May 2020 West Edition by Autobody News

WE STEDITION

AUTOBODY AK / CA / HI / ID / MT / NV / OR / WA / WY

Trump, Congress Agree on New Stimulus Package by Dan McCaleb, The Center Square

President Donald Trump and congressional leaders have agreed on a new, nearly $500 billion stimulus package to help small businesses im-

pacted by stay-at-home orders in response to the COVID-19 pandemic. The $484 billion deal includes $310 billion for the Paycheck Protection Program so businesses can continue paying employees. It also includes an additional $60 billion for a small business emergency grant and loan program, $75 billion for hospitals and $25 billion for a new coronavirus testing program. “I urge the Senate and House to pass the Paycheck Protection Program and Health Care Enhancement Act with additional funding for PPP, Hospitals, and Testing,” Trump wrote See New Stimulus Package, Page 10

The Pandemic Has Led My Profit to Drop How Much? by Kent Carlson

The ongoing pandemic and the measures being taken to stem its advance are playing havoc with the economy here and around the world. With collision centers facing a period of reduced sales, some collision center owners may be wondering how this will impact their profitability. Let’s figure that out. XYZ Collision Center normally has sales of $100,000 per month with a gross profit margin of 40% and overhead expenses totaling $30,000 per month. A summary profit and loss statement for

this company would look like the following.

Table 1

We know we have sales of $100,000 in a normal month. We also know gross profit is equal to the gross profit margin times sales, or $40,000. See Drop How Much? Page 16

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38 YEARS

AUTOBODYNEWS.COM Vol. 38 / Issue 5 / May 2020

CA, OR, WA Do Not Have a Target Date for Reopening Economies At a news conference April 22, California Gov. Gavin Newsom said there is no target date to lift the stayat-home orders in California, Oregon and Washington. The three states formed a pact April 13 to work together to reopen their states’ economies and control the spread of COVID-19. The only specific step Newsom brought up at the April 22 news conference was allowing elective surgeries to resume, though there is not a set date for that yet either. Non-critical surgeries were banned in March to maintain enough

open hospital beds to treat an expected rise in coronavirus patients. The three states have since created enough capacity to treat COVID-19 patients and others, Newsom said. Newsom said testing needs to be ramped up considerably before officials can confidently lift stay-at-home orders. Currently, about 16,000 people a day are tested in California. The goal is to test 25,000 per day by the end of April, and 60,000 to 80,000 per day in the near future. Newsom said President Donald See No Target Date, Page 3

Most Shops Weathering The Storm – So Far by Gary Ledoux

On April 17, 18, and 19, Autobody News used its 19,000 shop email subscribers and also social media channels to conduct a survey of collision shops across the country to see how they were coping with the COVID 19 pandemic. The majority of shops responding were independently owned singe-point shops, those perhaps the most vulnerable to volatile market swings. Despite that, and a wide range of available work, (most shops operating at 25% to 75% capacity) most seem to be faring reasonably well. The majority of shops (59%) have not laid off any workers although 21% have laid off three-quarters of their people. Most shops have taken a number of precautions to protect employees and customers including use of gloves and masks, frequent hand-washing, etc. It is surmised that not many shops think the pandemic situation will last very long because only 19% have taken on work other than traditional collision repair.

The majority of shops have applied for financial assistance through the government’s CARES Act but have not received their funds yet. The sad truth is, those funds may never come because as of this writing, the funds have been exhausted. There are, however, other measures being debated to replenish the program (see related stories.) Wayne Stevens, owner of Stevens Collision in western New York is a single-point shop, certified with FCA, Hyundai, and Kia but with no DRP arrangements. At present he hasn’t laid-off any employees because he has a two-week backlog of work. He says, “My father always told me, ‘Take care of the people that come through your door, no matter what they want, and you’ll build your business.’” Doug Hassell owns Hassell Auto Body on Long Island in New York, another single-point shop that has been in business since 1963, and has enough work to stay busy—so far. The shop has no DRP arrangements and no dealer relationships although they See Body Shop Survey, Page 18

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CONTENTS Auto Repair Shops, Car Dealership Service Departments Changing Procedures Amid COVID-19 Pandemic ��14 CA Auto Body Shop Owner Buys Building, Adds Jobs ��6 CA Saving $40 Million a Day Thanks to Reduced Road Traffic Due to Coronavirus ��11 CA, OR, WA Do Not Have a Target Date for Reopening Economies ��1 Idled Rental Cars Fill Landscape ��10 LCCC Faculty Adapt to Online Courses, but Will Miss Teaching Students In-Person ��12 Pirate Garage Car Show Set for Early June ��24

Five Groups Ask Trump to Keep Vehicle Sales Operations Open ��28 Ford Recalls Expeditions, F-150s and Rangers for Rollaway Risk ��25 Ford Teams With GE, 3M to Make Ventilators, Personal Protective Equipment ��28

Giving Breaks to Drivers, Businesses ��58

Is COVID-19 Accelerating An Industry Disruptor? ��59 Money for Emergency Small-Business Loans

New Carvana Customers Can Delay Payments

Phillips - CCG Shares Body Shop Advice & “Best Practices” During Coronavirus Restrictions ��52 Yoswick - Shops Cautioned Tough Economy Could Spur More Counterfeit Parts, Pirated Software ��50

Up to 90 Days ��36 New COVID-19 Programs Focus on Service Departments ��60 OH Shop Helps to Supply WV Hospital with Equipment ��14 OR Auto Body Shop Making Protective Face Shields ��14 Shops Using Downtime Advantageously During COVID-19 Crisis ��43 Subaru Releases Statement on Pre- and Post-Scanning of Collision Vehicles ��4

NATIONAL Auto Glass Industry Responds to Those in Need ��22 Automakers Will Need Months to Get Factories Up and Running ��26 AutoNation to Lay Off 7K Employees, Cut Costs Deeply ��31 Business Leaders Share Thoughts About Collision Industry Pandemic and Recovery ��34 Coronavirus Has Dealerships Moving to Online Sales—and Car Buying May Never be the Same ��63 COVID-19 Forces Extensions of Plant Closings ��22 Detroit 3 Gain Big Market Share as COVID-19 Infects Sales, April Looks Worse ��56 First Funding for Small-Business Loans Depleted, Second Round Just Approved ��54

800-699-8251

Corvette Orders ��25

Anderson - Now More Than Ever, Shops Need

Chess - A Quick Course on Primers ��38

ltedesco@autobodynews.com

GM Suspending New 2020 Chevrolet

Most Shops Weathering The Storm – So Far ��1

of COVID-19 on Collision Repair Industry ��47

AUTOBODY

GEICO, Farmers, Liberty Mutual Join Insurers

COLUMNISTS

to Renew Their Focus on ‘Capture Rate’ ��37

Call or Email Now for Rates:

Ford Tests Social-Distancing Wearables ��63

has Dried Up, Second Tranche Approved ��30

Attanasio - CCC Analyst Forecasts Impact

Trump promised to provide hundreds of thousands of testing swabs in the next few weeks. He said new testing sites will be established throughout the state, particularly in “testing deserts,” like

Tesla Offers to Make Ventilators at its Factory in Response to Coronavirus Shortages ��6 Tesla Under Pressure as County Sheriff Defines

INDEX OF ADVERTISERS

REGIONAL

No Target Date

rural areas and predominantly minority communities. Additionally, Newsom said, California will expand contract tracing— reaching out to everyone who has been in close contact with an individual who tests positive for the novel coronavirus, recommending they self-isolate and monitoring them for symptoms.

Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Contributing Writers: John Yoswick, Janet Chaney, Toby Chess, Ed Attanasio, Chasidy Sisk, David Luehr, Stacey Phillips, Victoria Antonelli, Gary Ledoux Advertising Sales: Joe Momber, Bill Doyle, Norman Morano, Andrew Staicer (800) 699-8251 Office Manager: Louise Tedesco Digital Marketing Manager: Bryan Malinski Art Director: Rodolfo Garcia Graphic Designer: Vicki Sitarz Online and Web Content Editor: Abby Andrews Accounting Manager: Heather Priddy Editorial/Sales Assistant: Randi Scholtes Office Assistant: Dianne Pray

Serving Alaska, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington and Wyoming. Autobody News is a monthly publication for the collision industry. Permission to reproduce in any form the material published in Autobody News must be obtained in writing from the publisher. ©2020 Adamantine Media LLC. Autobody News P.O. Box 1516 Carlsbad, CA 92018 (800) 699-8251 (760) 603-3229 Fax www.autobodynews.com editor@autobodynews.com

American Icon Automotive Finishes �� 6

Kia Motors America, Inc �� 21

Audi Wholesale Parts Dealers �� 61

Kia Motors Wholesale Parts Dealers ��44-45

AutoNation Roseville ��8-9

Kia of Carson �� 38

AutoNation South Bay Wholesale �� 30

Kia of Irvine �� 31

BMW Wholesale Parts Dealers �� 50

Larry H. Miller Chrysler-Jeep-Dodge-Ram �� 12

Car Pros Kia �� 34

Malco �� 25

Car Pros Kia Renton �� 42

Mazda Wholesale Parts Dealers �� 63

Certified Automotive Parts Association �� 14

Mercedes-Benz Wholesale Parts Dealers �� 48

Classifieds �� 62

Michael Hohl Motor Company �� 6

Colortone Automotive Paints �� 26

MINI Wholesale Parts Dealers �� 50

Courtesy Chevrolet San Diego �� 43

Montipower Americas, Inc �� 10

Cutter Chrysler-Dodge-Jeep-Ram �� 22

MOPAR Wholesale Parts Dealers �� 35

DCH Auto Group Temecula �� 18

Moss Bros. Chrysler-Jeep-Dodge �� 15

Eagle Abrasives, Inc �� 17

Nissan/Infiniti Wholesale Parts Dealers �� 57

Factory as ‘Non Essential Business’ Amid

Enterprise Rent-A-Car �� 36

Porsche Wholesale Parts Dealers �� 59

C-19 Outbreak ��22

Equalizer Industries, Inc. �� 20

PPG Refinish �� 13

First Auto Group �� 24

Prime Auto Center �� 28

Ford Wholesale Parts Dealers �� 53

Reno Buick-GMC �� 12

Frank Subaru �� 40

SATA Dan-Am Company �� 2

Galpin Motors �� 49

Sierra Chevrolet-Honda-Subaru �� 47

Garden Grove Kia �� 31

Southern Polyurethanes, Inc �� 23

Glenn E. Thomas Dodge-Chrysler-Jeep �� 5

Spanesi Americas �� 11

GM Wholesale Parts Dealers �� 55

Subaru Wholesale Parts Dealers �� 51

Haldon Company �� 27

Tacoma Dodge-Chrysler-Jeep-Ram �� 29

Honda-Acura Wholesale Parts Dealers ��32-33

The Bay Area Automotive Group �� 41

Hyundai Wholesale Parts Dealers �� 58

Tsunami Compressed Air Solutions �� 16

Industrial Finishes and Systems �� 7, 64

Vintage Flatz/Cumberland Products �� 19

Innovative Tools & Technologies, Inc �� 39

Volkswagen Wholesale Parts Dealers �� 54

Kearny Mesa Subaru-Hyundai �� 37

Volvo Wholesale Parts Dealers �� 63

Tesla’s Ventilator is Using a Model 3 Touchscreen and Other Car Parts ��4 The Pandemic Has Led My Profit to Drop How Much? ��1 Trump, Congress Agree on New Stimulus Package ��1 Understand How the Families First Coronavirus Response Act Affects You ��20 Used-Car Sales: Tracking the Good, the Bad & the Options ��60 Why You Should Keep Advertising During a Major Market Downturn ��63

Kia Downtown Los Angeles �� 46 autobodynews.com / MAY 2020 AUTOBODY NEWS 3

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Tesla’s Ventilator is Using a Model 3 Touchscreen and Other Car Parts by Joey Klender, Teslarati

Tesla released a video highlighting the company’s ventilator manufacturing process, which incorporates parts from its all-electric vehicles.

The video update was shared via Twitter on April 5, and shows a group of masked Tesla employees, including VP of Vehicle Engineering Lars Moravy, working in an engineering lab. Company Engineering Director Joe Mardall outlined the company’s current process of development for the ventilators, which consists of a design using Tesla car parts. The use of parts has allowed Tesla to develop machines that can assist patients in breathing while infected with the virus, while not taking away from the amount of actual ventilator parts that exist right now. The ventilator prototype uses a hospital-grade air supply system that

feeds into a mixing chamber. This combines air and oxygen to create breathable air. The air then is pressurized and fed into tubes, providing a patient with air, which alleviates their breathing issues. COVID-19 is primarily a respiratory virus that attacks a patient's lungs and breathing patterns. Ventilators also have screens that provide medical professionals with information like tidal volume

flow and volume. The shortage of ventilators across the U.S. is due to a low availability of the machines. Medtronic CEO Omar Ishrak said his company has quadrupled the production of ventilators to combat the shortage. While this increased production rate has helped provide hospitals in need with additional machines, there is still a massive shortage of ventilators.

per breath, respiratory rate (usually set by a doctor to give a patient the proper amount of breathable air), and oxygen concentration. These figures will be displayed on a Model 3 dash screen powered by the vehicle’s infotainment computer and will show air pressure, air-

Tesla plans to build its in-house breathing apparatuses with car parts as a strategy to “help out the medical industry without taking away from their supply.” Mardall said in the video Tesla’s reliable car parts could help solve the shortage of ventilators, as they

are readily available and produced in high volume. As ventilators remain a rarity in some locations of the world, Tesla’s influx of available car parts could solve a big part of the coronavirus issue, as there seems to be no ceiling on how many machines the company will be able to produce. Tesla made plans to help with the production of ventilators in late March after CEO Elon Musk said he had a conversation with Medtronic’s engineering team. Tesla’s team of engineers found their company’s vehicle parts were more than capable of being used in ventilators. After Medtronic’s first Tesla-purchased ventilators arrived in New York City on April 3, the company has shifted its focus to ventilators. Vehicle production has shut down at the company’s Fremont, CA, facility and Tesla’s engineering team has turned its focus to the health care field. Its preparation of the first Tesla ventilator prototype is evidently well under way. We thank Teslarati for reprint permission.

Subaru Releases Statement on Pre- and Post-Scanning of Collision Vehicles With each new model, Subaru of America, Inc., makes advancements in technology that assist in the operation and safety of our vehicles. These advancements incorporate different sensors, cameras and control units, as well as other components, to assist with the functionality of the vehicle. They are a critical part of vehicle operation and the safety features in each Subaru vehicle. In the event of a collision, these components could incur damage, which may trigger diagnostic trouble codes (DTC), but may not be evident via a warning light on the instrument cluster. Subaru defines a collision as damage that exceeds minor outer body panel cosmetic distortion. During collision repairs, it is critical the proper function of these systems and features be restored back to pre-accident condition and performance. If these components are not evaluated, it could have a direct effect on vehicle operation and safety. For Subaru vehicles from model year 2004 and forward involved in a collision, Subaru collision repair procedure requires pre-repair scanning be performed.

Pre-scanning will reveal DTCs for items not functioning properly in the vehicle. It allows a shop to identify any issues early in the estimate process, allowing a more complete estimate and encompassing repair process. Additionally, Subaru collision repair procedure also requires post-repair scanning be performed on these vehicles. Post-scanning is critical in ensuring the malfunctioning items have been repaired and there are no remaining DTCs. It may also assist in assuring the appropriate calibrations and reinitializations have been performed. To accurately determine whether DTCs are present in a vehicle, Subaru recommends the use of the Subaru SSM4 diagnostic tool. Information regarding the purchase of the Subaru SSM4 diagnostic software application and Denso DST-i interface device can be found in the Subaru Technical Information System (STIS) at https://techinfo.subaru. com/Information/Special Tool Information. If a Subaru SSM4 diagnostic tool is not available, Subaru recommends the use of an asTechTM device. The asTechTM device per-

forms a diagnostic scan remotely using a genuine Subaru scan tool. Information regarding the purchase of the asTechTM tool can be found at https://astech.com/. Subaru does not recommend the use of a generic scanning device as we cannot guarantee the content or accuracy. Always refer to the applicable Subaru Service Manual or Technical Service Bulletin (TSB) for the most up-to-date repair procedures. Some safety and driver assistive systems will require inspections, calibration and/or aiming after collision or other body repairs. Any time a collision repair is performed, always refer to the appropriate Body Repair Manual and Service Manual for the most up-todate repair procedures. All Subaru technical information including Body Repair Manuals, Service Manuals, TSBs and more are available for purchase in STIS at https://techinfo.subaru.com>Log in/ My Account > Purchase a Subscription. Subscription options are listed on the site. If a collision repair is necessary, Subaru strongly recommends any repairs be performed by a Subaru Cer-

tified Collision Center using Subaru Genuine Parts designated for use in the specific Subaru vehicle being repaired, including all mechanical and electrical parts, body panels and structural components. Subaru Genuine Parts are manufactured to the same specifications and tolerances as the parts installed on factory new Subaru models. The use of Subaru Genuine Parts will help ensure the vehicle is restored back to its original pre-collision condition. The use of non-OEM components that may not be manufactured to the same specifications or tolerances as Subaru Genuine Parts could compromise occupant safety in a subsequent collision. The use of any aftermarket or substitute structural, body, mechanical or electrical repair parts is not covered under the Subaru of America, Inc., limited warranty, replacement parts limited warranty or Subaru Added Security (SAS) agreements or contracts. Subaru of America, Inc., is not responsible for any resultant damage caused by the use and/or installation of any aftermarket substitute part(s). Source: Subaru of America, Inc.

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Tesla Offers to Make Ventilators at its Factory in Response to Coronavirus Shortages by Gene, Teslarati

Tesla CEO Elon Musk has offered to make medical ventilators at the company’s Fremont, CA, factory if a shortage should arise from the ongoing battle against the coronavirus. New York City Mayor Bill de Blasio reached out to Musk in a cry for help after seeing his offer to make ventilators. “Our country is facing a drastic shortage and we need ventilators ASAP—we will need thousands in this city over the next few weeks. We’re getting them as fast as we can but we could use your help! We’re reaching out to you directly,” said de Blasio. The offer by Musk came as a surprise to many, considering his recently publicized belief the global anxiety around the COVID-19 virus has been blown out of proportion and the danger of panic far exceeds the danger of the virus itself. Musk’s controversial statements provoked a large response within the Twitter community, including that of Raja Abbas, a Tesla owner within the medical field. “Please repurpose your factory

CA Auto Body Shop Owner Buys Building, Adds Jobs by Daily Republic staff

Jon Ramirez went to work at his parents’ auto repair shop in Suisun City, CA, in 1980, and purchased the shop in 2013. It became a Fix Auto franchise, under the name Fix Auto Fairfield-Suisun City, in 2014. After seven years of leasing the building at 1510 Humphrey Drive, Ramirez secured a Small Business Administration business loan to purchase the 17,288-square-foot building and added three jobs. The Bank of the West and the Bay Area Development Co. helped Ramirez secure the SBA 504 Loan—part of $50 billion in loans that has helped create 2 million jobs since Feb. 15, 2012.

to make ventilators which are needed ASAP. I am a Tesla owner and love the company. You have to stop being an idiot about this. This is a massive disaster. Ask the doctors in the field,” read a tweet by Abbas was aimed at Musk.

contagious COVID-19 coronavirus that has strained hospitals and medical facilities with patients outnumbering available machines. The ventilator has become a critical first line of defense for patients infected by the virus, which at-

“Tesla makes cars with sophisticated hvac systems. SpaceX makes spacecraft with life support systems. Ventilators are not diﬃcult, but cannot be produced instantly,” — Elon Musk Musk agreed to the request, noting Tesla and SpaceX already have experience with manufacturing devices that support human respiration. “Tesla makes cars with sophisticated hvac systems. SpaceX makes spacecraft with life support systems. Ventilators are not difficult, but cannot be produced instantly,” said Musk over Twitter, further adding, “Which hospitals have these shortages you speak of right now?” The need for additional ventilators has taken center stage in the ongoing fight against the spread of the

tacks the lungs and prevents it from providing vital oxygen to organs within the body. With more than two-thirds of coronavirus patients in critical condition needing respiratory support, hospitals and intensive care units in areas with a high concentration of infected patients have seen their limited supply of ventilators become fully exhausted. In attempts to prevent the spread of the novel coronavirus and reduce strain on intensive care units, governments around the world have implemented social distancing

measures by way of school closures, work from home policies and complete lockdowns. The San Francisco Bay Area was the first in the nation to implement a strict “shelter in place” order that required people to stay home and non-essential businesses to shut down. Tesla’s factory in Alameda County is among the businesses impacted by the policy that took effect March 17. It managed to remain in partial operation following a high-profile exchange with the county sheriff’s department, cutting its workforce by 75%, from 10,000 employees to 2,500 employees, though it announced March 19 it would suspend production at the Fremont at the end of the day March 23. It also said it would suspend production at its New York factory. Musk’s offer to manufacture ventilators from the factory can be seen as a welcome invitation for medical facilities that continue to support the ongoing battle against the spread of the coronavirus. We thank Teslarati for reprint permission.

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Continued from Cover

Idled Rental Cars Fill Landscape by Matthew Thayer, The Maui News

The sudden drop in visitors to Maui due to the global COVID-19 pandemic has sent rental car companies scrambling to find places to park their idled fleets. A helicopter flight over Kahului Airport on April 7 provided by Windward Aviation pilot Don Shearer showed tens of thousands of cars parked like sardines around the airport in former sugar cane fields, along roads and in maxed-out parking lots. There are also cars parked near Costco, behind the former Kmart building and in the Maui Arts & Cultural Center parking lot. Maui Airports District Manager Marvin Moniz said April 7 there are about 18,000 rental cars idle on Maui and another 2,500 “out and about.” “They’re still renting cars,” he said, adding he expected most of those to be turned in soon as well. For perspective, if the average rental car measures 15 feet in length, 20,000 cars could form a bumper-tobumper line of vehicles stretching

from the airport to Kaanapali and back with more than a mile of cars left over.

tain,” Simons said. “I’ve heard we have more rental cars on Maui than all the other islands combined. We have 450 for a little family company.” Simons said Kihei Rent-A-Car currently has about 50 cars rented. “We’re still here for locals when they need cars,” he said. “I rented a couple cars today to people who are having car troubles.” He said the drop in Jammed together like sardines, rental cars sit idle in a business has taken a toll former sugar cane field near Kahului Airport on April 7. on the company’s emCredit: Matthew Thayer ployees. “There’s no certainty when “It’s extremely tough,” Simons we move on from this,” Moniz said. “Everybody’s furloughed. It’s said. “We’re kind of winding down pretty much just family here. We’re now. By April 10, there may only be all doing our part.” one or two Mainland flights, maybe Simons said he expects to sell none.” some of his fleet. Kihei Rent-A-Car Manager “We rent used cars, so we’re alRyan Simons says rental cars re- ways selling off older ones as we upquire expenses like registration fees grade our fleet. We have some cars for sale.” whether they are rented or not. “We’re not making any money, We thank The Maui News for and they still cost money to main- reprint permission.

New Stimulus Package on Twitter. “We have a deal, and I believe we will pass it today,” Senate Minority Leader Chuck Schumer told CNN. The U.S. Chamber of Commerce heralded the news in a statement. “We applaud congressional leaders and the administration for reaching a deal to increase desperately needed funding to support America’s small businesses during this difficult time,” said Neil Bradley, executive vice president and chief policy officer, U.S. Chamber of Commerce. “Every hour of every day, small businesses across the country are being forced to make difficult decisions due to the significant revenue disruptions caused by the coronavirus.” We thank The Center Square for reprint permission.

AUTOBODY

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CA Saving $40 Million a Day Thanks to Reduced Road Traffic Due to Coronavirus by Evan Symon, California Globe

A UC Davis study has found that since stay-at-home orders have been put into effect, California has been saving around $40 million a day due to reduced traffic and reduced crashes. According to the study, traffic has gone down on highways by as much as 55% compared to last year. The study also found total crashes had been reduced by nearly two-thirds. Between March 21 and April 11, there were 1,128 collisions in 2019, compared to 450 in 2020. The combined total of property damage, healthcare costs, insurance figures, emergency services and other resulting figures amounted to $40 million a day being saved, or, as of April 20, more than $1 billion so far. “The savings was about $40 million a day,” said Fraser Schilling, UC Davis Road Ecology Center co-director, in a Los Angeles Times interview. “That’s about $15 billion over a one-year period, which is almost the size of the state portion of California’s transportation budget for a year.

“Suddenly you have much fewer cars. So it’s much safer to be a pedestrian or cyclist these days.” California hasn’t been the only beneficiary of reduced traffic. Oil prices have remained below average, with prices hitting a record low

into the negatives April 20, signaling cheaper gasoline prices and cheaper plane fuel as relief for the struggling airline business. Insurance companies have also been reporting billions in profits since March, as fewer insurance claims due to fewer cars on the road have led to a larger influx of money. “COVID-19, especially the economic effects, have been tough on a lot of people,” explained automo-

tive analyst Andrew Mueller. “But we’ve been seeing all these silver linings. Like pollution in L.A. dropping to levels we haven’t seen in decades. But also now essential workers are getting a break at the pumps. Airlines are hemorrhaging less money due to lowered fuel costs. Less crashes are happening, and we’ve seen crash deaths go down dramatically. “This is still doing so much economic harm right now, and we still don’t know what the full extent will be. California is saving money through this, but they’re losing much more per day in total through lost taxes and revenue,” Mueller said. “Right now I’m personally worrying about GM, Ford, Chrysler and Tesla making it through, as well as tire companies and things like that. But we need to take the positives in this where we can get it. And I have to say that less injuries and less deaths from car accidents freeing up hospitals to help treat coronavirus more is one of those positives. “Politically, with the state budget coming in soon, we may see a reduction in highway and road services for a year because of this. The Cali-

fornia Highway Patrol isn’t overseeing nearly as many cars anymore, for

example,” Mueller said. “During the last recession many law enforcement departments nationwide made severe cuts simply due to budget reasons, and now it’s up again, this time with fewer cars on the road, not to mention crime rates mostly dropping. “We’ll see where this leads.” It is expected that the state will save $40 million a day in car collision related costs until stay-at-home orders are lifted, which is not expected in most places in California until at least May. We thank the California Globe for reprint permission.

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LCCC Faculty Adapt to Online Courses, but Will Miss Teaching Students In-Person by Kathryn Palmer, Wyoming Tribune Eagle

When Robert Benning returns to teach auto body repair classes at Laramie County Community College, the 13 students he’s taught since fall semester won’t be joining him in the lab. Instead, they’ll be learning how to repair cars via the videoconference program called Zoom. It’s a reality instructors across all disciplines, at colleges across the country, are adapting to this spring in an effort to practice social distancing and stop the spread of COVID-19. LCCC’s instructors are doing their best to make it work and finish the semester, but some lessons are difficult to replicate online. “Initially, I thought it couldn’t be done,” said Benning, who has taught in-person auto body repair courses for 13 years. “The way that I had been teaching was hands-on. … During a regular year, it’s about 70% of work in the lab and 30% in the classroom.” Soon after COVID-19, the novel coronavirus that has killed more than 3,000 Americans, first appeared in Wyoming early last month, LCCC followed the lead of hundreds of other colleges and universities in the nation and announced it would be moving all instruction online for the remainder of the semester. To give teachers—especially those like Benning who’ve never taught online before—a chance to adapt their courses, the college extended spring break by two weeks. “This is the first time I’ve ever been put in a position like this,” Benning said. “I had to reimagine the entire course and come up with a way to teach them online.” After brainstorming with a handful of other instructors, Benning has decided he will evaluate students by recording himself in the shop and requiring students to use Zoom to tell him which tools and maneuvers to use to fix the cars. But Benning knows his course will be a “work in progress,” and said, “It’s not a replacement for what we normally do.” Student access to the technology required to participate in an online class they didn’t sign up for

emerged as one of the biggest concerns for instructors and LCCC administrators. The college sent out a technology survey soon after the school closure announcement in an attempt to identify students in need. Several teachers, including Benning and communications instructor Holly Manning, also followed up with their own students.

“My first concern was how to troubleshoot for those students who may not have the access to be able to do what we are asking them to do,” Manning said. “We are a community college, we are open access and accept anyone, and a lot of our students don’t have the luxury of having WiFi or a computer at home.” But Manning said the college’s response to filling those gaps has eased her concerns about inequitable access to online learning tools. According to Kari BrownHerbst, LCCC’s interim vice president for academic affairs, the college has prepped 250 laptops over the past week to distribute to students. Local internet providers, like Charter, have also started offering 60 days of free WiFi to households with K-12 and college students that don’t already have it. “Offers like that have made it so I’ll have more options with those students who didn’t have access to the internet before,” said Manning, whose goal is to prioritize flexibility during this semester. Manning will be holding daily lessons via Zoom, and any student from any of her six classes is free to join, though it won’t be mandatory, because she’ll post the recordings online afterward. She’s already been emailing with her students over the break to prepare them for the change. Some of them are indifferent to it, Manning said, while others have doubts.

“I have my ideal for how the class could work,” she said. For instance, in her public speaking classes, the ideal is for students to deliver a live speech. But if that’s not possible, a recording could suffice. “There’s also 10 other ways a student could do it in these circumstances, and I’ll accept any one of those.” Although Manning has taught online courses before, and was familiar with the technological aspects before COVID-19 ambushed higher education, there’s one thing a videoconference call can’t show her. “What’s always been a struggle with online learning, it is always up to a student to tell me when they are struggling,” Manning said. “When a student is in front of me, and we develop rapport, it’s a lot easier to detect. I’m going to miss having that ability.” For Benning, the auto body repair teacher who three weeks ago thought teaching his course online would be next to impossible, reformatting his course hasn’t been the

hardest part of the past few weeks. “The best part of teaching is having your students with you every day,” said Benning, who teaches the same cohort of students for 25 hours a week. “The main reason a lot of us teach is watching the students progress in their skillset and confidence level. Usually the spring semester is where you see students get that confidence.” While many other colleges have already canceled spring graduation ceremonies, LCCC hasn’t made an official announcement yet. But Benning suspects graduation, where he’s always been able to give his students a heartfelt sendoff, is “probably not going to happen” this year. He’s not sure when—or if—he’ll see his students in person again. “As close as we get as a group, my students usually stay in contact with me,” Benning said. “I’m hopeful this class does the same thing.” We thank the Wyoming Tribune Eagle for reprint permission.

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OH Shop Helps to Supply WV Hospital with Equipment

Auto Repair Shops, Car Dealership Service Departments Changing Procedures Amid COVID-19 Pandemic

By Alex Hines, 12 WBOY

by Dave Kunz, ABC 7 News

Like many businesses, Murray’s Auto Glass in Marietta, OH, has been closed as part of the precautions against the COVID-19 pandemic. But when a nurse friend of owner Dennis Farrar came to him worried for her safety, he and his crew jumped in to help by shifting production from auto glass to face masks. “That was the initial idea. I thought, gosh, we could make these. I’ve got the 1/32nd polycarbonate in stock, I’ve got 10 sheets, it’s sitting here. We closed anyway, so why not?” Farrar explained. His crew started small, making only a dozen of the face masks, and sending them to the WVU Medicine hospital in Parkersburg, WV. He explained they’re not built like the ones hospital staff may be used to, but they come with some advantages, too. To read more, see 12 WBOY News.

Everyone’s being safer these days. They’re washing hands and staying away from others when possible to avoid contracting the virus. But what if your car needs to go in for service? Most repair shops are playing it very safe now. “Obviously we’re going to wipe down the steering wheels, the key fobs, the door handles. We try and do everything to keep it as clean as possible. And then once the technician works on it, they’re obviously going to be wearing their gloves, with the masks, and so on,” said Mike Wright, owner of RM Automotive in Northridge, CA. Auto repair is considered essential business, and shops are allowed to remain open during the period of restrictions. “I have quite a few customers that work in hospitals right now and they need their car. It’s really important,” noted Wright. From small shops like RM Automotive to huge dealerships, the repair industry wants to get the word

out that they are there if you need them, with an eye on safety. “All my staff, service department as well as my parts department, are following the CDC guidelines. They have the masks, they have the gloves and they have the hand sanitizers,” said Mohammed Basith, general manager of Carson Nissan. And this particular dealership has reconfigured its customer waiting area to keep people at least 6 ft. apart. This goes along with reminder decals on every glass door about that physical distancing guideline. For new car dealerships, the pandemic presents a two-fold problem. First, how to handle service and repairs, and secondly what to do about sales. As far as the latter goes, hardly anyone’s buying cars these days. But this is a time of technology, so many transactions can be done virtually. “We launched what we call a ‘buy from home’ program. We’ve had about 4,000 dealers sign up already who are willing to complete the

paperwork online and deliver the vehicle to their home,” said Mike Darrow, president and CEO of TrueCar. com, an online service that connects buyers with dealerships. And if you are in the market for a car right now, auto manufacturers are offering some big incentives. “Nissan has stepped up with some great, great incentive programs. Like the 90-day deferred payment program. And then we have a great 0% for 60 months,” Basith said. Much of the U.S. economy has ground to a halt in recent weeks. But the auto repair industry hopes that their portion of it is just in a slowdown. A temporary one, that doesn’t last any longer than it has to. We thank ABC 7 News for reprint permission.

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OR Auto Body Shop Making Protective Face Shields by Kohr Harlan, KOIN 6

Normally, the people donning protective gear would be fixing wrecked cars—but at Central Auto Body in Portland, OR, these are not normal times. With fewer wrecked cars to fix, Central Auto’s owner, Bret Bothwel, and some of his employees converted an auto body building into a protective face shield production line. Soon, they’ll begin higher volume production, making face shields for medical workers and first responders. “So what I’m trying to do is employ technicians that are pretty crafty by nature. They can assemble just about anything,” said Bothwel. “If they can fix a wrecked car they can certainly figure out how to build a mask or a shield for medical people.” Bothwel says he’s fronting money for purchase of plastic foam and elastic that go into shields. Suppliers have chipped seed amounts of materials for free, while some suppliers have sold him material at their cost. But to ramp up produc-

tion, Bothwel says he’ll need help with money he’s raising in a GoFundMe campaign. He says he’ll be able to produce as many masks as he has money to make and that could be thousands and thousands. “We’re just trying to do our part,” said Bothwel. “We have a ton of people in our own company that have heard about it and said they want to volunteer their time even though they’re still working for us, they’re still wanting to get involved.” These are shields that might normally cost about $20 delivered, but Bothwel says as long as donations are there, he will keep making shields and providing them to medical people and first responders for free. It is another testament to the good brought out in people and companies by the bad times that have suddenly engulfed our lives. We thank KOIN 6 News for reprint permission.

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Continued from Cover

Drop How Much? The difference between sales and gross profit is the cost of goods sold, so we can enter $60,000 for that item. Overhead is entered at $30,000. And finally, the operating profit is equal to gross profit less overhead, or $10,000; on sales of $100,000, this is a reasonable operating profit of 10%. But what happens to the profit if sales were to drop by 10%? Let’s figure that out.

Sales would now fall to $75,000. If we follow a similar process, filling out the remainder of the profit and loss statement, we see the operating profit falls to $0. With a drop of only 25% in sales, we have a drop of 100% in our profit! But what if sales dropped even further than that? What if sales dropped by 50%, what would happen to the profit?

mal level. For these centers, the analysis above is overly optimistic. Without management acting to control labor costs, the gross and operating profit figures would be lower than reported in the tables, and the impact on profit or decreases in sales would be more severe. Second, I mentioned overhead would not decrease without manage-

Table 4 Table 2

If sales fall by 10%, the new sales level would be $90,000. If we assume for the moment the gross profit margin remains at 40%, then gross profit would be $36,000 (i.e., $90,000 x 40%). This would make the cost of goods sold equal $54,000. XYZ’s overhead would not be expected to drop significantly merely because sales drop. So, assuming management doesn’t take specific steps to lower overhead, we will leave this at $30,000. This results in an operating profit of $6,000. Sales dropped by 10%, but operating profit dropped 4 times more, by 40%! Well, what if things get a little bit worse? What if sales fell 25%?

Table 3

In this case, XYZ would show a loss of $10,000. Profit would have dropped by 200% while sales fell by only 50%. For XYZ to merely break even with sales 50% lower than normal, it would need to reduce overhead and costs by another $10,000 each month. A couple of assumptions are embedded in these calculations. First, I assumed the gross margin would remain at 40% for each of these scenarios. This is a fairly reasonable assumption for facilities with flat rate or commission production employees. As production drops, the flat rate or commission pay for these employees drops proportionately and the gross margin remains fairly constant. However, collision centers with numerous salaried or hourly production employees would not see their labor costs drop proportionately with sales decreases. Unless management cuts hours or reduces hourly rates or salaries or lays off or fires employees, labor costs would remain constant at the nor-

ment specifically taking steps to reduce it, and we would assume overhead would remain constant in these scenarios. Were management to act in these scenarios to lower overhead, then the results presented here may be more pessimistic than would

actually occur. The results presented are based upon the normal sales, gross profit margin and overhead of XYZ. If the normal levels for your business differ, you may see your profit drop-off at a different pace than XYZ. To that end, I’d encourage you to substitute your normal levels into the above analysis. Here is the take-away from this analysis: When sales drop significantly, management needs to act swiftly to reduce overhead. In the case of shops with hourly or salaried production employees, management also needs to act to reduce labor costs. Without taking these steps, a collision center’s profitability can be eliminated quickly, even with surprisingly small decreases in sales. Kent Carlson, the founder of Ad Meliora Consulting, has more than two decades of experience assisting body shops with moving ‘toward better.’ To contact him, call (847) 3720527 or email kent@admeliora.org. For information on a webinar in which Kent discusses this topic, visit www. collisionresourcesinc.com.

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Continued from the Cover

AUTOBODY are certified by FCA, Honda, Nissan, Lexus and a few others. Hassell writes, “In our shop, we work for the customer. Our customers are our friends, and we make things right for them.” When asked how he was handling his employee situation, Hassell replied, “We had one guy that was getting ready to retire, so he took this opportunity

Analysis of the Body Shop Survey

to do just that, and gave a younger guy a chance to stay on. That was very gracious of him. Other people were in a financial situation that would allow them to take a couple of weeks off without pay so that worked out. Plus, we have shifted hours around for some people and gone to a no-overtime policy. So, it’s all worked out.” Hassell not-

100%

Independently operated single-point shop Independently operated with two or more locations

NUMBER OF RESPONSE(S):

RESPONSE RATIO:

ANSWER:

87.2%

9.5%

MSO (Caliber, CARSTAR, Service King, etc.)

3.1%

No Response(s)

100%

TOTALS:

restoration work for the brands they usually handle—mainly Porsche and BMW. And one shop in a snow-belt area has taken on more rust-repair jobs to keep busy. Read Autobody News on-line at autobodynews.com and in-print to keep up with the industry’s latest developments.

2. Given the current pandemic situation, to what degree is your shop operating? (Choose one)

1. What is your type of shop? (Choose one) ANSWER:

ed that in his area of Long Island there is a heavy concentration of shops. Some are busy, some are dead. One shop in northern California noted that their DRP work had all but dried up so they were knocking on doors of businesses that were still open to find work. One highend shop in Utah has taken on some

NUMBER OF RESPONSE(S):

RESPONSE RATIO:

100%-plus (backlog of work)

5.3%

100% - 75%

17.0%

75% - 50%

22.3%

50% - 25%

27.6%

25% - 5%

21.2%

We’re temporarily closed

6.3%

No Response(s)

100%

TOTALS:

Delivering Customer Happiness

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18 MAY 2020 AUTOBODY NEWS / autobodynews.com

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3. Have you had any layoffs due to work changes? (Choose one) ANSWER:

100%

Yes - Laid off a quarter of my staff

4. What changes have you implemented in your workplace? (Choose all that apply)

NUMBER OF RESPONSE(S):

RESPONSE RATIO:

ANSWER:

NUMBER OF RESPONSE(S):

RESPONSE RATIO:

12.7%

Closed front office

29.6%

Pickup / deliver customer cars

54.9%

100%

Yes - Laid off half of my staff

6.3%

Yes - Laid off three-quarters of my staff

21.2%

Sanitation stations / enforce social distancing

78.0%

No - Have not had to lay off anyone

59.5%

Use face masks and rubber gloves regardless of the shop operation

56.0%

Other

16.4%

100%

No Response(s)

TOTALS:

5. Have you taken on any other type of work such as restoration or custom work?

TOTALS:

6. Have you applied for assistance under the CARES Act just passed by Congress? (Choose one)

NUMBER OF RESPONSE(S):

RESPONSE RATIO:

ANSWER:

Yes

19.1%

73.4%

If yes, what type of work? Comment below

7.4%

No Response(s)

100%

ANSWER:

100%

TOTALS:

NUMBER OF RESPONSE(S):

RESPONSE RATIO:

Yes - I have submitted a application but have not yet received the funds

62.7%

Yes - I have submitted a application and have already received the funds

10.6%

8.5%

11.7%

6.3%

100%

No - But I plan to at a later time No - I do not intend to use CARES funds No - I have not heard of the CARES Act

TOTALS:

autobodynews.com / MAY 2020 AUTOBODY NEWS 19

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Understand How the Families First Coronavirus Response Act Affects You by Jordan Scott, glassBYTEs.com

The Families First Coronavirus Response Act (FFCRA) requires certain employers to provide their employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. The Department of Labor’s Wage and Hour Division administers and enforces the new law’s paid leave requirements, effective through Dec. 31. The paid sick leave and expanded family and medical leave provisions of the FFCRA apply to certain public employers, and private employers with fewer than 500 employees. Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a growing concern. Covered employers qualify for dollar-for-dollar reimbursement through tax credits for all qualifying wages paid under the FFCRA. Qualifying wages are those paid to an employee who takes leave under the Act for a qualifying reason, up to the appropriate per diem and aggregate payment caps. Applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage. Employers covered by the act must provide all employees with: • Two weeks (up to 80 hours) of paid sick leave at the employee’s regular pay rate where the employee is unable to work because of being quarantined (pursuant to federal, state or local government order or advice of a healthcare provider), and/or experiencing COVID-19

symptoms and seeking a medical diagnosis; or • Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular pay rate because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to federal, state or local government order or advice of a health care provider), or care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/ or the employee is experiencing a substantially similar condition. Employers covered by the act also must provide to those who have been employed for at least 30 days up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular pay rate where an employee is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19. Qualifying Reasons for Leave Under the FFCRA, an employee qualifies for paid sick time if the employee is unable to work or telework due to a need for leave because the employee:

ject to an order described in (1) or self-quarantine as described in (2); 5. Is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or 6. Is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury. Duration of Leave For reasons 1 through 4 and 6, a fulltime employee is eligible for up to 80 hours of leave, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two-week period. For reason 5, a full-time employee is eligible for up to 12 weeks of leave at 40 hours a week, and a part-time employee is eligible for leave for the number of hours that the employee is normally scheduled

to work over that period. Pay Calculation The amount of pay an employee receives depends upon the reason for leave. For reasons 1 through 3, employees taking leave shall be paid at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in total (over a two-week period.) For reasons 4 or 6, employees taking leave shall be paid at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in total (over a two-week period.) For reason 5, employees taking leave shall be paid at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in total (over a 12-week period—two weeks of paid sick leave followed by up to 10 weeks of paid expanded family and medical leave.) We thank glassBYTEs.com for reprint permission.

1. Is subject to a federal, state or local quarantine or isolation order related to COVID-19; 2. Has been advised by a health care provider to self-quarantine related to COVID-19; 3. Is experiencing COVID-19 symptoms and is seeking a medical diagnosis; 4. Is caring for an individual sub-

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Tesla Under Pressure as County Sheriff Defines Factory as ‘Non Essential Business’ Amid C-19 Outbreak

Auto Glass Industry Responds to Those in Need

the value of the business’s inventory, ensure security, process payroll and employee benefits, or for related functions.” Companies must also provide workers the option to continue their employment remotely. With these in mind, Tesla’s Fremont factory would not be allowed to continue making electric cars, at least until the “minimum basic operations” rule is lifted. This could come as a blow to Tesla, considering the company is prone to engaging in widespread end-of-quarter production and delivery efforts to optimize its quarterly numbers. It should be noted the adverse effects of the C-19 shutdowns are not and will not be limited to Tesla alone. Automakers such as Volkswagen and Daimler in Europe have closed down their production facilities for at least two weeks. That being said, the Detroit 3 will remain operational for now, despite confirmed coronavirus cases among their employees. Amidst reports that a worker from Warren GM and Dearborn Ford

COVID-19 continues to impact the U.S., but some in the auto glass industry worked together to help those in need. Paul Bycok, of Glass One Auto Glass, used social media to challenge those in the industry to give back. He, along with others, went into their community to deliver “care boxes” to the elderly. According to Bycok, some of the items included in the boxes were toilet paper, water, rice, canned and packaged soup, toothbrushes with toothpaste, bar soap, pasta, pasta sauce, muffin mix, coffee, tea and cookies. “A lot of us have been blessed by this crazy industry. Let’s hope this passes over, but be mindful of others who (may) need a drop box of help,” Bycok said. We thank glassBYTEs.com for reprint permission.

by Simon Alvarez, Teslarati

Just a day after an Alameda County, CA, spokesperson declared in a statement to the Los Angeles Times that Tesla is an “essential business” and thus allowed to remain in operation amid the C-19 outbreak, the county’s sheriff’s office has taken an opposing stance. In a March 17 update on Twitter, the Alameda County sheriff declared Tesla is not an essential business at all and the company will only be allowed to maintain minimum basic operations. “Tesla is not an essential business as defined in the Alameda County Health Order. Tesla can maintain minimum basic operations per the Alameda County Health Order,” the county sheriff tweeted. Notes from the Alameda County Health Order define “minimum basic operations” as a company strictly complying with social distancing requirements for those who are still reporting to work. Activities that would still be allowed include those that “maintain

in Michigan and the Fiat-Chrysler Kokomo Transmission Plant in Indiana have tested positive for the C-19 virus, the Detroit 3 have decided to implement safety measures instead while keeping production activities ongoing. In a statement March 17, the UAW said the three automakers would be implementing a “rotating partial shutdown of facilities, extensive deep cleaning of facility and equipment between shifts, extended periods between shifts and extensive plans to avoid member contact.” That said, UAW President Rory Gamblet has noted in a statement to Automotive News the union asked for a pre-emptive two-week shutdown based on the World Health Organization and Centers for Disease Control and Prevention guidelines. Unfortunately, Gamblet said, the automakers “were not willing to implement this request” and asked for 48 hours to come up with a concrete plan of action. We thank Teslarati for reprint permission.

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COVID-19 Forces Extensions of Plant Closings by Jim Irwin, Wards Auto

Automakers announced another round of extended plant closures prompted by the COVID-19 pandemic. Ford says it will suspend most vehicle and engine production at its European manufacturing sites at least until May 4. The automaker had said March 17 it would suspend production “a number of weeks” depending on the pandemic situation, national restrictions, supplier constraints and the ability of its dealer network to operate. The exception is Ford’s operation at Valencia, Spain, which is to remain closed until at least April 27. “We are hopeful the situation will improve in the coming month,” Ford of Europe President Stuart Rowley said. “Our plans to restart operations, however, will continue to be informed by prevailing conditions and guidance of national governments.” Ford and its employees, meanwhile, are engaged in numerous

actions to help reduce the spread of COVID-19 activities across Europe. “These range from manufacturing medical equipment such as face masks and ventilators to providing camp beds to health personnel and donating vehicles for a number of uses, including the distribution of critical medical services, food deliveries and emergency transport,” the automaker said in a news release. In North America, Honda has extended the suspension of production at all its automobile, engine and transmission plants in the U.S. and Canada through April 10. The shutdown began March 23. Volkswagen extended the production shutdown at its Chattanooga, TN, complex by one week after previously announcing a weeklong suspension on March 21. The facility now is scheduled to resume production Sunday, April 12. We thank Wards Auto for reprint permission.

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Pirate Garage Car Show Set for Early June by Raiza Giorgi, Santa Ynez Valley Star

Helping students learning valuable life skills and exposing them to potential career paths has been the highlight of Rob Hill’s career as the automotive instructor at Santa Ynez Valley Union High School in Santa Ynez Valley, CA, for the past seven years. He totals more than 20 years teaching and will be retiring at the end of the year, but not before he helps the program continue. “Love being part of the CIMA team and establishing the racing club at the high school,” Hill said. “I have enjoyed teaching the kids and seeing their enthusiasm for the subject grow as they go through the program.” Hill teaches intro and advanced automotive as well as collision and repair. The classes work on students’ vehicles, as well as those of the teachers on campus. He is so proud of his students, as quite a few entered the automotive world. Jennifer Oseguera graduated in 2018 and said she credits her career as a custom painter to Hill. She

currently is working at Airtrix in Goleta, CA, and will be graduating this year from the automotive program at Santa Barbara City College. “He taught me how to paint and I realized I liked this part of automotive,” Oseguera said.

SYHS students who are passionate about anything and everything on wheels while teaching career skills such as public relations, philanthropy and management, as well as mechanical skills. “He is 110% always for the kids

“I have enjoyed teaching the kids and seeing their enthusiasm for the subject grow as they go through the program.” — Rob Hill Hill said his alumni often come back to help out with events, and the engines will be revving at the seventh annual Pirate Garage Car Show, a vital fundraiser for the Pirate Garage Club, that will take place in early June at Santa Ynez Valley Union High School. It was rescheduled from March 21 due to the coronavirus. The show will feature many vehicles displayed by their local owners, as well as sales of raffle tickets, food and Pirate merchandise. The Pirate Garage Club supports

FIRST HONDA

and spends countless hours outside of the workday helping them,” said Mindi Christian, volunteer and former regional occupational and career technical education programs leader. “He takes them to different events and learn more to excel. Rob is involved in the community and getting the students to represent the automotive program at various events like SYV Touch a Truck and Youth Rec to give back.” “The kids have such a big part in putting it together, and it’s a really great family and community event,” Christian added.

FIRST KIA Collision Parts that Shine

This success of the event is owed not only to the students but to Hill, Pirate Garage Club supervisor, Christian said. With Hill retiring, this show will be especially important to his students. “He relates to his students and their love of racing and mechanics, and he credits his own high school auto shop program with keeping him in high school and from racing on the streets,” Christian said. “He takes them to races and uses his break to make sure the students are cared for.” The club also has a successful racing team that competes in the National SkillsUSA competition, which seeks to “empower its members to become world-class workers, leaders and responsible American citizens,” according to its website. Pirate mechanics have placed often in regionals and won state championships in 2016. To find out more about the Pirate Garage Club or get more information on the show, email Hill at rhill@ syvuhsd.org. We thank the Santa Ynez Valley Star for reprint permission.

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Ford Recalls Expeditions, F-150s and Rangers for Rollaway Risk by David A Wood, Car Complaints

Ford is recalling nearly 68,000 model year 2020 Ford Ranger and F-150 trucks with 10-speed automatic transmissions, and 2020 Expeditions with police packages and 10-speed automatic transmissions. The recalled vehicles are not equipped with rotary gearshift dials. The automaker says a clip that locks the gearshift cable to the transmission may not be fully seated, which may allow the transmission to be in a gear different from the gearshift position selected by the driver. This could allow the driver to move the shifter to PARK and remove the ignition key without the transmission gear in PARK. This can also allow the vehicle to roll away, especially if the parking brake isn't applied. According to Ford, no crash or injury reports have been received. More than 55,000 vehicles are recalled in the U.S., while more than 12,000 are recalled in Canada

and 681 in Mexico. The 2020 Ford Rangers were built in Michigan between Feb. 28 and March 18, 2020, and the 2020 Ford F-150s were built in Michigan and Kansas City from Feb. 18 to March 19, 2020. In addition, the 2020 Ford Expeditions were manufactured in Kentucky between March 3 and March 19, 2020. Ford dealers will inspect the shift cable locking clips and properly seat them as needed. Ford owners with questions should call 866-436-7332 and use recall number 20S18. Ford’s 10-speed transmissions have been in the news recently after mulitple customers filed class action lawsuits, including one in August 2019, one in January 2020 and another in February 2020. We thank Car Complaints for reprint permission.

www.autobodynews.com

UPDATED DAILY

GM Suspending New 2020 Chevrolet Corvette Orders by Amanda Drago, The News Wheel

Since Chevrolet first announced the mid-engine C8 Corvette, there has been lots of excitement surrounding the new sports car. Such high demand for the car, coupled with low supply, led General Motors to recently announce it is suspending orders for the 2020 model.

It was first revealed GM would no longer be accepting orders for the C8 Corvette on March 18, when an email was leaked on Corvette Forum. The email states there was a delay in the production schedule for 2020 models, which has caused the automaker to limit the total amount of cars produced. “Due to an overwhelming demand for the 2020 Chevrolet Corvette Stingray, Chevrolet has decid-

ed to stop taking sold orders after March 18, 2020,” a GM spokesperon said. GM announced its suspension of C8 Corvette orders around the same time it said it would be halting production in the U.S. as a result of the coronavirus. However, the GM spokesperson confirmed the C8 Corvette order suspension is unrelated to the pandemic. Drivers who were able to order the C8 Corvette in time will enjoy thrilling drives in the car. Its powerful 6.2-liter V8 engine produces 495 horsepower and 470 lb.-ft. of torque. Plus, the boldly styled car can go 0 to 60 in just 2.9 seconds, while still proving a quiet and smooth ride. Although the news that GM is suspending orders for the 2020 model may be disappointing to some car enthusiasts, Chevrolet dealerships will be taking orders for the upcoming 2021 Corvette earlier than expected. Customers will be able to order the next iteration of the Corvette as early as May. We thank The News Wheel for reprint permission.

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Automakers Will Need Months to Get Factories Up and Running by Gabrielle Coppola and Craig Trudell, Bloomberg Law

Automakers are anxious to get their assembly lines rolling again, especially since leaving factories idle is costing them billions of dollars by the week. But the experience many of them have had in China illustrates just how long a slog it’s going to be before plants are producing at anywhere near pre-shutdown levels. It took almost two months for most of China’s industry to return to some semblance of normalcy—and that was with the benefit of mobile apps the government installed on citizens’ cell phones to track their movements and potential exposure to Covid-19 infected people. North American factories may have the benefit of Apple Inc. and Google trying to start a similar contract-tracing effort, but participation will be voluntary. And the tensions brewing already between President Donald Trump and state governors indicate U.S. government efforts won’t be nearly as centralized as China’s was, suggesting that already cash-strapped suppliers may also have to deal with a patchwork of state-by-state orders dictating when businesses can reopen. “Discipline is the key to success,” Jim Tobin, president of Asia operations at auto parts maker Magna International Inc., said last week. “In China, there’s mandates that come out. Here, there are requests.” Magna and other companies implemented dozens of protocols—including worker-temperature screenings and physical distance barriers—to open factories on single shifts, Tobin said during a webinar hosted by the Center for Automotive Research in Ann Arbor, MI. Many vehicle and parts plants in North America had been running multiple shifts to meet demand that’s held steady near all-time highs for years. Now, sales have cratered and are unlikely to recover quickly. Tesla Inc. and Fiat Chrysler Automobiles NV both are planning to begin reopening U.S. plants on May 4 after idling them in midMarch. General Motors Co. and Ford Motor Co. have refrained from scheduling restart dates for their facilities,

while Toyota Motor Corp. and Honda Motor Co. have said theirs will be down through at least May 1. While setting dates to reopen sends a signal to suppliers to start getting their parts inventories ready, doing so won’t be simple, with new layers of precautions and complications that didn’t exist before shelterin-place orders came into effect nearly a month ago. Here’s a rundown of what the industry is grappling with as it prepares for a restart: Patchwork of Orders A typical vehicle has thousands of parts, and as automakers survey their supply chains, they now have to look not just at inventories, but at health orders across the country. What the virus curve looks like in Illinois compared with Michigan or Ohio could determine whether or not a vehicle will have all the components needed to resume production. “What the manufacturers need to do is be able to map out state by state, county by county, where manufacturers are with regards to local lockdown stay-at-home orders,” said Brian Collie, head of Boston Consulting Group’s U.S. automotive practice. Even in states where people are allowed back to work, auto companies will likely use staggered shifts to increase social distancing and allow for more frequent deep cleaning. They’ll also likely deal with high rates of absenteeism, especially among older workers who fear getting infected, Collie said. Supply Chain Suppliers typically need a week or two of advance work to support an automaker’s ability to start running their assembly lines again, said Ann Marie Uetz, a Detroit-based partner at the law firm Foley and Lardner LLP, which represents parts manufacturers. And there are at least two major impediments the supply chain will be dealing with: kids and cash. With many school systems closed until the end of the year, parents within the workforce will have to find some form of child care before reporting back to plants. Many will be wary of bringing the virus home to their families.

The other problem is cash flow. With production already having been shut down for roughly a month, suppliers’ coffers are starting to run dry and many need help with the expenditures necessary to restart, Uetz said. Some are getting assistance from the federal government, but automakers also are negotiating ways to help. The dire financial straits many suppliers are in doesn’t leave much room for error in deciding on when to resume output, Magna’s Tobin said. “Start-stop does not help liquidity, because we start buying material, employing people, then they say, ‘We’re going to push it out another two weeks,’” Tobin said, referring to supplier-carmaker relationships. PPE Needs Much of the auto industry has pivoted to supporting the health care industry by making ventilators, masks, face shields and medical gowns. Some of those efforts to make personal protection equipment—or PPE—will come in handy for their own workforce, which pushed back against keeping

factories open last month. Social distancing and barriers will be goto tools, but for workers who can’t avoid close interaction, they’ll need face shields, said Aaron McCarthy, Magna’s chief of human resources. Companies may be unable to provide them until front line health care workers have enough. Ford, which is experimenting with social-distancing wristbands for workers on the factory floor, also is tallying up the equipment needs for its workplaces. “We’re identifying all the PPE requirements,” Jim Farley, the automaker’s chief operating officer, said in a podcast interview with Automotive News last week. “We’re not going to bring anyone back or even think about it before we have the sufficient supplies.” We thank Bloomberg Law for reprint permission. www.autobodynews.com

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Five Groups Ask Trump to Keep Vehicle Sales Operations Open by Auto Remarketing staff

As additional states and municipalities issue stay-at-home orders and business closures, dealerships are caught in a coronavirus-created storm of confusion. On March 24, the leaders of the National Automobile Dealers Association (NADA), the American Truck Dealers (ATD), the National Association of Minority Automobile Dealers (NAMAD), the American International Automobile Dealers Association (AIADA) and the Alliance for Automotive Innovation sent a letter to President Donald Trump asking for clarification that vehicle sales are essential services that need to be maintained during the COVID-19 pandemic. Federal officials already issued clarity that vehicle repair shops are deemed to be essential services and are to remain open. The associations explained the ability to provide replacement cars and trucks in response to any number of scenarios will be vital to ensuring that those in need of reliable personal transportation continue to have access to it. The groups stressed

that franchised car and truck dealers recognize the need to conduct even limited sales and leasing activities in a manner that protects the general public, customers and employees. “Most consumers are concerned about their jobs, families and health and will not be in the market for new or used vehicles for weeks or months, so the overall effect of this additional capacity will be limited,” the groups wrote. “However, for the many people who may need a replacement vehicle or a new vehicle for any number of reasons, the additional sales activity surely would be defined as vital or essential to them.” “Additionally, many of nation’s essential workers, including first responders, medical workers, grocery store employees, delivery drivers and others providing similar services may suddenly find that they need a more reliable way to get to these critical jobs,” the letter continued. “In short, there are thousands of scenarios that would prompt the urgent need for a car, SUV or truck—now more than ever.” According to the letter: • In 2019, 12.55 million ve-

hicles were scrapped because they wore out or it was not economical for them to be repaired. Approximately 9.4 million of those vehicles were replaced with a new or used vehicle. • In 2018, 1.24 million vehicles were determined by insurance companies to be total losses as a result of an accident, flooding or other total loss events. Individual consumers and businesses typically use their insurance proceeds to purchase a substitute vehicle within a few days. Without that option, they may not have affordable, reliable transportation to meet their personal or commercial needs. • Between March and July of this year, 1.8 million vehicle leases will expire (4.1 million for the entire year of 2020), all of which will require replacement. In many ways, these customers will face the same challenges as described above following a total loss. • Virtually all of last year’s 500,000 sales of medium and heavytrucks were sold for use in commercial fleets. Officials noted 71.4% of the nation’s tonnage freight is hauled

in trucks sold by truck dealer members. • The associations estimated around 500,000 “Essential Critical Infrastructure Workers,” as defined in DHS/CISA Guidance (healthcare providers, law enforcement, public safety, first responders, food and agriculture employees, etc.), annually acquire a new or used vehicle. “Not all vehicle sales are discretionary consumer purchases. A significant number of dealership sales transactions occur because a consumer or business is in immediate need of a replacement vehicle for basic transportation. This clarification is particularly important as various transit services have been curtailed or eliminated due to the public health recommendations about social distancing,” the groups said. “Our members would simply like to provide vehicles to those customers in a secure manner, while at the same time meeting our obligation to the public-at-large and our employees.” We thank Auto Remarketing for reprint permission.

Ford Teams With GE, 3M to Make Ventilators, Personal Protective Equipment by Dave Herndon, Press & Guide

Ford Motor Co. announced March 24 it will produce ventilators, face masks and more in conjunction with 3M and GE Healthcare to help fill shortages during the coronavirus pandemic. “By coming together across multiple industries, we can make a real difference for people in need and for those on the front lines of this crisis,” Executive Chairman Bill Ford said on a conference call with the media. According to the companies, Ford will start to manufacture 3M’s new respirator that uses a blower, instead of a person’s lungs to draw air through a filter. GE Healthcare officials said a “simplified” version of the machine will be manufactured in an expedited fashion. Ford said his company jumped into action after the U.S. government requested help. The equipment will be produced in at least one of the company’s Michigan plants, but didn’t say which plant or plants at this time. The company said its U.S. design team is also creating and starting

to test transparent full-face shields for medical workers and first responders to pair with N95 masks. The first 1,000 face shields will be tested this week at Detroit Mercy, Henry Ford Health Systems and Detroit Medical Center Sinai-Grace Hospitals.

FOR LEASE Ford Motor Company employee Dave Jacek wears a prototype of a 3D-printed medical face shield. Credit: Charlotte Smith, Ford Motor Co.

The company said it will employ UAW workers to assemble more than 100,000 of the plastic face shields every week at a Ford manufacturing site to help medical professionals, factory workers and store clerks. We thank the Press & Guide for reprint permission.

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Money for Emergency Small-Business Loans has Dried Up, Second Tranche Approved by Rick Barrett, Milwaukee Journal Sentinel

A $349 billion coronavirus loan program for small businesses has run out of money less than two weeks after it was launched, the U.S. Small Business Administration said April 16. The Paycheck Protection Program, part of the Coronavirus Aid, Relief and Economic Security Act passed by Congress in late March, is aimed at helping businesses meet payroll. As long as they keep their employees—or rehire those laid off—the loan amount covering eight weeks of paychecks can be forgiven. Wisconsin ranks 10th in the nation in both approved PPP loans, 31,702, and approved dollars, nearly $7.3 billion as of April 13, according to the SBA that’s made the federal program available to businesses with fewer than 500 employees. Nationwide, 70% of small businesses surveyed by the National Federation of Independent Businesses said they at least tried to apply for PPP money. Howev-

er, many applications could not be processed because of overwhelming demand, and now the initial round of funding has dried up. On its website, the SBA now says the agency "is unable to accept new applications ... based on available appropriations funding." The Treasury Department says by law, it will not be able to issue new PPP loan approvals due to the lapse, putting a pause on the program that's become a lifeline for millions of businesses. The loans have been dished out on a first-come, first-served basis. As of the morning of April 16, the SBA said it had approved roughly 1.6 million applications for more than $339 billion in loans. “The money running out has been a big fear that drove a lot of people to apply, I think, prematurely,” said Rose Oswald Poels, president and CEO of the Wisconsin Bankers Association. “There was this understanding that the government was going to help any business with eight weeks of payroll. But when you start working through

the details, you have to be operating right now with a full, normal payroll … and with the governor’s shelterat-home order in Wisconsin, it’s effectively closed businesses like bars and hair salons that don’t have a payroll right now," Poels said. There have been delays in getting the money out and some banks and credit unions haven’t had the closing documents or systems in place to make the transactions. “I liken it to trying to put a firetruck through a garden hose. You literally had, overnight, thousands of lenders who didn’t have access to the SBA system all trying to get access at once,” Poels said. The Trump administration has asked Congress, which set the program’s original ceiling, for another $250 billion, although that request has stalled in the Senate. “It is supposed to be open until June 30, so I am optimistic and really confident that Congress will put more money into it,” Poels said. Late April 15, Treasury Secretary Steven Mnuchin and SBA Ad-

ministrator Jovita Carranza issued a statement noting the historic demand for loans and pleading for Congress to pass additional funds for the program. “The SBA has processed more than 14 years’ worth of loans in less than 14 days. The Paycheck Protection Program is saving millions of jobs and helping America’s small businesses make it through this challenging time,” they said. “We urge Congress to appropriate additional funds for the Paycheck Protection Program—a critical and overwhelmingly bipartisan program.” Democrats have demanded that in approving more money for the program, Congress should also pass more funds for hospitals and state and local governments. They also want to bolster food stamp benefits and mandate some of the funds go to businesses owned by women and minorities. Republicans, on the other hand, have pushed for this money to be approved without any additions or mandates, arguing it's the only program at risk of evaporating thus far.

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on S of A $239 for $ appr 14% were sion vice Man with still plica nica have Som ey n prov rolle well the M ation eral spee and get said

A breakdown of the PPP loans on SBA’s website showed that, as of April 13, the average loan was $239,152, and 70% of the loans were for $150,000 and under. Construction companies were approved for the largest share, nearly 14%, or $34 billion. In second place were companies that provide professional, scientific and technical services, with 12.3% or $30.35 billion. Manufacturers were in third place with 12.25%, or $30.32 billion. Thousands of businesses are still awaiting word on their loan applications. “There were a lot of technical problems early on. And there have been communication problems. Some individuals applying for money never knew whether they were approved or not,” Poels said. Still, for a program of this size rolled out quickly, it’s gone quite well, said Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce. “I think the federal government worked with great speed, but with that comes haste and not a perfect delivery system to get this into the economy,” Sheehy said. He likens the PPP loans to

the $1,200 coronavirus checks that should be showing up in the mailbox of individuals soon, and the $600 in weekly federal unemployment money that is supposed to be coming. “Those individual and business lifelines are critically important … The severity and speed of the COVID-19 impact on the economy is unlike anything we’ve seen,” Sheehy said. Some Wisconsin businesses say the application process went smoothly enough for them. “I thought it was amazingly simple,” said Eric Isbister, CEO of GenMet, a metal fabrication company in Mequon that employs 46 people. “When I bought this business 20 years ago, we had an SBA loan with paperwork that was inches thick. This was much quicker,” he said. Keefe John, president and CEO of Ethoplex, a Germantown internet service provider, said he received approval on a PPP loan in less than a week. It helped, he said, that he already had a relationship with an SBA approved lender. “We just wanted some extra working capital to help us out during uncertain financial times. We will

use it to retain our employees and give people sick leave if they get the virus. I think small businesses need to do everything they can now to survive and remain competitive,” John said. His company currently employs 10 people. “We are actually looking to hire more now. We’re seeking technicians to do customer installations in southeast Wisconsin,” he said. Bob Roden, a dairy farmer from West Bend, said April 15 he was waiting to hear whether his PPP loan had been approved. He and his family milk about 700 cows and grow corn, beans and wheat on 1,800 acres. They have nine employees. Roden said his milk and grain prices have been sinking, with no bottom in sight as coronavirus wreaks havoc on the global economy. “The loan is going to help, but it’s a Band-Aid, not the answer,” Roden said. USA Today contributed to this report. We thank the Milwaukee Journal Sentinel for reprint permission.

AutoNation to Lay Off 7K Employees, Cut Costs Deeply by Clark Schultz, Seeking Alpha

AutoNation said April 3 it's taking dramatic measures after seeing significant declines in new and used vehicle unit sales, including a yearover-year decline of approximately 50% during the last two weeks. The retailer is placing 7,000 employees on unpaid leave, implementing temporary base pay reductions for associates and freezing all new hiring. Widespread spending cuts are also being initiated. On the financial front, AutoNation discloses it had borrowings outstanding of approximately $790 million on March 31 under its revolving credit facility and about $140 million under its commercial paper program. “Based on those borrowings and the maximum leverage ratio contained in our amended and restated credit agreement, we had approximately $1.1 billion of liquidity, including over $400 million of cash and approximately $700 million of availability under our revolving credit facility,” AutoNation said. We thank Seeking Alpha for reprint permission.

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Business Leaders Share Thoughts About Collision Industry Pandemic and Recovery Assured Performance is taking bold the future. mize the risk of the transmission of action to support our certified repair Since this industry is directly im- COVID-19 for both team members Autobody News recently reached out network. pacted by miles driven and employ- and customers alike. to leaders in the collision repair indus- We’ve created a special ment, people NOT driving Following the municipal, provintry to find out how they are best man- subsidy and stimulus proand forced to stay at home cial, state and federal guidelines for aging the inevitable interruptions to gram for our certified repair will be significant and could health and safety that are local to the “business as usual” during the current providers we hope will help be devastating if the shut- repairers remain paramount during coronavirus restrictions. in the short term and actualthis COVID-19 pandemic. Increased down lasts too long. In addition to sharing their insight ly reinvent and turbocharge In the short term, it is a rates of cleaning frequently touched on how this will affect the industry, their businesses for the long great time for shops to im- surfaces, spaces and property is a they offered some advice to business term. plement new systems, train common directive as well as making Dean Fisher owners and employees. staff and refine their sales, hand sanitizers and disinfectant wipes For immediate relief, we have instituted a payment pro- marketing and production processes. more available to both customers and Farzam Afshar, CEO of VeriFacts gram, discount incentives and ac- We can all be far better businesses employees. Automotive celerated rebate redemption for the coming out of this crisis if we do this VeriFacts Automotive is working cost of certification. As a stimulus, well and execute a smart business Jim Keller, President of 1Colllision closely with our customers, insurers we have introduced a new program improvement plan. Network and OEMs to adapt our practices in to help drive sales and re-engineer 1Collision has addressed our locations these challenging times. as a group in regard to safety precaubusiness operations to save money Dean Fisher, President of CARSTAR We are conducting many of our and manpower. The safety of our customers and team tions by issuing bulletins, holding coaching services virtually to ensure Through an agreement with members is always our first priority, group web meetings and conducting we are keeping our team members Bodyshop Booster, certified net- and we are taking steps to protect the discussions with shops about the ways and the shop employees safe. We are work shops can offer consumers health and wellbeing of our team and they are protecting employees and cusfollowing OEM guidelines and their insurers a hands- customers. tomers. on shop certification visits. To help capture traffic to your free estimating and repair We have implemented a num- Also, we’ve shared tips with process that protects the ber of precautions based on the ad- door, educate consumers on the vehicle our customers about how shop employees, the con- vice of the Centers for Disease Con- disinfecting measures they can take, they can enhance their busisumer and the insurers. trol, the World Health Organization as well as the policies and procedures ness practices to ensure shop The new process com- and other health authorities to mini- your repair facility has implemented. cleanliness, follow social bines photo and remote virdistancing rules and provide tual estimating with a fully Farzam Afshar convenient customer service. documented and/or certified The Parts You Need When You Need Them While there will be short-term repair. The process eliminates the declines in repair volume as fewer need for the consumer or the insurer people are on the road each day, we to come to the shop by using a pickup will see business return to previous and delivery system, centralized aplevels as this challenge subsides. pointment setting with an active cal We may also see daily driving endar and special tools for the shops’ trends increase, as people may be re- websites. luctant to return to air travel, trains These combined with full elecand public transportation. tronic visual documentation will en• Team of Dedicated In addition, people may hold on able consumers and insurers to interKia Parts Specialists to their vehicles longer rather than act with shops in a new and far better • Competitive Discounts investing in a new car, which will way of doing business. translate to more repair needs. Programs like this can save re• Extensive Inventory We always advise shop owners pairers hundreds of thousands of • Free Daily Delivery and managers to use the good times dollars each year and save insurers to prepare for potential millions. The process is far downturns, and to use the easier for consumers and ofdowntime to productivefers a “hands-free” solution ly plan for the future. This during this time of social Parts Parts is the ideal time to conduct distancing and quarantining. 818-745-1103 714-274-6178 your facility and equipment Consumers do not have to Fax Fax 818-244-0017 714-847-4410 maintenance, participate in come to the shop and they 400 S. Brand Blvd 18835 Beach Blvd employee training, complete will have higher confidence Scott Biggs Glendale, CA 91204 Huntington Beach, CA 92648 your annual financial review than ever before because of M-F 7am-7pm M-F 7am-6pm and planning and do your employee the repair documentation. Sat 7am-5pm Sat 8am-4pm reviews. Our certified repairers’ survival is essential to all of us. It may be the Scott Biggs, CEO of Assured perfect solution for these uncertain Performance times and become the new norm in Compiled by Stacey Phillips

34 MAY 2020 AUTOBODY NEWS / autobodynews.com

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In the sales process, especially ing…be compassionate, and assure during a shrinking market, it’s criti- them they are being heard and you will cal to educate consumers about mak- help in any way you can. Always reing the proper repair facility choice. member, without our employees, there By using effective sales and closing is no business. techniques, and writing a complete Collision business owners must and accurate repair plan, it be strong, smart, courageous will likely be the difference and lead their organization between breakeven and a by taking calculated risks. respectable profit. Henry Ford once said, On the financial side, I “The competitor to be feared recommend managing your is one who never bothers numbers daily; close more about you at all, but goes sales and manage all costs, on making his own business Jim Keller especially labor and parts. better all the time.” The lead With monthly building pay- er that does nothing will certainly lead ments, whether you are in a lease or to failure. a mortgage, have conversations with the bank or building owner to delay Aaron Schulenberg, Executive a payment or two to help weather the Director of SCRS storm. Analyzing all expenses to cut The Society of Collision Repair costs and being more efficient is al- Specialists (SCRS) recognizes many collision repairers are being inunways a good exercise. Also, grant programs are becom- dated with emails and information ing available on both a federal and surrounding the current events unstate-by-state basis, that are potential- folding, and many of our members ly beneficial to collision shop owners. are reaching out trying to understand The most critical issues I see for what it means to their businesses. shops are the early reports that have As an association, we are largeindicated lower claims volumes, which ly relying on those with specialized will mean lower WIP (work in prog- expertise to offer guidance, and then ress) and sales volumes. Parts availabil- finding ways to share that guidance ity will likely become a challenge, with through our free channels of commanufacturer supply chains weakening munications. These include Repairer internationally and the within the U.S. Driven News www.repairdrivennews Talk to your employees, and most .com, and a new resource page we importantly listen to what they are feel- have set up: www.scrs.com/covid19

-resources. The resource page is continually updated with information about workplace preparation and help, as well as financial aid and relief to help small businesses and citizens across the U.S. As essential businesses, we know the critical role collision repairers are playing right now for customers and employees. We’ve seen many exam-

SCRS Board

ples of businesses taking enhanced precautions against COVID-19, ranging from zero-contact interactions with customers at drop-off and pick-up, that allow for adherence to social distancing policies surrounding personal contact. We’ve also seen examples of businesses promoting services to “clean,” “sanitize” or “disinfect” customer vehicles. SCRS urges caution with the

language used in your promotion of services. For instance, your facility can assure that you “apply disinfectant,” but there is no testing protocol to ensure that you “disinfected” the vehicle. In our interaction with other industries, this has been a repeated caution; describe only what you performed, rather than a promise of what it accomplished. The information is constantly evolving, the situation changing, and the best advice we can offer is to make ample use of the resources available to you to stay abreast of the current events. But most importantly, remain positive. We are an industry that fixes broken, seemingly unfixable incidents every day, as we restore safety and peace of mind after unexpected tragedy. While the conditions are unchartered territory for us all, as an industry we will find our way through to the other side, using our professional experience to serve the motoring public as they turn to us in their time of need.

New Carvana Customers Can Delay Payments Up to 90 Days by Auto Remarketing staff

Carvana’s rush of recent activities continued April 13 with the online used-vehicle retailer making a move to help buyers who just took delivery.

The company announced it is now giving customers up to 90 days to make their first payment. Customers financing with Carvana are eligible to opt in to the payment extension option, as long as they complete their purchase by April 20. “Carvana has always been a company intensely focused on do-

ing the right thing for our customers, and in a time when many are feeling the strain between needing safe transportation to an essential job and personal finances, we want customers to know we’re here for them,” Carvana founder and CEO Ernie Garcia said in a news release. “Our hope is that those who simply can’t put a vehicle purchase on hold are able to get what they need quickly and easily, so they can keep moving,” Garcia added. The April 13 announcement arrived after Carvana landed up to $2 billion in origination funding from Ally Financial, rolled out its touchless delivery program and secured $600 million from investors. We thank Auto Remarketing for reprint permission.

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with Stacey Phillips

From the Desk of Mike Anderson with Mike Anderson

Mike Anderson is the president and owner of Collision Advice, a consulting company for the auto body/collision repair industry. For nearly 25 years, he was the owner of Wagonwork Collision Center, an OEM-certified, full-service auto body repair facility in Alexandria, VA.

Now More Than Ever, Shops Need to Renew Their Focus on ‘Capture Rate’ Even before the coronavirus outbreak, I was telling shops I work with a renewed focus on “capture rate” was increasingly important. Now it’s become critical. Here’s why: Look at any reliable source of claims counts in the U.S. over the last couple of years, and you’ll see they are declining. The increasing number of vehicle on the road with advanced driver assistance systems (ADAS) is reducing accidents. Not by a lot, and it varies a bit by region, but by about 2 to 4% a year overall, most analysts agree. That might not be particularly noticeable—yet. I think it has been masked by shops feeling like their sales increased in recent years, but that’s because severity has been getting higher. The ADAS impact on claims count has also been offset until recently because low unemployment and low gas prices were keeping more

vehicles on the road for more miles. But we’re a little bit like the frog in that old analogy: Put a frog in a pot of boiling water, and it will jump out. But put it in a pot of tepid water and only slowly bring up the temperature, and the frog will boil to death. Similarly, a 2 or 3% decline in claims counts each year might be easy to ignore, but in five or seven years, you’re going to be wondering why the water around you has gotten so hot. So now, and especially in response to this pandemic, we have to get back to the fundamentals, including focusing on capture rate, something most of us did when we were first in business. You need to convert more of your potential customers into actual repair orders. How do you do that? How about following up on estimates written? If a customer gets an estimate but

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doesn’t schedule the job, call them the next day, then three days later, then five days after the estimate. One of the major clients I work with said those type of follow-up calls are helping them capture 20% of those jobs that weren’t scheduled at the time of the estimate. That’s a big deal. The pandemic and work slowdown has shops following up like never before. I talked to a shop in late March who told me, “We’re following up on estimates we wrote a year ago.” The reality is all shops should have been doing that type of follow-up all along. Another thing you should be doing: Monitor where your work is coming from. Most management systems can help you do that. Unfortunately, I look at many shops’ “referral” or “source” reports and see just generic categories like “insurer” or “internet”

or “dealer.” That’s not good enough. Capture your source information in detail. Let’s say you’re a direct repair shop for ABC Insurance. If you run the source report and see you repaired about 20 cars a month through DRP claims paid for by ABC, and now you’re only doing 15 a month, you need to get proactive and find out why. You can also track how many claims were paid for by various insurers through a “Body Shop Scorecard” report available through Enterprise. It shows you by insurance company how many of your customers were in an Enterprise rental while their vehicle was in your shop. If you are seeing fewer rentals covered by a particular insurer, find out why. Don’t just list “dealer” as a source; identify which dealer. Again, if you see a decline in those referrals, See ‘Capture Rate’, Page 48

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Hey Toby! with Toby Chess

Toby Chess is an I-CAR program instructor, Training specialist, and former salvage yard operator. Toby is universally known in the collision industry for his work with first responders and advocacy for body shops and consumers. He can be reached at tcspeedster@gmail.com

A Quick Course on Primers Recently, I received a call from a The melting point of aluminum friend who owns a high-end colli- is 1,221 degrees Fahrenheit, comsion repair facility in the Los Ange- pared to aluminum oxide, which les area. melts at approximately 3,700 degrees. In June 2019, a 2017 Ford Rap- This oxide layer is much harder than tor was repaired at his shop. The the aluminum and helps the material shop replaced the A-pillar on the resist corrosion and abrasion. Howpassenger’s sidewith of the David vehicle. McClune Last ever, it also acts as an insulator that December, it rained in L.A. for three can create issues during welding, like days straight, and the vehicle devel- porosity, as well as during the repair oped a water leak at the windshield. process—body filler adhesion, adThe vehicle was returned to the shop hesive adhesion and certain types of and the glass company that installed primers and finish coats will not stick the new windshield was called to to it. come back and reseal the glass. In the case of the shop’s problem Everyone was surprised when with the windshield, the aluminum the glass on the passenger’s side post oxide and phosphoric acid caused the did not stick to the A-pillar. What adhesive to degrade and not stick to Johnfailure. Yoswick we have here iswith an adhesive the pillar. In other words, the adhesive did not stick to the substrate. Imagine if the vehicle were involved in another accident and the airbag struck the windshield and the glass blew out, and did not deflect the bag onto a passenger. I hate to think about the consequences. Fig. 1 I was called to come and look at the truck. Remember, use a stainless steel with Richard Steffen I asked the painter how he brush rather than a steel brush to preprepped the vehicle prior to painting. vent galvanic corrosion (See Fig. 2). He said the body technician sanded the bare aluminum with 180 grit sandpaper and primed it with epoxy primer. First problem: you cannot just sand bare aluminum and think it is ready for paint. You need to clean the bare metal with a stainless steel brush. I use the small “toothbrush” Fig. 2 with John Yoswick types because they do a better job of As a best practice, clean the area removing the aluminum oxide from bare aluminum (See Fig. 1) compared with a good wax and grease remover with the larger traditional brush. like Kent Automotive’s Acrysol (Fig. 3). Let’s take a look at aluminum oxide. Aluminum oxide (Al2O3) is a naturally-forming compound on bare aluminum. Metallic aluminum is very reactive with atmospheric oxygen and moisture, and a 4-nm laywithpassivation Karyn Hendricks er of aluminum oxide forms on any exposed aluminum surface in a matter of hundreds of a second. This layer protects the metal from further oxidaFig. 3 tion.

I asked the painter to bring over the epoxy primer he was using. It turned out to be self etch primer.

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Fig. 5

Fig. 4

Self etch primer (Fig. 4) uses phosphoric acid to etch the metal. If the acid has not fully dissipated, it will attack the adhesive, which will lead to an adhesive failure. The only recommend primer to be used in this repair is epoxy primer (Fig. 5).

After cleaning the part with the brush and Acrysol, I brushed on a coat of epoxy primer with a foam brush (Fig. 6 showing the process, but not the vehicle in this article) After a 30-minute dry time, the vehicle was ready to be primed and painted. The epoxy primer on the windshield flange is the only coating where the windshield will be attached to the vehicle (Fig. 7).

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or more panels. The coatings on the inner flanges are removed and the WTP is applied to the bare metal. Allow it to dry prior to welding. It should be noted the primer is cleaned from the hole when MIG plug welding. Also, Fiat Chrysler does not recommend the use of WTPs, preferring spot welding through the E-coat. Remember, E-coat is not electrically conductive, so a shut clamp will be necessary for the first weld (See Fig. 9).

ing. Audi and Ford recommend their WTP and Honda/Acura recommends Kent’s Self Etch WTP.

Fig. 6 Fig. 11

The next category of primers is Direct to Metal Primers (DTM), because they contain an acid that etches into the metal. Self etch primer (Fig. 10) comes

Fig. 9

Fig. 7

Note the strip of gray epoxy primer where the windshield will be attached. After seeing what happened at my friend’s shop, I taught his staff about the various types of primers used in the repair process. It would be beneficial to give the same information here so repairs are done properly, reducing the chance of a comeback or catastrophic failure. Here is a quick course on primers, starting with weld-through primers (WTP.) There are three major types of WTPs—copper-based, zinc-based and self etch (Fig. 8).

Some vehicle manufacturers do not recommend copper WTPs because in the past, some paint manufacturers were selling the primer, but it did not contain any zinc and would dissolve when cavity wax was applied to mating surfaces. Most of the copper WTPs have been reformulated with zinc added. The zinc WTPs are the most common. Any excess zinc primer on any surface to be painted needs to be removed—paint does not like to stick to zinc. The self-etch WTP uses phosphoric acid to etch the metal and has zinc for corrosion protection. Once completely dry, paint can be applied directly to metal that may have gotten some of the primer.

Fig. 12

in a spray can or quart container that can be sprayed. This primer contains phosphoric acid, which etches the surface, and zinc for corrosion protection. This primer is used over bare metal to provide a solid base for highbuild primers and paints. Self etch primers are not used under body fillers, on plastic parts or under seam sealers. To use it prior to applying seam sealer, first allow it to thoroughly dry—the acid needs to be totally evaporated—and follow with some sort of sealer. Whereas regular self etch primer is not sanded, this product is sandable. The same rules apply to this primer as with self etch primers. Another type of self etch primers is DTM primers. Similar to regular self etch primer, these primers are color coded to match the inner structural panels (rails, aprons, etc. Fig. 13) of a vehicle. You should follow the same rules of use as the self etch primers. The last of the DTM

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primers is epoxy primer (Fig. 5). Electrodeposition primer is applied to a manufactured vehicle by submerging the vehicle in a container or vessel holding the coating bath or solution and applying direct current electricity through the EPD bath using electrodes.

in his stall with the foam brush. Note: do not mask the vehicle for primer, and the car does not need to be moved to the paint department. After about 30 minutes drying time, the vehicle can have seam sealer applied to the welded joints. The tech does not need to go to the paint department and seal it. (See Figs. 14 & 15) Moreover, Honda released a bulletin in March saying “never apply seam sealers to bare metal and apply 2K epoxy primer to the bare metal.”

Fig. 13

The object to be coated is one of the electrodes, and a set of “counter-electrodes” are used to complete the circuit. A characteristic feature of this process is the primer particles are suspended in a liquid medium, migrate under the influence of an electric field (electrophoresis) and are deposited onto an electrode, or in this case, the metal of the vehicle. The final step is to rinse and bake the vehicle, resulting in a smooth finish. We in the collision industry do not have the ability to replace the E-coat the OEM has, but we have a product that comes very close—epoxy primer. Epoxy primer is known as a 2K primer, consisting of the primer and hardener. It can be applied to any rigid metal surface (steel, aluminum, SMC, fiberglass, etc.) It can be applied as a high build primer or reduced to be sprayed on as primer-sealer. I have my shops mix it up the epoxy primer in a 4:1 cup in the morning (it has an eight-hour pot life) and, depending on the job, I tell the body tech to brush it on with a foam brush as a first option. Dry time is about 30 minutes. For example, let’s say you are replacing upper fender reinforcement on a vehicle, the attached part is welded into place and now the bare metal needs to be coated with primer. In this case, the body tech does it

Fig. 16

repair news “2K epoxy is to be applied to all bare metal surfaces prior to applying seam sealer, body filler or other refinishing products.” Furthermore, primer can be applied using a foam or standard brush, small roller or dobber as well as being

sprayed on. The last primer is specialty high build primer. A few paint manufacturers have a high build primer (Fig. 16) in a handy spray can for small areas. This particular primer has a flex agent added, making it ideal for small plastic bumper repairs. In Fig. 17, the bumper repaired area was sanded and two coats of high build primer were applied in the body department. This primer works great with a short wave infrared light (Fig. 18).

Fig. 18

The primer was completely dry from the top to the base in less than two minutes, and the total repair was done by the body repair technician. Think of the time saved. I hope this article is helpful to you and your staff.

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Fig. 15

Toyota states in Collision Repair Information Bulletin (CRIB) #63 to “apply epoxy primer or wash primer over bare metal. Do not apply body filler over bare metal.” In CRIB #127, it says “body fillers should not be applied to bond surfaces. Epoxy primer applied directly to properly prepared bond surfaces should NOT be refinished with color or clear coat.” Ford, GM and Audi recommend in their repair manuals epoxy primer on bare metal glass bonding surfaces. Finally, Honda said in its March

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Shops Using Downtime Advantageously During COVID-19 Crisis by Chasidy Rae Sisk

As the U.S. strives to prevent the spread of COVID-19, most states have instituted some version of a shelter-in-place order. Many businesses are experiencing a decrease in workload, including collision repair shops and related businesses. While furloughs are happening, experts advise against it, especially in light of aid offered by the U.S. government, including the Paycheck Protection Program (PPP), which provides small businesses with forgivable loans to keep employees paid. Most shop owners are doing everything they can to maintain their employees, including pursuing less traditional schedules and duties. Industry leaders agree that looking for the opportunities within the current situation will help collision repair professionals maintain a more positive outlook and come out in a good position on the other side. “No one wants to face declining car counts and repair volume, but if

there is a silver lining to all of this, it does provide an opportunity to focus on how you can improve your business during the downtime,” VeriFacts CEO Farzam Afshar recently said. Improving the business can take a variety of forms, including maintenance, financial and training opportunities. During this period, many shops are using the extra time to clean and sanitize their entire facility. Deep clean the paint booth, change filters, service or upgrade equipment, power wash the building and reorganize to enhance efficiencies to prepare for the day the work starts coming back in the door. Kevin Anderson of Elite Auto Body in Gambrills, MD, has his team gutting the shop, purging junk and painting the floor and walls. At Downingtown Collision in Downingtown, PA, Tim Hedrick is “working because I’m trying to make sure my guys can collect a real paycheck and not unemployment. I’m paying them to do maintenance and

sweep and other stuff around the shop.” At Parks Royal Body Works in Boise, ID, the technicians are still processing their current workload, but after that, Matt Thornton has plans to deep clean the building, convert the booths to LED lighting and replace office carpet. “That should keep them busy for a couple of weeks. We are taking it day by day and keep adjusting our ideas and finances as needed,” Thornton said. “We applied for the PPP, which will really help.” The team at Cocoa Auto Salvage in Cocoa, FL, is employed on special projects like resetting the yard, maintenance and auditing as well. Owner Shan McMillon is also using the downtime to evaluate her inventory and update settings in her electronic platforms. “I have more time to work on my business, instead of in my business, and I’m trying to take full advantage of that,” McMillon said. DCR Systems LLC is processing paperwork and accounts receivables

during the lighter supply of vehicles, according to Marketing Specialist Pam Giarrizzo. “The team is working on ways to communicate with the insurance companies and the customer to try to lessen or eliminate short pays. It just takes more communication with both parties,” she said. “Develop your fully reopen checklist and get to work. ‘Fill the potholes,’ meaning go take care of the little things in your systems and processes that you just always seemed too busy to take the time needed and fix,” said John Hill of The Autotrends in Greensboro, NC. “If your building needs a little paint, it’s the perfect time to freshen things up.” On a recent CIECAst, Mike Anderson of Collision Advice recommended shops analyze their financials to look at areas they can reduce or eliminate. Closing out repair orders, chasing receivables and establishing new accounts may be worth a look, as well as audits and associate re-

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views, which often get deferred due to workload. With the reduction in work, many shops may be tempted to reduce or even eliminate marketing efforts, but successful shop owners disagree with that approach. “If your shops are slow, use this opportunity to put yourself in front of your customers,” said Brian Shaw from Sudden Impact Auto Body & Paint in Salisbury, NC. “I’m not a very good speaker and don’t do well on camera, but right now, at least in North Carolina, our customers are sitting at home scrolling Facebook. Try to have fun and stay positive!” At Body Works Plus in Charlotte, NC, Brian Davies has been sending email blasts to previous customers, which generate a 55% return ratio; the day after he sent the first blast, he received a job. He contracted a local marketing company to set up a free valet for customers to have their vehicles picked up and dropped off, sans contact. “We amped up our budget for marketing and started promoting our business on two new radio stations. Last week, I did a Facebook Live about a special we’re offering, and that went really well,” Davies said. “If things slow down, we’ve taken on a project to repair a veteran’s truck, and if it comes to it, we’ll paint the floors and perform maintenance.” “Do not stop marketing. If anything, increase it,” Hill said, recommending shops keep an eye on the future throughout this crisis. “Everyone is a startup now, and it’s a great time to adjust those pay plans you were too timid to address. Get help wanted ads out. We all knew the labor market was too tight with everyone employed, and now, we can get and retain some quality applicants. “It’s going to be a real-life game of musical chairs when people get back to work,” Hill said. “Plan now so you can get the right people lined up for the right chairs. The hysteria is going to end, and while it may be a little jagged getting to the new normal, I believe that many of us will like it better, ultimately.” Preparing for the future by ordering parts ahead of time, especially in light of staggered deliveries, can be helpful, Anderson recommended. Paul Morro of Morrobuilt in

Raleigh, NC, agreed. “Because I work on 40- to 50-year-old British cars, parts supply is critical, and when I received an email from my next-day supplier that they were temporarily shutting down operations, I placed a large hard parts stock order from a different supplier that is still in operation to ensure I

completing their vehicles, as well as our scheduled customers understanding our decision.” Molinaro didn’t pay his techs without assigning them some work, though. “We used this time to review SOPs and learn new procedures and technology from the products and

“No one wants to face declining car counts and repair volume, but if there is a silver lining to all of this, it does provide an opportunity to focus on how you can improve your business during the downtime,” — Farzam Afshar can satisfy future customer vehicle repairs,” Morro said. “I normally order as needed, but I wanted to be certain that I’d prepared for whatever the future holds.” Another common practice among shops is revising their employees’ work schedules in some way. “We’re still open five days each week, but our techs have gone to a four-day workweek, reducing payroll by approximately 20%,” said Stan Creech, from Creech Import Repair Inc. in Raleigh, NC. “During idle time, we clean the shop, paint, update equipment and perform maintenance.” R&N Motor Company, Inc. in Sanford, NC, has emailed its customer base to offer vehicle pickup and drop-off, is focused on sanitization and has begun preparing for equipment updates. “We lost a tech to a government job, but it couldn’t have happened at a better time,” Manager Robert Crawford said. “There’s still enough work coming in to keep two techs going. If we get caught up, they leave an hour or two early, but we still pay them to make up for the lack in billable hours. We are making plans to hire a new tech.” In Little Egg Harbor, NJ, one of the areas of the country hardest hit by COVID-19, John Molinaro of Streamline Auto Body erred on the side of caution. When New Jersey Gov. Phil Murphy implemented a stay-at-home order, Molinaro instructed employees to follow the order, “although we are essential,” he said. “They have received full pay for the time they are out, and my rent will be paid on time,” Molinaro said. “My customers were supportive in our decision with regards to delays in

tools we use,” he said. “Each employee is asked to view two hours of training videos each day, and Collision Hub has been amazing in having videos in one place for my techs to view, offering over 850 videos on YouTube.” Anderson recommended shops take advantage of downtime by reviewing repair guides from the manufacturers they repair and investing in training. Crawford, Davies, Creech and Thornton all have plans to train their teams as well. Often, shops complain

training causes delays in the repair process, but with a lack of workload, this is the perfect opportunity to take advantage of the many virtual training opportunities available. Due to the current situation, many associations and industry supporting companies are providing free resources and training opportunities online. Here are just a few websites offering free or discounted webinars: CollisionHub.com FordHarrison.com ShopMarketingPros.com business.spanesi-americas.com/ youtube.com/user/SCRSCollision youtube.com/user/ButlerCollision rts.i-car.com worldpac.com/training/classes/online/ thepowerofa.org/coronavirusadvocacy/ nada.org/coronavirus/resources/ sema.org/corona-updates/ tstseminars.org/ elitebodyshopsolutions.com/ Although there are many challenges ahead, there are plenty of ideas to help shops keep employees working with a little creativity and positivity. Good luck, and stay safe.

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epair oad, take rain-

many rting urces

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National News

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

with Ed Attanasio

CCC Analyst Forecasts Impact of COVID-19 on Collision Repair Industry Trying to figure out what the long- capacity. term impact of COVID-19 will be Gotsch has written the “Crash to the automotive, insurance and Course,” CCC’s annual publication collision repair industries is literally on trends affecting collision repair and with Chasidy Rae total Siskloss costs, since 1995. This puimpossible. Everyone is speculating and re- blication has become a key resource lying on news stories that change for the industry in understanding how hourly, so unless you trust psychics broader trends within the economy, like Sylvia Browne or Carnac The new and used vehicle marketplaces and collision industry are affecting Magnificent, you’re only guessing. Director/Industry Analyst Su- auto claim frequency and costs. sanna Gotsch from CCC Information with Chasidy Rae SiskGotsch also consults with the Services Inc. is a 28-year veteran, so development of CCC’s industry-leashe’s been there and done that when ding data warehouse and reporting it comes to interpreting numbers and products. hoping to predict what’s going to hap- What we are facing now is unpen next. precedented as it affects both our li Her job is to eliminate guess- velihoods and our health, Gotsch said, work to ferret out the facts. No one meaning that it’s hard to compare to knows when wewith will all get back Antonelli to anything else that has happened in our Victoria our “normal” lives, but Gotsch’s his- lives. torical perspective supported by data “We’ve obviously never been is invaluable for anyone who works here before, so we are comparing this in the automotive industry within any to prior epidemics or major econo-

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mic disruptions and right now we’re seeing the worst of both,” Gotsch said. “When the SARS epidemic hit the Far East in 2002-2003, car sales plummeted. But what’s interesting is

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Director/Industry Analyst Susanna Gotsch from CCC Informational Services forecasts a rocky road that will drive up claim and repair cycle times for the rest of the year.

that after the epidemic was over, auto sales went up significantly. We don’t know the reasons for that specifically, but we suspect that people living in urban populations didn’t want to use

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public transportation anymore.” History shows us the U.S. has seen overall miles driven in this country fall during recessionary periods, Gotsch said. “During the Great Recession that ran from December 2007 to June 2009, total miles driven fell over 3% from its pre-recession peak in November 2007 to its lowest point in February 2010 during the post-recovery,” she said. Logically, fewer drivers mean fewer potential accidents, Gotsch said. “Countries, states and communities worldwide are on lockdown, asking residents to go out only for food and other essential needs. Businesses have begun to close for an unspecified amount of time, and many are having workers work remotely,» she said. “This will most certainly lead to significant declines in miles driven, particularly at peak

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with Bruce Roistacher West_Issue_0520.indd 47

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driving times, where congestion has been shown to drive auto accident and claim frequency. “There was a steep decline in the frequency of auto claims during and after the Great Recession,” she said. “The number of claims per 100 insured vehicles for collision and liability coverages combined was 4.79 for the rolling four quarters ending Q1 2008, and fell nearly 12% to 4.22 claims per 100 insured vehicles for the rolling four quarters ending Q3 2008. “Collision claim coverage alone fell nearly 16% from 6.29 claims per 100 insured vehicles for the four quarters ending Q1 2008 to a low of 5.3 claims per 100 insured vehicles for the four quarters ending Q2 2011. Independently, liability claims experienced a nearly 10 percentage decline during that same period.” As more individuals are forced to work from home and discontinue all trips except those to stock up on essential items, it’s clear we can expect miles driven to plummet, and auto claim frequency to follow suit. If we want to get a look at what U.S. auto sales will be doing this summer, China can give you a glimpse into our future. Auto sales in China fell 33% in January 2020, and fell another 79% in February 2020. The car sales numbers in China are significant because they can forecast what is coming next in the U.S. “We will really watch these numbers, because a full recovery later in the year is unlikely,” she said. “Auto sales in China had already fallen over the last two years, and analysts are projecting that sales will be down bet-

ween 3-5% versus 2019 sales.” In Gotsch’s detailed report, it states in the U.S., analysts are predicting CY 2020 auto sales will fall by as much as 20%, as opposed to previous forecasts of a 1-2% decline for the year. The largest decline in sales are anticipated in March and April. Mid-March, the UAW and the Detroit automakers agreed to shutdowns of plants to stop the spread

Continued from Page 37

tion provider, is tracking the metric of “assignment received to estimate start date.” This report shows you how much time on average passes between when your shop receives an assignment and when you begin to write the estimate. Often when a shop tells me they need more work, we’ll check out their assignment-to-estimate metric and see it shows it’s taking them five or six days after getting an assignment to get that customer’s estimate started. Those shops don’t need to be attracting more work; they need to be getting on assignments in a more timely manner.

‘Capture Rate’ you can look into whether there’s been some change at the dealership. Maybe there’s a new general manager or service writer who is sending work to his buddy’s shop down the street. Similarly, don’t use a generic source as “internet.” Indicate whether that customer found you through your social media, your shop website, an OEM shop locator, etc. Another way to monitor and improve capture rate for direct repair shops, or those who receive “open assignments” through an informa-

or manufacturing locales for affected parts. As automakers come to grips with the real possibility that auto sales will fall, more will look to slow production even more.” Gotsch’s report states the car manufacturers in the U.S. will do more to keep their customers from going broke in 2020. “Numerous automakers are already offering consumers the ability

“We’ve obviously never been here before, so we are comparing this to prior epidemics or major economic disruptions and right now we’re seeing the worst of both,” — Susanna Gotsch of COVID-19. Other automakers are continuing to halt production due to the shortage of parts, identification of employees testing positive for COVID-19, as part of broader community/state quarantine efforts or in anticipation of fewer sales in CY 2020. COVID-19 will likely impact parts availability through the summer and possibly longer, Gotsch said. “The disruptions in auto parts manufacturing that occurred in China in January and February is expected to result in supply shortages beginning in late March through April and June,” Gotsch said. “If miles driven fall, this could lessen or delay that impact. “Automakers looking for components for use in production had begun shipping at-risk components via cargo plane, and where necessary, looking for alternative suppliers

to delay payments, purchase vehicles with zero-interest loans stretched out over many years or offering to pay monthly payments should a customer lose their job after purchase,” she wrote. Gotsch forecasts a larger decline in new auto insurance premiums related to new car sales. “During the Great Recession, private passenger vehicle net pre-

miums declined, as auto sales in the country fell, and consumers opted to drop all but the coverage mandated by law,” the CCC report stated. “The biggest drop occurred within private passenger auto physical damage in CY 2009: -2.2%. If car sales fall as precipitously as we saw back in 2009, private passenger auto premium growth will also be impacted.” Body shops will also have to deal with longer fulfillment times for certain replacement parts driving up claim and repair cycle times within the next few months or longer, Gotsch explained. “As COVID-19 continues to spread, people will drive less due to quarantines and to limit overall exposure, so our industry can expect a drop in auto accidents and claims as well,” Gotsch said. “With the epicenter of COVID-19 now having moved out of China to Europe and the U.S., the overall impact to the global economy will be significant. “All of us at CCC will continue to monitor this situation closely and provide additional updates during this unprecedented time as we return to normalcy.”

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48 MAY 2020 AUTOBODY NEWS / autobodynews.com

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with Erica Schroeder

Industry Insight with John Yoswick

—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). Contact him by email at jyoswick@SpiritOne.com.

Shops Cautioned Tough Economy Could Spur More Counterfeit Parts, Pirated Software

Shop Showcase

The economic fallout from the coro“That was knowing the supply navirus pandemic is likely to be felt chain. The internet kind of changed worldwide, and that has law enforce- that. As great as the internet is at conwith Ed Attanasio ment bracing for almost inevitable necting people that are good, it’s also uptick in crime, including illegal busi- really good at connecting people who ness activity. are bad with those who don’t know Shops should take a number of the other person is a bad source,” Jarmeasure to avoid perpetuating—or dines said. “But at the end of the day, falling victim to—criminal activity. it all comes down to knowing your The Automotive Anti-Counterwith Ed Attanasio supply chain. If you can trust your feiting Council (A2C2), a coalition supply chain, if you would put a part of 11 automakers, is reminding shops (you buy from a source) on your own to avoid counterfeit airbags and other car, we can’t ask for anything more automotive parts. from you.” Dee Pagdilao, of American HonAuthorities caution parts aren’t da, said A2C2 offers a visual guide to the only automaker product subject some of the mostwith common Edindications Attanasio to pirating. that a part may be counterfeit, includShops buying an aftermarket ing labels that don’t match one anoth- scan tool should determine whether er (such as two different part numbers the tool maker licensed the needed on the same package) or that cover information from the automaker, or other labels; labels with conflicting just “reverse-engineered” it by putinformation (“made in Thailand” and ting an OEM scan tool on a vehicle with Ed Attanasio “made in Japan”); or, most commonly, and using monitoring equipment to labels with odd misspellings of such common words as Ford. Genuine automaker airbags are shipped one per box, with a “Class 9” hazardous material label, Pagdiwith Stacey lao said; counterfeiters, however,Phillips often save money by shipping multiple airbags in a single box, or by skipping the hazardous material label. Shops concerned a part they reChoose Original ceived may be counterfeit should contact the Nationalwith Intellectual Property Stacey PhillipsMINI Parts. Rights Coordination Center (IPRC) (www.iprcenter.gov), part of the U.S. So. California Immigration and Customs Enforcement and the U.S. Department of MINI of Escondido Homeland Security. Escondido How can shops best avoid purwith Stacey Phillips800-544-4269 chasing or installing counterfeit parts? 760-747-0894 Fax The first step is to know your darrinedwards@miniofescondido.com parts supply chain, Abe Jardines of the IPRC said. “My first job when I was 17 The Dealers Above Are Original years old was delivering parts to auto MINI Parts Distributors shops in New Jersey a local Phillips car withfor Stacey dealer,” Jardines said. “Every guy at those body shops knew me by name, and I knew them by name. The next time my mom needed a body shop, ©2020 MINI USA, a division of BMW of North I could call that guy up and say my America, LLC. The MINI name, model names mother is coming in. I knew who I and logo are registered trademarks. trusted.

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determine the diagnostic routines to essentially copy. Greg Potter of the Equipment and Tool Institute said it’s safe to say every manufacturer of aftermarket scan tools reverse-engineers to some degree. “Even if you are given all the great data that you (license from) the OEMs, you still have to implement those features and functions into your aftermarket tool,” Potter said. “You have to validate and verify that that tool is doing what it’s supposed to do. How do you do that? You get the OEM tool, you send a command, you see what the reaction is, you monitor that traffic, and then you take your tool and you do the same thing. “That’s your validation effort, back and forth. That can certainly be called reverse-engineering. You are monitoring the messages from the OEM tool and making sure your

Media and Publicity for Shops

tool does the same thing and gets the same responses back.” But Donny Seyfer of National Automotive Service Task Force (NASTF) said it’s not really that type of “professional” reverse-engineering that is a problem. “It’s the, ‘How can we steal the software off the OEM tool and then sort of implement it into our own tool, and then sell it, in some cases representing it as an OEM tool,’ that’s the problem,” Seyfer said. “In some cases, they’re not even taking the (OEM tool) copyright information off. As you use it, you see that and say, ‘Huh, that’s not even the brand of the tool I’m using.’” Seyfer that type of piracy undermines the companies producing both OEM and legitimate aftermarket tools. “So if you buy those (pirated) tools just to save a few hundred bucks,

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and those other (legitimate scan tool) companies keep raising the prices because they’re spending all their time going to court (to fight the piracy,) now you’ll understand why,” Sey-

fer said. “Customs and border patrol snags these things constantly, by the case load. Truck loads in some cases.” Jack Rozint of Mitchell International said his company’s software

similarly gets pirated, and he said that the same online sources where that pirated software is being sold also often offers knock-offs of automaker scan tools for sale.

Deciding Which Scan Tools are the Best Fit for Your Shop How can a collision repairer know an aftermarket scan tool will adequately emulate the OEM tool? “Well, that’s the big challenge. You really can’t,” said Donny Seyfer of the National Automotive Service Task Force during a panel discussion earlier this year at the Collision Industry Conference. “Until you have it in your hands and plug it into the car, you don’t know if it works or not.” Seyfer said he thinks that’s why the collision industry is largely defaulting to OEM scan tools (or to using scanning service providers that use them.) “I’m not saying that’s necessarily the right solution, because unless you’re working on (a vehicle) that’s really, really new, you have a pretty good chance that the (aftermarket) scan

tool maker has integrated the test you need,” he said. But Seyfer also acknowledged aftermarket scan tool makers in general have focused on the mechanical repair segment of the market and won’t necessarily know what the collision industry needs until the industry conveys it. Scott Brown, a founder of Diagnostic Network, an online community designed to provide resources and support for diagnostic technicians, said aftermarket scan tools in some cases offer more functionality than OEM tools, particularly on vehicles that are a few years old. OEM scan tools don’t always display data in a format that is most helpful to technicians. “A lot of times, the aftermarket tool companies listen and end up fix-

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ing that, providing a way to display the data in a way that (best helps shop technicians find) the diagnostics needed,” Brown said. Greg Potter of the Equipment and Tool Institute agreed. “The automakers do a good job developing diagnostics for next year’s vehicles, because they have to. That’s their job, their focus,” Potter said. “But some of them don’t do a real good job in upgrading or enhancing diagnostic software that is a couple of years old. They move on to developing stuff for the future. But for the aftermarket, that’s their sweet spot. They focus on collecting information and enhancing software as they learn how people are using it, learning what the weaknesses are and correcting those issues.”

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repair or service job.

Capture rate will also increase in importance if something leads to an increase in the rate at which consumers are shifting to newer cars with more ADAS. That might seem hard to fathom with the slow-down in car sales we’ve seen. But that decline might at some point prompt some sort of “cash for clunkers” federal incentive to attempt to revive new car sales. The good news in such programs for shops is that newer cars are more likely to be insured and thus repaired after an accident. But it could also push a lot more ADAS-equipped cars onto the roads. That could mean the annual decline in claims could jump to 5 or 7 or 10% a year. So we all need right away to start refocusing on basic best practices, like improving capture rate. Because it’s going to be much more competitive for claims. The water around us is going to start heating up, and we can’t wait too long to respond.

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The following dealerships are eager to serve your needs. Call your local Subaru collision parts specialist today! autobodynews.com / MAY 2020 AUTOBODY NEWS 51

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with Stacey Phillips

Tips for Busy Body Shops with Stacey Phillips

Stacey Phillips is a freelance writer and editor for the automotive industry. She has 20 years of experience writing for a variety of publications, and is co-author of “The Secrets of America’s Greatest Body Shops.” She can be reached at sphillips.autobodynews@gmail.com.

CCG Shares Body Shop Advice & “Best Practices” During Coronavirus Restrictions When the news first broke about the state and county health department he recommends letting them know pandemic, the leadership team at Cer- websites; and the Coronavirus Aid, Re- where the shop owner stands, what tified Collision Group (CCG) recog- lief, and Economic Security (CARES) the expectations are at the workplace withofStacey Phillips Act. CCG has created a summary doc- and the potential impacts. nized the importance finding ways to support their network of 446 inde- ument with CARES Act Highlights. “Communication is huge and To assist affiliate shops consider- transparency is key,” said Evans. pendent body shops. “We quickly realized that the ing applying for a loan, CCG is sharing “Nothing is worse than a surprise. more information we can share, the information about COVID19loans.org. Talk to them early and communicate better off we’re all going to be,” said The new service was started by Brad with them often. Everyone has a perMarty Evans, COO of CCG. “This Mewes, owner of Supplement Adviso- sonal choice on how they are going to is true for our affiliate shops as well ry, to help shops understand the oppor- deal with any adversity, and I would with Victoria Antonelli as the industry as a whole.” tunities available and file the required consider this to be significant adversity.” CCG was founded in 2014 by paperwork. four individuals passionate about the Ingalls said these suggestions and Evans said he is aware of only a collision repair industry: Marc Se- tools are aimed to help their affiliates handful of businesses that have volunbastian, CEO of four Blake’s Auto through these trying and demanding tarily closed since the stay-at-home orders were announced. Some faBody shops in Northern California; times. cilities are now instituting Bill Lawrence, with owner of 1st CerEd12Attanasio split shifts, where half the tified Collision facilities in Southern staff works in the morning California; Luis Alonso, president of and the remainder works seven Pan American Collision Cenin the afternoon. ters in the San Jose, CA, area; and “Instead of furloughing Tom Adams, owner of TAG Marketing. and laying off people, we’re “CCG was with foundedGary on a simple seeing shops finding a way Ledoux to share the work as equitapremise established by our founders, to level the playing field for the inbly as possible,” said Evans. He recommends shop dependent collision repair operator,” Car Crafters in New Mexico is serving lunch to their team owners and managers stay said Jeff Ingalls, VP of marketing at in all six of their shops, which helps support the local CCG. “We do so by partnering with as calm as possible and community only the best independent repairers, leave every conversation “The health and well-being of the on a positive note. vendors, insurers and OEs. This align- with Stacey Phillips ment and partnership drive value for shops is something that CCG takes “It may not be a positive mesall while delivering the ultimate goal very seriously,” he said. sage, but let’s leave with a positive of providing the highest quality OE In addition to forwarding com- thought.” Ron Reichen, owner of PreciCertified repair on behalf of the cus- munication via email, CCG has also continued the practice of communi- sion Paint & Body, a CCG affiliate in tomer.” Since the onset of the corona- cating with shops via phone. Rather Oregon, agrees. virus restrictions, Evans said they than the usual weekly call, Evans “I was just discussing how to Mike learned early towith provide their Anderson shops said they are talking daily to con- stay positive and see the opportunities with as much information as possi- nect. currently with a dealer service manble. As a result, CCG has regularly “COVID-19 has changed our ager,” said Reichen. “More than ever, sent out online newsletters to all of its normal day-to-day conversations but safety is in the forefront of everyone’s affiliates with facts and advice about our staff is still hard at work,” said Ev- mind. That said, we should segue our the coronavirus as well as tips to help ans. conversations from how we are probody shops run safely and effectively. He said it’s advantageous for any tecting our clients’ vehicles before and “Our goal is to communicate organization to communicate more after drop-off to prevent the virus to with them in an authentic, genuine frequently at this time, to keep a posi- how important a certified repair proway so they know we are here for tive energy and outlook. tects the clients’ safety for the years them,” said Ingalls. “We have been “If we allow people to truly ahead.” providing tangible, pragmatic infor- self-isolate and shut off communica- Sean Guthrie, director of opermation in a way that isn’t inundating tion, we all know that it’s a leading ations at Car Crafters in New Mexiand flooding their inboxes.” indicator to negative results and de- co—another CCG affiliate—said his This includes links to many re- pression can set in quickly,” he said. family was born and raised in Albusources, such as the Center for Disease Rather than have employees rely querque and considers it their home. Control and Prevention (CDC); local, on the local news for information, The company is partnering with lo-

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cal restaurants to serve lunch to their team, which he said helps support the local community and other momand-pop businesses. “We feel now, more than ever, supporting those who make our home special is critical,” said Guthrie. “United together, we will get through these hard times.” “Through this experience, we are becoming much better communicators within our shops and the entire repair community,” said Sebastian, co-founder of CCG. “In the immediate, this is not about profit; it is about keeping our team employed, feeling valued and keeping our economy running. We can do it. It starts through consistent, daily, caring communication with our team, our customers, our partners and even the competition. Together we will emerge better, stronger, and more connected … in that I am confident.” “At the end of the day, we have to get through it together as an industry,” said Evans. “We’re all going to be facing similar challenges. Let’s find a way to share best practices and protect our industry as a whole.” 14 COVID-19 Best Practices from the CCG team: 1. Appoint a coronavirus action plan coordinator who will disseminate updated virus information, protocols and policies to everyone in the business. 2. Post CDC, state and/or county information regarding the virus to educate teammates. Remember to use bilingual posts as necessary. 3. Source all products and supplies required to properly disinfect objects, buildings and vehicles, including disinfectants, hand sanitizer, bleach, soap, rags, gloves, masks, etc. 4. Be sensitive to those who are in high-risk categories and explore remote work options. 5. Require associates to stay home if they exhibit signs of the virus—fever, cough and respiratory problems—or any contagious illness such as a cold or the flu. See CCG Shares Advice, Page 55

52 MAY 2020 AUTOBODY NEWS / autobodynews.com

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First Funding for Small-Business Loans Depleted, Second Round Just Approved by Rick Barrett, Milwaukee Journal Sentinel

A $349 billion coronavirus loan program for small businesses has run out of money less than two weeks after it was launched, the U.S. Small Business Administration said April 16. The Paycheck Protection Program, part of the Coronavirus Aid, Relief and Economic Security Act passed by Congress in late March, is aimed at helping businesses meet payroll. As long as they keep their employees—or rehire those laid off —the loan amount covering eight weeks of paychecks can be forgiven. Wisconsin ranks 10th in the nation in both approved PPP loans, 31,702, and approved dollars, nearly $7.3 billion as of Monday, according to the SBA that’s made the federal program available to businesses with fewer than 500 employees.

Bob Roden combines a field of winter wheat on his family’s farm, Roden Echo Valley LLC, in the West Bend area. They milk 700 cows on any given day and have 1,800 acres of corn, soybeans, winter wheat and alfalfa that they cultivate. Credit: Michael Sears, Milwaukee Journal Sentinel

Nationwide, 70% of small businesses surveyed by the National Federation of Independent Businesses said they at least tried to apply for PPP money. However, many applications could not be processed because of overwhelming demand and now the initial round of funding has dried up. On its website, the SBA now says the agency is unable to accept new applications based on a lack of available funding. The Treasury Department says by law it will not be able to issue new PPP loan approvals due to the lapse, putting a pause on the program that’s become a lifeline for millions of businesses. The loans have been dished out on a first-come, first-served basis. As of Thursday morning, the SBA

said it had approved roughly 1.6 million applications for more than $339 billion in loans since the program was launched April 3. “The money running out has been a big fear that drove a lot of people to apply,” said Rose Oswald Poels, president and CEO of the Wisconsin Bankers Association. For some businesses, the program was too good to be true. “There was this understanding that the government was going to help any business with eight weeks of payroll. But when you start working through the details, you have to be operating right now with a full, normal payroll … and with the governor’s shelter-at-home order in Wisconsin, it’s effectively closed businesses like bars and hair salons that don’t have a payroll right now,” Poels said. There have been delays in getting the money out and some banks and credit unions haven’t had the closing documents or systems in place to make the transactions. “I liken it to trying to put a firetruck through a garden hose. You literally had, overnight, thousands of lenders who didn’t have access to the SBA system all trying to get access at once,” Poels said. The Trump administration has asked Congress, which set the program’s original ceiling, for another $250 billion, although that request has stalled in the Senate. Late on April 15, Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza issued a statement noting the historic demand for loans and pleading for Congress to pass additional funds for the program. “The SBA has processed more than 14 years’ worth of loans in less than 14 days. The Paycheck Protection Program is saving millions of jobs and helping America’s small businesses make it through this challenging time,” they said. “We urge Congress to appropriate additional funds for the Paycheck Protection Program — a critical and overwhelmingly bipartisan program.” Democrats have demanded that in approving more money for the program, Congress should also pass more funds for hospitals and state and local governments. They also want to bolster food stamp benefits and mandate

some of the funds go to businesses owned by women and minorities. Republicans, on the other hand, have pushed for this money to be approved without any additions or mandates, arguing it’s the only program at risk of evaporating thus far. A breakdown of the PPP loans on SBA’s website showed that, as of Monday, the average loan size was $239,152, and 70% of the loans were for $150,000 and under. Construction companies were approved for the largest share, nearly 14%, or $34 billion. In second place were companies that provide professional, scientific and technical services, with 12.3% or $30.35 billion. Manufacturers were in third place with 12.25%, or $30.32 billion. Thousands of businesses are still awaiting word on their loan applications. “There were a lot of technical problems early on. And there have been communication problems. Some individuals applying for money never knew whether they were approved or not,” Poels said.

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As word leaked out this week that the PPP funding was nearly gone, one Wisconsin bank had 24 loan processors working through the night processing as many applications as they could, said Eric Skrum, communications manager for Wisconsin Bankers Association. If your application wasn’t submitted before April 15’s cutoff, don’t throw out the paperwork. “I would hold on to it. Then you’re prepared so that if Congress does in fact move forward and fund the program again, you will be that much further ahead,” Skrum said. Still, for a program of this size rolled out quickly, it’s gone quite well, said Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce. “I think the federal government worked with great speed, but with that comes haste and not a perfect delivery system to get this into the economy,” Sheehy said. He likens the PPP loans to the $1,200 coronavirus checks that should be showing up in the mailboxes of in-

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54 MAY 2020 AUTOBODY NEWS / autobodynews.com

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dividuals soon, and the $600 in weekly federal unemployment money that is supposed to be coming. “Those individual and business lifelines are critically important … The severity and speed of the COVID-19 impact on the economy is unlike anything we’ve seen,” Sheehy said. Some Wisconsin businesses say the application process went smoothly enough for them. “I thought it was amazingly simple,” said Eric Isbister, CEO of GenMet, a metal fabrication company in Mequon that employs 46 people. “When I bought this business 20 years ago, we had an SBA loan with paperwork that was inches thick. This was much quicker,” he said. Keefe John, president and CEO of Ethoplex, a Germantown internet service provider, said he received approval on a PPP loan in less than a week. It helped, he said, that he already had a relationship with an SBA-approved lender. “We just wanted some extra working capital to help us out during uncertain financial times. We will use it to retain our employees and give people sick leave if they get the virus.

I think small businesses need to do everything they can now to survive and remain competitive,” John said. His company currently employs 10 people. “We are actually looking to hire more now. We’re seeking technicians to do customer installations in southeast Wisconsin,” he said. Bob Roden, a dairy farmer from West Bend, said Wednesday he was waiting to hear whether his PPP loan was approved. He and his family milk about 700 cows and grow corn, beans and wheat on 1,800 acres. They have nine employees. Roden said his milk and grain prices have been sinking, with no bottom in sight as coronavirus wreaks havoc on the global economy. “The loan is going to help, but it’s a band aid not the answer,” Roden said.

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CCG Shares Advice 6. Maintain appropriate social distancing at all times. The recommendation is 6 feet. CCG’s Social Distancing in Your Shops flyer has additional information. 7. Require shop uniforms to remain at the workplace and ensure

delivery service. CCG provided a sample front door sign explaining the temporary policy. 10. Thoroughly disinfect all vehicles prior to any associate touching or entering them and all vehicles post-repair before delivering them to customers. 11. Eliminate group lunches at the shop, stagger lunch breaks and refrain from having self-serve food

“We quickly realized that the more information we can share, the better off we’re all going to be,” — Marty Evans they are cleaned every day. Have employees store personal clothing in their vehicles and encourage hand washing before retrieving them. 8. Expand photo estimating capabilities, which can provide remote work for qualified writers. 9. Institute curbside drop-off and delivery and set up a secure area where customers can call or text when they arrive. Use phone, text or email for all discussions, authorizations and approvals. Consider disbanding customer pick-up and home

and beverages in the front office and break rooms. 12. Show compassion and offer assistance if an employee becomes infected. CCG sample protocol to follow. 13. Research the small business emergency loans available. 14. Share best practices with other body shops and vendor partners. For more information about CCG and to share best practices, email Jeff Ingalls at jingalls@certifiedcg.com.

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Detroit 3 Gain Big Market Share as COVID-19 Infects Sales, April Looks Worse by Henry Payne, The Detroit News

With March auto sales infected by the coronavirus, Detroit automakers are bracing for an unprecedented spring of empty showrooms as analysts predict 2020 sales could be down as much as 30% from forecasts. The U.S. industry’s first quarterly sales reports since the the COVID-19 crisis shut auto plants and many showrooms delivered declines for every automaker. Declines were particularly acute in the last week of March as 80% of the country—39 states—issued shelterin-place orders, resulting in sales declines of 61%, according to forecasting firm J.D. Power. New York City and Detroit were the hardest hit metro markets. Yet, even as Fiat Chrysler Automobiles NV reported sales declines of 10% for the first quarter of the year and General Motors Co. was off 7%, the Detroit Three were poised to weather the downturn better than their peers due to healthy pickup sales. Buoyed by truckloads of incentives, GM, FCA and Ford Motor Co. gained a whopping 11 points in U.S. market share thanks to their most profitable vehicles. Ford isn’t scheduled to release its detailed January-March sales numbers until April 2. The sales pain spread across all sectors of the automotive market. Toyota and Hyundai saw first quarter sales decelerate, with the Japanese giant dropping 35.3% in March alone. Including its abysmal 43% March decline, Hyundai reported an 11% drop in the first quarter. Luxury automakers were particularly hard hit, with Porsche first-quarter sales chopped 20.2% from a year ago (after a record 2019) and BMW off 15.3%. The industry is bracing for difficult months ahead with March a passing rainstorm compared to the coming April hurricane. With states expected to be in lock-down until April 30, J.D. Power predicts an 80% decline in sales. After a record five years of annual U.S. sales over 17 million units, sales were expected to slow in 2020, according to J.D. Power forecasts, to a still healthy 16.8 million units. But with automakers poised for the spring selling season beginning in

March, COVID-19 has changed the landscape. Assuming sales pick up after July, annual sales should stabilize between 12.1 million and 14.8 million units for the year—down 10% to 30% from their 2019 projections. “It’s going to get much worse in April as uncertainty rises and the potential that regulations will stay in place,” said Thomas King, chief product officer for J.D. Power. “We expect 1.6 million to 2.4 million unit sales lost from March though July.” According to a University of Michigan survey, consumer sentiment tumbled last month to its lowest level since the 2008 Great Recession and is projected to hit its largest two-month decline ever. Not surprisingly, given COVID-19’s impact on seniors, the 57-years-and-up demographic saw the biggest decline—67%—in auto shoppers. “Most important is when stayat-home orders end,” continued King. “There is going to be significant economic damage, and the economic environment is going to be challenging for the rest of the year.” Dealers across the country are offering no-interest loans and unprecedented 84-month lease terms to entice buyers to profit-rich pickups in particular. To maintain truck sales, automakers doled out a record—46%—of 84-month loans, as well as a record $7,200 in incentives. As a result, pickup sales last week were down just 27% compared to 61% for the industry, leading to the Detroit Three’s highest market share since 2006. In GM’s stable, the Chevy Silverado pickup roared to a 26% sales gain over a year ago, with 143,698 units sold, while its Sierra cousin was plus 31%. The popular Ram pickup lifted sales 7% to 128,805 vehicles. “In terms of adapting to changing conditions, there may be no better group than auto dealers,” quipped King. “They are showing remarkable ability to retain volume in the key truck segment.” GM and its dealers are offering concierge service, courtesy transportation and home delivery where permissible. But permissible varies by state: In Michigan, Pennsylvania, Washington, Kentucky and Hawaii even online sales have been sus-

pended until April 14. The Michigan Automobile Dealers Association has advised its members that automotive sales remain closed under Gov. Gretchen Whitmer’s business guidelines. Only service, parts and body-shop operations are allowed to stay open. As a result, Detroit saw a near 100% collapse in sales in the last week. “We are still actively talking with customers, answering questions and booking appointments for when the governor’s executive order lifts on April 14,” said a spokesperson for Lafontaine Automotive Group. New York Gov. Andrew Cuomo lifted that state’s ban on online sales March 27. “This is an enormous win,” said New York State Auto Dealer Association President Bob Vancavage in a statement. Dealers “have been working non-stop to craft an exemption under the essential business guidelines to allow dealers to do what they do best: sell cars.” The cratering of sales in New York was a key reason that luxury auto sales took the biggest hit in March. The state accounts for some 14% of premium sales nationwide. In contrast to pickup makers, luxury brands saw their market share decline from 14% to just 10%. In California, the nation’s largest auto market, the California New Car Dealers Association has advised all 1,400 showrooms to comply with Gov. Gavin Newsom’s shutdown order. Even home-team Tesla Inc. was forced to shut down production and showroom deliveries of its electric cars. The shutdown comes as the Silicon Valley automaker is launching its first entry-level SUV, the Model Y. Analysts expect Tesla sales to be off 30%. The Golden State’s first-inthe-nation shelter-in-place order on March 19 showed ominous signs for the industry, as San Francisco sales slid 86% the first weekend after the order. But San Francisco has modestly rebounded in the week since, implying dealers are adapting quickly to the new environment. Since a majority of luxury vehicles are leased, J.D. Power predicts a lot of pent-up demand in that segment once shelter rules are lifted. For Detroit automakers, there

were some bright spots outside of their core truck lines and the small-volume Bolt electric car. Sales of Chevy’s entry-level, $22,295 Trax SUV soared even as the rest of the brand’s SUV lineup did not fare as well. The entry-level Spark sedan saw sales gains, but Autotrader analyst Michelle Krebs warned against a trend of small car purchases. “We anticipate that sales of subcompact and compact cars (and SUVs) will struggle the most in the coming year. These segments tend to be bought by the least credit-worthy buyers, who already pay high interest rates and are the most vulnerable to layoffs in this economic crisis,” she said. Overall, Chevy saw the least degradation among GM brands with sales off 3.8%. GMC dropped 5.5%, Cadillac 15.8% and Buick 34.7%. For Fiat Chrysler, sales of the family-friendly Chrysler Pacifica minivan climbed 5%. Jeep’s allnew Gladiator pickup continued to impress with its third consecutive quarter of 15,000-plus sales though the Jeep line declined 14% for the quarter. That paled next to Fiat’s 49% free fall. “We expect some automakers will use the crisis to clean their houses, choosing to eliminate models and even brands,” said Krebs. “Long-suffering brands like Fiat might not survive the crisis.” Despite the sales gloom, TrueCar projected the average transaction price of vehicles to be up 3.2% in March 2020. Transaction prices have been key to industry profit margins, but TrueCar analyst Eric Lyman sounded a cautionary note as COVID-19’s effect on sales did not set in until mid-month. “Historically, there’s been a strong correlation between consumer confidence and average transaction price,” he said. “We’re now seeing one of the largest one-month declines in consumer confidence in nearly 50 years. April will provide a much clearer picture of the full impact caused from the coronavirus.” We thank The Detroit News for reprint permission.

AUTOBODY www.autobodynews.com

56 MAY 2020 AUTOBODY NEWS / autobodynews.com

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GEICO, Farmers, Liberty Mutual Join Insurers Giving Breaks to Drivers, Businesses More auto insureds and small businesses are getting a break on their insurance premiums to help them through the coronavirus crisis. Auto insurer GEICO said it will give back approximately $2.5 billion in the form of a 15% credit to its auto and motorcycle customers as their policy comes up for renewal between April 8 and Oct. 7. The credit will also apply to any new policies purchased during this period. Farmers Insurance is giving a 20% discount to more than 115,000 of its business insurance customers. Liberty Mutual is refunding 15% of premium for two months to personal auto insurance customers. GEICO’s average auto policy has a semi-annual premium of about $1,000 and generally covers more than one vehicle. This means GEICO expects credits to average about $150 per auto policy and $30 per motorcycle policy. The company estimates the benefit to its 18 million auto and 1 million motorcycle customers will be approximately $2.5 billion. GEICO, the second largest auto insurer in the U.S., joins a growing list of insurers offering discounts to help customers during the coronavirus crisis, a time when insureds are driving less and there are fewer accidents. “This ongoing crisis has widespread effects that will linger. That is why we wanted to give this credit for at least six months,” said GEICO President and CEO Todd Combs. “Our customers have been loyal, and we are committed to doing all we can to help them.” Last month, GEICO announced it was pausing cancellations of coverage due to non-payment and policy expiration through at least April 30. Beyond that, the company has committed to offering maximum flexibility to policyholders who need special payment options, as well as transitioning nearly all of its associates to work from home to continue providing the 24/7 service it is known for. Business Relief Drivers are not alone in getting some insurance premium relief. With many small businesses struggling as a result of stay-at-home orders, Farmers Insurance announced it will provide relief to more than 115,000 of its business insurance customers. Farmers’ business customers in

the restaurant, office, retail and service sectors across the country will receive a 20% monthly credit on their Business Owners Policy (BOP) for the next two months on their upcoming premium notices.“We understand how challenging running a business can be, particularly in these extraordinary times, and we want our business insurance customers to know Farmers cares and we want to help,” said Sharon Fernandez, president of business insurance for Farmers. This 20% monthly credit to their BOP policies is on top of other measures the insurer has already taken to help business insurance customers, including temporarily pausing policy cancellations due to non-payment, through May 1. Additionally, for all business insurance customers, Farmers is allowing extra time for business insurance customers to pay for their policies. Current GEICO customers can expect to see the discount when they renew. The insurer said customers do not need to take any action to receive this credit. Similarly, Farmers said restaurant, office, retail and service business insurance customers will see the credit effective on their policy automatically. Liberty Mutual Liberty Mutual Insurance is giving personal auto insurance customers a 15% refund on two months of their annual premium. This returns approximately $250 million to Liberty Mutual and Safeco personal auto insurance customers and builds on other customer support, including flexible payment options and delivery coverage expansion for auto policies. “Today, more than ever, we recognize the uncertainty and financial challenges our customers are facing,” said Liberty Mutual Chairman and CEO David Long. Personal auto insurance customers will receive a 15% refund on two months of their annual auto premium as of April 7, pending regulatory approval. The refunds will begin in April and will be issued either by check or in the manner the customer made their most recent payment. The payments will happen automatically. Liberty Mutual has also halted late fee charges and cancellations due to non-payment for personal auto and home customers from March 23

through at least May 22. The Boston-based insurer has also expanded all personal auto policies to cover customers who use their personal vehicles to deliver food and medicine. Standard Safeco personal auto policies typically exclude such coverage. This additional protection is in effect for all personal auto policies in all states for losses occurring from March 16 to May 22, and reported by July 1. AmFam and Allstate Earlier this week, American Family Insurance said it will return approximately $200 million to its auto insurance customers. The premium relief will come in the form of a one-time full payment of $50 per vehicle covered by an American Family personal auto policy. The typical American Family household with auto coverage has two vehicles, meaning the average relief check will be $100. American Family expects to complete the distribution of all 2.3 million checks within 60 days. Also this week, Allstate announced its Allstate, Esurance and Encompass personal auto in-

surance customers will receive a premium credit of 15% of their monthly premium in April and May, totaling more than $600 million. Customers will receive the money back through a credit to their bank account, credit card or Allstate account. Allstate said its telematics data shows that people are driving between 35% and 50% fewer miles in most states. Digital commercial lines insurer Next Insurance is cutting April premiums by 25% for its customers with general liability, professional liability and commercial auto policies. The company’s founder and CEO, Guy Goldstein, said he is challenging other insurers to do the same. This 25% reduction applies to those who pay monthly or paid their full annual premium up front and who purchased coverage before March 1. The discount is subject to state regulatory approval. As of April 4, the company said 38 states have approved it. State Farm and Progressive Corp. have said they are also considering steps to provide premium relief. We thank Insurance Journal for reprint permission.

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Is COVID-19 Accelerating An Industry Disruptor? by Neil Pitt, Motorious

How is the collector industry adapting to so many shutdowns? Collector and classic car auctions have been around since the early 1970s, when notable Kruse International held its first collector car auction in Auburn, IN. The Kruse classic car auction quickly grew and became a destination event for car guys each Labor Day. Although Kruse International was plagued with economic disruptions and legal debacles, it enjoyed some successes, including being purchased by eBay in 1999 for stock valued at $130 million. Thomas Barrett, a car collector from from Phoenix, AZ, was inspired by the success of Kruse International in the early '70s and decided to hold his own auction to cull his personal collection. Later, Barrett partnered with a friend, Russell Jackson, to form what is now arguably the most well-known collector car auction on the planet, Barrett-Jackson. Over the past five decades, many others have joined the auction industry, focused on a hobby and relentless passion for the automobile.

As the use of technology has become more prevalent and purchasing items online has become the norm, the collector car market has also transitioned to an online model. Most physical car auctions include the ability to bid and purchase by phone or through a myriad of platforms, such as Auction Mobility and Proxibid. Many of the collector car classified sites also include auction platforms as demonstrated by Hemmings and Motorious. The collector car market is very different from the retail daily driver market, in that most people are looking for a unique vehicle that is typically not found within driving distance of their home. According to Speed Digital, a technology provider for Collector Car dealers, approximately 80% of collector vehicles are sold online with the first “tire kicking” the moment the vehicle is unloaded from the transporter. The past decade has seen the rise of a once obscure company, Bringa-Trailer (BaT), that originated as a grassroots community discussing cars. BaT is now the preeminent online destination for purchasing collector cars and boasts a bid of $3.125 million for

a 2015 Ferrari LaFerrari (did not meet reserve.) As the COVID-19 pandemic spreads across the U.S. and "social distancing" has become part of our daily vocabulary, many of the physical auctions have been forced to either postpone or take the auction completely online. The following auctions have online only offerings within the next few months. Motorious—March 13-27 RM Sotheby's—March 20-28 Vicari Auctions—April 17-18 Pros & Cons of online only auctions Pros: 1. Reduced travel cost. Both consigning and buying online can have significantly reduced costs associated with personal travel (airfare, hotels, meals.) 2. Reduced transportation costs. Potentially, the cost of shipping associated with transporting vehicles to and from the venue is reduced. This is especially true if the vehicle is a "no sale" as the consignor is on the hook for transportation to the venue and then back after the auction. 3. Flexibility. Technology allows the use of alerts on particular vehicles,

making a better use of time as compared to being on-site watching vehicles cross the block of no interest to the buyer. 4. Leveraging a larger car community. Platforms such as Bring-a-Trailer allow commenting, which provides information and sometimes specific expertise from a worldwide audience. Cons: 1. No physical inspection. There is no substitute for a personal physical inspection. While websites offer numerous photographs, videos and detailed descriptions, there are always opportunities for errors. 2. Missed comradery. Many of the annual auction events provide an opportunity for enthusiasts to get together. These events have become a highly anticipated pilgrimage and a chance to bond with like-minded individuals. As the COVID-19 pandemic subsides, will we see more online auctions or will the car community bounce back to reveling in exhaust-filled venues listening to the chatter of the auctioneer? We thank Motorious for reprint permission.

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Used-Car Sales: Tracking the Good, the Bad & the Options by Joe Overby, Auto Remarketing

Based on auto industry analyses, a rough March for used-vehicle sales appears to have spilled over into April, and as PureCars says in its latest COVID-19 report, dealers are “facing obvious headwinds” in preowned. But, some silver linings: the dive in used- and new-car sales appear to have hit its trough, according to Cox Automotive. And there are dealers who are realizing “some success” with strategies to shore up their used-car sales, as PureCars outlines in its report. First outlining the challenges, PureCars said in the report, “Aggressive APR offers mean used payments can be higher than new, RO data suggests shoppers are fixing versus trading up or out, auction prices continue to fall and wholesale markets have all but stopped operating as a way to dispose of depreciating used assets.” But there are some remedies dealers are finding that work. PureCars emphasizes some used-vehicle shoppers “are sitting on the sidelines,” so

“aggressive” strategies in pre-owned might not be the best course at the moment. “However, some dealers are gamblers and we’ve seen some success with the following tactics; low-funnel search awareness, social budget reallocations to move ‘up funnel’ to reach broader in-market shoppers to take advantage of falling CPM rates, overlay ORACLE dataset to hyper-target local in-market audiences, aggressively (re)pricing vehicles to drive intent and piggy-backing on OEM CPO program benefits where available,” PureCars said. Here’s how the numbers have shaken out recently in pre-owned. Franchised dealers had a 24% drop in used-car retail sales the week ending April 5, according to J.D. Power Valuation Services, following 32% sequential and nearly 40% year-over-year declines in March. Of the 25 states that provide vehicle sales data to Cross-Sell Interactive (part of Dominion Dealer Solutions), only one shown in a state-by-state comparison graph—

North Dakota, which was up 10%— showed year-over-year growth in combined new- and used-vehicle sales in March. The heaviest decline shown in Cross-Sell’s data set was in Missouri, where combined new and used sales were down 52%. New York was next at 46%. Several others, like Texas (down 28%), Michigan (27%), Indiana (25%) and Colorado (25%), had declines near 30%. Overall, new- and used-vehicle sales fell 19.6% year-over-year, among states in Cross-Sell’s data set. In the 25 states that report data to Cross-Sell, there were 1.91 million used-vehicle sales for March, which was up 9.1% from the 1.75 million used sales in February. However, the picture changes when looking at year-over-year comparisons. Used-car sales in the 25 states were down 21.1% from the 2.42 million sold in March 2019. Total used-vehicle sales in March fell 18.4% year-over-year, according to Cox Automotive, which

estimated the used-car SAAR for the month at 32 million. It was 39.2 million in March 2019 and 39.8 million in February, Cox said. For retail used (which Cox Automotive defines as sales from either franchised dealers or independent dealers, excluding private-party sales), the SAAR was approximately 17.3 million for March. It was 20.6 million a year ago and 21.2 million in February. In addition to the 18% drop in total used sales for March, Cox Automotive also observed a 38% decline in new-car sales, with the downturn in both picking up as the month went along. A bit of a silver lining though, as Cox Automotive said in an analysis: “The decline in sales bottomed last week, as we’ve seen seven consecutive days of improvement in year-over-year declines of both new and used through Wednesday, April 8.” We thank Auto Remarketing for reprint permission.

www.autobodynews.com

New COVID-19 Programs Focus on Service Departments by Auto Remarketing staff

Two new auto service programs are now available to help dealers during the COVID-19 pandemic, one providing data on closed repair order volume, which could help new-car dealerships understand and respond to changes in demand for vehicle maintenance and repairs. DriveSure is a customer retention product designed for new car dealerships, and it has compiled data on closed repair order volume. The data is a seven-day moving average of the weekly number of closed repair orders per dealership. It is a compilation of nearly 100 U.S. new-car dealerships. Updated daily, the data is meant to help dealership general managers and service directors understand rapid market changes. DriveSure says that on average since late February, reporting dealerships have shown a 40% drop in closed repair orders. “This is a time of uncertainty for all of us,” DriveSure President Bill Springer said in a news release. “We are sharing this aggregated information to help dealerships get some clear answers and be able to make decisions based on trends they

are seeing relative to other dealerships throughout the United States," Springer continued. DriveSure will also offer and curate tips for minimizing the long-term negative effects on fixed operations. “We know dealerships will be relying heavily on service revenue as vehicle sales sharply decline,” Springer said. “This information will give decision makers an opportunity to stay ahead of changes to service demand as much as they can and come out strong on the other side.” In other news, CarAdvise, which describes itself as “the nation’s largest consumer fleet,” has launched No Contact Car Care, an expansion of its digital technology in response to COVID-19. CarAdvise designed No Contact Car Care to protect people still relying on their vehicle for essential goods and services. The company said many of its customers are gig economy workers such as shoppers and others in areas such as rideshare and delivery. “Their current role is absolutely critical during this pandemic as they have been instrumental in maintaining the supply chain and supporting the economy,” CarShare writes.

The company describes No Contact Car Care as an automated, digital process. During that process, the user schedules, approves services and pays all from his or her smartphone. The process requires no human interaction. CarAdvise says with No Contact Car Care, consumers and automotive service center employees can maintain a high level of safety and operate under governmental distinction as an essential business. The company features a network of more than 20,000 shops nationwide. It is working with each national brand, franchise location and independent shop to adopt and become certified in No Contact Car Care. CarAdvise says it designed the effort to exceed CDC and local safety guidelines “because it removes human interaction entirely.” The company says No Contact Car Care is a fully digitized avenue that promotes social distancing beyond the recommended 6 ft. CarAdvise customers take the following steps: Schedule service online through CarAdvise. Drop keys at the counter or dropbox at the shop. Electronically approve and pay for services. Pick up the vehicle upon completion of service, with no direct

human interaction. CarAdvise electronically stores all receipts in the CarAdvise dashboard. That requires no signing or receiving a paper receipt. “Now is a time for not just every company in the automotive industry to unite, but also for every citizen in the United States to do their part to ensure we do everything we can to stop the spread of this deadly virus,” said CarAdvise founder and CEO Greg Tepas. “No Contact Car Care is our way of helping protect those who are continuing to provide crucial supply chain services to every American, as well as those who help keep those drivers on the road by servicing their vehicles," Tepas continued. CarAdvise has also pledged to donate $1 for every No Contact Car Care service performed now until Dec. 31. That is an effort to help COVID-19 victims. The company will also allocate the funding toward the Center for Disaster Philanthropy and the World Health Organization’s COVID-19 Response Fund. CarAdvise said it has asked additional industry leaders to join in and donate to the cause. We thank Auto Remarketing for reprint permission.

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Why You Should Keep Advertising During a Major Market Downturn Businesses nationwide are taking a hard hit due to the Covid-19 pandemic, and the print media industry is no exception. Often times during an economic crisis, businesses may end up cutting marketing expenditure in an effort to save money. However, history tells us that cutting advertising budgets during a downturn can actually hurt your business long-term as opposed to helping it. Forbes gives us a list of several different brands who benefitted by maintaining their marketing budget during an economic downturn. Here are their stories. Kellog’s Cereal Brand In the 1920’s, Post Foods Cereal brand was the category leader for ready-to-eat cereal. During the Great Depression, Post cut back on their advertising budget while Kellogg’s Cereal Brand doubled their advertising spend, investing in radio and introducing a new cereal called Rice Krispies, featuring “Snap, Crackle, and Pop.” Kellogg’s profits grew by 30% resulting in the company becoming the

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Ford is experimenting with wristbands that vibrate when employees come within 6 ft. of each other as part of a broader array of new safety protocols.

The devices could be deployed more widely once the carmaker reopens its idled manufacturing plants. Ford is also expected to subject all workers entering a facility to a thermal-imaging scan and will provide staff with masks and, in some cases, plastic face shields. We thank Seeking Alpha for reprint permission.

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Coronavirus Has Dealerships Moving to Online Sales—and Car Buying May Never be the Same by Mark Phelan, Detroit Free Press

d el?

Amazon sales grew by 28% in 2009 during the “great recession.” The tech company continued to innovate with new products during the slumping economy, most notably with new Kindle products which helped to grow market share. As a result, in the minds of consumers, Amazon became an innovative company by introducing a lower cost alternative to cash-strapped consumers. While the temptation now may be to cut back on advertising, you may want to reconsider. Instead, redirect your brands’ message to match the current economic climate but be careful with the type of message you put out there, especially during these fragile times. Covid-19 has impacted many individuals on a personal level, and you don’t want to risk coming off as insensitive or exploitative. Whatever your message may be, it’s best to keep a positive, inspirational and helpful tone.

Ford Tests Social-Distancing Wearables

The way we buy cars may never be the same, as auto dealers adjust to working under COVID-19 restrictions and customers discover they prefer the new approach, which leans heavily on internet sales and vehicle demos and could include valet-style pickup and delivery service for everything from test drives to oil changes. “This is going to fundamentally change how people view buying a car,” said Rhett Ricart, CEO of Ricart Automotive Group in Columbus, OH, and chairman of the National Auto Dealers Association. “By the end of this year, you’re going to see 80% to 90% of U.S. new car dealers with full e-commerce capability in their shops” to handle everything online but the test drive and—maybe—the final signature, he said. Online deals at Ricart’s domestic dealerships have doubled during the last six weeks, he said. In Michigan, Gov. Gretchen

Whitmer’s extended “stay home” order clears the way for that, after a month when nearly all vehicle sales were prohibited in the state. It allows “workers at motor vehicle dealerships who are necessary to facilitate remote and electronic sales or leases, or to deliver motor vehicles to customers, provided that showrooms remain closed to in-person traffic.” Michigan dealers have been hoping and making plans for just such a change. Deliveries could begin as soon as they work out a process that addresses all the legal documents that are part of buying a vehicle. “We’re seeing a fundamental change in the way cars will be sold,” said Doug North, owner of North Bros. Ford in Westland, MI, and chairman of the North American International Auto Show. “This pandemic is going to create some permanent changes.” We thank the Detroit Free Press for reprint permission.

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