricity costs, the three
incentive payable over 60 months. Because of the potential operational cost savings, solar arrays are now being considered for G&C’s Novato and Rohnert Park stores, which opened this year are under long-term leases, according to Crozat. “If you do not pay a lot in taxes, solar can be a waste of money,” said Shawn Crozat, chief operating officer. “But if you do, you can take the tax money and G&C’s Windsor, CA, location had a solar system installed during reinvest it into the comthe summer of 2011 pany.” G&C AutoBody had $20 million “If you’re a business that uses any electricity, you’re crazy if you don’t in revenues last year and is anticipattake advantage of this,” he told the ing receipts of $30 million this year. The solar projects have tapped the North Bay Business Journal. company’s planned capital spending The federal business energy infor the fourth quarter. vestment tax credit applies to 30 perHowever, the company in the first cent of the cost of solar projects completed in the next few years. The quarter of next year wants to acquire state offers a 10 percent performance two more auto body shops. That includes one in Napa Valley and another elsewhere in the North Bay currently Expansion in CA, TX, in purchase negotiations. solar projects were a bargain, according to Gene Crozat, president and founder. He’s planning for energy costs to rise significantly in coming years as greenhouse-gas emissionscontrol measures kick in.
CARSTAR Sets Stage for GA with Expanded Business Development Team CARSTAR Auto Body Repair Experts announced it has expanded the company’s business development team to manage a national growth initiative in the U.S. The MSO has also more than doubled its sales force as it prepares to expand into California and big metro areas in Texas and Georgia. The newly expanded business development team is charged with generating new franchise locations. The business development team, which includes three new leaders in the automotive franchise industry, will serve as business consultants to the country’s independent shop owners. The team will help owners evaluate their businesses and determine how the CARSTAR business model can benefit their operations. CEO David Byers said the larger team will allow North America’s largest group of branded collision repair facilities to finally move into the largest U.S. market. “It was just a matter of not having enough business development staff,” said Byers. The three new individuals appointed to CARSTAR’s business development team include: ● Ryan Keller, assistant vice president of franchise development for CARSTAR. Keller will be responsible for managing CARSTAR’s growth initiatives, enhancing the franchise sales process and overseeing independent store transitions into the CARSTAR
network. ● Mark Behrens, director of network development—California for CARSTAR. Behrens will focus on expansion of the CARSTAR brand into California and adding new franchise partners to existing CARSTAR markets. ● Keith McCrone, director of network development—Northeast for CARSTAR. McCrone will focus on strengthening the CARSTAR network in current and new markets. Dave Blackwell, director of network development—South, Southeast and Midwest for CARSTAR, and Lloyd Taylor, director of network development—Northwest and Central for CARSTAR, are also on the business development team. “We are excited to bring the resources of this expanded business development team to the independent auto body shop owners around the country,” said David Byers, CEO of CARSTAR. “The knowledge they have of the collision industry, their experience as franchisees and business entrepreneurs, and their expertise in guiding independent shop owners through the process of joining the nation’s largest auto body repair MSO all will be incredibly powerful in building the CARSTAR brand across North America.” For more information about franchise opportunities with CARSTAR, visit carstarinvestment.com.
16 JANUARY 2012 AUTOBODY NEWS | www.autobodynews.com
The special bonus depreciation deduction has been helpful for businesses because it applies to a number of modified accelerated cost-recovery system (MACRS) classes of new business property—equipment with depreciation schedules of less than 20 years and software normally depreciable over three years and commercial real estate tenant improvements, according to Greg Smith, a Santa Rosa-based CPA whose clients include G&C AutoBody. “These leasehold improvements are being done in a big way,” he said. Energy Solar of Cloverdale installed the arrays on G&C’s Petaluma and Windsor shops. Mill Valley-based startup Clean Focus Energy is installing the system in Santa Rosa. Gene Crozat has always maintained that if any other body shop owners want to visit his facilities to see what he’s doing and glean information from his business model, he’s anxious and pleased to help them in any way he can. “People don’t believe it when I say it, but there have never been secrets or closed doors around here. I See G&C Solar, Page 20
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Continued from Front Page
Might Have Missed
paint manufacturers consider tinting and blending as necessary procedures that are commonly performed in conjunction with each other. “Research of the color code and existing variations provided by the refinish manufacturer, and blending of the color coat are both recommended operations to perform an acceptable match,” SCRS said in a summary of its findings. “If the refinish technician determines that the color variance requires adjustment, it is a consistent recommendation to tint to a blendable match. When tinting is necessary for color adjustment, it is always done in conjunction with blending.” SCRS has posted individual responses from each of the five major paint companies in the “Technical Info” section of its website (www.scrs.com).
► 3 J.D. Power and Associates data released last year—based on surveys of more than 11,500 insured drivers who had a claim within the previous 12 months—shows how important to customer satisfaction it is to get repairs done quickly and on time. Satisfaction levels for the 75 percent of customers who felt their vehicle was done on time were nearly 200 points higher (883 vs. 709, on a 1,000point scale) than those who felt their vehicle wasn’t done on time. It doesn’t appear to matter what causes the delay: parts, unexpected additional damage, insurer delays or just plain too much work in the shop. In all these cases, customer satisfaction still never exceeded 728 points. Setting expectations is particularly important on larger, non-drivable jobs, Jeremy Bowler of J.D. Power and Associates said. Fair or not, customers expect a drivable vehicle to be repaired within a week, and non-drivable vehicles—even the worst “train wrecks”—within two weeks. An extra effort needs to be made to adjust these expectations if they can’t be met, Bowler suggests. Speed still offers a shop a chance to set itself apart, according to the data. One-in-four customers with drivable vehicles say they didn’t get them back within a week, and onethird of those with non-drivable vehicles didn’t get them back within two weeks.
► 4 Industry trainer Toby Chess last year was alerting shops to the need to recalibrate the steering angle sensor that is part of the electronic stability control system on an increasing number of new vehicles. Such systems are standard equipment on 85 percent of 2010 new vehicles, and will be Toby Chess required on all new remains concerned vehicles as of about steering model year 2012. recalibration The recalibration is an additional procedure that must be done after the vehicle alignment. “It’s an added step, and there’s also no more 2-wheel alignments with these systems. That won’t work,” Chess said. He said he is concerned because even though no “trouble light” will be lit on the dash and the vehicle may handle properly under normal driving conditions even if the system is not calibrated, the electronic stability control function may not work properly in a subsequent “emergency maneuver.”
► 5 The Automotive Education & Policy Institute, which last year received a grant from the Alliance of Automotive Service Providers to build a web-based repository of legal decisions finding in favor of collision repairers, has been posting court documents to the “legal cases” section of its website (www.autoepi.org). The Institute was founded by Ohio attorney Erica Eversman, who said that the website will give shops and their attorneys easy “access to court precedent and the facts and admissions leading to... decisions that Erica Eversman can be used to perdescribes the suade other courts, autoepi.org website customers and insurers that the repairers’ charges are reasonable and necessary for a safe and proper repair.” ► 6 Both Audatex and CCC Information Services last year began offering an automated labor time system for the additional labor needed when replacement bumpers arrive “raw” or unprimed from the factory. In the Audatex system, the “prep raw, unprimed bumper cover” labor
18 JANUARY 2012 AUTOBODY NEWS | www.autobodynews.com
operation is not automatically added to an estimate but must be selected by the user. A line for the operation will show in the “part edit box” when a bumper Audatex knows to be supplied raw from the manufacturer is selected. Although the labor time is prepopulated at 20 percent of the base refinish time for the part (or .3 minimum), the user can override this value. Jack Rozint of CCC said that that based on labor studies completed by Motor Information Systems, the pre-populated labor time for the operation in his company’s estimating system is 25 percent of the full refinish time for the part (with a minimum of .1 and a maximum of 1.0). The feature is available through Jack Rozint the “additional opaddresses the erations” menu unprimed bumper both when the labor issue bumper is known to arrive unprimed and when the condition of the new bumper is uncertain (when it may arrive unprimed); it will
not be seen only when the bumper is known by Motor to always arrive primed. If the automaker has informed Motor the bumper may or will arrive unprimed, footnotes in the CCC system will alert the estimator to this, and a headnote (“Add if Required”) will appear to allow the user to add the “prep unprimed bumper” operation if indeed the part is unprimed. Both Audatex and CCC said the stumbling block in extending the labor operation option to other types of parts that also may arrive unprimed is that information about the parts isn’t provided to them from the automakers.
► 7 With all the apparent bad news about the nation’s economy, one story many have missed is the relatively good news coming out of the automotive industry. Some economists in recent months, for example, were saying it may be the auto industry that “bails out” the nation from slipping back into a recession. Ford, GM and Chrysler have added 90,000 manufacturing jobs, a See Might Have Missed, Page 20
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Houston City Council Set to Vote on Auto Repair Ordinance, Draft Not Favorable to Shops The city of Houston is moving to enact an ordinance to regulate the automotive repair and service industry that would regulate every type of business that touches a car, whether it’s a body shop, an independent auto repair shop, a dealership or a big store like Wal-Mart. The mayor has set the vote for Wednesday, Dec. 21, the last City Council meeting of the year, and after this issue goes to press. “While this ordinance has good intentions, it paints the entire industry with one stroke. The proposed ordinance stems from an effort to eliminate a problem that comes from a small percentage of unscrupulous collision-repair shops, which is one Continued from Page 16
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won’t be in this business forever and if I can make the industry better overall, it will benefit my children and my grandchildren down the road. Give me a call and I’ll do everything and anything I can to help you. I’ve done it many times before and that will never change,” said Gene Crozat to Autobody News. Call the Santa Rosa shop at: 707525-3520. Visit www.gandcautobody.com for more information.
segment of the automotive repair trade. This attempt at a solution will wrap an already difficult business in more red tape,” says Kathryn van der Pol, Past President of ASA, Kathryn van der Pol Houston Chapter, and co-owner of Adolf Hoepfl & Son Garage, which has been in business since 1946. Writing in the Houston Chronicle, Van der Pol says there are some good features for the consumer in this ordinance: “The ordinance will require all
auto-repair facilities to post their license number on their advertising and invoices so that the consumer will know which companies are city-licensed repair facilities. “It will also require auto-repair facilities to carry a minimum amount of liability insurance. Currently, there is no local or state law that requires a repair shop to have insurance. In an uninsured shop, car owners are liable for anything the garage owner does with their car. Good shops already purchase insurance, but virtually all shops that lack integrity will also lack insurance. “Giving approval over the phone for any collision work will be illegal
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and limits will be placed on certain fees charged by collision shops. There is a good reason for this. Repairs resulting from accidents usually cost thousands of dollars. While we are hesitant to say that the city should set pricing for any private business transaction, we agree every approval for collision repair should be in writing. The ordinance includes pages and pages that regulate how records will be kept, how repair shops may gain approvals from customers and establishes fines for sometimes honest mistakes that must be paid to the city. If this new law takes effect, phone apSee Houston Ordinance, Page 25
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Might Have Missed
14 percent increase, from the low two years ago. Nissan, Volkswagen and other foreign-based automakers are expanding in the U.S., and dealers are making more per-sale than they have in years. The Commerce Department has reported significant gains in orders for autos and auto parts, a number of recent government reports have shown the auto industry was the strongest segment of the manufacturing economy in July.
John Yoswick, a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). He can be contacted by email at: jyoswick@SpiritOne.com.
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SCRS Asks Repairers to Submit Parts Quality Complaint Form In an open letter to repairers, SCRS is asking shops to complete a form if they encounter substandard parts in the course of a repair. The letter reads:
The Society of Collision Repair Specialists (SCRS) is requesting your participation in a research project to document the condition of parts as received by collision repair facilities. If you have examples of poor quality, mislabeled, incorrect or incomplete parts you have received, we are asking for you to complete the attached complaint form, and submit it to our offices along with photo documentation to substantiate the concern. The complaint can address any part type, including but not limited to New OEM, Salvaged, Reconditioned, Aftermarket or Certified Aftermarket. Complaint forms can be accessed from the home page of the SCRS Website, and should be submitted to SCRS via Email info@scrs.com or Fax 877-851-0660.
Emails should include photographs demonstrating the issues outlined in the complaint. Please note, SCRS is compiling this information for research, and will not be responding to individual complaints, nor necessarily directly addressing the quality issues raised. If you have a complaint that requires immediate attention, please contact the manufacturer, distributor or certifier of the product directly. We appreciate your input as we collect responses, and look forward to putting the information to good use for the industry. Sincerely,
Aaron Schulenburg SCRS Executive Director
302.423.3537 877.435.6028 Fax PO Box 346 Smyrna DE 19977 aaron@scrs.com www.scrs.com
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Delray Beach, FL, Shop Owner Opposes GEICO’s 10% Deductible on Domestic OEM Parts Eddie Quintela wants to know why GEICO is charging his customers a 10% deductible on their domestic OEM parts, regardless of fault, and in addition to regular deductible and/or applicable betterments. Quintela asks why GEICO is apparently assessing this fee in Palm Beach county but not in nearby Polk county; and why is it that an insured driving a foreign made vehicle is not deducted 10% for OEM parts, but one driving a vehicle made in the United States is made to pay 10% extra for their parts? Quintela sent his first email to GEICO’s Dan Maloney, his local claims supervisor, on Dec. 7: Dan, I called you twice and left two voice messages and haven’t heard back from you yet. I am writing in regards to the 10% parts discount that you have taken from the estimate on claim # 0088707650101145-01. As you are aware of, we do not offer any parts discount to Geico or any other insurance company which we do not have a direct repair agreement with. I spoke with our customer, your insured and asked them if there is any-
Eddie Quintela has sent multiple email letters to GEICO’s local claims supervisor seeking refunds (or at least an explanation) for his customers who are being charged an additional 10% on all domestic OEM parts appearing on estimates. So far he’s had perfuctory response from the insurer, and no substantiation of the “customary” charge. Quintela has offered to help GEICO do its survey of the market since none of the shops he contacted have seen a GEICO sponsored survey. He asks GEICO why they are compromising “relationships between your company and the hundreds of collision repair facilities here in South Florida?”
thing in their policy that states that they are responsible for anything other than their deductible or any applicable betterments. As per Mrs. Wrubel, she is unaware of anything in her policy that states that she will be responsible for anything other than her deductible or applicable betterments. She stated
that there [was] nothing stated about being responsible for 10% of the OEM part costs. Can you forward either her or me the part of her policy that states that the insured will have to pay 10% of the OEM part costs? If you cannot provide that, we would appreciate that you complete a supplement removing the 10% deduction. I hope that you will respond promptly to this email so that we can get this matter settled as quick as possible so that we can better serve our mutual customer.
The following day Quintela copied the previous email to Maloney’s supervisor prefacing with the following text: Good morning Mr. Nicely, My name is Eddie Quintela. I operate a collision repair facility in Delray Beach, FL. I am writing to you to see if I can obtain some assistance with an issue that we continue to have here in Palm Beach county, FL. I am forwarding you an email that I sent to your local claims supervisor Mr. Dan Maloney. Your company continues to take a deduction of 10% off of any domestic OEM part on all your estimates. This leaves your insured’s to pay an
additional out of pocket expense besides their deductible and/or any applicable betterments as described in your policies. I have yet to see where this additional deduction is spelled out or listed in your automobile policy. What is even more troubling is that it is also applied to claimants estimates where a Geico insured is at fault, thus placing an expense on a claimant that had no fault at all. Mr. Maloney did call me this morning to inform me that Geico ‘s position will not change and that they will have their insured pay the additional monies. As I asked Mr. Maloney in my email, can you please show your insured or me where it is written in your policy that they will be held responsible for this? I believe that Geico wants to treat every customer the same in every aspect, but how can an insured in Palm beach county not be made whole after a loss but an insured in Polk county, FL, can? How can an insured that drives a foreign made vehicle not be deducted 10% for OEM parts, but one that drives a vehicle made in the United States be made to pay 10% of their parts? My customers that own and insure American vehicles are infuSee Domestic Parts Deductible, Page 53
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Houston Ordinance
provals for mechanical work will be allowed only if the customer provides a third signature permitting an estimate either to be given orally, in person, or over the phone. Records of that approval have to be maintained for two years. Automotive professionals are concerned about this for a few reasons. “Our main concern,” continues van der Pol, “is that if your car is towed in to a mechanical shop, the facility can’t even look at the car until the owner comes in or faxes or emails a signature. If you are a business owner with a fleet account, you will have to email, fax or come to the shop to give approval of authorization or to sign a waiver. This will slow down the repair process and be an inconvenience for everyone involved. “Mechanical work is entirely different from collision. It differs in that it’s quick, less costly and customers depend on our efficiency so they can get their autos back. The city’s proposal will slow
down this repair process. If it sounds complicated, it will be even worse when customers are confronted with the legalese. If they refuse to sign the waiver authorizing estimates by phone, the customer will have to return to the shop, find a fax machine or send an email. “While the Automotive Service Association (ASA) fully supports efforts to root out bad players in our industry, we believe this ordinance overregulates and will be a burden to our customers who don’t own fax machines, have access to email or have a second car to come back to the shop for a signature. This is going to affect senior citizens, the disabled, those with lower incomes, and those who depend on one vehicle the most. “Another provision is that no authorizations are required for repairs under $100. As long as your bill is $99.99, the repair shop does not need your permission to make repairs or perform maintenance on your vehicle. Our concern is that if you are dropping off your car for an oil change and the technician calls because he determines your coolant needs to be flushed, the work will exceed $100.
Then you will have a delay in repair if you did not sign the waiver - even though we still have the two signatures required by the state. This provision seems unnecessary and could lead to confusion and abuse. “If a shop neglects to put the license plate number, vehicle identification number, or mileage on a work order, or records it inaccurately, it could result in a criminal misdemeanor charge with a $200 to $500 fine. “Why do the mayor and some members of City Council feel this ordinance is needed? “The ASA was told it was necessary because there were some bad body shops taking advantage of insurance companies, resulting in a rise of insurance premiums. “ASA requested information through an open records request about the complaints so that as an industry, we could better understand what problems the city is trying to address. The complaints did indeed support that there are some bad players in the collision repair industry who are charging excessive disassembly fees, administrative fees and are holding
cars hostage. We were given 257 complaints filed over a three-year period with the Houston Auto Dealers, a division of the Houston Police Department that enforces automotive repair facility licenses. Of those, 61 complaints concerned excessive fees from collision shops—none from mechanical. It is a problem, but, “it’s like killing flies with a cannon instead of a flyswatter,” as Councilmember Jolanda Jones said. “Last, there is the concern about increased costs of implementation that will be passed on to consumers. All our paperwork will have to change to comply. Not to mention all our fees and permits were increased this year. For example, in 2011 a Houston automotive repair facility license increased 147 percent, from $200 to $495. “What do we recommend? Ideally, the city should create two separate automotive licenses, one issued to regulate the collision industry and another, simpler one, for the mechanical industry. Many at City Hall acknowledge that this would be a real fix, but there is a rush right now to See Houston Ordinance, Page 39
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Black Friday Increases U.S. Car Sales to Best Since ‘Clunkers’ in 2009 U.S. consumers who set records for retail purchases during Thanksgiving weekend helped boost U.S. auto sales in November, which may have run at the fastest pace in more than two years, according to Bloomberg News. Light-vehicle deliveries in November, released December 1, may have run at a 13.4 million seasonally adjusted annual rate. That would top the 12.3 million pace of a year earlier and October’s 13.3 million rate, which was the best month since sales were helped by “cash for clunkers” in August 2009. Consumers spent a record $52.4 billion during the holiday weekend, excluding autos, according to the National Retail Federation. “The automakers are sending the consumer buying signals right now,” Jessica Caldwell, an analyst for researcher Edmunds.com, said. “The year-end sales, Thanksgiving sales, Black Friday sales, holiday sales, whatever it is, there’s some sort of sale out there. It makes sense for consumers that if now is the time to buy something, from jewelry, to a flat-
screen TV, it must also be a good time to get a deal on a car, too.” Analysts at Jefferies Inc., IHS Automotive and TrueCar.com may now increase their estimates for 2012 deliveries as Toyota Motor Corp. and Honda production recovers from natural disasters in Japan and Thailand. Demand is improving even as automakers maintain discipline by limiting incentives, they said. “Underlying consumer demand is stable and we may have hit a bottom in terms of minimum level of sales that the industry will continue to carry going into 2012,” said Jesse Toprak, an analyst for Santa Monica, California-based TrueCar.com. “Even though the stock market, housing market and consumer confidence all have been down or extremely volatile the last few months, new-car sales stood steady and in fact inched up a couple of notches.” Consumer confidence surged in November by the most in more than eight years, The Conference Board’s monthly index showed November 29. The percentage of consumers plan-
ning to buy a new vehicle within six months climbed to 4.1 percent, the highest since April, The Conference Board said. The pace of U.S. auto sales had dropped below a 12 million rate in May and June after the March 11 earthquake and tsunami in their home country disrupted parts supply and production for Toyota City, Japanbased Toyota and Tokyo-based Honda. The auto-sales rate stayed below 12.3 million in July and August. The slow recovery prompted analysts to cut their estimates for next year to 13.5 million light-vehicle sales, the average of 14 estimates compiled by Bloomberg. The average was more than 14.2 million before Japan’s tsunami hurt supply. Toyota may say deliveries rose 5 percent from a year earlier, and Honda sales may climb 2.6 percent, according to the average estimates of five analysts surveyed by Bloomberg. Both automakers have reported year-overyear declines in every month since April.
“Several high-volume launches, such as the Camry for Toyota, should support continued strength in auto sales into 2012,” said Peter Nesvold, a New York-based analyst for Jefferies. Jefferies sees “upward pressure” to its 2012 sales estimate of 12.7 million, which was reduced from 13.6 million in August, he said. Chrysler may lead all major automakers with a 37 percent surge in sales from a year earlier, the average of eight analysts’ estimates. The Auburn Hills-based automaker is boosting sales even as it reduces deliveries to fleet customers such as rental-car companies, said Alan Baum, principal of Baum & Associates. “Their retail volume a year ago was dreadful,” said Baum. Ford deliveries may climb 10 percent, the average of eight estimates. The Dearborn-based automaker’s performance is “encouraging” because it precedes Ford’s introduction of a new Escape sport-utility vehicle, which may boost sales when it goes on sale in the first See Black Friday, Page 27
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CHEVROLET 1450 South Shamrock Ave. Monrovia, California 91016
MAZDA 735 East Central Ave. Monrovia, California 91016
26 JANUARY 2012 AUTOBODY NEWS | www.autobodynews.com
SUBARU 1450 South Shamrock Ave. Monrovia, California 91016
HONDA 1450 South Shamrock Ave. Monrovia, California 91016
Texas DOI Investigating ANPAC Insurance for Possible Fraudulent Document in Shop Claim John Borek, General Manager of Autocraft Bodywerks in Austin, Texas, has filed a complaint with the Texas Department of Insurance against American National Property and Casualty Company (ANPAC) and a claims services company, American Claims Services, alleging that John Borek they “knowingly used a fraudulent document to justify their short-pay” of a claim. Borek said his shop submitted supplements on the claim to ANPAC through American Claims Service, which denied payment for color sand
and buff, sending the shop a document it said was from Audatex showing that procedure as included in 2-stage refinish formula. Borek said he filed an inquiry with the Database Enhancement Gateway (DEG), and Audatex, after searching the shop’s “Database Reference Manuals” back to 1993. Borek said he had never seen the supposed Audatex document before being presented with it from ANPAC. The DEG stated that the document is “most certainly not from ADP/Audatex.” (The actual Audatex manual shows color sand and buff as a not-included item.) “Color sand and buff has been a pet-peeve of mine since 1998, and I know it’s not included in any paint
time,” Borek said. “But how many shops are being sent incorrect information about things like this and not knowing any better?” The Texas Department of Insurance is now investigating ANPAC for using a supposedly fraudulent document. According to Borek, ANPAC has said they will pay the supplement now, but he has not seen any payment since reporting the findings to the DEG. In filing his complaint with the Texas DOI Property and Casualty Complaint Department, Borek wrote: “We believe that based on this document, ANPAC/American Claim Service is knowingly using a fraudulent See ANPAC, Page 47
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Audi of Downtown LA 1900 S. Figueroa St., Los Angeles, CA 90007 Tel: (213) 747-7248 Fax: (213) 222-1261 Parts Manager: Fausto G. www.audiofdowntownla.com Service Hours: M-F 7:30 – 6:30; Sat 8 - 4
Continued from Page 26
Black Friday
half of next year, said Itay Michaeli, a New York-based analyst for Citigroup. “November was a good retail environment for consumers overall,” Erich Merkle, Ford’s sales analyst, said . Consumers have been “sitting on the sidelines for quite some time. Black Friday provided that reason to get out there.” GM, No. 1 in the U.S. market, may say deliveries increased by 7.4 percent, the average of eight estimates. Don Johnson, vice president of U.S. sales, forecast at a Nov. 15 investor conference that the industry would get close to a 14 million sales rate, including medium-and heavyduty truck deliveries. Detroit-based GM is poised to replace Toyota as the world’s largest automaker by vehicle sales. Hyundai Motor Co., South Korea’s largest automaker, and its affiliate Kia Motors Corp., may combine to sell 24 percent more vehicles than a year earlier, according to the average of three estimates. Nissan Motor Co. may say deliveries climbed 12 percent in November, the average of five estimates. Industrywide car inventory rebounded to 53 days supply at the beginning of November, from 43 days a month earlier, according to LMC Automotive. That’s the biggest sequential increase since February, Jeff Schuster, a Troy-based analyst for LMC, said in an e-mail. Toyota and Honda have said production cuts that followed floods in Thailand will be less severe than the companies feared. Toyota said Nov. 23 that North American factories will operate on normal schedules this week and next week, including overtime. Honda said Nov. 28 that six plants in the U.S. and Canada will resume normal output Dec. 1. “We are really starting to see pent-up demand dig in,” said Jim Lentz, president of Toyota’s U.S. sales unit. “It’s starting to push industry sales regardless of whether the economy is flat or going up.” The U.S. averaged annual sales of 16.8 million vehicles from 2000 to 2007, according to Woodcliff Lake, New Jersey-based Autodata. November had 25 selling days, one more than the year- earlier period.
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www.autobodynews.com | JANUARY 2012 AUTOBODY NEWS 29
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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BMW Working on Lazer Beam Headlights, Energy Efficient
CALIFORNIA • NEVADA • ARIZONA
Honda Recalling 300,000 Vehicles for Airbag Flaws
BMW engineers say their laser headlights have big advantages over LEDs, or light-emitting diodes, and they are working to commercialize the lights. Laser headlights use less than half the energy of LEDs, and their light intensity is a thousand times greater, BMW says. Moreover, a laser diode is one-hundredth the size of an LED diode, which allows designers to shrink the headlight. “We see a lot of advantages,” says Hanafi Abdul, BMW’s optical systems designer. “We can reduce power consumption and weight, and it provides our stylists more freedom to produce beautiful shapes.” In each headlamp, three small diodes generate blue laser beams only 10 microns wide. Those beams are aimed at small mirrors, which reflect them onto a lens. Inside the lens is yellow phosphorus, which emits an intense white light when activated by the lasers. That light is bounced off a reflector onto the road ahead.
Honda Motor Co. is recalling 304,000 vehicles globally for airbags that may inflate with too much pressure in a crash, send metal and plastic pieces flying and cause injuries or deaths. There have been 20 accidents so far related to this problem, including two deaths in the U.S. in 2009. The Japanese automaker said the recall affects the Accord, Civic, Odyssey, Pilot, CR-V and other models, manufactured in 2001 and 2002. The recall spans 273,000 vehicles in the U.S. The latest recall is an expansion of recalls for the same problem in 2008, and again carried out in 2009, as well as last year. The recall now covers about 2 million vehicles worldwide. Honda spokesman Hajime Kaneko said the cause for the latest recall was the use of incorrect material in the chemical used to deploy air bags.The initial cause of the recall was excessive moisture in the inflator propellant, which inflates the air bag.
General Motors is teaming up with a major carbon-fiber supplier to develop new types of the strong, lightweight composite for future GM vehicles, including potentially high-volume models sold globally. GM is partnering with Teijin Ltd. of Japan, which has developed a technology that it says dramatically reduces the time it takes to process carbon-fiber material. The faster cycle time could open the door to the use of carbon fiber in high-volume vehicles, GM says. Carbon fiber is considerably stronger and lighter than steel and aluminum, but it’s more expensive, mostly because of a long, labor-intensive production process. As a result, the composite is only used for select parts in low-volume vehicles, such as the fenders on the Chevrolet Corvette Z06.
“Our relationship with Teijin provides the opportunity to revolutionize the way carbon fiber is used in the automotive industry,” GM Vice Chairman Steve Girsky said in a statement. “This technology holds the potential to be an industry game changer and demonstrates GM’s longstanding commitment to innovation.” GM says Teijin’s technology has the potential to mass produce carbonfiber composites using thermoplastic material that can be molded in less than one minute, vs. mold times of 10 minutes or more for traditional carbon fiber, which is made using a material called thermoset. “It’s easier to handle and quicker to mold,” Jim Hentschel, GM’s executive director for body and exterior, said in an interview. “That’s what allows us to be able to introduce this technology into more mainstream, high-volume vehicles.”
Auto Groups Fight Recall Fees Hike in front of Congress
Automakers, car dealers, rental car companies and the U.S. Chamber of Commerce are opposing an increase in fines for delaying vehicle recalls to as high as $250 million. The Senate Commerce Committee will consider a long-delayed bill to toughen auto safety laws. The bill, aimed at reforming the National Highway Traffic Safety Administration, would hike maximum fines for manufacturers that delay recalls to $250 million from the current $17.35 million. Proponents have pushed for more than a year to strengthen auto safety measures in the wake of sudden acceleration concerns in Toyota Motor Corp. vehicles. The bill by Sens. Mark Pryor, D-Ark., and Jay Rockefeller, D-W.Va. would not take effect until at least one year after passage. A coalition of groups told Congress late it opposes hiking the fines. The alliance includes General Motors Co., Ford Motor Co., Chrysler Group LLC, Toyota and eight others.
January 2012
Nissan’s LEAF to be Sold in More U.S. Markets
On Nissan LEAF’s one-year anniversary, the Japanese automaker announced that it will be expanding the availability of the all-electric car into new U.S. markets. Nissan has re-opened reservations and has begun taking orders from the general public for the 2012 Nissan LEAF in Delaware, Indiana, Louisiana, Nevada, Ohio, Pennsylvania, and Rhode Island. For the 2012 model year the LEAF gets additional standard equipment including quick charging and cold-weather features. “Nissan LEAFs have been on the U.S. roads for one year now, and thousands of drivers have become living proof that a 100-percent electric, zero-emissions vehicle fulfills the daily needs of drivers from all walks of life,” said Brian Carolin, senior vice president, Sales and Marketing, NNA. “We are seeing already-strong interest in the LEAF continue to grow.”
GM Partners with Japanese Carbon Fiber Supplier to Improve Composites
30 JANUARY 2012 AUTOBODY NEWS | www.autobodynews.com
Hentschel said the pact will allow Teijin to advance development of the technology while working with GM on integrating the material into vehicles. He wouldn’t predict when it might be used in GM vehicles. The companies didn’t disclose financial details of the deal but said it does not involve an exchange of equity. Teijin will open a technical center in the northern United States to do its work with GM, the companies said, but they didn’t specify a location. Automakers are seeking to cut vehicle weight as a way to improve fuel economy as they face increasingly stringent emissions and fueleconomy standards. GM is expected to expand the use of carbon fiber in the next-generation Chevrolet Corvette, which is expected to debut for the 2014 model year.
BMW AG has said it plans to begin high-volume production of carbon-fiber parts by 2013, which likely would make it the first automaker to expand use of the material beyond low-volume models. Its i3 electric car, which debuts in 2013, will have a carbon-fiber shell. Partly as a consequence of emissions reduction targets, mass-market automakers need to produce lighter cars. For the next few years, automakers such as Peugeot, Fiat, Volkswagen and Daimler expect weight reductions to come largely from using aluminium. But composites are 30 percent lighter than aluminium and 50 percent lighter than steel. If car makers can get the price down—composites currently cost at least 10 times as much as aluminium and 30 times as much as steel, according to Volkswagen—they hope to be able to use them in the mass-market.
Gonzo’s Toolbox
This is a new story by Scott “Gonzo” Weaver as posted on his website, www.gonzostoolbox.com. Gonzo has been serving the Tulsa area at Superior Auto Electric for over 27 years. See his book “Hey Look! I Found The Loose Nut”, which provides a Good Laugh for Mechanics of Any Age. The book is available at amazon.com. Contact Gonzo at Gonzosae@aol.com.
A Picture Worth a Thousand Words Most of Which We Can’t Print with Gonzo Weaver
Years ago my younger brother came to work for me. He didn’t know a thing about cars, but was willing to learn all that he could. Teaching new technicians is an art that most shop owners have to learn to do, but teaching your little brother can be a chore and can test your patience. I muddled through it all and taught him what I could. I was sure at some point in time the two of us would butt heads like brothers will do, and he would take his new found skills and move up in the rank and files of the automotive technical world, but in the meantime it was his turn to learn from his older brother. When he first started I would walk him through each step of how to diagnose a certain system in a car. A lot of times he would have questions, and I’d do my best to answer them. He learned quickly and was really sharp at picking up some of those lit-
tle details that are harder to teach, because you tend to forget to mention them while you’re teaching—mainly because you are trying to get to the solution as efficiently as possible, and you neglect to bring it up. Such as: “always test your test light connection before testing what you’re testing, or don’t forget to check for all your tools before you pull the car out of the shop.” Things like that. One day we had a truck come in with dual fuel tanks on it. The gas gauge wasn’t working and needed some attention. This was a perfect opportunity for Junior to learn a few of my short cuts on these old models. It was an older Ford, in which the tank gauge ran through the tank switchover button. It was rather easy to pull it out of the dash and connect to the gauge from the back of the switch. Luckily it was the typical problem I’ve seen a hundred times in the
past. The switch connections would melt and the tank wouldn’t switch from the front tank to the rear, and of course the gauge wouldn’t move either. After locating the correct leads to the gauge and to the tanks I decided to show him how the gauge worked. I hooked up the one of the tanks to the crossover lead that would supply the signal from the tank to the gauge. “Ya see this, that’s the lead to the fuel gauge in the dash, and this is one of the tank wires. I’ll connect these together and we should get a reading on the dash,” I told him. He was watching intently, taking in all the wiring diagram information, the location of the wires, and how I was bypassing the switch. He was fascinated with the flow of the current and the way the gauge would respond. I even went as far as moving the gauge from full to empty by open-
ing and closing it to a ground signal. While I had his attention I filled him in on the two types of gauges that were used back then (bimetallic and magnetic) and how low resistance on a bimetal type gauge would read near a full tank, while a magnetic gauge would read close to empty. Change the resistance and the gauge would/should read accordingly. “So, if we put gas in the tank the gauge should move right? That way we could check the sending units in the tanks too,” he asked me. “Great idea, grab a gas can and let’s add a few gallons,” I said, excited that he was so interested in the project. He grabbed a can of gas and poured a few gallons in the tank. I was watching the gas guage carefully, but there was no movement. I knew I was on the right wires, but nothing See Picture It, Page 41
www.autobodynews.com | JANUARY 2012 AUTOBODY NEWS 31
Continued from Front Page
Mike’s Auto Body
hind the program since day one. “It has been so rewarding over the last ten years presenting the cars to deserving individuals and organizations who are working to improve their skills and become independent,” Contreras said. “Everything is donated—the cars, parts, paint, mechanical inspections, tires and six months of insurance. The body and paint technicians donate their time and talents. AAA of Northern California, Mercury Insurance Group, Safeco, GEICO and Farmers Insurance are participating this year by donating a ‘written off’ vehicle to this effort.” Mike Rose said he is proud to be a part of the program. “We are in an industry that has the means to get these vehicles road ready,” Rose said. “It’s just a matter of getting all of our vendors on the same page. For the sake of the other applicants that are still in need of reliable transportation, we only hope that more shops can create a similar program of their own to give back to the community.” Each year, Mike’s Auto Body comes across cars that are “written off” by either the owner or the insurance company. Often times these are older vehicles that just need some mechanical and body work to get them back on the road and perfectly safe to drive. “Because we believe these cars are going to waste when there are people who really need them, we decided to do something about it”, Contreras explained. “We feel very fortunate to be involved with such a wonderful program and are very excited to be able to give back to the community that has supported us for the past 39 years,” Mike Rose said. “Being in this business for that long, repairing the vehicles is the easy part, having to decide on a recipient is the part that’s hard. After receiving hundreds of applications over the years and reading the heart breaking stores, we only wish that we could do more. But hopefully with increased publicity of our Benevolence Program other shops will adopt a similar program of their own.” Local media flocks to the unveiling ceremony every December and this year Channel 7 and other TV stations broadcast the presentation from Mike Rose’s Antioch location. Several local newspapers covered the presentation and the Mayor of Antioch Jim Davis opened the presentation by say-
Nancy Vongchanh received a 2006 Ford Focus donated by GEICO Insurance
ing a few words of good wishes and welcomed everyone to Antioch. The Contra Costa Fire Fighters Local 1230 generously donated brand new bicycles and new helmets for all the children and grandchildren of the recipients. Recipients this year included Delberta Ray Miller, a 65 year-old grandmother who has been raising her grandson since he was two years old. She lives on a fixed income and recently had to make a difficult decision—either buy groceries or fix her old car. Now she’ll be driving a 2007 Chevrolet Cobalt donated by Farmer’s Insurance. Thirty-three-year-old Marie Green is raising her four daughters and taking care of her mother who is suffering from COPD. She received an immaculate 2005 Honda Odyssey van donated by AAA Insurance. “With rent and four kids to take care of every penny that comes in the house has gone for bills or either the kids, so it is impossible to think about saving for a car,” Green said. “Even though I have a full time job, I am a home care provider for my mother who is ill and with minimal child support, there is still always something to take care of financially and making a car priority is something I just can’t afford. Receiving a car from your program will really help my family more than you will know. It will lift a huge weight off my shoulders as a mother because my children will be happy and that’s all I really care about the most.” Another recipient was Francisco A. Granados, 34 year-old single father raising two children. He received a 2007 Honda Civic donated by Safeco Insurance. “We live at home with my mother and father and it’s very hard not having our own vehicle,” Granados explained.”We’ve had so many ups and downs along the road. It’s very hard having to depend on others and public transportation, especially in Antioch. I work in the mornings at 4 a.m. and have to catch BART. I’m late almost every day because public transporta-
32 JANUARY 2012 AUTOBODY NEWS | www.autobodynews.com
Francisco A. Granados received a 2007 Honda Civic donated by Safeco Insurance
tion doesn’t run that early in the morning. When we get home there’s only time for dinner, showers, and getting ready for bed. It’s very hard to stay positive. I sleep on the coach in order for my kids to have a bed. The negativity is wearing down on the three of us. Kids don’t understand about money and how it’s not easy to come by. This car will give me a lot more time to pursue open doors and help me to broaden my search for a better job.” Nancy Vongchanh and Joshua Ledford got a 2006 Ford Focus donated by GEICO Insurance. Nancy was at the ceremony and Joshua was on the speakerphone from Afghanistan, finishing up a one-year deployment there with the Army National Guard.
Delberta Ray Miller, a 65 year-old grandmother who has been raising her grandson since he was two years old will now be driving a 2007 Chevrolet Cobalt donated by Farmer’s Insurance
And the fifth recipient was Tracy Denise Bland, a single mother with an eight-year-old son named Tracy. She was presented with a 2008 Toyota Yaris donated by Mercury Insurance. “I’m a typical hustle and bustle mom that does what it takes in order to survive”. Every day is a struggle for me. I walk my son to school which is about a 20-30 minute walk. After that, I beat the pavement in my community looking for employment. Now that I have this beautiful car, it will allow me to really get out into the workforce and to become the successful business woman that I know that I am!”
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Continued from First Page
Where We Stand
All of this should be good news for U.S. automakers, which have restructured their operations to be profitable at lower volumes in the U.S. General Motors, Ford, and Chrysler gained market share at the expense of the Japanese manufacturers, and the Detroit Three have now posted several quarters of consistently strong operating performance. Whether these improved earnings are short-lived will depend on a number of unknowns: ● As their output returns to normal, will Japanese companies reclaim their market share? ● Will the Detroit Three maintain their focus on new vehicle development and launches and continue to practice pricing discipline, which favors maximizing profits over volume or marketshare growth? ● How will rapid introductions to the U.S. market of highly competitive new models from automakers around the globe, combined with slow growth, play out? How will automakers differentiate their vehicles and earn the pricing and volume they need? What will they do to ensure that each program delivers an attractive return on invested capital? ● How will automakers serving the U.S. market protect themselves against the risk of disruption (such as the supply chain disruptions we have seen in Japan and Thailand) and will they do it at an affordable cost? Automakers [and repairers] will also face technological challenges. For example, advances in braking, parking assistance, propulsion, sensors, and other critical areas are bringing us closer and closer to the era of self-driving automobiles; indeed, Google has already logged well over 100,000 miles on its unmanned robotic vehicle. In urban areas, in particular, these innovations could improve traffic flow, provide revenues (through “smart tags” and traffic congestion pricing), and reduce accidents through vehicle-to-vehicle communication and coordination. Meanwhile, vehicle-based mobile communications technology continues to produce breakthroughs in voice-activated telephony, GPS, information, and entertainment. For example, GM customers can now use the automaker’s OnStar (driver com-
munication) and RelayRides (vehicle location tracking) systems to rent their personal vehicles to others and charge fees based on usage. Both original equipment manufacturers (OEMs) and suppliers will have to anticipate which new technologies and add-on services will justify the cost of innovation. Clearly, anything that consumers are willing to pay for, that increases safety or functionality, or that reduces cost has the potential to be successful. At the same time, OEMs must be careful to integrate new technology into vehicles effectively and only when it is well perfected, or risk adding features that are annoying or, worse yet, prone to breaking down, which could negatively affect consumer perceptions about the quality of the automaker’s products. A return to competition based on innovation is a refreshing change from the dismal situation the industry faced just two years ago. And while the Detroit Three focus on producing more exciting and attractive vehicles, they can take comfort in having addressed a perennially problematic issue through a new and mutually beneficial four-year labor agreement with the United Auto Workers. By being able to pay newly hired workers at rates comparable to those paid by Asian transplants in the U.S., GM, Ford, and Chrysler have taken another important step in narrowing the gap with their rivals on manufacturing costs. Suppliers are also relatively well positioned after several difficult years. Many suppliers were very profitable in 2011; they have emerged from the recession (and, in many cases, Chapter 11) with restructured balance sheets and lowered breakeven points. Moreover, supplier relationships with GM, Ford, and Chrysler have improved, according to the annual Planning Perspectives OEM-Supplier Working Relations Index. But there is more work to do: Chrysler and GM still score in the “very poor-poor” range. There are some dark clouds for suppliers, though. Raw material prices, already elevated, may continue to rise, and many suppliers are struggling to find the capital to ramp up production to meet increasing demand. Moreover, most suppliers must continue to deal with what has become an endemic issue: a talent shortage, as top-flight engineers willing to
34 JANUARY 2012 AUTOBODY NEWS | www.autobodynews.com
work in the auto industry are increasingly hard to find.
A Capabilities Strategy for OEMs Against this backdrop of an industry still in flux, this is the perfect moment for OEMs and suppliers alike to invest in developing the capabilities that allow them to achieve and sustain a leading position around the world. We define capabilities as the distinctive strengths a company has, or should develop, to set it apart from competitors. Each capability is built on a combination of processes, tools, knowledge, skills, human capital, and organization.
Prepare for Black Swans There is a natural tendency following horrific events such as the Japanese tsunami to evaluate a full range of risks and prepare contingency plans. But most black swans are the result of a cascading series of events; it is the cumulative impact that makes them so catastrophic. It is not justifiable to build costly, fully redundant supply chains, when the chances of another complete meltdown disruption are fairly small.
Companies would be better off by developing a risk preparation capability: Analyze the impact of potential disruptions and prioritize responses by magnitude and chance of exposure, expense, and ease of implementation. For example, manufacturing key electronic components in one location may yield attractive economies of scale but also significant risk. Options to mitigate the risk include splitting global volume across at least two facilities in different regions, or maintaining centralized production with backup capacity, possibly with a different supplier that can be brought up quickly. Recent experience has proven that having transparency and visibility several layers deep in the supply chain-that is, controlling and managing activities and risk among a supplier’s suppliers and their suppliers-is very difficult and yet essential. Therefore, automakers must do their best to protect themselves with nimble, agile response mechanisms, systems, and processes. (For an in-depth examination of this topic, see “Are You Ready for a Black Swan?”)
Build an Adaptive Innovation Engine In mature markets such as the U.S. and Europe, success depends on bringing to market ever-evolving new vehicles that consumers enthusiastically want and would be proud to drive. But the best ways to do this are rarely clear. For example, powertrain technologies are evolving rapidly; most manufacturers are thus trying to manage balanced portfolios of internal combustion, hybrid, electric, and fuel cells until there is greater clarity about the future. The challenge is exacerbated by fluctuating fuel prices and inconsistent government policies that make setting a long-term course and sticking to it extremely difficult and costly. Therefore, manufacturers need to develop distinctive practices-which might include open networks, frugal engineering, more intensive partnerships with suppliers, or other refinementsto out-innovate the competition at an affordable cost. Operate in a Global Marketplace Emerging economies such as the BRIC nations (Brazil, Russia, India, and China) offer the potential for high
growth and an opportunities to build strong positions in the biggest consumer markets of the future. By contrast, North America and Europe have high volumes but much more limited growth potential. Given this divide, OEMs need to tailor and customize their product portfolios to meet the disparate requirements of both mature and emerging markets, which have fundamentally different consumer needs and preferences, competitive dynamics, and economic returns. For example, manufacturing strategies for emerging markets should evolve over time, with long-term investment horizons and factories producing less expensive, less profitable automobiles now but geared for assembling higherpriced, higher-return vehicles in the future. Manage Inventory Well In a highly competitive market, it is more critical than ever for automakers to provide a mix of models and trims on dealer lots closely matching customer demand, although given the permutation of vehicles necessary to meet distinct customer needs, 100 percent inventory coverage is neither
possible nor practical. Providing the right inventory means at a minimum continually improving distribution and sales forecasting capabilities to make sure inventory in each region is adequate, but not excessive, based on potential sales. More ambitiously, smart inventory strategies may involve transitioning to a more sophisticated mix of build-to-stock for popular combinations and build-toorder, with more rapid and certain delivery than today, for unusual combinations. This could generate significant cost savings and better align vehicles with customer preferences.
Maintain Pricing Discipline Capacity issues have essentially been addressed in the U.S.; factory utilization rates are quite high for most OEMs in the NAFTA region. High-capacity utilization brings less pressure to offer discounts and incentives, and OEMs have taken excellent advantage of this situation to enjoy higher realized prices and profits. But as competition increases, automakers must maintain this rigorous and dispassionate approach to pricing and incentives,
using advanced modeling to understand price-volume trade-offs and to estimate residual value effects of firsttransaction decisions. And they must be willing to prioritize medium- and long-term profitability over immediate market share. Focus on Customer Experience As vehicle and quality differences narrow, automakers are increasingly exploring ways to create differentiated experiences for customers throughout the vehicle life cycle. This is fertile territory for revenue and earnings growth but requires a well-defined OEM capability. You must define the experience you want to provide, make it consistent with your brand heritage, and make every aspect of your product and service ecosystem more customer-centric-including in-store experience, warranty and ongoing maintenance and repair, and financial services options and execution. Over the past decade, there have been numerous attempts at this, often with high expectations; most have fallen short. We believe that in an era when consumers seek value, OEMs that can See Where We Stand, Page 38
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Hey Toby!
Toby Chess is an I-CAR program instructor, Training specialist, and former salvage yard operator. Toby is universally known in the collision industry for his work with first responders and advocacy for body shops and consumers. He can be reached at tcspeedster@yahoo.com
Life Changes or Industry Changes Don’t Happen Without Major Effort with Toby Chess
I want to start this month’s column with a personal reflection on some life changing events that happened to me last year. The last Saturday of September I woke up about 1:00 a.m. with a pain in my chest. It felt like a 500 lb gorilla was standing on my chest and the pain was excruciating. Not being the brightest person in the world, I got into my truck and drove myself to the hospital. When I told the nurse in emergency that I was experiencing chest pain, she rushed into a room and hooked up an EKG monitor and blood pressure gauge. My blood pressure was 170 over 90. Not real good (I am on blood pressure medication). The ER doctor came in and told me that I did not have a heart attack or a stroke, but there was something not working right with my heart and set up an appointment with a cardiologist the following week. Five hours later, I came home, hooked up my welding trailer and conducted an I-CAR structural steel test (Again, not the best move, sometimes my brain works in reverse). Monday, I made an appointment with a cardiologist for the following Friday. On that Wednesday, my daughter gave birth to an 8 lb baby girl named Hayley, and for my wife and me, our first grandchild. I will tell you that being a grandparent is a tremendous experience. The best experience of all is that I haven’t had diaper duty yet. On Friday, I had my appointment with the cardiologist. I had another EKG and he determined that I had a mild case of Atrial Fibrillation. Atrial fibrillation (AF or A-fib) is the most common cardiac arrhythmia (abnormal heart rhythm). It is a common cause of irregular heart beat, identified clinically by taking a pulse. Chaotic electrical activity in the two upper chambers (atria) of the heart result in the muscle fibrillating (i.e., quivering), instead of achieving coordinated contraction. The presence of AF can be confirmed with an electrocardiogram (ECG or EKG) by the absence of P waves and an irregular ventricular rate. Presence of AF in a population
increases with age, with 8% of people over 80 having AF. In AF, the normal electrical impulses that are generated by the ‘sinoatrial node are suddenly or grad-
Hayley, the first grandchild for Toby and Sheila Chess, was the catalyst for some serious changes
ually overwhelmed by disorganized electrical impulses that often originate in the roots of the pulmonary veins, leading to irregular conduction of impulses to the ventricles which generate the heartbeat. AF may occur in episodes lasting from minutes to weeks, or be permanent in nature. The natural tendency of AF over time is to become a chronic condition. Chronic AF leads to a small increase in the risk of death. He said that I had a choice. I could go on meds that would change my life style or I could lose weight (he suggested 75 lbs). It was my choice. At that moment, I realized that I wanted to be part of Hayley’s life and I decided to lose the weight. The doctor recommended that I use ‘Weight Watchers Online’ due to my crazy schedule. So I went home, Googled Weight Watchers and signed up. It works on a point system. You are allowed so many points per day and you enter the food that you ate and the points are automatically calculated. All the things I ate in the past like steaks, bread, sweet rolls, Italian sausages and nearly everything else I
36 JANUARY 2012 AUTOBODY NEWS | www.autobodynews.com
put into my mouth were high in points. I started off the program with 54 points. One hot dog is 12 points. It doesn’t take much to add up to the allotted daily points. The web site offered a lot of advice on what I should be eating. On October the ninth, I weighed 307 lbs. and by December 15, 2011, I weighed 281 lbs. I used to get tired after walking one block. My knees and hips would hurt. I started riding my bike and I am up to two miles a day and, guess what? My knees and hips have stopped hurting. It is very difficult to change one’s eating habits after 66 years of abuse, but the consequences of not changing them, were much too high. The reason for opening up my personal life is that it runs parallel to recent events in the collision repair industry. Last month, I requested from repairers that they send me pictures of parts that do not fit. To make the re-
placement parts better, we need data to back up our claims that there are parts being sold that don’t fit, have poor workmanship and they are not the same as the original. On a daily basis, I am told by people in the body shops about these substandard parts, yet when I requested pictures and data, only five shops have so far responded. It would have been a lot easier for me to take a pill for the A-Fib, but what was better for me was to make a sacrifice to eliminate of some of the foods that I normally ate. You can go the easy way and do nothing or you can get off the pot and send me that data. It’s your choice. If you choose not to do anything, then stop the complaining. I cannot help you if you can’t help yourself. I hope that you will make the same decision that I made—Make a change to improve our industry. With that I want to wish all of you a happy and prosperous 2012.
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Continued from Page 35
Where We Stand
master and execute this capability best will gain a major competitive advantage.
Primary Capabilities for Suppliers Drive Innovation One excellent way for suppliers to capture value is to offer OEMs something that others don’t and can’t. Indeed, when suppliers create end-user pull around their intellectual property, they can build market share and earn high profits. For example, one company has held a very large share of the global market for auto-dimming mirrors for years, with exceptionally high profits for a Tier 1 supplier as a result. In other cases, process and supply chain innovation can drive durable cost advantages, even for products that are commodities or close to it. Successful suppliers must understand the opportunities for innovation of both types to create and capture value, and invest accordingly.
Refine the Factory Footprint The economics of manufacturing in low-cost countries are shifting. With Chinese wages on the rise and an artificially strong renminbi, the tide of production shifting to Asia has slowed. In fact, for some products that do not ship well or have relatively low labor content, regional production footprints-factories in Asia, North America, Europe, and South America, for example-are increasingly preferable. The question to ask is what factory network will allow you to meet forecasted demand for your products most cost-effectively-and more cheaply than the competition. Ruthlessly Manage the Portfolio All too often, suppliers try to be everything to everyone-and, in doing so, design products that fail to meet the needs of anyone. To avoid this trap, suppliers must develop the market insight necessary to understand fully the varied requirements and purchase decisions of different OEMs and different market segments. With this knowledge, suppliers can determine which segments are most attractive based on their core skills, strategic out-
look, and business and operating models. This prioritization allows suppliers to target resources to business units with the potential to create sustainable and strong market positions and stop subsidizing weak businesses with little or no strategic value. Suppliers with this sophisticated knowledge of their businesses also know when to walk away from bids and programs when the economics are not right-pursuing programs with poor economics to fill factory capacity in hopes of someday increasing prices and margins is chasing after fool’s gold.
seller?-and in turn work to build the necessary supporting capabilities. For example, if you are a buyer, how do you assess which targets are the most attractive to your organization, and how do you overcome the operational, customer, financial, and change management challenges to ensure that you are able to capture the full value of an acquisition? And if you are a seller, how can you secure the most attractive valuation for your company?
Leverage M&A Potential Large M&A deals have been rare among auto suppliers during the postrecession restructuring period, but the pace of consolidation will pick up during 2012 as private equity and strategic buyers return to the market. In fact, a Booz & Company survey of automotive executives earlier this year (see “Is the U.S. Auto Industry Ready for Economic Recovery?”) found that 60 percent of automotive suppliers are actively pursuing acquisitions. Suppliers must assess their positions in this context-are you a buyer or a
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Houston Ordinance
pass the ordinance before the end of the year. What’s the rush? ASA has known about this proposal for less than a year, and we have been working diligently with the city to help. The Automotive Service Association wants City Hall to slow down, listen to both industry and consumers and do it right the first time. *** Houston City council approved changes to the city’s ordinance on Nov. 30 covering towing companies and auto shops geared toward “trying to make sure that an unhealthy relationship between the tow truck drivers and collision repair shops is monitored more closely,” Mayor Annise Parker said. “There are lots of reports that after accidents, tow trucks may be being paid bounties to take cars to particular collision repair shops.” The Houston city council voted to delay voting on those provisions for two weeks (until Dec. 21). The majority of the council feels that more
time should be granted to have input from additional small business owners. The delay will allow more time for further deliberation and communication with members of the Houston city council over potential changes in the proposed ordinance language. Other key industry representatives, including the Houston Auto Body Association (HABA), applaud some of the proposed mandates but are quick to say others may end up bogging down reputable businesses, slowing their ability to serve customers. James Brown, President of the Houston Auto Body Association (HABA), testified before the Mayor and City Council on behalf of HABA on November 29, voicing the HABA’s concerns with the current language in the ordinance. Brown was pulled into a private meeting with the Mayor’s Assistant, the City Attorney, and members of HPD Auto Dealers Division (Capt Baimbridge & Sgt Provost) following his testimony. The meeting lasted around an hour and a half and the group informed Brown that none of the latest revisions
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HABA requested would be honored for one reason or another. “We do think there’s a lot of good things in there, said Brown to KHOU 11 News Houston. “But there are a lot of things that still need some work. There are a lot of things in there that give the insurance companies the same authority as the consumer—the owner of the vehicle—which we would like to see taken out.” “HABA has been working with HPD Auto Dealers Division for over a year and that has resulted in a lot of positive changes,” said Brown, “HABA has also worked closely with ASA on the revisions and we have made a lot of progress but still have a ways to go.” Councilwoman Sue Lovell, who spent a year meeting with auto repair industry representatives to craft the changes, said that once a car arrives, some unscrupulous collision repair shops charge more than $1,000 just to generate an estimate. She brandished a binder full of complaints to back her assertion that while most merchants are honest, there have been enough cases of abuse to warrant the city’s intervention. “It’s really about con-
sumer protection,” she said. Jeanette Rash, owner of Fast Tow and leader of a consortium of wrecker companies that clears freeway breakdowns for the city, supported the revisions in part because it will allow storage yards to increase daily rates for the first time in a decade, from $15 to $20. Council members delayed action on other revisions that would have specifically regulated estimates and repairs to prevent the scenario Lovell outlined. Those changes would require mechanics and body shops to get written authorization for all work or a signed waiver allowing for a verbal approval from the customer. The changes would require shop owners to keep such records for two years. ‘Overregulation’ Councilman Oliver Pennington had two problems with the revisions. “I think it’s a classic case of overregulation,” he said. The recordkeeping requirements are too onerous for the shops, he said. He also complained that the rule changes fail to See Houston Ordinance, Page 45
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On Creative Marketing
An Effective Marketing Focus with Thomas Franklin
I recently noticed a shop that had several excellent repeat business sources lose one of them—a major dealership —to a competitor. When I inquired about how this could happen, I learned that the shop’s owner and manager were busy focusing their full attention on saving one of their insurance DRPs. During this time, they somewhat neglected that major dealership source. This gave the competitor an opening to jump in and grab that business. I’m sure that in retrospect, this shop owner realized he should have assigned someone—or hired someone —to maintain giving that dealership all of the attention they were accustomed to receiving. Is it possible to have too many irons in the fire? Is a shop better off just concentrating on a limited number of sources so each can be given abundant attention? Let me illustrate with a metaphor. One of the exciting technologies of
“the space age” is the development of lasers (L-ight A-mplified by S-timulated E-mission of R-adiation). A beam of light is concentrated to such a fine point it can cut through metal. Think about for the intensity of concentrated attention needed to hold onto a major referral source. On the opposite end of the light concentration spectrum is the flashlight. It casts a broad beam that encompasses a wide area ahead of the light, but the intensity of the light is fairly weak. It’s just strong enough for the human eye to get a general view of the area ahead. Marketing concentration can fall across a similar spectrum: intense concentration vs. a wide, less effective, general approach. There may be no “right answer” to the question: “How much or how little should I concentrate marketing attention?” But I believe the shop that lost the dealership needed to accurately as-
Tom Franklin has been a sales and marketing consultant for fifty years. He has written numerous books and provides marketing solutions and services for many businesses. He can be reached at (323) 871-6862 or at tbfranklin@aol.com. See Tom’s columns at www.autobodynews.com under Columnists > Franklin
sess how many balls they could juggle at once. I’ve seen novice shops that worked hard to get a DRP or a dealership relationship and then lose it because they didn’t realize that getting that relationship was just the beginning. After that, keeping the relationship depends on giving it adequate attention. Attention is one of the most prized commodities in existence. Many students fail classes in school because they can’t keep their attention on the teacher or the subject matter. Marital relationships often fail because one of the spouses is so involved in business or other aspects of life, he or she fails to give adequate attention to the spouse or the children. All business—and human—relationships call for an enormous amount of attention. Many aspects of life fall apart because of inadequate attention. Plants die without water or fertilizer. A stock in a retirement portfolio drops because the
owner failed to keep track of the value and didn’t sell in time to gain a profit or prevent a loss. A physical condition that might have been treated and cured early on becomes life threatening because no attention was paid to the early warning signs. The list can go on and on. The opposite of receiving attention is being ignored. Everyone likes attention. We seek out the restaurant where the waiters or waitresses know us by name and give us that special attention. We prefer the dry cleaner and the barber and other service people who favor us with their attention. In marketing, attention is the most valuable thing there is. Ignoring a shop’s repeat business source is a guaranteed way to lose it. So how can a shop owner or manager be certain a referral relationship is getting enough attention? It can often come down to: “How many man-hours can be devoted to the source?” I found out that in the early stages of losing that
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shop’s dealership relationship, an estimator was assigned to be on the dealership’s service drive every morning to write brief estimates on any damage observed on vehicles coming in for service. But when that estimator’s time at the dealership was reduced or eliminated altogether some days, the relationship began falling apart. Fortunately for the shop owner, the attention he took away from the dealership was turned to hosting manager meetings for a major insurance company, plus promoting a drive-in relationship with another. So he didn’t lose much business. But he also could have saved the dealership by somehow keeping a laser-like attention focus there as well. The biggest, most affluent shops never limit the number of referral sources they can obtain. They have the resources to assign one dedicated person (or more) to each source to be certain that source receives meticulous attention to repair requirements, estimate details, reports and more. But I believe a smaller shop without that kind of resources would be wiser to try for fewer sources and be certain each source they did have receives the ultimate in constant attention.
Continued from Page 31
Picture It
was happening. Now what? Are there more problems? “Crawl under there, and check to be sure the wire color is correct,” I yelled from the cab to him. “Yep, it’s the right wire on the tank.” “Well, we might have to pull the tank; it’s not changing the gauge readings up here.” “Before we do that let’s add some more gas, maybe we didn’t add enough,” Junior tells me. I thought I better go back and help hold the funnel, while he poured the gas in the tank. Unknowing to me, all this time my wife (who was the office manager) was listening in on the whole thing. She likes to keep tabs on me, and make sure I’m not going into one of my usual rants or having a fit because I had to explain something over and over again to little brother. This time she was standing at the corner of the shop just behind the truck with a camera. “CLICK”, I heard the camera shutter go off and she was back there
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laughing like there was no tomorrow. “What’s so funny?” I asked her. “You two idiots have been putting gas in the wrong tank. You’re on the front tank, and you’re putting gas in the rear tank,” my wife answers, laughing hysterically. About then the camera “clicked” again, this time it was an action shot taken at precisely the exact moment when these two idiots had that dumb struck look on their faces and realized what they just did. The shot had both of us on our knees, one holding a funnel and the other with the half empty gas can, and both of us staring right into the camera lens. Couldn’t have set it up any better if you tried. The picture clearly showed the side of the truck with both fuel tank doors visible and there was no doubt which tank we were putting in the extra gas. I guess it was one of those things I should have mentioned when we were checking the tank senders, make sure we are both on the same tank. For years that picture hung over her desk, and anytime I thought I was so smart she would point at the photo. Usually with that typical smirk, usu-
ally shaking her finger at me and of course the laugh, she had to laugh, but it wasn’t all that funny until she had me laughing about it too. Ok, Ok, I’m not perfect... and now my little brother knows it too. These days he’s a top notch tech at a dealership, and I have to call him on occasions for some help on how to solve things once in a while. Oh the photo…uhmmm… what photo?? Somehow it’s missing… haven’t seen the darn thing in years. But I guess I really don’t need to see the photo, the wife has a pretty good memory, she reminds me just how smart I think I am every chance she gets.
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www.autobodynews.com | JANUARY 2012 AUTOBODY NEWS 41
Continued from Front Page
Industry Wrap-Up
market parts and their quality and affordability that keeps insurance premiums and repair costs from totaling the majority of vehicles.” Pierini also predicted that the CA state Legislature would also see a parts certification bill in its coming session. “The car companies and their dealer distribution network will oppose any measure that they think has the State giving a ‘seal of approval’ for aftermarket parts, but the insurance companies see it as a way to ensure third party verified quality and expand the use of aftermarket parts as a cost containment tool that keeps repair costs down and premiums affordable. The aftermarket will defend quality and work to ensure that the measure does not impact competition in the marketplace. Furthermore, CAWA will fight to make sure the measure is limited to crash parts and not apply to mechanical parts,” said Pierini. Pierini also said that CAWA will continue to support work done by the Quality Parts Coalition (See Autobody News July 2011 Edition) on the federal level in their efforts to stop parts patenting by automakers. On a state level, Pierini said the CAWA will continue to support the California Air Resources Board (CARB)’s efforts to reduce active ingredients in automotive products. “CARB continues to intervene in the industry with ongoing efforts to reduce the active ingredients in many automotive products including paint, as well as glazing and solvents, etc. We (CAWA) will remain vigilant on CARB’s efforts and respond accordingly,” said Pierini. Larry Houk, Manager of Drew Collision-Fix Auto & Glass in San Diego, CA, also the President of the California Autobody Association (CAA) San Diego chapter, gave his take on industry issues over 2011. “I feel that the biggest issue for our market has been the misconception of what is being called ‘The Competitive Market.’ Shops are willing and doing repair labor well below what is the industry standard out of desperation due to a lack of volume and hoping to get more work from Insurers because of it,” said Houk. “Autobody collision repair is a business
and has to be profitable to stay in business; trading dollars in order to have the opportunity to repair vehicles will soon close the doors.” Houk feels that this degradation of repair quality in order to reduce prices for insurers will lead to another negative year for the collision industry. “I feel because of the bad business practices we are seeing from some of our competitors, that next year we will see a lot of shops closing up. Profit is not forbidden or a dirty word, collision repair is a business and needs treated as such!” said Houk.
Aftermarket vs. OEM Parts Issues In November, the Inland Empire chapter of the California Autobody Association (CAA) held a Parts Symposium meeting at LKQ in Ontario, CA. Several aftermarket associations and certifying groups spoke to 217 CAA members, insurance executives and aftermarket representatives about issues within the aftermarket industry. Monte Etherton, owner of Fender Mender in Encinitas, CA, pointed out some inconsistency he had seen between CAPA certified parts. Jack Gillis said that there can be inconsistency between some CAPA certified parts and CAPA is working to cut down on that by continuing to inspect 70 to 80 percent of their parts after the initial certification. Gillis also talked about the wellreported sawzall tests initiated by ICAR Instructor and Autobody News Columnist Toby Chess where Chess used a reciprocating saw to easily slice through an aftermarket bumper bar. Chess’ point was to demonstrate that the materials to fabricate the reinforcements were not the same. In the demonstration the saw couldn’t cut through the original automaker bumper bar. Gillis said that the backlash in the aftermarket parts industry following Chess’ demonstrations pushed CAPA to create a specific set of rigorous steps for bumper parts certification. Bob Frayer with NSF International touched on one issue body shops face with using certified aftermarket parts; if there is an issue with a certified part the only way a shop can file a complaint is to take the time to sit down and fill out a lengthy form. Unfortunately, Frayer said, there is not currently another option for a shop when filing a grievance about a
42 JANUARY 2012 AUTOBODY NEWS | www.autobodynews.com
certified part—whether it be by CAPA or NSF. However SCRS has recently initiated a parts report form that encourages repairers to report substandard an poorly fitting parts regardless of source. In November representatives of Insurance Commissioner David Jones called a pre-notice public meeting for discussions on regulations regarding standards for reasonable repairs and the use of aftermarket parts. The draft regulations largely pertain to the specification and use of aftermarket parts, but also include new requirements for adjusting estimates as well as consumer disclosures and remedies in the event that a defective part is used for a repair. (See Autobody News December 2011 Edition). At one point during the meeting, parts certification was introduced, but it was pointed out that the issue at hand was not certification, but insurer accountability. Gene Crozat, the owner of G&C Auto Body, attended the meeting and offered his perspective prior to the presentation. After reviewing the proposed changes, Crozat recognizes that the Commissioner is addressing a volatile subject and questions some of the language within the contemplated revisions. “I fix 1,000 cars every month and at least 70% of them contain aftermarket parts, prescribed by the insurance companies,” Crozat said. “In many cases, the aftermarket parts are equal in quality when compared to factory parts and price is always a huge issue. By using aftermarket parts many cars that would have been totaled can be fixed. For example, a bumper on a 1998 Toyota Corolla from the factory costs $239, but I can get a comparable set for $74 from the aftermarket. We need the aftermarket to provide competition for the OEMs. Can you imagine what factory parts could cost if there was no aftermarket?” Gigi Walker—owner of Walker’s Auto Body and Fleet Repair in Concord, was enthused about the meeting: “I hope these new regulations proposed by Commissioner Jones will better hold accountable the parts that don’t work to the insurers,” she said. “As you know, many shops don’t get reimbursed for parts that don’t fit properly. These proposed revisions just might help the collision
repairer to recoup the costs associated with ill-fitting aftermarket parts. These might not cover a DRP contract position with an insurer/collision agreement, but by Commissioner Jones opening up the conversation it’s definitely good for both sides of the industry. I’ve never seen this before, so it’s very promising. “The OEMs have procedures in place for the replacement/welding of certain components on vehicles and to make sure that these are mandatory in the written estimate and in the repair process are crucial in delivering a quality repair to the consumer. I hope some of the changes make the repair process for the collision repairer and consumers better, because that’s what it is all about. The first change adds more specific requirements for estimates written by insurers. Current law simply requires insurers to write an estimate that will allow the repairs to be made in ‘a workmanlike manner.’”
CA Continues to Lead the Way in Environmental Issues One notable regulation that caused a stir in 2011 was the Air Quality Management District (AQMD)’s Rule 1147. The rule would have required many shop owners to install expensive equipment to control noxious emissions. The rule could have required shops to install special gas meters and retrofit spray booths with low NOX burners at an approximate cost of $25,000 for a typical shop. Endres noted the fact that the rule failed to provide for any inspector to actually read the gas meters. In his testimony before the committee, he noted that a simple way to identify the volume of gas use would be to look at the shop’s gas company bill that specifies the number of therms used in a month. Less than 2400 therms would indicate less than a pound of pollutants per month, even for as many as three spray booths. Thanks to work done by Anthony W. (Tony) Endres, president of Furnace Dynamics, Inc., Linda Holcomb, President of the CAA Glendale/Foothills chapter, and several members of the CAA this requirement has been postponed until 2017, and a probable elimination of all collision repair shops from the requirement before then is expected, saving shops an enormous unnecessary investment.
Parts Profiles
Larry Williams is an innovative parts manager with national awards and over 30 years of experience in creating and managing profitable departments. He can be reached for consultation at ljoew2@gmail.com. To read all his columns go to http://www.autobodynews.com/columnists/williams-larry.html
Stockton Honda in Sandy, Utah, Cultivates Long Term Relationships with Larry Williams
This month I want to single out Stockton 12 Honda, in Sandy, Utah. Owned by former basketball star John Stockton, this dealership is located just a short drive south of Salt Lake City. Their web site is stockton12honda.com. Since 1998 this dealer has serviced its customers with pride, and a dedication to quality. Quality in all ways, which is best demonstrated by its parts department, led by “Peg” Ellenberger. Peg started her automotive career in 1985, moving to Stockton 12 Honda in 2001. She brought a following of loyal customers with her, customers who knew she cared about them. This dedication to quality service has led to continuous growth, and her customers now supply over half of the parts department’s business. Peg and I share the same opinion, dealers who cultivate long term relationships will always succeed. Those
short sighted opportunists, who always rely on the next customer, will almost always fail. The past five years have shown the truth of this opinion. Dealers who were out for the “quick buck” have vanished from the scene, leaving only the best to continue in business. Her secrets of success are simple: Don’t let your customer wait for a needed part; freight is not an issue; correct your mistakes immediately; value your customer’s business; and always put yourself into your customer’s shoes; always maintain a positive attitude, and don’t let the “problems” get you down; create long-term relationships; work smoothly together to repair cars as quickly as possible; work as friends, not strangers; and make someone else smile! Her teammates at Stockton 12 Honda share these philosophies, and treat their customers as partners, pro-
viding the best service possible to the real customer, the car owner. When you call this dealer, professionals Marc, Randy, Tamara, or JR will always give you the best service possible. Five incoming phone lines assure your call will be promptly answered. Four drivers, Melissa, Ryan, Travis and Victor will deliver parts quickly to your door. Honda of America helps this dealer, as they help all their dealers, with the Collision Link program. Peg credits this program as instrumental in her success. Her ability to come within $5 to $10 of the cost of an aftermarket part allows customers to select quality parts for their repairs. Honda’s support of their dealers over the last five years has ensured quality repairs; with original parts, to all Honda owners. Now for a little sad news, Peg is leaving. Her only regret is that she
will miss the daily contact with her team and her friends. She leaves Marc to continue her work, confident that he will continue to give her friends the same excellent service they have come to rely on. We can be assured that her life will continue to be filled with friends, wherever she goes. Good fortune always follows those who live as she does.
Larry Williams is a former parts manager and consultant with national awards and over 30 years of experience in creating profitable parts departments. He can be reached at ljoew2@gmail.com.
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949-586-5104 Fax 949-586-7093 Fax Mon-Fri 7am - 7pm Sat 8am - 5pm snielsen@tuttleclick.net www.tuttleclick.com
www.autobodynews.com | JANUARY 2012 AUTOBODY NEWS 43
Social Media for Shops
Ed Attanasio is an automotive journalist based in San Francisco, California. He can be reached at era39@aol.com.
Yelping Back, an Interview with Yelp’s Business Outreach Manager with Ed Attanasio
Back in July I wrote an article about Yelp—the well-known review website where customers can comment about businesses and rate their performance. My article was about body shops having a love-hate relationship with it. See www.autobodynews.com and search ‘yelp’ if you missed it. Like any business, shops appreciate postive reviews from customers and bristle at negative ones, but the issue we were addressing is what shops can do to mitigate negative reviews. Since then there have been some developments. Darnell Holloway is Manager for Local Business Outreach for Yelp, the on-line review site. Holloway recently spoke at a Santa Clara California Autobody Association meeting and Autobody News subsequently interviewed him about what he said in more depth. ABN: If a shop receives a bad review, what options does it have to respond? DH: Generally speaking, the business owners who have the most success with reputation management on Yelp are the ones who are dedicated to providing a great customer experience in the offline world. Beyond that, we provide a free suite of tools via www.biz.yelp.com that allows business owners to respond privately as well as publicly to reviews, upload information about themselves and add photos, among other things. Once a business starts receiving reviews, it’s important for business owners to join the conversation. We provide a whole host of information on Yelp for business owners, including how to respond to online critics. We also recently released a video featuring business owners as they share their thoughts on this subject. The most important takeaway for business owners is: 1) Remain calm. 2) Think about the complaint in relation to our existing customer service policy and then respond diplomatically. ABN: Why do bad Yelp reviews stay at the top of the list while more positive reviews disappear over time? DH: To clarify, the order in
which reviews appear on a business profile page is determined by Yelp Sort, and does not automatically assign a negative review as the first review. We encourage body shops to look at a variety of business profile pages to verify this for themselves. Yelp Sort is the default view, which factors in the recency of the reviews, and user voting (useful, funny or cool), among other factors. More importantly, we give users the ability to sort reviews by date, star rating, friends, Yelp Elite reviews, etc. Do some reviews disappear over time? You bet they do. And here are the three reasons why that might happen: 1) A Yelper may choose to remove his/her own review. 2) If a review is reported and found to be in violation of our Review Guidelines or our Terms of Service, our user support team will remove it. Business owners can contact our user support team and/or flag reviews for our user support team for evaluation. 3) The review may have been caught in our automated Review Filter which runs 24/7 on the site and aims to filter away biased or suspicious reviews from the business profile page. It’s important to note that because of our methods of quality control, review number fluctuation is common on Yelp. All businesses, whether they advertise with us or not, are subject to the same rules and standards. It’s also important to note that our stance on quality control is why consumers continue to come to Yelp in large numbers. ABN: How can a body shop use Yelp to help promote its business? DH: Consumers turn to Yelp for information about businesses before they step through the door. In the 3rd Quarter of this year, Yelp had a monthly average of 61 million unique visitors. On top of that, we had an average of over 5 million monthly unique users on Yelp’s mobile application for smart phones. If a potential customer is looking at a body shop’s Yelp listing, it means that they are actively searching for that type of business. The information on a Yelp listing can help users make a buying decision, which is why
44 JANUARY 2012 AUTOBODY NEWS | www.autobodynews.com
it’s important for business owners to claim their free business owner’s account at: www.biz.yelp.com. From there, we help business owners by providing them with a free suite of tools which allows them to maximize their presence on Yelp. Businesses can respond to reviewers, add photos, post check-in offers and run their own Yelp Deals. We also offer paid upgrades for businesses looking to expand their visibility even further.
ABN: If a body shop suspects that some of their bad reviews are from either former disgruntled employees or competitors, how can it respond? DH: The situation you describe is against Yelp’s terms of service. Business owners can report these situations by alerting our User Support team at www.yelp.com/contact or by flagging reviews using the “flag” button that appears right under the review itself. Our user support team evaluates these situations and may remove reviews that violate our guidelines.
ABN: Many of the positive Yelp reviews that some body shops see on their competitors’ pages suspect that they were written by themselves or friends, as opposed to genuine customers. Can anything be done about this and how can Yelp detect fake reviews? DH: Yelp has had an automated review filter which is designed to identify patterns of abuse, such as the scenario you are describing. It’s an automated system that has evolved over the years, but its purpose has remained the same—to protect consumers and business owners from fake, shill or malicious reviews. Some companies attempt to manipulate the system by soliciting reviews and reaching out to friends and family to write glowing reviews for them, but after a while the system can detect it. In addition, consumers are very savvy and they can read between the lines. If someone joins Yelp to write one positive review and then doesn’t use Yelp again, it’s red-flagged. So, we tell businesses they should focus on
providing good service and let the Yelp reviews build organically. It won’t happen overnight, but it will happen eventually. While our filter system isn’t perfect, it is effective at catching fake and shill reviews. We also understand that our review filter system sometimes raises questions and frustrations amongst body shop owners, but this is the high cost that we’ve chosen to accept, because we know the infinitely higher cost would be to not have an algorithm in place at all. We obviously need a review filter system to stop people who will spam and cheat the system. We know that there are companies out there who will sell reviews and create fake content for people and we need to work against it in order for us to retain our objectivity. Sure, it’s not a perfect system, but there isn’t anything out there in place that has proven to be better. We hear back from companies all the time that say Yelp has helped us. One important final note: Our system is 100% automated and we never favor advertisers over non-advertisers. And a lot of people don’t know it, but reviews are never deleted from Yelp. If one does get filtered, it goes into a section at the bottom of the company’s Yelp page, where it can still always be read.
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Continued from Page 39
Houston Ordinance
make a distinction between collision repair shops, which have generated most of the complaints of alleged swindles, and mechanics, which have not been the subject of widespread complaints. Pennington said mechanics should be able to get a verbal OK from customers for prices that exceed the estimate instead of having to do more paperwork that creates an in-
convenience and cost. Council members Jolanda Jones and C.O. Bradford said the Parker administration got the changes to them too late for proper consideration. The final version of the changes did not arrive at council offices until November 28, meaning many council members did not see them until moments before November 30th’s meeting.
Targeting ‘bad guys’ The late changes also caused automo-
tive repair industry representatives to hesitantly endorse a final version they acknowledged they were not yet familiar with based on how it had been described to them. “We want to get rid of the bad guys in the body shop business,” adds van der Pol. “On the other hand,” she said, “We don’t want something that burdens small business with overregulation,” and she worries that the proposed revisions will criminalize an honest mistake, such as not collecting a signature authorization.
Subaru of Glendale SO. CALIFORNIA
Glendale (818) 550-1500 (818) 549-3850 Fax Mon.-Fri. 7-6; Sat. 8-4 parts@glendalemitsu.com www.subaruofglendale.net
Sierra Subaru of Monrovia Monrovia (626) 359-8291 (626) 932-5660 Fax Mon.-Fri. 7-6; Sat. 8-4 parts@sierracars.com www.sierraauto.com
Timmons Subaru
The following dealerships are eager to serve your needs. Call your local Subaru collision parts specialist today! Galpin Subaru
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Van Nuys (818) 778-2005 (818) 778-2090 Fax www.galpin.com
Kearny Mesa Subaru San Diego (800) 548-9124 (858) 300-3331 Fax Mon.-Fri. 7-6 cguth@kmhyundaisubaru.com www.kearnymesasubaru.com/parts
Long Beach (888) 489-5001 (562) 426-3550 Fax Tue. 7-8; Mon., Wed.-Fri. 7-6; Sat. 8-4, Sat. No Delivery Parts@timmonslongbeach.com www.timmonssubaru.com
Marin Subaru
San Rafael (415) 257-4690 (415) 257-4684 Fax Mon.-Fri. 7:30-5:30; Sat. 8-4 marinmazdasubaru@yahoo.com www.marinsubaru.net
The Houston City Council says the new auto repair industry regulations for the city came about because of complaints that some body shops are deceiving consumers. The changes are aimed at increasing transparency within the industry, said Lt. Wendy Bainbridge with the Houston Police Department, according to KHOU 11 News Houston. The ordinance comes after one Houston City Council member said she received complaints about body See Houston Ordinance, Page 47
Subaru of Santa Cruz NO. CALIFORNIA
Santa Cruz (800) 549-8490 (831) 420-1402 (831) 420-1923 Fax Mon.-Fri. 7:30-6; Sat. 8-5 parts@santacruzsubaru.com www.santacruzsubaru.com
ARIZONA
Power Subaru
Scottsdale (480) 425-2950 (480) 425-2948 Fax Mon.-Fri. 7-6; Sat. 7-4
Subaru Superstore of Chandler Chandler (877) 443-3239 (480) 268-2402 (480) 621-3805 Fax Mon.-Fri. 7-6; Sat. 7-5 subaruparts@shopsubaru.com www.shopsubaru.com
NO. CALIFORNIA
Shingle Springs Subaru Shingle Springs (530) 676-0444 (530) 677-6528 Fax www.shinglespringssubaru.com
www.autobodynews.com | JANUARY 2012 AUTOBODY NEWS 45
Inside Insurance
The Insider is a corporate-level executive with a Top 10 auto insurer in the U.S.. Got a comment or question you’d like to see him address in a future column? Email him at Auto.Insurance.Insider@gmail.com
Sure, OEMs Set the Standard, But Who Fills the Gaps Left by OEMs? with The Insurance Insider
The debate continues to rage: What is the standard for collision repairs? Who develops the standard? Is it possible to deviate from the standard? If you can deviate, what entity can provide an alternate to the standard? As such, people, committees, associations, not-for-profit organizations and corporations are lining up quicker than adults outside of Toys R Us on Black Friday to offer their two cents on the subject. Sadly, most of their opinions aren’t worth a single copper Lincoln penny. Why not? Because most of those offering an opinion are basing their decision upon something other than being experts on the topic. I’m not professing to be an expert or proficient enough in repair methodology to offer an opinion worthy of your consideration. While that may be the most humble thing you will ever read in one of my articles, I am going to give you my opinion anyway. The way I see it, if you are reading and listening to alleged industry experts weigh in, why not an insurance executive who has never actually repaired a vehicle? Maybe I’m the best person to offer an opinion because I don’t stand to gain anything. Although I’ve never repaired a vehicle, don’t discredit the wisdom I’m about to impart upon you. Sometimes the best ideas come from the most unlikely of places. Do you think Moses knew what was going to happen at the top of the mountain? If you happen to be a good church-going boy or girl, you know that is where Moses received the Ten Commandments. Who could have guessed sectioning procedures were even an issue back then? So let me answer a few of the questions I posed at the outset of the article. In order the answers are: OEM, OEM, yes, to be determined. Even though I may be just an insurer who doesn’t know much, I know that the car manufacturer sets the standard.
They spend millions of dollars engineering these vehicles. I think they should have some say as to how they are or are not repaired. But note I said: They should have “some say…” That’s right. They aren’t
the end-all, be-all. The car manufacturers don’t have all the answers. It’s not God’s word. If it were, the Gospel according to the car manufacturers would be shrouded in monopolistic tendencies. If the car manufacturers were God for the day, aftermarket and salvage parts would be banished to hell. That’s not just or realistic. The fact is that the industry needs to be very careful what it is asking for. I would challenge any of my diehard readers to search for sectioning or replacement procedures on an assortment of foreign and domestic vehicles. You will find that there aren’t procedures to repair every part on the vehicle. There are more gaps than there are in our current health care plan. Neither provides the desired end result. So if we use the car manufacturer as the standard, does it automatically mean that alternative repair procedures can’t be developed? If you say ‘yes,’ there’s no need for you to read any further. You should also stop repairing ve-
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hicles at your shop because you are repairing them incorrectly. If you don’t believe me, try printing out the car manufacturers’ repair procedures on every vehicle in your shop. I think you will quickly realize that you can’t repair the car because there isn’t a standard for everything. Thus there is a need for alternatives from respected entities in the industry. I’m ill-equipped to suggest the best organization or company to develop an alternative, but I can assure you that safe and cost effective repair procedures can be developed. NHTSA (the National Highway Traffic Safety Administration), Thatcham (in the UK) and I-CAR are names that are often cited as the best candidates. Regardless as to who or how they are developed, alternative repair procedures should be as important to the industry as defining
the car manufacturer as the standard. I would argue that it’s probably more important. If finding potential safe alternate repairs isn’t an option, the industry is beholden only to the car manufacturers and their desire to be a profitable entity responsible to their shareholders. The debate shouldn’t be whether or not the car manufacturer is the standard. It should be about which organizations are best equipped to develop viable safe alternative repair options. Alternatives that ultimately provide you more opportunities to repair a vehicle as opposed to having it towed from your lot, auctioned and shipped overseas. The Insider is a corporate-level executive with a Top 10 auto insurer in the U.S. Got a comment or question you’d like him to address in a future column? Email him at Auto.Insurance.Insider@gmail.com.
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Continued from Page 45
Continued from Page 27
work done without customers’ consent. “They’d charge (customers) for the estimate. Sometimes up to $1,000. And if you wanted to get your car out, you had to pay the $1,000. We thought that wasn’t fair,” Council Member Sue Lovell said to KHOU 11 News Houston.
document to justify their short pay to limit the price paid for repairs to [the] automobile. By not performing these necessary operations, it will result in an incomplete repair. I have spoken today with the field appraiser assigned to this file and he confirmed that he put the needed repair operations on the original estimate (see Exhibit G-3) although a document generated from
Houston Ordinance
ANPAC
ANPAC/American Claim Service shows a zero by all these operations. “As resolution to this complaint, please take the necessary enforcement action against ANPAC/American Claim Service for what are appears to be deceptive trade practices. “I have attached the following exhibits and contact numbers for your review: “Exhibit A: Request to the database enhancement gateway to verify validity of document ANPAC/American Claim Service provided.
“Exhibit B: Document from ANPAC/American Claim Service stating they are denying payment for needed operations due to document they claim came from Audatex. “Exhibit C: Document ANPAC /American Claim Service provided that misrepresents material facts. “Exhibit D: Email from Audatex Manager, Robert Sandkaut, stating Exhibit C is not from Audatex. “Exhibit E: Correct database reference manual from Audatex. See ANPAC, Page 52
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Wholesale Direct: 925-828-8251 Fax: 925-829-2941 Hours: Mon. - Fri. 7am - 6pm Sat. 8am - 4:30pm 4200 John Monego Ct., Dublin, CA 94568 Chevrolet•Cadillac•GMC•Buick•Pontiac Oldsmobile•Saab•Saturn•Hummer
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ASRW Responds to Insider’s Comments in his Columns: ‘Can NACE Survive as a Traveling Regional Trade Show?’ and ‘Industry Undecided Which Organization Will Prevail’ In light of the excellent working relationship between ASRW and Autobody News, we wanted to comment on the ongoing ‘Insurance Insider’ column. We understand these are op-ed pieces and are written from the author’s point of view. However, the two articles we’ve seen—Can NACE Survive as a ‘Traveling Regional Trade Show? and Industry Undecided Which Organization Will Prevail in NACE vs. SEMA” each contain several inaccuracies. Our attempts to contact the ‘insider’ regarding these statements received standard automated replies. We wanted to bring the following inaccurate statements to your readers’ attention: ‘Can NACE Survive as a ‘Traveling Regional Trade Show’? October 20, 2011 (online); November 2011 (print) ● Article states: “Aside from the fact there weren’t a lot of people there, which made it easier to navigate the show floor, the smaller event meant my feet were intact after a few days of walking.” – Although the size of NACE has contracted in proportion to the size of the collision industry since the late-1990s, ASRW 2011 had an in-
crease in attendance of 18%. ● Article states: “They assembled a committee of industry experts that were supposed to help guide them to “NACE: The Next Generation.”—Although the ‘NACE: The Next Generation’ committee does not exist, we do solicit feedback from industry experts, attendees, exhibitors and prospective participants when making decisions that affect the future of ASRW. ● The article references a vote at the CIC meeting in early 2010 as the catalyst as to where the fall CIC meeting would take place.—Although votes occurred at this meeting, the relevant vote took place at the CIC Planning Meeting in January of 2011 and the results (holding the meeting in conjunction with NACE or SEMA) were separated by 1 vote.
‘Industry Undecided Which Organization Will Prevail in NACE vs. SEMA’ – November 23, 2011 (online); December 2011 (print) • Article states: “[NACE] staked their claim as the undisputed ‘Collision Industry Trade Show Champion’ after 2011.—While we have never made this particular claim, NACE re-
mains the only event dedicated to the professionals within the collision repair industry. ● Article states “SEMA is an upstart show.”—SEMA is not an upstart show. According to www.semashow.com, it is “the premier automotive specialty products trade event in the world,” and has been in existence since 1966. ● Article states: “NACE lost the sale, and Round 1 of the ‘Battle of the Century’ last year went to SEMA.” According to www.semashow.com, SEMA’s audience consists of approximately 60,000 automotive enthusiasts in the automotive, truck and SUV, powersports and RV markets. Unlike SEMA, NACE’s audience has been and remains the professional collision repairer. We consider Autobody News to be a great partner/supporter, and we appreciate the on-going coverage and support we consistently receive. We welcome the opportunity and are always available to provide the anyone – including the ‘insider’ with factual information regarding ASRW. Thank you, ASRW Show Management Hanley Wood Exhibitions
Brownsville, TX, Man Runs Smuggling Operation Out of Body Shop
A Brownsville, TX, man and three accomplices have been sentenced to federal prison for their roles in a drug smuggling and money laundering ring that moved cocaine from the border to Dallas and Atlanta. The U.S. attorney’s office says Arturo Gomez led the ring from his auto body repair shops in Brownsville. The 51-year-old had pleaded guilty to conspiracy to possess and distribute cocaine as well as money laundering. U.S. District Judge Hayden Head sentenced Gomez in Corpus Christi Thursday to 25 years in prison. Three other members of the group were given sentences last month ranging from nearly six years to almost 20 years. Sentencing for a fifth member was rescheduled for late December and a sixth member remains a fugitive after pleading guilty to bulk cash smuggling and then fleeing.
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Custom Corner with Rich Evans
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
Solution Finish’s Brings Black Back™ is a Breakthrough Product
I’ve missed you guys the last couple of months because I’ve been really slammed with great projects and getting ready for SEMA, but I’m back with a lot of great news and some great projects.
while you’ve noticed that the black plastic or the black finish on your windshield wipers fade over time. This problem is due to the carbon in the plastic and carbon is what makes the color whether it’s black, brown, grey. There’s never really been a product that could really fix these probwith Thomas Franklin lems. A lot of us just came to accept that there is nothing that can repair the problem. Eventually the sun and the wear and tear, the carbon is eventually going to fade. Now I know that there are silicones that you can wipe on to make the surface shiny and slimy, but it wipes off on your towel or rubs off on your clothes. It attracts dirt, and after one or two washes it comes off anyway. You can also slip if you get it on your running boards; it’s just a real Chris West with Rich Evans at SEMA with Dick Strom temporary fix. I’ve been fascinated with a prodI ran across a guy named Chris uct from a company that I came across West who invented Brings Black about six months ago called Solution Back. You wipe it on, you wipe it off, Finish. They have a product called and it restores the carbon and brings Brings Black BackTM that is in a class the black back. How cool is that? I’ve by itself. Just like I do with every- been testing it for the last 6 months on everything from stoves, to door handles, to wiper arms, to hitch covers, to inside bedliners. I’m trying to find a black finish that it doesn’t work on. It’s just amazing how far beyond the automotive world this product can exwith Lee Amaradio Jr. tend to. I’ve found that the best results come from washing the surface down with rubbing alcohol—it’s all about the prep. The product works with almost no prep, but to get the longest Half finished wiper restoration black back results, I’ve found dabbing thing, I put it to the 6 month test. I’m just a little bit of product on with a so excited about this product that I’m sponge goes a long ways. A dime sized drop of this product will do almost a half a cowl panel. Wipe it on, buff it a little, and rub off the extra with Sheila Loftus residue that didn’t bite into the plastic, and it really gives that deep black back. That’s the color that is out now but Solution Finish is just startDoing the rest of the job ing to get into other colors. putting my name to it (see ad). I’m not The product dries within two just endorsing this product, I’m part minutes. It doesn’t stick to paint or to owner of the company and I’m glad to windows so you don’t have to mask it. be a part of Solution Finish. This is It’s almost like spraying without a going to go viral and be used to fix paint gun. Nine out of ten cars you millions of cars from here on out. walk by need the product, whether it’s If you’ve worked on cars for a just wiper arms, belt moldings, front
bumpers, grille panels, whatever. It’s amazing to find a product that can ac-
On Creative Marketing
Half finished on the handle
tually fix millions of car finishes out there and actually create thousands of
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50 JANUARY 2012 AUTOBODY NEWS | www.autobodynews.com
Partial job on the bumper assembly
jobs. I’ve been really working with body shops, to help them do upsells, and paintless dent removal guys. You can see a couple of Youtube videos at: www.youtube.com/watch?v=KYfiPfD02DU. Note how easy it is to apply the product and wipe off with a microfiber sponge. The developer of this product Chris West says “Solution Finish was developed over the last six years using techniques unlike anybody has been using in the autocare industry. We didn’t follow any of the typical steps in developing a product. We reversed the process, we looked at how the surface, how the material is made and we tried to formulate a product that would not only enhance the general appearance, but something that would actually chemically place the color back into the plastic and how we
did that was we developed a series of modified and penetrating oils with a very high grade of colored carbon and we milled that carbon 7 times which makes the actual colorant smaller than a virus. So if you can imagine the penetrating oils will pull the black carbon, the colorant, deep back into the plastic, then the modified oils lock it in and it chemically changes the chemistry of the surface itself. So over a 6 year period this has been developed and perfected, I brought in Rich Evans at the final stages of formulation because there’s little tricks that only a professional body and fender paint guy would know and that was the missing key to finalizing the product.” Anybody that cares about their car will want or will need this product whether they apply it themselves or whether a body shop offers it as a service, or paintless dent remover guys offer it as a service, or any of the other guys out there doing interior repairs. It’s simple, easy, affordable, comes in 3 different sizes, a 1oz bottle is $29.95, a 12oz bottle is $125 and a 32oz bottle is $250. The one ounce bottle can repair up to 3 vehicles based on doing a Chevy Avalanche, which is 70% plastic finish. If you’ve seen one you know how much plastic avalanches have. Twelve oz bottle Every avalanche goes for $125 I see is faded. Bring Black Back lasts as long as a new part. I took one Avalanche and priced out what it would cost to replace all the parts—over $10,000 with labor—never mind putting all those new parts back on. Those replacement parts are only going to last as long as the original new parts did so in a year and a half you’re going to be doing it
Solution Finish Avalanche’ or ‘4nJDkORNges.’ Now a customer can buy, say, a 12oz bottle (you can do up to 36 complete vehicles with the 12oz bottle for $125) so if you’re the do-ityourself guy or if you’re the shop out there that wants to offer this service, this is a new product you really need to check out. A 32oz bottle will do up to 96 complete vehicles—who’s ever heard of coverage like that? I’m a body shop owner and I’ve been buying paint and product for a long time, to be able to do up to 96 cars for $250 worth of product. There’s no telling how many panels and parts you can do and how much money you can make—I guarantee a body shop on its slowest based profit would be 10 percent of what their income is. So if you can make a minumum of 10 percent in your sales increase and up to 30 to 40 percent, you have a customer. You’re going to
look like a rockstar because you’re going to be able to fix something that this customer has not been able to fix and they’d just accepted that they can’t fix it. So what’s that going to do? That’s going to get the word of mouth going. People are going to talk about it, people are going to say ‘hey this body shop fixed this and I’ve never been able to fix this problem.’ I spent $30,000 for my car, I want my car to look as good as it can look for a long time. Solution Finish has brought that to you. We want to make people like you happy and proud to have your car back in the shape that it was when you purchased it, without spending thousands of dollars. Let’s review the 10 basic steps of this: 1) quick and easy application. 2) long lasting results, lasts as long as a new part, second application may be required. So there’s no mill build or any of that, this is wipe-on wipe-off almost like shoe polish. Dries instantly. 3) no greasy residue. How cool is that? 4) No black streaks on towels after application. 5) long product shelf life. That’s cool, we’re hitting all the points. 6) wipes off protected paint, wipes off glass, or most application no masking required 7) doesn’t leave streaks on applied surfaces. 8) only a small amount is needed for each application, which is great for profitability.
transmission’s being ‘locked in park,’ or with the engine still running, increasing the chances of vehicle rollaway or carbon monoxide poisoning in an enclosed area,” the regulator said in the proposal. Toyota, in 2009 and 2010, recalled more than 10 million Toyota and Lexus vehicles for defects that may cause unintended acceleration. Some of the cars had push-button starts, meaning panicking drivers would have to hold down the button to stop the car rather than turning a key. The rule would standardize the length
of time drivers must push a button to stop a moving car to a half-second. The Society of Automotive Engineers, which writes industry standards for automakers to follow voluntarily, in January recommended a range of a half-second to two seconds. In a 2009 Lexus ES-350 crash that killed four people and helped lead to Toyota’s recalls, the car had a keyless electronic starting system with a push-button control that required the driver to hold the button for as long as three seconds to stop the engine, NHTSA said in the proposed rule.
again. Take a look at my video demo at: youtube.com, search ‘Rich Evans
Solution Finish Price Guide
NHTSA Proposes Panic-Stop Ignition Standard for Cars
Auto-safety regulators have proposed standardizing keyless ignitions to allow drivers to turn off cars faster and more easily in incidents of unintended acceleration following Toyota Motor Corp.’s record recalls. The proposed rule will cost less than $500,000 a year, the U.S. National Highway Traffic Safety Administration said in a proposed rule published Dec. 12 in the Federal Register. “At issue [is] drivers’ inability to stop a moving vehicle in a panic situation, and drivers who unintentionally leave the vehicle without the vehicle
9) lasts through heavy rain and normal washes. 10) the one I like the best—no silicone. How long does it last? Longer than a new part. If you own a vehicle, you need Solution Finish. So here’s another great product. I’m sharing my processes, my steps and procedures in building cars, all the way to finding and discovering products out there that’re going to help us fix cars. I’ve fixed thousands of cars and with this product I’m going to be fixing many more cars, but even more important is to be creating thousands of jobs for people out there. There’s detailers, there’s paintless dent removal guys, and others who can get in business for themselves. If you’re in the business you want to offer this service. It’s $29 to get into business! You’ve got to check this out: solutionfinish.com. Go and check out my Youtube, there’s testimonies that are going up as well. We’re putting this product into the major WD’s PBE warehouses, so if you’re a jobber and you’re wanting to buy go to PBE warehouse and order up some Solution Finish. Give it a shot yourself and offer it to your customers. If you just comp it, it’s going to get people talking. It’s going to get word back and raise money one way or the other, whether they bring cars back or referrals or talk about you. It’s all about the marketing part about it. At the end of the day, you can be confident that the product works great. Buy yourself a bottle, go out and fix three vehicles. I have a suggested price guide to help you to learn how to charge for it. It’s an easy way to create more income and it’s an easy way to look like a rockstar to people by fixing problems that have been out there for so long that people have forgotten it’s a problem. I’m really stoked about it and I’m really happy that I ran into Chris. I’m glad to be back on track, lots of cool projects coming up. Thanks again! Ignition sales The rule probably won’t help sales of push-button ignitions or components because it will probably require a calibration change, rather than different parts, said Rich Hilgert, a Morningstar Inc. analyst who follows auto suppliers. Automakers have also worked on standardizing keyless ignitions and are reviewing the proposed rule, said Gloria Bergquist, a spokeswoman for the Alliance of Automotive Manufacturers.
www.autobodynews.com | JANUARY 2012 AUTOBODY NEWS 51
AutoNation CEO Says No Double-dip Recession Coming The U.S. economy will avoid a double-dip recession as auto sales continue to climb back toward 16 million a year, says AutoNation Inc. CEO Mike Jackson. “There is so much stimulus in this economy” that another downturn will be avoided, Jackson told dealers at a Washington Area New Automobile Dealers Association luncheon. And while the recovery is weak, “if there’s a bright side in this economy, it is the auto industry,” said the chief of the nation’s largest retailer. Jackson is not yet giving a forecast for 2012 but says U.S. auto sales will increase from the 12.6 million or 12.7 million units likely in 2011. Longer term, though, reaching 16 million annual sales may take two or three years, he said. “We’re on a journey back to selling 16 million units a year.” He said the projected rebound has three drivers. 1. Demographics support it. With 14 million vehicles taken off the road annually, the scrappage rate exceeds new vehicle sales. Vehicles are getting older with the average age up to 11 years, he said. And 1 million new households are being formed annu-
China to Levy New Tariffs on U.S. Vehicles
ally. “You see it in the showroom every day: People need to replace their vehicles,” Jackson said. 2. Automakers are producing better vehicles than ever before with innovative new technology. 3. In a reversal of the credit crisis that triggered the industry downturn, great financing options are available. “If there’s one lesson from 2008, it’s that people will make their car payments,” Jackson said. “People will pay for their cars before they’ll pay for their house and before they’ll pay for their credit cards.”
In the latest sign of trade tensions between the world’s two largest economies, China has announced it will impose anti-subsidy and antidumping duties on imported cars made in the United States. The duties, to affect the Detroit Three and some U.S. units of foreign automakers, will begin Dec. 15 and last two years, the Chinese Commerce Ministry has announced. Cars that have engine capacity at or above 2.5 liters will be hit with duties ranging from 2 percent to 21.5 percent. GM will face anti-dumping and countervailing duties ranging from 8.9 percent to 12.9 percent. Chrysler’s will range from 6.2 percent to 8.8 percent, while the U.S. units of BMW AG and MercedesBenz will face duties of 2 percent and 2.7 percent, respectively. The United States has filed 12 trade cases against China since it joined the WTO, and a total of five since U.S. President Barack Obama took office.
Fiat 500 Gets Only 3-star Safety Rating from NHTSA
The 2012 Fiat 500, one of the first minicars to hit the U.S. market, received a disappointing safety rating from the National Highway Traffic Safety Administration. The Fiat 500 has a combined overall safety rating of three out of five stars. In comparison, the 2012 Ford Fiesta four- and five-door models received a combined overall safety rating of four out of five stars.
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Continued from Page 47
ANPAC
“Exhibit F: Email from the database enhancement gateway stating that Audatex will be contacting American Claims Service and sending them a current copy of the database reference manual. “Exhibit G-1 through G-6: Last supplement from ANPAC/American Claims Service. “Exhibit G-3: Supplements, 4 from ANPAC/American Claims Service listing the needed operations as zero on their estimate and that they are included in two stage refinish which is a material misrepresentation.” You can view the full text of these documents at: www.autobodynews.com. Borek says he has spoken to the claim representative, the field appraiser, and the Texas Field Supervisor for ANPAC about this incident. “I have attempted to contact American Claim Service who will not take or returnGive my phone calls.”opinion on mat us your “It’s just amazing that these insurance companies will do this,” said Borek.
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Domestic Parts Deductible
riated when I have to explain that they owe additional monies on top of their deductible because they drive a domestic vehicle. Mr. Nicely, I have already taken one of these claims to court and was awarded a judgment for the 10% and attorney fees. Your company has asked for a stay on the judgment and we are scheduled for another hearing on January 9, 2012. The 10% that we are suing for in that claim was a mere fraction of the attorney fees that we incurred and ordered to be paid by your company. I cannot see how that makes a sound business decision by your local management. It not only shows poor customer service on your company’s part towards their own insureds, but it deteriorates relationships between your company and the hundreds of collision repair facilities here in south Florida. If you can look into this matter and advise me if there is anything you can do, both your insured and I would greatly appreciate it. I would like to avoid any costly legal proceedings if at all possible. I would like to thank you for your time and I look forward to hearing from you.
Quintela then received a phone call from Dan Maloney, the local claims supervisor, who told Quintela that the domestic OEM parts discount was customary in the market, a surprise to Quintela, who called several local shops and dealers, then emailed back seeking written confirmation: Good morning [Dan Maloney], Thank you for your call yesterday. As per our conversation; you told me that your position on the 10% domestic OEM parts discount will not change and that it is customary in our market. I must say that I was taken aback by that statement. Besides Geico, there are no other insurance companies (that I am not a DRP for) that take this so called customary 10% discount. Since you told me that most shops and dealers accept this, I decided to make some phone calls to other shops and dealers and ask them if they offer this 10% discount or if Geico just “takes” this discount. As I thought, everyone that I spoke with told me that Geico just takes the 10% discount. I spoke with 2 shops in particular that stated that they must always charge your insured the 10%. Since you made the statement that this is customary in the market, I have begun to wonder, when was the last time that Geico surveyed the “market”?
I have yet to ever fill out or participate in a Geico survey. I also asked every shop owner and manager that I know if they ever filled out a Geico survey and I was astounded to find out that no one has ever been surveyed. If you never surveyed a shop in the “market,” how can you make such a statement? If I spoke to over two dozen shop owners and managers and none offer this 10% discount, how is it “customary” in our market? Mr. Maloney, I am willing to team up with Geico and do a survey of the south Florida market. Let the market speak for itself and let’s finally put this issue to rest. If you are confident that your position is correct and customary, let’s conduct a true survey and find out. Let the facts speak for themselves and we will have the correct data to determine what is fair and reasonable in our market.
Quintela then followed up with a copy of this email to Supervisor Nicely asking for written confirmation of the policy and repeating his offer to help GEICO with its survey of the market: Good morning Mr. Nicely, I emailed you last week regarding an issue that I am having with your company. I have yet to receive a response
in writing from either you or your local claim supervisor, Dan Maloney. I do not believe that this is typical of you or your employees, but a response in a timely matter would have been appreciated. Mr. Nicely, I also copied you on an email that I sent to Mr. Dan Maloney regarding Geico ‘s survey practice and idea of the local market area. If you or your company disagree with my findings or have information to illustrate that my findings are not accurate, than please respond in writing as to any inaccuracies or differences of which Geico may have within five, (5) business days. Should I receive no written response within this reasonable time frame than it will be agreed that the aforementioned facts are true and accurate as reflected herein. I look forward to hearing from you. I hope that we can work this matter out without any further complications. I thank you for your time.
GEICO responded with a hand delivered letter dated Dec. 13 saying: Dear Mr. Quintela, The e-mails that you sent to Mr. Nicely have been forwarded to our attention. Our experience is that we reach an accepted price on the vast majority of claims in your area. We rely on our ex-
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perienced staff to let us know when accepted prices cannot be reached and it occurs very infrequently. When we are unable to reach an agreed price, we have been able to resolve those matters through the appraisal clause of the policy. Tony Lodato, Auto Damage Manager
Quintela gave his last response, as of this writing, via email: Mr. Nicely, Thank you for forwarding my emails to your local auto damage manager, Mr. Tony Lodato. Please see the attached written response that was handed to me by Mr. Ladato & Mr. Dan Maloney yesterday, 12-14-11. I would have preferred if you had contacted me directly, or had someone other than a local manager respond to me since they are the root cause of my concerns. I would like to know if you have read and approved of your company’s response to my concerns? Mr. Nicely, your Auto damage manager, Tony Lodato has incorrectly
addressed the appraisal clause as a possible solution to my concerns. The appraisal clause would come into play if we did not agree upon the method of repairs, labor times, or if we had a disagreement over repair or replacement of a part or parts. We have no such disagreements. We are on the same page as far as these items go. What the concern is over, is the fact that Geico takes a 10% discount off of domestic OEM parts that we both agree need to be replaced. I still find it difficult to understand how Geico can take a discount on something that we do not offer. An insurance company, I understand, is to fully and properly indemnify an insured for their entire loss (less their deductible if applicable); but deducting 10% off of parts is not indemnifying your insured fully or properly, but is a breach of the policy contract and an act of bad faith. I am still baffled by the logic which your local management conducts itself by. How can an insurance company take a 10% domestic parts discount when it is never mentioned in the policy?
What is worse is when you fail to protect your own insured as stated in the policy when they are the tortfeasor [wrongdoer]. How can Geico justify having a claimant pay 10% of their parts when they were a victim of your policy holders’ negligence? That would cause a claimant to pursue legal action against your policy holder, and therefore causing another breach of contract on Geico‘s behalf. I believe that your local management has been breaching the policy contract and acting in bad faith in regards to this issue. I know that I have spoken to well over two dozen collision repair facilities and all seem to agree that this is taking place in on a wide scale throughout the south Florida area. I have offered to work with your company to do a survey of the market and determine what the true fair and reasonable labor rate and charges are. As I have stated in my past emails, I have yet to find a collision shop that is not a direct repair shop that offers this discount to Geico, they have all stated that Geico just takes it. I am respectfully
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asking for your intervention in this matter so that we can avoid any further complications. I would like nothing more than to arrange a meeting with you, your local management, and a group of my peers to sit and discuss this issue. I would like to be able to serve our mutual customers in the future without having to expose them to these unnecessary difficulties. We both know how hard it is to keep and retain customers, I can’t imagine a Geico customer would want to renew their policy after having to pay 10% of their parts costs on top of their deductibles; especially when it is not written in their policy contract. That also brings up the fact that I have yet to be shown where in Geico ‘s policy it states that the insured would be responsible for 10% of their parts cost if they drive and insure an American vehicle. I have a copy of your policy and have not been able to find this in it. Please feel free to contact me at anytime to discuss this further. I do hope that we will be speaking in the near future.
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