May 2010 Western

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Threat of Lawsuit Leads to Postponement of Latest CIC Parts Presentation

by John Yoswick Special to Autobody News

Just hours before industry trainer Toby Chess was to make another presentation about non-OEM bumper and structural parts at the Collision Industry Conference (CIC) in Atlanta on April 15, Chess said he was threatened with a lawsuit if he did so. He declined to reveal who threatened the legal action but said, because he had not had a chance to consult with an attorney, he chose to forego making his presentation at the meeting.

In presentations at the previous two CIC meetings in November and January, Chess showed potential problems with a number of non-OEM bumper parts, including apparent significant differences in the material and structure of the parts.

That has led at least four insurers to pull back from the use of such parts; it has also led parts suppliers to develop improved tracking and recall programs for the parts, and to the launch of several testing and certification programs for such parts.

Chess was clearly frustrated by the threat of legal action against him, saying he never portrayed the demonstrations as scientific research but merely as a way to “bring light” to a potential problem.

“I was asked last month why I did this,” Chess said. “I said that I don’t work for insurance companies, I don’t work for parts companies, I don’t work for body shops. I work for the consumer. I’m a trainer. I teach. So I have no vested stake in this. I thought it was necessary to say these things. I think we’ve demonstrated See Threat of Lawsuit, Page 40

SCRS Forum Brings State Shop Associations Together to Discuss Efforts and Share Ideas

by John Yoswick Special to Autobody News

Collision repair associations leaders from around the country met in Secaucus, New Jersey, in March to share ideas and discuss state legislative or regulatory successes and efforts. The 2010 East Coast Resolution Forum, an event sponsored by the Society of Collision Repair Specialists (SCRS) and Janet Chaney

the Alliance of Automotive Service Providers (AASP) of New Jersey, was held in conjunction with AASP-New Jersey’s NORTHEAST 2010 trade show.

Here’s a round-up of some of the news and discussion from the meeting: Iowa: Janet Chaney, of the Iowa Collision Repair Association, reported on the progress of a proposed state law the group supports that would in essence allow Iowa shops to transfer the expense of sales tax on paint materials they purchase to insurers or customers. Chaney said currently shops pay the sales tax on such purchases but are not reimbursed for it by insurers.

See SCRS Forum, Page 4

VOL. 28 ISSUE 5 MAY 2010

CAA Takes Position on Traceability of A/M Parts, Needed for Future Safety

The California Autobody Association (CAA) has recently met with a number of organizations and government agencies, including the California Department of Insurance, in discussion of current related regulations, CCR Section 2695.8 (g) that require, among other things, permanent, non-removable identification of non original crash parts which is a key component to the traceability issue. The CAA believes traceability is one of the most important issues currently facing the collision repair industry.

A system has to be in place within a relatively short time to track crash parts being installed on consumer vehicles. If these aftermarket crash parts do not meet standards in current law and cannot be tracked they should not be sold in the market place.

CAA continues to stress that the problem of possible unsafe parts in the market cannot be fixed unless a common traceability system is in place.

Even though other organizations have focused on a smaller area concerning parts that may or may not be unsafe, the bigger issue at hand is no matter what parts may have a failure, in advance of any wide spread failure that could cause accidents, this industry has a system in place that will ensure that all parts will perform or they will be subject to an efficient recall system.

In the cause of a failure, whatever segment of the industry that is responsible will know that they will be designated to reimburse the affected party.

A working traceability system in See Parts Traceability, Page 15

CONTENT HIGHLIGHTS

• CIC Presentation Postponed

• CRA Parts Demonstration Gets Major Media • CAA Takes Position on Parts Traceability • CA Insurance Commissioner Says Mercury Overcharged • Marina Auto Body: Dealerships and DRPs • Car West Elite Makes its Numbers in First Year • Arizona Glass Bill Passes State Senate

Toyota Fined, Awaits Class Action Still A Mustang, in name only, part 2 Gonzo’s Toolbox: “Slick Talkin’ Mechanic”

Change Service Requested

See Page 26

Service, Service, Diagnostic Diiagnostic D and an d Mechanical M e ch an iccal al NEWS nd Mec echanical Mech ech ec hanical nical ca

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Contents 80 Percent of Tested Cars Fail Inspection Checks. 27 Arizona Auto Glass Fraud Bill Passes State

Senate 28-0 . . . . . . . . . . . . . . . . . . . . . . . . . . 15

ASA ‘Taking the Hill’ Fly-in Conference Update. . . 38

ASAA Opposing Ohio OEM Parts Legislation . . . . 27 Attanasio - Car West Elite Hits its Numbers After

Ft. Myers, FL. . . . . . . . . . . . . . . . . . . . . . . . . . 32

It’s a Safety Marketplace and Consumers

Are Buying . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Keystone Automotive Says Parts Traceability

Exists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

LKQ Goes Green with New Recycling Promotion . 41 Maaco Positions Itself As Customer Pay Provider 12

One Year in Business. . . . . . . . . . . . . . . . . . . . 36

Maryland Salvage Bill Now Awaits Governor

Relationships & Selected DRPs . . . . . . . . . . . . 10

McGee and Webster - It’s Still a Mustang®;

First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Minnesota Body Shop Gets 30% of Power

in DC on R2R . . . . . . . . . . . . . . . . . . . . . . . . . 25

Mitchell Inc. Gives CAA Members Open-House

Overcharged Consumers. . . . . . . . . . . . . . . . . . 7

National Performance Buys Speed Warehouse

Valley/Ventura Chapter . . . . . . . . . . . . . . . . . . 39

New Redlands Warehouse For Continental Tire . . 20

Needed for Future Safety . . . . . . . . . . . . . . . . . . 1

Value at the Right Price . . . . . . . . . . . . . . . . . . 44

BMW Group has Sales Growth of 13.8% In

CA Auto Recycler Meets with Rep. Thompson

CA Insurance Commissioner Says Mercury Illegally CAA Combines Two Chapters To Make

CAA Takes Position on Traceability of A/M Parts, California Tire Sustainability Program

“Just Check It” . . . . . . . . . . . . . . . . . . . . . . . . 39

CAPA 501 Standard for Bumper System Parts . . . 12

Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 But in Name Only – PART 2 of 2 . . . . . . . . . . . 31

From Solar Arrays . . . . . . . . . . . . . . . . . . . . . . 12 Tour of Facilities . . . . . . . . . . . . . . . . . . . . . . . 17 of Hayward, CA. . . . . . . . . . . . . . . . . . . . . . . . 27

New Revolution® Lift Line Offers Quality &

Opposition Mounts to Prop. 17 . . . . . . . . . . . . . . 18 Parts for Profit, Part 2—Profitable Management

of Inventory & Personnel . . . . . . . . . . . . . . . . . 48

Car Car Council Wants Consumers to Remember

Pennsylvania Senator Rafferty Asks for

CARSTAR Collision Centers Promotes Green

PPG Chairman Charles Bunch Reports on

Causey - Games Insurers Play. . . . . . . . . . . . . . . 14

RAM Truck Brand Teams Up with Rocker

Controversy Between Homestead, FL, Mayor,

SCRS Forum Brings State Shop Associations

Their Three “R’s” . . . . . . . . . . . . . . . . . . . . . . 27 Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

CAWA Battery Core Bill Now Law in Arizona . . . . 27 Blogger, and Body Shop . . . . . . . . . . . . . . . . . 32

CRA Aftermarket Parts Demonstration Gets

Major Media Attention . . . . . . . . . . . . . . . . . . . 40

Indexof Advertisers

Attanasio - Marina Auto Body Melds Dealership

Investigation after Steering Experience. . . . . . . 20

New Strategy . . . . . . . . . . . . . . . . . . . . . . . . . 32

Zac Brown . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Together to Discuss Efforts and Share Ideas . . . 1

State Farm Prevails in Gunder Slander Suit; Gunder

Says He Will Appeal . . . . . . . . . . . . . . . . . . . . 41

CRA Writes to Insurance Commissioner Asking

Survey Says Ford Has Highest Customer Quality

Evans - Working On a ‘57 Thunderbird With

Texas Companies Leave Millions in Tax

For A/M Leadership. . . . . . . . . . . . . . . . . . . . . 43

Old School Tools & Techniques . . . . . . . . . . . . 46

Satisfaction. . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Credits Unclaimed. . . . . . . . . . . . . . . . . . . . . . 13

Falling Average Vehicle Product Use . . . . . . . . . . 26

Threat of Lawsuit Leads to Postponement of

GM Pays Back Gov’t Loans Years Early; Chrysler

Toyota Fined $16.4M, Will Face Single Sudden

GM, Carfax Unite to Push Out Recall News . . . . . . 6

Transmission Anti-Rollaway Shift Interlocks

Franklin - Concentrate Your Marketing Firepower . 44 Posts Operating Profit in Q1. . . . . . . . . . . . . . . 21

Gonzo's Toolbox - “You’re Just One of Those

Latest CIC Parts Presentation . . . . . . . . . . . . . . 1

Acceleration Lawsuit . . . . . . . . . . . . . . . . . . . . 26

Now Required . . . . . . . . . . . . . . . . . . . . . . . . . 27

Slick Talkin’ Mechanics” . . . . . . . . . . . . . . . . . 30

U.S. Chemical Introduces Two New 2.1

Texas Associations . . . . . . . . . . . . . . . . . . . . . 16

U.S. EPA Provides $1.5 Million to Clean Up

The Mitsubishi Lancer Evolution And Outlander 42

Yoswick - Insurers And Shops Don’t Always

Houston Auto Body Association Joins Existing I-CAR Tech - Aluminum Roof Replacement On IGA/NWRA Conferences Seminars in

VOC Primers . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Contributing Writers: Tom Franklin, Dick Strom, John Yoswick, Lee Amaradio, Rich Evans, Janet Chaney, Toby Chess, Mike Causey, Tom McGee Advertising Sales: Joe Momber, Christina Shubert (800) 699-8251 Sales Assistant: Stephanie Bowling Art Director: Rodolfo Garcia Serving California, Nevada and Arizona, Autobody News

AEGIS Tools Intl. . . . . . . . . . . . . . . . . . .14

is a monthly publication for the autobody industry. Permission to reproduce in any form the material published in Autobody News must be obtained in writing from the publisher. ©2010 Adamantine Media LLC. Autobody News P.O. Box 1400, Oceanside, CA 92051-1400 (800) 699-8251 (760) 721-0253 Fax www.autobodynews.com Email: news@autobodynews.com

Western

‘R2R Act’ Bipartisan Co-sponsor List Grows . . . . . 6

Hyundai Wholesale Parts Dealers . . . .15

Alldata Collision . . . . . . . . . . . . . . . . . . .7

Johnson’s Super Service . . . . . . . . . . .17

Autoland Scientech . . . . . . . . . . . . . . . .27

Kia Motors Wholesale Parts Dealers . . . .35

BMW of Riverside . . . . . . . . . . . . . . . . .32

Mazda Wholesale Parts Dealers . . . . . .44

Audi Wholesale Parts Dealers . . . . . . . .50

Auto Body Guru . . . . . . . . . . . . . . . . . .52

Kearny Pearson Kia . . . . . . . . . . . . . . . .18

LKQ . . . . . . . . . . . . . . . . . . . . . . . . . . . .55

BMW Wholesale Parts Dealers . . . . . . .23

Mitsubishi Wholesale Parts Dealers . . .42

Chassis Liner . . . . . . . . . . . . . . . . . . . . . .6

Nissan/Infiniti Wholesale Parts Dealers . . .41

British Motor Car Distributors . . . . . . . . .4

Classifieds . . . . . . . . . . . . . . . . . . . . . . .51 Completes Plus . . . . . . . . . . . . . . . . . . . .8

Crevier BMW . . . . . . . . . . . . . . . . . . . . . .9 Downtown Motors of LA

(Audi, VW, Porsche) . . . . . . . . . . . . .20

DuPont . . . . . . . . . . . . . . . . . . . . . . . . . .5

Enterprise Rent-A-Car . . . . . . . . . . . . . .49 Express Metal Recycling . . . . . . . . . . . .17 Ford Wholesale Parts Dealers

AZ, CA, & NV . . . . . . . . . . . . . . . . . . .19

Contaminated Properties . . . . . . . . . . . . . . . . . 38

Galpin Motors . . . . . . . . . . .24, 28-29, 34

Speak The Same Language . . . . . . . . . . . . . . . . 8

Honda/Acura Wholesale Parts Dealers 25

GM Wholesale Parts Dealers . . . . . . . .45

MOPAR Wholesale Parts Dealers . . . . .11

Pacific BMW . . . . . . . . . . . . . . . . . . . . .21

PPG . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Pro-Spray . . . . . . . . . . . . . . . . . . . . . . .13

RBL Products . . . . . . . . . . . . . . . . . . . .16

Replica Plastics . . . . . . . . . . . . . . . . . . .43

SCA Appraisal Company . . . . . . . . . . .12

Soft-Sanders from Style-Line, Corp . . .46 Suzuki Wholesale Parts Dealers . . . . . .50

Timmons VW-Subaru . . . . . . . . . . . . . .39

VIM Tools . . . . . . . . . . . . . . . . . . . . . . . .47

Volkswagen Wholesale Parts Dealers . . .48

Volvo Crash Wholesale Dealers . . . . . .38 Weatherford BMW . . . . . . . . . . . . . . . . .37

www.autobodynews.com | MAY 2010 AUTOBODY NEWS 3

Continued from Page 1

SCRS Forum

The bill (HF 2530) would exempt shops from sales tax for wholesale materials purchases if sales tax is billed and collected as a line item to the shops’ customers.

“That’s money right in our members’ pockets,” Chaney said. “If it’s a $1 million shop, that’s $10,000.”

An Iowa House committee had approved the bill, though it failed to make further legislative progress before lawmakers adjourned the session.

Montana: Chaney, who also represents the Montana Collision Repair Specialists, said a past president of the association, Max Yates of Yates Body Shop in Butte, Mont., has registered to run as a Republican for an open House seat in the Montana legislature.

“He said, ‘I’m tired of complaining about it. I’m going to see if I can make a difference,” Chaney said.

SCRS Executive Director Aaron Schulenburg said such efforts are important for the industry.

“Because that gives us somebody inside that body, being able to speak our voice to their peers, instead of just us speaking to them as a legislative body,” Schulenburg said.

New Jersey: Charlie Bryant of AASP-New Jersey said state regulators have told the association that companies conducting mobile repairs—such as those doing lot repairs at dealerships—are not covered under the state’s shop licensing law. He said the association is working to change that, in part by pointing ouot that even photos on some of those companies’ websites show them doing more than just minor damage repairs. Representatives from other states at the meeting told Bryant they have successfully addressed mobile repair operations by speaking with environmental regulators, the fire marshal, and even land zoning agencies (when a dealership was not zoned to have a body shop at its location).

Pennsylvania: Steve Behrndt of the Pennsylvania Collision Trade Guild expressed concern about a towing-related legislation in his state that he believes could have profound impact on collision repairs.

Behrndt said the bill (HB 2041), which has been passed by the Pennsylvania House and has been introduced in the Senate, prohibits a tower from obtaining a signature authorizing repairs, or from refusing to release a vehicle to an insurer when paid for towing and storage, seemingly overriding current state law requiring permission from the vehicle-owner. It also requires a tower to notify the insurer of a vehicle, if known, the whereabouts of the vehicle within 24 hours of the tow. Behrndt said all these provisions will make it easier for an insurer to get a vehicle into a shop of its choice.

“We call this legalized wreck-chasing on behalf of the insurance industry,” Behrndt said. He cautioned those from other states to watch for similar legislation in their state being promoted as s pro-consumer towing-related bill.

Massachusetts: Two of the three associations serving Massachusetts collision repair shops spoke at the meeting in New Jersey and both said the three groups are working Janet Chaney anmore closely together nounces Butte shop than ever before. owner Max Yates will “I can almost run as Republican guarantee you within candidate for Montana Legislature. the next six months that we will merge,” Peter Hendrix, president of the Massachusetts Autobody Association, said of his group, the Central Massachusetts Auto Rebuilders Association, and the AASP of Massachusetts/Rhode Island. “We’ve been fighting each other and fighting the insurance industry, we’ve been hiring separate lobbyist and dealing with often the same issues but on our own. It hasn’t worked. It’s not going to change unless we group together.”

Peter Abdelmaseh, executive director of AASP of Massachusetts and Rhode Island, said proposed state legislation related to shop rates is among the projects on which the three groups have been working together. The bill would establish three levels of shop classification, opening the door for higher rates for shops with better levels of equipment and training.

“We believe in Massachusetts that the standards need to be attached to some economic benefit,” he said. “Otherwise, our people will be out making investments with no return” Connecticut: Although there was not any discussion at the meeting about any merger of the two associations serving Connecticut shops, there was talk about improved relationships among the approximately 600 shops in the state.

“We stopped calling each other competitors,” shop owner Bob Skrip of the Auto Body Association of Connecticut said. “We’re all colleagues. Start using that word. In every other profession in this world, they all stick together. You’d talk to a colleague every day, but everyone’s afraid to talk to their competitors. No more competitors. We’re all colleagues.”

Skrip said his group is conducting a membership drive, getting board members and others from the group to meet one-onone with other shop owners to offer a money-back guarantee that new members will more than make back their first-year dues to the association.

As he reported a year earlier, Skrip said rather than legislative efforts, the association

4 MAY 2010 AUTOBODY NEWS | www.autobodynews.com

is focused on consumer education efforts.

“A smart consumer is very dangerous to insurers,” Skrip said.

He said he had no news to share with regard to the association’s successful class action lawsuit against The Hartford, saying the insurer is preparing its appeal of the $15 million judgment shops won against it.

“We all knew going in from 2003 that it’s a long process,” Skrip said of the litigation.

Meanwhile, Lisa Siembab of the Connecticut Collision Repair Specialists said that in addition to industry education and community service, that association may also focus this year on what it sees as a consumer disclosure issue related to some dealerships taking in collision repair work even if they don’t operate a body shop.

“The consumer is being led to believe that they indeed have a body shop when in fact they do not,” Siembab said. “We have a problem with that. We think the consumer needs to be fully informed that their vehicle will be leaving the premises to go to a body shop to be repaired. Consumers aren’t being told this.”

She said some dealers have gone so far as to have doors labeled “Body Shop” within the dealership. At least one member of the Auto Body Association of Connecticut at the meeting said that was an issue on which the two groups might work together.

Maryland and Virginia: Jordan Hendler, executive director of the Washington Metropolitan Auto Body Association, discussed several legislative proposals her group recently helped defeat. The association opposed a bill in Maryland, for example, that it felt would legitimize the use of salvaged airbags, and a bill in Virginia that would have raised the threshold of damage requiring a flooddamaged vehicle to Peter Hendrix, presireceive a branded title dent of the Massachufrom $1,000 to setts Autobody $5,000.

Association, saying “Legislatively, “it’s not going to change unless we it’s important to regroup together.” member that this type of block is as good as a win,” Ed Kizenberger, executive director of the Long Island Auto Body Repairmen’s Association (LIABRA), said association leaders should remind their members. “Here is an example where something that is proposed that is detrimental to the industry.

Being able to block that is important. It takes just as much work, and sometimes more, to stop something that has momentum than it is to try to start something legislatively on your own.”

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www.autobodynews.com | MAY 2010 AUTOBODY NEWS 5

GM, Carfax Unite to Push Out Recall News

General Motors and Carfax have entered into an agreement to aid dealers, owners and potential buyers about rectifying unrepaired safety, non-compliance and emission recalls.

GM executives explained that they’re providing millions of vehicle identification numbers to Carfax for units with open recalls. Brands include Chevrolet, Buick, GMC and Cadillac as well as ones the automaker no longer sells, Hummer, Saab, Pontiac and Saturn. Buyers and sellers can access this information through Carfax Vehicle History Reports and at www.carfax.com/recall

by May 1.

Carfax research indicated that consumers utilizing these resources can help significantly increase completion rates on open recalls. The data also revealed that about four out of five GM owners complete recall repairs within 18 months of being notified of a recall.

“We know some people do not take their vehicles in for recall repairs when they get their letters. Carfax makes it easy for consumers to find out whether a vehicle they are considering has an open recall and increases the chances of that repair being made,” stressed Jamie Hresko.

Maryland Salvage Bill Now Awaits Governor Signature

The Washington Metropolitan Auto Body Association (WMABA) is taking credit for successfully moving HB 1199 through both the House and the Senate during the recent 2010 legislative session.

This bill (HB 1199), which adds an exclusion to the threshold for “cosmetic damage” and “the cost of towing, storage or vehicle rental,” was successfully passed with majority support by stakeholders, as well as legislators.

The bill’s provisions create an additional salvage application statement that an insurer must provide in certain circumstances; prohibit anyone from using specified costs to determine the cost to repair a vehicle for highway operation under the motor vehicle salvage program; and ensure that a specified cost of repair calculation may not affect specified rights. The legislation would add an exclusion for non-structural items to the state’s total-loss calculation.

The bill also creates a specific exclusion for costs arising from towing, storage and vehicle rental, and would require a salvage certificate application for any vehicle acquired by an insurance company as a result of a claim settlement.

6 MAY 2010 AUTOBODY NEWS | www.autobodynews.com

‘R2R Act’ Bipartisan Co-sponsor List Grows

The Motor Vehicle Owners’ Right to Repair Act (HR 2057) has gained more bipartisan support with the addition of nine members of Congress to the growing cosponsor list. Reps. Michael Arcuri (DNY), Anh “Joseph” Cao (R-LA), Barney Frank (D-MA), Loretta Sanchez (D-CA), James Sensenbrenner, Jr. (R-WI), Bennie Thompson (D-MS), Glenn Thompson (R-PA), Paul Tonko (D-NY) and Charles Wilson (D-OH) have declared their support of the Right to Repair Act. The bill now has 60 co-sponsors in the House of Representatives.

“We thank these nine members of Congress for backing this critical piece of pro-consumer and pro-small business legislation,” said Ray Pohlman, president of the Coalition for Auto Repair Equality (CARE). “The Right to Repair Act does not cost tax payers money, does not create a new agency and, more importantly, does not ask taxpayers for a bailout. It simply requires that vehicle manufacturers provide car owners and their trusted neighborhood repair shops with the same access to the same safety alerts, technical service bulletins, diagnostic tools and repair information they provide to their dealer network – nothing more, nothing less. The top priority of the Right to Repair Act is motoring consumer safety, ensuring that motorists know what is happening with their vehi-

cles.” Because vehicles are becoming increasingly sophisticated with virtually every system either monitored or controlled by computers, servicing these vehicle systems to keep them in safe working order requires ready access to complete and accurate information, tools and software from the car companies.

The Right to Repair Act protects motorists by allowing them to have access to the repair information for the vehicle they purchased, thus ensuring that they can choose where, how and by whom they have their vehicles repaired.

“Allowing independent repair shops to compete on a level playing field promotes fair competition and ensures that car owners throughout the country continue to have access to affordable and convenient automotive repair,” said Kathleen Schmatz, president and CEO of the Automotive Aftermarket Industry Association (AAIA).

The Senate version of the Motor Vehicle Owners’ Right to Repair Act (S 3181) was recently introduced with bipartisan support by Sens. Barbara Boxer (D-CA) and Sam Brownback (R-KS).

The House version of the bill (HR 2057) was introduced by Reps. Edolphus Towns (D-NY), Anna Eshoo (D-CA) and George Miller (D-CA). The legislation is said to provide car companies with strong protections for their trade secrets.

CA Insurance Commissioner Says Mercury Illegally Overcharged Consumers

Inquiry also finds insurer failed to cease illegal acts despite previous agreements to do so

California Insurance Commissioner Steve Poizner announced today that an examination found that Mercury Insurance has violated the state insurance statutes and as a result, Mercury Insurance may have illegally overcharged thousands of Californians for auto and homeowners insurance.

“As the head of the state’s largest consumer protection agency, I must ensure that insurance companies fulfill their obligations and follow state law,” said Commissioner Poizner. “However, an examination done by the Department of Insurance appears to show that Mercury Insurance has disregarded California’s consumer protection statutes and overcharged consumers. In addition, the Department’s examination finds that Mercury Insurance has apparently continued to violate the law despite agreements with the state to terminate its illegal behavior.”

The California Department of Insurance (CDI) conducted a Market Conduct Exam covering the period of March 1, 2007 to May 31, 2007. During that timeframe, CDI found that Mercury Insurance Group, comprising Mercury Insurance Company, Mercury Casualty Company and California Automobile Insurance

Company, violated the insurance code, resulting in consumers being overcharged or denied coverage. The 35 categories of alleged violations include: Mercury Insurance failed to correct violations of state law indentified by the Department of Insurance from exams conducted in 1998 and 2002.

Mercury did not collect the right information about a driver’s prior accidents during its auto insurance application and underwriting process to make sure that surcharges are only applied for those accidents where the insured is at fault, and to make sure people are not charged for bodily injury accidents when no injuries had occurred.

The auto insurance applicant is required by Mercury Insurance to provide “lifetime” experience regarding certain major convictions, while the law only allows insurers to charge for such convictions for “10 years” for specific alcohol-related offenses and “three years” for the others.

Homeowners’ insurance premium credits were not being consistently applied when they were due, resulting in insureds being overcharged.

Mercury’s auto insurance non-renewal notices and procedures required the Good Driver to take additional steps, beyond what is provided for in the law, to obtain cover-

age when another person on the policy no longer qualified for coverage.

Mercury’s auto insurance underwriting guidelines required individuals with certain medical impairments to undergo additional underwriting scrutiny before a policy could be issued.

Mercury barred from coverage people in certain occupations -- Bartender, Liquor Store Owner, Painter, Cocktail Waitress/Waiter and Artists – who didn’t meet additional underwriting standards that were not applied to people in other occupations.

Mercury Insurance Group has 10 days to correct each violation found in the latest exam. Should the violations not be corrected, Mercury Insurance Group faces a $5,000 fine for each violation and an additional $5,000 fine for each violation if it is found to be willful. The insurer also faces additional penalties for the past violations, and its failure to implement corrections following the previous exam.

In an unrelated incident, protesters showed up at a booksigning by Poizner for his new book, “Mount Pleasant.”

They objected to passage in which Poizner says he knew he shouldn’t expect “Silicon Valley-caliber ambition and smarts from East San Jose schoolkids.”

Mercury Says Poizner’s Interests are Only Political

Mercury was quick to point out that Commissioner Poizner is seeking the Republican nomination for California governor. The company stated that “political interests” were at play in the department’s announcement.

Poizner’s own spokesman acknowledged that making such a big announcement about such violations was unusual, but Poizner’s office argues that the company has repeated violations it had previously agreed to fix.

Mercury is the $3.5 million main backer of Prop. 17, a November ballot initiative that would allow transferable “loyalty discounts” for drivers who change carriers, but the rates would not apply to those who let their insurance lapse. Prop 17 would create an insurance surcharge on drivers, including soldiers and seniors, who have had a lapse in car insurance coverage for virtually any reason during the past five years, or who missed a single payment. Under the measure, people who stopped driving and didn’t need insurance for a time would be required to pay up to a $1000 more for car insurance when they sought to restart coverage. Currently, insurance companies are prohibited from imposing such a surcharge in California (see p. 18).

www.autobodynews.com | MAY 2010 AUTOBODY NEWS 7

Industry Insight

John Yoswick is a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com).

He can be contacted by email at jyoswick@SpiritOne.com.

Insurers And Shops Don’t Always Speak The Same Language with John Yoswick

On its surface, the proposal seems fairly straight-forward.

“Word-tracks used to offer repair shop referrals to consumers should not include comments, remarks or statements that disparage any collision repair business,” the proposal, crafted last year by the Collision Industry Conference (CIC) Trade Practices Committee, reads. “When a consumer voices their shop selection, their decision should be honored without further comment. Repairers should also refrain from making any comments that disparage an insurer, direct repair program or other repair facilities.”

But during a recent panel discussion at CIC about how this and other trade practice proposals might get implemented, it became clear that shops and insurers aren’t always speaking the exact same language.

One man’s “steering” is another man’s “consumer education.”

“I’m not sure what this statement is intending to provide,” Allstate’s Randy Hanson said, a statement echoed by some other insurance company representatives on the panel. “If you’re trying to say,’ Follow the law and play nice,’ we do that. But I suspect there are other issues this is trying to get at, and this statement doesn’t do a lot for me in terms of what that is exactly.”

Industry consultant Lou DiLisio spoke for many collision repairers when at CIC he voiced frustration with insurers’ view of the issue.

“It’s the implementation and execution of those word tracks, and it’s what gets done when there’s something identified that’s out of place,” DiLisio said. “Whet gets done when I call up and say, ‘Your word track was deviated from…’ What gets done? Unfortunately, nothing.”

Steering vs. education The panel discussion organized by the “Insurer-Repairer Relations Committee” at the latest CIC meeting focused on just two of the first five proposals developed by the “Trade Practices Committee.”

Hanson wasn’t alone in portraying the word tracks and other information used to describe a direct repair program as “consumer education.”

“We should have the right to inform the consumer about the process,” Michael Lloyd of California Casualty said. “In some states, once the customer voices a choice of shop, that’s where it stops, and I’m good with that. But there are other states, like California, which recently passed a regulation that says we have the

right to explain our program to our customers. We’re going to honor their choice of shop, but I agree with that law that we should have the ability to make sure the consumer is informed.”

Joe Laurentino of Esurance told DiLisio that he doesn’t think his company’s employees stray from the company’s word tracks when talking to consumers about shop choice.

“I won’t say it doesn’t ever happen,” Laurentino said. “But the vehicles we fix today are highly complex. We need to make sure they get to the repairers who can fix the car properly and by the OE specifications.”

If there are concerns about the wording used by an Esurance employee, Laurentino told DiLisio, “I would personally address that if you call me with the claim number.”

Hanson said as more and more claims calls are handled by call centers, there is “strict adherence to the script,” scripts that Allstate has made available to the Automotive Service Association for feedback (and to which Allstate responded with some changes, he said). In response to a question, he said there is no financial incentive for call center employees to get a certain percentage of customers to use a Allstate direct repair program shop.

Hanson argued against state laws that limit an insurer’s right to discuss the program even with a consumer who has a shop in mind.

“What about the customer who comes back and says, ‘How come you didn’t tell me you had this program?’” he said. “I entertain a lot of those calls. That’s a difficult conversation too because I have to tell them I can’t tell them. They don’t understand that. They don’t understand that there’s a law that says I can’t inform them.”

But Aaron Schulenburg, executive director of the Society of Collision Repair Specialists (SCRS), challenged the idea that insurers are consistently adhering to scripts and honoring customers’ shop choice.

“Otherwise, I and the other association leaders in the room wouldn’t get calls on a regular basis from shops who say, ‘I had a customer. I had their keys. I had their car. I had a signed authorization, and the car got towed out because of what they were told,’ “ Schulenburg said. “That happens. Often. And there’s a lot of customers who quite frankly aren’t willing to fight. If the customer doesn’t have the time or energy in invest in fighting it and moving up

8 MAY 2010 AUTOBODY NEWS | www.autobodynews.com

the ladder and meeting the (insurance) manager and going to their department of insurance, at the end of the day they’ll throw their hands up and say, ‘Fine, tow it out and take it where you need it.’”

Dispute resolution The panel also discussed another of the “Trade Practices Committee” proposals, which calls for insurers to make available their DRP agreement guidelines and key performance metrics, and to “publish the intended field application of the program’s policies, guidelines and metrics, along with a process for handling potential misunderstandings or deviations from company policy.”

As with the word track proposal, this idea got a mixed reception from insurers on the panel. Hanson said Allstate includes a copy of its direct repair program contract on its website. Lloyd said California Casualty already makes standard operating procedures available to its direct repair shops through its website.

“But as far as posting that (DRP)

agreement to everyone, that’s not going to happen,” Lloyd said. “Hopefully our agreements give us some kind of competitive advantage. I guess that would be the main reason I just don’t see it happening.”

Laurentino said his company’s legal department won’t allow Esurance direct repair agreements to be openly published.

But several shop representatives on the panel said the actual terms of the DRP contracts are not as much the issue as inthe-field policies and procedures being interpreted or implemented differently by staff even within the same insurance company.

“When we believe there’s a deviation in the field, when a policy is being applied differently than, as I understand, corporate intended it, where do we go to bring that to somebody’s attention, to have some resolution of the issue,” Bill Lawrence of LC Automotive Group asked the insurers on the panel.

Joe Lacy of GEICO said in those instances a shop should contact a supervisor See Insurers and Shops, Page 14

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Shop Showcase

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

Marina Auto Body Melds Dealership Relationships & Selected DRPs with Ed Attanasio

Tom Williamson has owned and operated multiple body shops over many years. He’s discovered a formula for success that includes a team of people whom he trusts to do a great job; by building referral relationships with new car dealerships, and by carefully choosing insurance Direct Repair Programs (DRPs).

Williamson, 57, owns Marina Auto Body, with two locations in Southern California. Both shops are flourishing despite tough economic times by building solid partnerships, riding a strong reputation and stressing customer service above everything else.

Between their two locations in Southern California, Marina Auto Body repairs an average of nearly 400 cars per month.

Williamson’s Marina Del Rey location operates out of a 25,000 square-foot facility, employing 39 people and repairing 275–300 cars per month. The other location in Huntington Beach is in a 10,000 square-foot facility, employing ten people and repairing 75 cars per month.

“They’re two very different sizes and types of businesses, but we run both of them using the same principles. In the end, it comes down to satisfying our customers, which are in three key groups—car owners, insurance companies, and the dealerships we work with. You can have the right equipment, best people, and use top techniques to fix these vehicles, but the basics all apply. It comes down to CSIs (customer service indexes) in this industry. And, it can either make you or break you.”

Marina Auto Body has done remarkably well during the recession and Williamson credits that success to building a strong reputation in the past decades. He understands that a company is only as great as the employees who help run it and maintain credible relationships with their clients.

“We’re down a little because of the economy, but we are still keeping our car counts high. We’re fortunate, because many shops are having a difficult time in this area. I believe one of the main reasons we’re doing well is because our team is

constantly working towards improvements.”

Williamson’s method of sharing employees between his two locations has proven to run his shops more efficiently.

“We have to find economies of scale.

There is not enough margin in this business to ignore savings where we can take advantage of them. By utilizing key employees in both locations we’re able to take advantage of those resources,” he said.

One of the reasons Marina Auto Body has held its own is its tenacity in improving production processes and techniques. In early 2008, Marina Auto Body began using a tracking and analysis system developed

by The Fix Auto Group. This allowed the company to change the way the shops were performing, based on the information they received from their customers.

“We joined Fix Auto in ‘08 and they helped us open our eyes. From the data and customer feedback they made available to us, we found out who we really were as a company. We were able to determine what was missing to, not only, become better, but also compare ourselves against our peers.

We found out that we were doing a good job, but not a great job each time. As a team, we made diligent and appropriate changes and have seen better results overall.”

Williamson said the majority of Marina Auto Body’s revenue is evenly split between working with dealerships and insurance companies. “It’s a good mix. I have several DRP’s and referral relationships with three key dealerships (Toyota of Huntington Beach, Toyota of Marina Del Rey, and W.I. Simonson Mercedes-Benz).

They’re our referral source in each case.

A clean, comfortable customer waiting room at Marina Auto Body in Huntington Beach keeps clients content.

While these dealerships don’t have their own collision facilities, we’re proud to act as their preferred repair facility. They send us their clients and in return we purchase all of our parts for each Toyota and Mercedes-Benz from them. We’re satellite operations for these three accounts, and it works very well for our mutual customers.”

10 MAY 2010 AUTOBODY NEWS | www.autobodynews.com

It’s a comfortable situation because, by working with a wide range of clients, Williamson never puts too many of his eggs in one basket. “I’ve always felt like we need a blend of DRP’s and dealership work. When the dealerships are recommending us, it’s a win-win, because the customer in most cases is going to say, ‘this must be a pretty good shop and let’s take our vehicle there.’ Then, when they come to one of our shops, they see a professional operation. Immediately they notice that we all have the appropriate training, the latest equipment, and that we provide great service. After the job is completed, we follow it up with CSIs. “These dealership relationships enhance our credibility and our reputation, but then we have to deliver every time to maintain those levels. If we didn’t perform, we wouldn’t still have these great relationships with both the insurance companies and the dealerships. You’re only as good as your last job in this industry, and we know it,” said Williamson.

Williamson needs to keep all of his clients happy, but he knows the car owner is the most important cog in the wheel.

“Everything is driven by customer service, bottom line. The person who brings their car into our shops has to leave here feeling beyond satisfied every time. Sure, we want our insurance partners and our dealerships happy, but what we focus on is the final user. Without their respect and positive feedback, we wouldn’t succeed.

“We work with the DRP’s we’ve selected and we believe that the insurance companies we’re working with today are very pro-customer. They want their customer’s vehicles to be repaired to pre-accident condition. They’re not looking for the cheapest, but want customer satisfaction.

You hear it over and over again from all of the really good carriers. It’s about policy retention and not about doing a cheap repair.”

Williamson admitted that there are never easy solutions or simple answers to the questions surrounding what type of part to put on a particular car. “At times it’s an issue, because in many instances customers are bewildered when we have to call them and tell them that their insurance company requested that they put an aftermarket or used part on a car.

“I have no problem with a used part. If it’s an OE part, I have no issues selling it and we communicate that fact to the customer.

If their insurance company wants to put an aftermarket part on the customer’s car and they agree to it and it doesn’t fit, we won’t put it on their vehicle. When that happens,

we’ll get the insurance company to come out and inspect. In most cases, after someone from the insurance company has seen in for themselves, they’ll then allow us to put an OE part on that car. The parts are getting better, but we still experience fit problems.”

What does Williamson expect from a quality parts vendor? “The two most valuable things a vendor can bring to the table are knowledge and value. Our MercedesBenz and Toyota dealerships do an outstanding job and our relationship with them is great. Sure, quality and price are important, but in the end there is no substitute for a vendor’s product knowledge.”

Marina Auto Body has had great experiences with their parts vendors, because they shop around and find the ones that fit into their system most effectively. “If they don’t have everything you’re looking for, find a vendor that does. Our dealerships

Body Tech Jorge Jimenez sets up a 2010 Mercedes-Benz GLK on a Celette bench at Marina Auto Body.

started listening to their customers loud and clear long ago, so they have the right people in their wholesale parts departments which make everything easier. They do a great job.”

Continually refining and improving your business in this industry is Williamson’s final piece of advice to his fellow shop owners. “If we don’t strive to be better, we’re going to be extinct pretty quickly. We need to do it by embracing new technology, instituting employee training to insure proper repair techniques and emphasizing customer service while keeping it a priority.”

Marina Auto Body (Orange County) 17911 Georgetown Lane Huntington Beach, CA 92647 (714) 848-3178 www.marinaautobodyhb.com Marina Auto Body (Los Angeles) 4095 Redwood Avenue Los Angeles, CA 90066 (310) 822-6615 www.marinaautobody.com

www.autobodynews.com | MAY 2010 AUTOBODY NEWS 11

Maaco Positions Itself As Customer Pay Provider

The typical vehicle is 10.2 years old, the highest average in 14 years, according to a late-March report from R.L. Polk & Co. Old or new, most will eventually require some form of bodywork and painting. The cost should reflect conditions including a car’s age and projected longevity, say consumer-oriented statements by Maaco.

A collision repair on a one to threeyear-old car usually calls for state-ofthe-art options. The owner of a four to 10-year-old car could often benefit from a shop that knows how to provide a superior looking job and still find ways to lower the estimate, especially when the driver is paying out of pocket.

“It’s important to bring a vehicle back to a condition that maintains the resale value if the car would be going into the resale arena,” said David Lapps, president of Maaco Collision Repair & Auto Painting, “such as a lease turn back or a car that’s going to be sold in the next year or so.

“However, with an older car, or one the customer... may be paying herself, Maaco will find ways to save her money without affecting the quality, so that only the expert commercial buyers of newer used cars could pick it up.”

Minnesota Body Shop Gets 30% of Power From Solar Arrays

Minnesota’s Southwest Journal, a regional business publication, has reported that Mulroy’s Body Shop at the corner of 39th Street and Nicollet Avenue in Twin Cities Minnesota, has installed the largest array of solar panels in the Twin Cities area, generating 30 percent of the building’s power.

“Once you have grandchildren, you start thinking about how we’ve got to do our part to leave this world in better shape than we’ve got it,” said shop owner Pat Mulroy. “Body shops, we’re not known as a real green thing, but we want to change that.”

The installation of the shop’s 174panel, 40-kilowatt system was completed in early April as part of a project run by South Minneapolis-based Solarflow Energy, which offers solar electricity leasing.

The company is under contract with Xcel Energy for the project, which involves installing solar panels on 20 residential and five commercial properties in the metro. It is also partially funded through an Xcel Energy Renewable Development Fund grant.

“We’re trying to prove the model of solar service in Xcel territory,” said Solarflow CEO Gerardo Ruiz during a March interview about the project.

Ruiz said the panels are leased at a cost that is less than the value of the electricity being delivered, which Mulroy will receive at no additional expense. Mulroy

said he expects to break even financially this year, but because the lease rate is locked, he foresees significant savings in years to come.

U.S. Sen. Al Franken (D-Minn.) swung by Mulroy’s on April 7, along with City Council Member Elizabeth Glidden

helped create a new energy future,” he said. “So to me, this is just a perfect example of what we should be doing and what we are doing.”

Ruiz declined to specify how much stimulus funding he was getting, but he did say the purchase price of the system installed at Mulroys is about $300,000.

Glidden, who leads the city’s Regulatory, Energy and Environment Committee, said Minneapolis is pushing to find more ways to go solar and Mulroy’s is standing out as an example for the rest of the community of how to do it.

“I live a block away from here and Mulroy’s is one of the best community partners you can have,” she said.

The shop is also leasing space U.S. Sen. Al Franken and Minneapolis City Council Member Elizabeth Glidden (8th Ward) stopped by Mulroy’s to a company that converts gasBody Shop earlier this month to see its new solar panels, powered vehicles to electric. The talk to installers and promote clean energy. official launch of that business is planned later this spring. Mulroy (8th Ward) to see the panels, talk to in- said his shop’s other green efforts include stallers and emphasize the role of federal the use of eco-friendly water-based stimulus dollars in the project. Stimulus paints. funds provide a grant to Solarflow based Mulroy’s solar array is the largest in on the value of the installation, Franken the Twin Cities for now, but the Minsaid. neapolis Convention Center will pass it “This is an example of where the this summer with a project that involves stimulus package has created jobs and thousands of panels.

CAPA 501 Standard for Bumper System Parts

CAPA announced Feb 1 that it is developing a new bumper certification standard. The CAPA Bumper Systems Standard will cover steel bumpers (front and rear), steel reinforcements (rebars), bumper brackets and absorbers. The CAPA program is a direct response to the importance of truly independent certification and testing as a mechanism for fostering market competition. “We are pleased to respond to the cross-industry demand for CAPA certification. The bottom line is that insurers, repairers, and part distributors cannot simply look at competitive parts and make an informed decision on the true comparability of that part to a car company brand part,” said Gillis.

To ensure comparability, the car company service part undergoes a comprehensive testing regimen with the results becoming the “standard” to which the aftermarket part is compared. The aftermarket part undergoes the same comprehensive testing regimen. If the test results show the aftermarket part is comparable to the car company brand part, then, and only then, it can bear the CAPA Quality Seal. “The CAPA Quality Seal is crucial because as the various “tests results” being released demonstrate, it is impossible to determine if an aftermarket part will perform comparably to a car company brand part, unless all critical as-

pects of the part have been tested and reviewed,” said Gillis. The CAPA program requires comprehensive continuous post approval inspection and marketplace monitoring. After the dynamic bumper testing process has been completed, the proposed standard will be presented to CAPA’s Technical Committee for review and approval.

The CAPA Technical Committee includes representatives of key collision industry segments including repairers, distributors, manufacturers and insurers.

CAPA’s new Bumper Systems Standard (CAPA 501) will benefit from CAPA’s history in quality, safety assurance, and compliance. For over six years CAPA has been certifying automotive lighting. It was CAPA who discovered and reported FMVSS 108 compliance issues to the National Highway Traffic Safety Administration (NHTSA) in 2004. We learned that marketplace and package claims about safety compliance may be suspect when we discovered that 80% of the aftermarket lights we tested did not meet all the requirements of FMVSS 108 even though FMVSS 108 was printed on the boxes delivered to shops by part distributors.

Today, the best way insurers, shops, and distributors can ensure that aftermarket lights are truly comparable to car company brand lights and fully comply with FMVSS 108 is to look for the CAPA seal.

12 MAY 2010 AUTOBODY NEWS | www.autobodynews.com

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Texas Companies Leave Millions in Tax Credits Unclaimed

Texas employers are leaving millions in federal tax credits unclaimed and the opportunity for tax savings is now greater for those who choose to participate in the Work Opportunity Tax Credit (WOTC) program.

Employers who hire unemployed veterans or eligible 16- to 24-year-olds are now entitled to receive up to $2,400 in tax savings for each member of those groups added to their payrolls in 2009 and 2010. As part of the American Recovery and Reinvestment Act of 2009, these groups are now included with the existing 10 targeted populations eligible for WOTC. Administered by the U.S. Department of Labor and the Texas Workforce Commission (TWC), WOTC is a federal income tax benefit for private employers who hire from certain groups. Tax credits range from $1,200 to $9,000. WOTC reduces a business’ tax liability, serving as an incentive to select job candidates who face barriers in their efforts to find employment.

“We want Texas employers to earn valuable tax credits while benefitting from the skills of these often untapped groups of qualified workers,” said TWC Chairman Tom Pauken. “It’s particularly encouraging to me that unemployed veterans now are included in this program.”

TWC certifies which newly-hired employees make an employer eligible for the tax credit based on applications re-

ceived from the new employer. Although TWC was able to identify more than $200 million in tax credits for Texas employers in FY 2009, there were many more credits available that went unclaimed because applications were not submitted.

WOTC offers employers a way to address workforce shortages while reducing hiring costs and gives job seekers a way to overcome some employment barriers.

For the newly added groups to qualify their employers for WOTC, new hires who are unemployed veterans must have been receiving unemployment benefits for at least four weeks and youth must not have been regularly employed or regularly attending school for six months prior to being hired.

“Our company saved $114,000 on our federal income taxes last year by hiring 85 qualifying employees to work in our restaurants,” said Joseph Hicks, Certified Public Accountant for Wright Foods, which owns several restaurant franchises in the McAllen area.

Within each employee group, specific eligibility requirements apply. All forms and WOTC information are available online at: www.twc.state.tx.us/svcs/wotc/ wotc.html, or by calling the TWC WOTC unit at 1-800-695-6879.

(Source: Texas Business Today, Winter Issue)

CARSTAR Collision Centers Promotes Green Initiatives

When most car owners think about going green, they think of hybrid vehicles or alternative fuels. But now, car owners can go greener when they have their accident damage repaired.

CARSTAR Collision centers are adopting green repair practices—from new painting technology to energy saving techniques to environmental improvements—designed to improve the car repair process and reducing the shops’ carbon footprint.

CARSTAR has created a Certified Green program with partners such as the EPA’s Collision Repair Campaign, Energy Star and Certified Green Investment to guide collision centers through enacting smart environmental management practices and delivering continual improvements on a yearly basis.

“We want to do our part to help improve the environment and enhance how the thousands of collision repairs that happen in CARSTAR locations impact their local communities,” says Dick Cross, CEO of CARSTAR Collision Centers, the nation’s largest chain of collision repair experts. “There have been tremendous improvements in repair technology, new methods for decreasing energy use, and better ways to reduce waste that, collectively, help the collision centers deliver a more

‘green’ car repair. We’re proud of the many CARSTAR stores who have achieved Certified Green status and look forward to having all of the CARSTAR stores embrace this important effort.”

The CARSTAR Certified Green program will help deliver projected annual savings of $5,300 to each CARSTAR Collision Center, along with an annual Eco Savings of 26.7%, which reflects a reduction in environmental pollution and contribution toward global greenhouse gas reduction. Certified Green stores also qualify for tax credits, utility service rebates, government grants and other benefits such as reduced insurance premiums, workers comp discounts and compliance concessions.

The first CARSTAR stores to achieve Certified Green status are CARSTAR Metcalf in Stillwell, Kan., and Scuderi Auto Body CARSTAR in Rockville, Md. CARSTAR stores are modernizing their equipment, changing to waterborne paint systems, adding energy efficient light fixtures, updating heating, ventilation and air conditioning controls, improving pollution prevention measures and employing smart waste management practices.

www.autobodynews.com | MAY 2010 AUTOBODY NEWS 13

The Right Cause

Games Insurers Play with Mike Causey

It has been said that one does not realize the value of a good insurance company until one files a claim.

Insurers that have local agents that the policyholder can meet with “face to face� generally fare better than the “internet based� insurance policies, according to numerous autobody association surveys.

When it comes to insurance coverage for physical property damage, cheaper premiums are not always the best way to go.

Remember that old adage: You get what you pay for!

As for the claims process for auto body repair, most claimants can use all the help they can get. The truth is that most claimants are simply not familiar with the process and all the pitfalls that many insurers place in their path.

The investment in a motor vehicle is significant for most people. Making sure the value of that investment is not diminished through poor quality visible repairs is important to most vehicle owners.

While not all insurance companies are guilty of “steering� customers to certain “preferred body shops� or demanding body shops cut corners to save a dime, most insurers do just that. The goal is to squeeze every penny they can to pay out as little as possible on each claim.

Most insurance companies play a game—a game that makes sure that the cost of repairing an insured damaged vehicle is held down to the lowest level possible without incurring the wrath of the masses.

Insurers bank on one important fact.

The fact that most vehicle owners won’t keep their vehicle very long. Therefore, the

Insurers and Shops

Continued from Page 8

for a clarification. Lloyd said his company could be willing to put together some “generic guidelines of how we do business� but would want more input from the committee as to what topics should be covered.

Hanson said he understand shops are sometimes hesitant to move up the chain of command because of possible reprisals. But he balked at the idea of some way to submit concerns anonymously or through a thirdparty or “hotline,� saying it “complicates the resolution� and often lacks enough detailed information to be “actionable.�

If a problem involves some sort of fraud—such as an insurance company employee seeking some of pay-off—repairers should contact the corporate security department at that company, several

Mike Causey is a consumer advocate and lobbyist for the Independent Auto Body Association (IABA), in addition to Non-profits such as alternative healthcare groups (Citizens for Healthcare Freedom, NC Reflexology Association), Organic farming and Healthy Eating. Mike is a writer and speaker on numerous consumer issues and legislation. Mailing address: Causey & Associates, P.O. Box 16725, Greensboro, NC 27416 Email: gocausey@aol.com Phone: (336) 210-1947

insurers are not too worried about using imitation crash parts or sub-standard parts.

Suppose an insurance company saves $40 or $50 on a part by demanding the body shop use the “Made in Taiwan� or “Made in China� imitation crash parts.

How much does this “savings� cost the unsuspecting customer? Could it be hundreds or maybe thousands of dollars at trade-in time?

When an insurance company chooses to use the cheaper types of parts, a “diminished value� claim (DV) is a possible consideration in many states. A DV claim could compensate you for the “imitation crash parts� replacing your factory “original equipment� or “OEM� parts.

The art of steering Here are a few of the word tracks used to manipulate the customer into using a specific “preferred� repair facility: > “Oh, sorry, we can’t guarantee the repairs at [your shop] because ‘they’ are not one of our network shops and they’re not on our list;� > “If you use them, we can’t get an adjuster out for two weeks; if you take it to our network shop we will have someone start on it right away;� > “Claims take longer to settle if you use them;� > “Oh no, they charge more than the prevailing rate for this area and you will have to ‘pay the difference’ in repair cost;� > “If you use that shop you will have to pay for your rental out of pocket.�

Insurance company control of the collision repair industry has grown signifiof the panelists said.

But panelist Mike Condon, one of the consultants that conducted a study last year to examine the viewpoints of top auto claims personnel, offered perhaps the most optimistic viewpoint on hopes for at least one aspect of the trade practice proposal. “It was clear that most insurers wanted, or were interested in, some sort of dispute resolution process, but none of them really had any idea of how to do it,� Condon said of the interviews in the study with top claims personnel at nine major insurers.

He said the fact that no such mechanism exists could provide a good opportunity for the industry to work together to develop one, rather than having a number of different ones pop up. “What we need to start is probably to develop requirements from insurers as to what it might look like,� Condon said.

14 MAY 2010 AUTOBODY NEWS | www.autobodynews.com

cantly in recent years. Many shop owners now struggle everyday to get paid fairly.

They’re pressured to use aftermarket crash parts on the jobs they do get and watch insurers steer away customers right and left.

Shop owners are routinely “secondguessed� regarding their estimates. They generally feel “under the thumb� of the insurer (or insurer representative). All this daily pressure from insurers has caused many body shop owners to be resentful toward the insurance industry.

This resentment is apparent from comments on internet blogs as well as surveys conducted by industry associations and publications.

Body Shop owners who say they have lost business because of steering had these comments: � “We’ve been in business for 19 years and 99 percent of the time, the customers are very happy. Yet insurers steer business away from us constantly.� � “I’ve had old customers tell me they were told to go to another shop.� � “Insurers make the customers feel as

though they won’t pay unless they take the vehicle to one of their shops.� � “Vehicles have been removed from our shop because of insurers.� “The companies tell appraisers what they can and can’t pay for,� says another shop owner. “We continually hear, ‘I know you need to do it, but I can’t pay for it.’�

Tell your customers to call their insurance company and tell them where they would like to have their vehicle repaired.

Customers should be told: “If you need any help deciding on which insurance carrier to buy your policy from, ask or call your local body shop. We can tell you which insurance companies are customer service friendly and will help with your insurance claim needs every step of the way.

Some insurance companies make you feel that they have your best interest in mind when in reality they are just managing their bottom line.�

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Continued from Page 1

Parts Traceability

place will ensure that crash parts manufactured will have correct non-removable identification and produced to the highest standards.

“With the evolution of the automobile, more and more replacement parts can be argued that they are related to the overall safety of the vehicle,” states David McClune, Executive Director, California Autobody Association. “We appreciate what other groups are doing on a smaller scale, but the bigger issue is having parts properly identified and a standard system for the traceability of all safety related parts available. When you really start connecting the dots, this single traceability issue has such a far reaching impact that it could change how we look at collision repair in the future. And in my opinion, that is going to be a good thing for the collision repair industry, including the insurers and consumers.”

California’s other Collision Association, CRA, does not endorse traceability, favoring testing and certification of Aftermarket parts, followed by recall if necessary. See CRA Letter to Insurance Commissioner p. 43.

Arizona Auto Glass Fraud Bill Passes State Senate 28-0

An Arizona House bill addressing auto glass businesses and insurance fraud passed the state’s Senate April 19 with a unanimous vote of 28-0. The legislation adds a section to the state’s laws addressing auto glass shops and details a number of items that are “unlawful” for those “who sell or repair auto glass.”

It had previously passed the state’s House, where it originated, but one small technical amendment was made in the Senate (changing the word “advising” to “advise”), so it now returns to the House for Rep. McLain’s acceptance of the amendment and a final vote.

The Senate calendar defines the bill’s purpose as follows: “Outlines unlawful practices for a person who sells or repairs auto glass and institutes a penalty of a class 6 felony for persons who violate the auto glass laws with the intent to injure, defraud or deceive an insurer.”

The legislation identifies the following items as illegal: * To submit a false claim to an insurer for auto glass repair or replacement or for related services if the services were not provided, if the work appears on the invoice as being completed in an incorrect geographical area, resulting in a higher payment, if the work wasn’t au-

thorized by the owner or lessee of the vehicle, or if the invoice was mislabeled with such a date that insurance coverage might not have applied; * To advise a policyholder to “falsify the date of damage to the auto glass that results in a change of insurance coverage for repair or replacement of the glass;” * To misrepresent the price of the repairs or replacement being billed to an insurer, or that the insurer has approved the repairs “unless the auto glass repair or replacement facility has verified coverage or obtained authorization directly from the insurance company or any other third party administrator contracted with the insurance company and the evidence has been confirmed by fax, e-mail or other written and recorded communication;” * To advise a customer that the work will be paid entirely by his/her insurer “unless the insurance coverage has been verified by a person who is employed by or is a producer contracted with the policyholder’s insurer or is a third party administrator contracted with the insurer;” * To add to the damage of the auto glass prior to the work being done, or to encourage a customer to do the same “to

increase the scope of repair or replacement;” and * To perform work “clearly and substantially beyond the level of work necessary to repair or replace the auto glass to put the vehicle back into a safe predamaged condition in accordance with accepted or approved reasonable and customery glass repair or replacement techniques.”

In addition, the legislation includes a section making it illegal for an auto glass business representative to “misrepresent the relationship of the glass repair facility to the policyholder’s insurer.”

The bill originally was introduced

by Arizona Rep. Nancy McLain, who advised at a recent hearing that she introduced the bill “to try to get rid of some outright fraud that’s going on in the windshield repair business.”

Representatives of the Arizona Glass Association, including Rex Altree of New Image Auto Glass and Kerry Soat of FasBreak, both of which are based in Arizona, worked closely with legislators to reach an agreed-upon wording in the bill.

To read background on the bill and its journey to passage, see www.glassbytes.com and www.autobodynews.com

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Hyundai Sales Up More than 14% (year on year). In 2008 Hyundai became the world's fifth-largest automaker, with 7% market share in the United States. www.autobodynews.com | MAY 2010 AUTOBODY NEWS 15

Houston Auto Body Association Joins Existing Texas Associations

by David M. Brown Special to Autobody News

A trio of auto association groups is now serving the Lone Star State: San Antoniobased Texas Independent Auto Association; Austin’s Automotive Parts & Services Association; and, as of 2009, the Houston Auto Body Association, which became an affiliate of the national Society of Collision Repair Specialists in February.

Established in 2009 to serve the greater Houston area, HABA comprises approximately 35 owners and managers of collision centers (Active Members), businesses associated with the collision industry (Associate Members) and like-minded associations that abide by the group’s code of ethics (Group Affiliate Members).

The group was formed to put the collision industry in Houston on a straightercourse. “Many of us felt we weren’t getting fair and reasonable compensation for our work,” says the group’s president, James Brown, owner of Rapid Body Works in Houston. He notes that different areas and insurers were using unique procedures, creating confusion and misinterpretation.

Brown explains that Andy Holder, owner of Metropolitan Collision, also in Houston, began contacting body shops the first part of 2009, and by that September HABA became a registered nonprofit association. Holder is now vice president of the group. “Together, we could strategize and agree on standards and procedures to improve business for all of us, so that consumers could be ensured their vehicles were being restored to their safe pre-loss condition,” says Brown, whose nine-year-old company is ICAR Platinum and ASE certified.

HABA’s membership requirements include proof of liability insurance and technical certification for technicians, the use of a computerized estimating system, a lifetime warranty against defects and an approved spray booth meeting current federal and local requirements.

Brown says that the organization is dedicated to setting just and equitable standards and providing a forum for working out differences between shops and shops and insurers. HABA is establishing itself as a consumer advocacy agency in providing both information and a presence at the Texas Legislature to protect the public’s rights, as well as those in the collision industry.

“One of our members has already had meetings with the Texas Insurance Commissioner and presented questions as well as signed petitions to add to the Consumer Bill of Rights,” Brown reports.

Assisting Brown and Holder as board of directors officers are Phillip Hahn, Treasurer (Mossy Nissan Collision Center); Jennifer Barbee, Secretary (Metropolitan Collision); and Ronnie Brush,

Chairman of the board (Westside Lexus Collision Center).

SCRS is welcoming of HABA, which adds to its portfolio of 38 affiliate associations comprising 6,000 collision repair businesses and 58,500 specialized professionals in the United States.

“It is always exciting for SCRS to partner with new, emerging industry leaders,” says Aaron Schulenburg, executive director of SCRS.

David Abrahams (l) of PPG distributor TASCO presenting a substantial donation to HABA President James Brown.

“The HABA has exhibited tremendous drive and determination in the formation of their association, and their commitment to the implementation of recognized and practiced repair standards is laudable.”

The oldest organization of the Texas three is the Texas Automotive Parts & Services Association, founded Oct. 11, 1932, as the Automotive Wholesalers of Texas. As a trade association designed to serve the automotive aftermarket industry, APSA serves a 10-state membership of 800 members representing approximately 2,000 locations. Besides Texas, representative states are Kansas, Oklahoma, Nebraska, Iowa, Missouri, Arkansas, Colorado, New Mexico, and Wyoming.

The members own or represent auto parts and paint stores, machine shops, engine rebuilders and service repair shops, both mechanical and collision. In the last few years, through a series of mergers, APSA has grown from a single state association to a regional association which, because of the increase in the number of members, has enabled APSA to provide quality programs and benefits, says the organization’s president, Jim Quinten.

For instance, the group offers its members an insurance package through the member-owned AP&S Insurance Agency. Still, the most important work APSA does is legislative advocacy — lobbying in the various states and in Washington, Quinten explains.

He is assisted by the APSA vice president, Melanie Norman, and a 25-member board of directors representing all 10 states.

“The members own the association, and it only exists for their benefit,” he says. “The APSA staff works for the members and are dedicated to that effort.”

Formed in 1980, TIAA comprises mechanical and body shops throughout Texas.

The organization began with chapters in Odessa, Waco, Austin, Houston, San An-

16 MAY 2010 AUTOBODY NEWS | www.autobodynews.com

tonio and the Rio Grande Valley, but membership grew to approximately 850 members statewide. Between 30–40 collision shops now belong.

“Our members are mostly familyowned and -operated independent business that put the focus on customer service on a personal level,” says Gary Pundt, TIAA president and owner of Alamo Heights Garage in San Antonio.

Joining him on the board are Hank Amor, vice president and owner of Oak Hill Automotive in Austin; David Bippert Secretary, owner of Lone Star Radiator in San Antonio; and Roy Baird, Treasurer, owner, Car Pro of San Antonio. In May, the group will choose new officers at its annual meting, Pundt explains.

“We formed so that our members would have more control over the state and local chapters and be able to monitor the Legislature and act on our own behalf at the state level and not get lost in the national association shuffle,” he explains.

The group actively monitors legislation affecting the mechanical and the collision industry: “We have members in Austin that will at a moment’s notice rally support to testify at the state capitol on behalf of our membership.”

He adds: “We’re also a great platform for our members to network across the state

and be able to stay in touch and discuss industry issues that come up.” He notes that these include “insurance-steering problems and the repair process that the insurance companies force upon the collision shops.”

Education is also an important TIAA component. Members serve on various education boards, offering feedback on new training programs and guidance for future technicians. The group also fund raises for scholarships to give financial aid to those deserving and in need.

For the last for years, TIAA members have also donated services and parts to repair vehicles at no charge for residents of battered women’s shelters in Austin and San Antonio.

Says Pundt: “This is a public service that we are proud to do, and we feel it is a great way to give back to our local communities.”

James Brown, President, HABA jbrown2000@charterinternet.com www.habaonline.org (832)-515-9609 Jim Quinten, APSA 8000 Centre Park Drive, Suite 150 Austin, Texas 78754 Phone: 512-339-0044 Fax: 512-339-4477 jim.quinten@apsassociation.com Gary Pundt, State President T.I.A.A. 210-445-7625 gary@ahgarage.com

Mitchell Inc. Gives CAA Members Open-House Tour of Facilities

Mitchell International hosted an Open House for CAA members at their Mitchell Technology Campus in the Scripps Ranch area of San Diego on March 23rd.

The CAA San Diego Chapter joined with Mitchell International to host the Open House so that CAA members could get a unique insider’s view of Mitchell’s collision information software and development facility.

The event was well attended with approximately 100 participants. Mitchell provided small group tours of their editorial and software development areas and explained how tremendous amounts of information is turned into state-of-the art

tools for collision repair professionals.

Mitchell also hosted a casual dinner at the end of the tour.

Hosting the Mitchell tour was Mike Milliken, VP Content Management. The tour coordinator was Gil Silva, Director of Editorial Operations/Data Acquisition.

The Mitchell tour was comprised of 4 stops (see photos).

3rd stop: Vehicle Dimension Database – Tom Beres, Supervisor, Vehicle Dimension Department.

each have over 10-15 years of collision repair hands-on experience and the Esti-

mating Team is made up of staff with estimating backgrounds.

Many in the CAA group were impressed to hear that Mitchell measures each car independently from what the OEM’s provide as measurements. According to Tom: “It takes about 6 hours to measure a vehicle. If it’s in Mitchell, it’s been measured by us.”

For additional information about the CAA and membership benefits, contact Hop Sanchez at SanchezH@Finishmaster.com For additional information about Mitchell International and their products and services contact Amanda Smith at 858371-1523 or Amanda.Smith@mitchell.com

2nd stop: Collision Estimating Database – Jerry Gastineau, Manager, Labor Department.

1st stop: TechAdvisor-Repair Standards Database - Serge Pirino, Manager Procedural Department.

Jerry explained how the Mitchell Collision Estimating Database team was made up of 3 key process teams. The Parts Team is comprised of staff with many years of dealership Parts Department experience, the Labor Team staff

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Survey Says Ford Has Highest Customer Quality Satisfaction Ford Motor Company now has the highest customer satisfaction with vehicle quality among all major automakers, a new consumer research study shows.

Eighty-four percent of customers who purchased 2010 model-year Ford, Lincoln and Mercury cars and trucks are satisfied with the quality of their vehicle, a 4 percentage point improvement since the fourth quarter of 2009, according to the first quarter Global Quality Research System (GQRS) study, conducted for Ford by RDA Group of Bloomfield Hills, Mich.

With the improvement, Ford’s customer satisfaction scores are now significantly higher than all other full-line automotive manufacturers, including Asian and European automakers, according to the study.

The study also showed Ford has the fewest number of vehicle defects or “things gone wrong” among all full-line manufacturers in the first three months of ownership. Owners of 2010 model Ford, Lincoln and Mercury owners reported 1,107 TGWs per 1,000 vehicles, an 8 percent improvement compared to last year.

“To become the No. 1 automaker in terms of customer satisfaction with vehicle quality is amazing accomplishment and

testament to the whole company’s commitment to quality,” said Bennie Fowler, Ford group vice president, Global Quality.

“All the third parties studies are showing the same thing—Ford now has world-class quality.”

As Ford’s quality has improved, it has reduced warranty repair rates on vehicles in their first three months of service by an average of more than 40 percent in every major business region around the world in the past three years.

“Ford has proven its commitment to quality by demonstrating steady improvements through consistency and discipline,” said Donald Pietrowski, president, RDA Group. “Those improvements are clearly reflected in rising customer satisfaction with its products.”

Ford captured eight segment leaders in customer satisfaction, TGW or both.

Notably, Fusion Hybrid owners now report 93 percent satisfaction with the quality of their vehicle while 92 percent of Taurus owners are satisfied.

The following models led their respective segments in the survey: * Taurus, Satisfaction leader D/E car. * Fusion Hybrid, Satisfaction leader C/D car

Opposition Mounts to Prop. 17

The California Labor Federation joined a growing list of organizations in opposition to Proposition 17, the Mercury Insurancesponsored measure that would allow insurance companies to raise drivers’ premiums based on their history of buying auto insurance (see related story, p. 7.)

Prop 17 is also opposed by consumer and citizen groups including Consumers Union, Consumer Watchdog, Consumer Federation of California, California Alliance of Retired Americans and VoteVets.org.

The California Labor Federation is made up of more than 1,200 AFL-CIO and Change to Win unions, representing 2.1 million union members in manufacturing, retail, construction, hospitality, public sector, health care, entertainment and other industries.

Doug Heller, with the Stop Prop 17 campaign, said today, “Labor organizations that represent millions of California’s working families have joined the fight to stop this insurance industry ripoff that will increase the price of auto insurance. While Mercury Insurance will spend millions of dollars to try and buy this election, groups representing millions of Californians will be warning voters to oppose Prop 17.”

This weekend the Democratic Party of California, at its convention, will decide

whether to oppose Prop 17. Party delegates are being urged to join labor, consumer, senior and veterans groups and oppose this insurance company funded initiative.

The California Department of Insurance issued a scathing report about Prop 17 sponsor Mercury Insurance’s history of overcharging and discriminating against customers and the company’s failure to make promised changes after similar investigations in 1998 and 2002. The Department has filed an administrative lawsuit against Mercury. (see p. 7 this issue.)

“Democratic party members should take a strong stand against an industry bully with a nasty track record of cheating California drivers that is now running a deceptive campaign in order to raise auto insurance premiums on Californians already struggling in a tough economy,” said Heller.

Prop 17 would create an insurance surcharge on drivers, including soldiers and seniors, who have had a lapse in car insurance coverage for virtually any reason during the past five years, or who missed a single payment. People who stopped driving and didn’t need insurance for a time would be required to pay up to a thousand dollars more for car insurance when they sought to restart coverage.

18 MAY 2010 AUTOBODY NEWS | www.autobodynews.com

* Milan Hybrid, TGW leader C/D car * Focus, Satisfaction leader C car * Mountaineer, TGW leader Medium Traditional Utility * Expedition, TGW and Satisfaction leader Large Utility * Navigator, TGW and Satisfaction Leader Large Premium Utility * Ranger, TGW and Satisfaction Leader Compact Pickup These dramatic gains in quality have also contributed to a 23 percent year-over-year improvement in the resale values of Ford vehicles with one to five years on the road – outpacing the industry average by 4 percentage points.

“While we are proud of the progress we’ve made, we know how important it is to keep the momentum going,” said Fowler. “We can never be satisfied.”

The GQRS study is conducted on a quarterly basis with scores assessed from survey responses collected from owners of vehicles purchased within specific time frames.

New vehicle owners are asked to report any defects or issues as well as rate their satisfaction with vehicle quality on a scale of 1 to 10 across an array of vehicle systems and features.

RAM Truck Brand Teams Up with Rocker Zac Brown The Ram Truck Brand announced a partnership with GRAMMY-winning Southern-Rock artists, Zac Brown Band, to help honor U.S. soldiers as well as promote the band’s USO Tour and their latest single.

“Just as your vehicle is an extension of who you are—music also defines your inner character,” said Olivier Francois, Lead Marketing Executive, Chrysler Group LLC. “The Ram Truck Brand and Zac Brown Band both strive to connect with people and have a unifying ‘can do’ attitude and a character filled with authenticity, care, passion and pride.”

“We are excited about the new alignment with Zac Brown Band,” said Fred Diaz, President and CEO, Ram Truck Brand, Chrysler Group LLC. “It’s the Grammy-award winning ‘Best New Artist’ meets the 2010 Motor Trend ‘Truck of the Year.’ It’s a true win-win partnership for our customers, dealers and the Ram Truck Brand.”

Zac Brown commented, “Performing with the USO for the men and women in uniform has been a great experience for us. We wanted to find a bigger way to thank them, a way to mobilize people nationwide to show their support.”

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Pennsylvania Senator Rafferty Asks for Investigation after Steering Experience Pennsylvania Senator John C. Rafferty Jr. (R) has introduced Senate Resolution 254 calling on the state’s insurance commissioner to investigate the practice of steering by insurers in the collision repair industry and report his findings back to the legislature. SR254 was introduced on Senator John Rafferty Feb. 26 and reads: A (R-44) remarked to resolution urging the Insurance Commissioner Joel Ario Insurance Commisthat he has received sioner to investigate numerous constituent the prevalence of the complaints about practice by which auto insurance motor vehicle insurcarriers dealing with repair shops. ers coerce or other-

wise attempt to aggressively direct their insureds who have filed claims for damaged motor vehicles to use motor vehicle repair shops that have been preapproved by the insurer or that are affiliated with the insurer, thereby restricting or adversely affecting the choice of the insureds to select repair shops of their own choice.

Rafferty experienced insurer steering firsthand following a collision with a deer last year. He introduced the resolution following a hearing days before during which he told Insurance Commissioner Joel Ario, “I’m finding it very disturbing that this is happening.”

Rafferty said, “Five or six individuals who own auto repair shops have told me insurance companies agressively turning [customers] to what they’re calling their preferred shops... individual shop owners are starting to lose business.”

New Redlands Warehouse For Continental Tire

Continental Tire the Americas says it is now at full operating capacity at its new distribution center in Redlands, CA. The company held an official ribbon-cutting ceremony and open house for the local media and business community on April 15. Continental took occupancy of the facility earlier in the year in a move that consolidated two smaller operations in Ontario and South Gate, Calif. The Redlands warehouse offers 500,000-square-feet of space situated on a 27.5 acre-plot of land. The facility is now fully operational for Continental’s passenger and commercial tire divisions and features a state-of-the-art operating system to expedite orders.

“We are very pleased to open our doors in an official way,” said Adam Sepanski, warehouse manager, Continental Tire. “We couldn’t have found a better location than right here in Redlands, and we look forward to a long tenure in this outstanding facility.”

The new facility will provide Continental with enough space to store and distribute more than 450,000 passenger, light truck and commercial tires.

The facility is expected to move an estimated two million units each year.

The resolution urges the Insurance Commissioner “to investigate the prevalence of the practice by which motor vehicle insurers coerce or otherwise attempt to aggressively direct their [insureds] to use motor vehicle repair shops that have been preapproved by the insurer or that are affiliated with the insurer, thereby restricting or adversely affecting the choice of the insureds to select repair shops of their own choice.”

Referring to the issue as a “serious problem,” Rafferty said in a hearing prior to the resolution’s introduction that, “I think this is something that we have to get a handle on and tell the insurance companies to back off.”

The bill has been assigned to the Senate Banking & Insurance Committee on which Rafferty serves.

Rafferty, an attorney that previously served as Pennsylvania’s Deputy Attorney

General, represents parts of Berks, Chester and Montgomery counties just outside the city of Philadelphia.

The resolution, if passed, would require the Insurance Commissioner to report the findings of its investigation to the General Assembly within six months of the adoption of the resolution.

In an unrelated matter, the Pennsylvania Collision Trade Guild wrote to PA commissioner Joel Ario asking that “structural crash parts (i.e. front and rear bumpers, bumper brackets, energy absorbers, structure members etc.), manufactured by other than the original equipment manufacturers (OEM)” be recalled, and where necessary, re-repairs be undertaken to return affected vehicles to their pre-loss condition relative to safety and performance.”

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GM Pays Back Gov’t Loans Years Early; Chrysler Posts Operating Profit in Q1 In what can only be called a remarkable turnaround since last year’s bankruptcy procedings, both GM and Chrylser have rewarded the faith of “bailout” proponents with strong first quarter results reflecting better vehicle sales buoyed by a thawing economy and improved consumer spending.

General Motors announced it has repaid loans from the U.S. government, five years ahead of schedule. GM completed the repayment of its loans from the U.S. and Canadian governments by paying the outstanding balances of $4.7 billion and $1.1 billion respectively.

In addition, Chrysler announced an operating profit for the first quarter of 2010, so may soon be in a position to start to repay its government loans as well.

Chrysler posted a $143-million operating profit in the first quarter and was on track to at least break even this year on an operating basis with a stronger cash position.

Chrysler owes the U.S. government nearly $7 billion in loans. Payments on principal are not due until 2011 and full repayment is not expected until 2014.

The administration wasted no time in taking credit where it is due, saying that not only did the $85 billion auto industry bailout work, it saved millions of jobs.

President Barack Obama “took a lot of

heat” to keep GM alive, said Vice President Joe Biden. “And this has even exceeded our expectations.”

White House press secretary Robert Gibbs led off his press briefing with the GM and Chrysler news, saying it justifies President Obama's “very difficult and unpopular decision” to loan them money last year. The loans were designed to assist “a structured bankruptcy, and save 1 million to 3 million jobs.”

While the Obama administration still expects a loss on the taxpayer bailout of the industry, it will be smaller than initially forecast. The White House budget office once projected the loss on the GM package alone to be some $30B, but now says it will likely not exceed $8B. GM didn't need to be making this payment now. The company had already paid back $2 billion of what it owes under the terms of the Troubled Asset Relief Program that began in December of 2008. The company had until 2015 to repay the rest but chose to do so now for reasons of business psychology in an attempt to reduce the “Government Motors” taint.

“We’ve developed a healthy, clean balance sheet and we’ve developed a cost structure that allows us to be competitive,” CEO Ed Whitacre, said of GM’s perform-

ance. Much of GM’s improvement comes from slashing its debt load and workforce as part of its bankruptcy reorganization last year. It has stated it wants to be a public company again as soon as practical, but CEO Whitacre's team has backed off of that commitment somewhat.

GM still owe $45.3-billion to the government that will be repaid when the company sells its IPO stock offering, which GM chief financial officer Chris Liddell said would take place “when the markets and the company are ready.” GM is still a long way from regaining its blue-chip status. It remains more than 60 per cent government-owned and lost $3.4 billion in last year's fourth quarter alone.

Whitacre, the former telecommunications executive, announced the loan playback at the company’s Fairfax Assembly Plant in Kansas City, Kan. He also said GM is investing $257 million in that factory and the Detroit-Hamtramck plant in Michigan.

No new jobs will be added, but workers at both plants are gaining job security because they will build the next generation of the popular midsize Chevrolet Malibu.

Chrysler, now run by Italy's Fiat Group, posted an operating profit of $143 million in the first quarter that was attributed to cost cuts and sales of its new Ram

Heavy Duty pickup. The company is building up cash but had a net loss of $197 million in the quarter and has shed $3.78 billion after it emerged from bankruptcy on June 10. That loss included $2.1 billion in payments to the healthcare trust fund of the United Auto Workers.

Chrysler-Fiat CEO Sergio Marchionne has said Chrysler will break even this year (Fiat also lost significant money last year) saying, “This positive operating result in the first quarter is a concrete indication to our customers, dealers and suppliers that the 2010 targets we have set for ourselves are achievable. We are also generating cash to finance the investments being made in our product portfolio and brand repositioning,” Larry Summers, presidential economic adviser and co-architect of the bailout, wrote: In 2008, the American auto industry lost over 400,000 jobs and analysts estimated that at least 1 million more jobs could have been lost had GM and Chrysler liquidated.

That didn't happen. Instead, over the past nine months since GM and Chrysler emerged from bankruptcy, the industry has actually added 45,000 jobs— the strongest pace of job growth in the auto industry in nearly a decade.

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www.autobodynews.com | MAY 2010 AUTOBODY NEWS 21

It’s a Safety Marketplace and Consumers Are Buying

Reprinted from the Insurance Institute of Highway Safety, Status Report, V. 45, No. 4.

Car safety ratings often grab the media spotlight. Sometimes they’re published by the Institute, while other ratings are from the government or Consumer Reports.

Bigger news than these periodic media splashes is the growth of the safety marketplace around the world, spurred by the availability of vehicle ratings from multiple sources.

the mid-1980s to put air-bags in cars ahead of federal requirements (see Status Report, Dec. 7, 1985; on the web at iihs.org). Side airbags followed at a much faster pace, beginning in the 1990s. This also is when automakers began a concerted effort to redesign vehicle seats and head restraints to provide better occupant protection in rear-end crashes.

Among the most important safety advancements since the 1990s are the redesigned structures of passenger vehicles.

Now the fronts and sides themselves, not just the safety features inside, provide important protection in crashes.

Initially pushing automakers toward this emphasis on safety was the popularity of The Car Book, a National Highway Traffic Safety Administration (NHTSA) brochure that compiled safety information vehicle model by vehicle model. Launched in 1980, it became the most frequently requested government publication of its time.

Raising consumer interest in safety to much higher levels are the crash tests and crashworthiness ratings published not only

by NHTSA but also by private organizations in the United States and worldwide.

Consumers use the comparative ratings to make informed choices among cars to buy.

US government was first: The 1972 Motor Vehicle Information and Cost Savings Act required NHTSA to establish a program of car crashworthiness ratings.

The high NCAP scores most vehicles earn limit the usefulness of the ratings in distinguishing safety differences among vehicles.

“We do favor changes,” Lund says, “but at the same time it’s important to recognize NCAP’s success over decades.

Auto manufacturers have improved the designs of their vehicles. In particular, they’ve improved the restraint systems in modern cars to earn high NCAP ratings.”

Besides NCAP, both the Institute and Consumers Union rate vehicle safety, and the ratings attract more media attention than NCAP’s. Institute crash tests routinely are covered on national news, attracting tens of millions of viewers. About 8 million people subscribe to Consumers Union publications, making the flagship Consumer Reports a top 10 magazine.

Ratings expand worldwide: Comparative safety ratings aren’t confined to the US market. NHTSA’s pioneering NCAP has spawned similar programs in other countries. These include: 1. EuroNCAP, launched in 1997, is backed by 7 governments, the European Commission, and by consumer groups in every EU country. Ratings are based on occupant protection in front, side, and pole tests. There’s also a test for whiplash injury in rear impacts and a set of measures to compare the damage vehicles inflict on pedestrians in crashes. EuroNCAP boosts the ratings of vehicles with safety belt reminders, speed limiters, and electronic stability control.

2. Japan’s NCAP, established in 1996 and revised in 2001, is a government program based on front and side tests adopted from both US government and Institute tests. Japan’s side test is conducted at a faster speed than EuroNCAP’s (35 versus 30 mph).

3. Launched in 1992, ANCAP in Australia and New Zealand is sponsored by national and state governments together

The resultant New Car Assessment Program (NCAP), launched in 1978, isn’t part of any government regulatory program. It exists to provide consumer information, initially assigning pass or fail scores to cars based on performance in front and rear crash tests. Since then the pass/fail ratings have given way to stars, 1 to 5 depending on how well a vehicle performs in front, side, and rollover tests.

Now more than 30 years old, NCAP is due for some changes (see Status Report, July 24, 2008; on the web at iihs.org).

with insurers and other private groups.

Current tests are based on the front and side impacts conducted by EuroNCAP. 4. Also launched in 1999 is Korea’s NCAP, sponsored by the Ministry of Construction and Transportation. Tests include not only front, side, and rear configurations but also brake and rollover tests.

5. The world’s newest NCAP is in China, where the basis of the ratings is a regimen of front and side tests. This program is run by the China Automotive Technology & Research Center, an inde-

The safety ratings published by the institute, consumer reports, and the federal government aren’t in competition. One isn’t better than another. The key for any car buyer is to look at every available source of safety information and choose a vehicle with good ratings across the board. These vehicles are on the market, and buyers are finding them.

“These crashworthiness ratings aren’t in competition. One isn’t better than another,” says Institute president Adrian Lund. “The key is to look at every available source of safety information and choose a car, pickup, or SUV with top ratings across the board. These vehicles are on the market, and buyers are finding them.

A new poll confirms the attention that consumers are paying to safety, factoring it into their vehicle choices. In turn, this demand puts pressure on auto manufacturers to compete in the safety marketplace.

Consumer interest isn’t new: More than a half century ago, Ford officials estimated that installing optional lap belts and other safety features in 1956 models pushed sales up about 200,000. The safety belts generated demand that was “considerably higher than originally anticipated,” A.L. Haynes of Ford told Congress in 1957.

Other early indicators of car buyers’ interest in safety involve their rejection of vehicles perceived to be unsafe. Sales of Chevrolet Corvairs plummeted after 1965, for example, when Ralph Nader focused public attention on suspension problems that could lead to loss of control and rollover. Likewise, negative publicity about the easyto-damage fuel tanks on Ford Pintos led to declining sales in the 1970s.

By the 1980s, automakers were tuning in to safety and beginning to compete in the worldwide safety marketplace. A sign of this involves airbags. After waging in earlier years what the US Supreme Court dubbed “the regulatory equivalent of war” against frontal airbags (see Status Report, July 7, 1983; on the web at iihs.org), automakers began competing in

Knowing that consumers factor safety into their decisions about which vehicles to buy, auto manufacturers rush to advertise any safety honor associated with their products.

22 MAY 2010 AUTOBODY NEWS | www.autobodynews.com

Consumers are paying attention to vehicle safety A new institute poll shows safety is a high priority among drivers

“You need all the safety you can get.” This is what a respondent to a 1992 Institute survey said when asked about factors that are important when buying a new car (see Status Report, May 23, 1992; on the web at iihs.org). The responses haven’t changed much since then. Safety still is important. It’s the second most important factor, behind only quality/reliability, in both the 1992 survey and a new one conducted for the Institute earlier this year.

Eighty-six percent of respondents to the 2010 survey said safety is a very important consideration. Only 2 percent said it’s not important.

What’s new this year is the proportion of respondents who know about vehicle crash tests and safety ratings. Back in 1992, only the federal government was supplying such ratings, but since then the Institute and others have begun rating vehicle safety and attracting extensive media attention to the comparative results. So it’s not surprising that more than 3 of every 4 respondents to the 2010 survey said they’ve seen vehicle safety ratings.

The source of such ratings isn’t uppermost in consumers’ minds. Only 30 percent of respondents could name an organization that provides ratings (Consumer Reports was mentioned the most). Only 14 percent could name the rating of their present vehicle. Yet 78 percent said they’d seen safety ratings, mostly on the internet, in magazines, or on television. Sixty-seven percent said such ratings would be very useful in purchasing a vehicle or considering what vehicle to own.

These findings are in line with a 2005 survey conducted for Euro-NCAP in the Czech Republic, France, Germany, Great Britain, Italy, Poland, and Portugal. Safety and reliability were cited as the top factors in buying a car. Each was deemed important by 94 percent of EU respondents. Only 2 percent said these aren’t important.

Almost half of the EU respondents overall, including more than 70 percent in Germany, said they had used or looked for information about the crash protection provided by various vehicle makes. The source of this information was fairly evenly distributed among car magazines, friends or acquaintances, and newspaper or television.

The Institute’s telephone survey of 928 licensed drivers 18 and older was conducted in February 2010 by International Communications Research in Pennsylvania. The 2005 survey for EuroNCAP was conducted

by Market & Opinion Research International.

It involved face-to-face interviews as well as telephone polling of more than 900 adults in each of the 7 EU countries.

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These days automakers mostly advertise the crash test ratings of

their safest vehicles, but before

such ratings became ubiquitous some automakers advertised the

real-world experience of their

cars. For example, General Mo-

tors ran an annual ad toutIng the

better-than-average

insurance

loss experience of its product

line. The 1981 ad shown above

ran in more than 330 newspapers and magazines as part of what GM described as “a continuing

effort to emphasize the quality” of its products.

pendent group authorized by the government.

A common characteristic of these NCAPs and the crash-worthiness evaluation programs run by the Institute and Consumers Union is that the tests aren’t part of any regulatory program. In fact, the idea of these tests conducted primarily for consumer information is to see which vehicles go beyond minimum governmental requirements to do a better job of protecting their occupants in crashes. For this reason, the tests generally are more demanding than those required to comply with safety regulations established by governments in the United States and elsewhere.

Ratings influence automakers: Providing consumer information is the primary, but not the sole, purpose of rating vehicles for safety. The ratings also pressure automakers to manufacture safer cars.

As a former Ford executive put it, the ratings “provide information we have to address. Our customers are paying attention.”

The hard evidence that automakers heed the ratings is the overall improvement in scores. NCAP was first, compelling manufacturers to improve vehicle restraints. Another example involves the Institute’s frontal offset crash tests. When the first set of results of this program became public in the mid-1990s, poor per-

formers outnumbered good ones (see Status Report, Dec. 2, 1995; on the web at iihs.org). But this has turned around, and it’s the rare new car design that doesn’t earn a good rating based on the same test.

So successful is this program that the Institute has looked for ways to get out of the business of frontal offset crash testing altogether (see Status Report, March 29, 2006; on the web at iihs.org).

“Everybody who has been rating vehicle safety for years has a similar success story,” Lund says. “The scores improve over time, and sometimes very quickly.

This wouldn’t happen over and over again if consumers weren’t paying enough attention to the ratings to make automakers take notice.”

Real-world data complement tests: Besides vehicle ratings based on controlled tests, information is available about the onthe-road safety experience of hundreds of passenger vehicles. For example, the Institute publishes death rates by vehicle make and model (see Status Report, April 19, 2007; on the web at iihs.org).

The affiliated Highway Loss Data Institute compares vehicle loss experience under 6 insurance coverages, including 3 related to injuries. Both the insurance statistics and the death rates are adjusted for driver age and other factors that could influence the results.

“This real-world information complements the crash test results. Each kind of information has its strengths,” Lund explains. “The tests take the driver factor completely out of the comparisons among vehicles, focusing on design differences that influence safety. The realworld results are useful, too, because they indicate what’s going on out on the road. The idea is to pick vehicles with good test results and good real-world experience, too.”

Future of vehicle safety ratings: So far ratings worldwide indicate primarily vehicle crashworthiness — that is, how well a vehicle protects its occupants in collisions. A couple of years ago the Institute added the availability of electronic stability control to the criteria to earn its highest award, TOP SAFETY PICK, and the following year EuroNCAP began factoring this feature into its safety ratings.

The addition marks a new direction because electronic stability control isn’t about crashworthiness. It’s designed to help drivers maintain control in emergencies and avoid crashing in the first place.

Thus, more recent ratings of vehicle safety reflect not only crashworthiness but also how well a vehicle can help a driver avoid a crash.

This may be the direction of the future, as more crash avoidance features are

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added to cars. Their potential to reduce crashes is huge (see Status Report, April 17, 2008; on the web at iihs.org), but the features are relatively new. They aren’t on most models yet, so their effectiveness hasn’t been quantified. The Institute is working on this.

“If our evaluations find that some of the newer features are reducing crashes, we’ll report this and look to factor it into our vehicle safety ratings,” Lund promises. Other organizations are headed in the same direction, seeking to expand the amount and quality of safety information available to consumers worldwide.

Defects Versus Safety Ratings Safety ratings indicate how well a car protects its occupants in a crash, compared with other models. The tests on which the ratings are based sometimes reveal safety defects but aren’t designed to do so. Ferreting out vehicle design defects that jeopardize safety and deciding what to do about them are the work of the National Highway Traffic Safety Administration’s (NHTSA) Office of Defects Investigation.

“If one of our crash tests finds a defect, we report it to NHTSA. We also tell the automaker, who might elect to fix the problem voluntarily and initiate a recall. If we believe a proposed fix will solve the problem, we report the findings to consumers

and let them know that our published ratings apply only to vehicles that have been fixed. This has happened a number of times,” says Institute president Adrian Lund.

By the same token, the Institute would downgrade the crashworthiness rating of a vehicle that isn’t fixed. This virtually never happens, though, because disclosure is such a powerful incentive.

Automakers usually hurry to fix any problems the Institute uncovers in its tests.

Most safety defects aren’t uncovered in crash tests conducted by the Institute or any other group. Most such problems are revealed by consumers who report problems to NHTSA. The agency monitors complaints, looking for trends indicating that a serious defect might exist, and then opens an investigation when a trend indicates this step is warranted. NHTSA is authorized to order automakers to recall vehicles and make repairs, based on investigations indicating serious safety problems in a vehicle’s design, construction, or performance.

“Think of crashworthiness ratings as general information about car safety, and then consult NHTSA about specific safety recalls,” Lund concludes. “Make sure a vehicle you’re thinking of buying hasn’t been recalled or, if it has, the problem has been fixed. Then it should be okay.”

CA Auto Recycler Meets with Rep. Thompson in DC on R2R

F. John Azevedo and his wife Shirley Azevedo, owners of Pacific Auto Salvage Inc. in Napa County, CA, met with Rep. Mike Thompson (D-S.Helena) on March 18. The meeting was in conjunction with the (ARA) Automotive Recyclers Association Legislation Days meeting held in Washington, DC, March 17–19 2010.

During the visit, ARA members presented issues that affect the Automotive Recycling Industry. The Azevedos said they were lucky to have Mr. Thompson and Jonathan Birdsong, his Legislative Director, speak with them in person; many of the members do not get to see their Representatives, only staff. During the visit, Anthony Livingston, Director of Government Affairs with ARA, addressed three major issues: 1) National Motor Vehicle Title Information System (NMVTIS); 2) National Vehicle Mercury Switch Recovery Program (NVMSRP); 3) Motor Vehicle Owners Right to Repair (HR 2057) “HR2057 is probably the biggest issue for me and my son at Pacific Auto Salvage. My son Willie Azevedo is a licensed ASE Master Automotive Technician. In order for us to provide a quality part and the solution to our customer’s transportation needs, we need to be able to accurately test the parts we

Left to right, Pacific Auto Salvage owner, F. John Azevedo, Rep. Mike Thompson (D-S.Helena), Shirley Azevedo and Jonathan Birdsong last month in Washington D.C.

provide to our customers. We also need the vehicle repair information so that we can help our customers properly diagnose their automobile problems,” said Azevedo.

Small auto repair businesses say that if HR2057 does not pass the independent auto repair and auto part supply businesses like Pacific Auto Salvage will not have access to the information needed to test and repair customers’ cars. There will not be any choice for the consumer, but to take their cars back to the dealer. That is not a good solution for the auto industry and the consumers.

“If you can’t afford $5,000 for a new Dodge transmission and buy a rebuilt one from me for $800, you still have to have your car towed to the dealer before it will work,” Azevedo said.

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Toyota Fined $16.4M, Will Face Single Sudden Acceleration Lawsuit Western Edition

CALIFORNIA • NEVADA • ARIZONA

May 2010

Toyota agreed April 19 to pay a $16.4 million fine imposed by the Transportation Department—the largest ever government penalty against an automaker, and the maximum amount allowed under U.S. law. The fine was imposed on Toyota for concealing and delaying the release of information related to recent recalls to fix sticking pedals. Toyota failed to tell the agency about the ‘sticky pedal’ problem for at least four months.”

The Houston Chronicle reported, “The government has linked 52 deaths to crashes allegedly caused by accelerator problems in Toyotas. The recalls have led to congressional hearings, a criminal investigation by federal prosecutors, dozens of lawsuits and an intense review by the Transportation Department.” A separate investigation by the Los Angeles Times has indicated that more than 100 deaths may ultimately be blamed on the defect.

The federal fine “is only narrowly tailored for one of the many defects,” confirms Susan Schroeder, the Orange County (California) DA’s chief of staff, “and it in no way effects our case.” It does not release Toyota from civil or criminal actions, including the recently filed lawsuit. The federal court system has consolidated more than 200 separate lawsuits against Toyota

into one single class-action suit, which will be heard in a California courtroom.

The Los Angeles Times reports, “In a ruling handed down [April 16], the U.S. Judicial Panel on Multidistrict Litigation allowed more than 100 suits seeking classaction status, as well as at least 50 personal injury cases, to be adjudicated in a single federal courtroom.”

The Detroit Free Press notes, “lawsuits began appearing last fall as Toyota initiated recalls eventually involving about 8 million vehicles,” all triggered by claims that some Toyota vehicles can accelerate suddenly, without input from the driver.

The Times put the number at about 150 lawsuits, but an AP report on April 21 claims the decision “affects more than 200 lawsuits against Toyota around the country.” Claims have been filed by owners seeking “damages from Toyota for injuries or deaths attributed to instances of sudden acceleration,” as well as some who don’t claim their Toyotas have been involved in accidents, but who are suing because their vehicles have lost value due to the recalls.

Toyota had pushed the courts to consolidate all of the claims into a single case, according to the Times. The company argued that “the legal process would be best

served if the cases were argued in one courtroom.”

However, there are risks for Toyota in this approach. Reuters notes, “Some lawyers estimate Toyota faces potential civil liability of more than $10 billion as it struggles to contain an auto-safety crisis that has tarnished its public image.” Such a massive claim will be covered heavily by the media, and a loss in the lawsuit could be devastating to the Japanese automaker.

The major players in the courtoom will be used to high stakes. The legal team opposing Toyota, Reuters reports, include “firms with experience ranging from big tobacco litigation to the Enron Corp bankruptcy and claims arising from the Exxon Valdez oil spill.” The first hearing in the matter has been set for May 13.

Lexus GX 460 recall Toyota said the factors contributing to the Lexus GX 460 rollover risk include components such as 18-inch wheels, as well as heavy components, such as the fuel tank, which is located on the left side. Plus “the left side is made even heavier because of the presence of the driver.”

Toyota also said the activation of the vehicle stability control “may not be suffi-

Sienna Recall Toyota has issued a recall order for about 600,000 Sienna minivans from model years 1998 through 2010, in order to correct a defect that could cause the spare tire to fall from beneath the van.

In light of bad publicity from a series of high-profile recalls, the company has released details of this recall to the media unusually quickly—before The National Highway Traffic Safety Administration had time to issues a formal recall order. The New York Times reports, “Toyota said its latest recall covered the 1998–2010 model year Siennas with two-wheel-drive that have been sold or registered in 20 cold-climate states and the District of Columbia. Toyota said rust from road salt could cause the carrier cable that holds the spare tire to rust and break, allowing the tire to tumble into the road.”

by Jim Lang, President, Lang Marketing

across the overall light vehicle market were generated by the expanding number of vehicles on U.S. roads during these ten years.

This reflects the increasing average age of cars in the U.S. and the growing number of domestic cars twelve years and older.

Generally, consumers perform only necessary repairs on older vehicles. Consumers are also inclined to purchase economy rather than premium aftermarket components when having repairs done by mechanics or performing DIY work on older vehicles.

Growth Versus Decline Aftermarket product use by the average light truck climbed over $12 between 1999 and 2009, while product consumption by the typical car slipped nearly $55 at userprice. At the same time, total light vehicle aftermarket product sales climbed nearly 16%, a direct result of the increasing number of light vehicles on U.S. roads and light truck population growth.

Falling Average Vehicle Product Use

The number of cars and light trucks on U.S. roads increased slightly during 2009; while light vehicle aftermarket product sales receded. As a result, average light vehicle product volume continued its downward trend during 2009, at user-price.

Ten Year Aftermarket View Product use by the average car and light truck decreased $13 at user-price between 1999 and 2009, with 2009 product volume totaling just over $360 for the typical light vehicle on U.S. roads.

Rate Of Decline Aftermarket product consumption per light vehicle declined at a 0.4% average annual pace between 1999 and 2009, underscoring that all aftermarket product gains

Cars Versus Light Trucks Aftermarket product consumption by the typical car is falling faster than is light vehicle truck product volume.

While annual product use per passenger car in the U.S. declined 16% between 1999 and 2009, light truck product use for the average vehicle climbed nearly 3% over this ten-year span.

Passenger Car Product Use Aftermarket product volume by the average passenger car slipped below $275 at user-price during 2009, much less than the nearly $325 in 1999 product volume per car.

26 MAY 2010 AUTOBODY NEWS | www.autobodynews.com

Light Trucks Also Decline in 2009 Light trucks averaged $4 less in 2009 products per vehicle than during the previous year.

This annual product decline among light trucks is the result of two factors: an aging truck population and a drop in accessory volume, which average much more per light truck than for the typical passenger car.

cient in certain circumstances due to the setting of the VSC program.

Toyota will update the VSC program to enhance the effectiveness of the VSC so that the risk of the vehicle sliding, even to the point that it is almost sideways, will be reduced.

More Analysis In-depth analysis of the changing use of aftermarket products for cars and light trucks as well as for all light vehicles is provided in the soon-to-be-released 2011 AAIA Factbook & Lang Aftermarket Annual.

From Aftermarket Insight™ by Jim Lang, President of Lang Marketing Resources, Inc., www.langmarketing.com.

Transmission Anti-Rollaway Shift Interlocks Now Required

New cars with automatic transmissions must be equipped with an interlock device that requires the brake pedal be pressed before the driver can shift the transmission out of “park,” as of Sept.

1, 2010.

The National Highway Traffic Safety Administration took the action in response to a law passed in 2008 designed to protect children from vehicle rollaways in which a car is inadvertently shifted into neutral or another gear. The new requirement applies to all passenger cars and light trucks weighing 10,000 lbs. or less.

National Performance Buys Speed Warehouse of Hayward, CA

Larry Pacey, president and CEO of National Performance Warehouse (NPW), has announced that the company is acquiring the wholesale operations of Speed Warehouse.

The transaction will be completed on April 26th. Speed Warehouse has been in business for more than 60 years.

The business was started by Jerry Light in 1949, selling high-performance parts after World War II. Speed operates out of three distribution points in Hayward, San Jose, and Tustin, CA.

80 Percent of Tested Cars Fail Inspection Checks

Last year, eight out of 10 cars failed at least one component of a national vehicle-inspection process, according to the Car Care Council (carcare.org)

Problems were: ● Low, overly full, or dirty engine oil was found in 27% of cars ● Low, leaky, or dirty coolant in the radiator or surge tank was identified in 26% of cars. ● One out of every two belts was unsatisfactory in 51% of cars ● 10% of cars required at least one new hose.

Car Car Council Wants Consumers to Remember Their Three “R’s” In recognition of Earth Day, the Car Care Council is encouraging vehicle owners to consider the new 3 R’s to do their part to protect the environment: Reuse, reduce and repower. Consumers could make a huge environmental contribution and a wise investment by reusing or hanging onto their current vehicles rather than buying a new one, by reducing emissions and fuel consumption through vehicle maintenance and by repowering a failed engine. This year marks the 40th anniversary of Earth Day.

ASAA Opposing Ohio OEM Parts Legislation

The Automotive Aftermarket Suppliers Association (AASA) is working to oppose provisions in Ohio legislation that would bar OEM part sales to non-franchised dealers or reimbursements to nonfranchised dealers for warranty or recall work. The two provisions are part of House and Senate bills revising Ohio’s motor vehicle franchise laws. Rep. Matt Lundy (D-Ohio 57th District) is the sponsor of HB 364 and Sen. Mark Wagoner (R-Ohio 2nd District) introduced a companion bill in the Ohio Senate.

In its March 22 letter to Rep. Lundy, AASA noted, “Aftermarket manufacturers are deeply concerned with language contained in HB 364 ... We believe this provision eliminates consumer choice by requiring individuals to obtain replacement parts only at automobile dealerships.” The letter notes that the provision would affect both independent repair shops and the DIY market. “The language restricts the access to original equipment parts only to auto dealers. Vehicle owners would no longer perform their own maintenance with the parts of their choice. Moreover, independent repair shops would no longer have access to the full range of parts that consumers may need for vehicle repair,” the AASA letter noted.

AASA appealed to Lundy to amend the provisions.

CAWA Battery Core Bill Now Law in Arizona

The California/Nevada/Arizona Automotive Wholesalers' Association (CAWA) says that Arizona Gov. Jan Brewer has signed into law HB 2130 to address a discrepancy in battery core sales and deposits. HB 2130, authored by Rep. Michele Reagan and sponsored on behalf of CAWA, will update the amount of the recycling deposit that retailers can charge consumers who purchase automotive batteries to an amount that is not greater than the recycling deposit charged by battery manufacturers. The bill increases from $5 to not more than $15, the recycling deposit that a retailer can charge a consumer for the purchase of a new battery. The deposit is returned to the consumer upon the return of the used battery core. The bill also increases from 30 days to 45 days the amount of time a consumer has to return a used battery core for recycling, in order to have the recycling deposit returned in full. “CAWA is elated with this victory on behalf of Arizona automotive parts stores and retailers. Last year we heard from our retailer members how important this issue was for them, and as a result, we acted quickly and proactively to address this monetary discrepancy related to the sale and deposit of automotive batteries,” said Rodney Pierini, CAWA president and CEO. In 1990, legislation was enacted that prohibits the disposal of automotive batteries in landfills or by incineration. In

www.autobodynews.com | MAY 2010 AUTOBODY NEWS 27

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Gonzo’s Toolbox

Excerpted from Scott “Gonzo” Weaver’s 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 Scott Weaver at Gonzosae@aol.com and see his website at www.gonzostoolbox.com.

“You’re Just One of Those Slick Talkin’ Mechanics” with Gonzo Weaver

A referral came in from and old customer.

It was an early 90’s Ford pickup that could have passed for a clown car. This thing had every color of the rainbow on it. Windshield was cracked, and the driver side window was hanging sideways. Even the bed of the truck was loaded down with all kind of debris from roofing shingles to old busted up lawn furniture. Not to mention the interior could use some house cleaning.

These are the type of vehicles I hate to get stuck behind when I’m riding my motorcycle. You just never know when something is going to fly out of the bed of the truck and smack into you.

The only reason I even took this pile of junk into the shop was because it was a referral from a regular customer. Normally, if you pull up to the shop in this bad of shape you better have one hell of a heart bleeding story, or I’ll tell you to get it on down the road.

Anyway, this beat up old Ford had so many problems. I had to do my best to sort though what I could. It was hard to start, and when it did start it had a terrible miss.

If you tried to drive it even few feet it would buck and backfire, and eventually start to move, but not without a great effort on the motor’s part.

I called our junk collector and told him what I had found right off the bat, and that it needed taken care before we went any further. The old distributor had such a wobble in the shaft that half the time it couldn’t find the contact points. I thought this was why it was so hard to start, and for that matter the big backfire. Of course a lot of other things could cause the same problem. But this was so obvious any first year tech could have spotted the problem.

“So that’s all there is wrong with it?” he asked. “I seriously doubt that. I haven’t checked it for codes. I haven’t looked at

the transmission or fuel pressure, but this distributor has got to go,” I said.

Now it’s a money thing. He told me to go ahead with it, and keep him informed of the results.

After installing the distributor it started right up, even sounded pretty good.

Before pulling it out onto the road, I thought I better check those codes. There were 2 codes; One for a TPS, and another for the transmission. I called him and told him what I found.

Now it’s back to money thing again.

“OK, go ahead with the TPS. I don’t think there is anything wrong with the transmission,” he told me. This was like putting the curse of Murphy on the truck. Something has to go wrong now.

I put the TPS in, and cleared the codes.

The engine started great, ran terrific, and sounded surprisingly solid. All the codes cleared, and no more really obvious problems (I could have spent days straightening things under the hood). It was time to hit the road. Oh, oh. The truck’s transmission was trash. It had all the gears, well, sort of.

It would lumber along, drop in and out of gear, and find a new neutral position when it had a chance. For the most part the transmission was in about as good of shape as the rest of the truck. Just plain overworked.

You might as well put a fork in this one, because it’s done.

Time to make the call. It seems every time you get this far into one of these never ending repairs it will reach a point where you’re not solving one problem at a time, but creating an even bigger one, the financial one. Almost every time this type of customer will go along with what needs done until he thinks you don’t know what you’re doing, and are just out to take their money. Not so! The whole thing comes down to maintenance. It’s not like every-

thing broke at once. They let it go, then expect a one-fix repair with a discount!.

Like I said, the outcome is a little different each time, but the common factor is usually the same. I’m not getting paid for all the work I have completed….only some sort of agreed upon amount of the repair. This guy took it the extreme. When I called him and told him about the transmission he didn’t have the money. I expected this. Oh, he didn’t have the money for the repairs we had already done. What he was going to try to do was talk me into giving the truck back to him, and he would pay so much each week, because he needed that truck to get back and forth to work. If he didn’t have a way to get to work he couldn’t pay me. I told him that he should have thought of that before he agreed to the work that was done, because the car doesn’t leave until the bill is paid.

That’s when he started in on me. “You’re just one of those slick-ass talking mechanics,” he shouted through the phone.

“Well that might be the case, and I have called worse, but we did have an agreed upon bill.” I said. “Oh come on man, I know it didn’t need any of that work you did. All it needed was a transmission. So I’m not going to pay for any of it, and I’m picking up my truck today,” he screamed into the phone.

Now there are two things to keep in mind on this story. One, he originally agreed to all the repairs as they were getting done. And two, he didn’t think there was anything wrong with the transmission. Or did I miss something in the conversation?

The screaming on the phone went on for what seemed like hours. There was no getting through to him about the agreed upon work, or the conversations we had about the additional work to the truck. Or the fact that I had originally told him about

the amount of items I found wrong with the truck. I could tell I might as well be talking to the wall.

“OK fella, I can see we’re not going to get anywhere. You know me being a slick-ass talking mechanic and all; tell me how much you have and be honest now. If I agree to accept the amount I’ll put your truck out front, and you bring in what cash you have and I’ll give you the keys. Here I am trying to help you out, and now all you want to do is change things after the fact. I didn’t want to do this job in the first place because of the horrible condition it was in, but another customer said you were an upstanding guy. So I did the work. Take your truck home and do whatever you want with it, because I don’t need to make a living off someone who doesn’t trust me.

Even if the guy who referred you does.

He agreed to this strange arrangement, but he was still mouthing off when he got to the shop. He walked out to his truck and started right up. He came back in the office still mad as hell, and wanted me to show him which parts I changed, so he wouldn’t change the same ones again. I did, and then he wanted a receipt for the parts. You can figure out the rest, he left the same way he came in. Unfortunately for him, there was no way to show his manhood with a tire squealing peel out in the parking lot. The transmission doesn’t work that well!

Oh by the way, I do feel sorry for the guy, and wish I could have done more for him since he was a referral from a good friend and customer. The money is very important, but I do need to have some assurance that I’m appreciated for what I do.

The old customer and I talked about it later.

He said he thought the guy was a kind and conscientious guy. He’d never heard a cuss word out of him, since he was the janitor at his local church and all. Go figure.

The BMW Group increased sales by 13.8% percent in the first quarter: A total of 315,614 (prev. yr. 277,264) BMW, MINI and Rolls-Royce brand automobiles were delivered to customers worldwide. The company’s sales volumes rose 12.1% in March to reach a total of 141,701 (prev. yr.

126,381) vehicles. All three brands made strong gains: Sales of BMW brand vehicles climbed 12.7% to 117,696 (prev. yr.

104,423) units in the month under review.

MINI delivered 23,880 vehicles in March (+9.1%), while Rolls-Royce automobiles were presented to 125 customers (+78.6%) last month. Ian Robertson, member of the

Board of Management of BMW AG, responsible for Sales and Marketing: “We are back on our growth track in nearly all the automobile markets. We had a good first quarter with a sales increase of 13.8%. We intend to continue improving on last year’s figures throughout the second quarter, thanks not least to the new BMW 5 Series Sedan and new models such as the 3 Series Coupé and Convertible.”

Robertson added: “For 2010 as a whole, we are aiming for healthy growth in the single-digit percent range to reach more than 1.3 million vehicles.”

In the United States, the company

posted a 7.4% increase in volumes, with sales of 55,051 (prev. yr. 51,244) vehicles between January and March. Substantial increases were also seen in other key markets: For instance, in the United Kingdom sales climbed 13.8% to 34,327 (prev. yr. 30,165) units; in France sales were up 5.2% to 14,462 (prev. yr. 13,745) units; and in Spain sales were 37.4% higher at 10,374 (prev. yr.

7,549) units. The BMW Group made gains in almost all automobile markets in the first quarter. The company achieved new quarterly records not only in the emerging BRIC countries of Brazil (+131.2%), Russia (+11.6%), India (+32.5%) and China

(+106.1%), but also in Austria (+23.1%), South Korea (+65.8%) and Malaysia (967 / +14.0%), as well as in the Latin American markets (4,173 / +71.0% - including Brazil) and the Middle East (3,908 / +13.1%).

Despite the overall downward market trend, the BMW Group was the only German manufacturer to also make gains in its largest single market, Germany, where it expanded its market share. With a total of 56,617 (prev. yr. 55,837) vehicles sold in the country in the first three months of the year, there were 1.4% more new BMW and MINI registrations than in the same period last year.

BMW Group has Sales Growth of 13.8% In First Quarter

30 MAY 2010 AUTOBODY NEWS | www.autobodynews.com

ALL OEM Information with Tom McGee and Jeffrey Webster

Tom McGee is National Account Manager for ALLDATA Collision. He has had a long career with I-CAR, including as President & CEO. Tom is an ASE certified Master Collision Repair/Refinish Technician. He has also run his own collision facility and been a career and technical school instructor. He can be reached at Tom.McGee@alldata.com. For other Tom McGee articles in Autobody News, go to: http://www.autobodynews.com/tom-mcgee/index.php — JEFF WEBSTER is an ALLDATA Technical Writer.

It’s Still a Mustang®; But in Name Only – PART 2 of 2

In my April column, I wrote that, as I visit shops, I sometimes hear the same comments regarding the need for OE repair information. Among the most common are: “I’ve been fixing cars since 1960something and we know how to fix them.”

“They are still cars and nothing is really changing on them.”

“My technicians are great and they know how to fix cars.”

So, last month, I started comparing a 1965 Ford® Mustang® with the 2008 version. The point being that fixing today’s complex cars requires more than experience. New metals and plastics, electronic systems and reset procedures, hybrid systems and more have changed the way we do business.

Let’s continue looking at the Mustang to see what has changed over the years and how those changes affect the collision repair process.

Sectioning – Lower Frame Rail While I looked everywhere I could, I was not able to find any sectioning procedures for the front lower frame rail on the ‘65.

Here is a portion of the 2008 sectioning procedure: Always refer to ALLDATA® ColliSM sion for safety procedures, identification of material types, recommended refinish materials, and removal and installation procedures. Always refer to the vehicle manufacturer for questions relating to applicable or non-applicable warranty repair information.

Item 1

Part Number

16055 LH / 16054 RH

Material Front Frame Rail WARNING: Frame rail crush zones absorb crash energy during a collision and must be replaced if damaged. Straighten damaged frame rails to correct frame dimensions prior to frame member section-

ing. Failure to follow these instructions may adversely affect frame rail performance and may result in serious personal injury to vehicle occupant(s).

NOTE: Right side shown (Figure 1), Left side similar.

NOTE: Cut line shown in illustration is approximate, refer to the following procedure for specific cut locations.

WARNING: Never install used or reconditioned parts (as specified below) from pre-owned, salvaged or damaged vehicles.

The use of such parts could lead to serious injury.

Never use non-Ford parts or accessories for completing repairs.

Ford Motor Company does not approve or recognize body and structural repair procedures, tools, parts or anything but new genuine Ford equipment. Ford cannot attest to the safety, quality, durability or legality of non-Ford parts or accessories. Use of such parts could lead to serious personal injury as they may contain damage which is not visible.

Ford does not approve use of the following: • Salvaged or used parts • Major body clips or assemblies from salvage vehicles • Aftermarket structural or body components • Salvaged or reconditioned wheels • Used supplemental restraint system (SRS) components - air bags - restraint sysDescription tem modules Frame rail sectioning kit - safety belts, buckles or retractors - crash sensors Returning a vehicle to pre-accident condition can only be assured if repair procedures are carried out by skilled technicians using new genuine Ford parts and Ford-approved methods. Structural component repair procedures approved by Ford, using genuine Ford parts, have been validated by Ford Motor Company engineers.

Ford Motor Company does not endorse, cannot attest to, and makes no representations re-

garding structural repairs (frames, rails, aprons and body panels) carried out using non-genuine Ford Motor Company parts or non-Ford-approved methods. In particular, Ford makes no representations that the vehicle will meet any crash safety or anti-corrosion performance requirement. Such parts and methods have not been tested by Ford, and may not meet Ford’s requirements for safety, performance, strength, quality, durability and corrosion protection.

Ford Motor Company bears no responsibility or liability of any kind if repairs are performed using alternative structural component repair procedures and/or parts.

WARNING: Invisible ultraviolet and infrared rays emitted in welding can injure unprotected eyes and skin. Always use protection such as a welder’s helmet with dark-colored filter lenses of the correct density. Electric welding will produce intense radiation, therefore, filter plate lenses of the deepest shade providing adequate visibility are recommended. It is strongly recommended that persons working in the weld area wear flash safety goggles. Also, always wear protective clothing. Failure to follow these instructions may result in serious personal injury.

WARNING: Always wear protective equipment including eye protection with side shields, and a dust mask when sanding or grinding.

Failure to follow these instructions may result in serious personal injury.

NOTICE: This sectioning procedure is only recommended when collision damage does not extend into the front shock tower area. For more severe collision damage, repairs must be made at the original factory seam and joint locations. Failure to follow these instructions may compromise the structural integrity of the vehicle.

NOTE: The following repair procedure illustrates the sectioning of the front side member and fender reinforcement components In situations where collision damage is less severe, the sectioning procedure to repair only those damaged components may be determined from these procedures.

1. Position the vehicle on a frame repair rack following the manufacturer’s recommendations. Measure the vehicle to determine if the body requires straightening and alignment.

• Remove the front bumper For additional information, refer to Bumpers.

2. Remove the engine For additional information, refer to Engine System - General Information.

3. Remove the suspension components For additional information, refer to Front Suspension.

NOTICE: The frame rail sectioning instruction kit provides the specific service procedure instructions for replacement of the frame rail sectioning kit. It is mandatory that the replacement section be installed per the installation guidelines. The frame rail service component must be located to maintain the original factory dimensions.

For additional information, refer to Body in this section for correct underbody dimensional information.

4. Remove the radiator support assembly.

5. Cut off the front apron from the main part of the apron, 80.5 mm (3.16 in) for-

ward of the 14 mm (0.55 in) x 20 mm (0.78 in) slot, and remove the remainder of the apron (Figure 2).

6. NOTE: Factory spot welds may be substituted with either resistance spot welds or Metal Inert Gas (MIG) plug welds.

Spot/plug welds should equal factory welds in both location and quantity. Do not place a new spot weld directly over an original weld location. Plug weld hole should equal 8 mm (0.31 in) diameter.

NOTE: Refer to welding equipment manufacturer’s instructions for correct machine set up. Drill out the spot welds in the front fender apron reinforcement.

See Still a Mustang, Page 34

www.autobodynews.com | MAY 2010 AUTOBODY NEWS 31

IGA/NWRA Conferences Seminars in Ft. Myers, FL

The Independent Glass Association (IGA) and the National Windshield Repair Association (NWRA) are hosting an expansive seminar schedule at their conferences in Fort Myers, FL, on May 20–22. This seminar schedule will accompany the Spring Auto Glass Show™ and other special conference events. The seminars feature a wide array of topics such as "Legislative & Standards Update," "Internet Marketing: Websites That Produce Results," and "Steering and Grass Roots Initiatives."

Scott Orth of Scott Orth Inc. will present "Internet Marketing: Websites That Produce Results." Orth will address how companies can use the Internet to grow their businesses.

Collision industry representative Wade Ebert will be joining the IGA to discuss "Freedom of Choice: From the Auto Body Perspective." Ebert, who is widely respected in the auto body industry, will share with attendees his experiences and what's he learned in his battle for freedom of choice.

The NWRA will be featuring a seminar entitled "Windshield Repair Marketing Tips," presented by NWRA member Corbin Archer of TechnaGlass Inc.

Controversy Between Homestead, FL, Mayor, Blogger, and Body Shop

In late January, the City of Homestead, FL, contracted A&B Paint & Body Shop at 142 SW Fifth Ave, to repair damage to the front and rear of a city-owned Ford Expedition driven by Mayor Steve Bateman. Total cost: $1,303.86, which the city paid for.

The cause of the damage was said to be a shredded rear tire on the SUV. A local blogger, Francisco Alvarado, deemed the matter highly suspicious since the shop’s records indicated that touch up work was done on the front of the vehicle as well. Alvarado said he had a tip that the mayor had been involved in an unreported car accident in a city vehicle and that the city manager was trying to cover it up to protect his boss, the mayor.

Wrote Alvarado: “Oh, really? Well, those must have been some serious tire shreds that the pieces would not only damage the back of the SUV but also propel themselves forward to bang up the front of the vehicle too.”

The city manager’s assistant, Marlene Volkert, provided Alvarado with the following account: There was no “crash.” Mayor Steven Bateman and Councilman Jimmie L. Williams were returning to Homestead in the City-owned Ford Expedition from a Florida League of Cities, Institute for Elected Municipal Officials Conference in Gainesville, Florida.

PPG Chairman Charles Bunch Reports on New Strategy

At the company's recent annual meeting, PPG Industries’ Chairman and CEO Charles Bunch reviewed steps the company took in 2009 to respond to the global financial crisis that began at the in 2008 and continued through 2009.

“The strategic vision we have established is to continue to be the world’s leading coatings and specialty products company,” Bunch said. “We have continued to make progress toward achieving that vision. Yet, in 2009, we were clearly challenged with an uncertain and difficult global economy. At PPG, we responded quickly and decisively.”

Bunch said that during 2009, PPG shifted its priorities to respond to the difficult economic conditions.

“We placed greater emphasis on operating discipline. We worked on restoring margin leadership, especially in the coatings industry. We focused more on profitability than pure growth. We took steps to improve our cost structure, and we worked to leverage our global technological and manufacturing capabilities to the most efficient use of the entire company. We keyed in on costs, margins, working capital and cash flow,” he said.

Bunch also noted two restructuring initiatives—one announced in September 2008 and one in March 2009 – that are

expected to result in approximately $250 million in annual cost savings once completed.

“In addition to our cost-cutting measures,” Bunch said, “PPG benefited from actions it has taken over the past several years to grow the coatings and optical and specialty material components of our portfolio.” He said that the proportion of PPG’s sales in these businesses has grown substantially over the past few years. “These businesses saw continuously improving positive momentum throughout the year, and by the end of 2009 were delivering higher year-overyear earnings,” he said.

Bunch commented that the company also benefited from efforts to broaden the geographic reach of its business, and specifically its expanding footprint in the Asia/Pacific region, which posted record earnings for the year and now represents about 15 percent of the company. “Overall, our efforts to transform PPG have served us well in this downturn,” Bunch said. In 2009, PPG posted sales of $12.2 billion, a decrease of about 23 percent versus the prior year. This was largely attributable to the contraction of demand in many of PPG’s key end-use markets, which in turn was driven by the global recession.

32 MAY 2010 AUTOBODY NEWS | www.autobodynews.com

The left-rear tire failed about 100 miles from Gainesville while the vehicle was travelling approximately 70 mph.

When the left-rear tire disintegrated, it damaged the vehicle's bodywork. The vehicle was safely driven to a stop without impacting anything. The tire was changed and the vehicle was driven without incident to Homestead.

According to the city's risk manager, Priscilla Thompson, there are no legal requirements to file an accident report for a tire blow-out unless that blow-out results in an accident with another vehicle or results in incidental property damage external to the vehicle itself.

Repairs to city vehicles that are damaged in such cases are handled without “incident” reports.

Alvarado pressed the matter further quoting text messages between the mayor and the city manager, saying the dates didn’t add up: “Marlene Volkert had explained the damage occurred as Bateman and a city councilman were returning from a trip to Orlando on January 24. Yet text messages from [City manager] Purrinos to Bateman indicated the SUV was banged up three days earlier. In one of the messages, Purrinos informs Bateman not to “worry the fire has been put out.”

Now definitive information has been provided by the person who should have

been asked first, the body shop owner/manager.

Phil Spinella, owner of A&B Body Shop in Homestead, says he can't remember the exact date he put a bid in to repair the Expedition or when he picked up the SUV from the city's motor pool, but he insists the damage he repaired on Mayor Steve Bateman's city-issued SUV was caused by a blown tire.

“There is no question about it,” Spinella said via a telephone interview with blogger, Alvarado. “The tire's rubber housing took out the rear bumper. That's what we billed for.

As a courtesy to the city, we also touched up the front bumper.”

The final word on the saga may have been spoken by a responder to the blog named “Spraygun.” He wrote: “Tire delamination at highway speed causes massive damage. The City is probably a real important customer. So you've ordered the matching paint and you have some left over, what's a business owner to do? Easy. Prep that front bumper and let's take care of all those nicks and scratches while we're at it.

Keep a good customer happy by making vehicle look good as new. (really important if vehicle is leased) Only question is why it is difficult for most journalists to understand how small business really works.”

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Continued from Page 31

Still a Mustang

7. Drill out the spot welds attaching the shock tower to the apron panel, and the apron to the lower rail.

• Dress all spot weld surfaces.

8. Chamfer inner and outer side member cutline surfaces to improve butt weld surfaces.

9. Measure 12.5 mm (0.49 in) rearward

from the lower rail cutline. Drill seven 8 mm (0.31 in) holes in the insert overlap area flange (Figure 3).

10. Transcribe the inner front side member cutline to the new lower side member, cut to length and chamfer the bull end to improve the weld surface.

11. Construct an insert from the unused inner side member material (Figure 4).

12. Measure 12.5 mm (0.49 in) forward from the lower rail cutline. Drill nine 8 mm (0.31 in) holes in the new lower side

member for attachment of the insert (Figure 5).

13. Apply corrosion protection to the repair areas on the vehicle and service parts (Figure 6).

14. Position the insert to the new lower side member, clamp and check fit and alignment MIG plug weld 9 holes.

15. Measure underbody to verify correct dimensions. For additional information, refer to Body for dimensional information.

16. Position the new radiator support assembly, apron panel, rail assembly, front fender lower reinforcement and front fender upper reinforcement (Figure 7).

• MIG plug weld all holes.

17. Fusion weld the front fender upper and lower reinforcements to the front fender apron, front fender apron to the radiator support and the seam between the old and the new side members.

• Dress all welds.

18. Install the engine. For additional information, refer to Engine System-General Information.

19. Install the suspension components. For additional information, refer to Front Suspension.

Tire Pressure Monitoring System (TPMS) As near as I can tell, the ‘65 Mustang came

equipped with bias-ply tires.

You had to provide your own pressure gauge to determine the air pressure in the tires. Today we have tire pressure monitoring systems. Here is the procedure to reset the TPMS on the 2008 Mustang:

NOTE: If the vehicle has been stationary for more than 30 minutes the sensors will go into a “sleep mode” to conserve battery power.

It will be necessary to wake them up so they will transmit the latest tire pressure information to the Smart Junction Box (SJB).

NOTE: The tire pressure sensor training procedure must be done on a single vehicle in an area without radio frequency noise

and at least 1 m (3 ft) away from other vehicles equipped with a Tire Pressure Monitoring System (TPMS).

Radio frequency noise is generated by electrical motors and appliance operation cellular telephones remote transmitters, power inverters and portable entertainment equipment.

NOTE: If a sensor does not respond to the Tire Pressure Monitor Activation Tool attempt to activate the same sensor with the Tire Pressure Monitor Activation Tool. If the sensor still does not respond move the vehicle to rotate the wheels at least onefourth of a turn and attempt to activate the same sensor again.

NOTE: The SJB has a 2-minute time limit See Still a Mustang, Page 37

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

Shop Showcase

Car West Elite Hits its Numbers After One Year in Business with Ed Attanasio

Car West Auto Body has six locations in Northern California fixing approximately 1,200 cars monthly combined, but the company’s prize gem is its 52,000-square foot shop in Fremont, CA. The facility employs 35 people and contains approximately $1.8 million in equipment alone, making it one of the largest body shops in the entire Bay Area.

Car West Elite Auto Body operates from a huge facility in Fremont, Calif.

They call it Car West Elite Auto Body, and tout it as a premium auto body shop— and when people see it for the very first time, it’s hard to disagree.

It’s an enormous undertaking with thousands of moving parts, but Craig Moe, the president of Car West Auto Body, is reporting respectable numbers from his Fremont location after just one year in existence. Many people said Moe was crazy for opening a big shop in April ‘09 in the midst of a deep recession, but it now looks like a sage move, because the Fremont facility is fixing 175 cars per month and adding more all the time.

“We figured it would take us at least a year to get ramped up to where we we’re making money and we’ve done that,” Moe told Autobody News.

“For the first couple of months, we were doing 35–50 vehicles per month and now we’re just under 200. We’ve already reached its minimum capacity to make money, so it’s worked out very well. It’s not like we came here thinking we’d have to start all over. We knew we were going to get a fair amount of business at the start, because we had been doing all the collision work for Magnusssen’s Lexus of Fremont out of our Dublin location. We were running the Dublin shop 24/7, so it was logical to move that work to Fremont when we opened.”

Shop Manager Brian Hobaugh brought his key employees from Dublin to work at their Fremont shop so that they could hit the ground running when it opened. “We took most of the top people from our Dublin facility so that we could immediately start servicing the Mag-

nussen’s Lexus located in the Fremont Auto Mall. The entire purpose of building this shop was to be closer to the dealership.

The transition has worked well and we’re pleased with the results. The service to Magnussen’s was uninterrupted and fairly seamless, which was our goal.”

In the meantime, Car West’s Dublin facility has re-ramped up their volume quickly through targeted marketing and by reaching out to the area. “We’ve extended our market reach in Dublin now by adding more and insurance DRPs and we’re also getting a lot of referral business from the dealerships in the area. We have Dublin back to where it was before we opened the facility in Fremont.”

Hobaugh is enthused about the results he’s seen within just one year of operation at the company’s Fremont mega-shop, he explained. “Craig essentially said, ‘we’ll build it and they’ll come’ and it’s worked out that way. Once people see this shop, they want to work with us. It speaks for itself.”

thing without everybody’s input. We made sure that everyone contributed feedback, from the technicians, mechanics, painters and management. And I believe we did everything right. I think we nailed it.”

By implementing a production system where techs work in teams and help each other when needed, Car West Elite is operating smoothly, hitting their cycle times and putting out the type of quality they’re always thriving for, Moe said.

“The shop is very efficient. We wanted to create a facility where our customers would always want to bring their cars here.

We wanted to carry the same high-end look and approach throughout the entire shop. I’ve seen some impressive shops where the front end of the facility is really nice, but when you get into the actual shop itself, that’s where they try to save money.

We didn’t cut back in any aspect of this shop and it’s paid off.”

To get their name out there, Car West Auto Body showcases their Fremont shop

mont area to their list of customers. “We’re adding DRPs and we have several more in the works. We’re very close to the Fremont Auto Mall and we’ve always been working with Magnussen’s Lexus, but we’ve now also added Fremont Chevrolet and are now working Jaguar, Volvo, Nissan, and Land Rover—all from the Auto Mall,” Moe said.

Being a multi-shop operation (MSO) has helped Car West Auto Body in acquiring insurance business, Moe said. “It’s a model that many insurance companies prefer, I believe,” he said. “They want one point of contact with a company like ours, so that if there are any changes to their program or administrative procedures they need to deal with, they don’t have to call six different people. It’s convenient and the insurance companies are leaning toward that model more and more.”

Car West Elite prides itself on a high profile reception area that impresses customers and vendors alike.

Body techs work in teams and support each other within the production system implemented at Car West Elite Auto Body.

Car West Elite is Moe’s dream shop, containing all of the bells and whistles he began to envision many years ago. “This is my first opportunity to build a shop from the ground up, so to speak. We had a shell, but when it came to the complete layout— the overall design, the equipment we put into it and exactly how it was going to be set up—including the lean processes and everything—we did it all from scratch. We basically started with a blank piece of paper and we didn’t want to make any mistakes.

Moe traveled throughout the state to look at other cutting-edge shops before designing his own, he said. “We looked closely at some of the top body shops in California and researched all of the best equipment. Then, we had many, many meetings with employees and vendors.

The worst thing you can do is build some-

36 MAY 2010 AUTOBODY NEWS | www.autobodynews.com

whenever they can. “Part of our marketing involves using the shop for meetings, luncheons and training sessions for insurance companies, I-CAR classes, and for equipment vendors to promote the facility and the industry as a whole. We’ll do whatever it takes to get exposure for this shop and to get people to see what we’ve done,” Moe said.

What will the immediate future look like for Car West?

“Things will get better,” Moe said.

“From what I’ve seen, we’ve already hit the bottom of this recession, so we’re excited about growing and pushing to capacity. We’re doing only 25% of what this shop can produce. Our goal is 700 cars per month and I believe we can get there.”

To feed their plus-sized shop, Car West Elite has added several insurance DRPs and local car dealerships in the Fre-

Moe also thinks the number of body shops in the Bay Area will shrink considerably more within the next year, he said.

“We’ve seen a lot of car dealerships close within the last 18 months, so it logically means that more body shops could close their doors as well. There are shops out there right now that are probably out of business, but they just don’t know it or haven’t admitted it yet. The problem in this business is that you have to keep investing in newest equipment and adapting to servicing the insurance companies the best way you can. We decided a long time ago to gear our key performance indicators (KPIs) toward dealing with the insurance companies. They’re always looking at our cycle times, days and hours touch time and customer satisfaction numbers, so we’re specifically gearing ourselves to what the insurance companies are looking for.”

Car West Elite Auto Body 4311 Solar Way Fremont, California 94538 (510) 657-3300 Shop Manager Brian Hobaugh 52,000-sqaure-foot facility

Continued from Page 34

Still a Mustang

between sensor responses. If the SJB does not recognize any 1 of the 4 tire pressure sensors during this time limit, the horn will sound twice and the message center (if

equipped) will display TIRE NOT TRAINED REPEAT and the entire procedure must be repeated.

NOTE: For vehicles with different front and rear tire pressures (such as the E-Series and certain F-Series), the tire pressure sensors must be trained following a tire rotation.

Failure to train the sensors will cause the TPMS indicator to illuminate. For vehicles with the same tire pressure for front and rear tires, tire rotation will not affect the system.

1. Turn the ignition switch to the OFF position, then press and release the brake pedal.

2. Cycle the ignition switch from the OFF position to the RUN position 3 times, ending in the RUN position.

3. Press and release the brake pedal.

4. Turn the ignition switch to the OFF position.

5. Turn the ignition switch from the OFF position to the RUN position 3 times, ending in the RUN position.

The horn will sound once and the TPMS indicator will flash if the training mode has been entered successfully. If equipped, the message center will display TRAIN LF TIRE. 6. NOTE: It may take up to 6 seconds to activate a tire pressure sensor.

During this time, the Tire Pressure Monitor Activation Tool must remain in place at the valve stem.

Place the Tire Pressure Monitor Activation Tool on the LF tire sidewall at the valve stem. Press and release the test button on the Tire Pressure Monitor Activation Tool.

The horn will sound briefly to indicate that the tire pressure sensor has been recognized by the SJB. 7. Within 2 minutes of the horn sounding, place the Tire Pressure Monitor Activation Tool on the RF tire sidewall at the valve stem and press and release the test button to train the RF tire pressure sensor.

8. NOTE: Do not wait more than 2 minutes between training each sensor or the SJB will time out and the entire procedure must be repeated.

Repeat Step 7 for the RR and LR tires.

The procedure is completed after the last tire has been trained. When the training procedure is complete the message center (if equipped) will display TIRE TRAINING COMPLETE. For vehicles not equipped with a message center successful completion of the training procedure will be verified by turning the ignition switch to the OFF position without the horn sounding. If the horn sounds twice when the switch is turned to the OFF position the training procedure was not successful.

9. Using the scan tool locate the updated TPMS sensor identifiers trained to the SJB and document them.

10. NOTE: This step is required to clear DTC C2780 cause the SJB to exit the manufacturing mode and to make sure there are no other concerns with a newly programmed SJB. If the sensors are being trained due to the installation of a new SJB clear any DTCs and carry out the SJB On-Demand Self Test.

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tion, but you cannot work by memory on today’s version of the Mustang, or any other vehicle for that matter. You definitely need the proper OE technical information.

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It’s still a Mustang, but it has definitely changed since the 60’s There have definitely been changes in this vehicle since the ‘60’s. And we haven’t even touched the diagnostic trouble codes, changes in the drivetrain, or even the number of exterior colors available. We might have been able to set the points and timing on the ‘65 without OE technical informa-

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parts@weatherfordbmw.com www.autobodynews.com | MAY 2010 AUTOBODY NEWS 37

U.S. EPA Provides $1.5M to Clean Up Contaminated Properties in California San Diego, Brea, LA County, and Rialto Neighborhoods to gain health, environmental, and economic benefits

The U.S. Environmental Protection Agency (EPA) has announced $1,542,085 million in brownfields grants to the Southern California communities of San Diego, Brea, LA County, and Rialto, all receiving funding through the Brownfields Assessment, Revolving Loan Fund, and Cleanup Grants program.

Across the nation, nearly $80 million in brownfields grants will be used for the assessment, cleanup and redevelopment of brownfields properties, including abandoned gas stations, old textile mills, closed smelters, and other abandoned industrial and commercial properties.

“Cleaning up and reusing distressed properties brings new jobs and stronger communities,” said Jared Blumenfeld, Regional Administrator for EPA in the Pacific Southwest. “In addition to creating green jobs, local efforts to revitalize brownfield sites reduce threats to public health while attracting positive investments in our neighborhoods.”

Brownfields grants in Southern California will be distributed as follows:

San Diego Assessment Grants $200,000 for hazardous substances $200,000 for petroleum EPA has selected the City of San Diego Redevelopment Agency for two brownfields assessment grants. Community-wide hazardous substances grant funds will be used to inventory and prioritize sites and conduct 12 to 15 Phase I and four or five Phase II environmental site assessments. Grant funds also will be used for cleanup planning and community outreach activities. Petroleum grant funds will be used to perform the same tasks at sites with potential petroleum contamination.

City of Brea $141,085 for hazardous substances EPA has selected the City of Brea for a brownfields assessment grant. Site-specific hazardous substances grant funds will be used to perform a Phase II environmental site assessment of the Brea “Rails to Trails” project site - Union Pacific Railroad portion located between State College and Brea Boulevards. Grant funds also will be used to support community outreach activities.

Los Angeles County $200,000 for hazardous substances $200,000 for petroleum EPA has selected Los Angeles County for two brownfields assessment grants,

$200,000 for hazardous substances and $200,000 for petroleum. Community-wide hazardous substances grant funds will be used to inventory brownfield sites in the targeted unincorporated areas of East Los Angeles, and conduct 15 Phase I environmental site assessments and Phase II environmental site assessments at high-priority sites. Grant funds also will be used to support community outreach activities. Petroleum grant funds will be used to conduct the same tasks at sites with potential petroleum contamination.

Rialto Assessment Grants $200,000 for hazardous substances $200,000 for petroleum Cleanup Grant $200,000 for hazardous substances The Redevelopment Agency of the City of Rialto was selected to receive two brownfields assessment grants and a brownfields cleanup grant. At one time, the city was home to seven citrus packing plants that shipped to all regions of the country. Today, this area contains many brownfields. The target areas contain 47 underground storage tank sites, 18 of which are leaking. Brownfield assessments will clarify the threats posed by the sites to human health and the environment, and are expected to help catalyze cleanup and redevelopment.

The brownfields program encourages redevelopment of America’s estimated 450,000 abandoned and contaminated waste sites. As of March 2010, EPA’s brownfields assistance has leveraged more than $14 billion in cleanup and redevelopment funding, and 61,277 jobs in cleanup, construction, and redevelopment.

These investments and jobs target local, under-served and economically disadvantaged neighborhoods – places where environmental cleanups and new jobs are most needed. Cleaning up our communities is one of EPA Administrator Lisa P. Jackson’s priorities, which leads not only to health and environmental benefits but also economic development and prosperity.

In total, EPA is selecting 304 grants through the Brownfields Assessment, Revolving Loan Fund, and Cleanup Grants programs:

● 188 assessment grants, totaling $42.56 million, will conduct site assessment and planning for cleanup at one or more brownfields sites as part of a communitywide effort. ● 17 revolving loan fund grants, totaling $17 million, will provide loans and subgrants for communities to begin cleanup activities at brownfields sites. Revolving loan funds are generally used to provide

38 MAY 2010 AUTOBODY NEWS | www.autobodynews.com

low interest loans for brownfields cleanups. ● 99 cleanup grants, totaling $19.36 million, will provide funding for grant recipients to carryout cleanup activities at brownfield sites they own.

Since the beginning of the brownfields program in 1995, EPA has awarded 1,702 assessment grants totaling $401 million, 262 revolving loan fund grants totaling more than $256.7 million, and 655 cleanup grants totaling $129.4 million. As part of Administrator Jackson’s commitment to this program, the 2011 proposed budget includes an increase of $215 million for brownfields with a focus on planning, cleanup, job training and redevelopment.

In 2002, the Small Business Liability Relief and Brownfields Revitalization Act was passed. The brownfields law expanded the definition of what is considered a brownfield, so communities may now focus on mine-scarred lands, sites contaminated by petroleum, or sites contaminated as a result of manufacturing and distribution of illegal drugs (e.g. meth labs).

More information on EPA’s brownfields program, success stories, and FY 2010 grant recipients: http://www.epa.gov/brownfields

ASA ‘Taking the Hill’ Fly-in Conference Update

The Automotive Service Association (ASA) has extended the registration deadline for the ASA 'Taking the Hill' Fly-In and Automotive Management Institute (AMI) Leadership Conference to be held May 11–12 in Washington, D.C. The deadline has been extended to Wednesday, May 5.

Event details and an online registration form are available at www.TakingTheHill.com. Travel and hotel accommodations are the responsibility of each participant.

The ASA Fly-In will address the key issues facing both collision- and mechanical-repair professionals, and allow members to meet face-to-face with policymakers on The Hill. The AMI Leadership Conference sessions scheduled for May 11 will allow attendees to participate in two threehour workshops focusing on ethical leadership. The workshops are designed to enhance attendees' business and personal success.

For additional information about ASA, including past news releases, go to www.ASAshop.org, or visit ASA's legislative Web site at www.TakingTheHill.com. The Web site contains conference times, travel suggestions and a downloadable flier about the event.

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California Tire Sustainability Program “Just Check It” The Car Care Council and CalRecycle have partnered to promote California’s new Tire Sustainability Program – “Just Check It” – to inform consumers about the benefits of tire inflation and maintenance.

CalRecycle kicked-off the education campaign at a special event at the State Capitol Southeast Parklands in Sacramento on April 22, coinciding with Earth Day and National Car Care Month. State legislators, consumers and the media are invited to attend the event. The California Air Resources Board (CARB), the Bureau of Auto Repair (BAR), AAA of Northern California and other state agencies and industry and environmental groups exhibited and participated along with the Car Care Council.

“Working with CalRecycle on its public awareness outreach is a natural fit for the Council’s ‘Be Car Care Aware’ consumer education campaign,” said Rich White, executive director. “Proper tire inflation and care is a key maintenance message echoed by the Council for improved vehicle fuel efficiency, safety and extended tire life.”

“Now more than ever, Californians are looking for simple ways to save money

and live green,” said CalRecycle Acting Director Margo Reid Brown. “Checking tire pressure once a month takes just a few short minutes and delivers many lasting benefits, including better performance, improved fuel efficiency and longer lasting tires, which saves money while helping to protect the environment.”

About the Car Care Council: The Car Care Council is the source of information for the “Be Car Care Aware” consumer education campaign promoting the benefits of regular vehicle care, maintenance and repair to consumers. For a copy of the council’s Car Care Guide or for more information, visit www.carcare.org.

About CalRecycle: CalRecycle is the state’s leading authority on recycling, waste reduction, and product reuse. CalRecycle plays an important role in the stewardship of California’s vast resources and promotes innovation in technology to encourage economic and environmental sustainability. For more information, visit www.calrecycle.ca.gov.

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CAA Combines Two Chapters To Make Valley/Ventura Chapter

CAA Valley/Ventura 2010 Board Members (left to right standing): Jim Marko (President); Gary White (Chapter Board Rep); Joe Pellegrino; Marsh Gluchow; Jeff Stevens; Mitch Shenkin; Kyle Huckman; Jay Flor; Kyle Sabie; (kneeling): Mark D’Angelo; Adam Belsky (Secretary); Paula Chipman (Treasurer) is missing from photo

The California Autobody Association (CAA) has combined two chapters to make a new chapter called the CAA Valley/Ventura Chapter. Their first meeting for 2010 was a huge success with over 200 people in attendance. It was held on March

24th at the Odyssey Restaurant in Granada Hills. The speakers were the EEEC Auto Body Inspection Task Force. If you would like more information about this chapter please contact Cindy Shillito the So Cal CAA rep at radiatorgirl@socal.rr.com.

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Autobody News Website www.autobodynews.com

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CRA Aftermarket Parts Demonstration Gets Major Media Attention

In a media-oriented demonstration organized by the Collision Repair Association of California (CRA), Autobody News’ columnists CRA President Lee Amaradio (left in photo) and Industry Trainer Toby Chess (using saw) were featured on ABC TV news replicating Chess’ earlier demonstration of softer steel in certain aftermarket parts vs higher-strength steel in OEM bumper reinforcements.

Attending the April 8 demonstration in Sacramento was California State Assemblyman Dave Jones, (flanked by Amaradio (l) and Chess (r) in the photo adjacent) who said he wants claimants notified if they had their vehicles repaired with any aftermarket bumper bar. Jones said he wants insurers to stop requiring the use of aftermarket rebars.

Jones released the following statement on April 9: “Unbeknownst to most Californians, for many years inferior aftermarket parts have been installed in their cars when they are repaired as part of an insurance claim after a collision.

These substandard parts can affect the safety and performance of the vehicle in a future collision and pose a serious risk to anyone on California roads and highways.

Lee Amaradio steadies an aftermarket reinforcement bar for Toby Chess California law rewho saws through it in a press demonstration of apparent differences quires that aftermarket between OEM and aftermarket reinforcement bars. replacement crash parts only be used in the reIn the photo Lee Amaradio steadies an pair of an automobile if “the parts are at aftermarket reinforcement bar for Toby least equal to the original equipment manChess who saws through it in a press ufacturer parts in terms of kind, quality, demonstration of the apparent difference safety, fit, and performance,” and that inbetween OEM and an unspecified type of surers warrant that these parts are in fact aftermarket reinforcement bar. The saw as good or better than the manufacturer hardly scratched the OEM part (see video parts. at www.autobodynews.com) yet cut this Today, I am calling on the Insurance particular aftermarket part with apparent Commissioner and the Insurance Industry ease. to: Continued from Page 1

Threat of Lawsuit

to the industry that there has to be more than just selling these parts. I hope that after I get some legal counsel on this, I can come back to you and show you more of what I did find. Some (of the non-OEM parts) are very good. And I was prepared to tell you about that.”

What may have provoked alarm in the market was that Chess was preparing to present his results on a series of tests on OEM and aftermarket hoods. In part, Chess had intended to point out that a particular replacement hood for an ‘09 Corolla, which was CAPA-certified, had tested very close to the OEM control in his analysis. Of course, this information was not relayed to the attendees.

Without confirming or denying it was the source of threatened legal action against

Chess, LKQ Corporation, following the CIC meeting issued a written statement about Chess’ presentations (see sidebar above), including the one last November in which he used a firefighter’s extrication saw to show it was easier to cut through the metal used to make a particular non-OEM bumper bar being sold as a replacement for an OEM part made from ultra-high-strength steel.

In its statement, LKQ Corporation said it tried to replicate such a test and found “the saw [also] cut through the OE rebar with relative ease, “raising concerns that “there is a lot of misinformation being spread.”

The company pointed to crash testing it did that it says showed both an OEM and non-OEM bumper passed federal safety standards for passenger protection.

A number of CIC participants in Atlanta after Chess’ announcement expressed outrage that legal threats would be used to

40 MAY 2010 AUTOBODY NEWS | www.autobodynews.com

inforcement bars; * Notify the owners of the vehicles of the existence of these substandard parts and the risk they pose; and, * Develop a program to replace all of the defective bumper reinforcement bars on California roads and highways.

If the Insurance InState Assemblyman Dave Jones flanked by CRA president Lee Amaradio dustry is not able to take (left) and ICAR trainer Toby Chess (right) announces his plan to take legthese simple steps to islative action if Insurance Commissioner Steve Poizner fails to address comply with California the issue of damaged vehicles repaired with aftermarket reinforcement law and protect our resibars. Jones said he wants claimants notified if they had their vehicles repaired with an aftermarket bumper bar and said he wants insurers to stop dents, legislation should requiring the use of aftermarket bars. be introduced that orders insurance companies to * Identify all of the vehicles that con- do so, and provides strict penalties for failtain these inferior aftermarket bumper re- ing to do so.”

LKQ Issues Statement Following CIC Meeting “LKQ believes the collision industry needs accurate and relevant information. In an effort to determine the veracity of Mr. Chess’ “sawzall” test at NACE in November 2009, we attempted to replicate his test of the OE rebar. Our results were significantly different! The saw cut through the OE rebar with relative ease.

“Questioning the relevance of a sawzall test, we chose to conduct crash tests of the aftermarket part. The results of the tests, which more accurately replicate actual accident condi-

prevent a presentation and open discussion at the meeting.

Speaking as a past CIC Chairman, Chuck Sulkala said this was the first such incident he was aware of in CIC’s nearly 30-year history. He said Chess was merely raising awareness of issues that had been discussed for decades, and commended parts suppliers for finally taking action in the months since Chess’ previous presentations to address traceability of the parts.

“To have something stopped because of a potential lawsuit is shooting the messenger,” Sulkala said. “The day of stopping discussions at CIC because of a legal issue has got to come to an end. It should never have come to be in the first place.”

Industry consultant John Bosin, who chairs the CIC Parts Committee, also called such a threat of legal action “reprehensible” and told Chess he would help start a legal defense fund if necessary.

tions, showed the aftermarket rebar met FMVSS208, the federal standard for occupant safety.

“That both the OE and aftermarket rebars performed well in the crash test was not surprising. But, by performing the sawzall test ourselves, it is very clear to us that there is a lot of misinformation being spread. LKQ believes that it is important for the consumer and the industry to receive relevant and accurate information, so we have communicated that message to the parties involved.”

“Whomever has initiated this (threat of) legal action passed up the opportunity to use this as the forum it is, to express their views,” Bosin said.

“We would have been open. We may not have liked what we heard, but they could have come here. They were welcome. Whoever it is, why aren’t they here talking about the issue and telling us what their concerns are and explaining their actions.”

CIC Chairman and Collision Week publisher Russ Thrall assured CIC attendees he would “figure a way through this to make sure the things that need to be said get said.” Like Bosin, he said CIC’s mission is to serve as an open forum for the industry.

“If there’s a presentation up here that you find uncomfortable or you feel is wrong, that’s why the microphones (throughout the room) exist,” Thrall said.

Keystone Automotive Says Parts Traceability Exists

Keystone Automotive, a subsidiary of LKQ Corporation, has offered product traceability through its KeyTrac program for more than eight years.

Products installed on vehicles repaired with aftermarket parts that are part of Keystone’s quality assurance programs are traceable from the repaired vehicles back to the manufacturers’ specific production runs.

KeyTrac provides 100 percent traceability of all of Keystone’s quality assurance parts from the vehicle owner back to the original raw materials. No other program in the aftermarket industry provides 100 percent traceability. At the time of installation, details including the part lot number, manufacturer, and other pertinent tracking information. are automatically recorded as part of a body shop’s invoice records. The lot number corresponds to the date and place of the manufacturer’s part production.

“We stand behind the quality of the parts we sell to collision repairers. For the past eight years we have used Key Trac, Keystone’s proprietary tracking software, to support our commitment to provide quality aftermarket parts,” commented Robert Wagman, senior VP division, LKQ Corporation.

LKQ Goes Green with New Recycling Promotion

LKQ Corp. is celebrating Earth Day by kicking off a new promotion for its customers and those who want to help the environment. LKQ will plant a tree in honor of each person who visits the website www.LKQGetGreen.com and enters a valid email address between April 22 and June 30. "Choosing to buy recycled car and truck parts is an easy way for our customers to do something good for the environment, but for Earth Day, we wanted to give them a chance to do even more to ‘Get Green with LKQ," said Robert Wagman, senior vice president of operations, Wholesale Parts Division for LKQ. "We also wanted to open up the opportunity to be green to anyone who signs up at our website." Wagman also pointed out that LKQ is committed to helping the environment year-round. "We always celebrate Earth Day, but for us, being green is just the way we do business, not a once-a-year event." Last year, LKQ processed more than 492,000 vehicles, which is equivalent to recycling about 540,000 tons of steel (or more steel than the Willis Tower, Empire State Building, Eiffel Tower and the Beijing National Stadium, the world's largest steel structure, combined), 47,000 tons of aluminum (equivalent to 3.2 billion aluminum cans), and 13,000 tons of copper.

LKQ helped to reduce greenhouse gas emissions by more than 890,000 tons

State Farm Prevails in Gunder Slander Suit; Gunder Says He Will Appeal State Farm won a summary judgement against Ray Gunder (see Autobody News, April edition) on March 26.

The U.S. District judge, Steven D. Merryday, ruled that although State Farm may have made defamatory statements about Gunder’s Auto Center of Lakeland, Fla., the shop failed to prove that the insurer’s primary motive in making such statements was to harm the shop rather than further its own cause.

Gunder had alleged that State Farm “intentionally and unjustifiably interfered with [Gunder’s] relationships with its customers” by falsely stating to insureds that the shop overcharged for repairs and completed repairs in an untimely, inefficient and substandard manner.

The judge noted that Gunder’s Auto Center was terminated from State Farm’s DRP program in 2004, and case records also showed that Gunder’s objected to State Farm’s method of compensating repair shops for paint and materials.

To recover for slander, the plaintiff must show 1) that the defendant published a false statement; 2) about the plaintiff; 3) to a third-party and 4) the plaintiff suffered damages as a result of the publication of the statement.

State Farm argued that even if State Farm agents uttered false statements about the plaintiff, the statements are privileged.

“State Farm was acting as an insurer and was communicating with the party seeking benefits under the insurance contract about an issue in which they have a common interest, the prompt and full repayment of repairs,” the court decision stated.

Although the judge agreed that the communications between State Farm and claimants were privileged, he noted that they could still be considered slanderous if Gunder’s could Ray Gunder prove State Farm acted with “express malice,” meaning, “ill will, hostility or evil intention to defame and injure.” However, the court ruled that “The plaintiff fails to provide extrinsic evidence of express malice.” The Florida Supreme Court defined “express malice” as follows: Where a person speaks upon a privileged occasion, but the speaker is mostly motivated more by a desire to harm the person defamed than by a purpose to protect See State Farm Prevails, Page 45

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www.autobodynews.com | MAY 2010 AUTOBODY NEWS 41

This article first appeared in the I-CAR Advantage Online, which is published and distributed free of charge. I-CAR, the Inter-Industry Conference on Auto Collision Repair, is a not-for-profit international training organization that researches and develops quality technical education programs related to collision repair. To learn more about I-CAR, and to subscribe to the free publication, visit http://www.i-car.com.

I-CAR Tech

Aluminum Roof Replacement On The Mitsubishi Lancer Evolution And Outlander

The use of dissimilar metals together in one area of the vehicle structure, and the attachment methods used with those materials, can affect damage analysis and repair versus replace decisions. Two models from Mitsubishi that require these considerations are the Lancer Evolution and Outlander.

The Lancer Evolution and Outlander are equipped with an aluminum roof, on models without a sunroof (see Figures 1 and 2). On models with a sunroof, the roof panel is made from steel. On vehicles with an aluminum roof, the roof panel is attached to steel roof rails and roof bows.

roof panel is ready to be separated from the body at the bonded locations. To assist in the removal process, heat can be used in the bonded area of the damaged panel with a flameless heat source up to 204°C (400°F). As the adhesive gets warmer, its strength and bond will weaken. Heating above 204°C (400°F) may weaken high-strength steels and aluminum. The lower center roof bow on the Lancer Evolution, and the inner side roof rails on both the Lancer Evolution and the Outlander are high-strength steel parts.

and Outlander models.

This aluminum roof panel replacement procedure is just one example of this type of construction technology.

The I-CAR Advanced Material Damage Analysis (DAM08) Figure 2 - (Mitsubishi media photo) This 2008 Mitsubishi Outlander has a course presents addirivet-bonded aluminum roof panel. tional information regarding the use of praisers and collision repair technicians dissimilar metals in new vehicle conmust provide complete and accurate di- struction. Watch for it in your area. agnosis and repairs to maintain the reliability of a vehicle structure. Damage analysis and repair versus replace deci- For comments or suggestions on the Adsions have become more challenging be- vantage Online, please contact I-CAR at cause of the increased use of dissimilar advantage@i-car.com. materials in vehicle construction, such as the rivet-bonded aluminum roof panel Photos courtesy of Mitsubishi Motors on some Mitsubishi Lancer Evolution North America, Inc.

Installing a Replacement Roof Panel Blind rivets and adhesives are used for the replacement roof panel attachment. The recommended rivet diameter is 4.8 mm.

The adhesive used for the rivetbonding is different from that used for the attachment areas with just adhesive. The Lancer Evolution and Outlander body repair manuals state to use Genuine Genuuin Ge ine Mitsubishi Miiits M ttssu sub ubis ishi h replacement reppllaac acceem meent nt Crash Cra rash sh Parts Parttss are arree close clo lose se at at hand hand ha nd through thhrrou ough ughh the the he following foolllloow wiiing nngg Figure 1 - (Mitsubishi media photo) This 2008 Mitsubishi Lancer Evolution an epoxyayresin strucquality qquuaallit ity dealerships. deal de aler ersh ship ship ipss.. They Thheey offer ooff ff ffeer er exceptional exc xceeppt pti tioonnal al customer cuussttoome mer service, servic se rviicce, rv e, wide wid ide selection sele se lect ctio ion of ion of in-stock inn--st stoc ock has a rivet-bonded aluminum roof panel. tural adhesive for the parts ppaarrtts and and the an the experience th exppeeri ex rien rien ence ce necessary neecces essa sary ry to to ensure eennsu sure re your your our repairs ou reppaaiirrs proceed re pprrooccee eed smoothly. smoo sm ooth thly ly. on matters affecting the industry.

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According to the 2008–2010 Lancer Evo- ment, specifically 3M AAD Part No. 8115 lution and 2007–2010 Outlander Body Re- or equivalent. For the adhesive bonding atpair Manuals, the aluminum roof panel is tachment, a urethane body sealer, specifi@autobodynews.com made from a type of aluminum containing cally 3M AAD Part publisher@autobodynews.com No. 08360 or magnesium, copper, and silicon. The man- equivalent is recommended. uals state that this type of aluminum has The recommended adhesives are apthe equivalent strength of cold-rolled steel plied to the appropriate locations, noted in sheets. the repair manual.Promote The adhesive maker’s your business with Promote your business with recommendations should be followed for an exclusive article featuring an exclusive article featuring part preparation.

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CRA Writes to Insurance Commissioner Asking For A/M Leadership The CRA has hand-delivered a letter (see below) to Insurance Commissioner Steve Poizner asking that he enforce the law by requiring insurers to either stop putting aftermarket reinforcement bars in damage estimates, or else warrant to the claimant that the aftermarket bar is as good as highstrength steel bars from the vehicle manufacturer.

Allen Wood, CRA Executive Director, signed the letter which points out that aftermarket proponents incorrectly believe automotive repair dealers (ARDs) are responsible for determining if aftermarket parts are equal to OEM. “There is no mystery to the law,” stated Wood, “it clearly requires insurers to warrant that the aftermarket part is at least equal to OEM. Therefore, Commissioner Poizner, show us you can lead by enforcing current law. The CRA has yet to hear if the Commissioner or his staff understands that the burden of proof on the worthiness of aftermarket reinforcement bars falls on the insurer.

The CRA’s letter reads: 300 Capitol Mall Sacramento, CA 95814

Dear Commissioner Poizner, On behalf of the CRA, I want to express the association’s concern over your depart-

ment’s failure to address the issue of unsafe aftermarket reinforcement bars in a timely fashion, or more significantly, to press insurers for a response to this problem.

In a letter of February 2, 2010 I wrote you regarding how certain aftermarket reinforcement bars were inferior to those produced by the vehicle manufacturer and that this difference in quality could compromise passenger safety in a collision. After two weeks without a response from you or your staff, we sent a follow-up letter dated February 17, 2010. As a result of the second letter, a meeting was convened on March 4 involving your legal counsel, Peter Conlin, and board members of the CRA, the CRA’s lobbyist and myself. Mr. Conlin appeared to understand the safety concerns. However, it is imperative that your department grasp why as the regulator of insurers, the department should be out in front of all other agencies in terms of protecting vehicle occupants from unsafe automobile parts.

Specifically, Section 2695.8 (g) of the California Code of Regulations states: “ No insurer shall require the use of non-original equipment manufacturer replacement crash parts in the repair of an automobile unless:(1) the parts are at least equal to the original equipment manufacturer parts in terms of kind, quality, safety, fit and performance: and (3) insurers specifying the

A Work Of Art.

use of non-original equipment manufacturer replacement crash parts warrant that such parts are of like kind, quality, safety, fit , and performance as the original equipment manufacturer replacement crash parts.”

Insurers typically specify the usage of non-original equipment crash parts in their prepared damage assessments/settlement offers. When a California insurer specifies the usage of an aftermarket part, by regulation the insurer is required to warrant the part per Section 2695.8(g). Insurers specifying the use of aftermarket parts that do not meet the regulatory standard of “ like kind and quality” would appear to be participating in an unfair claims practice.

On April 8, 2010 State Assemblyman Dave Jones [see related story this issue] and the CRA held a press conference to alert California consumers about the usage and dangers associated with these substandard aftermarket parts. A key portion of the conference involved a live demonstration by Mr. Toby Chess, a collision industry trainer. Mr. Chess explained how OEM reinforcement bars were comprised of ultra high-strength steel while the aftermarket counterparts were a low-grade alloy. He easily sawed through the aftermarket part while the saw didn’t penetrate the OEM part. He went on to detail how the weaker aftermarket part would adversely affect deployment of an airbag during a collision.

At the conference I discussed the quality issue with a representative of the aftermarket industry who said that not all aftermarket parts are inferior. I asked him how is a consumer or shop owner to determine when a part is compliant. He stated it

is the repair professional’s responsibility to determine if the aftermarket part meets the quality standard. This concept is contrary to current law. The warranting of equal, kind, quality, safety, fit, and performance is regulated as part of the business of insurance and not auto repair. Any shifting of liability is not supported by current regulation as this issue is rooted in the business of insurance and not repair.

Commissioner Poizner, our request is simple: enforce current law. Don’t allow claims settlement practices to be based on costs associated with parts that do not meet regulatory requirements. California consumers should not be subject to the re-engineering of the structural and related safety aspects of their vehicles via the insurance claims process. Today’s vehicles are designed to save lives and any compromise of the engineering of these vehicles during the claims process should not be tolerated.

I understand the department may be perplexed by how it is to assess the quality of aftermarket reinforcement bars. Our association stands ready to assist your staff in this deliberation. However, forming a working group, or calling for a study, should not be the first response. The law requires insurers to warrant that aftermarket parts are the same as OEM. Please require insurers that limit benefits to aftermarket reinforcement bars to prove to you that these parts are as good as OEM—it’s the law!

Allen Wood, Executive Director P.O. Box 2891, Rancho Cordova, CA 95741-2891 916-837-2362 www.cra-ca.com

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U.S. Chemical & Plastics, a division of Alco Industries and a leader in repair, refinish, appearance and maintenance products for the automotive aftermarket, has added two new low 2.1 VOC primers to its line-up of refinishing products, including 2520™ DTM Primer and 2720™ 2K Urethane Primer.

“Our 2520 is a fast drying, high build, direct-to-metal primer,” said Sharon Nixdorf, product manager. “It's ideal for use on properly-prepared bare substrates, body filler and sanded original equipment (OE) finishes. It also features outstanding filling, leveling and sanding properties and offers excellent adhesion to bare metal.”

USC 2520 is available now along with 2515-4 Activator, which is specifically formulated for use with the DTM Primer.

The company's 2720 2K Urethane Primer is a high quality, two-component acrylic urethane that is easy to sand and can be applied to a variety of substrates.

It provides outstanding fill, build and

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USC's new 2520 and 2720 2.1 VOC primers join an already extensive family of premium primers, including USC 1K Acrylic, Easywork Epoxy, Easywork 2K Urethane, Morton Eliminator HB Polyester and Morton Impact Flexible Primer/Surfacer. This diverse offering gives auto body repair professionals several options for selecting the right primer for each unique project.

www.autobodynews.com | MAY 2010 AUTOBODY NEWS 43

On Creative Marketing

Tom Franklin has been a sales and marketing consultant for forty 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.

Concentrate Your Marketing Firepower with Thomas Franklin

Insurance companies are up to their old failed to do quality repairs or to treat custricks again. Apparently none learned the tomers fairly—but because the company’s lesson of the M-2 fiasco a few years ago. corporate-minded executives believe the Because insurance executives are often myth that shifting to large consolidators graduates of business schools and thor- and multi-shop enterprises will result in oughly educated in corporate culture, they lower repair costs. The irony of their move have a natural tendency to believe the is their inconsistency in reasoning. This is myth of “economy of scale.” This leads a company that still works through agents them to believe that a monolithic mess like because agents provide personalized care.

M-2—a consolidator that bought up a huge They ignore the fact that large corporate with Dick Strom number of shops only to collapse under a shops tend, like M-2, to have revolving pile of debt, loss and inefficiency—could door employees who thus pay far less perrepair vehicles for much less than inde- sonal attention to customers.

So what does this have to do with the pendent shops.

Around that time, the nations largest dozens of independent shops that suddenly insurance company dropped dozens of find a major insurance source of jobs and small shops in favor of large shops and revenue disappear? The usual response is consolidators they believed could deliver to scramble to find other sources of busirepaired vehicles for less because of ness. Unfortunately this often means try“economy of scale.” Management guru ing many multiple marketing efforts at Peter Drucker observed many years ago once. By dividing their resources into relthat so-called “economy of scale”—by atively unfocused advertising, promotion which shops would be expected to pur- and sales efforts, they lose the power that with Lee Jr.be gained from one highly concenchase parts and outsource someAmaradio services could more cheaply—are generally lost because trated marketing effort at a time. It’s not of bloated bureaucracies that arise in large that a shop should only go after a dealercorporations so that tracking real costs are ship, a DRP, a fleet account or any other often lost in the shuffle. At the end, M-2 specific source. It’s just that it’s more efcould no longer pay for parts or stall on fective to choose a single target and put all payments. Inconsistent payment of em- available resources behind that one big ployees resulted in continual turnover of push. Otherwise they’re like a military employees. The idea that “economy of bombing operation that scatters a few scale” is really that important in a labor- bombs over a large area without hitting the intensive business like collision repair is most important target.

An example of concentrated firepower corporate think nonsense.

So now another large insurance com- would be going after a new insurance DRP pany (see last month’s column) is dropping with Sheila Loftusby addressing the agents, the adjusters, the dozens of small shops—not because they local coordinator and also executives at the

Opinions Count

Action Counts

Your Turn

state and national level. Records of prior jobs performed for that insurer’s customers and letters from satisfied customers plus any other relevant documentation may take some time to assemble, but that is the kind of ammunition needed to press this marketing initiative. One shop manager who succeeded in gaining new DRP business for her shop traveled to several CIC meetings to meet the top-level insurance executives who represented their companies at the periodical meetings. Rather than the usual approach, contacting the local DRP coordinator and sending a comprehensive package of information about the shop, she used a top-down approach, using her CIC contacts to influence the local coordinators, and then using the references from customers and agents to reinforce her proposal.

A concentrated effort to get a dealership’s business would involve getting the buy-in from every level of management, including the used car sales manager, the parts manager, the service manager, and of course the general manager and owner.

Shop records of jobs performed on those

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makes and models of vehicles would reinforce this shop’s ability to focus on this dealership’s products. While a DRP arrangement either exists or it doesn’t, it is possible with many dealerships to propose a “toe-in-thedoor” approach, such as a dealership that already had an “authorized collision repair facility.” You could take on any overload and any problem jobs the other shop preferred not to do. Dealership relationships can be a lot like marriages, often ending in divorce. By providing exemplary service, the “toe-in-thedoor” shop, became the new authorized shop when the other shop failed to deliver one too many times. Losing a major source of business—especially in a tough economy like this— can be a devastating experience, but it’s essential for a shop owner or manager to resist scattering resources all around. Using a concentrated firepower approach may not guarantee a result, but it can form a basis for a second and third concentrated effort if needed and provide a feeling of certainty that all that could be done has been done on that one target. That certainty will make the next concentrated effort that much more effective.

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New Revolution® Lift Line Offers Quality & Value at the Right Price

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Technician productivity and wellbequality, safety and overall value at a coming are paramount at Revolution Lift. All petitive price.

With the many economic chal- Revolution two-post and four-post lifts lenges facing shops today, it’s more im- wear the gold label that demonstrates they portant than ever to buy the right have been third-party tested by ETL, and Janet equipment at thewith right price.

In theChaney past, ALI certified to meet ANSI/ALI ALCTVshop owners have been willing to sacri- 2006 safety standards. They are manufice value for low price when choosing factured in an ISO 9001 certified facility which vehicle lifts to install, says John owned by Revolution’s parent company, Rylee, director of marketing. Now they Vehicle Service Group (VSG).

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The judge said “in essence, the plaintiff alleges that State Farm began falsely accusing the plaintiff of “overcharging” customers promptly after State Farm admonished the plaintiff for attempting to set prices in the area. Although State Farm statements (if false) might be defamatory, the plaintiff offers no evidence (other than the alleged falsity of the statements) from which a juror could infer malice. The statements “do not inherently demonstrate express malice.”

Gunder submitted additional affidavits from several potential and former customers who said they would have used Gunder’s for repairs had it not been for statements about the shop made by State

Continued from Page 41

State Farm Prevails

the personal or social interest giving rise to the privilege, then it can be said that there was express malice and the privilege is destroyed. Strong, angry or intemperate words do not alone show express malice; rather, there must be a showing that the speaker used his privileged position to “gratify his malevolence.”

Ray Gunder openly discussed with the other repair shops State Farm’s method for determining the “prevailing competitive market rate” for repairing vehicles insured

by State Farm..

Farm. Regarding State Farm’s claims that Gunder’s overcharges for repairs, the shop submitted proof that State Farm routinely paid for repairs at other shops that charged rates similar to or higher than Gunder’s.

When the judge ruled for summary judgement the additional affidavits were declared moot.

“State Farm neither attacked the plaintiff's moral character nor accuse the plaintiff or its proprietors of violent crime; each allegedly slanderous statement concerns only the matter of common interest between State Farm and the insured—the quality and value of the plaintiff's work,” said the judge.

Merryday ruled that the evidence provided by Gunder’s was insufficient

Our parts in the trained hands of a professional.

and failed to show “express malice” on the part of State Farm: “The plaintiff fails to present evidence showing that State Farm’s ‘primary motive’ was to harm the plaintiff rather than to further State Farm and the insured’s mutual interest in securing timely, quality repairs to the insured’s automobile,” the decision stated.

Ray Gunder has said he will appeal.

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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

Working On a ‘57 Thunderbird With Old School Tools & Techniques

We are going to switch it up this month are one step ahead. Looking at the uniand go back to the old school way of fix- structure bolted on the chassis and from ing things on a `57 Thunderbird.

A friend there we need to start with our left fender with Rich Evans from New York shipped me out his Thun- which is pretty much wasted. In most peoderbird, and there’s a good story behind it. ple’s eyes that fender is gone. They’d cut it His Dad had it in the family for awhile and off and put a new one on. took it for its last drive before turning it This time I’m going to take a more over to his son. We know what happened difficult route and repair that. It’ll take from there. It got in a car accident and took probably about 160 hours of actual labor Thomas Franklin a heavy hit to thewith front. My buddy knows versus spending the money on “gold parts” my work and was prepared to ship me the from the wrecking yard. When you have a customer that is budget conscious, it pays to have to have an A, B and C plan. What is left over is profit.

I’m going to repair as much as I can and reach with Thomas Franklin out to companies that will supply me with the available parts needed. I send the bumper out for repair. I am going to get a left headlight bezel, a left headlight assembly, a new grill and there’s a nose piece and a reinforcement for a nose piece, Hood. a new harmonic balance drum. I’m also car from New York, so I told him ‘no probwith Dick Strom going to need a new radiator. lem, I could fix it.’

What I can’t repair I’ll get used. I am Now it would probably be faster and going to have to repair the left and right easier to go to a wrecker and buy a front core support, the lower balance, repair the clip to repair this Thunderbird. But with left fender, left inner fender, the hood, left my experience buying parts for older cars, hood hinge. I’ll get the harmonic balancer I always seem to come across problems used. Other than that we are going to have with Dick with those parts when I buy them.Strom They’re to repair everything else. also expensive.

Starting with the fender we take a Here I decided we are going to repair half-inch piece of metal and make a temas much as possible and see what’s avail- plate because the right and left side are baable in new parts, which are easily repro- sically the same but flip-flopped. We will duced from jigs made to reproduce the make a template, flip-flop it to the right. original parts. The nose panel was avail- Then put this piece of metal behind it, drill with Lee Amaradio Jr. able; a couple of the fiberglass pieces were a hole in the middle of it and use it as a available, but that would take away from pulling device, so we’re not tearing the its original feel. Then I happened to get a fender. We want to put tension on it and call from a buddy in New Zealand, Willie massage this fender out and walk it back Newman, a friend who is probably one of out to give it shape. the best metal finishers on the planet. Not with Amaradio Jr. a lot of guys I know hereLee are doing much metal finishing, but in New Zealand it’s a valued trade. They will fix or fabricate what they don’t have or can’t get easily, and they get very good at it.

Willie stopped off in California on his way to Germany and I figured it would be with Sheila Loftus a good time for me to take on a different challenge and repair, rather than just buy- Hood Reinforcement. ing, by making a few panels. It’s good to There’s a lot of hammering and dolhone your inner craftsman. There’s always 100 ways to fix a car but I’m always will- lying involved. Willie and guys like him ing to try something new and approach it use more gas acetylene torches versus the TIG or MIG. It’s just great old-school in a different way.

Loftus I got the carwith on the Sheila frame rack and craftsmanship. They use a low flame and tied the car down securely. It looks like it the type of rod you use when you’re piecgot hit above the frame. So what I want to ing things together you can hammer and do is hang my gauges on the four points of dolly and flatten out the weld from behind, the chassis so I can see if the chassis is as long as you make access when you’re bent or not. The chassis looks good so we doing that. We pull on the fender and get it

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pretty true, and at a certain point remove some of the paint so we can see what’s underneath and guess what? We run into a lot of shoddy craftsmanship. We then decided not to put another fender on it because we might run across it in the other fenders or rust or extra work so we were geared up for it. We had to cut a few pieces out on the top of the fender.

After getting it pulled we got the new parts in and had to make some alterations with those parts. The header panel was really flimsily done and the inner reinforcement I just had to pack it back up and send it back to the place I got from. I ended up ordering the left and right baffle, at 300 bucks each, and they weren’t even close to being a fit. So we just took the old ones; hammered and dollied them out, getting the reference lines from the factory stamping and just spent a lot of time hammering and dollying these parts. Each part that we took, we dressed up, got it back to as close as we could. When we go for a mockup, things are getting closer. You’re screwing and fitting them in, cross meas-

uring, using your grills and other pieces for reference.

We expect some obstacles. The next big part was straightening out that hood.

We didn’t want to pay an arm and a leg for a hood. We figured we would remove the skin from the frame and that will give us the access to straighten that frame. Before doing that we hammer and dolly the frame.

Hood Repaired.

We used a flat bench where we could really get on it and push it back to get the major buckle out of it. Then we depicked it and fixed the frame.

The metal has memory so you can hammer and dolly areas that are obvious

ly damaged. You don’t want to look at the whole picture at this point. You want to have a plan, go in, hammer and dolly, get things straightened out, it will start taking its shape back. Then we’ll go to the hood and hammer and dolly that. We

had to do a lot of shrinking to give it its shape because the metal was really stretched. Take your time and bring back some real craftsmanship. I know that’s a dying art.

Nowdays, working on the modern cars, we’re really just changing panels that are already made available. A lot of body techs out there aren’t really learning the craftsmanship. I try to learn something new everyday and the biggest thing is a staying active. “If you don’t use, you lose it.”

I make an effort to work alongside other people who’s work I admire and try to learn their ways of doing things. If I

don’t like what I learn, I just won’t use it or apply it. Even if you are only picking up 20% of what’s being done, you are learning. That’s the key. Learning something new every day will make you better at what you do at the end of the day.

So getting our left and right baffles banged and hammered out. We get the hood where we need it so all the pieces are coming into place. On the front of the fender we needed to cut the front flange off and make a flange, taking a piece of metal, putting it in the brake and take it over to the shrinkers. Woodward supplies me with a lot shrinkers, English wheel and brakes and shears. Go to their web site. They’ve got a great set of equipment choices that if your just working in your garage or you have a body shop and you want to start messing with metal of more and fabbing your own pieces. These are affordable products, and if you do it more and more everyday, you might get a heavier duty product that is a little bit more expensive.

Those are available through Woodward as well.

Use what you have. A lot of jigs you have to make up for putting these hoods on, or clamping things. When you’re making parts, you have to make jigs and templates. It’s more man hours, but it’s less money out of your pocket and more profit in your pocket.

So getting back to that flange on the front fender, we create that. We’ll fit it over, mark it, and cut the old piece it has too many cracks and too many welds.

Too many people have worked on it, and the metal is too thin. We’ll add a new piece there. So taking measurements and making sure everything is in its right place. We take the torch and gas it, hammer and dolly it, and tack it in place. Just like a TIG you are going to work your way around and hammer and dolly it. Make sure the metal is not moving. Keep checking it. Check your references and use what templates and what pieces you have. We’ve got the

new hinge in and we’re putting the hinge on just to check our gaps. We ran into a few problems on the hood, but eventually, if you keep checking it, you’re going to get it right.

You are dealing with a unistructure so with everything screwed in place you can move things around and adjust it.

You want to have the integrity of everything moving smoothly. You want your gaps to be even. Again, it’s a lot of hammering and dollying. Make sure you wear earplugs because it does get loud. A lot of body shops aren’t used to just hammering and dollying any more. If you walk into a body shop and you hear hammering and dollying, you know the real thing’s going on. It’s a kind of music to my ears. It’s amazing what you can do with a hammer and a dolly.

We had to make some adjustments that to the front nose panel we bought. We had to cut and move it in because it was way off. Sometimes the parts that you are buying have to be modified to fit. They are going to be close but not really accurate.

Any time you are buying aftermarket parts you can guarantee you have to modify them somewhat to fit. Make sure you do your mockup and check things as you go.

Don’t weld things into place and put your hood on without checking your gaps because you are going to run into some problems.

Working with Willie, who has maybe 35 years of experience with this kind of craftsmanship, is a great experience. All he does is build, so coming into a collision job he might not understand it in the same way guys who do it everyday. But he does this kind of fabrication every day, so he knows that when he comes across obsta-

cles, he can actually take a flat piece of metal and just make it, versus purchasing a replacement.

So think about that if you’re building a hot rod or an old-school vehicle and you can’t find the part. Don’t think you’re at a dead end because there are ways. There are videos out there that can show you how. Gene Winfield has a line of videos out. So does Ron Covell. Visit their Web sites.

I thought this would be a good project to cover in the column because it was fun and satisfying doing it. It’s good to stand back and see what you can fix versus replace. Everything that you learn from this kind of project you are going to be able to take to the next one. You are going to be able to depend on yourself to create and make something cool. Using that approach with hammering and dollying so you are not using so much filler. Anytime you are taking out a dent or something make sure you are getting it as metal finished as possible by using slapsticks or metal files. You want to file everything down.

Guys like Willie file everything. Hit and pick and find your lows and highs and hammer and dolly it until it comes out true. You don’t want to take too much metal away because it takes away from the strength and integrity of the vehicle.

Next time I’ll be able to show you a 57’ Thunderbird completed with using every part you’ve seen damaged, repaired versus the grill and the nose panel. I had to alter those. The grill was chrome, so I used that as reference point. I think of it like the old blacksmiths who have inspired me. Especially the guys that used to make the suits of armor. That took thousands and thousands of hours but they did what

they did without a welder. They did with what they had: fire, hammers, wood, whatever they needed, even leather to put things together and they riveted everything.

Imagine what you can do today if you applied that kind of creativity with the types of tools you have available now.

Anyway that’s the story for this month.

Take a look. I think you guys will be impressed with what was done.

Thanks as usual to my sponsor companies. I’ll go over them next column.

www.autobodynews.com | MAY 2010 AUTOBODY NEWS 47

Parts for Profit, Part 2—Profitable Management of Inventory & Personnel

by Larry Williams

This is Part 2 of last month’s article directed to dealership parts managers directly managing employees handling both mechanical and collision parts, however, Larry Williams the same principles apply to parts management in a body shop.

To read Part 1, see Autobody News, April 2010 edition or look online at www.autobodynews.com.

Larry Williams is a former parts manager and consultant who has received national awards during his 40 years of creating profitable departments. He can be reached at ljoew2@gmail.com.

Making the most profit out of your inventory is easy, and once set up properly, needs minimum maintenance. Making the best profit out of your personnel is the hard part. This is why I spend most of my effort on my people.

The hardest part of any profession is learning the language. The various terminologies used to communicate needs. Auto parts is one of the hardest, a language of multiple words for the same item. Controller, solenoid, actuator, module, ECU, etc.

can all used to describe the same object.

Only a few years ago Ford started a program to unify parts terminology. Now all departments, design, engineering, manufacturing, service and parts would all refer to a part by one name. Manufacturers have been in business almost a hundred years, and only now are addressing the problem. Same thing with new models…all kinds of information for sales and service, nothing for parts education. Everyone must learn on the job.

Qualified personnel are difficult to find, so your best results will be if you train your people yourself. Promote from within on a scale of needed expertise, driver, stockman, back counter, front counter, phones. Always start new counter personnel at the back counter. They can get the most help, information, and actually see the vehicle if necessary. Technicians will educate a new counterperson better and faster than any other method. Every person has an area they are happiest working in, find the best fit for your personnel. A person is most productive when working in the area that they like. They make fewer mistakes, enjoy their work, have less attendance problem, etc.

Every person must know exactly what their job and their responsibilities are. Not just verbal, WRITTEN DOWN! You must create your own policy and procedure man-

ual, with every position defined, and all duties outlined. Only with a permanent “bible” for your department can you cope with ongoing personnel issues.

A few examples:

3) Attempt to fill all missed sales with local sources.

4) Verify all unfilled orders with both technician and service advisor.

5) Handle all “car down” orders as quickly as possible.

6) Process all core and warranty part returns daily.

7) Keep my area as neat as possible.

Analyze and define every position and discuss with each employee exactly what you believe their job duties are. The result creates secure feelings between you and your people about their work.

Here are a few thoughts concerning each position.

Driver Duties: 1) Maintain a professional appearance 2) Keep my vehicle clean and maintained daily.

3) Maintain a professional attitude with all my customers.

4) Organize my deliveries in the best way for time and distance.

5) Maintain contact at all times.

6) When not delivering, assist with receiving-shipping, and housekeeping.

7) Obtain training toward further advancement.

Parts Driver: One of the most important, yet lowest-paid and least-trained position. Many times, this is the only representative of the dealer to actually meet the customer face-to-face. Your driver is the symbol of your professionalism, pride, and sincerity in all transactions with your most frequent customers. These customers have the option of purchasing parts elsewhere, and if offended by a driver surely will. Let your drivers know how important they are to the image of the dealership, and that the customers are theirs as well as the dealers. Their uniforms must be clean and well kept, their appearance a credit to your

Receiving Clerk Duties 1) Maintain my area in a neat and clean, organized manner.

2) Complete all receipts every day.

3) Complete all paperwork every day.

4) Complete all stocking duties every day.

5) Report all errors, mistakes, problems immediately.

Shop Counter Duties 1) Fill all part requests as quickly as possible.

2) Record all transactions at time of sale.

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business. Delivery trucks must be clean, with easily read signs, not cluttered, but with name and phone numbers clearly stated.

Make each driver responsible for their vehicle. Check all fluids, tires, gasoline, etc. each night, in order to have them completely ready for the next morning’s business. Remember, your customers appreciate early deliveries rather than late ones. It is better to have several runs each day to different areas rather than one run that will take all day.

Short runs allow you to make an emergency run for that “special” customer. If you have a central location in town, divide your deliveries by area, east/west, or north/south, and set a schedule. Make sure all your customers are aware of your schedule. Always have some way to keep in touch with your driver—radio, pager, cell phone, etc.

Give your driver some discretion in the field. Allow him to make minor adjustments for damaged goods, returns, wrong parts, etc. Your customers will appreciate the quick handling of their problems. Drivers are responsible for obtaining all information when wrong parts are sent, since the second trip must be correct.

I make a note here about an unfortunate bias in our industry. I have found it unwise to use a female driver in a situation that calls for speedy deliveries. The typical garage or body shop customer is male, and when meeting a female driver, usually wants to

talk longer than he would with a male driver.

This creates a no-win situation for the female driver. If she stops to be friendly, she is delaying deliveries to the rest of her customers. If she is efficient, the man will sometimes interpret this action as curt or unfriendly, and may hesitate on placing his next order. None of this is her fault; it’s just the situation. I therefore have used only male delivery drivers, although I have absolutely no hesitation in placing women in any other parts department position. Indeed, some of my best parts salespeople have been women.

Receiving-Shipping: Stated in that order because receiving is the most common and the most important duty.

All incoming freight must be checked pieceby-piece. Quantity ordered, billed, and received must match. All packing slips must be checked and turned in to the manager for final accounting. Mark all exceptions on packing slips, also a separate exception report to the manager. For extra parts, make packing slips for posting; then make all claims after checking with the factory invoice. All part number changes must be posted, any bin locations changed daily, after all the receiving is done.

Remember, you must have accuracy in three places: physical on-hand stock, computer inventory information, and your accounting dollars. All three have to agree at all times.

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Parts received are generally in two classifications, stocking and special orders.

Stock orders are easier to handle. Every part has a location, and no pressure to deliver.

Orders are received in the morning and parts are on your shelves in the afternoon.

Special orders are a completely different situation. All special orders are to be considered high priority. A $2.00 part can be holding up a $1,000 job. After checking all the parts on the packing slip, separate pieces by order type. Priority is your shop, then wholesale, and finally retail.

With shop orders, speed is your first concern, followed by communication. Take all shop orders to a designated area near your back counter. Give written notification to your back counter personnel and also to the responsible service consultant. Parts should also be visible to the technicians when they are at the back counter.

Wholesale customers are next. Notify the counterperson responsible; then place the part in either the will-call or delivery area for your driver.

Retail customers are last, but they require the most handling. A copy of the special order is attached to the part; the part is placed in a special order section in alphabetical order. A copy of the order is placed in an alphabetical file, and another copy is used to contact the customer. A phone call is best, but a post card can also be mailed.

Special orders will always accumulate.

For reasons unknown, even when parts have been pre-paid, customers will not come back for them. You must clean out special order shelves on a regular basis. This is just a part of normal business.

The most important thing about shipping is keeping records. Duplicates of packing slips, carrier name and shipping number, all necessary information to track shipments must be kept in an organized file, preferably kept by carrier and date. Remember, if you cannot prove liability on lost shipments, you will have to assume the loss.

As you can see, the receiving, shipping, housekeeping portion of the department’s business is critical to all sales areas.

This is a good position for an assistant manager. You need someone with good organizational skills, who is good with paperwork, neat, and supportive of all the other personnel. This position is truly the foundation of a good parts department.

Shop Counter Personel As I have said before, the back counter is the best place to train a future counterperson. The technician cannot be lost or driven off by unfortunate delays or errors. The car, the technician, all of the necessary information, is here. Advice and help are available at all times. Your regular back counter personnel can always use the extra hands and feet, and the heavy volume of orders provides the greatest experience in the least amount of time.

Your back counter (service sales) is the best profit center and the backbone of all parts department sales. A good parts operation contributes to increased service and sales. Customers who have their car repaired in a timely manner return for more service, and continue to purchase vehicles at your dealership. The most important thing for service sales is the proper inventory of expected parts. You must never be out of parts for regularly scheduled service. Set minimum amounts (two services) for all part numbers. Not having simple items such as spark plugs, filters, etc. will give your customer the worst possible impression of your department and dealership.

A separate fast-moving stock area must be next to your back counter. Not only for filters and fluids, your service special order section must also be here. A separate shelf, in view of your technicians, is used for all “car down” orders. The part is a constant reminder to get the car into the shop and finished.

The back counter is also the center for phasing in new numbers and adjusting onhand quantities. Here is where you purchase parts from other dealers or more importantly, other parts suppliers, like NAPA and AUTO ZONE. If you have a regular monthly bill of over $1000 for your own car line, you are not managing your inventory properly. Independent part stores only carry the most popular parts, the same ones you should never be out of.

Every purchase of a part that has a factory number needs to be entered in your system. Instruct all of your countermen to use only factory numbers on purchase orders.

When you do your daily review, enter all these numbers as lost sales. You should only have to do this two times before the number comes up on your suggested stock order. If you do not catch these missed sales, you will continue giving away profits that rightfully belong to you.

If your dealership includes a body shop, assign one person to handle all these orders.

This position is mandatory training for a future wholesale counterperson. They must know how your best customer operates in order to work with him. Six months of dedicated involvement with a functioning body shop will give them the experience necessary to understand this customer’s point of view.

Remember, you are not just a parts warehouse. You are a partner in the auto repair business. Your people should know how their parts will be used. They should be aware of a technician’s primary needs, and which parts need to be available first. This attitude creates a bond between you and your customer that will benefit you both.

Retail Counter Personel After learning on the back counter; transfer your trainees to the front counter. By now they should be able to find the most common parts, and understand the repair procedures used in mechanical and body repair. At the front counter they will learn

www.autobodynews.com | MAY 2010 AUTOBODY NEWS 49

how to take care of a new kind of customer… the kind that can be extremely frustrating to serve.

The typical front counter (walk-in) customer is an amateur mechanic, who may or may not know the correct terminology of the part, or parts, that he needs. A trainee will learn to use illustrations, locations, and descriptions to determine the required parts.

These customers need more time per sale than any other. Patience is the primary requirement for this position. Other walk-in customers will be your local wholesale accounts; picking up orders.

This position, along with your parts driver, is the “face” of your dealership. The first few seconds of your customer’s experience determines all of his future purchases.

A smile, with a pleasant greeting, helps set the stage for future sales. An attitude of being “interrupted” however is unfortunately a common occurrence in many businesses. If you happen to notice this attitude, shift your employee to the back counter, where his frustration will do less harm.

Technicians know how to deal with this, and may help you save the employee. At the front counter the manager will also learn if the trainee is a salesman or an “order taker.”

Most of your employees will simply take orders. There are very few “natural” salesmen found in parts departments. Cultivate these people when you find them. This is the type of personality you want on the front counter,

and later, on wholesale telephones. Special traits to look for are friendliness, extra consideration, eagerness, keen sense of enthusiasm, and the desire to help. All of these characteristics are required to understand difficult customers, and again, patience! You are looking for someone who likes to solve other people’s problems. This employee will have ideas that encourage sales—by changing displays, promoting accessories, and looking for extra opportunities which promote growth. In other words, this is an “Atype” personality. This employee responds best to positive feedback, self-management, and performance rewards, and is one of your best profit-producing assets.

Let this person be the one who takes the overflow of your telephone business. He takes the calls from your main telephone number—not your direct wholesale lines.

This process allows gradual entry into telephone sales. Some time must be spent in this capacity in order to gain the experience necessary for the most difficult position; the voice of your dealership.

Retail Counter Duties 1) Keep work area neat and clean.

2) Maintain a professional image.

3) Maintain a professional attitude.

4) Greet every customer as soon as possible.

5) Maintain the sale. When parts are out of stock, check nearby sources, then special order.

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50 MAY 2010 AUTOBODY NEWS | www.autobodynews.com

6) Call customers when special orders arrive.

Wholesale Telephone Sales This position calls for your most experienced personnel. It is the voice of your department, and the hallmark of your competence. Many of your important customers will never see anyone except your driver. Their perception of you will be the person they talk to when they place their order. That perception must be the best one possible. Your employee will have to recognize exactly what the customer wants, without delay, and complete the transaction quickly.

Here is the perfect spot for your “Atype” individual. This person loves to hear the phone ring, has a smile in their voice, and makes friends easily. This employee enjoys getting ahead, reaching goals, and responds to rewards.

This individual will have every tool they need at their disposal. Telephone, computer, paper, order forms, pens, and stapler—everything should be at their station. Time management is the key to wholesale success. Every call needs to be handled as efficiently as possible, to keep your lines open for the next call. If any call is for more than two parts, train your personnel to always call back. Never keep a customer on hold. The hold button is your worst enemy.

Your next enemy is doubt. Time spent going to the bin to check on a part is time

wasted. Your telephone wholesaler must always be able to trust the inventory information available to them. If the inventory states that there is one part in stock, they must be able to sell it, without checking. The accuracy of your inventory is key. The parts manager is the one who should accept all responsibility for the accuracy of the inventory. You can allow your people to make inventory adjustments, but make sure they notify you of any and all changes that have been made. You need to know if your inventory errors are excessive, and why.

If you do your job right, an increase will be the natural result of your efficiency.

With proper training, you will always have personnel available to move up into sales positions. Simply add personnel as your demand increases.

Increasing business can bring on a new set of problems—a breakdown in communication being the most common one. Watch your telephone traffic, and be prepared to add additional direct phone lines when necessary. With a large wholesale operation, a separate line just for your drivers is also a good idea.

Some dealers employ outside sales personnel to promote their business. I have never done this myself, but you may find it that works for you.

Comments? Contact Larry Williams at ljoew2@gmail.com.

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